<SEC-DOCUMENT>0001144204-12-064712.txt : 20121126
<SEC-HEADER>0001144204-12-064712.hdr.sgml : 20121126
<ACCEPTANCE-DATETIME>20121123173857
ACCESSION NUMBER:		0001144204-12-064712
CONFORMED SUBMISSION TYPE:	S-4
PUBLIC DOCUMENT COUNT:		12
FILED AS OF DATE:		20121126
DATE AS OF CHANGE:		20121123

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:		S-4
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-185134
		FILM NUMBER:		121223086

	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
</SEC-HEADER>
<DOCUMENT>
<TYPE>S-4
<SEQUENCE>1
<FILENAME>v327631_s4.htm
<DESCRIPTION>FORM S-4
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As filed with the Securities and Exchange
Commission on November 23, 2012 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>Registration No. 333-</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNITED STATES </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WASHINGTON, D.C. 20549 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>FORM S-4
</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>REGISTRATION
STATEMENT</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I>UNDER </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><I>THE SECURITIES ACT OF 1933 </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif; color: Red"></P>

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<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif; color: Red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-size: 12pt"><B>DOCUMENT
SECURITY SYSTEMS, INC.</B></FONT><B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif; color: Red"></P>

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<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif; color: Red"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(Exact name of registrant as specified
in its charter) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; width: 33%; font-weight: bold; text-align: center">New York</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 32%; font-weight: bold; text-align: center">7373</TD>
    <TD STYLE="vertical-align: bottom; width: 1%">&nbsp;</TD>
    <TD STYLE="width: 33%; font-weight: bold; text-align: center">16-1229730</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; text-align: center">(State or other jurisdiction of<BR>
incorporation or organization)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">(Primary Standard Industrial<BR>
Classification Code Number)</TD>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(I.R.S. Employer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Identification Number)</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>First Federal Plaza</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white"><B>28
Main Street, Suite 1525</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white"><B>Rochester,
New York 14614</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: black; background-color: white"><B>Telephone:
(585) 325-3610</B></FONT><B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Address, including zip code, and telephone
number, including area code, of registrant&rsquo;s principal executive offices)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif; color: Red"></P>

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<P STYLE="margin: 0pt 0; font: 10pt Times New Roman, Times, Serif; color: Red"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white"><B>Robert
B. Bzdick </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white"><B>President
and Chief Operating Officer </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white"><B>Document
Security Systems, Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white"><B>First
Federal Plaza</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white"><B>28
Main Street East, Suite 1525</B></FONT>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white"><B>Rochester,
New York 14614</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="background-color: white"><B>Telephone:
(585) 325-3610</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">(Name, address, including
zip code, and telephone number, including area code, of agent for service)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B><I>Copies
to: </I></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>James Martin Kaplan, Esq.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Joseph Walsh, Esq.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Troutman Sanders LLP</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The Chrysler Building</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>405 Lexington Avenue</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>New York, New York 10174</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(212) 704-6030</B></P></TD>
    <TD STYLE="width: 50%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Kenneth R. Koch, Esq.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Jeffrey P. Schultz, Esq.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Mintz, Levin, Cohn, Ferris, Glovsky and
        Popeo, P.C.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Chrysler Center</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>666 Third Avenue</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>New York, New York 10017</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(212) 935-3000</B></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: Red"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Approximate date of commencement of proposed sale of the
securities to the public: </B>As soon as practicable after the effectiveness of this registration statement and the satisfaction
or waiver of all other conditions under the merger agreement described herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
the securities being registered on this form are being offered in connection with the formation of a holding company and there
is compliance with General Instruction G, check the following box. </FONT><FONT STYLE="font-family: Wingdings; color: black; background-color: white">&uml;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement number of the earlier effective registration statement number
for the same offering. </FONT><FONT STYLE="font-family: Wingdings; color: black; background-color: white">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. </FONT><FONT STYLE="font-family: Wingdings; color: black; background-color: white">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12b-2 of the Exchange Act. (Check one):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 22%; padding-left: 4.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Large accelerated filer&nbsp;</FONT><FONT STYLE="font-family: Wingdings; color: black">&uml;</FONT></TD>
    <TD STYLE="width: 25%; text-align: left; padding-left: 0.24in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accelerated filer&nbsp;</FONT><FONT STYLE="font-family: Wingdings; color: black">&uml;</FONT></TD>
    <TD STYLE="width: 28%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Non-accelerated filer&nbsp;</FONT><FONT STYLE="font-family: Wingdings; color: black">&uml;</FONT></TD>
    <TD STYLE="width: 25%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">Smaller reporting company&nbsp;</FONT><FONT STYLE="font-family: Wingdings">x</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 4.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">(Do not check if a smaller reporting company)</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3" STYLE="text-align: center"></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">If applicable, place an X in the box to designate the
appropriate rule provision relied upon in conducting this transaction:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Exchange
Act Rule 13e-4(i) (Cross-Border Issuer Tender Offer) </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Exchange
Act Rule 14d-1(d) (Cross-Border Third-Party Tender Offer) </FONT><FONT STYLE="font-family: Wingdings">&uml;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Wingdings"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CALCULATION OF REGISTRATION FEE </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Title&nbsp;of&nbsp;Each&nbsp;Class&nbsp;of <BR>Securities <BR>to&nbsp;be&nbsp;Registered</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount&nbsp;to&nbsp;be<BR> Registered&dagger;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Proposed <BR>Maximum<BR> Offering&nbsp;Price<BR> Per&nbsp;Share</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Proposed&nbsp;Maximum<BR> Aggregate<BR> Offering&nbsp;Price</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount&nbsp;of<BR> Registration&nbsp;Fee&nbsp;(3)</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%">Common Stock, par value $0.02 per share</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">27,590,559 </TD><TD STYLE="width: 1%; text-align: left">(1)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">N/A</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">1,065.88 </TD><TD STYLE="width: 1%; text-align: left">(2)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">0.15</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Preferred Stock, par value $0.02 per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,195,073</TD><TD STYLE="text-align: left">(4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">N/A</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">597.12</TD><TD STYLE="text-align: left"> (5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.08</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Warrants to purchase Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,859,894 </TD><TD STYLE="text-align: left">(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">N/A</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">N/A</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">N/A</TD><TD STYLE="text-align: left">(7)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Common Stock issuable upon exercise of the Warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,859,894 </TD><TD STYLE="text-align: left">(8)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.80</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">24,488,779.20</TD><TD STYLE="text-align: left"> (9)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,340.27</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">$.02 Warrants to purchase Common Stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,195,073 </TD><TD STYLE="text-align: left">(10)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">N/A</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">N/A</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">N/A</TD><TD STYLE="text-align: left">(7)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Common Stock issuable upon exercise of the $.02 Warrants</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,195,073 </TD><TD STYLE="text-align: left">(11)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">103,861.46</TD><TD STYLE="text-align: left">(12)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">14.17</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Common Stock issuable as compensation to Palladium Capital Advisors, LLC</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">786,678 </TD><TD STYLE="text-align: left">(13)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.65</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,084,696.70</TD><TD STYLE="text-align: left">(14)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">284.35</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">&dagger;</TD>
    <TD STYLE="width: 97%">Pursuant to Rule 416, this registration statement also covers an indeterminate number of additional
    securities of Document Security Systems, Inc. (&ldquo;<B>DSS</B>&rdquo;) as may be issuable as a result of stock splits, stock
    dividends or similar transactions.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(1)</TD>
    <TD>Represents the maximum number of shares of DSS common stock, par value $0.02 per share, estimated to be issuable to
    holders of Lexington Technology Group, Inc. (&ldquo;<B>Lexington</B>&rdquo;) capital stock (including shares of DSS common
    stock issuable upon conversion of the DSS preferred stock) in     the     transactions     described in the proxy
    statement/prospectus. If     DSS     effects     a     reverse     stock     split as     described in     the proxy
    statement/prospectus, all DSS     common     stock, including     the     securities     covered by     this     Registration
    Statement,     will be     reclassified and     combined by a reverse     stock     split into a     lesser amount of     DSS
    common     stock, and the     amount of     undistributed     common stock     deemed to be     covered by this
    Registration     Statement shall be     proportionately reduced. </TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(2)</TD>
    <TD>Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(f)(2) under the Securities Act. As Lexington, the issuer of the securities to be acquired and cancelled in the proposed transaction, has an accumulated capital deficit of approximately $6,931,000 as of September 30, 2012, the offering price shown is calculated based on one-third of the aggregate $0.0001 par value per share of Lexington common stock to be cancelled in the Merger or underlying preferred stock to be exchanged in the Merger.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(3)</TD>
    <TD>Determined in accordance with Section 6(b) of the Securities Act of 1933 by multiplying 0.0001364 by the proposed maximum aggregate offering price.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(4)</TD>
    <TD>Represents the estimated maximum number of shares of DSS convertible preferred stock that may be issued by DSS at the completion of the Merger.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(5)</TD>
    <TD>The offering price shown is calculated based on one-third of the aggregate $0.0001 par value per share of Lexington preferred stock to be cancelled in the Merger.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(6)</TD>
    <TD>Represents the maximum number of warrants to purchase DSS common stock that may be issued by DSS at the completion of the Merger.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(7)</TD>
    <TD>In accordance with existing SEC interpretations, the entire registration fee for the warrants is allocated to the DSS common stock registered underlying the warrants, and no separate fee is recorded for the warrants to purchase shares of DSS common stock.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(8)</TD>
    <TD>Represents the maximum number of shares of DSS common stock issuable upon exercise of the warrants, to be issued by DSS in the Merger.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(9)</TD>
    <TD>The proposed maximum aggregate offering price of DSS&rsquo;s warrants to purchase DSS common stock is calculated based on the $4.80 exercise price of the warrants.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(10)</TD>
    <TD>&nbsp;The $.02 warrants will only be issued in the event that the DSS stockholders do not approve the proposal to create the series of preferred stock to be issued in the Merger.&nbsp; The number of shares issuable upon exercise of such $0.02 warrants, if issued to Lexington stockholders in connection with the Merger, would be the same number of shares as are issuable upon conversion of the preferred stock to be issued in the Merger.&nbsp; In accordance with existing SEC interpretations, the entire registration fee for the $.02 warrants is allocated to the DSS common stock registered underlying the $.02 warrants, and no separate fee is recorded for the $.02 warrants to purchase shares of DSS common stock.</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">(11)</TD>
    <TD STYLE="width: 97%">&nbsp;Represents the maximum number of shares of DSS common stock issuable upon exercise of the $.02 warrants that may be issued by DSS in the Merger.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(12)</TD>
    <TD>&nbsp;The proposed maximum aggregate offering price of DSS&rsquo;s $.02 warrants to purchase DSS common stock is calculated based on the $0.02 exercise price of the $.02 warrants.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(13)</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD>&nbsp;Based on the maximum number of shares of DSS common stock that may be issued to Palladium Capital Advisors, LLC as
    compensation     for their     services in connection with the transactions contemplated by the Merger Agreement.&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(14)</TD>
    <TD>Pursuant to Rule 457(c) under the Securities Act of 1933, as amended, and solely for purposes of calculating this
    registration fee, the proposed maximum aggregate offering price is equal to the product of (i) $2.65, the average of the high
    and low prices per share of DSS common stock on November 16, 2012 as reported on the NYSE MKT, and (ii) 786,678
    (which is the maximum number of shares of DSS common stock that may be issued to Palladium Capital Advisors, LLC).</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE REGISTRANT HEREBY AMENDS THIS REGISTRATION
STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT
WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES
AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red"><B><I>The information in this
proxy statement/prospectus is not complete and may be changed. Document Security Systems, Inc. may not sell these securities until
the registration statement filed with the Securities and Exchange Commission, of which this proxy statement/prospectus is a part,
is declared effective. This proxy statement/prospectus is not an offer to sell these securities and it is not the solicitation
of an offer to buy these securities in any jurisdiction where the offer, solicitation or sale is not permitted or would be unlawful
prior to registration or qualification under the securities laws of any such jurisdiction. Any representation to the contrary is
a criminal offense</I>. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PRELIMINARY&mdash;SUBJECT TO COMPLETION&mdash;DATED
NOVEMBER 23, 2012 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img src="tlogo.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PROPOSED MERGER&mdash;YOUR VOTE IS VERY
IMPORTANT </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Document Security Systems,
Inc. (&ldquo;<B>DSS</B>&rdquo;), DSSIP, Inc., a wholly-owned subsidiary of DSS (&ldquo;<B>Merger Sub</B>&rdquo;), Lexington Technology
Group, Inc. (&ldquo;<B>Lexington</B>&rdquo;) and Hudson Bay Master Fund Ltd., as representative of Lexington&rsquo;s stockholders
solely for certain purposes, entered into an Agreement and Plan of Merger on October 1, 2012 (as may be amended or modified, the
&ldquo;<B>Merger Agreement</B>&rdquo;), pursuant to which Merger Sub will merge with and into Lexington, with Lexington surviving
the merger as a wholly-owned subsidiary of DSS (the &ldquo;<B>Merger</B>&rdquo;). The board of directors of DSS has approved the
Merger Agreement and the Merger. In addition, the board of directors of Lexington has unanimously approved the Merger Agreement
and the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.75in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the
terms of the Merger Agreement, upon completion of the Merger (the &ldquo;<B>Effective Time</B>&rdquo;) and subject to the
Beneficial Ownership Condition (as defined below), each share of then-issued and outstanding common stock of Lexington, par
value $0.0001 per share (&ldquo;<B>Lexington Common Stock</B>&rdquo;) and each share of then-issued and outstanding Series A
Convertible Preferred Stock of Lexington, par value $0.0001 per share (&ldquo;<B>Lexington Preferred Stock</B>&rdquo;) (other
than shares of Lexington Common Stock and Lexington Preferred Stock held in treasury or owned by DSS or any direct or
indirect wholly-owned subsidiary of DSS or Lexington that will be canceled and retired at the Effective Time) will be
automatically converted into (i) shares of DSS common stock, par value $0.02 per share (&ldquo;<B>DSS Common
Stock</B>&rdquo;), (ii) Warrants (as described below) to purchase DSS Common Stock, and (iii) a pro rata portion of 7,100,000
shares of DSS Common Stock to be held in escrow (as described in this proxy statement/prospectus, the &ldquo;<B>Escrow
Shares</B>&rdquo;) and, as applicable, shares of DSS&rsquo;s Series A Convertible Preferred Stock (&ldquo;<B>DSS Preferred
Stock</B>&rdquo;), determined by multiplying each of (x) 17,250,000 shares plus the number of Additional Shares, as described
in this proxy statement/prospectus, and Exchanged Shares, as described in this proxy statement/prospectus, if any, (y)
4,859,894 warrants, and (z) 7,100,000 shares by a fraction, the numerator of which shall be one and the denominator of which
shall be the sum of (A) the number of shares of Lexington Common Stock plus (B) the number of shares of Lexington Preferred
Stock, in each case issued and outstanding immediately prior to the Effective Time (such fraction referred to as the
&ldquo;<B>Common Stock Exchange Ratio</B>&rdquo;). At the Effective Time of the Merger, DSS will issue to the holders of
Lexington Common Stock and Lexington Preferred Stock (on a <I>pro rata</I> as-converted basis) an aggregate of 4,859,894
warrants to purchase an aggregate of 4,859,894 shares of DSS Common Stock with an exercise price of $4.80 per share and a
term of five years commencing upon the closing of the Merger (the &ldquo;<B>Warrants</B>&rdquo;). Upon the consummation of
the Merger, only the holders of Lexington Preferred Stock who would, after giving effect to the Merger and receipt of the
merger consideration, beneficially own more than 9.99% of DSS Common Stock (the &ldquo;<B>Beneficial Ownership
Condition</B>&rdquo;) shall receive for each share of Lexington Preferred Stock they hold the same merger consideration as
outlined above except that such holders shall receive a combination of DSS Common Stock and DSS Preferred Stock that is
convertible into (or, if the proposal to authorize DSS Preferred Stock is not approved by the DSS stockholders, $.02
Warrants, as described in this proxy statement/prospectus, exercisable for) that number of shares of DSS Common Stock they
would have received if they had been a holder of Lexington Common Stock immediately prior to the Effective Time in such
amounts that would enable such holders, after giving effect to the Merger, to beneficially own no more than 9.99% of DSS
Common Stock upon consummation of the Merger. Those holders of Lexington Preferred Stock who do not exceed the
Beneficial Ownership Condition and accordingly will not receive DSS Preferred Stock or $.02 Warrants (as described in this
proxy statement/prospectus) will receive DSS Common Stock and the other types of merger consideration in exchange for their
Lexington Preferred Stock based on the Common Stock Exchange Ratio. Finally, at the Effective Time, up to an aggregate of
3,600,000 outstanding and unexercised options to purchase Lexington Common Stock will be assumed by DSS and each such option
will convert into an option to purchase or acquire shares of DSS Common Stock (i) in a number equal to the number of shares
of Lexington Common Stock subject to the option immediately prior to the Effective Time multiplied by 0.556
(the &ldquo;<B>Option Exchange Ratio</B>&rdquo;) and (ii) with an exercise price per share equal to the exercise price of
the applicable option immediately prior to the Effective Time divided by the Option Exchange Ratio, with the number of shares
in (i) and the price per share in (ii) rounded up or down to the next whole share number or tenth (0.1) of a cent, as the
case may be, in a manner such that, after taking into account such rounding, both (A) the excess of the aggregate fair
market value of the shares subject to the new option over the aggregate exercise price for such shares does not exceed the
excess of the aggregate fair market value of the shares subject to the old option over the aggregate exercise price for such
shares immediately prior to the Effective Time, and (B) the ratio on a per option basis of the exercise price to the fair
market value of the shares subject to the option is not increased.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Immediately following
the completion of the Merger (without taking into account any shares of DSS Common Stock held by Lexington stockholders prior to
the completion of the Merger), the former stockholders of Lexington are expected to own approximately 50% of the outstanding common
stock of the combined company (or 56% of the outstanding common stock of the combined company calculated on a fully diluted basis)
and the current stockholders of DSS are expected to own approximately 50% of the outstanding common stock of the combined company
(or 44% of the outstanding common stock of the combined company calculated on a fully diluted basis).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS Common Stock is
listed on the NYSE MKT and trades under the symbol &ldquo;DSS.&rdquo; On [&bull;], 2013, the latest practicable date before the
printing of this proxy statement/prospectus, the closing sale price of DSS Common Stock was $[&bull;] per share. Lexington is a
privately held intellectual property monetization company. Following the completion of the Merger, the combined company is expected
to be publicly traded on the NYSE MKT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">DSS
is soliciting proxies for use at a special meeting of its stockholders to consider and vote upon (i) a proposal to approve the
Merger, including, but not limited to, the issuance of shares of DSS Common Stock and DSS Preferred Stock (or, if proposal (ii)
below is not approved by the DSS stockholders, $.02 Warrants) and Warrants to purchase shares of DSS Common Stock </FONT>(and the
shares of DSS Common Stock issuable upon conversion of the DSS Preferred Stock or exercise of the $.02 Warrants, as applicable,
and the shares of DSS Common Stock issuable upon the exercise of the Warrants) <FONT STYLE="color: black">to the Lexington stockholders
in connection with the Merger, (ii) a proposal to approve an amendment to DSS&rsquo;s amended and restated certificate of incorporation
to authorize a class of preferred stock and establish the associated rights and preferences thereof, (iii) a proposal to approve
an amendment to DSS&rsquo;s amended and restated certificate of incorporation to implement a staggered board of directors, (iv)
a proposal to approve an amendment to DSS&rsquo;s amended and restated certificate of incorporation to effect a reverse stock split
of DSS Common Stock within the range of one-for-two to one-for-four (with the exact amount, if any, to be determined prior to the
completion of the merger based on the requirements of the NYSE MKT), (v) a proposal to approve the Document Security Systems, Inc.
2013 Employee, Director and Consultant Equity Incentive Plan and (vi) a proposal to adjourn the DSS special meeting, if necessary,
to solicit additional proxies if there are not sufficient votes in favor of any of proposals (i) through (v). <B>The board of directors
of DSS recommends that DSS stockholders vote FOR each of the foregoing proposals. Approval of the foregoing proposal (i) is necessary
to complete the Merger.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black"><B>Your
vote is very important.&nbsp;</B>&nbsp;Whether or not you plan to attend the DSS special meeting of stockholders, please submit
your proxy as promptly as possible (i) through the Internet, (ii) by telephone or (iii) by marking, signing and dating the enclosed
proxy card and returning it </FONT>by mail<FONT STYLE="color: black"> in the postage-paid envelope provided to make sure that your
shares are represented at the special meeting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This proxy statement/prospectus
provides you with detailed information about the DSS special meeting, the Merger and the other business to be considered by DSS
stockholders at the special meeting. In addition to being a proxy statement, this document is also a prospectus to be used by DSS
when issuing DSS Common Stock and DSS Preferred Stock (or, if proposal (ii) above is not approved by the DSS stockholders, $.02
Warrants), the Warrants to purchase DSS Common Stock and the shares of common stock underlying such DSS Preferred Stock or $.02
Warrants, as applicable, and Warrants to be issued to the Lexington stockholders in connection with the Merger. DSS encourages
you to read the entire document carefully.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Please pay particular
attention to the section entitled &ldquo;Risk Factors&rdquo; beginning on page 50 for a discussion of the risks related to
the Merger, the combined company following the completion of the Merger, and the business and operations of each of DSS and Lexington.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="color: black">R</FONT>obert B. Bzdick</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">President and Chief Operating Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Document Security Systems, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of the securities to be issued in connection
with the Merger or determined if this proxy statement/prospectus is accurate or complete. Any representation to the contrary is
a criminal offense. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This proxy statement/prospectus
is dated ___________, 2013 and is first being mailed to the stockholders of DSS on or about __________, 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REFERENCES TO ADDITIONAL INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This proxy statement/prospectus
references important business and financial information about DSS that is not included in or delivered with this proxy statement/prospectus.
DSS and its proxy solicitor, [&bull;], will provide you with copies of this information (excluding all exhibits) relating to DSS,
without charge, upon written or oral request. You can obtain these documents, which are referred to in this proxy statement/prospectus,
by requesting them in writing or by telephone from DSS or [&bull;], DSS&rsquo;s proxy solicitor, at the following address and telephone
number, as applicable:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Document Security Systems, Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">First Federal Plaza</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white">28
        Main Street, Suite 1525</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white">Rochester,
        New York 14614</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="background-color: white">Telephone:
        (585) 325-3610</FONT></P></TD>
    <TD STYLE="width: 50%; text-align: center">[PROXY SOLICITOR]</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In order for you to
receive timely delivery of the documents in advance of the DSS special meeting you must request the information no later than __________,
2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ABOUT THIS PROXY STATEMENT/PROSPECTUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This proxy statement/prospectus,
which forms a part of a Registration Statement on Form S-4 filed with the Securities and Exchange Commission by DSS (File No. 333-___________),
constitutes a prospectus of DSS under Section 5 of the Securities Act of 1933, as amended, with respect to the shares of DSS Common
Stock and DSS Preferred Stock (or, if the proposal (ii) below is not approved by the DSS stockholders, $.02 Warrants) and the Warrants
(and the shares of DSS Common Stock issuable upon conversion of the DSS Preferred Stock or the exercise of the $.02 Warrants, as
applicable, and the shares of DSS Common Stock issuable upon the exercise of the Warrants) to be issued to the Lexington stockholders
in connection with the merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This proxy statement/prospectus
also constitutes a notice of meeting and a proxy statement under Section 14(a) of the Securities Exchange Act of 1934, as amended,
with respect to a DSS special meeting, at which DSS stockholders will be asked to consider and vote upon certain proposals, including
(i) a proposal to approve the Merger, including, but not limited to, the issuance of shares of DSS Common Stock and DSS Preferred
Stock (or, if the proposal (ii) below is not approved by the DSS stockholders, $.02 Warrants) and Warrants (and the shares of DSS
Common Stock issuable upon conversion of the DSS Preferred Stock or the exercise of the $.02 Warrants, as applicable, and the shares
of DSS Common Stock issuable upon the exercise of the Warrants) to the Lexington stockholders in connection with the merger, (ii)
a proposal to amend DSS&rsquo;s amended and restated certificate of incorporation to authorize a class of preferred stock<FONT STYLE="color: black">
and establish the associated rights and preferences thereof</FONT>, (iii) a proposal to amend DSS&rsquo;s amended and restated
certificate of incorporation to <FONT STYLE="color: black">implement a staggered board of directors</FONT>, (iv) <FONT STYLE="color: black">a
proposal to approve an amendment to DSS&rsquo;s amended and restated certificate of incorporation to effect a reverse stock split
of DSS Common Stock within the range of one-for-two to one-for-four (with the exact amount, if any, to be determined prior to the
completion of the merger based on the requirements of the NYSE MKT), (v) a proposal to approve the Document Security Systems, Inc.
2013 Employee, Director and Consultant Equity Incentive Plan, and (vi) a proposal to adjourn the DSS special meeting, if necessary,
to solicit additional proxies if there are not sufficient votes in favor of any of proposals (i) through (v). </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img src="tlogo1.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Document Security Systems, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">First Federal Plaza</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white">28
Main Street, Suite 1525</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white">Rochester,
New York 14614</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="background-color: white">Telephone:
(585) 325-3610</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TO BE HELD ON_________________, 2013
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">To the Stockholders of Document Security
Systems, Inc.:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The special meeting
of stockholders of Document Security Systems, Inc., a New York corporation, will be held on ____________, 2013, at [&bull;]:[&bull;]
a.m., local time, at [ &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;], for the following purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; text-align: justify">1.</TD>
    <TD STYLE="width: 93%; text-align: justify">To approve a merger, including, but not limited to, the issuance of shares of DSS common stock and preferred stock (or, if Proposal 2 below is not approved by the DSS stockholders, $.02 warrants) and warrants (and the shares of common stock issuable upon conversion of the preferred stock or exercise of the $.02 warrants, as applicable, and exercise of the warrants) to the Lexington stockholders in connection with the merger contemplated by the Agreement and Plan of Merger, dated as of October 1, 2012, by and among DSS, Lexington and DSSIP, Inc., a wholly-owned subsidiary of DSS;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">2.</TD>
    <TD STYLE="text-align: justify">To amend DSS&rsquo;s amended and restated certificate of incorporation to authorize a class of preferred stock<FONT STYLE="color: black"> and establish the associated rights and preferences thereof</FONT>;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">3.</TD>
    <TD STYLE="text-align: justify">To amend DSS&rsquo;s amended and restated certificate of incorporation to <FONT STYLE="color: black">implement a staggered board of directors</FONT>; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">4.</TD>
    <TD STYLE="text-align: justify">To amend DSS&rsquo;s amended and restated certificate of incorporation to effect a reverse stock split of DSS&rsquo;s issued and outstanding common stock within the range of one-for-two to one-for-four (with the exact amount, if any, to be determined prior to the completion of the merger based on the requirement of the NYSE MKT);</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">5.</TD>
    <TD STYLE="text-align: justify">To approve the Document Security Systems, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan, as approved by the DSS board of directors on _____________;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">6.</TD>
    <TD STYLE="text-align: justify">To approve the adjournment of the DSS special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of any of the proposals referred to in (1) through (5) above; and</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">7.</TD>
    <TD STYLE="text-align: justify">To conduct any other business as may properly come before the DSS special meeting or any adjournment or postponement thereof.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS board of directors
has determined that the merger, upon the terms and conditions set forth in the merger agreement, and the other transactions contemplated
by the merger agreement are advisable and fair to, and in the best interests of, DSS and its stockholders. The board of directors
makes its recommendation to the DSS stockholders after consideration of the factors described in this proxy statement/prospectus.
<B>The DSS board of directors unanimously recommends that DSS stockholders vote FOR each of the foregoing proposals.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS board of directors
has fixed __________, 2013 as the record date for the determination of stockholders entitled to notice of, and to vote at, the
DSS special meeting and any adjournment or postponement thereof. Only holders of record of shares of DSS common stock at the close
of business on the record date are entitled to notice of, and to vote at, the DSS special meeting. At the close of business on
the record date, DSS had ___________shares of common stock outstanding and entitled to vote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">By Order of the Board of Directors,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Robert B. Bzdick</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">President and Chief Operating Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">_____________, 2013</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Your vote is important</B>.&nbsp;&nbsp;The
affirmative vote of the holders of a majority of the shares of DSS common stock present and entitled to vote on the matter either
in person or by proxy at the DSS special meeting is required for approval of DSS Proposal Nos. 1, 5 and 6. The affirmative vote
of the holders of a majority of the outstanding shares of DSS common stock entitled to vote on the matter either in person or by
proxy at the DSS special meeting is required for approval of DSS Proposal Nos. 2, 3 and 4.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All DSS stockholders
of record are cordially invited to attend the DSS special meeting in person. However, even if you plan to attend the DSS special
meeting in person, DSS urges you to submit your proxy as promptly as possible (i) through the Internet, (ii) by telephone or (iii)
by marking, signing and dating the enclosed proxy card and returning it by mail in the postage-paid envelope as instructed on the
enclosed proxy card to ensure that your shares of DSS common stock will be represented at the DSS special meeting if you are unable
to attend. If you sign, date and mail your proxy card without indicating how you wish to vote, all of your shares will be voted
<B>FOR</B> DSS Proposal Nos. 1, 2, 3, 4, 5 and 6. If you fail to submit your proxy as instructed on the enclosed proxy card, the
effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the DSS special
meeting and will have the same effect as a vote against DSS Proposal Nos. 2, 3 and 4 but such failure will have no effect with
respect to DSS Proposal Nos. 1, 5 and 6. If you do attend the DSS special meeting and wish to vote in person, you may withdraw
your proxy and vote in person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This proxy statement/prospectus
provides you with detailed information about the merger and the other business to be considered by DSS stockholders at the special
meeting. DSS encourages you to read the entire document carefully. Please pay particular attention to the section entitled &ldquo;Risk
Factors&rdquo; beginning on page 50  for a discussion of the risks related to the merger, the combined company following the
completion of the merger, and the business and operations of each of DSS and Lexington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<DIV STYLE="padding: 0.25; border: Black 1pt solid">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>IMPORTANT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><SUP>&nbsp;</SUP></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Your vote is important. Whether or not
you expect to attend the DSS special meeting, please submit your proxy (i) through the Internet, (ii) by telephone or (iii) by
marking, signing and dating the enclosed proxy card and returning it by mail in the postage-paid envelope provided, as instructed
in these materials, as promptly as possible in order to ensure that your shares of DSS common stock will be represented at the
DSS special meeting. Even if you have voted by proxy, you may still vote in person if you attend the DSS special meeting and revoke
your proxy. Please note, however, that if your shares are held in &ldquo;street name&rdquo; by a broker or other nominee and you
wish to vote at the DSS special meeting, you must obtain a proxy issued in your name from such record holder prior to the special
meeting.</B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 40.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 40.5pt"><B>TABLE OF CONTENTS
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 40.5pt"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 90%; text-decoration: none"><FONT STYLE="color: windowtext">QUESTIONS AND ANSWERS ABOUT THE MERGER AND THE DSS SPECIAL MEETING </FONT></TD>
    <TD STYLE="width: 10%; text-align: center; vertical-align: bottom">1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">SUMMARY</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">14</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">The Companies</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">14</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">The Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">16</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">What Lexington Stockholders Will Receive in the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">17</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Ownership of the Combined Company After the Completion of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">18</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Treatment of Lexington Stock Options</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">18</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Treatment of DSS Stock Options</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">18</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Board of Directors and Executive Officers of the Combined Company After the Completion of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">19</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Recommendations of the DSS Special Committee and the DSS Board of Directors and its Reasons for the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">19</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Interests of DSS Directors and Executive Officers in the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">20</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Anticipated Accounting Treatment of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">21</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Material United States Federal Income Tax Consequences of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">21</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Restrictions on Sales of Shares of DSS Common Stock Received By Lexington Stockholders in the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">22</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Appraisal Rights</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">22</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Regulatory Approvals</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">22</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Conditions to the Completion of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">23</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">No Solicitation</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">24</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Termination of the Merger Agreement</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">25</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Termination Fees and Expenses</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">26</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Voting by DSS Directors and Executive Officers</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">26</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Voting and Support Agreements</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">26</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Rights of Lexington Stockholders Will Change as a Result of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">27</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Risk Factors</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">27</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Matters to Be Considered at the DSS Special Meeting</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">28</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="text-underline-style: none; color: windowtext">SELECTED HISTORICAL FINANCIAL DATA O</FONT>F DSS</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">29</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>SELECTED HISTORICAL FINANCIAL DATA OF LEXINGTON</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">31</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">SUMMARY UNAUDITED PRO FORMA COMBINED FINANCIAL DATA</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">33</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">MARKET PRICE DATA AND DIVIDEND INFORMATION</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">42</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">48</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">RISK FACTORS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">50</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Risks Related to the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">50</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Risks Related to the Combined Company if the Merger Is Completed</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">54</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="text-underline-style: none; color: windowtext">Risks</FONT> Related to DSS&rsquo;s Business</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">59</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Risks Related to Lexington&rsquo;s Business </FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">66</TD></TR>
</TABLE>
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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 90%; text-decoration: none"><FONT STYLE="color: windowtext">THE MERGER</FONT></TD>
    <TD STYLE="width: 10%; text-align: center; vertical-align: bottom">74</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Structure of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">74</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">What Lexington Stockholders Will Receive in the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">74</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Ownership of the Combined Company After the Completion of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">76</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Treatment of Lexington Stock Options</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">76</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Background of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">77</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Merger</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">83</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Position of the DSS Board of Directors as to Fairness of the Merger and Recommendation of the DSS Board of Directors </FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">85</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Board of Directors and Executive Officers of the Combined Company After the Completion of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">86</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Interests of DSS Directors and Executive Officers in the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">87</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Anticipated Accounting Treatment</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">90</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Tax Treatment of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">91</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Regulatory Approvals Required for the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">91</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Restrictions on Sales of Shares of DSS Common Stock Received by Lexington Stockholders in the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">91</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Appraisal Rights</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">91</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">NYSE MKT Listing of DSS Common Stock</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">91</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">92</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">THE MERGER AGREEMENT</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">96</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Terms of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">96</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Completion of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">96</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Certificate of Incorporation; Bylaws; Directors and Officers</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">97</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Merger Consideration</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">97</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Exchange of Lexington Stock Certificates</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">99</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Representations and Warranties</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">99</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Material Adverse Effect</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">99</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Certain Covenants of the Parties</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">101</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">No Solicitation</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">102</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Board Recommendations</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">104</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none; color: windowtext">Approval of Stockholder</FONT>s</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">104</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Indemnification of Directors and Officers</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">104</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Conditions to the Completion of the Merger</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">105</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Termination of the Merger Agreement</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">106</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Termination Fees and Expenses</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">106</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Amendments</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">107</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Governing Law</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">107</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Escrow Agreement</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">108</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Voting and Support Agreements</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">108</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">INFORMATION ABOUT THE COMPANIES</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">109</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Document Security Systems, Inc.</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">109</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Lexington Technology Group, Inc.</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">110</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">DSSIP, Inc.</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">110</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">THE SPECIAL MEETING OF DSS STOCKHOLDERS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">111</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Date, Time and Place</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">111</TD></TR>
</TABLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 90%; padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Purpose of the DSS Special Meeting</FONT></TD>
    <TD STYLE="width: 10%; text-align: center; vertical-align: bottom">111</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">DSS Record Date; Shares Entitled to Vote</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">111</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Quorum</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">112</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Required Vote</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">112</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Counting of Votes; Treatment of Abstentions and Incomplete Proxies</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">113</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Voting by DSS Directors and Executive Officers</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">113</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Voting of Proxies by Registered Holders</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">113</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Shares Held in Street Name</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">113</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Revocability of Proxies and Changes to a DSS Stockholder&rsquo;s Vote</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">114</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Solicitation of Proxies</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">114</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Delivery of Proxy Materials to Households Where Two or More DSS Stockholders Reside</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">115</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Attending the DSS Special Meeting</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">115</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.25in">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">DSS PROPOSALS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">116</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">DSS Proposal No. 1: Approval of the Issuance of DSS Common Stock, Preferred Stock (or, if the Preferred Stock Creation Proposal is Not Approved, $.02 Warrants) and Warrants in Connection with the Merger</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">116</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">DSS Proposal No. 2: Approval of an Amendment to DSS&rsquo;s Amended and Restated Certificate of Incorporation to Authorize a Class of Preferred Stock</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">118</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">DSS Proposal No. 3: Approval of an Amendment to DSS&rsquo;s Amended and Restated Certificate of Incorporation to Implement a Staggered Board of Directors</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">120</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">DSS Proposal No. 4: Approval of an Amendment to DSS&rsquo;s Amended and Restated Certificate of Incorporation to Effect a Reverse Stock Split of DSS Common Stock</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">122</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">DSS Proposal No. 5: Approval of <FONT STYLE="color: black">Document Security Systems, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">129</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">DSS Proposal No. 6: Approval of the Adjournment of the DSS Special Meeting, if Necessary, to Solicit Additional Proxies if There Are Not Sufficient Votes in Favor of the DSS Proposals</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">134</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">DSS&rsquo;S BUSINESS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">135</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">DSS&rsquo;S MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS </FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">141</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">LEXINGTON&rsquo;S BUSINESS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">160</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">LEXINGTON&rsquo;S MANAGEMENT&rsquo;S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS </FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">167</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">MANAGEMENT OF THE COMBINED COMPANY FOLLOWING THE MERGER</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">174</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Executive Officers and Directors</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">174</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Composition of the Board of Directors and Director Independence</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">177</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Committees of the Board of Directors</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">178</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Board Leadership Structure and Risk Oversight</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">180</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Compensation Risk Assessment</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">180</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Code of Ethics</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">180</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Section 16(a) Beneficial Ownership Reporting Compliance</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">180</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Related Person Transactions</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">180</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Director Compensation</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">182</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Executive Compensation</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">183</TD></TR>
</TABLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 90%; text-decoration: none"><FONT STYLE="color: windowtext">DSS SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</FONT></TD>
    <TD STYLE="width: 10%; text-align: center; vertical-align: bottom">191</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">LEXINGTON SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">193</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF THE COMBINED COMPANY FOLLOWING THE MERGER </FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">195</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">DESCRIPTION OF CAPITAL STOCK</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">199</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Common Stock</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">199</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-decoration: none; text-indent: -0.1in"><FONT STYLE="color: windowtext">Preferred Stock</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">199</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">Warrants</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">200</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.35in; text-indent: -0.1in">New York Statutory Business Combination Provisions</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">201</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">202</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">COMPARISON OF RIGHTS OF DSS STOCKHOLDERS AND LEXINGTON STOCKHOLDERS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">212</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">LEGAL MATTERS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">224</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">EXPERTS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">224</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>FUTURE STOCKHOLDER PROPOSALS</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">224</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">WHERE YOU CAN FIND ADDITIONAL INFORMATION</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">224</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">DOCUMENT SECURITY SYSTEMS, INC. INDEX TO THE FINANCIAL STATEMENTS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">F-1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>LEXINGTON<FONT STYLE="text-underline-style: none; color: windowtext"> TECHNOLOGY GROUP, INC. INDEX TO THE FINANCIAL STATEMENTS</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom">F-50</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; width: 10%">Annexes</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="text-align: center; width: 4%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 82%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Annex A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-decoration: none"><FONT STYLE="color: windowtext">The Merger Agreement</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Annex B</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>Voting and Support Agreements</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Annex C</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>Form of $.02 Warrant</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Annex D</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>Form of Warrant</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Annex E</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>Form of Certificate of Amendment to Authorize Preferred Stock</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Annex F</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>Form of Certificate of Amendment to Effect a Reverse Stock Split</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Annex G</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>Form of Certificate of Amendment to Implement a <FONT STYLE="color: black">Staggered</FONT> Board of Directors</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Annex H</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&mdash;</TD>
    <TD>&nbsp;</TD>
    <TD>Document Security Systems, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>QUESTIONS AND ANSWERS ABOUT THE MERGER
AND<BR>
THE DSS SPECIAL MEETING</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>The following are
some questions that you, as a stockholder of Document Security Systems, Inc. (&ldquo;<B>DSS</B>&rdquo;) may have regarding the
Merger (as defined below) or the DSS special meeting, together with brief answers to those questions. DSS urges you to read carefully
the remainder of this proxy statement/prospectus, including the annexes and other documents referred to in this proxy statement/prospectus,
because the information in this section may not provide all of the information that might be important to you with respect to the
Merger or the DSS special meeting.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>When this proxy
statement/prospectus refers to the combined company, it means DSS and its subsidiaries and Lexington Technology Group, Inc. (&ldquo;<B>Lexington</B>&rdquo;)
and its subsidiaries, collectively.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">Q:</TD>
    <TD STYLE="width: 96%; font-weight: bold; text-align: justify">What is the Merger?</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD STYLE="text-align: justify">DSS, Lexington, DSSIP, Inc. and Hudson Bay Master Fund Ltd., as representative of
    Lexington&rsquo;s stockholders (&ldquo;<B>Lexington Representative</B>&rdquo; or &ldquo;<B>Hudson Bay</B>&rdquo;) solely for
    certain purposes, entered into an Agreement and Plan of Merger, dated as of October 1, 2012 (as may be amended or modified,
    the &ldquo;<B>Merger Agreement</B>&rdquo;), that sets forth the terms and conditions of the proposed business combination of
    DSS and Lexington. Under the Merger Agreement, DSSIP, Inc., a wholly-owned subsidiary of DSS (&ldquo;<B>Merger
    Sub</B>&rdquo;) will merge with and into Lexington, with Lexington being the surviving corporation (the &ldquo;<B>Surviving
    Corporation</B>&rdquo;) as a wholly-owned subsidiary of DSS (the &ldquo;<B>Merger</B>&rdquo;). A complete copy of the Merger
    Agreement is attached to this proxy statement/prospectus as <U>Annex A</U>.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD STYLE="font-weight: bold; text-align: justify">Why is DSS proposing to effect the Merger?</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD STYLE="text-align: justify">The board of directors of DSS has approved the Merger Agreement and the Merger. The combination of the two companies will substantially increase DSS&rsquo;s intellectual property portfolio, add significant talent in technological innovation and position DSS to enhance its opportunities for revenue generation through the monetization of the combined company&rsquo;s assets, including a potential successful outcome of Lexington&rsquo;s patent infringement litigation (the &ldquo;<B>Litigation</B>&rdquo;) against five companies, including Facebook, Inc. and LinkedIn Corporation, for unlawfully using systems that incorporate features claimed in patents owned by Lexington&rsquo;s wholly-owned subsidiary, Bascom Research, LLC (&ldquo;<B>Bascom Research</B>&rdquo;).</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD STYLE="font-weight: bold; text-align: justify">Why am I receiving these materials?</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD STYLE="text-align: justify">DSS is sending these materials to its stockholders to help them decide how to vote their shares of DSS common stock with respect to the Merger and the other matters to be considered at the special meeting. This document serves as both a proxy statement of DSS used to solicit proxies for its special meeting and as a prospectus of DSS used to offer shares of DSS common stock, DSS preferred stock <FONT STYLE="color: black">(or, if Proposal 2 is not approved by the DSS stockholders, $.02 Warrants (as defined below) in lieu of such preferred stock), as applicable, </FONT>and warrants to purchase DSS common stock (including the shares of DSS common stock issuable upon conversion of the DSS preferred stock or exercise of the $.02 Warrants, as applicable, and shares of DSS common stock issuable upon the exercise of the warrants) issuable to the Lexington stockholders in connection with the Merger. This proxy statement/prospectus contains important information about the Merger and the DSS special meeting and you should read it carefully.</TD></TR>
</TABLE>
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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">Q:</TD>
    <TD STYLE="width: 96%; font-weight: bold; text-align: justify">What will Lexington stockholders receive in the Merger?</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the terms of the Merger Agreement,
        upon completion of the Merger (the &ldquo;<B>Effective Time</B>&rdquo;) and subject to the Beneficial Ownership Condition (as defined
        below), each share of then-issued and outstanding common stock of Lexington, par value $0.0001 per share (&ldquo;<B>Lexington Common
        Stock</B>&rdquo;) and each share of then-issued and outstanding Series A Convertible Preferred Stock of Lexington, par value $0.0001
        per share (&ldquo;<B>Lexington Preferred Stock</B>&rdquo;) (other than shares of Lexington Common Stock and Lexington Preferred
        Stock held in treasury or owned by DSS or any direct or indirect wholly owned subsidiary of DSS or Lexington that will be canceled
        and retired at the Effective Time) will be automatically converted into (i) shares of DSS common stock, par value $0.02 per share
        (&ldquo;<B>DSS Common Stock</B>&rdquo;), (ii) Warrants (as described below), and (iii) a pro rata portion of 7,100,000 shares of
        DSS Common Stock to be held in escrow (as described below, the &ldquo;<B>Escrow Shares</B>&rdquo;) and, as applicable, shares of
        DSS&rsquo;s Series A Convertible Preferred Stock (&ldquo;<B>DSS Preferred Stock</B>&rdquo;), determined by multiplying each of
        (x) 17,250,000 shares plus the number of Additional Shares (as defined below) and Exchanged Shares (as defined below), if any,
        (y) 4,859,894 warrants, and (z) 7,100,000 shares by a fraction, the numerator of which shall be one and the denominator of which
        shall be the sum of (A) the number of shares of Lexington Common Stock plus (B) the number of shares of Lexington Preferred Stock,
        in each case issued and outstanding immediately prior to the Effective Time (such fraction referred to as the &ldquo;<B>Common
        Stock Exchange Ratio</B>&rdquo;).</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At the Effective Time of the Merger, DSS
        will issue to the holders of Lexington Common Stock and Lexington Preferred Stock (on a <I>pro rata</I> as-converted basis) an
        aggregate of 4,859,894 warrants to purchase an aggregate of 4,859,894 shares of DSS Common Stock with an exercise price of $4.80
        per share and a term of five years commencing upon the closing of the Merger (the &ldquo;<B>Warrants</B>&rdquo;). Upon the consummation
        of the Merger, only the holders of Lexington Preferred Stock who would, after giving effect to the Merger and receipt of the merger
        consideration, beneficially own more than 9.99% of DSS Common Stock (the &ldquo;<B>Beneficial Ownership Condition</B>&rdquo;) shall
        receive for each share of Lexington Preferred Stock they hold the same merger consideration as outlined above except that such
        holders shall receive a combination of DSS Common Stock and DSS Preferred Stock that is convertible into (or if the proposal to
        authorize DSS Preferred Stock is not approved by the DSS stockholders, $.02 Warrants (as defined below), exercisable for) that
        number of shares of DSS Common Stock they would have received if they had been a holder of Lexington Common Stock immediately prior
        to the Effective Time in such amounts that would enable such holders, after giving effect to the Merger, to beneficially own no
        more than 9.99% of DSS Common Stock upon consummation of the Merger.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Those holders of Lexington Preferred Stock
        who do not exceed the Beneficial Ownership Condition and accordingly will not receive DSS Preferred Stock or $.02 Warrants, as
        applicable, will receive DSS Common Stock and the other types of merger consideration in exchange for their Lexington Preferred
        Stock based on the Common Stock Exchange Ratio. In the event DSS&rsquo;s stockholders approve the issuance of the merger consideration,
        but do not approve the authorization of the DSS Preferred Stock, then the holders of Lexington Preferred Stock that satisfy the
        Beneficial Ownership Condition shall receive warrants to purchase DSS Common Stock with an exercise price of $0.02 per share (the
        &ldquo;<B>$.02 Warrants</B>&rdquo;). Each $.02 Warrant is exercisable at any time after the date of issuance for a period of ten
        years. If at any time between the three month anniversary of the issuance date and the expiration date, there is no effective registration
        statement registering the resale of the shares issuable under the Warrants, then the holder may elect to exercise the Warrants,
        or a portion thereof, by way of a cashless exercise. Except under certain circumstances, no holder may exercise its Warrants or
        $.02 Warrants if such exercise would result in such holder beneficially owning in excess of 9.99% of the number of shares of DSS
        common stock outstanding immediately after giving effect to the issuance of shares of common stock upon exercise of the Warrants.
        In addition, under certain circumstances, a holder of the $.02 Warrants will be entitled to participate in any distribution of
        DSS&rsquo;s assets (or the right to acquire its assets) or any declared cash dividend, to the same extent such holder would have
        participated therein if such holder had held the shares of common stock acquirable upon complete exercise of the $.02 Warrants.</P></TD></TR>
</TABLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 96%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Finally, at the Effective Time, up
        to an aggregate of 3,600,000 outstanding         and unexercised options to purchase Lexington Common Stock will be assumed by
        DSS and         each         such         option         will convert into an option         to purchase or acquire shares of
        DSS Common         Stock (i) in a         number equal to         the number of         shares of Lexington Common Stock
        subject         to the         option immediately         prior to the Effective Time         multiplied by 0.556
        (the &ldquo;<B>Option Exchange         Ratio</B>&rdquo;) and              (ii) with an exercise price per         share equal
        to the exercise         price of the         applicable option immediately prior         to the Effective Time
        divided by         the Option Exchange Ratio, with         the         number of shares in (i) and the         price per
        share in (ii) rounded up or down to the         next whole         share number or tenth         (0.1) of a cent, as the
        case may be, in a manner such that, after taking into            account such rounding,         both (A) the         excess
        of         the aggregate fair market value of the shares subject         to the         new option over the aggregate
        exercise price                  for such shares does not exceed the excess of         the aggregate fair         market value
        of the shares subject to the old option         over         the         aggregate         exercise price for such shares
        immediately prior to the Effective Time, and (B)         the ratio on a per              option basis of the         exercise
        price to the         fair market value of the shares subject         to the option is         not increased.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Immediately following the completion of
        the Merger (without taking into account any shares of DSS Common Stock held by Lexington stockholders prior to the completion of
        the Merger), the former stockholders of Lexington are expected to own approximately 50% of the outstanding common stock of the
        combined company (or 56% of the outstanding common stock of the combined company calculated on a fully diluted basis) and the current
        stockholders of DSS are expected to own approximately 50% of the outstanding common stock of the combined company (or 44% of the
        outstanding common stock of the combined company calculated on a fully diluted basis).</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a condition to the closing of the Merger,
        DSS, Lexington Representative and American Stock Transfer &amp; Trust Company, LLC, as escrow agent, will enter into an escrow
        agreement (the &ldquo;<B>Escrow Agreement</B>&rdquo;). Pursuant to the Escrow Agreement, at the Effective Time, DSS shall deposit
        the Escrow Shares into an escrow account to be released to the holders of Lexington Common Stock (pro rata on a fully-diluted basis
        as of the Effective Time) if and when the closing price per share of DSS Common Stock exceeds $5.00 per share (as adjusted for
        stock splits, stock dividends and similar events) for 40 trading days within a continuous 90 trading day period following the closing
        of the Merger. If within one year following the closing of the Merger, such threshold is not achieved, the shares of DSS Common
        Stock held in escrow shall be cancelled and returned to the treasury of DSS.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, if at the Effective Time Lexington
        has at least $7,500,000 in cash (including amounts paid or accrued for certain professional fees, not to exceed $1,000,000 in the
        aggregate) and it and its subsidiaries shall have no indebtedness for borrowed money, DSS shall issue a number of additional shares
        of DSS Common Stock to Lexington&rsquo;s stockholders calculated by dividing any cash held by Lexington in excess of $7,500,000
        (up to $1,500,000) by $3.00 (any such shares referred to as the &ldquo;<B>Additional Shares</B>&rdquo;).</P></TD></TR>
</TABLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 96%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No fractional shares of DSS Common Stock
        or DSS Preferred Stock will be issued in connection with the Merger. Instead, each Lexington stockholder who would be otherwise
        entitled to receive a fractional share will receive from DSS, in lieu thereof, the next highest whole number shares of DSS Common
        Stock or DSS Preferred Stock, as applicable.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For a more complete discussion of what
        Lexington stockholders will receive in connection with the Merger, see the sections entitled &ldquo;The Merger&nbsp;&mdash;&nbsp;What
        Lexington Stockholders Will Receive in the Merger,&rdquo; &ldquo;The Merger&nbsp;&mdash;&nbsp;Ownership of the Combined Company
        After the Completion of the Merger&rdquo; and &ldquo;The Merger Agreement&nbsp;&mdash;&nbsp;Merger Consideration&rdquo; beginning
        on pages <FONT STYLE="text-underline-style: none; color: windowtext">74</FONT>, <FONT STYLE="text-underline-style: none; color: windowtext">76</FONT>
        and <FONT STYLE="text-underline-style: none; color: windowtext">97</FONT>, respectively.</P></TD></TR>
</TABLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-weight: bold">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>How will DSS stockholders be affected
        by the Merger?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">A:</TD>
    <TD STYLE="width: 96%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Merger will have no effect on the number
        of shares of DSS Common Stock held by current DSS stockholders as of immediately prior to the completion of the Merger (subject
        to any changes in outstanding shares of DSS Common Stock as a result of the proposed reverse stock split described in the Reverse
        Stock Split Proposal below). However, it is expected that upon completion of the Merger such shares will represent only an aggregate
        of approximately <FONT STYLE="text-underline-style: none; color: windowtext">44</FONT>% of the outstanding shares of common stock
        of the combined company calculated on a fully diluted basis (without taking into account shares of DSS Common Stock held by Lexington
        stockholders prior to the completion of the Merger). For example, if you are a DSS stockholder and hold 5% of the outstanding shares
        of DSS Common Stock calculated on a fully diluted basis immediately prior to the completion of the Merger and do not also hold
        shares of Lexington capital stock then, upon completion of the Merger, you will hold an aggregate of approximately <FONT STYLE="text-underline-style: none; color: windowtext">2.20</FONT>%
        of the outstanding shares of common stock of the combined company calculated on a fully diluted basis as of immediately following
        the completion of the Merger.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-weight: bold">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Is the Common Stock Exchange Ratio subject
        to adjustments based on fluctuations in the price of DSS Common Stock or value of Lexington capital stock?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No. The Common Stock Exchange Ratio
        is         a fraction, the numerator of which shall be one and the denominator of which shall be the sum of (x) the number of
        shares of Lexington         Common Stock plus (y) the number of shares of Lexington Preferred Stock, in each case issued and
        outstanding immediately prior         to the Effective Time, which as of November 19, 2012 is 31,776,552. There will be no
        adjustments to the Common Stock Exchange Ratio         based on fluctuations in the price of DSS Common Stock or the value of
        Lexington capital stock prior to the completion of the Merger.         As a result of any such fluctuations in stock price or
        value, the aggregate market value of the shares of DSS Common Stock that         the Lexington stockholders are entitled to
        receive at the time that the Merger is completed could vary significantly from the value         of such shares on the date
        of this proxy statement/prospectus, the date of the DSS special meeting or the date on which the Lexington
        stockholders actually receive their shares of DSS Common Stock or DSS Preferred Stock.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On October <FONT STYLE="text-underline-style: none; color: windowtext">2</FONT>,
2012, the first trading day following the announcement of the Merger, the last reported sale price of DSS Common Stock was $<FONT STYLE="text-underline-style: none; color: windowtext">4.15</FONT>,
for an aggregate market value of DSS of $90,079,763, or $108,003,696 on a fully diluted basis. On <FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]</FONT>,
the latest practicable date before the printing of this proxy statement/prospectus, the last reported sale price of DSS Common
Stock was $<FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]</FONT>, for an aggregate market value of DSS of
$<FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]</FONT> million, or $<FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]
</FONT>million on a fully diluted basis. Assuming the issuance on such date of an aggregate of <FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]
</FONT>shares of DSS Common Stock (including Escrow Shares) and an aggregate of <FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]
</FONT>shares of DSS Preferred Stock, based on a Common Stock Exchange Ratio of <FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]</FONT>,
and an aggregate of 4,859,894 of Warrants, if the Merger was completed on such date, the market value attributable to the shares
of DSS Common Stock to be issued to Lexington&rsquo;s stockholders in the aggregate, or approximately <FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]</FONT>%
of the outstanding shares of the combined company calculated on a fully diluted basis, would equal $<FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]
</FONT>million.<B>&nbsp;</B></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 95%; text-align: justify">For a more complete discussion of the Common Stock Exchange Ratio, see the section
entitled &ldquo;The Merger&nbsp;&mdash;&nbsp;What Lexington Stockholders Will Receive in the Merger&rdquo; beginning on page <FONT STYLE="text-underline-style: none; color: windowtext">74</FONT>.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What will holders of Lexington stock
        options receive in the Merger? </B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">At the Effective Time of the Merger,
        up         to an aggregate of 3,600,000 Lexington stock options, whether vested or unvested, will be converted into and
        become options         to         purchase         DSS Common Stock and         DSS will assume such Lexington
        stock options in         accordance with the         terms of the         existing         non-qualified stock option
        agreements.         After the         Effective Time of the Merger,         (a) each Lexington         stock option
        assumed by DSS may be exercised solely         for shares of DSS         Common Stock         and (b) the number of
        shares of DSS Common         Stock and the         exercise price subject to each Lexington stock         option assumed
        by DSS shall         be determined by the         Option         Exchange Ratio. As of November 19, 2012, the
        outstanding and unexercised Lexington stock                options to purchase         3,600,000 shares of Lexington common
        stock,         whether vested or unvested, would be converted         into         and become options         to
        purchase an aggregate of <FONT STYLE="text-underline-style: none; color: windowtext">2,000,000</FONT>         shares of DSS
        Common         Stock         at an exercise price of $<FONT STYLE="text-underline-style: none; color: windowtext">3.00</FONT>
        per share.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For a more complete discussion
of what holders of Lexington stock options will receive in connection with the Merger, see the section entitled &ldquo;The Merger
&mdash; Treatment of Lexington Stock Options&rdquo; beginning on page <FONT STYLE="text-underline-style: none; color: windowtext">76</FONT>.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>How will the Merger affect DSS&rsquo;s
        business?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">DSS will undergo changes in
        connection with the Merger. Currently, DSS is engaged in developing and integrating cloud computing data security, Radio
        Frequency Identification (&ldquo;<B>RFID</B>&rdquo;) systems and security printing technologies which prevent
        counterfeiting,         product diversion and brand fraud (as more fully discussed in the section entitled
        &ldquo;DSS&rsquo;s         Business&nbsp;&mdash;&nbsp;Overview&rdquo; beginning on page <FONT STYLE="text-underline-style: none; color: windowtext">135</FONT>).
        Following the Merger, DSS will pursue maximizing the economic benefits of its intellectual property portfolio, add
        significant talent in technological innovation, and potentially enhance its opportunities for revenue generation through the
        monetization of the combined company&rsquo;s assets, including DSS&rsquo;s patents and litigation, patents owned by
        Lexington         and the outcome of its patent infringement litigation against five companies, including Facebook, Inc. and
        LinkedIn         Corporation, for unlawfully using systems that incorporate features claimed in patents owned by Bascom
        Research. In addition,         as a result of the Merger, former Lexington stockholders are expected to possess majority
        control of the combined company and         designees of Lexington will possess majority control of the board of directors of
        the combined company.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Through the Merger, DSS will own patent
        assets acquired from Thomas Bascom. DSS intends to expand its intellectual property portfolio through both internal development
        and acquisition. The experience and liquidity of the combined company will enable DSS to expand on that portfolio as well as create
        additional intellectually property internally. DSS intends to monetize its intellectual property through:</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 87%; text-align: justify">licensing,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">customized technology solutions (such as applications for medical electronic health records),</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 87%; text-align: justify">strategic partnerships, and</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">litigation.</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 95%; text-align: justify">For a more complete discussion of the existing businesses of DSS and
    Lexington, see the sections entitled &ldquo;DSS&rsquo;s Business,&rdquo; &ldquo;DSS&rsquo;s Management&rsquo;s Discussion and
    Analysis of Financial Condition and Results of Operations,&rdquo; &ldquo;Lexington&rsquo;s Business,&rdquo; and
    &ldquo;Lexington&rsquo;s Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo;
    beginning on pages <FONT STYLE="text-underline-style: none; color: windowtext">135</FONT>, <FONT STYLE="text-underline-style: none; color: windowtext">141</FONT>,
    160 and 167, respectively. In addition, you should carefully review the section entitled &ldquo;Risk Factors&rdquo; beginning
    on page <FONT STYLE="text-underline-style: none; color: windowtext">50</FONT>, which presents risks and uncertainties
    related to the Merger, the combined company following the completion of the Merger, and the business and operations of each
    of DSS and Lexington.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Will the shares of DSS Common Stock
        and DSS Preferred Stock received by Lexington stockholders in the Merger be subject to any transfer restrictions?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No. The shares of DSS Common Stock and
        DSS Preferred Stock received by Lexington stockholders in the Merger will not be subject to any transfer restrictions. However,
        shares of DSS Common Stock and DSS Preferred Stock received by Lexington stockholders who become affiliates of DSS for purposes
        of Rule 144 under the Securities Act of 1933, as amended (the &ldquo;<B>Securities Act</B>&rdquo;), may be resold by them only
        in transactions permitted by Rule 144 or as otherwise permitted under the Securities Act.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For a more complete discussion of the restrictions
        on sales of shares of DSS Common Stock received by Lexington stockholders in the Merger, see the section entitled &ldquo;The Merger&nbsp;&mdash;&nbsp;Restrictions
        on Sales of Shares of DSS Common Stock Received by Lexington Stockholders in the Merger&rdquo; beginning on page <FONT STYLE="text-underline-style: none; color: windowtext">91</FONT>.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What was the role of the DSS special
        committee and the DSS board of directors in connection with the Merger?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition to reviewing, evaluating and
        negotiating the terms and conditions of the Merger and considering the interests of DSS&rsquo;s directors and executive officers
        in the Merger, the DSS board of directors conducted a review of all strategic alternatives for DSS in an effort to maximize stockholder
        value, including continuing DSS as a stand-alone publicly traded company and entering into strategic transactions with a number
        of other operating companies.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Following a recommendation from the DSS
        special committee, the DSS board of directors recommends that the Merger Agreement and the transactions contemplated thereby, including
        the Merger, be approved by the stockholders of DSS. The DSS board of directors made its recommendation to the DSS stockholders
        following a recommendation from the DSS special committee and after considering the factors described in the section entitled &ldquo;The
        Merger&nbsp;&mdash;&nbsp;Recommendations of the DSS Board of Directors and its Reasons for the Merger.&rdquo;</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">Q:</TD>
    <TD STYLE="width: 95%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What proposals are DSS stockholders
        being asked to consider?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a condition to the completion of the
        Merger, DSS stockholders must approve the Merger, including, but not limited to, the issuance of shares of DSS Common Stock and
        DSS Preferred Stock (or, if the Preferred Stock Issuance Proposal described below is not approved, $.02 Warrants) and Warrants
        (including the shares of DSS Common Stock issuable upon conversion of the DSS Preferred Stock or exercise of the $.02 Warrants,
        as applicable, and the shares of DSS Common Stock issuable upon the exercise of the Warrants) to the Lexington stockholders in
        connection with the Merger (the &ldquo;<B>Securities Issuance Proposal</B>&rdquo;), which approval requires the affirmative vote
        of the holders of a majority of the shares of DSS Common Stock present and entitled to vote on the matter either in person or by
        proxy at the DSS special meeting. DSS stockholders are also being asked to consider <FONT STYLE="color: black">(i) an amendment
        to </FONT>the DSS amended and restated certificate of incorporation (the &ldquo;<B>DSS&rsquo;s Certificate</B>&rdquo;)<FONT STYLE="color: black">
        </FONT>to authorize a class of preferred stock<FONT STYLE="color: black"> and establish the associated rights and preferences thereof</FONT>
        (the &ldquo;<B>Preferred Stock Creation Proposal</B>&rdquo;), (ii) an amendment to the DSS&rsquo;s Certificate to <FONT STYLE="color: black">implement
        a staggered board of directors (the &ldquo;<B>Staggered Board Proposal</B>&rdquo;), (iii) </FONT>a reverse stock split of DSS issued
        and outstanding common stock within the range of one-for-two to one-for-four (with the exact amount, if any, to be determined by
        DSS prior to the completion of the Merger based on the requirements of the NYSE MKT) (the &ldquo;<B>Reverse Stock Split Proposal</B>&rdquo;),
        which approval for each of (i), (ii) and (iii) requires the affirmative vote of the holders of a majority of the shares of DSS
        Common Stock outstanding and entitled to vote on the matter and (iv) to approve the <FONT STYLE="color: black">Document Security
        Systems, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan</FONT> (the &ldquo;<B>2013 Equity Incentive Plan</B>,)&rdquo;
        which is described in the section entitled &ldquo;DSS Proposal No. 5: Approval of the 2013 Equity Incentive Plan&rdquo; and attached
        to this proxy statement/prospectus as <U>Annex H</U> (the &ldquo;<B>2013 Equity Incentive Plan Proposal</B>&rdquo;), which approval
        requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock present and entitled to vote on the
        matter, however, the approval of such proposals is not a condition to consummation of the Merger. The above proposals are collectively
        referred to herein as the &ldquo;<B>DSS Proposals</B>.&rdquo;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What stockholder approvals are required
        for the adjournment of the DSS special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in
        favor of any of the DSS Proposals?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The holders of a majority of the shares
        of DSS Common Stock present and entitled to vote either in person or by proxy at the DSS special meeting must vote in favor of
        any adjournment of the DSS special meeting.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What conditions must be satisfied or
        waived to complete the Merger?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD STYLE="text-align: justify">In order to complete the Merger, each of the closing conditions contained in the Merger Agreement must be satisfied or waived (to the extent permitted by applicable law). Among the closing conditions is the requirement that (i) t<FONT STYLE="color: black">he stockholders of DSS have approved the issuance of DSS Common Stock and the stockholders of Lexington have approved the Merger and the Merger Agreement; (ii) the registration statement on Form S-4 of which this proxy statement/prospectus forms a part has become effective; (iii) the shares of DSS Common Stock shall have been approved for listing on the NYSE MKT; (iv) the Escrow Agreement shall have been executed and delivered; (v) the representations and warranties of each party contained in the Merger Agreement are true and correct in all material respects; (vi) each party shall have performed or complied in all material respects with all agreements and covenants under the Merger Agreement; (vii) Lexington and its subsidiaries shall have at least $7,500,000 in cash (less professional fees, not to exceed $1,000,000 in the aggregate), shall have no liabilities or obligations required to be accrued under GAAP, shall have no indebtedness for borrowed money and shall be solvent, able to pay its indebtedness as it matures and have capital sufficient to carry on its businesses; (viii) the receipt of all necessary consents or approvals; (ix) the absence of a Material Adverse Effect (as defined in the Merger Agreement); (x) none of Lexington&rsquo;s intellectual property shall be held unpatentable, invalid or unenforceable by a court of competent jurisdiction; (xi) Lexington shall have received written resignations from certain directors and officers of DSS and its subsidiaries; and (xii) the voting and support agreements shall have been executed and delivered. </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 95%; text-align: justify">For a more complete discussion of the conditions to the completion of the Merger under the Merger Agreement, see the section entitled &ldquo;The Merger Agreement&nbsp;&mdash;&nbsp;Conditions to the Completion of the Merger&rdquo; beginning on page <FONT STYLE="text-underline-style: none; color: windowtext">105</FONT>.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What is the reverse stock split and
        why is it necessary?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If necessary to continue to list
DSS&rsquo;s securities on the NYSE MKT, it is expected that immediately prior to the Effective Time, DSS will effect a reverse
stock split within the range of one-for-<FONT STYLE="text-underline-style: none; color: windowtext">two</FONT> to one-for-<FONT STYLE="text-underline-style: none; color: windowtext">four
</FONT>(with the exact ratio, if any, to be determined immediately prior to the completion of the Merger based on the requirements
of the NYSE MKT). The DSS board of directors believes that stockholder approval of an amendment granting this discretion, rather
than approval of a specified ratio, provides the appropriate flexibility to react to then-current market conditions and NYSE MKT&rsquo;s
requirements for continued listing therefore and is in the best interests of DSS and its stockholders. In addition, DSS may elect
not to undertake a reverse stock split. The Merger may constitute a &ldquo;reverse merger&rdquo; under applicable rules and regulations
established by the NYSE MKT, which requires the combined company to comply with the initial listing standards of the rules and
regulations established by NYSE MKT to continue to be listed on such market following the Merger. DSS Common Stock is required
to be listed on the NYSE MKT as a condition to closing the Merger. The NYSE MKT&rsquo;s initial listing standards require a company
to have, among other things, a $3.00 per share minimum bid price. Because the per share price of DSS Common Stock may be less
than $3.00, the reverse stock split may be necessary to meet the minimum bid listing requirement. From June 5, 2012 to October
18, 2012, the DSS Common Stock had a closing price of $3.00 or above for each trading day. On November <FONT STYLE="text-underline-style: none; color: windowtext">19</FONT>,
2012, the closing price of DSS Common Stock was $<FONT STYLE="text-underline-style: none; color: windowtext">2.73</FONT>. If the
DSS Common Stock continues to trade at or above $3.00 at the time of the Merger, DSS does not anticipate that it will need to
undertake a reverse stock split, even if DSS obtains stockholder approval to do so.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What is the proposal to amend DSS&rsquo;s
        Certificate to implement a staggered board of directors?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Staggered Board Proposal
        to approve a classified board for DSS would result in DSS&rsquo;s board of directors being divided into three classes of
        directors serving staggered terms. Staggering the terms of directors means that at the annual meeting in any given year, only
        a fraction (roughly one-third) of the directors are up for re-election. A classified board can increase the likelihood of
        continuity and stability in the policies formulated by the board of directors and increase a corporation&rsquo;s ability to
        attract and retain desirable directors. A classified board may also prevent potential unsolicited acquirors from quickly
        obtaining control of DSS in certain circumstances and thereby discourage attempts to acquire DSS or remove management. The
        classification of directors would also have the effect of making it more difficult for stockholders to change the composition
        of DSS&rsquo;s board of directors in a relatively short period of time. Approval of the Staggered Board Proposal, however, is
        not required to consummate the Merger and the transactions contemplated thereby. If DSS&rsquo;s stockholders do not approve
        the Staggered Board Proposal, then the board of directors of DSS following the Merger shall initially consist of eight (8)
        directors, four of whom as designated by Lexington and the other four as designated by DSS, provided, that, prior to the
        closing of the Merger, DSS and Lexington will jointly identify a ninth person to be nominated as a member of the board of
        directors of DSS following the Effective Time.</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">Q:</TD>
    <TD STYLE="width: 95%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>When does DSS expect to complete the
        Merger?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">DSS expects to complete the Merger as soon
        as possible following the approval of the DSS Proposals at the special meeting, assuming the satisfaction or waiver of all other
        closing conditions contained in the Merger Agreement. It is possible, therefore, that factors outside of each company&rsquo;s control
        could require DSS to complete the Merger at a later time or not complete it at all.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>How does the DSS board of directors
        recommend that DSS stockholders vote with respect to each of the proposals and the adjournment of the DSS special meeting?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The DSS board of directors unanimously
        recommends that the DSS stockholders vote FOR the Securities Issuance Proposal, FOR the Preferred Stock Creation Proposal, FOR
        the Staggered Board Proposal, FOR the Reverse Stock Split Proposal, FOR 2013 Equity Incentive Plan and FOR the adjournment of the
        DSS special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of any of the DSS Proposals.
        The DSS board of directors made its recommendation after considering the factors described in this proxy statement/prospectus.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What risks should I consider in deciding
        whether to vote in favor of the DSS Proposals?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You should carefully review the section
        of this proxy statement/prospectus entitled &ldquo;Risk Factors&rdquo; beginning on page <FONT STYLE="text-underline-style: none; color: windowtext">50</FONT>,
        which presents risks and uncertainties related to the Merger, the combined company, and the business and operations of each of
        DSS and Lexington.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What are the material federal income
        tax consequences of the Merger to me?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Merger <FONT STYLE="color: black">should
        constitute </FONT>a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as
        amended (the &ldquo;<B>Code</B>&rdquo;). Mintz., Levin, Cohn, Ferris, Glovsky, Ferris and Popeo, P.C. (&ldquo;<B>Mintz Levin</B>&rdquo;)
        will render its written opinion regarding such qualification. As a result of the reorganization, DSS stockholders generally will
        not recognize gain or loss for United States federal income tax purposes as a result of the Merger.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The opinion of counsel will rely on certain
        assumptions as well as representations made by DSS, Merger Sub and Lexington, including factual representations and certifications
        contained in officers&rsquo; certificates to be delivered at closing, and assume that these representations are true, correct and
        complete, without regard to any knowledge limitation. If any of these representations or assumptions are inconsistent with the
        actual facts, the opinion could become invalid as a result, and the United States federal income tax treatment of the merger could
        be adversely affected. An opinion of counsel represents counsel&rsquo;s best legal judgment and is not binding on the Internal
        Revenue Service (&ldquo;<B>IRS</B>&rdquo;) or any court. No ruling has been, or will be, sought from the IRS as to the tax consequences
        of the Merger.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Merger<FONT STYLE="color: black"> should
        constitute </FONT>a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code. As a result of the &ldquo;reorganization,&rdquo;
        Lexington stockholders generally should not recognize gain or loss for United States federal income tax purposes upon the exchange
        of their shares of Lexington capital stock for the equity securities of DSS in connection with the Merger (including the $.02 Warrants
        in the event they are issued). However, a Lexington stockholder who perfects appraisal rights and receives cash in exchange for
        such stockholder&rsquo;s Lexington capital stock will recognize gain or loss measured by the difference between the amount of cash
        received and such stockholder&rsquo;s adjusted tax basis in those shares. DSS stockholders generally will not recognize gain or
        loss for United States federal income tax purposes as a result of the Merger.</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 95%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">One of the requirements for the Merger
        to constitute a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code is that the Lexington stockholders
        receive at least 80% of the aggregate value of their merger consideration in the form of DSS Common Stock (the &ldquo;<B>Control
        Requirement</B>&rdquo;). The IRS has issued regulations addressing whether and when such requirement should be measured: by reference
        to the value of the merger consideration as of the signing date of the Merger Agreement, here October 1, 2012 (the &ldquo;<B>Signing
        Date Rule</B>&rdquo;), or on the Effective Date of the Merger. Counsel is of the opinion that the Signing Date Rule should apply
        to the Merger. In this regard, an independent valuation analysis obtained by Lexington concludes that the Control Requirement was
        met on October 1, 2012. However, the IRS may contend that the Control Requirement must instead be met on the Effective Date. If
        such contention prevails, then in order for the Merger to constitute a &ldquo;reorganization&rdquo; under Section 368(a) of the
        Code, the Lexington stockholders will need to receive DSS Common Stock (including the Additional Shares, if any) with a value measured
        on the Effective Date of at least 80% of the aggregate value of the merger consideration (it is not clear if only the Exchanged
        Shares may be included in such calculation, or if the Escrow Shares also may be included at the Effective Date or only when and
        to the extent released to the Lexington stockholders). If the Control Requirement must be determined on the Effective Date and,
        based on a valuation of the merger consideration, such requirement is not then met (or not met later when the Escrow Shares are
        released) because of change in the relative value of the DSS Common Stock, DSS Preferred Stock (or the $.02 Warrants in the event
        they are issued) and the Warrants, then the Merger will not constitute a &ldquo;reorganization&rdquo; under Section 368(a) of the
        Code. In such case, a Lexington stockholder will recognize gain or loss measured by the difference between the value of the equity
        securities of DSS received in the Merger and such stockholder&rsquo;s adjusted tax basis in the Lexington shares exchanged therefor.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Tax matters are very complicated,
        and the tax consequences of the Merger to a particular DSS or Lexington stockholder will depend in part on such stockholder&rsquo;s
        circumstances. Accordingly, DSS and Lexington urge you to consult your own tax advisor for a full understanding of the
        tax consequences of the Merger to you, including the applicability and effect of federal, state, local and foreign income
        and other tax laws. For a more complete discussion of the material United States federal income tax consequences of the
        Merger, see the section entitled, &ldquo;Material United States Federal Income Tax Consequences of the Merger&rdquo; beginning
        on page <FONT STYLE="text-underline-style: none; color: windowtext">92</FONT>.</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Do I have appraisal rights in connection
        with the Merger?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Under the Business Corporation Law of the
        State of New York (the &ldquo;<B>NYBCL</B>&rdquo;), holders of DSS Common Stock are not entitled to appraisal rights in connection
        with the Merger or the proposals described in this proxy statement/prospectus. Under the General Corporation Law of the State of
        Delaware (the &ldquo;<B>DGCL</B>&rdquo;), however, holders of Lexington capital stock may be entitled to appraisal rights in connection
        with the Merger.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>When and where will the DSS special
        meeting take place?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The DSS special meeting will be held on
        <FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]</FONT>, 201<FONT STYLE="text-underline-style: none; color: windowtext">3</FONT>
        at <FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]</FONT>:00 a.m., local time, at the offices of <FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]</FONT>.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Who can attend and vote at the stockholder
        meetings?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD STYLE="text-align: justify">All DSS stockholders of record as of the close of business on <FONT STYLE="text-underline-style: none; color: windowtext">[&bull;]</FONT>, the record date for the DSS special meeting, are entitled to receive notice of and to vote at the DSS special meeting.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">Q:</TD>
    <TD STYLE="width: 95%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What do I need to do now and how do
        I vote?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">DSS urges you to read this proxy statement/prospectus
        carefully, including its annexes, and to consider how the Merger may affect you.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you are a DSS stockholder, you may vote
        by telephone or through the Internet by following the instructions included on your proxy card, you may indicate on the enclosed
        proxy card how you would like to vote, sign and return the proxy card in the enclosed postage-paid envelope by mail, or you may
        attend the DSS special meeting in person. Please provide your proxy instructions only once and as soon as possible so that your
        shares can be voted at the DSS special meeting.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you hold your shares in &ldquo;street
        name,&rdquo; please refer to your proxy card or the information forwarded by your broker or other nominee to see which options
        are available to you.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What happens if I do not submit my proxy
        or if I elect to abstain from voting?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you are a DSS stockholder and you fail
        to submit your proxy (i) through the Internet, (ii) by telephone or (iii) by marking, signing and dating the enclosed proxy card
        and returning it by mail in the enclosed postage-paid envelope, your shares will not be counted as present for the purpose of determining
        the presence of a quorum, which is required to transact business at the DSS special meeting, and your failure to take action will
        have no effect on the outcome of DSS Proposal Nos. 1 (Securities Issuance Proposal), 5 (2013 Equity Incentive Plan Proposal) and
        6 (adjournment to solicit additional proxies, if necessary). However, such failure to take action will have the same effect as
        voting AGAINST DSS Proposal Nos. 2 (Preferred Stock Creation Proposal), 3 (Staggered Board Proposal) and 4 (Reverse Stock Split
        Proposal).</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you are a DSS stockholder and you sign,
        date, and mail your proxy card without indicating how you wish to vote, your proxy will be counted as present for the purpose of
        determining the presence of a quorum for the DSS special meeting and all of your shares will be voted FOR DSS Proposal Nos. 1,
        2, 3, 4, 5 and 6. However, if you submit a proxy card and affirmatively elect to abstain from voting, your proxy will be counted
        as present for the purpose of determining the presence of a quorum for the DSS special meeting, but will not be voted at the DSS
        special meeting. As a result, your abstention will have the same effect as voting AGAINST DSS Proposal Nos. 1, 2, 3, 4, 5 and 6.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>If my DSS shares are held in &ldquo;street
        name&rdquo; by a broker or other nominee, will my broker or nominee vote my shares for me?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If your DSS shares are held in
&ldquo;street name&rdquo; in a stock brokerage account or by another nominee, you must provide the record holder of your shares
with instructions on how to vote your shares. Please follow the voting instructions provided by your broker or other nominee.
Please note that you may not vote shares held in &ldquo;street name&rdquo; by returning a proxy card directly to DSS or by voting
in person at the DSS special meeting unless you provide a legal proxy, which you must obtain from your broker or other nominee
that holds your shares giving you the right to vote the shares in person at the DSS special meeting.&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">Q:</TD>
    <TD STYLE="width: 95%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>May I vote in person?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you are a stockholder of DSS and your
        shares of DSS Common Stock are registered directly in your name with DSS&rsquo;s transfer agent, you are considered, with respect
        to those shares, the stockholder of record, and the proxy materials and proxy card are being sent directly to you by DSS. If you
        are a DSS stockholder of record, you may attend the DSS special meeting and vote your shares in person, rather than submitting
        your proxy.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If your shares of DSS Common Stock are
        held in a brokerage account or by another nominee, you are considered the beneficial owner of shares held in street name, and these
        proxy materials are being forwarded to you together with a voting instruction card. As the beneficial owner, you are also invited
        to attend the DSS special meeting. However, since a beneficial owner is not the stockholder of record, you may not vote these shares
        in person at the DSS special meeting unless you obtain a legal proxy from the broker or other nominee that holds your shares giving
        you the right to vote the shares in person at the DSS special meeting.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>May I revoke or change my vote after
        I have provided proxy instructions?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Yes. You may revoke or change your vote
        at any time before your proxy is voted at the DSS special meeting. You can do this in one of four ways. First, you can send a written
        notice to DSS stating that you would like to revoke your proxy. Second, you can submit a duly executed proxy bearing a later date
        or time than that of the previously submitted proxy. Third, you can submit a later dated vote by the Internet or telephone. Fourth,
        you can attend the DSS special meeting and vote in person. Your attendance alone at the DSS special meeting will not revoke your
        proxy. If you are a DSS stockholder and have instructed a broker or other nominee to vote your shares, you must follow directions
        received from your broker or other nominee in order to change those instructions.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you are a beneficial owner of DSS Common
        Stock, you may submit new voting instructions by contacting your broker or other nominee. You also may vote in person if you obtain
        a legal proxy. All shares that have been properly voted and not revoked will be voted at the DSS special meeting.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What constitutes a quorum?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Stockholders who hold a majority of the
        shares of DSS Common Stock outstanding as of the close of business on the record date for the DSS special meeting must be present
        either in person or by proxy in order to constitute a quorum to conduct business at the DSS special meeting.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Who is paying for this proxy solicitation?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">DSS will bear its own cost and
expense of preparing, assembling, printing, and mailing this proxy statement/prospectus, any amendments thereto, the proxy card,
and any additional information furnished to the DSS stockholders. DSS will bear any fees paid to the Securities and Exchange Commission
(&ldquo;<B>SEC</B>&rdquo;). DSS may also reimburse brokerage houses and other custodians, nominees and fiduciaries for their costs
of soliciting and obtaining proxies from beneficial owners, including the costs of reimbursing brokerage houses and other custodians,
nominees and fiduciaries for their costs of forwarding this proxy statement/prospectus and other solicitation materials to beneficial
owners. In addition, proxies may be solicited without additional compensation by directors, officers and employees of DSS by mail,
telephone, fax, or other methods of communication. DSS has retained [Proxy Solicitor] to assist DSS in the solicitation of proxies
from DSS stockholders in connection with the DSS special meeting. [Proxy Solicitor] will receive a fee of [&bull;] as compensation
for its services, plus reimbursement of out-of-pocket expenses.&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">Q:</TD>
    <TD STYLE="width: 95%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Whom should I contact if I have any
        questions about the Merger or the DSS special meeting?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you have any questions about the Merger,
        the DSS special meeting, or if you need assistance in submitting your proxy or voting your shares or need additional copies of
        this proxy statement/prospectus or the enclosed proxy card, you should contact DSS or [Proxy Solicitor], DSS&rsquo;s proxy solicitor.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you are a DSS stockholder you
should contact DSS or [Proxy Solicitor], DSS&rsquo;s proxy solicitor, at the applicable address and telephone number listed below:</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 51%; font-weight: bold; text-align: center">Document Security System, Inc.</TD>
    <TD STYLE="width: 2%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 47%; text-align: justify">[Proxy Solicitor]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">First Federal Plaza</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">28 Main Street, Suite 1525</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">Rochester, New York 14614</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">Attn: Chief Executive Officer</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">(585) 325-3610</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; font-weight: bold; text-align: justify">Q:</TD>
    <TD STYLE="width: 95%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What happens if I sell my shares after
        the applicable record date but before the applicable special meeting?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you transfer your DSS Common Stock after
        the applicable record date but before the date of the applicable meeting, you will retain your right to vote at the special meeting
        (provided that such shares remain outstanding on the date of the applicable meeting).</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What do I do if I receive more than
        one proxy statement/prospectus or set of voting instructions?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you hold shares directly as a record
        holder and also in &ldquo;street name&rdquo; or otherwise through a nominee, you may receive more than one proxy statement/prospectus
        and/or set of voting instructions relating to the DSS special meeting. These should each be voted and/or returned separately in
        order to ensure that all of your shares are voted.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Q:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Should I send in my stock certificates
        now?</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">A:</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">No. DSS stockholders are not required
to tender or exchange their stock certificates as part of the Merger. However, you will receive written instructions from American
Stock Transfer &amp; Trust Company, LLC, DSS&rsquo;s transfer agent, for exchanging your DSS stock certificates in connection
with any reverse stock split.&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; border: Black 1pt solid; width: 99%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SUMMARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 5pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><I>This proxy statement/prospectus
is being sent to DSS and Lexington stockholders. This summary highlights selected information from this proxy statement/prospectus.
It may not contain all of the information that is important to you with respect to the DSS Proposals or any other matter described
in this proxy statement/prospectus. DSS urges you to carefully read this proxy statement/prospectus, as well as the documents
attached to or referred to in this proxy statement/prospectus, to fully understand the Merger. In particular, you should read
the Merger Agreement, which is described elsewhere in this proxy statement/prospectus and attached as <U>Annex A</U>. To understand
the Merger fully, you should read carefully this entire document, including the business and financial information about DSS and
Lexington, and the documents to which this proxy statement/prospectus refers, including the annexes attached hereto. See the section
entitled &ldquo;Where You Can Find Additional Information&rdquo; beginning on page 224. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Companies</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Document Security
Systems, Inc. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 5pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in">DSS is a developer
and an integrator of cloud computing data security, RFID systems and security printing technologies which prevent counterfeiting,
product diversion and brand fraud. DSS specializes in fraud and counterfeit protection for all forms of printed documents and digital
information. DSS holds numerous patents for optical deterrent technologies that provide protection of printed information from
unauthorized scanning and copying. DSS operates three production facilities, a security and commercial printing facility, a packaging
facility and a plastic card facility where DSS produces secure and non-secure documents for our customers. DSS licenses its anti-counterfeiting
technologies to printers and brand-owners. In addition, DSS has a digital division which provides cloud computing services for
its customers, including disaster recovery, back-up and data security services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 5pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in">Prior to 2006, DSS&rsquo;s
primary revenue source in its document security division was derived from the licensing of its technology. In 2006, DSS began a
series of acquisitions designed to expand its ability to produce its products for end-user customers. In 2006, DSS acquired Plastic
Printing Professionals, Inc. (&ldquo;<B>P3</B>&rdquo; or &ldquo;<B>DSS Plastics Group</B>&rdquo;), a privately held plastic cards
manufacturer located in the San Francisco, California area. In 2008, DSS acquired substantially all of the assets of DPI of Rochester,
LLC, a privately held commercial printer located in Rochester, New York (&ldquo;<B>Secuprint</B>&rdquo; or &ldquo;<B>DSS Printing
Group</B>&rdquo;). In 2010, DSS acquired Premier Packaging Corporation (&ldquo;<B>Premier Packaging</B>&rdquo; or &ldquo;<B>DSS
Packaging Group</B>&rdquo;), a privately held packaging company located in the Rochester, New York area. In May 2011, DSS acquired
all of the capital stock of ExtraDev, Inc. (&ldquo;<B>ExtraDev</B>&rdquo;), a privately held information technology and cloud computing
company located in the Rochester, New York area, referred to herein as the DSS Digital Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In 2011, DSS integrated
its corporate brand and now DSS operates in four operating segments as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 5pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"><I>DSS Printing Group</I>
&mdash; Provides secure and commercial printing services for end-user customers along with technical support for the DSS&rsquo;s
technology licensees. The division produces a wide array of printed materials such as security paper, vital records, prescription
paper, birth certificates, receipts, manuals, identification materials, entertainment tickets, secure coupons, parts tracking forms,
brochures, direct mailing pieces, catalogs, business cards, etc. The division also provides the basis of research and development
for its security printing technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>
<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; padding-right: 5pt; border: Black 1pt solid; width: 100%">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS Plastics Group</I>
&mdash; Manufactures laminated and surface printed cards which can include magnetic stripes, bar codes, holograms, signature panels,
invisible ink, micro fine printing, guilloche patterns, Biometric, Radio Frequency Identification (RFID) and watermarks for printed
plastic documents such as ID cards, event badges, and driver&rsquo;s licenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS Packaging Group</I>
&mdash; Produces custom paperboard packaging serving clients in the pharmaceutical, beverage, photo packaging, toy, specialty foods
and direct marketing industries, among others. The division incorporates our security technologies into printed packaging to help
companies prevent or deter brand and product counterfeiting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS Digital Group</I>
&mdash; Provides data center centric solutions to businesses and governments delivered via the &ldquo;cloud&rdquo;. This division
is also developing proprietary digital data security technologies based on the DSS&rsquo;s optical deterrent technologies. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s principal
executive offices are located at 28 Main Street East, Suite 1525, Rochester, New York 14614 and its telephone number is (585) 325-3610.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS is headquartered
in Rochester, New York and was incorporated in New York in 1984. DSS&rsquo;s principal offices are located at 28 Main Street East,
Suite 1525, Rochester, New York 14614 and its telephone number is (585) 325-3610. DSS&rsquo;s principal website is <I>www.dsssecure.com</I>.
The information on or that can be accessed through DSS&rsquo;s website is not part of this proxy statement/prospectus. DSS Common
Stock is listed on the NYSE MKT and trades under the symbol &ldquo;DSS.&rdquo; Additional information about DSS and its subsidiaries
is included elsewhere in this proxy statement/prospectus. See the sections entitled &ldquo;DSS&rsquo;s Business,&rdquo; &ldquo;DSS&rsquo;s
Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations,&rdquo; and &ldquo;DSS&rsquo;s Financial
Statements&rdquo; beginning on pages 135, 141, and F-1, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Lexington Technology
Group Inc. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">L</FONT><FONT STYLE="color: windowtext">exington
is a private intellectual property monetization company that recently acquired a patent portfolio of six patents and four pending
patent applications relating to technology invented by Thomas Bascom (the &ldquo;<B>Bascom Portfolio</B>&rdquo;). Lexington is
focused on the economic benefits of intellectual property assets through acquiring or internally developing patents or other intellectual
property assets (or interests therein) and then monetizing such assets through a variety of value enhancing initiatives, including,
but not limited to: </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">licensing, </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">customized technology solutions (such
as applications for medical electronic health records), </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">strategic partnerships, and </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">litigation. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#9;On October 3, 2012, Lexington, through
its wholly-owned subsidiary, Bascom Research, initiated patent infringement lawsuits in the United States District Court for the
Eastern District of Virginia against five companies, including Facebook, Inc. and LinkedIn Corporation, for unlawfully using systems
that incorporate features claimed in patents owned by Bascom Research. The patents-in-suit relate to the data structure used by
social and business networking web sites and Web 2.0 corporate intranets. &#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

</div>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; padding-right: 5pt; border: Black 1pt solid; width: 100%">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington is headquartered
in New York, New York with offices in Dallas, Texas and McLean, Virginia and was incorporated in Delaware in May 2012. Lexington&rsquo;s
principal offices are located at 375 Park Avenue, 26th Floor, New York, New York 10152 and its telephone number is (888) 862 9249.
Lexington&rsquo;s principal website is www.lex-tg.com. The information on or that can be accessed through Lexington&rsquo;s website
is not part of this proxy statement/prospectus. Lexington is a private company and shares of its capital stock are not publicly
traded. Additional information about Lexington and its subsidiaries is included elsewhere in this proxy statement/prospectus. See
the sections entitled &ldquo;Lexington&rsquo;s Business,&rdquo; &ldquo;Lexington&rsquo;s Management&rsquo;s Discussion and Analysis
of Financial Condition and Results of Operations,&rdquo; and &ldquo;Lexington&rsquo;s financial statements&rdquo; beginning on
pages 160, 167, and F-50, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 41.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 41.9pt; text-align: justify"><B><I>DSSIP, Inc.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Merger Sub is a wholly-owned
subsidiary of DSS and was incorporated in Delaware on September 20, 2012, solely for the purpose of facilitating the Merger. Merger
Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection
with the transactions contemplated by the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>The Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS, Lexington and
Lexington Representative (solely for certain purposes (as described in the Merger Agreement)) have entered into the Merger Agreement,
which provides that, subject to the terms and conditions of the Merger Agreement and in accordance with the DGCL, at the Effective
Time, Merger Sub will merge with and into Lexington, with Lexington surviving as a wholly-owned subsidiary of DSS. The board of
directors of DSS has approved the Merger Agreement and the Merger. The board of directors of Lexington has unanimously approved
the Merger Agreement and the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
</div>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; padding-right: 5pt; border: Black 1pt solid; width: 100%">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>What Lexington Stockholders Will Receive
in the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion
of the Merger, <FONT STYLE="color: black">and subject to the Beneficial Ownership Condition, each share of then-issued and
outstanding Lexington Common Stock and each share of then-issued and outstanding Lexington Preferred Stock (other than shares
of Lexington Common Stock and Lexington Preferred Stock held in treasury or owned by DSS or any direct or indirect
wholly-owned subsidiary of DSS or Lexington that will be canceled and retired at the Effective Time) will be automatically
converted into (i) shares of DSS Common Stock, (ii) Warrants (as described below), and (iii) a pro rata portion of 7,100,000
Escrow Shares, as described in this proxy statement/prospectus, and, as applicable, shares of DSS Preferred Stock, determined
by multiplying each of (x) 17,250,000 shares plus the number of Additional Shares, as described in this proxy
statement/prospectus, and Exchanged Shares, as described in this proxy statement/prospectus, if any, (y) 4,859,894 warrants,
and (z) 7,100,000 shares by the Common Stock Exchange Ratio. At the Effective Time of the Merger, DSS will issue to the
holders of Lexington Common Stock and Lexington Preferred Stock (on a <I>pro rata</I> as-converted basis) an aggregate of
4,859,894 Warrants to purchase an aggregate of 4,859,894 shares of DSS Common Stock with an exercise price of $4.80 per share
and a term of five years commencing upon the closing of the Merger. Upon the consummation of the Merger, only the holders of
Lexington Preferred Stock who would, after giving effect to the Merger and receipt of the merger consideration, meet the
Beneficial Ownership Condition shall receive for each share of Lexington Preferred Stock they hold the same merger
consideration as outlined above except that such holders shall receive a combination of DSS Common Stock and DSS Preferred
Stock that is convertible into (or if the proposal to authorize DSS Preferred Stock is not approved, $.02 Warrants
exercisable for) that number of shares of DSS Common Stock they would have received if they had been a holder of Lexington
Common Stock immediately prior to the Effective Time in such amounts that would enable such holders, after giving effect to
the Merger, to beneficially own no more than 9.99% of DSS Common Stock upon consummation of the Merger. Those holders of
Lexington Preferred Stock who do not meet the Beneficial Ownership Condition and will not receive DSS Preferred Stock or $.02
Warrants, will receive DSS Common Stock and the other types of merger consideration in exchange for their Lexington Preferred
Stock based on the Common Stock Exchange Ratio. In the event DSS&rsquo;s stockholders approve the issuance of the merger
consideration, but do not approve the authorization of the DSS Preferred Stock, then the holders of Lexington Preferred Stock
that satisfy the Beneficial Ownership Condition shall receive warrants to purchase DSS Common Stock with an exercise price of
$.02 per share. Each $.02 Warrant is exercisable at any time after the date of issuance for a period of ten years. If at any
time between the three month anniversary of the issuance date and the expiration date, there is no effective registration
statement registering the resale of the shares issuable under the Warrants, then the holder may elect to exercise the
Warrant, or a portion thereof, by way of a cashless exercise. Except under certain circumstances, no holder may exercise its
Warrants if such exercise would result in such holder beneficially owning in excess of 9.99% of the number of shares of DSS
Common Stock outstanding immediately after giving effect to the issuance of shares of common stock upon exercise of the
Warrants. In addition, under certain circumstances, a holder of the Warrants will be entitled to participate in any
distribution of DSS&rsquo;s assets (or the right to acquire its assets) or any declared cash dividend, to the same extent
such holder would have participated therein if such holder had held the shares of common stock acquirable upon complete
exercise of the Warrants. Finally, at the Effective Time, up to an aggregate of 3,600,000 outstanding and unexercised options
to purchase Lexington Common Stock will be assumed by DSS and each such option will convert into an option to purchase or
acquire shares of DSS Common based on the Option Exchange Ratio, with an exercise price per share equal to the exercise price
of the applicable option immediately prior to the Effective Time divided by the Option Exchange Ratio, with the number of
shares in (i) and the price per share in (ii) rounded up or down to the next whole share number or tenth (0.1) of a cent, as
the case may be, in a manner such that, after taking into account such rounding, both (A) the excess of the aggregate fair
market value of the shares subject to the new option over the aggregate exercise price for such shares does not exceed the
excess of the aggregate fair market value of the shares subject to the old option over the aggregate exercise price for such
shares immediately prior to the Effective Time, and (B) the ratio on a per option basis of the exercise price to the fair
market value of the shares subject to the option is not increased. Immediately following the completion of the Merger
(without taking into account any shares of DSS Common Stock held by Lexington stockholders prior to the completion of the
Merger), the former stockholders of Lexington are expected to own approximately 50% of the outstanding common stock of the
combined company (or 56% of the outstanding common stock of the combined company calculated on a fully diluted basis) and the
current stockholders of DSS are expected to own approximately 50% of the outstanding common stock of the combined company (or
44% of the outstanding common stock of the combined company calculated on a fully diluted basis).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No fractional shares
of DSS Common Stock or DSS Preferred Stock will be issued in connection with the Merger. Instead, each Lexington stockholder who
would be otherwise entitled to receive a fractional share will receive from DSS, in lieu thereof, the next highest whole number
shares of DSS Common Stock or DSS Preferred Stock, as applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For a more complete discussion of what Lexington stockholders
will receive in connection with the Merger and the formula that will be used to calculate the Common Stock Exchange Ratio, see
the sections entitled &ldquo;The Merger&mdash;What Lexington Stockholders Will Receive in the Merger&rdquo; and &ldquo;The Merger
Agreement&mdash;Merger Consideration&rdquo; beginning on pages 74 and 97, respectively.&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>
</div>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B></B></P>
<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; padding-right: 5pt; border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Ownership of the Combined Company After
the Completion of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger and regardless of the exact Common Stock Exchange Ratio (or any reverse stock split), the former stockholders of Lexington
(without taking into account any shares of DSS Common Stock held by Lexington stockholders prior to the completion of the Merger)
are expected to own approximately 50% of the outstanding common stock of the combined company (or 56% of the outstanding common
stock of the combined company calculated on a fully diluted basis) and the current stockholders of DSS are expected to own approximately
50% of the outstanding common stock of the combined company (or 44% of the outstanding common stock of the combined company calculated
on a fully diluted basis).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Treatment of Lexington Stock Option</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the
Effective Time, up to an aggregate of 3,600,000 outstanding and unexercised options to purchase Lexington Common Stock, will
be assumed by DSS and each such option will convert into an option to purchase or acquire shares of DSS Common Stock (i) in a
number equal to the number of shares of Lexington Common Stock subject to the option immediately prior to the Effective Time
based on the Option Exchange Ratio and (ii) with an exercise price per share equal to the exercise price of the
applicable option immediately prior to the Effective Time divided by the Option Exchange Ratio, with the number of shares in
(i) and the price per share in (ii) rounded up or down to the next whole share number or tenth (0.1) of a cent, as the case
may be, in a manner such that, after taking into account such rounding, both (A) the excess of the aggregate fair market
value of the shares subject to the new option over the aggregate exercise price for such shares does not exceed the excess of
the aggregate fair market value of the shares subject to the old option over the aggregate exercise price for such
shares immediately prior to the Effective Time, and (B) the ratio on a per option basis of the exercise price to the fair
market value of the shares subject to the option is not increased.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of [&#8729;], 2013,
the latest practicable date before the printing of this proxy statement/prospectus, there were outstanding options to purchase
3,600,000 shares of Lexington common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For a more complete
discussion of the treatment of Lexington stock options, see the section entitled &ldquo;The Merger &mdash; Treatment of Lexington
Stock Options&rdquo; beginning on page 76.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Treatment of DSS Stock Options; Change
of Control Payments&#9;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon the
change of control in connection with the consummation of the Merger, previous grants of options and restricted stock to
DSS employees, consultants and directors will remain intact, and will not be accelerated, except for certain grants made to
DSS executives and senior managers who have agreed to modifications to their existing employment agreements, or who have
agreed to be subject to restrictive covenants, in connection with the Merger. Options to purchase an aggregate of 725,000
shares of DSS Common Stock at an exercise price of $3.00 per share for a term of five years granted to these DSS executives,
board members and senior managers. In addition, an aggregate of $155,000 in bonus
payments will be made to such executives and senior managers upon the closing of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>
</div>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; padding-right: 5pt; border: Black 1pt solid; width: 100%">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Board of Directors and Executive Officers of the Combined
Company After the Completion of the Merger</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger, the combined company will have a nine (9) member board of directors, comprised of <FONT STYLE="color: black">Robert
B. Fagenson, Ira A. Greenstein, Robert B. Bzdick and David Klein</FONT>, all of whom are currently members of the DSS board of
directors, and <FONT STYLE="color: black">Jeffrey Ronaldi, Peter Hardigan and Warren Hurwitz</FONT>, all of whom are designees
of Lexington, and two<FONT STYLE="color: black"> other directors will be designated by Lexington (reasonably acceptable to DSS)
on or prior to filing of the first amendment to this proxy statement/prospectus. However, if DSS&rsquo;s stockholders do not approve
the Staggered Board Proposal, then the board of directors of DSS following the Merger shall initially consist of eight (8) directors,
four of whom are designated by Lexington and the other four are designated by DSS, as described above, provided that, prior to
closing DSS and Lexington will jointly designate a ninth person to be nominated for a position on the board of directors of DSS
following the Effective Time. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If DSS&rsquo;s stockholders
approve the Staggered Board Proposal upon the completion of the Merger, the board of directors of DSS will be divided into three
classes, Class I to be comprised of David Klein, Ira A. Greenstein and Jeffrey Ronaldi, Class II to be comprised of Robert B. Bzdick,
Peter Hardigan and an additional member to be designated by Lexington and Class III to be comprised of Warren Hurwitz, Robert B.
Fagenson and an additional member to be designated by Lexington. The three directors constituting the Class I directors would serve
until the DSS annual meeting of stockholders for 2013; the three directors constituting the Class II directors would serve until
the DSS annual meeting of stockholders for 2014; and the three directors constituting the Class III directors would serve until
the DSS annual meeting of stockholders for 2015. At each annual meeting starting with the first annual meeting in 2013, directors
would be elected to succeed those whose terms expire, with each newly elected director to serve for a three-year term. If DSS&rsquo;s
stockholders do not approve the Staggered Board Proposal, then the board of directors of DSS following the Merger shall initially
consist of eight (8) directors, four of whom as designated by Lexington and the other four as designated by DSS, provided, that,
prior to the closing of the Merger, DSS and Lexington will jointly identify a ninth person to be nominated as a member of the board
of directors of DSS following the Effective Time. Approval of the Staggered Board Proposal, however, is not required to consummate
the Merger and the transactions contemplated thereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The executive management
team of the combined company is expected to be composed of the following individuals:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 18%; font-weight: bold">Name</TD>
    <TD STYLE="vertical-align: top; width: 2%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 43%; font-weight: bold">Current Position</TD>
    <TD STYLE="vertical-align: top; width: 2%; padding-left: 5.05pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; width: 35%; font-weight: bold">Position with the Combined Company</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Jeffrey Ronaldi</TD>
    <TD STYLE="padding-left: 5.05pt">&nbsp;</TD>
    <TD>Chief Executive Officer of Lexington</TD>
    <TD STYLE="padding-left: 5.05pt">&nbsp;</TD>
    <TD>Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="color: black">Peter Hardigan</FONT></TD>
    <TD STYLE="padding-left: 5.05pt">&nbsp;</TD>
    <TD>Chief Operating Officer of Lexington</TD>
    <TD STYLE="padding-left: 5.05pt">&nbsp;</TD>
    <TD><FONT STYLE="color: black">Chief Investment Officer</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="color: black">Philip Jones</FONT></TD>
    <TD STYLE="padding-left: 5.05pt">&nbsp;</TD>
    <TD>Chief Financial Officer of DSS</TD>
    <TD STYLE="padding-left: 5.05pt">&nbsp;</TD>
    <TD><FONT STYLE="color: black">Chief Financial Officer</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Robert B. Bzdick</TD>
    <TD STYLE="padding-left: 5.05pt">&nbsp;</TD>
    <TD>President and Chief Operating Officer of DSS</TD>
    <TD STYLE="padding-left: 5.05pt">&nbsp;</TD>
    <TD>Executive Vice President</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Recommendations of the DSS Special Committee and the DSS
Board of Directors and Its Reasons for the Merger</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">An independent special
committee of the DSS Board of Directors (the &ldquo;<B>DSS Special Committee</B>&rdquo;) unanimously determined that the Merger
Agreement and the transactions contemplated thereby, including the Merger, are advisable and fair to, and in the best interests
of, DSS and its stockholders, and recommended that the DSS Board of Directors approve and declare advisable the Merger Agreement
and the transactions contemplated by the Merger Agreement, including the Merger. For a more complete discussion of the recommendations
of the DSS Special Committee and its reasons for the Merger, see the section entitled &ldquo;The Merger&mdash;Position of the DSS Board of Directors as to Fairness of the Merger and Recommendation of DSS Board of Directors&rdquo; beginning on page 85.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>
</div>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; padding-right: 5pt; border: Black 1pt solid; width: 100%">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">After carefully considering
the unanimous recommendation of the DSS Special Committee and the other factors described in the section entitled &ldquo;The Merger&mdash;Position of the DSS Board of Directors as to Fairness of the Merger and Recommendation of DSS Board of Directors&rdquo; beginning on page 85, has unanimously approved the Merger
Agreement and the transactions contemplated thereby, including the Merger. The DSS board of directors has determined that the Merger
Agreement and the transactions contemplated thereby, including the Merger, are advisable and fair to, and in the best interests
of, DSS and its stockholders, and therefore recommends that the DSS stockholders vote FOR the Securities Issuance Proposal, FOR
the Preferred Stock Creation Proposal, FOR the Staggered Board Proposal, FOR the Reverse Stock Split Proposal, FOR the approval
of the 2013 Equity Incentive Plan Proposal and FOR the adjournment of the DSS special meeting, if necessary, to solicit additional
proxies if there are not sufficient votes in favor of the DSS Proposals. The DSS board of directors made its recommendations to
the DSS stockholders after considering the factors described in this proxy statement/prospectus. For a more complete discussion
of the recommendations of the DSS board of directors and its reasons for the Merger, see the section entitled &ldquo;The Merger&mdash;Position of the DSS Board of Directors as to Fairness of the Merger and Recommendation of DSS Board of Directors&rdquo; beginning on page 85.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Interests of DSS Directors and Executive Officers in the
Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You should be aware
that certain directors and executive officers of DSS have interests in the Merger that are different from, or in addition to, the
interests of the stockholders of DSS generally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Interests
of DSS&rsquo;s directors and executive officers in connection with the Merger relate to (i) the continuing service of each of Robert
B. Fagenson, Ira A. Greenstein, David Klein and Robert B. Bzdick as directors of the combined company following the completion
of the Merger, (ii) the fact that Philip Jones and Robert B. Bzd</FONT>I<FONT STYLE="font-family: Times New Roman, Times, Serif">ick
are currently executive officers of DSS and will remain executive officers of the combined company following the completion of
the Merger, and (iii) upon the change of control in connection with the consummation of the Merger, options to purchase an aggregate
of 280,000 shares of DSS Common Stock at an exercise price of $3.00 per share for a term of five years that were granted to certain
of DSS&rsquo;s executives and senior managers will vest upon the closing of the Merger. In addition, an aggregate of $155,000 in
bonus payments will be made to such executives and senior managers upon the closing of the Merger, and the right to continued indemnification
for directors and executive officers of DSS following the completion of the Merger.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth the benefits to be made to DSS&rsquo;s directors and executive officers in connection with the Merger, assuming a change
of control occurs and termination of DSS&rsquo;s directors as of November 19, 2012:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 95%; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Name</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Bonus ($)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Equity ($)<SUP>(1)</SUP></B></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 74%; text-align: left; text-indent: -10pt; padding-left: 10pt">Patrick A. White <B><SUP>(2)</SUP></B></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">40,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">80,000</TD><TD STYLE="width: 1%; text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Robert B. Bzdick <B><SUP>(2)</SUP></B></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">250,000</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Philip Jones</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">25,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left"></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 95%; border-collapse: collapse; margin-left: 0.25in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; text-align: justify">(1)</TD>
    <TD STYLE="width: 96%; text-align: justify">Estimated grant date fair value of options calculated using the Black Scholes Merton option pricing model granted to executive that will vest upon the closing of the Merger.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(2)</TD>
    <TD STYLE="text-align: justify">Mr. White resigned from his position as Chief Executive Officer of DSS effective December 1, 2012 and will continue to serve as a consultant to DSS. Mr. Bzdick was appointed as the Chief Executive Officer of DSS effective December 1, 2012.<FONT STYLE="font-size: 10pt; color: black"> </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS board of directors
was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and in recommending
that DSS stockholders approve the DSS Proposals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

</div>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; padding-right: 5pt; border: Black 1pt solid; width: 100%">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For a more complete
discussion of the interests of the directors and executive officers of DSS in the Merger, see the section entitled &ldquo;The Merger&mdash;Interests
of DSS&rsquo;s Directors and Executive Officers in the Merger&rdquo; beginning on page 87.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Anticipated Accounting Treatment of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><SUP>&nbsp;</SUP></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger will be
treated by DSS as a reverse merger under the acquisition method of accounting in accordance with United States generally accepted
accounting principles (&ldquo;<B>GAAP</B>&rdquo;). For accounting purposes, Lexington is considered to be acquiring DSS in this
transaction. For a more complete discussion of the anticipated accounting treatment of the Merger, see the section entitled &ldquo;The
Merger&mdash;Anticipated Accounting Treatment&rdquo; beginning on page 90.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Material United States Federal Income Tax Consequences of
the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger should constitute
a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code. Mintz Levin will render its written opinion regarding
such qualification. As a result of the &ldquo;reorganization,&rdquo; Lexington stockholders generally should not recognize gain
or loss for United States federal income tax purposes upon the exchange of their shares of Lexington capital stock for the equity
securities of DSS in connection with the Merger. However, a Lexington stockholder who perfects appraisal rights and receives cash
in exchange for such stockholder&rsquo;s Lexington capital stock will recognize gain or loss measured by the difference between
the amount of cash received and such stockholder&rsquo;s adjusted tax basis in those shares. DSS stockholders generally will not
recognize gain or loss for United States federal income tax purposes as a result of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The opinion of counsel
will rely on certain assumptions as well as representations made by DSS, Merger Sub and Lexington, including factual representations
and certifications contained in officers&rsquo; certificates to be delivered at closing, and assume that these representations
are true, correct and complete, without regard to any knowledge limitation. If any of these representations or assumptions are
inconsistent with the actual facts, the opinion could become invalid as a result, and the United States federal income tax treatment
of the merger could be adversely affected. An opinion of counsel represents counsel&rsquo;s best legal judgment and is not binding
on the IRS or any court. No ruling has been, or will be, sought from the IRS as to the tax consequences of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">One of the requirements
for the Merger to constitute a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code is that the Lexington
stockholders receive at least 80% of the aggregate value of their merger consideration in the form of DSS Common Stock (the &ldquo;<B>Control
Requirement</B>&rdquo;). The IRS has issued regulations addressing whether and when such requirement should be measured: by reference
to the value of the merger consideration as of the signing date of the Merger Agreement, here October 1, 2012 (the &ldquo;<B>Signing
Date Rule</B>&rdquo;), or on the Effective Date of the Merger. Counsel is of the opinion that the Signing Date Rule should apply
to the Merger. In this regard, an independent valuation analysis obtained by Lexington concludes that the Control Requirement was
met on October 1, 2012. However, the IRS may contend that the Control Requirement must instead be met on the Effective Date. If
such contention prevails, then in order for the Merger to constitute a &ldquo;reorganization&rdquo; under Section 368(a) of the
Code, the Lexington stockholders will need to receive DSS Common Stock (including the Additional Shares, if any) with a value measured
on the Effective Date of at least 80% of the aggregate value of the Merger Consideration (it is not clear if only the Exchanged
Shares may be included in such calculation, or if the Escrow Shares also may be included at the Effective Date or only when and
to the extent released to the Lexington stockholders). If the Control Requirement must be determined on the Effective Date and,
based on a valuation of the merger consideration, such requirement is not then met (or not met later when the Escrow Shares are
released) because of change in the relative value of the DSS Common Stock, DSS Preferred Stock and the Warrants, then the Merger
will not constitute a &ldquo;reorganization&rdquo; under Section 368(a) of the Code. In such case, a Lexington stockholder will
recognize gain or loss measured by the difference between the value of the equity securities of DSS received in the Merger and
such stockholder&rsquo;s adjusted tax basis in the Lexington shares exchanged therefor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

</div>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>
<DIV STYLE="padding: 5pt; border: Black 1pt solid; width: 99%">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Tax matters
are very complicated, and the tax consequences of the Merger to a particular DSS or Lexington stockholder will depend in part
on such stockholder&rsquo;s circumstances. Accordingly, DSS and Lexington urge you to consult your own tax advisor for a full
understanding of the tax consequences of the Merger to you, including the applicability and effect of federal, state, local and
foreign income and other tax laws. For a more complete discussion of the material United States federal income tax consequences
of the Merger, see the section entitled &ldquo;Material United States Federal Income Tax Consequences of the Merger&rdquo; beginning
on page 92</I></B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Restrictions on Sales of Shares of DSS
Common Stock Received by Lexington Stockholders in the Merger</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The shares of DSS Common
Stock and DSS Preferred Stock received by Lexington stockholders in the Merger will not be subject to any transfer restrictions.
However, shares of DSS Common Stock and DSS Preferred Stock received by Lexington stockholders who become affiliates of DSS for
purposes of Rule 144 under the Securities Act of 1933, as amended (the &ldquo;<B>Securities Act</B>&rdquo;), may be resold by them
only in transactions permitted by Rule 144 or as otherwise permitted under the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For a more complete
discussion of the restrictions on sales of shares of DSS Common Stock and DSS Preferred Stock and Warrants received by the Lexington
stockholders in the Merger, see the section entitled &ldquo;The Merger&nbsp;&mdash;&nbsp;Restrictions on Sales of Shares of DSS
Common Stock Received by Lexington Stockholders in the Merger&rdquo; beginning on page 91.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Appraisal Rights </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the NYBCL, holders
of DSS Common Stock are not entitled to appraisal rights in connection with the Merger. Under the DGCL, however, holders of Lexington
capital stock may be entitled to appraisal rights in connection with the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Regulatory Approvals </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of the date of this
proxy statement/prospectus, neither DSS nor Lexington is required to make filings or to obtain approvals or clearances from any
regulatory authorities in the United States or other countries to complete the Merger. In the United States, DSS must comply with
applicable federal and state securities laws and the rules and regulations of the NYSE MKT in connection with the issuance of shares
of DSS Common Stock and DSS Preferred Stock and what may possibly be deemed the resulting change in control of DSS and the filing
of this proxy statement/prospectus with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>
</div>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; padding-right: 5pt; border: Black 1pt solid; width: 100%">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Conditions to the Completion of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS and Lexington expect
to complete the Merger as soon as possible following the approval of the Securities Issuance Proposal at the special meeting. Completion
of the Merger will only be possible, however, after all closing conditions contained in the Merger Agreement are satisfied or waived,
including after DSS receives stockholder approval at the special meeting. It is possible, therefore, that factors outside of each
company&rsquo;s control could require them to complete the Merger at a later time or not complete it at all.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The obligations of
DSS and Lexington to consummate the Merger are each subject to the satisfaction or waiver (to the extent permitted under applicable
law) of the following conditions, among others and subject, in some cases, to the exceptions or limitations contained in confidential
disclosure schedules delivered to each party by the other:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&bull;</FONT><FONT STYLE="font-family: Symbol">&#9;</FONT></TD>
    <TD STYLE="width: 93%; padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: black">the stockholders
        of DSS have approved the issuance of DSS Common Stock and the stockholders of Lexington have approved the Merger and the Merger
        Agreement</FONT>;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The registration statement of which this
        proxy statement/prospectus forms a part has become effective;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: black">the shares of
        DSS Common Stock shall have been approved for listing on the NYSE MKT</FONT>;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">the representations and warranties of the
        parties shall be true, complete and correct in all material respects on and as of the Effective Time, with the same force and effect
        as if made on and as of the Effective Time, except for those (x) representations and warranties that are qualified by materiality,
        which representations and warranties shall be true, complete and correct in all respects and (y) representations and warranties
        which address matters only as of a particular date;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Lexington and its subsidiaries shall have
        at least $7,500,000 in cash on hand (which, for purposes of calculating such amount, shall include the amount, not to exceed $1,000,000,
        of professional fees paid or accrued prior to the Effective Time) and Lexington and its subsidiaries shall have no indebtedness
        for borrowed money;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">the parties shall have performed or complied
        in all material respects with all agreements and covenants required by the Merger Agreement to be performed or complied with by
        it on or prior to the Effective Time;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">since the date of the Merger Agreement
        there shall not have occurred, and no event or circumstance shall exist that has had or could reasonably be expected to have, a
        material adverse effect on DSS or Lexington, as applicable;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">None of Lexington&rsquo;s intellectual
        property shall, as of the Effective Date, be held unpatentable, invalid or unenforceable by a court of competent jurisdiction;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">holders of no more than 10% of the issued
        and outstanding Lexington capital stock shall have demanded and perfected their right to an appraisal of Lexington capital stock
        under the DGCL;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify; padding-right: 5pt">the voting and support agreements shall have been executed and delivered;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>
</div>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>
<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; padding-right: 5pt; border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 93%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">each of Lexington and its subsidiary shall
        be solvent, able to pay its indebtedness as it matures and have capital sufficient to carry on its businesses, and not be in default
        under any material agreement to which it is a party; and</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">Lexington shall have received written resignations from all of the directors and officers of the DSS not elected as officers or directors in the Merger and the directors and officers to be designated by DSS and Lexington shall have been appointed.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For a more complete
discussion of the conditions to the completion of the Merger, see the section entitled &ldquo;The Merger Agreement&mdash;Conditions
to the Completion of the Merger&rdquo; beginning on page 105.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>No Solicitation </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subject to certain
exceptions described below, prior to the completion of the Merger or the earlier termination of the Merger Agreement, each of DSS
and Lexington has agreed that it will not, and it will not authorize or permit its subsidiaries and/or their respective officers,
directors, employees, investment bankers, attorneys, accountants and other advisors or representatives to directly or indirectly:
(a) solicit, initiate, induce or take any action to facilitate, encourage, solicit, initiate or induce any action relating to,
or the submission of any Lexington Acquisition Proposal (as defined below) or DSS Acquisition Proposal (as defined below), as the
case may be; (b) enter into, participate or engage in discussions or negotiations in any way with any person concerning any Lexington
Acquisition Proposal or DSS Acquisition Proposal, as the case may be; (c) furnish to any person (other than the other party) any
information relating to the other party or its subsidiaries or afford to any person (other than the other party) access to the
business, properties, assets, books, records or other information, or to any personnel of either party or its subsidiaries, with
the intent to induce or solicit the making, submission or announcement of, or the intent to encourage or assist, a Lexington Acquisition
Proposal or DSS Acquisition Proposal, as the case may be or the making of any proposal that would reasonably be expected to lead
to a Lexington Acquisition Proposal or DSS Acquisition Proposal, as the case may be; (d) approve, enforce or recommend a Lexington
Acquisition Proposal or DSS Acquisition Proposal, as the case may be; (e) enter into any agreement in principle, letter of intent,
term sheet, merger agreement, acquisition agreement or other similar instrument or contract relating to a Lexington Acquisition
Proposal or a DSS Acquisition Proposal, as the case may be, or requiring either party to abandon or terminate the Merger Agreement;
or (f) grant any approval pursuant to any &ldquo;moratorium,&rdquo; &ldquo;control share acquisition,&rdquo; &ldquo;business combination,&rdquo;
&ldquo;fair price&rdquo; or other form of anti-takeover law to any person or transaction (other than the Merger) or waiver or release
any standstill or similar agreement with respect to the equity securities of either party. &ldquo;Lexington Acquisition Proposal&rdquo;
means, in summary any offer, proposal, discussions, negotiations by any person in a transaction or series of related transactions
relating to issuance, sale or other disposition of securities representing 20% or more of the voting power or economic interests
of Lexington or its subsidiaries. &ldquo;DSS Acquisition Proposal&rdquo; means any offer, proposal, discussions, negotiations by
any person in a transaction or series of related transactions relating to issuance, sale or other disposition of securities representing
20% or more of the voting power or economic interests of DSS or its subsidiaries. Notwithstanding the foregoing, in the event that
either Lexington or DSS receives a Lexington Acquisition Proposal or a DSS Acquisition Proposal, the board of directors of each
company may under certain circumstances change its recommendation for approval of the Merger if, after reviewing with outside counsel,
either board determines that such Lexington Acquisition Proposal or DSS Acquisition Proposal, as the case may be, is a superior
proposal or an event, development or change in circumstances that occurs or arises following the date of the Merger Agreement,
and/or the failure to effect a board recommendation change would be inconsistent with such company&rsquo;s board of directors&rsquo;
fiduciary duties to its stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>
</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<DIV STYLE="padding-top: 5pt; padding-bottom: 5pt; padding-left: 5pt; padding-right: 5pt; border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For a more complete
discussion of the prohibition on solicitation of acquisition proposals from third parties, see the section entitled &ldquo;The
Merger Agreement&mdash;No Solicitation&rdquo; beginning on page 102.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Termination of the Merger Agreement
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Generally and except
as specified below, the Merger Agreement may be terminated and the Merger may be abandoned at any time prior to the completion
of the Merger, including after the required DSS stockholder approval is obtained:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">by mutual written consent of DSS, Merger
Sub and Lexington; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">by either party, if:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify; padding-right: 5pt">the closing has not occurred on or before March 15, 2013;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify; padding-right: 5pt">any law enacted by a governmental authority prohibits the consummation of the Merger; or any governmental
authority has issued an order or taken any other action which restrains, enjoins or otherwise prohibits the Merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify; padding-right: 5pt">the other party&rsquo;s stockholders do not approve the Merger, unless the failure to obtain approval
is attributable to a failure on the part of such party seeking to terminate the Agreement; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">by DSS, if: </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify; padding-right: 5pt">the Lexington&rsquo;s board of directors changes its recommendation for approval of the Merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify; padding-right: 5pt">the board of directors of Lexington or any authorized committee has failed to present or recommend
the approval of the Merger Agreement and the Merger to the stockholders;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify; padding-right: 5pt">Lexington shall have entered or caused itself or its subsidiaries to enter, into any letter of
intent, agreement in principle, term sheet, merger agreement, acquisition agreement or other similar agreement related to any Lexington
Acquisition Proposal;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify; padding-right: 5pt">Lexington shall have breached any term of the non-solicitation provision of the Merger Agreement;
or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">by Lexington, if: </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify">the DSS board of directors changes their recommendation for approval of the Merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify; padding-right: 5pt">the board of directors of DSS or any authorized committee has failed to present or recommend the
approval of the Merger Agreement and the Merger to the stockholders;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify; padding-right: 5pt">DSS shall have entered or caused itself or its subsidiaries to enter, into any letter of intent,
agreement in principle, term sheet, merger agreement, acquisition agreement or other similar agreement related to any DSS Acquisition
Proposal;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;</P>

<P STYLE="margin: 0"></P>


<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify">DSS shall have breached any term of the non-solicitation provision of the Merger Agreement; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">by either party, if the other party, or
in the case of Lexington, DSS or Merger Sub, is in material breach of its obligations or representations or warranties under the
Agreement; </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">by either DSS or Lexington, if prior to
obtaining stockholder approval such party determines to enter into a definitive agreement relating to a superior proposal; or </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify; padding-right: 5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">by Lexington, at any time, upon payment
to DSS of a termination fee equal to $5,000,000.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5pt; text-align: justify; text-indent: 0.5in">For a more complete
discussion of termination of the Merger Agreement, see the section entitled &ldquo;The Merger Agreement&mdash;Termination of the
Merger Agreement&rdquo; beginning on page 106.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Termination Fees and Expenses </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5pt; text-align: justify; text-indent: 0.5in">Under certain circumstances,
if the Merger is terminated by either DSS or Lexington, then DSS shall pay to Lexington a termination fee in cash equal to the
sum of (i) $3,000,000 plus (ii) 5% of the consideration paid to all security holders of DSS in connection with a superior proposal
in the same form as such consideration is paid to such security holders. In addition, under certain circumstances, if the Merger
is terminated by Lexington, then Lexington shall pay DSS a termination fee equal to $5,000,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5pt; text-align: justify; text-indent: 0.5in">For a more complete
discussion of termination fees and expenses, see the section entitled &ldquo;The Merger Agreement&mdash;Termination Fees and Expenses&rdquo;
beginning on page 106.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Voting by DSS Directors and Executive
Officers </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5pt; text-align: justify; text-indent: 0.5in">As of [&bull;], 2013,
the latest practicable date before the printing of this proxy statement/prospectus, directors and executive officers of DSS beneficially
owned and were entitled to vote [&bull;] shares of DSS Common Stock, or approximately [&bull;]% of the total outstanding voting
power of DSS. It is expected that DSS&rsquo;s directors and executive officers will vote their shares FOR the approval of the Merger
Agreement and the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Voting and Support Agreements </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 5pt; text-align: justify; text-indent: 0.5in">On October 1, 2012,
concurrently with the execution of the Merger Agreement, certain stockholders of DSS, including certain directors and officers,
representing 10.86% of DSS&rsquo;s shares of common stock issued and outstanding (collectively, the &ldquo;<B>Key DSS Stockholders</B>&rdquo;)
entered into voting and support agreements (collectively, the &ldquo;<B>DSS Voting Agreement</B>&rdquo;), pursuant to which the
Key DSS Stockholders have agreed, among other things, to vote all shares of common stock of DSS owned by them in favor of the adoption
of the Merger Agreement, the approval of the Merger and the approval of the transactions contemplated by the Merger Agreement and
any actions required in furtherance thereof, including approval of the amendments to the certificate of incorporation of DSS, the
creation of a staggered board and the approval of the issuance of the merger consideration. The DSS Voting Agreement will terminate
upon the earliest to occur of: (i)&nbsp;the mutual written consent of Lexington and the Key DSS Stockholder; (ii) the Effective
Time; (iii) the date of termination of the Merger Agreement in accordance with its terms; and (iv)&nbsp;the date on which an amendment
to the Merger Agreement to increase the merger consideration is effected without the consent of such Key DSS Stockholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

</DIV>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">On October 1, 2012,
concurrently with the execution of the Merger Agreement, certain stockholders of Lexington, representing 11.99% of Lexington&rsquo;s
capital stock issued and outstanding (collectively, the &ldquo;<B>Key Lexington Stockholders</B>&rdquo;) entered into voting agreements
(collectively, the &ldquo;<B>Lexington Voting Agreement</B>&rdquo;), pursuant to which the Key Lexington Stockholders have agreed,
among other things, to vote all shares of capital stock of Lexington owned by them in favor of the approval of the Merger Agreement,
the approval of the Merger and the approval of the transactions contemplated by the Merger Agreement and any actions required in
furtherance thereof. In addition, the Key Lexington Stockholders have agreed not to seek appraisal or dissenters&rsquo; rights
under Delaware General Corporation Law. The Lexington Voting Agreement will terminate upon the earliest to occur of: (i)&nbsp;the
mutual written consent of DSS, Merger Sub and the Key Lexington Stockholder; (ii) the Effective Time; (iii) the date of termination
of the Merger Agreement in accordance with its terms; and (iv)&nbsp;the date on which an amendment to the Merger Agreement to decrease
the merger consideration is effected without the consent of such Key Lexington Stockholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Rights of Lexington Stockholders Will
Change as a Result of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">Due to differences
between the governing documents of DSS and Lexington, Lexington stockholders receiving DSS Common Stock and DSS Preferred Stock
in connection with the Merger will have different rights once they become DSS stockholders. The material differences are described
in detail under the section entitled &ldquo;Comparison of Rights of DSS Stockholders and Lexington Stockholders&rdquo; beginning
on page 212.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Risk Factors </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">The Merger, including
the possibility that the Merger may not be completed, poses a number of risks to each company and its respective stockholders,
including the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 2%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 1%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 93%; padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">the issuance of shares of DSS Common Stock
        and Preferred Stock (or, if the Preferred Stock Creation Proposal is not approved, $.02 Warrants) and Warrants to Lexington stockholders
        in connection with the Merger will substantially dilute the voting power of current DSS stockholders;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">the announcement and pendency of the Merger
        could have an adverse effect on the DSS stock price and/or the business, financial condition, results of operations, or business
        prospects for DSS and/or Lexington;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">failure to complete the Merger or delays
        in completing the Merger could negatively impact DSS&rsquo;s and Lexington&rsquo;s respective businesses, financial condition,
        business prospects or results of operations or the DSS stock price;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">some of the directors and executive officers
        of DSS and Lexington have interests in the Merger that are different from, or in addition to, those of the other DSS and Lexington
        stockholders; and</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify; padding-right: 5pt">the Merger Agreement contains provisions that could discourage or make it difficult for a third party to acquire DSS or Lexington prior to the completion of the Merger.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">In addition, each of
DSS, Lexington, and the combined company is subject to various risks associated with its business. The risks are discussed in greater
detail in the section entitled &ldquo;Risk Factors&rdquo; beginning on page 50. DSS encourages you to read and consider all
of these risks carefully.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Matters to Be Considered at the DSS
Special Meeting </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in"><I>Date, Time and Place</I>.
The DSS special meeting will be held on [&bull;], 2013 at [&bull;]:[&bull;][&bull;].m., at [&bull;].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in"><I>Matters to be Considered
at the DSS Special Meeting. </I>At the DSS special meeting, and any adjournments or postponements thereof, DSS stockholders will
be asked to:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 89%; padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">approve the Securities Issuance Proposal;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">approve the Preferred Stock Creation Proposal;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">approve the Staggered Board Proposal;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">approve the Reverse Stock Split Proposal;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">approve the 2013 Equity Incentive Plan
        Proposal;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="padding-right: 5pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">approve the adjournment of the DSS special
        meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of any of the DSS Proposals; and</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify; padding-right: 5pt">conduct any other business as may properly come before the DSS special meeting or any adjournment or postponement thereof.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in"><I>Record Date. </I>
The DSS board of directors has fixed the close of business on [&bull;] as the record date for determining the DSS stockholders
entitled to notice of and to vote at the DSS special meeting and any adjournment or postponement thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in"><I>Required Vote.</I>
Approval of the Securities Issuance Proposal, the 2013 Equity Incentive Plan Proposal and any proposal to adjourn the DSS special
meeting requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock present and entitled to vote
on the matter either in person or by proxy at the DSS special meeting. Approval of the Preferred Stock Creation Proposal, Staggered
Board Proposal and the Reverse Stock Split Proposal requires the affirmative vote of the holders of a majority of the shares of
DSS Common Stock outstanding and entitled to vote on the matter either in person or by proxy at the DSS special meeting. As of
the close of business on the record date for the DSS special meeting, there were [&bull;] shares of DSS Common Stock outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">For additional information
about the DSS special meeting, see the section entitled &ldquo;The Special Meeting of DSS Stockholders&rdquo; beginning on page
111.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>


<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SELECTED HISTORICAL FINANCIAL DATA OF
DSS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">The following
table sets forth DSS selected historical financial data as of the dates and for each of the periods indicated. The financial
data for the years ended December 31, 2011 and 2010 and as of December 31, 2011 and 2010 are derived from DSS&rsquo;s audited
financial statements and Financial data as of September 30, 2011 derived from DSS&rsquo;s Unaudited financial Statements,
which are included elsewhere in this proxy statement/prospectus. The financial data as of and for the years ended December
31, 2009, 2008 and 2007 is derived from DSS&rsquo;s audited historical financial statements, which are not included into this
proxy statement/prospectus. The financial data for the nine months ended September 30, 2012 and 2011 and the financial data
as of September 30, 2012 and as of September 30, 2011 are derived from DSS&rsquo;s unaudited financial statements which are
included elsewhere in this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">You should read the
selected historical financial data below together with DSS&rsquo;s Management&rsquo;s Discussion and Analysis of Financial Condition
and Results of Operations and with the financial statements and notes thereto for the year ended December 31, 2011 and for the
nine months ended September 30, 2012, each of which are included elsewhere in this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Statements of Operations Data ($- in
thousands, except for share and per share data):&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 97%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Nine Months Ended September
    30</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Years Ended December 31,</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2012</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2011</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2011</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2010</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2009</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2008</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2007</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 37%"><FONT STYLE="font-size: 8pt">Revenue</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; text-align: right"><FONT STYLE="font-size: 8pt">11,666</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; text-align: right"><FONT STYLE="font-size: 8pt">9,177</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; text-align: right"><FONT STYLE="font-size: 8pt">13,384</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; text-align: right"><FONT STYLE="font-size: 8pt">13,381</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; text-align: right"><FONT STYLE="font-size: 8pt">9912</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; text-align: right"><FONT STYLE="font-size: 8pt">6,643</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 6%; text-align: right"><FONT STYLE="font-size: 8pt">5,991</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Cost of revenue</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">7,558</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">6,164</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">9,212</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">9,696</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">6,256</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">3,029</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">2,864</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Gross profit</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">4,108</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">3,013</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">4,172</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">3,685</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">3,656</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">3,614</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">3,127</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Operating expenses:</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Selling, general and administrative</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">6,061</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">5,213</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">7,076</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">6,138</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">5,734</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">7,431</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">7,974</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Research and development</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">545</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">208</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">285</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">265</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">292</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">433</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">420</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Impairment of intangible assets</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">376</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">797</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Amortization of intangibles</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">228</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">205</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">285</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">803</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">1,342</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">1,972</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">1,754</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in"><FONT STYLE="font-size: 8pt">Operating expenses</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">6,834</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">5,626</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">7,646</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">7,582</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">7,368</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">10,633</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">10,148</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Operating loss</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(2,726</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(2,613</FONT></TD><TD STYLE="text-align: left">)<FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,474</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,897</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,712</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(7,019</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(7,021</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Other income (expenses),
    net</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">(425</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">191</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">102</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">(688</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">(259</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">(1,247</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">65</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Loss before income taxes</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,151</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(2,422</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,372</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(4,585</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,971</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(8,266</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(6,956</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Income tax expenses, (benefit) net</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">14</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">(155</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">(151</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">(1,122</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">19</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">19</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">19</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Net loss</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,165</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(2,267</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,221</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,463</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,990</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(8,285</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(6,975</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt"><B>Net loss per share-basic and diluted:</B></FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(0.15</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(0.12</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(0.17</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(0.20</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(0.27</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(0.59</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(0.51</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">Weighted average common
    shares outstanding, basic and diluted</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">20,536,448</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">19,435,930</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">19,454,046</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">17,755,141</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">14,700,453</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">14,002,034</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">13,629,877</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<!-- Field: Page; Sequence: 43; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Balance Sheet Data ($- in thousands):</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: Red"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 97%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September 30,</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="18" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December 31,</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2008</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2007</TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 30%; text-align: left">Total current assets, net</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">4,191</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">4,018</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">3,192</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">7,147</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">1,868</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">2,005</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 7%; text-align: right">2,228</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,759</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,147</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,020</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,543</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,286</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,517</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,495</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">234</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">244</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">244</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">326</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">306</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">265</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">325</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Goodwill</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,323</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,323</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,323</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,084</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,316</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,397</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,397</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Other intangible assets, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,919</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,077</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,043</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,848</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,939</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,873</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">6,149</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">13,426</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">13,809</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">12,822</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">14,948</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">6,715</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">8,057</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">11,594</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">LIABILITIES AND STOCKHOLDERS' EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total current liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,882</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,315</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,272</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,144</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,687</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,486</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,426</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Long-term debt, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,132</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,052</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,831</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,260</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,720</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,493</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">595</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other long-term liablilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">261</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">104</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">219</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,957</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">71</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">216</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total stockholders' equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">7,151</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">6,338</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,500</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">4,587</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,237</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,026</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">7,357</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total liabilities and stockholders' equity</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">13,426</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">13,809</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">12,822</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">14,948</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">6,715</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">8,057</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">11,594</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: Red"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SELECTED HISTORICAL FINANCIAL DATA OF
LEXINGTON</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">The following
tables sets forth Lexington selected historical financial data as of September 30, 2012, which financial data is derived from
Lexington&rsquo;s June 30, 2012 audited financial statements and unaudited financial statements for the three month period
ended September 30, 2012 and as of September 30, 2012, which are included elsewhere in this proxy statement/prospectus. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">You should read the
selected historical financial data below together with Lexington&rsquo;s Management&rsquo;s Discussion and Analysis of Financial
Condition and Results of Operations and with the financial statements and notes thereto as of and for the period ended September
30, 2012 and June 30, 2012, which are included elsewhere in this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Statements of Operations Data ($- in thousands, except for
share and per share data):</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 97%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Three months</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Period from</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Period from</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">ended</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">May 10, 2012</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">May 10, 2012</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">September 30,</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(inception) through</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(inception) through</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">June 30,2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">September 30,2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 46%; text-align: left; padding-left: 9pt">Officers' compensation</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">375</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">8</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">383</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Legal and professional fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">510</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">General and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; padding-bottom: 1pt">Amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">98</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">98</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in; padding-bottom: 1pt">Loss from operations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(964</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(173</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(1,137</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Other expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">435</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">465</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Change in fair value of warrant liability</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,320</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">9</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,329</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in; padding-bottom: 1pt">Total other expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,755</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">39</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,794</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(6,719</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(212</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(6,931</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<!-- Field: Page; Sequence: 45; Value: 1 -->
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Balance Sheet Data ($- in thousands):</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 97%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">September 30,</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">June 30,</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-indent: -0.1in; padding-left: 0.1in">ASSETS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Current Assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-indent: -0.1in; padding-left: 0.35in">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">12,261</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">3,627</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in; padding-bottom: 1pt">Intangible assets, net of accumulated amortization of $98 and 0, respectively</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,077</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">45</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in; padding-bottom: 2.5pt">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">14,338</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">3,672</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in">LIABILITIES AND STOCKHOLDERS' EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Current Liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Accounts payable and accrued expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">389</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">218</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Senior notes payable - related parties, net of deferred debt discount of $989 and $1,164, respectively</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,449</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,461</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt; padding-bottom: 1pt">Warrant liability</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">252</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 34.2pt; padding-bottom: 1pt">Total liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,838</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,931</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Stockholders' Equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Preferred stock - 29,000,000 shares authorized; par value $0.00001 per share. Series A preferred stock - 27,225,000 shares authorized; par value $0.00001 per share; 17,913,727 and 0 shares issued and outstanding, respectively.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Common stock - 100,000,000 shares authorized; par value $0.00001 per share; 13,862,825 and 16,571,529 shares issued and outstanding, respectively.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,428</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">951</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in; padding-bottom: 1pt">Deficit accumulated during the development stage</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(6,931</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(212</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 34.2pt; padding-bottom: 1pt">Total stockholders' equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">11,500</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">741</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -0.1in; padding-left: 0.1in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in; padding-bottom: 1pt">Total liabilities and stockholders' equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">14,338</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">3,672</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red"><B>&nbsp;</B></P>

</DIV>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: Red"><B>&nbsp;</B></P>

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<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SUMMARY UNAUDITED PRO FORMA COMBINED
FINANCIAL DATA</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">The following summary
unaudited pro forma combined financial data is intended to show how the Merger might have affected historical financial statements
if the Merger had been completed on January 1, 2011, for the purposes of the statements of operations, and September 30, 2012,
for the purposes of the balance sheet, and was prepared based on the historical financial statements and results of operations
reported by DSS and Lexington. The following should be read in conjunction with the section entitled &ldquo;Unaudited Pro Forma
Combined Financial Statements&rdquo; beginning on page&nbsp;<FONT STYLE="text-underline-style: none; color: windowtext">202</FONT>&nbsp;and
the audited historical financial statements of DSS and Lexington and the notes thereto beginning on pages F-<FONT STYLE="text-underline-style: none; color: windowtext">1</FONT>&nbsp;and
F-<FONT STYLE="text-underline-style: none; color: windowtext">50</FONT>, respectively, the sections entitled &ldquo;DSS&rsquo;s Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo; beginning on page&nbsp;<FONT STYLE="text-underline-style: none; color: windowtext">141</FONT>&nbsp;and
&ldquo;Lexington&rsquo;s Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo;
beginning on page <FONT STYLE="text-underline-style: none; color: windowtext">167</FONT>, and the other information contained
in this proxy statement/prospectus. The following information does not give effect to the proposed reverse stock split of DSS common
stock described in DSS Proposal No. <FONT STYLE="text-underline-style: none; color: windowtext">4</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify"><B>Accounting Treatment of the Merger</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">U.S. Generally Accepted
Accounting Principles (hereafter&nbsp;&mdash;&nbsp;GAAP), require that for each business combination, one of the combining entities
shall be identified as the acquirer, and the existence of a controlling financial interest shall be used to identify the acquirer
in a business combination. In a business combination effected primarily by exchanging equity interests, the acquirer usually is
the entity that issues its equity interests. However, it is sometimes not clear which party is the acquirer. In these situations,
the acquirer for accounting purposes may not be the legal acquirer (i.e., the entity that issues its equity interest to effect
the business combination).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">If a business
combination has occurred, but it is not clear which of the combining entities is the acquirer, GAAP requires considering
additional factors in making that determination. These factors include the relative voting rights of the combined entity
after the business combination, the existence of a large minority voting interest in the combined entity,  the composition of the governing body of the combined entity, the composition of senior management
in the combined entity and the relative size of the combining entities. While no hierarchy is provided to explain how to
assess factors that influence the identification of the acquirer in a business combination, effectively concluding that no
one of the criteria is more significant than any other, it is reasonable to conclude that the entity with largest percentage
of voting rights after the business combination is most like to be considered the acquirer, unless other mitigating factors
are present.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">The
stockholders of Lexington will hold the largest percentage of the voting shares on a fully dilutive basis after the
completion of the Merger at 56% of the combined entity. The percentages of ownership include the 7,100,000 shares held in
escrow, which are eligible to be voted while in escrow. <FONT STYLE="color: black">If the escrow shares are terminated (which
will be determined after 1 year of the deal being consummated), Lexington stockholders would own 46% and DSS stockholders
would own 54% on a fully diluted basis. Lexington stockholders will represent the larger minority voting interest in the
combined entity at 46% compared to DSS&rsquo;s organized group (consisting of management and the board) at 12%. After the
closing of the acquisition, senior management of the combined entity is expected to include four officers: the Chief
Executive Officer and Chief Investment Officer from Lexington, and the Chief Financial Officer and Chief Operating Officer
from DSS. Based on the aforementioned, and after taking in consideration all relevant facts and circumstances (which
included, among others, the relative voting rights of the combined entity on a fully diluted basis, the larger minority
voting interest, and the composition of the senior management), we came to a conclusion that, Lexington is the accounting
acquirer, as it is defined in FASB Topic ASC 805 &ldquo;Business Combinations.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">Because DSS will be
issuing equity interests in order to acquire Lexington that results in a change of control in the combined entity, the transaction
will be accounted for as a reverse acquisition. In the post-combination consolidated financial statements, Lexington&rsquo;s assets
and liabilities will be presented at its pre-combination carrying amounts, and DSS&rsquo;s assets and liabilities will be measured
and recorded at fair value in accordance with ASC 805. In addition, the consolidated equity will reflect DSS&rsquo;s common and
preferred stock (if any), at par value, as DSS is the legal acquirer. The total consolidated equity will consist of Lexington&rsquo;s
equity just before the merger, along with DSS issued and outstanding common stock prior to the transaction at the quoted price
the day the transaction is consummated. Goodwill will be allocated to each reporting unit that is expected to benefit from the
synergies created by the business combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">Generally, in reverse
acquisitions according to ASC 805-40, the financial statements of the combined entity are a continuation of the financial statements
of the accounting acquirer, which as determined above, is Lexington. However, <FONT STYLE="color: black">assessment of whether
predecessor financial statements are required is separate from the identification of the accounting acquirer. Given that Lexington
has limited historical operations, consisting of no revenue and only administrative expense, while DSS has experienced significant
operating results in historical periods that would be included in comparative financial statements, management believes predecessor
financial statement presentation is appropriate, where DSS is the predecessor. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">With respect to unaudited
pro forma combined financial statements to be presented in the combined entity&rsquo;s registration statement as required by Rule
8-05 of Regulation S-X and footnotes to the financial statements of future periodic filings as required by ASC 805, the combined
entity will present pro forma financial information showing the effects of the acquisition in columnar format including pro forma
adjustments and results. Despite the fact that Lexington has only been in existence since May 2012, pro forma operating financial
information will assume the merger took place on the first day of the most recently completed fiscal year in order to accommodate
predecessor accounting as discussed above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">The summary unaudited
pro forma combined balance sheet as of September 30, 2012 combines the historical balance sheets of DSS and Lexington as of September
30, 2012 and gives pro forma effect to the Merger as if it had been completed on September 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">The summary unaudited
pro forma statements of operations for the year ended December 31, 2011 and the period from January 1, 2012 through September 30,
2012 gives pro forma effect to the Merger as if it had been completed on January 1, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">The historical financial
data has been adjusted to give pro forma effect to events that are (i) directly attributable to the Merger, (ii) factually supportable,
and (iii) with respect to the statements of operations, expected to have a continuing impact on the combined results. The pro forma
adjustments are preliminary and based on management&rsquo;s estimates of the fair value and useful lives of the assets acquired
and liabilities assumed and have been prepared to illustrate the estimated effect of the acquisition and certain other adjustments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify; text-indent: 0.5in">The unaudited pro forma
combined financial statements are presented for illustrative purposes only, and are not necessarily indicative of the financial
condition or results of operations of future periods or the financial condition or results of operations that actually would have
been realized had the entities been combined during the periods presented. In addition, as explained in more detail in the accompanying
notes to the unaudited pro forma combined financial statements (see the section entitled &ldquo;Unaudited Pro Forma Combined Financial
Statements&rdquo; beginning on page&nbsp;202), the preliminary acquisition-date fair value of the identifiable assets acquired
and liabilities assumed reflected in the unaudited pro forma combined financial statements is subject to adjustment and may vary
from the actual amounts that will be recorded upon completion of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt"><B>Unaudited Pro Forma Consolidated Balance Sheet as of September
30, 2012 ($- in thousands)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 97%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Historical</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">Lexington <BR> Technology
    Group, <BR> Inc.</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">Document Security <BR> Systems,
    Inc.</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">Pro Forma <BR> Adjustments</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">Notes</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">Pro- Forma <BR> Consolidated</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">ASSETS</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 35%; font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Total current assets</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 8pt">12,261</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 8pt">4,191</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 6%; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 10%; text-align: right"><FONT STYLE="font-size: 8pt">16,452</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Property, plant and equipment, net</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">3,759</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">3,759</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Other assets</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">234</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">234</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">Goodwill</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">3,323</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">66,453</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">3</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">69,776</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Other intangible assets, net</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2,077</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">1,919</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">5,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">1</FONT></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">8,996</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">Total assets</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">14,338</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">13,426</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">71,453</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">99,217</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">LIABILITIES AND STOCKHOLDERS' EQUITY</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Total current liabilities</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">389</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">3,882</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">337</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">2</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">4,608</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Long-term debt, net</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">2,449</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">2,132</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">456</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">4</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">5,037</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Interest rate swap hedging liabilities</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">138</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">138</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Deferred tax liability</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">123</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(123</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">4</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Stockholders' equity</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 8pt">Preferred stock, $.02 par value</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">2</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">102</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">5</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">104</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt"><FONT STYLE="font-size: 8pt">Common stock, $.02 par value</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">1</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">417</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">463</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">5</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">881</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Additional paid-in capital</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">18,428</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">53,212</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">27,475</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">2,6</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">99,115</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Accumulated other comprehensive loss</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(138</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">138</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">6</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Accumulated deficit</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(6,931</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(46,340</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">42,605</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">6</FONT></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(10,666</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Total stockholders' equity</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">11,500</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">7,151</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">70,783</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">89,434</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">Total liabilities and stockholders' equity</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">14,338</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">13,426</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">71,453</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: center; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">99,217</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0 5pt"><B>Unaudited Pro Forma Consolidated Statement of Operations, for the year ended December 31, 2011 ($- in
thousands, except per share and per share data)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 97%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Historical</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Lexington<BR> Technology
    Group,<BR> Inc.</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Document Security<BR>
    Systems, Inc.</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> Adjustments</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Notes</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> consolildated</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13,384</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13,384</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 31%; padding-bottom: 1pt">Cost of revenue</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">9,212</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right">9,212</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: right">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,172</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,172</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,076</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,735</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">2</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,811</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">285</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">285</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt">Amortization of intangibles</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">285</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">1</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">785</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7,646</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,235</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11,881</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,474</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,235</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,709</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Other income (expense):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(259</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(259</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Change in fair value of derivative liability</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">361</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">361</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Loss before income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,372</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,235</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,607</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Income tax benefit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(151</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(151</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">-</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(3,221</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(4,235</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(7,456</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net loss per share -basic and diluted:</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.17</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.21</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Weighted average common shares outstanding, basic and
    diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,454,046</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">16,082,164</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2.5pt">7</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">35,536,210</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>


<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt"><B>Unaudited Pro Forma Consolidated Statement of Operations,
for the nine month period ended September 30, 2012 ($- in thousands, except per share and per share data)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 97%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Historical</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Lexington&nbsp;Technology<BR>
    Group,&nbsp;Inc.</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Document&nbsp;Security<BR> Systems,&nbsp;Inc.</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Pro&nbsp;Forma<BR> Adjustments</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Notes</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Pro&nbsp;Forma<BR> consolildated</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">(From&nbsp;May&nbsp;10,&nbsp;2012<BR> (Inception)&nbsp;through<BR>
    September&nbsp;30,&nbsp;2012)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 41%">Revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">11,666</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 6%; text-align: center">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">11,666</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cost of revenue</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7,558</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7,558</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: right">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,108</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,108</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,039</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,061</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,100</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">545</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">545</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt">Amortization of intangibles</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">98</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">228</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">375</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">1</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">701</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,137</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,834</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">375</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">8,346</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,137</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,726</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(375</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,238</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Other income (expense):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(465</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(176</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(641</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Change in fair value of derivative liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,329</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,329</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Amortizaton of note discount</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(249</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(249</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Loss before income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6,931</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,151</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(375</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,457</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Income tax expense</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">14</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">14</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(6,931</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3,165</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(375</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(10,471</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net loss per share -basic and diluted:</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.73</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.15</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.29</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>

<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; width: 31%">Weighted average common shares outstanding,
    basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; width: 12%">9,424,022</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; width: 12%">20,536,448</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; width: 12%">16,082,164</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2.5pt; width: 8%">7</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; width: 12%">36,618,612</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>


<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt"><B>Notes to Unaudited Pro Forma Consolidated Statements of
Operations and Balance Sheet</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
pro forma adjustment represents the additional amortization expense as a result of the long-lived intangible assets acquired in
the Merger, assuming the Merger occurred at the beginning of the most recently completed fiscal year, January 1, 2011. The acquired
intangible assets have an estimated aggregate fair value of $6,919,000 and a weighted average remaining useful life of 10 years.
The $5,000,000 pro forma adjustment represents the estimated difference between the fair value and the carrying value of DSS&rsquo;s
patent assets, customer lists and non-compete agreements on the date of acquisition. As a result, the increase in amortization
expense for the year ended December 31, 2011 is $500,000, and the increase in amortization expense for the nine month period ended
September 30, 2012 is $375,000. See the preliminary purchase price allocation table on page 204.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify">For these pro forma
consolidated financial statements of operations and balance sheet we assume that there was no sign of impairment of long-lived
intangible assets throughout the periods presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
pro-forma adjustment represents direct, incremental costs of the Merger including (1) fees paid to Palladium Capital who acted
as an advisor to DSS in the Merger, comprising of cash of $182,000 and the expected fair value of 786,678 shares of DSS Common
Stock that will be issued upon the closing of the Merger with an estimated fair value of approximately $2,950,000 to Palladium
Capital, and (2) cash bonuses of $155,000 and $448,000 of stock based compensation expense related to the fair value of options
issued to executives and senior managers upon closing of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;This pro forma adjustment represents the estimated goodwill acquired as a result of the Merger. For the purposes
of the Merger, since Lexington is determined to be the accounting acquirer and DSS is determined to be the accounting acquiree,
the consideration effectively transferred is measured based on the expected fair value of the common stock of DSS outstanding
immediately prior to the closing of the Merger. For the purposes of the accompanying pro forma combined financial data, the estimated
fair value of DSS common stock is $3.75 per share and the number of shares outstanding is based on the 20,872,316 shares outstanding
at September 30, 2012. The goodwill adjustment represents the excess of the purchase price over the fair value of the tangible
and intangible assets acquired less liabilities assumed. See the preliminary purchase price allocation table on page 204.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
pro-forma adjustment represents the change in the fair value of DSS long-term liabilities. The adjustment in a convertible note
held by DSS was determined by the difference in the carrying amount of the convertible note as of September 30, 2012 compared
to the estimated fair value of the convertible common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify">5.&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
pro forma adjustment presents the effect on the common stock and preferred stock (if approved), at par, of the combined company
that reflects DSS as the legal acquirer and Lexington as the legal acquiree in the Merger. As a result, the common stock and preferred
stock (if approved) share number will be adjusted to include the shares issued to the shareholders of Lexington and to Palladium
Capital as an advisor on the date of the Merger. The following shares outstanding:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center; border-bottom: Black 1pt solid">As&nbsp;of&nbsp;September&nbsp;30,&nbsp;2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; text-align: left">Document Security Systems</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">20,872,316</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Document Security Systems shares of common stock expected to be issued to former Lexington Technology
    Group stockholders</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,395,486</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Document Security Systems shares of common stock issued to Palladium Capital
    in conjunction with the Merger</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">786,678</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Total common stock outstanding, pursuant to the Merger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,054,480</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Par value per share of common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Common stock, at par</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">881,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Document Security Systems shares of preferred stock (if approved) expected to be issued to former
    Lexington Technology Group stockholders</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,195,073</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Par value per share&nbsp; of preferred stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Preferred stock, at par</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">104,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
pro forma adjustment presents the effect of business combination accounting on additional paid-in capital, accumulated
deficit and accumulated other comprehensive loss of the combined company that reflect Lexington as the accounting acquirer
and DSS as the accounting acquiree in the Merger. As a result, in the post-combination consolidated financial statements,
additional paid-in capital will reflect Lexington&rsquo;s paid-in capital amounts immediately prior to the Merger, plus the
fair value of the outstanding common stock of DSS just prior to the Merger and the fair value of equity securities issued to
Palladium Capital. Accumulated deficit will only reflect the balance of Lexington prior to the Merger. The accumulated
deficit and accumulated other comprehensive loss of DSS will be cancelled in conjunction with the Merger. (See the
preliminary purchase price allocation table on page 204.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 5pt; text-align: justify">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
post-combination consolidated pro-forma equity will reflect DSS Common Stock and DSS Preferred Stock (if approved), including that
issued to Lexington and Palladium Capital as DSS is the legal acquirer. Shares used to calculate the unaudited pro-forma
basis and diluted loss per share were computed by adding the shares assumed to be issued upon the Merger to the weighted
average number of shares outstanding of DSS for the year ended December 31, 2011 and the nine months ended September 30,
2012, respectively. Potentially dilutive securities issuable under preferred stock agreements (if approved), convertible debt
agreements, options, warrants, and restricted stock agreements were excluded from the calculations of diluted earnings per
share because their inclusion would have been anti-dilutive to DSS&rsquo;s losses in the respective periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">For the year ended<BR> December 31, 2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; font-weight: bold; text-align: left; padding-bottom: 1pt">Net loss &ndash;($ -in thousands)</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 15%; border-bottom: Black 1pt solid; text-align: right">(7,456</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Weighted average of Document Security Systems shares of common stock outstanding for the period:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,454,046</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Weighted average of Document Security Systems shares of common stock expected to be issued to
    former Lexington Technology Group stockholders, as of January 1, 2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,395,486</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Less: Escrow shares</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,100,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Weighted average of Document Security Systems shares of common stock issued to Palladium Capital,
    as&nbsp; of January 1, 2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">786,678</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,536,210</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Basic and diluted net loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.21</TD><TD STYLE="text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<DIV STYLE="border: Black 1pt solid; width: 100%">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">For the nine months ended<BR> September
    30, 2012</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; font-weight: bold; text-align: left; padding-bottom: 1pt">Net loss &ndash;($ -in thousands)</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 15%; border-bottom: Black 1pt solid; text-align: right">(10,471</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Weighted average of Document Security Systems shares of common stock outstanding for the period</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,536,448</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Weighted average of Document Security Systems shares of common stock expected to be issued to
    former Lexington Technology Group stockholders, as of January 1, 2011.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,395,486</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Less: Escrow shares</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,100,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Weighted average of Document Security Systems shares of common stock issued to Palladium Capital,
    as of January 1, 2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">786,678</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,618,612</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Basic and diluted net loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.29</TD><TD STYLE="text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>MARKET PRICE DATA AND DIVIDEND INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Market Price</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The table below sets
forth, for the calendar quarters indicated, the high and low sales prices per share of DSS Common Stock, which trades on the NYSE
MKT under the symbol &ldquo;DSS.&rdquo; DSS&rsquo;s fiscal year ends on December 31st.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS<BR> Common<BR> Stock</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">High</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Low</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Fiscal Year 2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 74%; text-align: left">First Quarter</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">4.50</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2.32</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Second Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.04</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.66</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Third Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.18</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.97</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Fourth Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.32</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Fiscal Year 2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">First Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5.65</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.03</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Second Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.16</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.90</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Third Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.97</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1.86</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Fourth Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.50</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.33</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Fiscal Year 2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">First Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5.12</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.40</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Second Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.34</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.26</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Third Quarter</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.35</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3.50</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Fourth Quarter (through November 19, 2012)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4.26</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2.50</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The closing price as of November 19,
2012 was $2.73. Lexington is a private company and shares of its capital stock are not publicly traded.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Record Holders</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">As of November 19, 2012, DSS had 911 stockholders
of record.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Dividends</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS has not declared
or paid any cash dividend on its capital stock during the two most recent fiscal years. Any determination to pay dividends to
holders of DSS Common Stock in the future will be at the discretion of the DSS board of directors and will depend upon many factors,
including DSS&rsquo;s financial condition, results of operations, capital requirements and any other factors that the DSS board
of directors considers appropriate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 2, 2012,
the first trading day following the announcement of the Merger, the last reported sale price of DSS Common Stock was $4.15, for
an aggregate market value of DSS of $90,079,763, or $108,003,696 on a fully diluted basis. On [&bull;], the latest practicable
date before the printing of this proxy statement/prospectus, the last reported sale price of DSS Common Stock was $[&bull;], for
an aggregate market value of DSS of $[&bull;] million, or $[&bull;] million on a fully diluted basis. Assuming the issuance on
such date of an aggregate of [&bull;] shares of DSS Common Stock and an aggregate of [&bull;] shares of DSS Preferred Stock based
on a Common Stock Exchange Ratio of [&bull;], an aggregate of [&bull;] of DSS Warrants if the Merger was completed on such date,
the market value attributable to the shares of DSS Common Stock to be issued to Lexington&rsquo;s stockholders in the aggregate,
or approximately [&bull;]% of the outstanding shares of the combined company calculated on a fully diluted basis, would equal
$[&bull;] million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth information as of November 19, 2012, regarding the beneficial ownership of the combined company upon completion of the
Merger by (i) each person known by the management of DSS and Lexington that is expected to become the beneficial owner of 5% of
the common stock of the combined company upon completion of the Merger, (ii) each director and named executive officer of the
combined company, and (iii) all directors and named executive officers of the combined company as a group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Information with respect
to beneficial ownership is based solely on a review of DSS capital stock transfer records and on publicly available filings made
with the SEC by or on behalf of the stockholders listed below and on Lexington&rsquo;s stock ledger. Unless otherwise indicated
in the footnotes, the address for each listed stockholder is: c/o Lexington Technology Group, Inc., 375 Park Avenue, 26th Floor,
New York, New York 10152.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The percent of common
stock before the merger is based on 21,705,967 shares of DSS common stock that were outstanding as of November 19, 2012. The percent
of common stock of the combined company after the merger is based on 49,842,645 shares of common stock of the combined company
outstanding upon completion of the Merger on an as-converted basis with respect to the DSS preferred stock issued in connection
with the Merger and assumes that the Exchange Ratio to be used in connection with the Merger is approximately 1.02 shares of DSS
common stock and DSS Warrants for each share of Lexington capital stock (without giving effect to the proposed reverse stock split
described elsewhere in this proxy statement/prospectus) and that Lexington has at least $9,000,000 at the Effective Time of the
Merger (and accordingly, the maximum amount of Additional Shares are issued). Shares of DSS common stock subject to stock options
and warrants that are currently exercisable or exercisable within 60 days after November 19, 2012 are treated as outstanding and
beneficially owned by the holder of such options for the purpose of computing the percentage ownership of the combined company&rsquo;s
common stock of such holder, but are not treated as outstanding for the purpose of computing the percentage ownership of the combined
company&rsquo;s common stock of any other stockholder. Shares of Lexington common stock subject to options that are currently
exercisable or exercisable within 60 days of November 19, 2012 are treated as outstanding and beneficially owned by the holder
of such options for the purpose of computing the percentage ownership of the combined company&rsquo;s common stock of such holder,
but are not treated as outstanding for the purpose of computing the percentage ownership of the combined company&rsquo;s common
stock of any other stockholder. Unless otherwise indicated, DSS and Lexington believe that each of the persons named in this table
has sole voting and investment power with respect to all shares shown as beneficially owned by them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">Before the Merger</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">After the Merger</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">Name and Address of Beneficial Owner</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Amount&nbsp;of<BR> Beneficial<BR> Ownership</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Percent<BR> of<BR> Class</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Amount&nbsp;of<BR> Beneficial<BR> Ownership</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Percent&nbsp;of<BR> Class</TD><TD STYLE="font-weight: bold; text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; text-indent: -10pt; padding-left: 10pt">5% Stockholders
    (Preferred)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%; text-align: left">Hudson Bay Master Fund, Ltd.<BR> 777 Third Avenue<BR> New York, NY 10017</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="width: 1%; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="width: 1%; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right; vertical-align: top">5,147,606</TD><TD STYLE="width: 1%; text-align: left; vertical-align: top">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right; vertical-align: top">99</TD><TD STYLE="width: 1%; text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">1960480 BT, LLC (10)<BR> 2515 McKinney Ave <BR> Suite 1000<BR> Dallas, TX 75201</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">47,467</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left">5% Stockholders (Common)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Hudson Bay Master Fund, Ltd.<BR> 777 Third Avenue<BR> New York, NY 10017</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">725,805</TD><TD STYLE="text-align: left; vertical-align: top">(3)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">3.3</TD><TD STYLE="text-align: left; vertical-align: top">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">5,146,606</TD><TD STYLE="text-align: left; vertical-align: top">(9)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">9.99</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">1960480 BT, LLC<BR> 2515 McKinney Ave <BR> Suite 1000<BR> Dallas, TX75201</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">5,055,630</TD><TD STYLE="text-align: left; vertical-align: top">(10)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">9.99</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Barry Honig <BR> 4400 Biscayne Boulevard<BR> Suite 850<BR> Miami, FL 33137</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">161,290</TD><TD STYLE="text-align: left; vertical-align: top">(17)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">4,377,867</TD><TD STYLE="text-align: left; vertical-align: top">(11)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">8.65</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Four Kids Investment Funds LLC<BR>
    (Alan Honig)<BR> 4400 Biscayne Boulevard<BR> Suite 850<BR> Miami, FL 33137</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">2,511,680</TD><TD STYLE="text-align: left; vertical-align: top">(12)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">5.00</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; font-style: italic; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; text-indent: -10pt; padding-left: 10pt">Named Executive
    Officers and Directors:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&nbsp;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Philip Jones (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">163,333</TD><TD STYLE="text-align: left; vertical-align: top">(4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">*</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">163,333</TD><TD STYLE="text-align: left; vertical-align: top">(4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">*</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">David Klein (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">8,333</TD><TD STYLE="text-align: left; vertical-align: top">(5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">*</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">8,333</TD><TD STYLE="text-align: left; vertical-align: top">(5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">*</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Robert B. Fagenson (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1,058,500</TD><TD STYLE="text-align: left; vertical-align: top">(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">4.87</TD><TD STYLE="text-align: left; vertical-align: top">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1,058,500</TD><TD STYLE="text-align: left; vertical-align: top">(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">2.12</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Ira A. Greenstein (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">52,333</TD><TD STYLE="text-align: left; vertical-align: top">(7)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">*</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">52,333</TD><TD STYLE="text-align: left; vertical-align: top">(7)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">*</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Robert B. Bzdick (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">673,773</TD><TD STYLE="text-align: left; vertical-align: top">(8)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">3.08</TD><TD STYLE="text-align: left; vertical-align: top">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">673,773</TD><TD STYLE="text-align: left; vertical-align: top">(8)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1.35</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Peter Hardigan (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">141,344</TD><TD STYLE="text-align: left; vertical-align: top">(13)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">*</TD><TD STYLE="text-align: left; vertical-align: top"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Warren Hurwitz (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">*</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Jeffrey Ronaldi (2)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">&mdash;</TD><TD STYLE="text-align: left; vertical-align: top">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">101,482</TD><TD STYLE="text-align: left; vertical-align: top">(14)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">*</TD><TD STYLE="text-align: left; vertical-align: top"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; text-indent: -10pt; padding-left: 10pt">All executive
    officers and directors as a group (8 persons)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">1,956,270</TD><TD STYLE="text-align: left; vertical-align: top">(15)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">8.84</TD><TD STYLE="text-align: left; vertical-align: top">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">2,199,096</TD><TD STYLE="text-align: left; vertical-align: top">(16)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right; vertical-align: top">4.37</TD><TD STYLE="text-align: left; vertical-align: top">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">*</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Does
                                                           not exceed 1%</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(1)</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The
                                                             business address of each listed stockholder is c/o Document Security
                                                             Systems, Inc., 28 East Main Street, Suite 1525, Rochester, New York
                                                             14614.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(2)</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">The
                                                             business address of each listed stockholder is c/o Lexington Technology
                                                             Group, Inc., 375 Park Avenue, 26th Floor, New York, New York 10152.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(3)</TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Includes
                                                             241,935 shares of common stock issuable upon the exercise of warrants
                                                             exercisable within 60 days of November 19, 2012.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(4)</TD><TD STYLE="text-align: justify">Includes 163,333 shares of DSS common
                                                             stock issuable upon the exercise of stock options exercisable within
                                                             60 days of November 19, 2012.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(5)</TD><TD STYLE="text-align: justify">Includes 8,333 shares of DSS common
                                                             stock issuable upon the exercise of stock options exercisable within
                                                             60 days of November 19, 2012.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(6)</TD><TD STYLE="text-align: justify">Includes 49,000 shares of DSS common
                                                             stock issuable upon the exercise of stock options exercisable within
                                                             60 days of November 19, 2012, 100,000 shares of DSS common stock held
                                                             by Mr. Fagenson&rsquo;s wife and an aggregate of 100,000 shares of
                                                             DSS common stock held in trusts for Mr. Fagenson&rsquo;s two adult
                                                             children, of which Mr. Fagenson is trustee. Mr. Fagenson disclaims
                                                             beneficial ownership of the 100,000 shares of DSS common stock held
                                                             by his wife and the 100,000 shares of DSS common stock held in trusts
                                                             for Mr. Fagenson&rsquo;s two adult children.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(7)</TD><TD STYLE="text-align: justify">Includes 52,333 shares of DSS common
                                                             stock issuable upon the exercise of stock options exercisable within
                                                             60 days of November 19, 2012.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(8)</TD><TD STYLE="text-align: justify">Includes 158,333 shares of DSS common
                                                             stock issuable upon the exercise of stock options exercisable within
                                                             60 days of November 19, 2012.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(9)</TD><TD STYLE="text-align: justify">Includes 1,442,018 shares of common
                                                             stock issuable upon the exercise of warrants that will be issued
                                                             in connection with the Merger, 2,106,697 shares of common stock to
                                                             be held in escrow for up to one year after the closing of the Merger
                                                             and to be released upon certain conditions, and 241,935 shares of
                                                             common stock issuable upon the exercise of warrants exercisable within
                                                             60 days of November 19, 2012. In addition to any shares of DSS common
                                                             stock that Hudson Bay and its affiliates will hold after the Merger,
                                                             Hudson Bay Master Fund Ltd. will hold shares of DSS preferred stock
                                                             convertible into 5,206,928 shares of DSS common stock. In accordance
                                                             with the Certificate of Designations, Preferences and Rights of Series
                                                             A Convertible Preferred Stock with respect to the DSS preferred stock
                                                             to be filed by DSS prior to the consummation of the Merger and the
                                                             terms of the DSS warrants to be received in connection with the Merger,
                                                             Hudson Bay may not convert any of the DSS preferred stock or exercise
                                                             its warrants to purchase DSS common stock to the extent that after
                                                             giving effect to such conversion or exercise, as the case may be,
                                                             Hudson Bay (together with its affiliates) would have acquired, through
                                                             conversion of DSS preferred stock, exercise of DSS warrants or otherwise,
                                                             beneficial ownership of a number of shares of DSS common stock that
                                                             exceeds 9.99% of the number of shares of DSS common stock outstanding
                                                             immediately after giving effect to such conversion, excluding for
                                                             purposes of such determination, shares of DSS common stock issuable
                                                             upon conversion of the DSS preferred stock or exercise of the DSS
                                                             warrants that have not been converted or exercised. Hudson Bay Capital
                                                             Management, L.P., the investment manager of Hudson Bay Master Fund
                                                             Ltd., has voting and investment power over these securities. Sander
                                                             Gerber is the managing member of Hudson Bay Capital GP LLC, which
                                                             is the general partner of Hudson Bay Capital Management, L.P. Sander
                                                             Gerber disclaims beneficial ownership over these securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(10)</TD><TD STYLE="text-align: justify">Includes 769,068 shares of common
                                                              stock issuable upon the exercise of warrants that will be issued
                                                              in connection with the Merger, and 1,123,560 shares of common stock
                                                              to be held in escrow for up to one year after the closing of the
                                                              Merger and to be released upon certain conditions. In addition to
                                                              any shares of DSS common stock that 1960480 BT and its affiliates
                                                              will hold after the Merger, 1960480 BT will hold shares of DSS preferred
                                                              stock convertible into 79,105 shares of DSS common stock. In accordance
                                                              with the Certificate of Designations, Preferences and Rights of
                                                              Series A Convertible Preferred Stock with respect to the DSS preferred
                                                              stock to be filed by DSS prior to the consummation of the Merger
                                                              and the terms of the DSS warrants to be received in connection with
                                                              the Merger, 1960480 BT may not convert any of the DSS preferred
                                                              stock or exercise its warrants to purchase DSS common stock to the
                                                              extent that after giving effect to such conversion or exercise,
                                                              as the case may be, 1960480 BT (together with its affiliates) would
                                                              have acquired, through conversion of DSS preferred stock, exercise
                                                              of DSS warrants or otherwise, beneficial ownership of a number of
                                                              shares of DSS common stock that exceeds 9.99% of the number of shares
                                                              of DSS common stock outstanding immediately after giving effect
                                                              to such conversion, excluding for purposes of such determination,
                                                              shares of DSS common stock issuable upon conversion of the DSS preferred
                                                              stock or exercise of the DSS warrants that have not been converted
                                                              or exercised. Ryan Lane, the managing member of 1960480 BT,
                                                              has voting and investment power over these securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(11)</TD><TD STYLE="text-align: justify">Includes 635,464 shares of common
                                                              stock issuable upon the exercise of warrants that will be issued
                                                              in connection with the Merger, and 928,373 shares of common stock
                                                              to be held in escrow for up to one year after the closing of the
                                                              Merger and to be released upon certain conditions. Includes 216,589
                                                              shares of common stock, 52,655 shares of common stock issuable upon
                                                              exercise of warrants and 76,925 shares of common stock to be held
                                                              in escrow to be issued to Mr. Honig in connection with the Merger,
                                                              893,431 shares of common stock, 217,202 shares of common stock issuable
                                                              upon exercise of warrants and 317,318 shares of common stock to
                                                              be held in escrow to be issued to GRQ Consultants, Inc. 401K in
                                                              connection with the Merger, and 1,503,880 shares of common stock,
                                                              365,608 shares of common stock issuable upon exercise of warrants
                                                              and 534,130 shares of common stock to be held in escrow to be issued
                                                              to GRQ Consultants, Inc. Roth 401K FBO. Mr. Honig is the trustee
                                                              of GRQ Consultants, Inc. 401K and GRQ Consultants, Inc. Roth 401K
                                                              FBO Barry Honig, and, in such capacity, has voting and dispositive
                                                              power over the securities held by such entities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(12)</TD><TD STYLE="text-align: justify">Includes 378,526 shares of common
                                                              stock issuable upon the exercise of warrants that will be issued
                                                              in connection with the Merger, and 553,002 shares of common stock
                                                              to be held in escrow for up to one year after the closing of the
                                                              Merger and to be released upon certain conditions. Alan Honig acts
                                                              as the custodian and trustee of Four Kids Investment Funds LLC and
                                                              has voting and investment power over these securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(13)</TD><TD STYLE="text-align: justify">Includes 18,672 shares of common
                                                              stock issuable upon the exercise of warrants that will be issued
                                                              in connection with the Merger, and 27,279 shares of common stock
                                                              to be held in escrow for up to one year after the closing of the
                                                              Merger and to be released upon certain conditions. Also includes
                                                              options to purchase 16,667 shares of common stock of DSS that will
                                                              vest upon the consummation of the Merger.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(14)</TD><TD STYLE="text-align: justify">Includes 15,198 shares of common stock issuable upon the exercise of warrants that will be
                                                              issued in connection with the Merger, and 22,204 shares of common stock to be held in escrow for up to one year after the
                                                              closing of the Merger and to be released upon certain conditions.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(15)</TD><TD STYLE="text-align: justify">Includes 431,333 shares of DSS common
                                                              stock issuable upon the exercise of stock options exercisable within
                                                              60 days of November 19, 2012.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(16)</TD><TD STYLE="text-align: justify">Includes 448,000 shares of DSS common
                                                              stock issuable upon the exercise of stock options exercisable within
                                                              60 days of November 19, 2012, 33,870 shares of common stock issuable
                                                              upon the exercise of warrants that will be issued in connection
                                                              with the Merger, and 49,483 shares of common stock to be held in
                                                              escrow for up to one year after the closing of the Merger and to
                                                              be released upon certain conditions.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.45pt; text-align: justify; text-indent: -25.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 25.45pt">(17)</TD><TD STYLE="text-align: justify">Includes 80,645 shares of DSS common
                                                              stock issuable upon the exercise of stock warrants exercisable within
                                                              60 days of November 19, 2012.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because the market
price of DSS Common Stock is subject to fluctuation, the market value of the shares of DSS Common Stock that holders of Lexington
capital stock will receive in the Merger may increase or decrease. The foregoing information reflects only historical information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the completion
of the Merger and successful reapplication to the NYSE MKT for initial inclusion of the DSS Common Stock on the NYSE MKT, the
common stock of DSS, including the shares of DSS Common Stock issued to Lexington stockholders in connection with the Merger,
will continue to be listed on the NYSE MKT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This proxy statement/prospectus
and the other documents referred to in this proxy statement/prospectus contain or may contain forward-looking statements of DSS
within the meaning of Section 21E of the Exchange Act, which is applicable to DSS but not to Lexington because DSS, unlike Lexington,
is a public company subject to the reporting requirements of the Exchange Act. For this purpose, any statements contained herein,
other than statements of historical fact, may be forward-looking statements under the provisions of the Private Securities Litigation
Reform Act of 1995. Such statements can be identified by the fact that they do not relate strictly to historical or current facts.
Statements that include words such as may, will, project, might, expect, believe, anticipate, intend, could, would, estimate,
continue or pursue or the negative of these words or other words or expressions of similar meaning may identify forward-looking
statements. These forward-looking statements are found at various places throughout this proxy statement/prospectus and the other
documents referred to and relate to a variety of matters, including but not limited to (i) the timing and anticipated completion
of the Merger, (ii) the benefits expected to result from the Merger, (iii) the anticipated business of the combined company following
the completion of the Merger, and (iv) other statements that are not purely statements of historical fact. These forward-looking
statements are made on the basis of the current beliefs, expectations, and assumptions of management are not guarantees of performance
and are subject to significant risks and uncertainty. These forward-looking statements should, therefore, be considered in light
of various important factors, including those set forth in this proxy statement/prospectus and those that are referred to in this
proxy statement/prospectus. Important factors that could cause actual results to differ materially from those described in forward-looking
statements contained herein include, but are not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">the expected timetable for completing the Merger;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify; width: 90%">the potential value created by the Merger for DSS&rsquo;s and Lexington&rsquo;s
    stockholders;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">the potential of the combined company&rsquo;s technology platform;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">the respective or combined ability to raise capital to fund the combined operations
    and business plan;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">the listing of the combined company&rsquo;s securities on the NYSE MKT;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">market acceptance of DSS products;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">the collective ability to protect intellectual property rights;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">competition from other providers and products;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">the ability to license and monetize the patents owned by Lexington, including
    the outcome of the Litigation against five companies, including Facebook, Inc. and LinkedIn Corporation; and</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">the combined company&rsquo;s management and board of directors.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition to the risk factors identified
elsewhere, various important risks and uncertainties affecting each of DSS and Lexington may cause the actual results of the combined
company to differ materially from the results indicated by the forward-looking statement in this proxy statement/prospectus, including
without limitation:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">the financial condition, financing requirements, prospects and cash flow of DSS
    and Lexington;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">expectations regarding potential growth;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%; text-align: justify">the inability to have DSS Common Stock listed for trading on the NYSE MKT or another
    national securities exchange;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">the loss of strategic relationships;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">competitive position;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">introduction and proliferation of competitive products;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">changes in technology;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">the inability to achieve sustained profitability;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">failure to implement short- or long-term growth strategies;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">decrease in the market price for the shares of common stock;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">the cost of retaining and recruiting key personnel or the loss of such key personnel;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">compliance with applicable laws;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">ability to maintain or protect the validity of patents and other intellectual property;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">ability to obtain a positive verdict or settlement arrangement in Lexington&rsquo;s initial Litigation;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">ability to internally develop new products and intellectual property; and</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 3%">&bull;</TD>
    <TD STYLE="width: 90%">liquidity.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You are cautioned
not to place undue reliance on these forward-looking statements, which speak only as of the date of this proxy statement/prospectus
or, in the case of documents referred to in this proxy statement/prospectus, as of the date of those documents. DSS disclaims
any obligation to publicly update or release any revisions to these forward-looking statements, whether as a result of new information,
future events or otherwise, after the date of this proxy statement/prospectus or to reflect the occurrence of unanticipated events,
except as required by law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RISK FACTORS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>In addition to
the other information included and referred to in this proxy statement/prospectus, including the matters addressed in the section
entitled &ldquo;Cautionary Statement Regarding Forward-Looking Statements&rdquo; beginning on page 48, you should carefully
consider the following risk factors before deciding how to vote your shares of DSS Common Stock at the DSS special meeting. These
factors should be considered in conjunction with the other information included by DSS in this proxy statement/prospectus. If
any of the risks described below or referred to in this proxy statement/prospectus actually materialize, the business, financial
condition, results of operations, or prospects of DSS, Lexington, and/or the combined company, or the stock price of DSS and/or
the combined company, could be materially and adversely affected. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risks Related to the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The issuance of
DSS&rsquo;s securities to Lexington security holders in connection with the Merger will substantially dilute the voting power
of current DSS stockholders. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the terms
of the Merger Agreement, it is anticipated that DSS will issue to Lexington common and preferred stockholders shares of DSS Common
Stock and DSS Preferred Stock (or, if the Preferred Stock Creation Proposal is not approved, $.02 Warrants) and Warrants to purchase
shares of DSS Common Stock. After such issuance (without taking into account any shares of DSS Common Stock held by Lexington
stockholders prior to the completion of the Merger, the possible release of any Escrow Shares or the exercise of any warrants),
the stockholders of Lexington are expected to own approximately 43% of the outstanding common stock of the combined company (or
46% of the outstanding common stock of the combined company calculated on a fully diluted basis) and the stockholders of DSS are
expected to own approximately 57% of the outstanding common stock of the combined company (or 54% of the outstanding common stock
of the combined company calculated on a fully diluted basis). If the Escrow Shares are released, the percentages in the preceding
sentence would be 50%, 56%, 50% and 44%. Accordingly, the issuance of shares of DSS Common Stock to Lexington stockholders in
connection with the Merger will significantly reduce the relative voting power of each share of DSS Common Stock held by current
DSS stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The announcement
and pendency of the Merger could have an adverse effect on the business prospects for DSS and/or Lexington and on DSS&rsquo;s
stock price and/or business, financial condition or results of operations. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While there have been
no significant adverse effects to date, the announcement and pendency of the Merger could disrupt DSS&rsquo;s and/or Lexington&rsquo;s
prospective and current businesses in the following ways, among others:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">&bull;</TD>
    <TD><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">third parties may seek to terminate
        and/or renegotiate their relationships with DSS or Lexington or decide not to conduct business with either DSS or Lexington
        as a result of the Merger, whether pursuant to the terms of their existing agreements with DSS and/or Lexington or otherwise;
        and</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">the attention of DSS and/or Lexington management may be directed toward the completion of
    the Merger and related matters and may be diverted from the day-to-day business operations of their respective companies,
    including from other opportunities that might otherwise be beneficial to DSS or Lexington.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Should they occur,
any of these matters could adversely affect the stock price of DSS or harm the financial condition, results of operations, or
business prospects of DSS, Lexington, and/or the combined company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Failure to complete
the Merger or delays in completing the Merger could negatively impact DSS&rsquo;s business, financial condition or results of
operations or DSS&rsquo;s stock price. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The completion of
the Merger is subject to a number of conditions and there can be no assurance that the conditions to the completion of the Merger
will be satisfied at all or satisfied in a timely manner. If the Merger is not completed or delayed, DSS will be subject to several
risks, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">the current trading price of DSS Common Stock may reflect a market assumption that the Merger
    will occur, meaning that a failure to complete the Merger or delays in completing the Merger could result in a decline in
    the price of DSS Common Stock;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">certain executive officers and/or directors of DSS may seek other employment opportunities,
    and the departure of any of DSS&rsquo;s executive officers and the possibility that DSS would be unable to recruit and hire
    experienced executives could negatively impact DSS&rsquo;s future business;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">the DSS board of directors will need to reevaluate DSS&rsquo;s strategic alternatives, such
    alternatives will include other merger and acquisition opportunities and/or additional financing necessary to ensure that
    DSS has sufficient funds to operate;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">Under certain circumstances, if the Merger is terminated by either DSS or Lexington in connection
    with or due to DSS entering into an alternate transaction constituting a superior proposal, then DSS is required to pay to
    Lexington a termination fee in cash equal to the sum of (i) $3,000,000 plus (ii) 5% of the consideration paid to all security
    holders of DSS in connection with such superior proposal in the same form as such consideration is paid to such security holders;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">DSS is expected to incur substantial transaction costs in connection with the Merger whether
    or not the Merger is completed; and</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">DSS would not realize any of the anticipated benefits of having completed the Merger.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the Merger is not
completed, these risks may materialize and materially and adversely affect DSS&rsquo;s business, financial condition, results
of operations, and DSS&rsquo;s stock price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Any delay in completing
the Merger may substantially reduce the benefits that DSS expects to obtain from the Merger. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to obtaining
the approval of the stockholders of each of DSS and Lexington for the consummation of the Merger, the Merger is subject to a number
of other conditions beyond the control of DSS that may prevent, delay, or otherwise materially adversely affect its completion.
DSS cannot predict whether or when the conditions required to complete the Merger will be satisfied. The requirements for satisfying
the closing conditions could delay the completion of the Merger for a significant period of time or prevent it from occurring.
Any delay in completing the Merger may materially adversely affect the benefits that DSS expects to achieve if the Merger and
the integration of the companies&rsquo; respective businesses are completed within the expected timeframe.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>NYSE MKT may consider
the anticipated Merger a &ldquo;reverse merger&rdquo; and therefore may require that DSS submit a new listing application, which
would require certain actions on the part of the combined company which may not be successful and, if unsuccessful, could make
it more difficult for holders of shares of the combined company to sell their shares.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">NYSE MKT may consider
the Merger proposed in this proxy statement/prospectus a &ldquo;reverse merger&rdquo; and might require that DSS submit a new
listing application. If it does so, NYSE MKT may not approve DSS&rsquo;s new listing application for the NYSE MKT on a timely
basis, or at all. If this occurs and the Merger is still completed, you may have difficulty converting your investments into cash
effectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, as part
of any new listing application, DSS may be required to submit, among other things, a plan for the combined company to conduct
a reverse stock split. A reverse stock split would likely increase the per share trading price by an as yet undetermined multiple.
The change in share price may affect the volatility and liquidity of the combined company&rsquo;s stock, as well as the marketplace&rsquo;s
perception of the stock. As a result, the relative price of the combined company&rsquo;s stock may decline and/or fluctuate more
than in the past, and you may have trouble converting your investments in the combined company into cash effectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Some of the directors
and executive officers of DSS have interests in the Merger that are different from, or in addition to, those of the other DSS
stockholders.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">When considering the
recommendation by the DSS board of directors that the DSS stockholders vote &ldquo;for&rdquo; each of the DSS Proposals, DSS&rsquo;s
stockholders should be aware that certain of the directors and executive officers of DSS have arrangements that provide them with
interests in the Merger that are different from, or in addition to, those of the stockholders of DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For instance,
in connection with the Merger, (i) Robert B. Fagenson, Ira A. Greenstein, David Klein and Robert B. Bzdick, each a
current director of the DSS board of directors, will continue to serve as a director of the combined company following the
completion of the Merger, and the remaining directors of DSS will resign, effective as of the completion of the Merger, (ii)
Philip Jones and Robert B. Bzdick, currently executive officers of DSS, will remain executive officers of the combined
company following the completion of the Merger, and (iii) options to purchase an aggregate of 775,000 shares of DSS common
stock at an exercise price of $3.00 per share for a term of five years that were granted to certain of DSS&rsquo;s executives,
board members and senior managers. In addition, an aggregate of $155,000 in bonus
payments will be made to such executives and senior managers upon the closing of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the directors
and executive officers of DSS also have certain rights to indemnification and to directors&rsquo; and officers&rsquo; liability
insurance that will be provided by the combined company following the completion of the Merger. See the sections entitled &ldquo;The
Merger&nbsp;&mdash;&nbsp;Interests of DSS Directors and Executive Officers in the Merger&rdquo; beginning on page 87.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS board of directors
was aware of and considered these interests, among other matters, in evaluating and negotiating the Merger Agreement and in recommending
that DSS stockholders approve the DSS Proposals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The Merger Agreement
contains provisions that could discourage or make it difficult for a third party to acquire DSS prior to the completion of the
Merger.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
contains provisions that make it difficult for DSS to entertain a third-party proposal for an acquisition of DSS. These provisions
include the general prohibition on DSS&rsquo;s soliciting or engaging in discussions or negotiations regarding any alternative
acquisition proposal. In addition, under certain circumstances, if the Merger is terminated by either DSS or Lexington in connection
with or due to DSS entering into an alternate transaction constituting a superior proposal, then DSS is required to pay to Lexington
<FONT STYLE="color: black">a termination f</FONT>ee in cash equal to the sum of (i) $3,000,000 plus (ii) 5% of the consideration
paid to all security holders of DSS in connection with such superior proposal in the same form as such consideration is paid to
such security holders. See the sections entitled &ldquo;The Merger Agreement&nbsp;&mdash;&nbsp;No Solicitation,&rdquo; &ldquo;The
Merger Agreement&nbsp;&mdash;&nbsp;Board Recommendations&rdquo; and &ldquo;The Merger Agreement&nbsp;&mdash;&nbsp;Termination
Fees and Expenses&rdquo; beginning on pages 102, 104, and 106, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">These provisions might
discourage an otherwise interested third party from considering or proposing an acquisition of DSS, even one that may be deemed
of greater value than the Merger to DSS stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Lexington can terminate
the Merger Agreement for any reason or no reason upon payment of a termination fee and DSS will have no recourse against Lexington.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the Merger
Agreement, Lexington can terminate the Merger Agreement, at any time, for any reason or no reason, upon payment to DSS of a termination
fee equal to $5,000,000. DSS will have no recourse against Lexington other than receiving such termination fee and would not realize
any of the anticipated benefits of having completed the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>If the Merger does
not qualify as a &ldquo;reorganization&rdquo; under Section 368(a) of the Code, the stockholders of Lexington may be required
to pay substantial United States federal income taxes as a result of the Merger. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS and Lexington
intend that the Merger <FONT STYLE="color: black">will </FONT>qualify as a &ldquo;reorganization&rdquo; under Section 368(a) of
the Code. DSS and Lexington currently anticipate that the United States holders of shares of Lexington capital stock generally
should not recognize taxable gain or loss as a result of the Merger. However, neither DSS nor Lexington has requested, or intends
to request, a ruling from the IRS with respect to the tax consequences of the Merger, and there can be no assurance that the companies&rsquo;
position would be sustained if challenged by the IRS. Accordingly, if there is a final determination that the Merger does not
qualify as a &ldquo;reorganization&rdquo; under Section 368(a) of the Code and is taxable for United States federal income tax
purposes, Lexington stockholders generally would recognize taxable gain or loss on their receipt of equity securities of DSS in
connection with the Merger equal to the difference between such stockholder&rsquo;s adjusted tax basis in their shares of Lexington
capital stock and the fair market value of the equity securities of DSS. For a more complete discussion of the material United
States federal income tax consequences of the Merger, see the section entitled &ldquo;Material United States Federal Income Tax
Consequences of the Merger&rdquo; beginning on page 92.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Litigation may
be instituted against DSS, members of the DSS board of directors, Lexington, members of the Lexington board of directors, and
Merger Sub challenging the Merger and adverse judgments in these lawsuits may prevent the Merger from becoming effective within
the expected timeframe or at all.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS, members of the
DSS board of directors, Lexington, members of the Lexington board of directors, and Merger Sub may be named as defendants in class
action lawsuits to be brought by DSS or Lexington stockholders challenging the Merger. If the plaintiffs in these potential cases
are successful, they may prevent the parties from completing the Merger in the expected timeframe, if at all. Even if the plaintiffs
in these potential actions are not successful, the costs of defending against such claims could adversely affect the financial
condition of DSS or Lexington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risks Related to the Combined Company
if the Merger Is Completed </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The failure to
integrate successfully the businesses of DSS and Lexington in the expected timeframe could adversely affect the combined company&rsquo;s
future results following the completion of the Merger. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The success of the
Merger will depend, in large part, on the ability of the combined company following the completion of the Merger to realize the
anticipated benefits from combining the businesses of DSS and Lexington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The failure to integrate
successfully and to manage successfully the challenges presented by the integration process may result in the combined company&rsquo;s
failure to achieve some or all of the anticipated benefits of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Potential difficulties
that may be encountered in the integration process include the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">using the combined company&rsquo;s cash and other assets efficiently to develop the business
    of the combined company;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">appropriately managing the liabilities of the combined company;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">potential unknown or currently unquantifiable liabilities associated with the Merger and the
    operations of the combined company;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">potential unknown and unforeseen expenses, delays or regulatory conditions associated with
    the Merger; and</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&bull;</TD>
    <TD STYLE="text-align: justify">performance shortfalls at one or both of the companies as a result of the diversion of management&rsquo;s
    attention caused by completing the Merger and integrating the companies&rsquo; operations.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS may not realize
the potential value and benefits created by the Merger. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The success of the
Merger will depend, in part, on DSS&rsquo;s ability to realize the expected potential value and benefits created from integrating
DSS&rsquo;s existing business with Lexington&rsquo;s business, which includes the maximization of the economic benefits of the
combined company&rsquo;s intellectual property portfolio. The integration process may be complex, costly, and time-consuming.
The difficulties of integrating the operations of Lexington&rsquo;s business could include, among others:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 0.25in; text-align: justify">&bull;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">failure to implement DSS&rsquo;s business plan for the combined business;</TD></TR>
<TR>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&bull;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">unanticipated issues in integrating the business of both companies;</TD></TR>
<TR>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&bull;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">Potential lost sales and customers if any customer of DSS decides not
    to do business with DSS after the Merger;</TD></TR>
<TR>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&bull;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">loss of key employees with knowledge of DSS&rsquo;s historical business
    and operations;</TD></TR>
<TR>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">&bull;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">unanticipated changes in applicable laws and regulations; and</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 0.25in; text-align: justify">&bull;</TD>
    <TD STYLE="vertical-align: top; text-align: justify">other unanticipated issues, expenses, or liabilities that could impact,
    among other things, DSS&rsquo;s ability to realize any expected benefits on a timely basis, or at all.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS may not accomplish
the integration of Lexington&rsquo;s business smoothly, successfully, or within the anticipated costs or time frame. The diversion
of the attention of management from DSS&rsquo;s current operations to the integration effort and any difficulties encountered
in combining businesses could prevent DSS from realizing the full expected potential value and benefits to result from the Merger
and could adversely affect its business. In addition, the integration efforts could divert the focus and resources of the management
of DSS and Lexington from other strategic opportunities and operational matters during the integration process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The combined company
will be dependent on certain key personnel, and the loss of these key personnel could have a material adverse effect on the combined
company&rsquo;s business, financial conditions and results of operations.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt; color: black">The
success and future prospects of the combined company largely depend on the skills, experience and efforts of its key personnel,
including Jeffrey Ronaldi, Peter Hardigan and </FONT>[&bull;]<FONT STYLE="font-size: 10pt; color: black">. The loss of Messrs.
</FONT>Ronaldi, Hardigan and [&bull;]<FONT STYLE="font-size: 10pt; color: black"> or other executives of the combined company,
or the combined company</FONT>&rsquo;s failure to retain other key personnel, would jeopardize the combined company&rsquo;s ability
to execute its strategic plan and materially harm its business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The Merger will
result in changes to the DSS board of directors and the combined company may pursue different strategies than either DSS or Lexington
may have pursued independently. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the parties complete
the Merger, the composition of the DSS board of directors will change in accordance with the Merger Agreement. Following the completion
of the Merger, the combined company&rsquo;s board of directors will consist of nine (9) members, including <FONT STYLE="color: black">Jeffrey
Ronaldi, Peter Hardigan, Warren Hurwitz</FONT>, all of whom are designees of Lexington,<FONT STYLE="color: black"> and two other
directors to be designated by Lexington</FONT> (reasonably acceptable to DSS) and <FONT STYLE="color: black">Robert B. Fagenson,
Ira A. Greenstein, Robert B. Bzdick and David Klein</FONT>, all of whom are currently members of the DSS board of directors. However,
if DSS&rsquo;s stockholders do not approve the Staggered Board Proposal, then the board of directors of DSS following the Merger
shall initially consist of eight (8) directors, four of whom as designated by Lexington and the other four as designated by DSS,
provided, that, prior to the closing of the Merger, DSS and Lexington will jointly identify a ninth person to be nominated as
a member of the board of directors of DSS following the Effective Time. Currently, it is anticipated that the combined company
will maximize the economic benefits of its intellectual property portfolio, add significant talent in technological innovation
and potentially enhance its opportunities for revenue generation through the monetization of the combined company&rsquo;s assets.
However, because the composition of the board of directors of the combined company will consist of directors from both DSS and
Lexington, the combined company may determine to pursue certain business strategies that neither DSS nor Lexington would have
pursued independently.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Ownership of the
combined company&rsquo;s common stock may be highly concentrated, and it may prevent you and other stockholders from influencing
significant corporate decisions and may result in conflicts of interest that could cause the combined company&rsquo;s stock price
to decline. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger, DSS&rsquo;s and Lexington&rsquo;s executive officers and directors continuing with the combined company, and are expected
to beneficially own or control approximately 4.37% of the combined company (see the sections entitled &ldquo;DSS Security Ownership
of Certain Beneficial Owners and Management&rdquo; beginning on page 191, &ldquo;Lexington Security Ownership of Certain
Beneficial Owners and Management&rdquo; beginning on page 193 and &ldquo;Security Ownership of Certain Beneficial Owners
and Management of the Combined Company Following the Merger&rdquo; beginning on page 195 for more information on the estimated
ownership of the combined company following the Merger). Accordingly, these executive officers and directors, acting individually
or as a group, will have substantial influence over the outcome of a corporate action of the combined company requiring stockholder
approval, including the election of directors, any merger, consolidation or sale of all or substantially all of the combined company&rsquo;s
assets or any other significant corporate transaction. These stockholders may also exert influence in delaying or preventing a
change in control of the combined company, even if such change in control would benefit the other stockholders of the combined
company. In addition, the significant concentration of stock ownership may adversely affect the market value of the combined company&rsquo;s
common stock due to investors&rsquo; perception that conflicts of interest may exist or arise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The success of
the combined company will depend in part on relationships with third parties, which relationships may be affected by third-party
preferences or public attitudes about the Merger. Any adverse changes in these relationships could adversely affect the combined
company&rsquo;s business, financial condition, or results of operations. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The combined company&rsquo;s
success will be dependent on its ability to maintain and renew the business relationships of both DSS and Lexington and to establish
new business relationships. There can be no assurance that the management of the combined company will be able to maintain such
business relationships, or enter into or maintain new business contracts and other business relationships, on acceptable terms,
if at all. The failure to maintain important business relationships could have a material adverse effect on the business, financial
condition, or results of operations of the combined company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Future results
of the combined company may differ materially from the unaudited pro forma financial statements presented in this proxy statement/prospectus
and the financial forecasts prepared by DSS and Lexington in connection with discussions concerning the Merger. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The future results
of the combined company may be materially different from those shown in the unaudited pro forma combined financial statements
presented in this proxy statement/prospectus, which show only a combination of the historical results of DSS and Lexington, prepared
by DSS and Lexington in connection with the Merger. DSS expects to incur significant costs associated with the completion of the
Merger and combining the operations of the two companies. The exact magnitude of these costs are not yet known, but are estimated
to be approximately $1,000,000. Furthermore, these costs may decrease the capital that the combined company could use for continued
development of the combined company&rsquo;s business in the future or may cause the combined company to seek to raise new capital
sooner than expected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The combined company
may require additional capital to support its present business plan and its anticipated business growth, and such capital may
not be available on acceptable terms, or at all, which would adversely affect the combined company&rsquo;s ability to operate.
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The combined company
may require additional funds to further develop its business plan. Based on current operating plans of DSS and Lexington, the
current resources of the combined company are expected to be sufficient to fund its planned operations into the fourth quarter
of 2014. Since it is impossible to predict the timing and amount of any recovery, if any, resulting from the Lexington Litigation,
we anticipate that we will need to raise additional funds through equity offerings in order to meet our liquidity requirements
in the fourth quarter of 2014. However, if revenues of DSS do not meet expectations or if operating expenses exceed expectations,
or a combination of both, then the combined company may require additional resources prior to the fourth quarter of 2014. Any
such financing that DSS undertakes will likely be dilutive to DSS&rsquo;s current stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The combined company
intends to continue to make investments to support its business growth, including patent or other intellectual property asset
creation. In addition, the combined company may also need additional funds to respond to business opportunities and challenges,
including its ongoing operating expenses, protecting its assets, satisfying debt payment obligations, developing new lines of
business and enhancing its operating infrastructure. While the combined company may need to seek additional funding for such purposes,
it may not be able to obtain financing on acceptable terms, or at all. In addition, the terms of the combined company&rsquo;s
financings may be dilutive to, or otherwise adversely affect, holders of its common stock. The combined company may also seek
additional funds through arrangements with collaborators or other third parties. The combined company may not be able to negotiate
any such arrangements on acceptable terms, if at all. If the combined company is unable to obtain additional funding on a timely
basis, it may be required to curtail or terminate some or all of its business plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, in accordance
with the terms and conditions of the Merger Agreement, DSS may not currently incur any indebtedness without the consent of Lexington.
As of September 30, 2012, the indebtedness of DSS and Lexington was approximately $3.1 million and $3.4 million, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The price of DSS
Common Stock after the Merger is completed may be affected by factors different from those currently affecting the shares of DSS.
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger, holders of Lexington capital stock will become holders of DSS Common Stock and DSS Preferred Stock. The business of
DSS differs from the business of Lexington and, accordingly, the results of operations of the combined company and the trading
price of DSS Common Stock following the completion of the Merger may be significantly affected by factors different from those
currently affecting the independent results of operations of DSS because the combined company will be conducting activities not
undertaken by DSS prior to the completion of the Merger. For a discussion of the businesses of DSS and Lexington and of certain
factors to consider in connection with those businesses, see the sections entitled &ldquo;DSS&rsquo;s Business,&rdquo; &ldquo;DSS&rsquo;s
Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations,&rdquo; &ldquo;Lexington&rsquo;s Business,&rdquo;
&ldquo;Lexington&rsquo;s Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations,&rdquo; and
the financial statements of DSS and Lexington, including the notes thereto, which are included elsewhere in this proxy statement/prospectus,
and the other information contained in this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Material weaknesses
may exist when the combined company reports on the effectiveness of its internal control over financial reporting for purposes
of its reporting requirements.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to the filing
of the registration statement of which this proxy statement/prospectus forms a part, Lexington was not subject to Sarbanes-Oxley
Act of 2002 (&ldquo;<B>Sarbanes-Oxley</B>&rdquo;). Therefore, Lexington&rsquo;s management and independent registered public accounting
firm did not perform an evaluation of Lexington&rsquo;s internal control over financial reporting in accordance with the provisions
of Sarbanes-Oxley. Following the completion of the Merger within the expected timeframe, the combined company will be required
to provide management&rsquo;s report on internal control over financial reporting in its Annual Report on Form 10-K for the year
ending December 31, 2013, as required by Section 404 of Sarbanes-Oxley. Material weaknesses may exist when the combined company
reports on the effectiveness of its internal control over financial reporting for purposes of its reporting requirements under
the Exchange Act or Section 404 of Sarbanes-Oxley following the completion of the Merger. The existence of one or more material
weaknesses would preclude a conclusion that the combined company maintains effective internal control over financial reporting.
Such a conclusion would be required to be disclosed in the combined company&rsquo;s future Annual Reports on Form 10-K and could
impact the accuracy and timing of its financial reporting and the reliability of its internal control over financial reporting,
which could harm the combined company&rsquo;s reputation and cause the market price of its common stock to drop.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS does not expect
the combined company to pay cash dividends on its common stock. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS anticipates that
the combined company will retain its earnings, if any, for future growth and therefore does not anticipate paying cash dividends
on its common stock in the future. Investors seeking cash dividends should not invest in the combined company&rsquo;s common stock
for that purpose.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Anti-takeover provisions
in the combined company&rsquo;s charter and bylaws may prevent or frustrate attempts by stockholders to change the board of directors
or current management and could make a third-party acquisition of the combined company difficult. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The combined company&rsquo;s
certificate of incorporation and bylaws, as amended, will contain provisions that may discourage, delay or prevent a merger, acquisition
or other change in control that stockholders may consider favorable, including transactions in which stockholders might otherwise
receive a premium for their shares. These provisions could limit the price that investors might be willing to pay in the future
for shares of the combined company&rsquo;s common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Because the lack
of a public market for Lexington&rsquo;s capital stock makes it difficult to evaluate the fairness of the Merger, Lexington&rsquo;s
stockholders may receive consideration in the Merger that is greater than or less than the fair market value of Lexington&rsquo;s
capital stock. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The outstanding capital
stock of Lexington is privately held and is not traded in any public market. The lack of a public market makes it difficult to
determine the fair market value of Lexington. Since the percentage of DSS Common Stock, DSS Preferred Stock and Warrants to be
issued to Lexington&rsquo;s stockholders was determined based on negotiations between the parties, it is possible that the value
of the DSS Common Stock, DSS Preferred Stock and Warrants to be issued in connection with the Merger will be greater than the
fair market value of Lexington. Alternatively, it is possible that the value of the shares of DSS Common Stock, DSS Preferred
Stock and Warrants to be issued in connection with the Merger will be less than the fair market value of Lexington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>If any of the events
described in &ldquo;Risks Related to DSS&rsquo;s Business&rdquo; or &ldquo;Risks Related to Lexington&rsquo;s Business&rdquo;
occur, those events could cause the potential benefits of the Merger not to be realized. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the completion
of the Merger, current DSS executive officers and certain Lexington executive officers and certain Lexington and DSS directors
will direct the business and operations of the combined company. Additionally, Lexington&rsquo;s business is expected to be an
important part of the business of the combined company following the Merger. As a result, the risks described below in the section
entitled &ldquo;Risks Related to Lexington&rsquo;s Business&rdquo; beginning on page 66 are among the significant risks
to the combined company if the Merger is completed. To the extent any of the events in the risks described below in either the
section entitled &ldquo;Risks Related to DSS&rsquo;s Business&rdquo; or &ldquo;Risks Related to Lexington&rsquo;s Business&rdquo;
occur, those events could cause the potential benefits of the Merger not to be realized and the market price of the combined company&rsquo;s
common stock to decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risks Related to DSS&rsquo;s Business
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS is currently,
and after the completion of the Merger the combined company will continue to be, subject to the risks described below.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS may not be
able to consummate the Merger with Lexington.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The consummation of
the Merger with Lexington is subject to stockholders approval and other closing conditions. DSS has expended significant effort
and management attention to the proposed transaction. There is no assurance that the Merger will be approved. For example, DSS&rsquo;s
stockholders may not approve the Merger. If the Merger is not consummated for any reason, DSS&rsquo;s business and operations,
as well as the market price of its common stock may be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS has a history
of losses.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS has a history
of losses. In fiscal 2011, 2010, and 2009, DSS incurred losses of approximately $3.2 million, $3.5 million, and $4.0&nbsp;million,
respectively. DSS&rsquo;s results of operations in the future will depend on many factors, but largely on DSS&rsquo;s ability
to successfully market DSS&rsquo;s anti-counterfeiting products, technologies and services. DSS&rsquo;s failure to achieve profitability
in the future could adversely affect the trading price of its common stock and its ability to raise additional capital and, accordingly,
its ability to continue to grow its business. There can be no assurance that DSS will succeed in addressing any or all of these
risks, and the failure to do so could have a material adverse effect on DSS&rsquo;s business, financial condition and operating
results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS has a significant
amount of indebtedness, some of which is secured by its assets, and may be unable to satisfy its obligations to pay interest and
principal thereon when due.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;As of September
30, 2012,&nbsp;DSS has the following significant amounts of outstanding indebtedness:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">(i)</TD>
    <TD STYLE="text-align: justify">$575,000 convertible promissory note bearing interest at 10% per annum due in full on December
    29, 2013, or convertible into up to 260,180 shares of DSS Common Stock, secured by the assets of DSS&rsquo;s wholly-owned
    subsidiary, Secuprint. Interest is due quarterly.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">(ii)</TD>
    <TD STYLE="text-align: justify">$725,000 due under a term loan with Citizens Bank which matures February 1, 2015 and is payable
    in monthly payments of $25,000 plus interest. Interest accrues at 1 Month LIBOR plus 3.75% and is secured by all of the assets
    of DSS&rsquo;s subsidiary, Premier Packaging. DSS subsequently entered into an interest rate swap agreement to lock into a
    5.7% effective interest rate over the life of the term loan. The term loan has also been guaranteed by DSS and its subsidiaries
    P3 and Secuprint.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">(iii)</TD>
    <TD STYLE="text-align: justify">Up to $1,000,000 in a revolving line of credit with Citizens Bank available for use by Premier
    Packaging, subject to certain limitations which matures on May 31, 2013 (as amended) and is payable in monthly installments
    of interest only. Interest accrues at 1 Month LIBOR plus 3.75%, and is secured by all of the assets of the DSS&rsquo;s subsidiary,
    Premier Packaging. As of September 30, 2012, there was approximately $481,000 outstanding on the line.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 0.25in; text-align: justify">(iv)</TD>
    <TD STYLE="text-align: justify">$1,176,433 due under a promissory note with Citizens Bank used to purchase DSS&rsquo;s packaging
    division facility. DSS is required to pay monthly installments of $7,658 plus interest until August 2021 at which time a balloon
    payment of the remaining principal balance of $919,677 is due. DSS subsequently entered into an interest rate swap agreement
    to lock into a 5.865% effective interest rate over the life of the term loan. The promissory note is secured by a first mortgage.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All of the Citizens
Bank credit facilities are subject to various covenants including a fixed charge coverage ratio, tangible net worth and current
ratio. The Citizens Bank obligations are secured by all of the assets of Premier Packaging and are also secured through cross
guarantees by DSS and its other wholly-owned subsidiaries, P3 and Secuprint.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If DSS were to default
on any of the above indebtedness, and the creditors were to foreclose on secured assets, this could have a material adverse effect
on DSS&rsquo;s business, financial condition and operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>If DSS is unable
to adequately protect its intellectual property, its competitive advantage may disappear.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The success of DSS
will be determined in part by its ability to obtain United States and foreign patent protection for its technology and to preserve
its trade secrets. Because of the substantial length of time and expense associated with developing new document security technology,
DSS places considerable importance on patent and trade secret protection. DSS intends to continue to rely primarily on a combination
of patent protection, trade secrets, technical measures, copyright protection and nondisclosure agreements with its employees
and customers to establish and protect the ideas, concepts and documentation of software and trade secrets developed by DSS. DSS&rsquo;s
ability to compete and the ability of its business to grow could suffer if these intellectual property rights are not adequately
protected. There can be no assurance that DSS&rsquo;s patent applications will result in patents being issued or that current
or additional patents will afford protection against competitors. Failure of DSS&rsquo;s patents, copyrights, trademarks and trade
secret protection, non-disclosure agreements and other measures to provide protection of its technology and its intellectual property
rights could enable DSS&rsquo;s competitors to more effectively compete with it and have an adverse effect on DSS&rsquo;s business,
financial condition and results of operations. In addition, DSS&rsquo;s trade secrets and proprietary know-how may otherwise become
known or be independently discovered by others. No guarantee can be given that others will not independently develop substantially
equivalent proprietary information or techniques, or otherwise gain access to DSS&rsquo;s proprietary technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, DSS may
be required to litigate in the future to enforce its intellectual property rights, to protect its trade secrets, to determine
the validity and scope of the proprietary rights of others, or to defend against claims of infringement or invalidity. Any such
litigation could result in substantial costs and diversion of resources and could have a material adverse effect on DSS&rsquo;s
business, financial condition or results of operations, and there can be no assurances of the success of any such litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS may face intellectual
property infringement or other claims against it, its customers or its intellectual property that could be costly to defend and
result in its loss of significant rights.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 47.25pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 47.25pt">Although DSS has
received patents with respect to certain of its technologies, there can be no assurance that these patents will afford DSS any
meaningful protection. Although DSS believes that its use of the technology and products it has developed and other trade secrets
used in its operations do not infringe upon the rights of others, DSS&rsquo;s use of the technology and trade secrets it developed
may infringe upon the patents or intellectual property rights of others. In the event of infringement, DSS could, under certain
circumstances, be required to obtain a license or modify aspects of the technology and trade secrets it developed or refrain from
using the same. DSS may not have the necessary financial resources to defend an infringement claim made against it or be able
to successfully terminate any infringement in a timely manner, upon acceptable terms and conditions or at all. Failure to do any
of the foregoing could have a material adverse effect on DSS and its financial condition. Moreover, if the patents, technology
or trade secrets DSS developed or uses in its business are deemed to infringe upon the rights of others, DSS could, under certain
circumstances, become liable for damages, which could have a material adverse effect on DSS and its financial condition. As DSS
continues to market its products, DSS could encounter patent barriers that are not known today. A patent search may not disclose
all related applications that are currently pending in the United States Patent Office, and there may be one or more such pending
applications that would take precedence over any or all of DSS&rsquo;s applications.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, third
parties may assert that DSS&rsquo;s intellectual property rights are invalid, which could result in significant expenditures by
DSS to refute such assertions. If DSS becomes involved in litigation, DSS could lose its proprietary rights, be subject to damages
and incur substantial unexpected operating expenses. Intellectual property litigation is expensive and time-consuming, even if
the claims are subsequently proven unfounded, and could divert management&rsquo;s attention from DSS&rsquo;s business. If there
is a successful claim of infringement, DSS may not be able to develop non-infringing technology or enter into royalty or license
agreements on acceptable terms, if at all. If DSS is unsuccessful in defending claims that its intellectual property rights are
invalid, DSS may not be able to enter into royalty or license agreements on acceptable terms, if at all. This could prohibit DSS
from providing its products and services to customers, which could have a material adverse effect on DSS and its financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The value of DSS&rsquo;s
intangible assets may not be equal to their carrying values.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of September 30,
2012, DSS had approximately $5.2 million of net intangible assets, including goodwill. DSS is required to evaluate the carrying
value of such intangibles. Whenever events or changes in circumstances indicate that the carrying value of an intangible asset,&nbsp;including
goodwill, may not be recoverable, DSS will have to determine whether there has been impairment by comparing the anticipated undiscounted
cash flows (discounted cash flows for goodwill) from the operation and eventual disposition of the product line with its carrying
value. If any of DSS&rsquo;s intangible assets are deemed to be impaired then it will result in a significant reduction of the
operating results in such period. No impairments were recognized as of September 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Certain of DSS&rsquo;s
recently developed products are not yet commercially accepted and there can be no assurance that those products will be accepted,
which would adversely affect DSS&rsquo;s financial results.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Over the past several
years, DSS has spent significant funds and time to create new products by applying its technologies onto media other than paper,
including plastic and cardboard packaging, and delivery of DSS&rsquo;s technologies digitally. DSS has had limited success to
date in selling its products that are on cardboard packaging and those that are delivered digitally. DSS&rsquo;s business plan
for 2012 and beyond includes plans to incur significant marketing, intellectual property development and sales costs for these
newer products, particularly the digitally delivered products. If DSS is not able to sell these new products, its financial results
will be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The results of
DSS&rsquo;s research and development efforts are uncertain and there can be no assurance of the commercial success of its products.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS believes that
it will need to continue to incur research and development expenditures to remain competitive. The products DSS is currently developing
or may develop in the future may not be technologically successful. In addition, the length of DSS&rsquo;s product development
cycle may be greater than it originally expected and DSS may experience delays in future product development. If DSS&rsquo;s resulting
products are not technologically successful, they may not achieve market acceptance or compete effectively with DSS&rsquo;s competitors&rsquo;
products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Changes in document
security technology and standards could render DSS&rsquo;s applications and services obsolete.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The market for document
security products, applications, and services is fast moving and evolving. Identification and authentication technology is constantly
changing as DSS and its competitors introduce new products, applications, and services, and retire old ones as customer requirements
quickly develop and change. In addition, the standards for document security are continuing to evolve. If any segments of DSS&rsquo;s
market adopt technologies or standards that are inconsistent with DSS&rsquo;s applications and technology, sales to those market
segments could decline, which could have a material adverse effect on DSS and its financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The market in which
DSS operates is highly competitive, and DSS may not be able to compete effectively, especially against established industry competitors
with greater market presence and financial resources.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s market
is highly competitive and characterized by rapid technological change and product innovations. DSS competitors may have advantages
over DSS because of their longer operating histories, more established products, greater name recognition, larger customer bases,
and greater financial, technical and marketing resources. As a result, they may be able to adapt more quickly to new or emerging
technologies and changes in customer requirements, and devote greater resources to the promotion and sale of their products. Competition
may also force DSS to decrease the price of DSS&rsquo;s products and services. DSS cannot assure you that it will be successful
in developing and introducing new technology on a timely basis, new products with enhanced features, or that these products, if
introduced, will enable DSS to establish selling prices and gross margins at profitable levels.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS&rsquo;s growth
strategy depends, in part, on DSS acquiring complementary businesses and assets and expanding DSS&rsquo;s existing operations
to include manufacturing capabilities, which DSS may be unable to do. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s growth
strategy is based, in part, on its ability to acquire businesses and assets that are complementary to its existing operations
and expanding DSS&rsquo;s operations to include manufacturing capabilities. DSS may also seek to acquire other businesses. The
success of this acquisition strategy will depend, in part, on DSS&rsquo;s ability to accomplish the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">identify
                                                                                                               suitable businesses
                                                                                                               or assets to buy;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">complete
                                                                                                               the purchase of
                                                                                                               those businesses
                                                                                                               on terms acceptable
                                                                                                               to DSS;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">complete
                                                                                                               the acquisition
                                                                                                               in the time frame
                                                                                                               DSS expects; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">improve
                                                                                                               the results of
                                                                                                               operations of the
                                                                                                               businesses that
                                                                                                               DSS buys and successfully
                                                                                                               integrate their
                                                                                                               operations into
                                                                                                               DSS&rsquo;s.</TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although DSS has been
able to make acquisitions in the past, there can be no assurance that DSS will be successful in pursuing any or all of these steps
on future transactions. DSS&rsquo;s failure to implement its acquisition strategy could have an adverse effect on other aspects
of DSS&rsquo;s business strategy and its business in general. DSS may not be able to find appropriate acquisition candidates,
acquire those candidates that DSS finds or integrate acquired businesses effectively or profitably.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS has in the past
used, and may continue to use, its common stock as payment for all or a portion of the purchase price for acquisitions. If DSS
issues significant amounts of its common stock for such acquisitions, this could result in substantial dilution of the equity
interests of DSS stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; text-indent: 0.5in"><B>If
DSS fails to retain certain of its key personnel and attract and retain additional qualified personnel, DSS might not be able
to pursue its growth strategy.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s future
success depends upon the continued service of certain of its executive officers and other key sales and research personnel who
possess longstanding industry relationships and technical knowledge of DSS products and operations. Although DSS believes that
its relationship with these individuals is positive, there can be no assurance that the services of these individuals will continue
to be available to DSS in the future. There can be no assurance that these persons will agree to continue to be employed by DSS
after the expiration dates of their current contracts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>If DSS does not
successfully expand its sales force, it may be unable to increase its revenues.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS must expand the
size of its marketing activities and sales force to increase revenues. DSS continues to evaluate various methods of expanding
its marketing activities, including the use of outside marketing consultants and representatives and expanding its in-house marketing
capabilities. If DSS is unable to hire or retain qualified sales personnel or if newly hired personnel fail to develop the necessary
skills to be productive, or if they reach productivity more slowly than anticipated, DSS&rsquo;s ability to increase its revenues
and grow could be compromised. The challenge of attracting, training and retaining qualified candidates may make it difficult
to meet DSS&rsquo;s sales growth targets. Further, DSS may not generate sufficient sales to offset the increased expense resulting
from expanding DSS&rsquo;s sales force or DSS may be unable to manage a larger sales force.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Future growth in
DSS&rsquo;s business could make it difficult to manage DSS&rsquo;s resources.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s anticipated
business expansion could place a significant strain on its management, administrative and financial resources. Significant growth
in DSS&rsquo;s business may require it to implement additional operating, product development and financial controls, improve
coordination among marketing, product development and finance functions, increase capital expenditures and hire additional personnel.
There can be no assurance that DSS will be able to successfully manage any substantial expansion of its business, including attracting
and retaining qualified personnel. Any failure to properly manage its future growth could negatively impact its business and operating
results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS cannot predict
its future capital needs and DSS may not be able to secure additional financing.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS may need to raise
additional funds in the future to fund its working capital needs, to fund more aggressive expansion of its business, to complete
development, testing and marketing of its products and technologies, or to make strategic acquisitions or investments. DSS may
require additional equity or debt financings, collaborative arrangements with corporate partners or funds from other sources for
these purposes. No assurance can be given that necessary funds will be available for DSS to finance its development on acceptable
terms, if at all. Furthermore, such additional financings may involve substantial dilution of DSS stockholders or may require
that DSS relinquish rights to certain of its technologies or products. In addition, DSS may experience operational difficulties
and delays due to working capital restrictions. If adequate funds are not available from operations or additional sources of financing,
DSS may have to delay or scale back its growth plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>If DSS is unable
to respond to regulatory or industry standards effectively, its growth and development could be delayed or limited.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s future
success will depend in part on its ability to enhance and improve the functionality and features of its products and services
in accordance with regulatory or industry standards. DSS&rsquo;s ability to compete effectively will depend in part on its ability
to influence and respond to emerging industry governmental standards in a timely and cost-effective manner. If DSS is unable to
influence these or other standards or respond to these or other standards effectively, its growth and development of various products
and services could be delayed or limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Changes in the
laws and regulations to which DSS are subject may increase DSS&rsquo;s costs.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS is subject to
numerous laws and regulations, including, but not limited to, environmental and health and welfare benefit regulations, as well
as those associated with being a public company. These rules and regulations may be changed by local, state, provincial, national
or foreign governments or agencies. Such changes may result in significant increases in DSS&rsquo;s compliance costs. Compliance
with changes in rules and regulations could require increases to DSS&rsquo;s workforce, and could result in increased costs for
services, compensation and benefits, and investment in new or upgraded equipment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Declines in general
economic conditions or acts of war and terrorism may adversely impact DSS&rsquo;s business.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Demand for printing
services is typically correlated with general economic conditions. The recent declines in United States economic conditions have
adversely impacted DSS&rsquo;s business and results of operations, and may continue to do so for the foreseeable future. The overall
business climate of DSS&rsquo;s industry may also be impacted by domestic and foreign wars or acts of terrorism, which events
may have sudden and unpredictable adverse impacts on demand for DSS&rsquo;s products and services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS has a large
number of authorized but unissued shares of common stock, which DSS&rsquo;s management may issue without further stockholder approval,
thereby causing dilution of your holdings of DSS Common Stock.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of September 30,
2012, there were approximately 179 million authorized but unissued shares of DSS Common Stock. DSS management continues to have
broad discretion to issue shares of its common stock in a range of transactions, including capital-raising transactions, mergers,
acquisitions, for anti-takeover purposes, and in other transactions, without obtaining stockholder approval, unless stockholder
approval is required for a particular transaction under the rules of the NYSE MKT, state and federal law, or other applicable
laws. If DSS&rsquo;s board of directors determines to issue additional shares of DSS Common Stock from the large pool of authorized
but unissued shares for any purpose in the future without obtaining stockholder approval, your ownership position would be diluted
without your further ability to vote on such transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The exercise of
DSS&rsquo;s outstanding options and warrants, vesting of restricted stock awards and conversion of debt securities may depress
DSS&rsquo;s stock price. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">As
of September 30, 2012, DSS had outstanding stock options, warrants, and convertible debt, to purchase an aggregate of 4,</FONT>319,200
<FONT STYLE="font-size: 10pt">shares of DSS Common Stock at exercise prices ranging from $1.86 to $6.31 per share. This amount
includes 130,000 outstanding unvested restricted shares of DSS&rsquo;s common stock that are subject to various vesting terms
and 260,180 shares issuable upon conversion of debt securities. To the extent that these securities are converted into common
stock, dilution to DSS&rsquo;s stockholders will occur. Moreover, the terms upon which DSS will be able to obtain additional equity
capital may be adversely affected, since the holders of these securities may exercise them at a time when DSS would, in all likelihood,
be able to obtain any needed capital on terms more favorable to DSS than the exercise and conversion terms provided by those securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Sales of these securities
in the public market, or the perception that future sales of these securities could occur, could have the effect of lowering the
market price of DSS Common Stock below current levels and make it more difficult for DSS and DSS&rsquo;s stockholders to sell
DSS&rsquo;s equity securities in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Sale or the availability
for sale of shares of common stock by stockholders could cause the market price of DSS Common Stock to decline and could impair
DSS&rsquo;s ability to raise capital through an offering of additional equity securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS does not intend
to pay cash dividends.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS does not intend
to declare or pay cash dividends on its common stock in the foreseeable future. DSS anticipates that it will retain any earnings
and other cash resources for investment in its business. The payment of dividends on DSS&rsquo;s common stock is subject to the
discretion of its board of directors and will depend on DSS&rsquo;s operations, financial position, financial requirements, general
business conditions, restrictions imposed by financing arrangements, if any, legal restrictions on the payment of dividends and
other factors that its board of directors deems relevant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS has material
weaknesses in its internal control over financial reporting structure, which, until remedied, may cause errors in its financial
statements that could require restatements of its financial statements and investors may lose confidence in DSS&rsquo;s reported
financial information, which could lead to a decline in DSS&rsquo;s stock price.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Section 404 of the
Sarbanes-Oxley Act of 2002 requires DSS to evaluate the effectiveness of its internal control over financial reporting as of the
end of each year, and to include a management report assessing the effectiveness of DSS&rsquo;s internal control over financial
reporting in each Annual Report on Form 10-K.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS has identified
two material weaknesses in its internal control over financial reporting in its annual assessment of internal controls over financial
reporting that management performed for the year ended December 31, 2011. Management has concluded that (i) DSS did not maintain
a sufficient complement of qualified accounting personnel and controls associated with segregation of duties; and (ii) DSS lacks
sufficient resources within the accounting department to have effective controls associated with identifying and accounting for
complex and non-routine transactions in accordance with United States generally accepted accounting principles, and that the foregoing
represented material weaknesses in its internal control over financial reporting. DSS is uncertain at this time of the costs to
remediate all of the above listed material weaknesses, however, DSS anticipates the cost to be in the range of&nbsp;$200,000 to
$400,000 (including the cost of hiring additional&nbsp;qualified accounting personnel to eliminate segregation of duties issues
and using the services of accounting consultants for complex and non-routine transactions if and when they arise). DSS cannot
guarantee that the actual costs to remediate these deficiencies will not exceed this amount. If DSS&rsquo;s internal control over
financial reporting or disclosure controls and procedures are not effective, there may be errors in DSS&rsquo;s financial statements
and in DSS&rsquo;s disclosure that could require restatements. Investors may lose confidence in DSS&rsquo;s reported financial
information and in DSS&rsquo;s disclosure, which could lead to a decline in DSS&rsquo;s stock price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s management,
including its Chief Executive Officer and Chief Financial Officer, does not expect that DSS&rsquo;s internal control over financial
reporting will prevent all errors and all fraud. A control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the control system&rsquo;s objectives will be met. Further, the design of a control system
must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.
Controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override
of the controls. Over time, controls may become inadequate because changes in conditions or deterioration in the degree of compliance
with policies or procedures may occur. Because of the inherent limitations in a cost-effective control system, misstatements due
to error or fraud may occur and not be detected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result, DSS cannot
assure you that significant deficiencies or material weaknesses in its internal control over financial reporting will not be identified
in the future. Any failure to maintain or implement required new or improved controls, or any difficulties DSS encounters in their
implementation, could result in significant deficiencies or material weaknesses, cause DSS to fail to timely meet DSS&rsquo;s
periodic reporting obligations, or result in material misstatements in DSS&rsquo;s financial statements. Any such failure could
also materially adversely affect the results of periodic management evaluations regarding disclosure controls and procedures and
the effectiveness of DSS&rsquo;s internal control over financial reporting required under Section 404 of the Sarbanes-Oxley Act
of 2002 and the rules promulgated thereunder.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risks Related to Lexington&rsquo;s
Business</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Lexington&rsquo;s
limited operating history makes it difficult to evaluate its current business and future prospects.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington is a newly
formed development stage company and has generated no revenue to date and has only incurred expenses. Lexington was incorporated
in May 2012 and acquired a portfolio of patents from Thomas Bascom in July 2012. Therefore, Lexington not only has a very limited
operating history, but also a very limited track record in executing its business model which includes, among other things, creating,
prosecuting, licensing, litigating or otherwise monetizing its patent assets. Lexington&rsquo;s limited operating history makes
it difficult to evaluate its current business model and future prospects.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In light of the costs,
uncertainties, delays and difficulties frequently encountered by companies in the early stages of development with no operating
history, there is a significant risk that Lexington will not be able to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">implement
                                                                                                             or execute its current
                                                                                                             business plan, or
                                                                                                             that its business
                                                                                                             plan is sound; and/or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">raise
                                                                                                             sufficient funds
                                                                                                             in the capital markets
                                                                                                             to effectuate its
                                                                                                             business plan.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If Lexington cannot
execute any one of the foregoing or similar matters relating to its operations, its business may fail.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Lexington is presently
reliant exclusively on the patent assets it recently acquired. If Lexington is unable to license or otherwise monetize such assets
and generate revenue and profit through those assets or by other means, there is a significant risk that Lexington&rsquo;s business
would fail.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In July 2012, Lexington
acquired a portfolio of patent assets from Thomas Bascom that Lexington plans to license or otherwise monetize. If Lexington&rsquo;s
efforts to generate revenue from such assets fail, Lexington will have incurred significant losses and may be unable to acquire
additional assets. If this occurs, Lexington&rsquo;s business would likely fail.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Lexington has commenced
legal proceedings against five companies, including Facebook, Inc. and LinkedIn Corporation, and Lexington expects such litigation
to be time-consuming and costly, which may adversely affect Lexington&rsquo;s financial condition and its ability to operate its
business.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To license or otherwise
monetize the patent assets Lexington acquired from Thomas Bascom, Lexington has commenced legal proceedings against five companies,
including Facebook, Inc. and LinkedIn Corporation, pursuant to which Lexington alleges that such companies infringe on one or
more of Lexington&rsquo;s patents. Lexington&rsquo;s viability is highly dependent on the outcome of this litigation, and there
is a risk that Lexington may be unable to achieve the results it desires from such litigation, which failure would harm Lexington&rsquo;s
business to a great degree. In addition, the defendants in this litigation are much larger than Lexington and have substantially
more resources than Lexington does, which could make Lexington&rsquo;s litigation efforts more difficult.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington anticipates
that these legal proceedings may continue for several years and may require significant expenditures for legal fees and other
expenses. Disputes regarding the assertion of patents and other intellectual property rights are highly complex and technical.
Once initiated, Lexington may be forced to litigate against others to enforce or defend Lexington&rsquo;s intellectual property
rights or to determine the validity and scope of other parties&rsquo; proprietary rights. The defendants or other third parties
involved in the lawsuits in which Lexington is involved may allege defenses and/or file counterclaims in an effort to avoid or
limit liability and damages for patent infringement. If such defenses or counterclaims are successful, they may preclude Lexington&rsquo;s
ability to derive licensing revenue from the patents. A negative outcome of any such litigation, or one or more claims contained
within any such Litigation, could materially and adversely impact Lexington&rsquo;s business. Additionally, Lexington anticipates
that its legal fees and other expenses will be material and will negatively impact Lexington&rsquo;s financial condition and results
of operations and may result in its inability to continue its business. Lexington estimates that its legal fees over the next
twelve months will be approximately $2,000,000. Expenses thereafter are dependent on the outcome of the litigation; in the event
the case is appealed, legal fees over the course of the subsequent twelve months would be approximately $2,000,000. The costs
of enforcing Lexington&rsquo;s patent rights may exceed its recoveries from such enforcement activities. In addition, the primary
law firm being utilized by Lexington for such litigation would be entitled to a certain percentage of any recoveries from the
litigation or licensing of the patents. The inventor of the patents is likewise entitled to a percentage of such recoveries, as
is IP Navigation Group, the intellectual property consulting firm engaged by Lexington in connection with its efforts to acquire
and monetize this portfolio of patents. Accordingly, in order for Lexington to generate a profit from its patent enforcement and
monetization activities, the revenues from such enforcement and monetization activities must be high enough to offset both the
cash outlays and the contingent fees payable from such revenues. Lexington&rsquo;s failure to monetize its patent assets would
significantly harm its business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>While Lexington
believes that the patents acquired from Thomas Bascom are infringed by the defendants in the Litigation, there is a risk that
a court will find the patents invalid, not infringed or unenforceable and/or that the US Patent Office will either invalidate
the patents or materially narrow the scope of their claims during the course of a re-examination. In addition, even with a positive
trial court verdict, the patent may be invalidated, found not infringed or rendered unenforceable on appeal. This risk may occur
either presently in Lexington&rsquo;s initial litigation or from time to time in connection with future litigations Lexington
may bring. If this were to occur, it would have a material adverse effect on the viability of its company and its operations.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington believes
that certain social and business networking and other companies infringe on at least four of its patents, but recognizes that
obtaining and collecting a judgment against such infringers may be difficult or impossible. Patent litigation is inherently risky
and the outcome is uncertain. Some of the parties Lexington believes infringe on Lexington&rsquo;s patents are large and well-financed
companies with substantially greater resources than Lexington. Lexington believes that these parties would devote a substantial
amount of resources in an attempt to avoid or limit a finding that they are liable for infringing Lexington&rsquo;s patents or,
in the event liability is found, to avoid or limit the amount of associated damages. In addition, there is a risk that these parties
may file re-examinations or other proceedings with the USPTO or other government agencies in an attempt to invalidate, narrow
the scope or render unenforceable the patents Lexington acquired from Thomas Bascom.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At this time, Lexington
cannot predict the outcome of such potential litigation or administrative action, and if Lexington is unsuccessful in its litigation
efforts for any reason, Lexington&rsquo;s business would be significantly harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, in connection
with any of Lexington&rsquo;s present or future patent enforcement actions, it is possible that a defendant may request and/or
a court may rule that Lexington has violated statutory authority, regulatory authority, federal rules, local court rules, or governing
standards relating to the substantive or procedural aspects of such enforcement actions. In such event, a court may issue monetary
sanctions against Lexington or its operating subsidiaries or award attorneys&rsquo; fees and/or expenses to one or more defendants,
which could be material, and if Lexington or its subsidiaries are required to pay such monetary sanctions, attorneys&rsquo; fees
and/or expenses, such payment could materially harm Lexington&rsquo;s operating results and its financial position.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, it is
difficult in general to predict the outcome of patent enforcement litigation at the trial level. There is a higher rate of appeals
in patent enforcement litigation than more standard business litigation. Such appeals are expensive and time-consuming, and the
outcomes of such appeals are sometimes unpredictable, resulting in increased costs and reduced or delayed revenue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Finally, Lexington
believes that the more prevalent patent enforcement actions become, the more difficult it will be for Lexington to license its
patents without engaging in litigation. As a result, Lexington may need to increase the number of its patent enforcement actions
to cause infringing companies to license the patent or pay damages for lost royalties. This will adversely affect Lexington&rsquo;s
operating results due to the high costs of litigation and the uncertainty of the results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Lexington may be
unable to retain key advisors and legal counsel to represent Lexington in the current patent infringement Litigation and in future
legal proceedings.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt; color: black">The
success of Lexington&rsquo;s pending legal proceedings and future legal proceedings depends in part upon Lexington&rsquo;s ability
to retain key advisors and legal counsel to represent Lexington in such litigation. The retention of such key advisors and legal
counsel is likely to be expensive and Lexington may not be able to retain such key advisors and legal counsel on favorable economic
terms. Therefore, Lexington may be unable to retain key advisors and legal counsel to represent Lexington in its litigation, which
could have a material adverse effect on Lexington&rsquo;s business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>The patent infringement
cases initiated by Lexington may take longer and be more expensive if the cases litigated in the United States District Court
for the Eastern District of Virginia are transferred to another jurisdiction.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington initiated
its patent infringement litigation in the United States District Court for the Eastern District of Virginia. It is difficult to
predict the length of time it will take to complete such litigation. If the patent infringement cases initiated by Lexington are
transferred to another jurisdiction, Lexington believes that, as a result, the patent infringement litigation may be significantly
longer, more expensive and the financial position of Lexington could be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Lexington may seek
to internally develop additional new inventions and intellectual property, which would take time and would be costly. Moreover,
the failure to obtain or maintain intellectual property rights for such inventions would lead to the loss of Lexington&rsquo;s
investments in such activities.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Members of Lexington&rsquo;s
management team have significant experience as inventors. As such, part of Lexington&rsquo;s business may include the internal
development of new inventions or intellectual property that Lexington will seek to monetize. However, this aspect of Lexington&rsquo;s
business would likely require significant capital and would take time to achieve. Such activities could also distract Lexington&rsquo;s
management team from its present business initiatives, which could have a material and adverse effect on Lexington&rsquo;s business.
There is also the risk that Lexington&rsquo;s initiatives in this regard would not yield any viable new inventions or technology,
which would lead to a loss of Lexington&rsquo;s investments in time and resources in such activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, even
if Lexington is able to internally develop new inventions, in order for those inventions to be viable and to compete effectively,
Lexington would need to develop and maintain, and it would heavily rely on, a proprietary position with respect to such inventions
and intellectual property. However, there are significant risks associated with any such intellectual property Lexington may develop
principally including the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">patent
                                                                                                               applications Lexington
                                                                                                               may file may not
                                                                                                               result in issued
                                                                                                               patents or may
                                                                                                               take longer than
                                                                                                               Lexington expects
                                                                                                               to result in issued
                                                                                                               patents;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lexington
                                                                                                               may be subject
                                                                                                               to interference
                                                                                                               proceedings;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lexington
                                                                                                               may be subject
                                                                                                               to opposition proceedings
                                                                                                               in the U.S. or
                                                                                                               foreign countries;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">any
                                                                                                               patents that are
                                                                                                               issued to Lexington
                                                                                                               may not provide
                                                                                                               meaningful protection;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lexington
                                                                                                               may not be able
                                                                                                               to develop additional
                                                                                                               proprietary technologies
                                                                                                               that are patentable;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">other
                                                                                                               companies may challenge
                                                                                                               patents issued
                                                                                                               to Lexington;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">other
                                                                                                               companies may design
                                                                                                               around technologies
                                                                                                               Lexington has developed;
                                                                                                               and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">enforcement
                                                                                                               of Lexington&rsquo;s
                                                                                                               patents would be
                                                                                                               complex, uncertain
                                                                                                               and very expensive.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington cannot be
certain that patents will be issued as a result of any future applications, or that any of Lexington&rsquo;s patents, once issued,
will provide Lexington with adequate protection from competing products. For example, issued patents may be circumvented or challenged,
declared invalid or unenforceable, or narrowed in scope. In addition, since publication of discoveries in scientific or patent
literature often lags behind actual discoveries, Lexington cannot be certain that it will be the first to make its additional
new inventions or to file patent applications covering those inventions. It is also possible that others may have or may obtain
issued patents that could prevent Lexington from commercializing Lexington&rsquo;s products or require Lexington to obtain licenses
requiring the payment of significant fees or royalties in order to enable Lexington to conduct its business. As to those patents
that Lexington may license or otherwise monetize, Lexington&rsquo;s rights will depend on maintaining its obligations to the licensor
under the applicable license agreement, and Lexington may be unable to do so. Lexington&rsquo;s failure to obtain or maintain
intellectual property rights for Lexington&rsquo;s inventions would lead to the loss of Lexington&rsquo;s investments in such
activities, which would have a material and adverse effect on Lexington&rsquo;s company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, patent application
delays could cause delays in recognizing revenue from Lexington&rsquo;s internally generated patents and could cause Lexington
to miss opportunities to license patents before other competing technologies are developed or introduced into the market.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>New legislation,
regulations or court rulings related to enforcing patents could harm Lexington&rsquo;s business and operating results.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If Congress, the United
States Patent and Trademark Office or courts implement new legislation, regulations or rulings that impact the patent enforcement
process or the rights of patent holders, these changes could negatively affect Lexington&rsquo;s business model. For example,
limitations on the ability to bring patent enforcement claims, limitations on potential liability for patent infringement, lower
evidentiary standards for invalidating patents, increases in the cost to resolve patent disputes and other similar developments
could negatively affect Lexington&rsquo;s ability to assert its patent or other intellectual property rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, on September
16, 2011, the Leahy-Smith America Invents Act (or the Leahy-Smith Act), was signed into law. The Leahy-Smith Act includes a number
of significant changes to United States patent law. These changes include provisions that affect the way patent applications will
be prosecuted and may also affect patent litigation. The U.S. Patent Office is currently developing regulations and procedures
to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith
Act will not become effective until one year or 18 months after its enactment. Accordingly, it is too early to tell what, if any,
impact the Leahy-Smith Act will have on the operation of Lexington&rsquo;s business. However, the Leahy-Smith Act and its implementation
could increase the uncertainties and costs surrounding the prosecution of patent applications and the enforcement or defense of
Lexington&rsquo;s issued patents, all of which could have a material adverse effect on Lexington&rsquo;s business and financial
condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Further, and in general,
it is impossible to determine the extent of the impact of any new laws, regulations or initiatives that may be proposed, or whether
any of the proposals will become enacted as laws. Compliance with any new or existing laws or regulations could be difficult and
expensive, affect the manner in which Lexington conducts its business and negatively impact Lexington&rsquo;s business, prospects,
financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Lexington&rsquo;s
acquisitions of patent assets may be time consuming, complex and costly, which could adversely affect Lexington&rsquo;s operating
results.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Acquisitions of patent
or other intellectual property assets, which are and will be critical to Lexington&rsquo;s business plan, are often time consuming,
complex and costly to consummate. Lexington may utilize many different transaction structures in its acquisitions and the terms
of such acquisition agreements tend to be heavily negotiated. As a result, Lexington expects to incur significant operating expenses
and will likely be required to raise capital during the negotiations even if the acquisition is ultimately not consummated. Even
if Lexington is able to acquire particular patent assets, there is no guarantee that Lexington will generate sufficient revenue
related to those patent assets to offset the acquisition costs. While Lexington will seek to conduct confirmatory due diligence
on the patent assets Lexington is considering for acquisition, Lexington may acquire patent assets from a seller who does not
have proper title to those assets. In those cases, Lexington may be required to spend significant resources to defend Lexington&rsquo;s
interest in the patent assets and, if Lexington is not successful, its acquisition may be invalid, in which case Lexington could
lose part or all of its investment in the assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington may also
identify patent or other intellectual property assets that cost more than Lexington is prepared to spend with its own capital
resources. Lexington may incur significant costs to organize and negotiate a structured acquisition that does not ultimately result
in an acquisition of any patent assets or, if consummated, proves to be unprofitable for Lexington. These higher costs could adversely
affect Lexington&rsquo;s operating results, and if Lexington incurs losses, the value of its securities will decline.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, Lexington
may acquire patents and technologies that are in the early stages of adoption in the commercial, industrial and consumer markets.
Demand for some of these technologies will likely be untested and may be subject to fluctuation based upon the rate at which Lexington&rsquo;s
licensees will adopt its patents and technologies in their products and services. As a result, there can be no assurance as to
whether technologies Lexington acquires or develops will have value that it can monetize.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>In certain acquisitions
of patent assets, Lexington may seek to defer payment or finance a portion of the acquisition price. This approach may put Lexington
at a competitive disadvantage and could result in harm to Lexington&rsquo;s business.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington has limited
capital and may seek to negotiate acquisitions of patent or other intellectual property assets where Lexington can defer payments
or finance a portion of the acquisition price. These types of debt financing or deferred payment arrangements may not be as attractive
to sellers of patent assets as receiving the full purchase price for those assets in cash at the closing of the acquisition. As
a result, Lexington might not compete effectively against other companies in the market for acquiring patent assets, many of whom
have greater cash resources than Lexington has. In addition, any failure to satisfy Lexington&rsquo;s debt repayment obligations
may result in adverse consequences to its operating results.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Any failure to
maintain or protect Lexington&rsquo;s patent assets or other intellectual property rights could significantly impair its return
on investment from such assets and harm Lexington&rsquo;s brand, its business and its operating results.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington&rsquo;s
ability to operate its business and compete in the intellectual property market largely depends on the superiority, uniqueness
and value of Lexington&rsquo;s acquired patent assets and other intellectual property. To protect Lexington&rsquo;s proprietary
rights, Lexington relies on and will rely on a combination of patent, trademark, copyright and trade secret laws, confidentiality
agreements with its employees and third parties, and protective contractual provisions. No assurances can be given that any of
the measures Lexington undertakes to protect and maintain its assets will have any measure of success.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the acquisition
of patent assets, Lexington will likely be required to spend significant time and resources to maintain the effectiveness of those
assets by paying maintenance fees and making filings with the United States Patent and Trademark Office. Lexington may acquire
patent assets, including patent applications, which require Lexington to spend resources to prosecute the applications with the
United States Patent and Trademark Office. Further, there is a material risk that patent related claims (such as, for example,
infringement claims (and/or claims for indemnification resulting therefrom), unenforceability claims, or invalidity claims) will
be asserted or prosecuted against Lexington, and such assertions or prosecutions could materially and adversely affect Lexington&rsquo;s
business. Regardless of whether any such claims are valid or can be successfully asserted, defending such claims could cause Lexington
to incur significant costs and could divert resources away from Lexington&rsquo;s other activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Despite Lexington&rsquo;s
efforts to protect its intellectual property rights, any of the following or similar occurrences may reduce the value of Lexington&rsquo;s
intellectual property:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lexington&rsquo;s
                                                                                                               applications for
                                                                                                               patents, trademarks
                                                                                                               and copyrights
                                                                                                               may not be granted
                                                                                                               and, if granted,
                                                                                                               may be challenged
                                                                                                               or invalidated;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">issued
                                                                                                               trademarks, copyrights,
                                                                                                               or patents may
                                                                                                               not provide Lexington
                                                                                                               with any competitive
                                                                                                               advantages versus
                                                                                                               potentially infringing
                                                                                                               parties;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lexington&rsquo;s
                                                                                                               efforts to protect
                                                                                                               its intellectual
                                                                                                               property rights
                                                                                                               may not be effective
                                                                                                               in preventing misappropriation
                                                                                                               of Lexington&rsquo;s
                                                                                                               technology; or</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Lexington&rsquo;s
                                                                                                               efforts may not
                                                                                                               prevent the development
                                                                                                               and design by others
                                                                                                               of products or
                                                                                                               technologies similar
                                                                                                               to or competitive
                                                                                                               with, or superior
                                                                                                               to those Lexington
                                                                                                               acquires and/or
                                                                                                               prosecutes.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Moreover, Lexington
may not be able to effectively protect its intellectual property rights in certain foreign countries where Lexington may do business
in the future or from which competitors may operate. If Lexington fails to maintain, defend or prosecute its patent assets properly,
the value of those assets would be reduced or eliminated, and Lexington&rsquo;s business would be harmed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Lexington may not
be able to capitalize on potential market opportunities related to its licensing strategy or patent portfolio.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In order to capitalize
on its patent portfolio, Lexington intends to enter into licensing relationships. However, there can be no assurance that Lexington
will be able to capitalize on its patent portfolio or any potential market opportunity in the foreseeable future. Lexington&rsquo;s
inability to generate licensing revenues associated with potential market opportunities could result from a number of factors,
including, but not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">Lexington
                                                                                                               may not be successful
                                                                                                               in entering into
                                                                                                               licensing relationships
                                                                                                               on commercially
                                                                                                               acceptable terms;
                                                                                                               and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">challenges
                                                                                                               from third parties
                                                                                                               as to the validity
                                                                                                               of Lexington&rsquo;s
                                                                                                               patents underlying
                                                                                                               Lexington&rsquo;s
                                                                                                               licensing opportunities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Weak global economic
conditions may cause infringing parties to delay entering into licensing agreements, which could prolong Lexington&rsquo;s litigation
and adversely affect its financial condition and operating results.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington&rsquo;s
business plan depends significantly on worldwide economic conditions, and the United States and world economies have recently
experienced weak economic conditions. Uncertainty about global economic conditions poses a risk as businesses may postpone spending
in response to tighter credit, negative financial news and declines in income or asset values. This response could have a material
negative effect on the willingness of parties infringing on Lexington&rsquo;s assets to enter into licensing or other revenue
generating agreements voluntarily. Entering into such agreements is critical to Lexington&rsquo;s business plan, and Lexington&rsquo;s
failure to do so could cause material harm to its business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE MERGER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Structure of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance with
the Merger Agreement, the NYBCL and the DGCL, at the Effective Time, Merger Sub, a wholly-owned subsidiary of DSS formed solely
for the purpose of carrying out the Merger, will merge with and into Lexington with Lexington continuing as the surviving corporation
and a wholly-owned subsidiary of DSS. In connection with the Merger, each share of Lexington capital stock outstanding as of immediately
prior to the effective time will be converted into the right to receive shares of DSS Common Stock and DSS Preferred Stock (<FONT STYLE="color: black">or,
if the proposal to authorize DSS Preferred Stock is not approved by the DSS stockholders, $.02 Warrants)</FONT>, as applicable,
and Warrants, all in accordance with the terms and conditions of the Merger Agreement. The Merger will become effective when a
certificate of merger is filed with the Secretary of State of the State of Delaware or at such other time as agreed to by the
parties and specified in the certificate of merger. If the DSS stockholders approve the Securities Issuance Proposal, then DSS
expects the Merger to be completed as soon as practicable following the DSS special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>What Lexington Stockholders Will Receive in the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the terms
of the Merger Agreement, upon completion of the Merger, <FONT STYLE="color: black">and subject to the Beneficial Ownership Condition,
each share of then-issued and outstanding Lexington Common Stock and each share of then-issued and outstanding Lexington Preferred
Stock (other than shares of Lexington Common Stock and Lexington Preferred Stock held in treasury or owned by DSS or any direct
or indirect wholly-owned subsidiary of DSS or Lexington that will be canceled and retired at the Effective Time) will be automatically
converted into (i) shares of DSS Common Stock, (ii) Warrants (as described below), and (iii) a pro rata portion of the Escrow
Shares, as described in this proxy statement/prospectus, and, as applicable, shares of DSS Preferred Stock, determined by multiplying
each of (x) 17,250,000 shares plus the number of Additional Shares, as described in this proxy statement/prospectus, and Exchanged
Shares, as described in this proxy statement/prospectus, if any, (y) 4,859,894 warrants, and (z) 7,100,000 shares by the Common
Stock Exchange Ratio, which is equal to 0.998 at November 19, 2012. At the Effective Time of the Merger, DSS will issue to the
holders of Lexington Common Stock and Lexington Preferred Stock (on a <I>pro rata</I> as-converted basis) Warrants to purchase
an aggregate of 4,859,894 shares of DSS Common Stock. Upon the consummation of the Merger, only the holders of Lexington Preferred
Stock who would, after giving effect to the Merger and receipt of the merger consideration, meet the Beneficial Ownership Condition
shall receive for each share of Lexington Preferred Stock they hold the same merger consideration as outlined above except that
such holders shall receive a combination of DSS Common Stock and DSS Preferred Stock that is convertible into (or if the proposal
to authorize DSS Preferred Stock is not approved, $.02 Warrants exercisable for) that number of shares of DSS Common Stock they
would have received if they had been a holder of Lexington Common Stock immediately prior to the Effective Time in such amounts
that would enable such holders, after giving effect to the Merger, to beneficially own no more than 9.99% of DSS Common Stock
upon consummation of the Merger. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Those holders of Lexington
Preferred Stock who do not meet the Beneficial Ownership Condition and will not receive DSS Preferred Stock or $.02 Warrants,
will receive DSS Common Stock and the other types of merger consideration in exchange for their Lexington Preferred Stock based
on the Common Stock Exchange Ratio. In the event DSS&rsquo;s stockholders approve the issuance of the merger consideration, but
do not approve the authorization of the DSS Preferred Stock, then the holders of Lexington Preferred Stock that satisfy the Beneficial
Ownership Condition shall receive the $.02 Warrants to purchase DSS Common Stock with an exercise price of $0.02 per share. Each
$.02 Warrant is exercisable at any time after the date of issuance for a period of ten years. If at any time between the three
month anniversary of the issuance date and the expiration date, there is no effective registration statement registering the resale
of the shares issuable under the Warrants, then the holder may elect to exercise the Warrant, or a portion thereof, by way of
a cashless exercise. Except under certain circumstances, no holder may exercise its Warrants if such exercise would result in
such holder beneficially owning in excess of 9.99% of the number of shares of DSS Common Stock outstanding immediately after giving
effect to the issuance of shares of common stock upon exercise of the Warrant. In addition, under certain circumstances, a holder
of the $.02 Warrants will be entitled to participate in any distribution of DSS&rsquo;s assets (or the right to acquire its assets)
or any declared cash dividend, to the same extent such holder would have participated therein if such holder had held the shares
of common stock acquirable upon complete exercise of the $.02 Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Finally, at the
Effective Time, up to an aggregate of 3,600,000 outstanding and unexercised options to purchase Lexington Common Stock will
be assumed by DSS and each such option will convert into an option to purchase or acquire shares of DSS Common based on
the Option Exchange Ratio, with an exercise price per share equal to the exercise price of the applicable option
immediately prior to the Effective Time divided by the Option Exchange Ratio, with the number of shares in (i) and the price
per share in (ii) rounded up or down to the next whole share number or tenth (0.1) of a cent, as the case may be, in a manner
such that, after taking into account such rounding, both (A) the excess of the aggregate fair market value of the shares
subject to the new option over the aggregate exercise price for such shares does not exceed the excess of the aggregate fair
market value of the shares subject to the old option over the aggregate exercise price for such shares immediately prior to
the Effective Time, and (B) the ratio on a per option basis of the exercise price to the fair market value of the shares
subject to the option is not increased.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a result, i<FONT STYLE="color: black">mmediately
following the completion of the Merger (without taking into account any shares of DSS Common Stock held by Lexington stockholders
prior to the completion of the Merger), the former stockholders of Lexington are expected to own approximately 50% of the outstanding
common stock of the combined company (or 56% of the outstanding common stock of the combined company calculated on a fully diluted
basis) and the current stockholders of DSS are expected to own approximately 50% of the outstanding common stock of the combined
company (or 44% of the outstanding common stock of the combined company calculated on a fully diluted basis).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Fractional Shares
</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No fractional shares
of DSS Common Stock or DSS Preferred Stock will be issued in connection with the Merger. Instead, each Lexington stockholder who
would be otherwise entitled to receive a fractional share will receive from DSS, in lieu thereof, the next highest whole number
shares of DSS Common Stock or DSS Preferred Stock, as applicable. For an additional discussion of what Lexington stockholders
will receive in connection with the Merger, see the section entitled &ldquo;The Merger Agreement&mdash;Merger Consideration&rdquo;
beginning on page 97.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Ownership of the Combined Company after
the Completion of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger and regardless of the exact Exchange Ratio (or any reverse stock split), Lexington stockholders are expected to receive
shares of DSS Common Stock and DSS Preferred Stock and Warrants representing an aggregate of approximately 56% of the outstanding
shares of common stock of the combined company calculated on a fully diluted basis. DSS stockholders will continue to own their
existing shares of DSS Common Stock, which will not be affected by the Merger, and, unless they hold shares of Lexington capital
stock, will not receive any additional shares of DSS Common Stock in connection with the Merger. As a result, immediately upon
completion of the Merger, such shares will represent an aggregate of approximately 44% of the outstanding shares of common stock
of the combined company calculated on a fully diluted basis. For example, if you are a DSS stockholder and hold 5% of the outstanding
shares of DSS Common Stock calculated on a fully diluted basis immediately prior to the completion of the Merger and do not also
hold shares of Lexington capital stock, then upon completion of the Merger you will hold an aggregate of approximately 2.20% of
the outstanding shares of common stock of the combined company calculated on a fully diluted basis as of immediately following
the completion of the Merger. If you are a Lexington stockholder and hold 5% of the outstanding shares of Lexington capital stock
calculated on a fully diluted basis immediately prior to the completion of the Merger and do not also hold shares of DSS Common
Stock, then upon completion of the Merger you will hold an aggregate of approximately 2.80% of the outstanding shares of common
stock of the combined company, calculated on a fully diluted basis as of immediately following the completion of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Treatment of Lexington Stock Options</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the
Effective Time, up to an aggregate of 3,600,000 outstanding and unexercised options to purchase Lexington Common Stock will be
assumed by DSS and each such option will convert into an option to purchase or acquire shares of DSS Common Stock (i) in a
number equal to the number of shares of Lexington Common Stock subject to the option immediately prior to the Effective Time
based on the Option Exchange Ratio and (ii) with an exercise price per share equal to the exercise price of the applicable
option immediately prior to the Effective Time divided by the Option Exchange Ratio, with the number of shares in (i) and the
price per share in (ii) rounded up or down to the next whole share number or tenth (0.1) of a cent, as the case may be, in a
manner such that, after taking into account such rounding, both (A) the excess of the aggregate fair market value of the
shares subject to the new option over the aggregate exercise price for such shares does not exceed the excess of the
aggregate fair market value of the shares subject to the old option over the aggregate exercise price for such shares
immediately prior to the Effective Time, and (B) the ratio on a per option basis of the exercise price to the fair market
value of the shares subject to the option is not increased. As of November 19, 2012, the outstanding and unexercised stock
options to purchase 3,600,000 shares of Lexington, at an exercise price of $1.67 per share, would be converted and become
options to purchase an aggregate of 2,000,000 shares of DSS Common Stock at an exercise price of $3.00 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of [&#8729;], 2013,
the latest practicable date before the printing of this proxy statement/prospectus, there were outstanding options to purchase
3,600,000 shares of Lexington common stock. For an additional discussion of the treatment of Lexington stock options, see the
section entitled &ldquo;The Merger Agreement &#9472; Merger Consideration&rdquo; beginning on page 97.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Background of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The terms of the merger
are the result of negotiations that took place between executives and board members of DSS and executives, on the one hand, and
board members of Lexington and partners of Hudson Bay Capital Management LP (&ldquo;<B>Hudson Bay Capital</B>&rdquo;), the investment
manager of Lexington&rsquo;s large stockholder, Hudson Bay, on the other hand.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS&rsquo;s
Background</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">DSS
was incorporated in May of 1984 under the original name of Thoroughbreads, USA, Inc. DSS&rsquo;s principal executive offices are
located in Rochester, New York. In 2002, DSS chose to strategically focus on becoming a developer and marketer of secure technologies.
DSS specializes in fraud and counterfeit protection for all forms of printed documents and digital information. DSS holds numerous
patents for optical deterrent technologies that provide protection of printed information from unauthorized scanning and copying.
DSS operates three production facilities, a security and commercial printing facility, a packaging facility and a plastic card
facility- where DSS produces secure and non-secure documents for its customers. DSS licenses its anti-counterfeiting technologies
to printers and brand-owners. In addition, DSS has a digital division which provides cloud computing services for its customers,
including disaster recovery, back-up and data security services. During the period from February 2012 through the entry into the
Merger Agreement, DSS has explored a number of potential mergers to maximize shareholder value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; text-indent: 0.5in"><I>Lexington<FONT STYLE="color: black">&rsquo;s
Background</FONT></I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington was incorporated
under the laws of the state of Delaware on May 10, 2012 under the name Snip Inc. On September 10, 2012, Snip Inc. changed its
name to Lexington Technology Group, Inc. Lexington is a holding company that owns 100% of the membership interests of Bascom Research.
Bascom was incorporated in Virginia on June 6, 2012 under the name of Bascom Linking Intellectual Property, LLC, for the purpose
of acquiring and/or developing patented technologies and intellectual property. On August 29, 2012, Bascom Linking Intellectual
Property, LLC changed its name to Bascom Research, LLC. Lexington&rsquo;s principal offices are located in New York City.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>History of Events</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 7, 2012,
Michael Hartstein, Director of Investment Banking of Palladium Capital Advisors, LLC (&ldquo;<B>Palladium</B>&rdquo;), provided
an introduction among DSS and certain investors interested in participating in a DSS private placement. These investors included
Hudson Bay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 12, 2012,
DSS closed the private placement resulting in gross proceeds to DSS of $3,000,000, $1,500,000 of which were invested by Hudson
Bay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 14, 2012,
a meeting between DSS, Palladium, and certain of the investors in the private placement was held in the Rochester, New York offices
of DSS. Present at the meeting were Patrick A. White, then the Chief Executive Officer of DSS, Philip Jones, Chief Financial Officer
of DSS, Robert B. Bzdick, President and Chief Operating Officer of DSS, Jeff D&rsquo;Angelo, Vice President and General Counsel
of DSS, David Wicker, Vice President of Research and Development of DSS, Mr. Hartstein, Yoav Roth, a partner at Hudson Bay, the
investment manager for Lexington&rsquo;s  large stockholder, Hudson Bay, Barry Honig of CRQ Consultants, the Chief Operating
Officer of Party A and via telephone, John Cronin, Chief Executive Officer of IpCapital (&ldquo;<B>IpCapital</B>&rdquo;) and a
DSS director. During the meeting DSS provided an overview of DSS with particular focus on DSS&rsquo;s patent portfolio and strategy.
In addition, the Chief Executive Officer of Party A provided an overview of Party A and its patent portfolio and patent litigation
opportunities, including a patent litigation opportunity related to its search engine patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 17, 2012,
DSS received an unsolicited Letter of Intent from Party A for a proposed merger of Party A with and into DSS for the purpose of
merging Party A&rsquo;s patent asset portfolio and related patent litigation strategy with DSS. DSS began several internal discussions
regarding the Letter of Intent and potential litigation opportunity and ultimately determined it was not ready to move forward
on the proposal at that time. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 22, 2012,
DSS rejected Party A&rsquo;s offer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 24, 2012,
a dinner meeting was held in New York City between Messrs. White, Jones, Hartstein, Roth and Honig to discuss DSS and an additional
patent litigation opportunity similar to the Party A opportunity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 25, 2012,
Mr. White informed Mr. Hartstein that DSS was interested in pursuing additional patent litigation opportunities similar to the
Party A opportunity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On April 26, 2012,
DSS and Hudson Bay Capital entered into a confidentiality agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 7, 2012, a
meeting was held at the New York offices of Hudson Bay among Robert Fagenson, Chairman of the Board of DSS, Mr. Hartstein, Mr.
Roth and Mr. Honig. A potential merger transaction was discussed, including the overview of Lexington&rsquo;s (f/n/a SNIP, Inc.)
patents, the potential litigation defendants, the size and scope of the potential litigation strategy of Lexington. In addition,
the general structure of a potential merger transaction was discussed and both parties agreed to continue negotiations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 11, 2012, Mr.
Hartsein sent a Non-Binding Confidential Term Sheet for a proposed merger between DSS and Lexington. Under the Non-Binding Confidential
Term Sheet, DSS and Lexington would merge. At the effective time of the merger, Lexington would become a wholly-owned subsidiary
of DSS in exchange for 27,000,000 shares of DSS common stock, of which 9,000,000 would be subject to a &ldquo;claw back&rdquo;
provision, 12,500,000 warrants to purchase DSS common stock at exercise prices between $4.00 and $6.00 per share, and the assumption
of up to $4,000,000 of Lexington&rsquo;s debt by DSS. In addition, under the Non-Binding Confidential Term Sheet, DSS would conduct
a private placement in which Palladium would act as the placement agent. The private placement was not a condition to the consummation
of the proposed merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 21, 2012, Mr.
Fagenson sent a memo to Mr. Roth in response to the Non-Binding Confidential Term Sheet which set forth the points of difference
between DSS and Lexington, including, among other things, the number of shares to be issued to the Lexington stockholders, the
number and exercise price of the warrants, the &ldquo;claw back&rdquo; terms and the private placement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 24, 2012, Lexington
sent a revised Non-Binding Confidential Term Sheet to DSS. The only material change from the Non-Binding Confidential Term Sheet
previously delivered was changes to post-merger management and the terms of the private placement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 29, 2012, Mr.
Fagenson sent an email to Mr. Roth expressing his concern with the latest Non-Binding Confidential Term Sheet and suggested that
the merger discussions should be discontinued.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 29, 2012, Mr.
Roth responded to Mr. Fagenson&rsquo;s email by indicating that he believed the differences could be resolved, but also that if
DSS was not interested in a merger, Lexington had other companies that would be interested in the opportunity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 31, 2012, Mr.
Fagenson and Mr. Roth agreed via email to continue the negotiation process and scheduled a meeting for June 6, 2012 at the New
York offices of Hudson Bay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 6, 2012, Messrs.
Fagenson, White, Roth, Hartstein, Honig and Ira A. Greenstein, a DSS director, (via telephone) met at the New York offices of
Hudson Bay. During the meeting, significant transaction terms were discussed, including the following: (i) the structural issues
of the proposed merger that would affect the accounting treatment and tax effects of the proposed merger, (ii) the voting control
of the combined company, (ii) the composition of the board of directors and management of the combined company, and (iv) the funding
requirements of DSS post-merger. The meeting was concluded with the intention that both parties would engage legal counsel to
assist in finalizing the Non-Binding Confidential Term Sheet and prepare a Definitive Term Sheet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 15, 2012,
the DSS board of directors held its 2012 annual shareholders meeting and immediately thereafter. a board of directors meeting.
At the DSS board of directors meeting, Messrs. Fagenson and White described to the board of directors the potential merger transaction
with Lexington. After much discussion, the board of directors approved the formation of a special committee, consisting of Mr.
Fagenson, Mr. Greenstein, David Klein and Roger O&rsquo;Brien, (i) to investigate Lexington&rsquo;s proposal and any matters relating
thereto as the DSS special committee, in its sole discretion, deemed appropriate; (ii) to review and evaluate the terms of Lexington&rsquo;s
proposal and discuss such terms with Lexington and its representatives as the DSS special committee deemed appropriate; (iii)
if and when appropriate, to negotiate and execute ancillary and definitive agreements with respect to Lexington&rsquo;s proposal,
the execution and delivery of any such definitive agreements being subject, however, to the approval of the full DSS board of
directors; (iv) to report to the DSS board of directors the recommendations and conclusions of the DSS special committee with
respect to Lexington&rsquo;s proposal, including a determination or recommendation as to whether the final terms of such proposal
are fair to and in the best interests of the stockholders of DSS and should be approved by the full DSS board of directors and,
if applicable, by DSS&rsquo;s stockholders. In addition, the DSS special committee was instructed to engage legal counsel for
the transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The board of directors
of DSS also considered the cost of obtaining a fairness opinion and the relative benefits considering that the assets of Lexington
consisted solely of cash (which did not require any input from an investment banking firm) and intellectual property and determined
not to obtain a fairness opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 16,
2012, the DSS special committee held its first official meeting and elected Mr. Fagenson as Chairman of the DSS special committee.
Also at the meeting, the DSS special committee discussed next steps, including retaining an independent legal advisor to assist
the DSS special committee with its evaluation of Lexington&rsquo;s proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 16, 2012 the
DSS special committee retained Troutman Sanders LLP (&ldquo;<B>Troutman Sanders</B>&rdquo;) to act as its independent legal advisor.
Among the reasons for this selection were Troutman Sanders&rsquo; reputation, its experience in mergers and acquisitions transactions,
its experience in representing other special committees and the absence of any material prior relationship with Lexington. Troutman
Sanders provided the DSS special committee with an overview of the directors&rsquo; fiduciary duties in connection with their
role as members of the DSS special committee and discussed the independence standards under New York law. After a further discussion,
the DSS special committee determined that no conflicts existed that would
impair the ability of the DSS special committee to act in the best interests of DSS&rsquo; stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Between June 16, 2012
and June 21, 2012, Troutman Sanders and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., counsel for Lexington (&ldquo;<B>Mintz
Levin</B>&rdquo;), held a series of conference calls to discuss the transaction and consider various legal and tax structures
in relation to the proposed merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 21, 2012,
DSS sent Lexington a revised Non-Binding Confidential Term Sheet that included, among other things, the following revised terms:
(i) the number of DSS shares to be issued in the proposed merger was reduced to 24,000,000 shares, of which 8,000,000 were to
be held in escrow, (ii) added a provision that a portion of the 24,000,000 shares could be issued in the form of preferred stock
of DSS, (iii) the number of DSS warrants to be issued was reduced to 4,486,056 with an exercise price between $4.60 and $5.00,
(iv) change to the assumption of Lexington debt by DSS to up to $4,000,000 provided that Lexington had at least $4,000,000 in
cash and cash equivalents to offset the debt at the time of closing, and (5) the DSS board post-merger would consist of eleven
directors, six of which would be designated by Lexington and five of which would be designated by DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Between June 22, 2012,
and July 10, 2012, Troutman Sanders and Mintz Levin held a series of conference calls to discuss the proposed merger transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 10, 2012,
DSS sent Lexington a revised Non-Binding Confidential Term Sheet that included, among other things, the following revised terms:
(i) the number of DSS shares to be issued was increased to 25,000,000 shares, of which 7,500,000 were to be held in escrow (ii)
the number of DSS warrants to be issued was increased to 4,859,894 with an exercise price of $4.80, (iii) the condition that Lexington
have at least $7,500,000 in cash and no debt at the time of closing in exchange for an additional 2,500,000 shares of DSS common
stock, and (iv) the board of directors of the combined company would consist of nine directors, five of which would be designated
by Lexington and four of which would be designated by DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 13, 2012,
the DSS special committee held a telephonic meeting. Also present at this meeting were representatives of Troutman Sanders. Troutman
Sanders first discussed the material terms of the revised Non-Binding Confidential Term Sheet with the members of the DSS special
committee. The DSS special committee then approved the revised Non-Binding Confidential Term Sheet and recommended to the DSS
board of the directors that they approve the Non-Binding Confidential Term Sheet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 16, 2012,
the DSS board of directors held a telephonic meeting. Also present as this meeting were representatives of Troutman Sanders. Troutman
Sanders first discussed the material terms of the Non-Binding Confidential Term Sheet with the members of the DSS Board. Mr. Fagenson
then discussed with the full DSS Board the recommendation of the DSS special committee. Based on the recommendation of the DSS
special committee, the DSS board of directors approved the Non-Binding Confidential Term Sheet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 17, 2012,
the Definitive Term Sheet was signed by DSS and Lexington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Commencing on July
17, 2012, both parties began to prepare a definitive merger agreement and ancillary documents including the warrants, the voting
and support agreements, the amended DSS Certificate of Incorporation, the escrow agreement, and various employment agreements
and amendments. In addition, both parties initiated formal due diligence procedures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 18, 2012,
Troutman Sanders engaged ipCapital to provide an analysis and report of Lexington&rsquo;s patent portfolio and its proposed litigation
with Facebook, Inc. and other potential infringers. Among other reasons for taking this action, the DSS special committee noted
the analysis and report would provide additional support for the merger consideration to be paid to the Lexington stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 26, 2012 Mintz
Levin distributed an initial draft of the merger agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 3, 2012,
DSS and Troutman Sanders sent Lexington and Mintz Levin their combined comments on the initial draft of the merger agreement where,
along with various edits, suggested the concept of a staggered board to ensure that the initial composition of the post-merger
board of directors would be maintained for a period of up to three years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 10, 2012,
DSS and Troutman Sanders provided comments to the proposed warrants, including the rejection of any down-round protection provisions,
cashless exercise provisions and dividend participation rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Between August 10,
2012 and August 26, 2012, Mr. Fagenson, Mr. Roth and representatives of Troutman Sanders and Mintz Levin considered various mechanisms
that did not unduly impact the economics of the overall transaction or adversely affect the tax treatment of the transaction in
the event that DSS&rsquo;s stockholders approved the merger agreement and the proposed merger but did not approve the authorization
of the DSS convertible preferred stock. The primary use of the convertible preferred stock was the use of a beneficial ownership
limitation which was to minimize the voting control in the hands of one Lexington stockholder and also benefitting such stockholder
by reducing its obligations under the federal securities laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 27, 2012,
a revised draft of the merger agreement was sent by Mintz Levin which, among other things, included a warrant with an exercise
price of $0.02 per share that could be used to address the possibility that DSS would not gain stockholders approval for the amendment
of its Certificate of Incorporation authorizing DSS to issue the preferred stock in the merger. Prior to this date, the parties
had discussed the issuance of convertible debt and exchangeable preferred stock which would remain as preferred stock at the Lexington
level but be exchangeable for DSS common stock subject to the beneficial ownership limitation. The parties determined that convertible
debt was not desirable because it would require DSS to incur debt which would adversely affect the balance sheet and be burdensome
on DSS. The exchangeable preferred stock idea was dismissed because it was more complex than the warrants with an exercise price
of $0.02 per share and the exchange of Lexington capital stock for DSS common stock would have been a taxable transaction. Although
warrants with an exercise price of $0.02 per share were not desirable, it was more favorable than the other proposals. In addition,
this version of the merger agreement memorialized the staggered board concept.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 30, 2012,
Mr. Fagenson, Mr. Roth and representatives of Troutman Sanders and Mintz Levin met at the New York officers of Hudson Bay. During
this meeting, Mr. Fagenson and Mr. Roth agreed, among other things, to the following: (i) that if the staggered board proposal
was not approved by the DSS stockholders, the DSS board of directors post-merger will consent of eight directors, four of which
would be designated by DSS and four of which would be designated by Lexington, (ii) cashless exercise of the warrants issued in
the merger only if at the time of exercise, there was not an effective registration statement covering the resale of the shares
issued upon exercise thereof, and (iii) Dawson James Securities (&ldquo;<B>Dawson James</B>&rdquo;) would replace Palladium as
the placement agent for the private placement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 31, 2012,
Mintz Levin circulated a revised draft of the merger agreement that, among other things, included Hudson Bay as the agent for
the escrow shares, reduced the number of escrow shares to 7,100,000 and if the staggered board proposal was not approved by the
DSS stockholders, the DSS board of directors post-merger will consist of eight directors, four of which would be designated by
DSS and four of which would be designated by Lexington. Subsequent to this version of the merger agreement, while additional drafts
of the merger agreement were sent back and forth between the parties, there were no additional substantive issues or terms that
changed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 6, 2012,
Troutman Sanders delivered the final form of the merger agreement and related documents to the DSS special committee, along with
the findings of the due diligence, including the report of the patents by ipCapital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 7, 2012,
DSS replaced Palladium as placement agent for the private placement with Dawson James.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 19, 2012,
the DSS special committee met with Troutman Sanders to consider the final terms of the merger agreement and its recommendation
of the transaction to the full DSS board of directors. Troutman then described in detail Lexington&rsquo;s intellectual property
portfolio to the DSS special committee. Mr. Cronin of ipCapital then gave a report on the potential value of Lexington&rsquo;s
intellectual property. After considering, among other things, the factors discussed below under &ldquo;&mdash;Recommendation of
the DSS Special Committee and DSS Board of Directors and its Reasons for the Merger,&rdquo; the DSS special committee determined
that the proposed merger was fair to and in the best interests of DSS and its stockholders and unanimously approved resolutions
recommending that the DSS board of directors approve and declare advisable the merger agreement and the proposed merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 20, a
revised draft of the merger agreement was circulated that finalized all of the terms of the merger agreement, including the names
of the proposed post-merger executive management and board of directors and updated the merger agreement to reflect the name change
of SNIP, Inc. to Lexington Technology Group, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On September 20, 2012,
the full DSS board of directors convened to consider the DSS special committee&rsquo;s recommendation and Mr. Fagenson discussed
with the DSS board of directors the various factors which led to the recommendation of the proposed merger to the DSS board of
directors. Mr. Fagenson then reviewed with the DSS board of directors the terms of the proposed transaction. Troutman Sanders
then described in detail the material terms of the merger agreement to the DSS board of directors. Troutman Sanders directed the
DSS board of directors&rsquo; particular attention to material terms and conditions, including, but not limited to, the closing
conditions and the termination provisions. After considering, among other things, the factors described below under &ldquo;&mdash;Recommendation
of the DSS Special Committee and DSS Board of Directors and its Reasons for the Merger,&rdquo; the terms of the definitive merger
agreement and the recommendation of the special committee, the members of the board of directors unanimously determined that the
proposed merger was advisable, fair to and in the best interests of DSS shareholders and unanimously approved resolutions approving
the proposed merger and recommending that DSS&rsquo;s shareholders vote to adopt the merger agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October
1, 2012, the private placement closed resulting in net proceeds of $2,500,000 and the Merger Agreement was executed and
publicly announced by DSS and Lexington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 19,
2012, the DSS board of directors convened to discuss amending the  Merger  Agreement to provide for (i) the entry into of employment agreements between Lexington and Mr. Ronaldi and Mr. Hardigan, respectively, (ii)
the issuance of equity by Lexington in connection therewith, (iii) the cancellation of options issued to certain officers
and employees of DSS, and (iv) the increase in the number of options DSS may issue from 300,000 to 775,000.  An amendment
to the Merger Agreement was executed by the parties on November 20, 2012 memorializing the foregoing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Both the DSS special
committee and the DSS board of directors have determined that the Merger Agreement and the transactions contemplated thereby,
including the Merger, are advisable and fair to, and in the best interests of, DSS and its stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>The DSS Special
Committee </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS special committee,
acting with the advice and assistance of its legal advisor, evaluated the terms and conditions of the Merger Agreement and the
transactions contemplated thereby, including the Merger At a meeting on September 19, 2012, the DSS special committee unanimously:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">determined
                                                                                                               that the Merger
                                                                                                               Agreement and the
                                                                                                               transactions contemplated
                                                                                                               thereby, including
                                                                                                               the Merger, are
                                                                                                               advisable and fair
                                                                                                               to, and in the
                                                                                                               best interests
                                                                                                               of, DSS and its
                                                                                                               stockholders; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">recommended
                                                                                                               to the DSS board
                                                                                                               of directors that
                                                                                                               it approve and
                                                                                                               declare advisable
                                                                                                               the Merger Agreement
                                                                                                               and the transactions
                                                                                                               contemplated thereby,
                                                                                                               including the Merger,
                                                                                                               upon the terms
                                                                                                               and conditions
                                                                                                               contained therein,
                                                                                                               and that the Merger
                                                                                                               Agreement and the
                                                                                                               transactions contemplated
                                                                                                               thereby, including
                                                                                                               the Merger, be
                                                                                                               submitted to the
                                                                                                               DSS stockholders
                                                                                                               for approval and
                                                                                                               adoption. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the course of reaching
its determination and recommendations, the DSS special committee considered the following factors as being generally positive
or favorable, each of which the DSS special committee believed supported its determination and recommendations:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               belief that the
                                                                                                               combination of
                                                                                                               DSS&rsquo;s and
                                                                                                               Lexington&rsquo;s
                                                                                                               businesses would
                                                                                                               create more value
                                                                                                               for the DSS stockholders
                                                                                                               in the long-term
                                                                                                               than DSS could
                                                                                                               create as a stand-alone
                                                                                                               business given
                                                                                                               the challenges
                                                                                                               in its business
                                                                                                               and those presented
                                                                                                               by a volatile economy;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               DSS special committee's
                                                                                                               and the DSS board
                                                                                                               of directors&rsquo;
                                                                                                               consideration of
                                                                                                               strategic alternatives
                                                                                                               to the Merger in
                                                                                                               the form of a potential
                                                                                                               equity fundraising,
                                                                                                               a sale of the business
                                                                                                               or other merger
                                                                                                               scenarios considered
                                                                                                               by the DSS special
                                                                                                               committee and the
                                                                                                               DSS board in the
                                                                                                               document security
                                                                                                               industries or continuing
                                                                                                               to operate DSS
                                                                                                               on a stand-alone
                                                                                                               basis;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               opportunity for
                                                                                                               the DSS stockholders
                                                                                                               to participate
                                                                                                               in the potential
                                                                                                               future value of
                                                                                                               the combined company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">ipCapital's
                                                                                                               analysis and report
                                                                                                               of Lexington's
                                                                                                               patent portfolio
                                                                                                               and its proposed
                                                                                                               litigation with
                                                                                                               Facebook and other
                                                                                                               potential infringers;
                                                                                                               </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               consideration of
                                                                                                               DSS short- and
                                                                                                               long-term performance
                                                                                                               on a stand-alone
                                                                                                               basis;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               belief that the
                                                                                                               Merger is more
                                                                                                               favorable to the
                                                                                                               DSS stockholders
                                                                                                               than the alternatives
                                                                                                               to the Merger;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               terms and conditions
                                                                                                               of the Merger Agreement,
                                                                                                               including that
                                                                                                               DSS is permitted
                                                                                                               to engage in negotiations
                                                                                                               with, and provide
                                                                                                               information to,
                                                                                                               third parties,
                                                                                                               under certain circumstances
                                                                                                               in response to
                                                                                                               an unsolicited
                                                                                                               proposals received
                                                                                                               by DSS prior to
                                                                                                               stockholder approval
                                                                                                               of the Merger that
                                                                                                               DSS&rsquo;s board
                                                                                                               of directors determines
                                                                                                               in good faith constitutes
                                                                                                               or would reasonably
                                                                                                               be expected to
                                                                                                               lead to a transaction
                                                                                                               that is more favorable
                                                                                                               to DSS stockholders
                                                                                                               than the Merger;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               belief that the
                                                                                                               terms of the Merger
                                                                                                               Agreement, including
                                                                                                               the parties&rsquo;
                                                                                                               representations,
                                                                                                               warranties and
                                                                                                               covenants and the
                                                                                                               conditions to their
                                                                                                               respective obligations,
                                                                                                               are reasonable;
                                                                                                               </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               likelihood that
                                                                                                               the Merger will
                                                                                                               be completed on
                                                                                                               a timely basis;
                                                                                                               and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               fact that the Common
                                                                                                               Stock Exchange
                                                                                                               Ratio will not
                                                                                                               fluctuate based
                                                                                                               upon changes in
                                                                                                               the price of DSS
                                                                                                               Common Stock or
                                                                                                               the value of Lexington
                                                                                                               capital stock prior
                                                                                                               to the completion
                                                                                                               of the Merger,
                                                                                                               which protects
                                                                                                               the DSS stockholders
                                                                                                               from any materially
                                                                                                               negative trends
                                                                                                               in the price of
                                                                                                               DSS Common Stock.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS special committee
also considered a number of potentially negative factors in its deliberations concerning the Merger, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               general challenges
                                                                                                               associated with
                                                                                                               successfully integrating
                                                                                                               two companies;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               failure to integrate
                                                                                                               successfully the
                                                                                                               businesses of DSS
                                                                                                               and Lexington in
                                                                                                               the expected timeframe
                                                                                                               could adversely
                                                                                                               affect the combined
                                                                                                               company&rsquo;s
                                                                                                               future results
                                                                                                               following the completion
                                                                                                               of the Merger;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               risk that Lexington
                                                                                                               will be unable
                                                                                                               to achieve a positive
                                                                                                               verdict or settlement
                                                                                                               in the Litigation;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               possible volatility,
                                                                                                               at least in the
                                                                                                               short term, of
                                                                                                               the trading price
                                                                                                               of DSS Common Stock
                                                                                                               resulting from
                                                                                                               the public announcement
                                                                                                               of the Merger;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               announcement and
                                                                                                               pendency of the
                                                                                                               Merger could have
                                                                                                               an adverse effect
                                                                                                               on DSS&rsquo;s
                                                                                                               stock price and/or
                                                                                                               the business, financial
                                                                                                               condition, results
                                                                                                               of operations,
                                                                                                               or business prospects
                                                                                                               for DSS and/or
                                                                                                               Lexington;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               potential loss
                                                                                                               of key employees
                                                                                                               critical to the
                                                                                                               ongoing success
                                                                                                               of the combined
                                                                                                               company&rsquo;s
                                                                                                               business;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               interests of DSS
                                                                                                               directors and executive
                                                                                                               officers in the
                                                                                                               Merger, including
                                                                                                               the matters described
                                                                                                               under the section
                                                                                                               entitled &ldquo;The
                                                                                                               Merger &mdash;
                                                                                                               Interests of DSS
                                                                                                               Directors and Executive
                                                                                                               Officers in the
                                                                                                               Merger&rdquo; beginning
                                                                                                               on page 87;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               impact of certain
                                                                                                               deal protection
                                                                                                               measures contained
                                                                                                               in the Merger Agreement
                                                                                                               on DSS, its business
                                                                                                               and operation,
                                                                                                               including the restrictions
                                                                                                               on DSS&rsquo;s
                                                                                                               ability to solicit
                                                                                                               better offers;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               risk that conditions
                                                                                                               to the completion
                                                                                                               of the Merger will
                                                                                                               not be satisfied
                                                                                                               and that the Merger
                                                                                                               may not be completed
                                                                                                               in a timely manner
                                                                                                               or at all;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               ability of Lexington&rsquo;s
                                                                                                               current stockholders
                                                                                                               and board members
                                                                                                               to significantly
                                                                                                               influence the combined
                                                                                                               company&rsquo;s
                                                                                                               business following
                                                                                                               the completion
                                                                                                               of the Merger;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               ability of Lexington
                                                                                                               to terminate the
                                                                                                               Merger Agreement
                                                                                                               for any reason;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">the
                                                                                                               absence of any
                                                                                                               material risk that
                                                                                                               any governmental
                                                                                                               authority would
                                                                                                               prevent or materially
                                                                                                               delay the merger
                                                                                                               under any antitrust
                                                                                                               law; </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               requirement that
                                                                                                               DSS receive approval
                                                                                                               from NYSE MKT for
                                                                                                               the listing of
                                                                                                               DSS&rsquo;s common
                                                                                                               stock to be issued
                                                                                                               in connection with
                                                                                                               the Merger; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                               other risks described
                                                                                                               above under the
                                                                                                               section entitled
                                                                                                               &ldquo;Risk Factors&rdquo;
                                                                                                               beginning on page
                                                                                                               50.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing discussion
of the information and factors considered by the DSS special committee is not intended to be exhaustive, but includes the material
factors considered by the DSS special committee. In view of the wide variety of factors considered by the DSS special committee
in evaluating the Merger Agreement and the Merger, the DSS special committee did not find it practicable, and did not attempt,
to quantify, rank or otherwise assign relative weights to the foregoing factors in reaching its conclusion. In addition, individual
members of the DSS special committee may have given different weights to different factors and may have viewed some factors more
positively or negatively than others. The DSS special committee&rsquo;s determinations and recommendations described above were
based upon the totality of the information considered.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Position of the DSS Board of Directors as to Fairness of
the Merger and Recommendation of the DSS Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS board of directors,
after considering the factors described below, (i) has determined that the Merger Agreement and the transactions contemplated
thereby, including the Merger, are advisable and fair to, and in the best interests of, DSS and its stockholders, (ii) has approved
the Merger Agreement and each of the amendments to DSS&rsquo;s Certificate, and (iii) recommends that the DSS stockholders vote
FOR the DSS Proposals. The board of directors made its recommendation to the DSS stockholders after considering the factors described
in this proxy statement/prospectus. The DSS board of directors consulted with DSS&rsquo;s senior management in evaluating the
Merger. In addition, the DSS board of directors considered a number of factors that they believed supported their respective decisions
to take the foregoing actions, including, but not limited to, the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 42.45pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the
                                                                                                                 DSS special committee&rsquo;s
                                                                                                                 unanimous determination
                                                                                                                 that the Merger
                                                                                                                 Agreement and
                                                                                                                 the transactions
                                                                                                                 contemplated
                                                                                                                 thereby, including
                                                                                                                 the Merger, are
                                                                                                                 advisable and
                                                                                                                 fair to, and
                                                                                                                 in the best interests
                                                                                                                 of, DSS and its
                                                                                                                 shareholders
                                                                                                                 and its unanimous
                                                                                                                 recommendation
                                                                                                                 that the DSS
                                                                                                                 Board approve
                                                                                                                 and declare advisable
                                                                                                                 the Merger Agreement
                                                                                                                 and the transactions
                                                                                                                 contemplated
                                                                                                                 thereby, including
                                                                                                                 the Merger; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>
<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 42.45pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the DSS board of directors independently reviewed and evaluated the positive and negative factors
set forth above under Recommendations of the DSS Special Committee and DSS Board of Directors and its Reasons for the Merger &ndash;
The DSS Special Committee;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 60.5pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 42.45pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">ipCapital's analysis and report of Lexington's patent portfolio and its proposed litigation with
Facebook and other potential infringers;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 60.5pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 42.45pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the DSS special committee&rsquo;s having retained and received advice from its legal advisor and
that legal advisor's presentation to the DSS Board regarding Merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 60.5pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 42.45pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">the process undertaken by the DSS special committee in connection with evaluating
the proposed Merger, as described above in &ldquo;&mdash;Background of the Merger,&rdquo; beginning on page 77; and</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 60.5pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 42.45pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify">their own views as to the value of Lexington, the value of the Company and the relative future
prospects of Lexington and the Company.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This discussion of
the information and factors considered by the DSS board of directors is not intended to be exhaustive but is intended to summarize
all material factors considered by the DSS board of directors in connection with its approval and recommendation of the Merger
and the other related transactions described in this proxy statement/prospectus. In view of the wide variety of factors considered,
DSS board of directors has not found it practicable to quantify or otherwise assign relative weights to the specific factors considered.
However, the DSS board of directors concluded that the potential benefits of the Merger outweighed the potential negative factors
and that, overall, the Merger had greater potential benefits for the DSS stockholders than other strategic alternatives, including
continuing to operate DSS as a stand-alone publicly traded company on the NYSE MKT. Therefore, after taking into account all of
the factors set forth above, the DSS board of directors determined that the Merger Agreement and the transactions contemplated
thereby, including the Merger, are advisable and fair to, and in the best interests of, DSS and its stockholders and that DSS should
enter into the Merger Agreement and take all actions necessary to complete the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board of Directors and Executive Officers
of the Combined Company After the Completion of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Board of Directors </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger, the combined company will have a nine (9) member board of directors, comprised of <FONT STYLE="color: black">Robert
B. Fagenson, Ira A. Greenstein, Robert B. Bzdick and David Klein</FONT>, all of whom are currently members of the DSS board of
directors, and <FONT STYLE="color: black">Jeffrey Ronaldi, Peter Hardigan and Warren Hurwitz</FONT>, all of whom are designees
of Lexington, and two<FONT STYLE="color: black"> other directors will be designated by Lexington (reasonably acceptable to DSS)
on or prior to filing of the first amendment to this proxy statement/prospectus. However, if DSS&rsquo;s stockholders do not approve
the Staggered Board Proposal, then the board of directors of DSS following the Merger shall initially consist of eight (8) directors,
four of whom are designated by Lexington and the other four are designated by DSS, as described above, provided that, prior to
closing DSS and Lexington will jointly designate a ninth person to be nominated for a position on the board of directors of DSS
following the Effective Time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If DSS&rsquo;s stockholders
approve the Staggered Board Proposal upon the completion of the Merger, the board of directors of DSS will be divided into three
classes, Class I to be comprised of David Klein, Ira A. Greenstein and <FONT STYLE="color: black">Jeffrey Ronaldi</FONT>, Class
II to be comprised of Robert B. Bzdick, Peter Hardigan and an additional member to be designated by Lexington and Class III to
be comprised of Warren Hurwitz, Robert B. Fagenson and an additional member to be designated by Lexington. The three directors
constituting the Class I directors would serve until the DSS annual meeting of stockholders for 2013; the three directors constituting
the Class II directors would serve until the DSS annual meeting of stockholders for 2014; and the three directors constituting
the Class III directors would serve until the DSS annual meeting of stockholders for 2015. At each annual meeting starting with
the first annual meeting in 2013, directors would be elected to succeed those whose terms expire, with each newly elected director
to serve for a three-year term. If DSS&rsquo;s stockholders do not approve the Staggered Board Proposal, then the board of directors
of DSS following the Merger shall initially consist of eight (8) directors, four of whom as designated by Lexington and the other
four as designated by DSS, provided, that, prior to the closing of the Merger, DSS and Lexington will jointly identify a ninth
person to be nominated as a member of the board of directors of DSS following the Effective Time. Approval of the Staggered Board
Proposal, however, is not required to consummate the Merger and the transactions contemplated thereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Executive Officers </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The executive management
team of the combined company is expected to be composed of the following individuals:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 65%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 30%; font-weight: bold; text-align: justify">Name</TD>
    <TD STYLE="width: 70%; padding-left: 0; font-weight: bold; text-align: justify">Position with the Combined Company</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"><FONT STYLE="color: black">Jeffrey Ronaldi</FONT></TD>
    <TD STYLE="padding-left: 0; text-align: justify">Chief Executive Officer</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"><FONT STYLE="color: black">Peter Hardigan</FONT></TD>
    <TD STYLE="padding-left: 0; text-align: justify"><FONT STYLE="color: black">Chief Investment Officer</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"><FONT STYLE="color: black">Philip Jones</FONT></TD>
    <TD STYLE="padding-left: 0; text-align: justify"><FONT STYLE="color: black">Chief Financial Officer</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">Robert B. Bzdick</TD>
    <TD STYLE="padding-left: 0; text-align: justify">Executive Vice President</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Interests of DSS Directors and Executive
Officers in the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In considering the
recommendation of the DSS board of directors to vote FOR the DSS Proposals, DSS stockholders should be aware that the directors
and executive officers of DSS have interests in the Merger that may be in addition to, or different from, your interests as DSS
stockholders, which could create conflicts of interest in their determinations to recommend the Merger. You should consider these
interests in voting on the merger. These interests in connection with the Merger relate to or arise from, among other things:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the fact that <FONT STYLE="color: black">Robert
B. Fagenson, Ira A. Greenstein, Robert B. Bzdick and David Klein</FONT> are current directors of DSS and will remain directors
of the combined company following the completion of the Merger;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the fact that Philip Jones and Robert
B. Bzdick are currently executive officers of DSS and will remain executive officers of the combined company following the completion
of the Merger;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the fact that options to purchase an
                                                                                                               aggregate of 775,000 shares of DSS Common Stock at an exercise price of $3.00 per share for a term of five years were
                                                                                                               granted to certain of DSS&rsquo;s executives, board members and senior managers. In
                                                                                                               addition, an aggregate of $155,000 in bonus payments will be made to such executives and senior managers upon the closing of
                                                                                                               the Merger; </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in"></P>
<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the right to continued indemnification
for directors and executive officers of DSS following the completion of the Merger; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the DSS board of directors was aware of
these potential conflicts of interest during its deliberations on the merits of the Merger and when making its decision regarding
the Merger Agreement and the transactions contemplated thereby, including the Merger.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Ownership Interests </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of ______________,
2013, the latest practicable date before the printing of this proxy statement/prospectus, directors and executive officers of DSS,
together with their respective affiliates, beneficially owned and were entitled to vote ______________ shares of DSS Common Stock,
or approximately [&bull;]% of the shares of DSS Common Stock outstanding on that date. Assuming the Merger had been completed as
of such date, all directors and executive officers of DSS, together with their respective affiliates, would beneficially own, in
the aggregate, approximately [&bull;]% of the outstanding shares of common stock of the combined company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For a more complete
discussion of the ownership interests of the directors and executive officers of DSS, see the sections entitled &ldquo;DSS Security
Ownership of Certain Beneficial Owners and Management&rdquo; and &ldquo;Security Ownership of Certain Beneficial Owners and Management
of the Combined Company Following the Merger&rdquo; beginning on pages 191 and 195, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Employment Agreements with Certain
Executive Officers of DSS </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger, Patrick A. White, Philip Jones and <FONT STYLE="font-size: 10pt">Robert B. Bzdick</FONT> will be entitled to certain
payments and other benefits or payments, as applicable, as more fully described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Patrick A. White</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In conjunction with
the termination of Mr. White&rsquo;s employment as the Chief Executive Officer of the DSS, effective December 1, 2012, DSS and
Mr. White entered into an Amended Consulting Agreement (the &ldquo;<B>White Amended Consulting Agreement</B>&rdquo;) and a Confidentiality,
Non-Competition, Non-Solicitation and Intellectual Property Agreement (the &ldquo;<B>White Confidentiality and Non-Compete Agreement</B>&rdquo;),
both dated November 15, 2012, and both having an effective date of December 1, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The White
Amended Consulting Agreement replaces a consulting agreement previously entered into between DSS and White, dated October 1,
2012. The term of the White Amended Consulting Agreement will commence on December 1, 2012 continue until March 1, 2015.
Pursuant to the White Amended Consulting Agreement, Mr. White will provide consulting services to DSS as requested by DSS&rsquo;s Chief Executive Officer, up to a maximum of 60 hours per month. As consideration for the performance of the
consulting services, Mr. White shall be paid the sum of $14,166.67 per month for the 15 month period commencing from December
1, 2012 through February 28, 2014 and, thereafter, Mr. White will be paid the sum of $11,666.67 per month for the remaining
12 months of the consulting term. In addition to the above-described monthly payments, White will be paid a bonus of $40,000
on or before December 7, 2012 and, on September 21, 2012, Mr. White was granted options to acquire 50,000 shares of DSS
Common Stock at an exercise price of $4.26 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 19, 2012, DSS cancelled Mr. White&rsquo;s September 21,
2012 option grant, and reissued his options to acquire 50,000 shares of DSS Common Stock with an exercise price of $3.00 per
share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the White Confidentiality
and Non-Compete Agreement, Mr. White has agreed, among other things, not to (i) disclose certain Confidential Information (as defined
in the White Confidentiality and Non-Compete Agreement) related to DSS; (ii) while engaged with DSS, and for a period of one year
from and after the termination of the White Amended Consulting Agreement, engage in certain competitive activities relating to
DSS&rsquo;s business (as defined in the White Confidentiality and Non-Compete Agreement); or (iii)(a) solicit any Customer (as
defined in the White Confidentiality and Non-Compete Agreement) of DSS that has purchased or licensed the DSS&rsquo;s intellectual
property, products or services, (b) solicit any employee of DSS to become an employee of any other business or business entity,
or (c) at any time without DSS&rsquo;s prior written consent, discuss, publish or otherwise divulge any Confidential Information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Philip Jones</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 1, 2012,
DSS and Philip Jones, Chief Financial Officer of DSS, entered into a letter agreement (the &ldquo;<B>Jones Letter Agreement</B>&rdquo;),
which will be effective on the date of the consummation of the Merger. Under the Jones Letter Agreement, upon termination of Mr.
Jones&rsquo;s employment for any reason by DSS, DSS will pay Mr. Jones (or, in the case of his death, his estate) (i) any unpaid
base salary earned through the date of termination payable when otherwise due in accordance with DSS&rsquo;s regular payroll practices
and any accrued but unused vacation in accordance with DSS&rsquo;s policy; (ii) any unreimbursed expenses incurred through the
date of termination; and (iii) all other payments, benefits or fringe benefits to which Mr. Jones may be entitled. In the event
Mr. Jones&rsquo;s employment with DSS is terminated by DSS without Cause (as defined in the Jones Letter Agreement), or by Mr.
Jones for Good Reason (as defined in the Jones Letter Agreement), and provided Mr. Jones executes a customary general release,
DSS will pay to Mr. Jones, (1) his current base salary following the date of his termination, payable in equal biweekly installments
in accordance with DSS&rsquo;s regular payroll practices, for an additional 12 months; and (2) certain medical benefits premiums
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (&ldquo;<B>COBRA</B>&rdquo;), for the first
twelve months of such COBRA coverage.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November
19, 2012, DSS granted Mr. Jones options to acquire 100,000 shares of DSS common stock at an exercise price of $3.00 per
share, and cancelled a previous grant to Jones of options to acquire 25,000 share at DSS common stock at an exercise price of
$4.26 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Robert B. Bzdick</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">On
October 1, 2012, </FONT>DSS and Robert B. Bzdick, Chief Operating Officer of DSS, entered into Amendment No. 1 to
Employment Agreement (the &ldquo;<B>Bzdick Amendment</B>&rdquo;) which amended certain terms and provisions of his Employment
Agreement, effective as of February 12, 2010, (as amended, the &ldquo;<B>Bzdick Employment Agreement</B>&rdquo;). The Bzdick
Amendment will be effective on the date of the consummation of the Merger. Pursuant to the Bzdick Amendment, among other
things, (i) the term of the Bzdick Employment Agreement is reduced from February 12, 2015 to December 31, 2014, which
agreement shall be renewed automatically for a succeeding period of five years on the same terms and conditions as set forth
therein, unless either party, at least 90 days prior to the expiration of the term of the Bzdick Employment Agreement,
provides written notice to the other party of its intention not to renew the Bzdick Employment Agreement; (ii) if DSS elects
not to renew the initial term of the Bzdick Employment Agreement, DSS will pay Mr. Bzdick $300,000, which shall be payable as
follows: $100,000 on the first anniversary of such non-renewal, and $50,000 on each of the second through fifth anniversaries
after such non-renewal; and (iii) Mr. Bzdick&rsquo;s salary is decreased from $240,000 to $200,000. Upon the consummation of
the Merger, DSS will pay to Mr. Bzdick a bonus equal to $50,000 and on September 21, 2012, DSS granted options to Mr. Bzdick
to acquire 150,000 shares of DSS common stock at an exercise price of $4.26 per share, which options will vest in full upon
the consummation of the Merger. On November 19, 2012, DSS reissued Mr. Bzdick&rsquo;s options to acquire 150,000 shares of
DSS common stock at an exercise price of $3.00 per share, and cancelled the previous grant of options made to him on
September 21, 2012. The November 19, 2012 event to Bzdick will vest in full upon consummation of the Merger. In addition, on
November 19, 2012, DSS granted Mr. Bzdick options to purchase an additional 100,000 shares of DSS common stock at an exercise
price of $3.00 per share, which will vest  ratably over 12 calendar quarters .</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon
consummation of the Merger, Mr. Bzdick will be permitted to sell up to 300,000 shares of common stock that he currently owns
pursuant to a 10b5-1 plan previously approved by  DSS&rsquo;s board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Accelerated Vesting of Stock Options
</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s employees,
consultants and directors who received option grants or restricted stock grants prior to the Merger will continue to hold such
options and stock post-merger. No acceleration of those options grants will occur as a result of the Merger. Options grants made
to certain of DSS&rsquo;s employees in consideration of their agreements to modify employment agreements and/or subject themselves
to post-merger restrictive covenants in connection with the Merger will vest in full upon consummation of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Indemnification and Insurance </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
provides that all rights to indemnification with respect to acts or omissions occurring at or prior to the completion of the Merger
(including any acts or omissions arising out or pertaining to the Merger) existing in favor of each present and former director,
officer or employee of Lexington or any of its subsidiaries as provided in their respective certificates of incorporation or bylaws
or indemnification agreements shall continue. The Merger Agreement provides that DSS and Merger Sub will continue to indemnify
and hold harmless each present and former director, officer or employee of Lexington or any of its subsidiaries, with respect to
acts or omissions occurring or alleged to have occurred before or after the completion of the Merger, including advancing expenses
to the fullest extent allowed by law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
provides the DSS will continue to indemnify and hold harmless each present and former director (or member of any committee of a
board of directors) or officer, employee or agent of Lexington or any of its subsidiaries, with respect to acts or omissions occurring
or alleged to have occurred at or prior to the completion of the Merger, to the fullest extent permitted under applicable law in
effect on the date of the Merger Agreement or as amended to increase the scope of permitted indemnification and DSS&rsquo;s Certificate
or DSS&rsquo;s bylaws (the &ldquo;<B>DSS&rsquo;s Bylaws</B>&rdquo;). The Merger Agreement also provides that the combined company
will honor all indemnification agreements in place with each present and former director or officer of DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, <FONT STYLE="color: black">following
the closing of the Merger, DSS shall purchase and maintain a directors&rsquo; and officers&rsquo; liability insurance policy, and,
if such policy does not cover certain of DSS&rsquo;s directors, officers and employees for events occurring at or prior to the
Effective Time, DSS shall purchase and obtain a six (6) year extended reporting period or tail policy covering each for events
occurring at or prior to the Effective Time, at DSS&rsquo;s expense.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Anticipated Accounting Treatment</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger will be
treated by DSS as a reverse merger under the acquisition method of accounting in accordance with GAAP. For accounting purposes,
Lexington is considered to be acquiring DSS in this transaction. Therefore, the aggregate consideration paid in connection with
the Merger will be allocated to DSS tangible and intangible assets and liabilities based on their fair market values. The assets
and liabilities and results of operations of DSS will be consolidated into the results of operations of Lexington as of the completion
of the Merger. These allocations will be based upon a valuation that has not yet been finalized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Tax Treatment of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS and Lexington intend
the Merger to qualify as a reorganization within the meaning of Section 368(a) of the Code and have agreed to use reasonable best
efforts to structure the Merger to qualify as a reorganization and not to take any action that would prevent the Merger from qualifying
as a reorganization under Section 368(a) of the Code. DSS and Lexington shall use commercially reasonable efforts to enable Lexington
to receive a written opinion, in form and substance reasonably acceptable to it, dated as of the closing date of the Merger to
the effect that, for United States federal income tax purposes the Merger should constitute a &ldquo;reorganization&rdquo; within
the meaning of Section 368(a) of the Code. In rendering such opinion, such counsel shall be entitled to rely upon customary assumptions
and representations reasonably satisfactory to such counsel, including representations set forth in certificates of officers of
DSS, Merger Sub and the Lexington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For a more complete
discussion of the material United States federal income tax consequences of the Merger, see the section entitled &ldquo;Material
United States Federal Income Tax Consequences of the Merger&rdquo; beginning on page 92.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Regulatory Approvals Required for the
Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of the date of this
proxy statement/prospectus, neither DSS nor Lexington is required to make filings or to obtain approvals or clearances from any
antitrust regulatory authorities in the United States or other countries to complete the Merger. In the United States, DSS must
comply with applicable federal and state securities laws and the rules and regulations of the NYSE MKT in connection with the issuance
of shares of DSS Common Stock and Preferred Stock (<FONT STYLE="color: black">or, if Proposal 2 is not approved by the DSS stockholders,
$.02 Warrants)</FONT> and Warrants in the Merger and what may possibly be deemed the resulting change in control of DSS and the
filing of this proxy statement/prospectus with the SEC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Restrictions on Sales of Shares of DSS
Common Stock Received by Lexington Stockholders in the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The shares of DSS Common
Stock and DSS Preferred Stock <FONT STYLE="color: black">(or, if Proposal 2 is not approved by the DSS stockholders, $.02 Warrants</FONT>)
received by Lexington stockholders in the Merger will not be subject to any transfer restrictions. However, shares of DSS Common
Stock and DSS Preferred Stock received by Lexington stockholders who become affiliates of DSS for purposes of Rule 144 under the
Securities Act, may be resold by them only in transactions permitted by Rule 144 or as otherwise permitted under the Securities
Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Appraisal Rights </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the NYBCL, holders
of DSS Common Stock are not entitled to appraisal rights in connection with the Merger or the proposals described in this proxy
statement/prospectus. Under the DGCL, however, holders of Lexington capital stock may be entitled to appraisal rights in connection
with the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"><B>NYSE MKT Listing
of DSS Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS Common Stock currently
is listed on the NYSE MKT under the symbol &ldquo;DSS.&rdquo; DSS has agreed to use its reasonable best efforts to cause the shares
of DSS Common Stock to be approved, at or prior to the completion of the Merger, for listing (subject only to notice of issuance)
on the NYSE MKT at and following the completion of the Merger, and the listing of the shares of DSS Common Stock issuable pursuant
to the Merger Agreement on the NYSE MKT is a condition to Lexington&rsquo;s obligation to complete the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of the date of the
mailing of this proxy statement/prospectus, DSS has filed an initial listing application for listing on the NYSE MKT in connection
with the Merger pursuant to NYSE MKT&rsquo;s reverse merger rules. If such application is approved, DSS anticipates that its common
stock will be listed on the NYSE MKT following the completion of the Merger under the trading symbol &ldquo;DSS.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>MATERIAL UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES OF THE MERGER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following discussion
summarizes the material United States federal income tax consequences of the Merger. This summary is based upon current provisions
of the Code, existing Treasury Regulations promulgated thereunder and current administrative rulings and court decisions, all of
which are subject to change and to differing interpretations, possibly with retroactive effect. Any change could alter the tax
consequences to DSS, Lexington or Lexington stockholders, as described in this summary. This summary is not binding on the IRS,
and there can be no assurance that the IRS (or a court, in the event of an IRS challenge) will agree with the conclusions stated
herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This discussion does
not address all of the United States federal income tax consequences of the Merger that may be relevant to Lexington stockholders
and DSS stockholders in light of their particular circumstances and does not apply to stockholders that are subject to special
treatment under United States federal income tax laws, including, without limitation:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">dealers, brokers and traders in securities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">individuals who are not citizens or residents of the United States, including United States expatriates;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">corporations (or other entities taxable as a corporation for United States federal income tax purposes)
created or organized outside of the United States;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">tax-exempt entities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">financial institutions, regulated investment companies, real estate investment trusts or insurance
companies;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">partnerships, limited liability companies that are not treated as corporations for United States
federal income tax purposes, subchapter S corporations and other pass-through entities and investors in such entities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">an estate or trust;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">holders who are subject to the alternative minimum tax provisions of the Code;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">holders who acquired their shares in connection with stock option or stock purchase plans or in
other compensatory transactions;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">holders who hold their shares through a pension plan or other qualified retirement plan;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">holders who hold their shares as part of an integrated investment such as a hedge or as part of
a hedging, straddle or other risk reduction strategy;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">holders who do not hold their shares as capital assets within the meaning of Section 1221 of the
Code (generally, property held for investment will be a capital asset); or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">holders who have a functional currency other than the United States dollar.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In addition, the following discussion
does not address:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the tax consequences of the Merger under any United States federal non-income tax laws or under
state, local or foreign tax laws;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the tax consequences of transactions effectuated before, after or at the same time as the Merger,
whether or not they are in connection with the Merger, including, without limitation, transactions in which shares of Lexington
capital stock or DSS capital stock are acquired;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the tax consequences to holders of options issued by Lexington that are assumed, replaced, exercised
or converted, as the case may be, in connection with the Merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the tax consequences of the receipt of equity securities of DSS other than in exchange for shares
of Lexington capital stock; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the tax consequences of the ownership or disposition of equity securities of DSS Common Stock,
DSS Preferred Stock and/or Warrants acquired in the Merger.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Accordingly, Lexington
stockholders are advised and expected to consult their own tax advisors regarding the United States federal income tax consequences
of the Merger in light of their personal circumstances and the consequences of the Merger under United States federal non-income
tax laws and state, local and foreign tax laws.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>United States Federal Income Tax
Consequences of the Merger </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger is intended
to qualify as a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code. DSS and Lexington have agreed to
use reasonable best efforts to structure the Merger to qualify as a &ldquo;reorganization&rdquo; and not to take any action that
would prevent the Merger from qualifying as a reorganization under Section 368(a) of the Code. Neither DSS nor Lexington presently
intends to waive these conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If, as intended, the
Merger is treated for United States federal income tax purposes as a &ldquo;reorganization&rdquo; within the meaning of Section
368(a) of the Code, then the Merger will have the following material United States federal income tax consequences:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger will be
treated for United States federal income tax purposes as a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of
the Code and that the Merger will have the following material United States federal income tax consequences:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">DSS, Merger Sub, Lexington and the DSS stockholders generally will recognize no gain or loss solely
as a result of the Merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">Lexington stockholders, other than Lexington stockholders who exercise appraisal rights (as discussed
below), generally will recognize no gain or loss upon the receipt of equity securities of DSS for their Lexington capital stock
(including the $.02 Warrants in the event they are issued);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the aggregate tax basis of the equity securities of DSS that are received by a Lexington stockholder
in the Merger will be equal to the aggregate tax basis of the shares of Lexington capital stock surrendered in exchange therefor;
and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the holding period of the equity securities of DSS received by a Lexington stockholder in connection
with the Merger will include the holding period of the shares of Lexington capital stock surrendered in exchange therefor.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mintz Levin will render
its written opinion that the Merger should constitute a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the
Code. The opinion of counsel will rely on certain assumptions as well as representations made by DSS, Merger Sub and Lexington,
including factual representations and certifications contained in officers&rsquo; certificates to be delivered at closing, and
assume that these representations are true, correct and complete. If any of these representations or assumptions are inconsistent
with the actual facts, the opinion could become invalid as a result, and the United States federal income tax treatment of the
merger could be adversely affected. An opinion of counsel represents counsel&rsquo;s best legal judgment and is not binding on
the IRS or any court. No ruling has been, or will be, sought from the IRS as to the tax consequences of the Merger. Accordingly,
if there is a final determination that the Merger does not qualify as a &ldquo;reorganization&rdquo; under Section 368(a) of the
Code and is taxable for United States federal income tax purposes, Lexington stockholders generally would recognize taxable gain
or loss on their receipt of equity securities of DSS in connection with the Merger equal to the difference between such stockholder&rsquo;s
adjusted tax basis in their shares of Lexington capital stock and the fair market value of the equity securities of DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There will be no material
United States federal income tax consequences of the Merger for DSS stockholders whether or not the Merger qualifies as a &ldquo;reorganization&rdquo;
within the meaning of Section 368(a) of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">One of the requirements
for the Merger to constitute a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code is that the Lexington
stockholders receive at least 80% of the aggregate value of their merger consideration in the form of DSS Common Stock (the &ldquo;<B>Control
Requirement</B>&rdquo;). The IRS has issued regulations addressing whether and when such requirement should be measured: by reference
to the value of the merger consideration as of the signing date of the Merger Agreement, here October 1, 2012 (the &ldquo;<B>Signing
Date Rule</B>&rdquo;), or on the Effective Date of the Merger. Counsel is of the opinion that the Signing Date Rule should apply
to the Merger. In this regard, an independent valuation analysis obtained by Lexington concludes that the Control Requirement was
met on October 1, 2012. However, the IRS may contend that the Control Requirement must instead be met on the Effective Date. If
such contention prevails, then in order for the Merger to constitute a &ldquo;reorganization&rdquo; under Section 368(a) of the
Code, the Lexington stockholders will need to receive DSS Common Stock (including the Additional Shares, if any) with a value measured
on the Effective Date of at least 80% of the aggregate value of the merger consideration (it is not clear if only the Exchanged
Shares may be included in such calculation, or if the Escrow Shares also may be included at the Effective Date or only when and
to the extent released to the Lexington stockholders). If the Control Requirement must be determined on the Effective Date and,
based on a valuation of the merger consideration, such requirement is not then met (or not met later when the Escrow Shares are
released) because of change in the relative value of the DSS Common Stock, DSS Preferred Stock (or the $.02 Warrants in the event
they are issued) and the Warrants, then the Merger will not constitute a &ldquo;reorganization&rdquo; under Section 368(a) of the
Code. In such case, a Lexington stockholder will recognize gain or loss measured by the difference between the value of the equity
securities of DSS received in the Merger and such stockholder&rsquo;s adjusted tax basis in the Lexington shares exchanged therefor.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Treatment of Lexington Stockholders
Who Exercise Appraisal Rights </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The discussion above
does not apply to Lexington stockholders who properly perfect appraisal rights with respect to such stockholder&rsquo;s shares
of Lexington capital stock. Generally, a Lexington stockholder who perfects appraisal rights and receives cash in exchange for
such stockholder&rsquo;s Lexington capital stock will recognize capital gain or loss measured by the difference between the amount
of cash received and such stockholder&rsquo;s adjusted tax basis in those shares. Such gain or loss will generally be long-term
capital gain or loss, provided the shares of Lexington capital stock were held for more than one year before the disposition of
the shares. The deductibility of capital losses is subject to limitations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Information Reporting and Backup
Withholding </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Generally, non-corporate
Lexington stockholders may be subject to information reporting and backup withholding (currently at a rate of 28%) with respect
to cash received for perfecting appraisal rights. However, backup withholding will not apply to a Lexington stockholder who furnishes
valid taxpayer identification number and complies with certain certification procedures or otherwise establishes an exemption from
backup withholding. Amounts withheld, if any, are generally not an additional tax and may be refunded or credited against the Lexington
stockholder&rsquo;s United States federal income tax liability, provided that the Lexington stockholder timely furnishes the required
information to the IRS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">THE FOREGOING SUMMARY
OF MATERIAL UNITED STATES FEDERAL INCOME TAX CONSEQUENCES IS NOT INTENDED TO BE A COMPLETE ANALYSIS OR DESCRIPTION OF ALL POTENTIAL
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER. IN ADDITION, THE SUMMARY DOES NOT ADDRESS TAX CONSEQUENCES THAT MAY
VARY WITH, OR ARE CONTINGENT ON, INDIVIDUAL CIRCUMSTANCES. MOREOVER, THE SUMMARY DOES NOT ADDRESS ANY UNITED STATES FEDERAL NON-INCOME
TAX OR ANY FOREIGN, STATE OR LOCAL TAX CONSEQUENCES OF THE MERGER, NOR ANY TAX CONSEQUENCES OF ANY TRANSACTION OTHER THAN THE MERGER.
ACCORDINGLY, EACH LEXINGTON STOCKHOLDER IS STRONGLY URGED TO CONSULT HIS, HER, OR ITS OWN TAX ADVISOR TO DETERMINE THE PARTICULAR
FEDERAL, STATE, LOCAL, OR FOREIGN INCOME OR OTHER TAX CONSEQUENCES OF THE MERGER TO SUCH LEXINGTON STOCKHOLDER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE MERGER AGREEMENT </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following
is a summary of the material provisions of the Merger Agreement but does not purport to describe all of the terms of the Merger
Agreement. The following summary is qualified in its entirety by reference to the complete text of the Merger Agreement, a copy
of which is attached as <U>Annex A</U> to this proxy statement/prospectus and is incorporated by reference into this proxy statement/prospectus.
This summary may not contain all of the information about the Merger Agreement that is important to you. You should refer to the
full text of the Merger Agreement for details of the transaction and the terms and conditions of the Merger Agreement.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger
Agreement has been included in this proxy statement/prospectus to provide you with information regarding its terms. The terms
of, and other information in, the Merger Agreement should not be relied upon as disclosures about DSS and Lexington without considering
the entirety of the information about DSS and Lexington set forth in the public reports filed with the SEC. Such information can
be found elsewhere in proxy statement/prospectus and in the other public filings DSS makes with the SEC, which are available without
charge at <U>www.sec.gov</U>.</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally,
the representations, warranties and covenants described in this section and contained in the Merger Agreement have been made only
for the purpose of the Merger Agreement and, as such, are intended solely for the benefit of DSS, Merger Sub and Lexington. In
many cases, these representations, warranties and covenants are subject to limitations agreed upon by the parties and are qualified
by certain disclosures exchanged by the parties in connection with the execution of the Merger Agreement. These disclosure schedules
contain information that has been included in DSS&rsquo;s general prior public disclosures, as well as potential additional non-public
information. Furthermore, many of the representations and warranties in the Merger Agreement are the result of a negotiated allocation
of contractual risk among the parties and, taken in isolation, do not necessarily reflect facts about DSS or Lexington, their respective
subsidiaries and affiliates or any other party. Likewise, any references to materiality contained in the representations and warranties
may not correspond to concepts of materiality applicable to investors or stockholders. Finally, information concerning the subject
matter of the representations and warranties may have changed since the date of the Merger Agreement or may change in the future
and these changes may not be fully reflected in the public disclosures made by DSS and/or Lexington. <B>As a result of the foregoing,
you are strongly encouraged not to rely on the representations, warranties and covenants contained in the Merger Agreement, or
any descriptions thereof, as accurate characterizations of the state of facts or condition of DSS, Lexington, or any other party.
You are likewise cautioned that you are not a third-party beneficiary under the Merger Agreement and do not have any direct rights
or remedies pursuant to the Merger Agreement.</B></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Terms of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
provides that, subject to the terms and conditions of the Merger Agreement and in accordance with the NYBCL, and the DGCL, at the
completion of the Merger, Merger Sub will merge with and into Lexington with Lexington being the Surviving Corporation as a wholly-owned
subsidiary of DSS through an exchange of capital stock of Lexington for capital stock of DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Completion of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The closing of the
Merger will take place no later than the second business day after the satisfaction or waiver of the conditions to the completion
of the Merger contained in the Merger Agreement, other than the conditions which by their terms can be satisfied only as of the
closing of the Merger, or on such other day as DSS, Lexington and Merger Sub may mutually agree. For a more complete discussion
of the conditions to the completion of the Merger, see the section entitled &ldquo;The Merger Agreement&mdash;Conditions to the
Completion of the Merger&rdquo; beginning on page 105. The completion of the Merger will occur at the time that the parties
file the certificate of merger with the Secretary of State of the State of Delaware on the closing date of the Merger or on such
later date as DSS, Merger Sub and Lexington mutually agree (and set forth in the certificate of merger). Because the completion
of the Merger is subject to the satisfaction of other conditions, DSS cannot predict the exact time at which the Merger will become
effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Certificate of Incorporation; Bylaws;
Directors and Officers </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger, the certificate of incorporation and bylaws of Lexington will be the certificate of incorporation and bylaws of the
Surviving Corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the
closing, the following persons shall serve on the board of directors of DSS and the Surviving Corporation: Jeffrey Ronaldi,
Peter Hardigan, Warren Hurwitz, Robert B. Fagenson, David Klein, Robert Bzdick, and Ira A. Greenstein, and the following
persons shall be appointed to the following positions of the Surviving Corporation: Jeffrey Ronaldi &ndash; Chief Executive
Officer, President and Secretary and Peter Hardigan &ndash; Chief Operating Officer and Treasurer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Merger Consideration </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">Upon
completion of the Merger on the Effective Time and subject to the Beneficial Ownership Condition, each share of then-issued and
outstanding Lexington Common Stock and each share of then-issued and outstanding Lexington Preferred Stock (other than shares of
Lexington Common Stock and Lexington Preferred Stock held in treasury or owned by DSS or any direct or indirect wholly owned subsidiary
of DSS or Lexington that will be canceled and retired at the Effective Time) will be automatically converted into (i) shares of
DSS Common Stock, (ii) Warrants, in the form </FONT>attached to this proxy statement/prospectus as<FONT STYLE="color: black"> <U>Annex
D</U>, and (iii) a pro rata portion of 7,100,000 shares of DSS Common Stock to be held in escrow (as described below, the &ldquo;<B>Escrow
Shares</B>&rdquo;) and, as applicable, shares of DSS Preferred Stock, determined by multiplying each of (x) 17,250,000 shares plus
the number of Additional Shares (as defined below) and Exchanged Shares (as defined below), if any, (y) 4,859,894 warrants, and
(z) 7,100,000 shares by a fraction, the numerator of which shall be one and the denominator of which shall be the sum of (A) the
number of shares of Lexington Common Stock plus (B) the number of Lexington Preferred Stock, in each case issued and outstanding
immediately prior to the Effective Time (such fraction referred to as the &ldquo;<B>Common Stock Exchange Ratio</B>&rdquo;). </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the Effective Time
of the Merger, DSS will issue to the holders of Lexington Common Stock and Lexington Preferred Stock (on a <I>pro rata</I> as-converted
basis) an aggregate of 4,859,894 warrants to purchase an aggregate of 4,859,894 shares of DSS Common Stock with an exercise price
of $4.80 per share and a term of five years commencing upon the closing of the Merger (the &ldquo;<B>Warrants</B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon the consummation
of the Merger, only the holders of Lexington Preferred Stock who would, after giving effect to the Merger and receipt of the merger
consideration, beneficially own more than 9.99% of DSS Common Stock (the &ldquo;<B>Beneficial Ownership Condition</B>&rdquo;) shall
receive for each share of Lexington Preferred Stock they hold the same merger consideration as outlined above except that such
holders shall receive a combination of DSS Common Stock and DSS Preferred Stock that is convertible into (or if the proposal to
authorize DSS Preferred Stock is not approved, $.02 Warrants exercisable for) that number of shares of DSS Common Stock they would
have received if they had been a holder of Lexington Common Stock immediately prior to the Effective Time in such amounts that
would enable such holders, after giving effect to the Merger, to beneficially own no more than 9.99% of DSS Common Stock upon consummation
of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">Those
holders of Lexington Preferred Stock who do not meet the Beneficial Ownership Condition and will not receive DSS Preferred Stock
or $.02 Warrants, will receive DSS Common Stock and the other types of merger consideration in exchange for their Lexington Preferred
Stock based on the Common Stock Exchange Ratio. In the event DSS&rsquo;s stockholders approve the issuance of the merger consideration,
but do not approve the authorization of the DSS Preferred Stock, then the holders of Lexington Preferred Stock that satisfy the
Beneficial Ownership Condition shall receive $.02 Warrant, in the form </FONT>attached to this proxy statement/prospectus as<FONT STYLE="color: black"><U>
Annex C</U>, to purchase DSS Common Stock with an exercise price of $0.02 per share. Each $.02 Warrant is exercisable at any time
after the date of issuance for a period of ten years. If at any time between the three month anniversary of the issuance date and
the expiration date, there is no effective registration statement registering the resale of the shares issuable under the Warrants,
then the holder may elect to exercise the Warrant, or a portion thereof, by way of a cashless exercise. Except under certain circumstances,
no holder may exercise its Warrants if such exercise would result in such holder beneficially owning in excess of 9.99% of the
number of shares of DSS Common Stock outstanding immediately after giving effect to the issuance of shares of common stock upon
exercise of the Warrant. In addition, under certain circumstances, a holder of the $.02 Warrants will be entitled to participate
in any distribution of DSS&rsquo;s assets (or the right to acquire its assets) or any declared cash dividend, to the same extent
such holder would have participated therein if such holder had held the shares of common stock acquirable upon complete exercise
of the $.02 Warrants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">The
DSS Preferred Stock will have the powers, preferences and privileges and other rights as will be set forth in a Certificate of
Amendment to the Certificate of Incorporation of DSS </FONT>in the form attached to this proxy statement/prospectus as <U>Annex
E</U><FONT STYLE="color: black"> to be filed by DSS prior to closing, which rights include, among other things, the right to participate
in any dividends and distributions paid to common stockholders on an as-converted basis, pro rata with the holders of DSS Common
Stock. Upon the occurrence any Liquidation Event (as such term is defined in the Certificate of Amendment), after the payment of
all debts and liabilities of DSS, any remaining assets shall be distributed pro rata to the holders of DSS Common Stock and DSS
Preferred Stock on an as-converted basis. The DSS Preferred Stock will be non-voting, except as required by law and in certain
defined instances, including in connection with a fundamental transaction. The holder of the DSS Preferred Stock shall be indemnified
against losses due to a buy-in following a conversion failure and DSS shall pay the holders of the DSS Preferred Stock a penalty
of one-quarter of one percent (0.25%) for each full 15 day period during which DSS&rsquo;s Common Stock is suspended from trading
or if the DSS Common Stock is delisted.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, at
the Effective Time, up to an aggregate of 3,600,000 outstanding and unexercised options to purchase Lexington Common Stock
will be assumed by DSS and each such option will convert into an option to purchase or acquire shares of DSS Common Stock (i)
in a number equal to the number of shares of Lexington Common Stock subject to the option immediately prior to the
Effective Time multiplied by 0.556 (the &ldquo;<B>Option Exchange Ratio</B>&rdquo;) and (ii) with an exercise price per share
equal to the exercise price of the applicable option immediately prior to the Effective Time divided by the Option Exchange
Ratio, with the number of shares in (i) and the price per share in (ii) rounded up or down to the next whole share number or
tenth (0.1) of a cent, as the case may be, in a manner such that, after taking into account such rounding, both (A) the
excess of the aggregate fair market value of the shares subject to the new option over the aggregate exercise price for such
shares does not exceed the excess of the aggregate fair market value of the shares subject to the old option over the
aggregate exercise price for such shares immediately prior to the Effective Time, and (B) the ratio on a per option basis of
the exercise price to the fair market value of the shares subject to the option is not increased.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No fractional shares
of DSS Common Stock or DSS Preferred Stock will be issued in connection with the Merger. Instead, each Lexington stockholder who
would be otherwise entitled to receive a fractional share will receive from DSS, in lieu thereof, the next highest whole number
shares of DSS Common Stock or DSS Preferred Stock, as applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Exchange of Lexington Stock Certificates
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">As
promptly as practicable before or after the completion of the Merger, DSS (or its designee) will send</FONT> to each Lexington
stockholder a letter of transmittal and instructions for use in surrendering all certificates of Lexington Common Stock and/or
Lexington Preferred Stock for the applicable portion of the merger consideration. The Merger Agreement provides that upon surrender
to DSS (or its designee) of a properly completed letter of transmittal, a holder of shares of Lexington capital stock will be entitled
to receive the applicable portion of the merger consideration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If any stockholder
has lost a certificate representing shares of Lexington capital stock, or if any such certificate has been stolen or destroyed,
such stockholder will, as a condition to receiving the applicable portion of merger consideration for the shares represented by
such certificate, be required to make an affidavit of the loss, theft or destruction and, if reasonably required by DSS, post a
bond in a reasonable amount as indemnity against any claim that may be made against DSS with respect to such certificate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">From and after the
completion of the Merger each Lexington stock certificate will represent only the right to receive an applicable portion of the
merger consideration to which such Lexington stockholder is entitled to receive under the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Representations and Warranties </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
contains customary representations and warranties of each of DSS and Lexington (many of which are qualified by concepts of knowledge,
materiality and/or dollar thresholds and are further modified and limited by confidential disclosure schedules exchanged by the
parties), as applicable, relating to, among other things, (a) organization and qualification; (b) subsidiaries; (c) capital structure;
(d) authorization, performance and enforceability of the Merger Agreement; (e) required filings, (f) board approval and required
vote; (g) financial statements and information; (h) absence of undisclosed liabilities and minimum cash; (i) absence of changes
or events; (j) agreements, contracts and commitments; (k) compliance with laws; (l) material permits; (m) litigation; (n) restrictions
on business activities; (o) employees and employee benefit plans; (p) taxes; (q) tangible assets; (r) real property leases; (s)
insurance; (t) intellectual property; (u) certain business practices; (v) interested party transactions; (w) books and records;
(x) brokers; and (y) information related to this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Material Adverse Effect </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Several of the representations,
warranties, covenants and closing conditions contained in the Merger Agreement refer to the concept of &ldquo;<B>Lexington Material
Adverse Effect</B>&rdquo; or &ldquo;<B>DSS Material Adverse Effect</B>.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Lexington Material Adverse Effect </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For purposes of the
Merger Agreement, an <B>&ldquo;Lexington Material Adverse Effect&rdquo; </B>means any change, event or occurrence that has a material
adverse effect on the condition (financial or otherwise), business, operations, prospects, properties, assets or liabilities of
Lexington or its subsidiaries, taken as a whole; provided, that none of the following, in and of itself or themselves, nor any
effect arising out of or resulting from the following shall constitute or be taken in account in determining whether a Lexington
Material Adverse Effect has occurred or may, would or could occur:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">changes, events, occurrences or effects
generally affecting the economy or financial, credit, banking, currency, commodities or capital markets generally in the United
States or other countries or regions, including changes in currency exchange rates, interest rates, monetary policy or inflation;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">changes, events, occurrences or effects
generally affecting the industries in which Lexington and its subsidiaries conduct operations;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">changes or prospective changes in law,
in applicable regulations of any governmental authority, in United States generally accepted accounting principles or other applicable
accounting standards or changes or prospective changes in the interpretation or enforcement of any of the foregoing, or any changes
or prospective changes in general, legal, regulatory or political conditions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">any act of God or other calamity, national
or international, political or social conditions (including, the engagement by any country in hostilities, whether commenced before
or after the date of the Merger Agreement, and whether or not pursuant to the declaration of a national emergency or war), or the
occurrence of any military or terrorist attack;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the negotiation, execution, announcement
or performance of the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement, including
the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners, employees or
regulators;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">any action taken by Lexington or its subsidiaries
that is required by the Merger Agreement or taken at DSS&rsquo;s written request, or the failure to take any action by Lexington
or its subsidiaries if that action is prohibited by the Merger Agreement; or </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">any change resulting or
arising from the identity of, or any facts or circumstances relating to </FONT>DSS<FONT STYLE="color: black">, Merger Sub or their
respective affiliates.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>DSS Material Adverse Effect </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For purposes of the
Merger Agreement, a <B>&ldquo;DSS Material Adverse Effect&rdquo; </B>means any change, event or occurrence that has a material
adverse effect on the condition (financial or otherwise), business, operations, prospects, properties, assets or liabilities of
DSS or its subsidiaries, taken as a whole; provided, that none of the following, in and of itself or themselves, nor any effect
arising out of or resulting from the following shall constitute or be taken in account in determining whether a DSS Material Adverse
Effect has occurred or may, would or could occur:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">changes, events, occurrences or effects
generally affecting the economy or financial, credit, banking, currency, commodities or capital markets generally in the United
States or other countries or regions, including changes in currency exchange rates, interest rates, monetary policy or inflation;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">changes, events, occurrences or effects
generally affecting the industries in which DSS and its subsidiaries conduct operations;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">changes or prospective changes in law,
in applicable regulations of any governmental authority, in United States generally accepted accounting principles or other applicable
accounting standards or changes or prospective changes in the interpretation or enforcement of any of the foregoing, or any changes
or prospective changes in general, legal, regulatory or political conditions;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">any act of God or other calamity, national
or international, political or social conditions (including, the engagement by any country in hostilities, whether commenced before
or after the date of the Merger Agreement, and whether or not pursuant to the declaration of a national emergency or war), or the
occurrence of any military or terrorist attack;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the negotiation, execution, announcement
or performance of the Merger Agreement or the consummation of the transactions contemplated by the Merger Agreement, including
the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners, employees or
regulators;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">any action taken by DSS or its subsidiaries
that is required by the Merger Agreement or taken at Lexington&rsquo;s written request, or the failure to take any action by DSS
or its subsidiaries if that action is prohibited by the Merger Agreement; or </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">any change resulting or arising from the
identity of, or any facts or circumstances relating to Lexington or its subsidiaries or their respective affiliates.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Certain Covenants of the Parties </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
contains certain other agreements of the parties including, among other things, that (a) DSS will prepare and file with the SEC
a registration statement (the &ldquo;<B>Registration Statement</B>&rdquo;) containing a proxy statement (the &ldquo;<B>Proxy Statement</B>&rdquo;)
for the vote of the DSS stockholders to approve the Merger; (b) each party will take all action necessary to have its stockholders
vote on the Merger; (c) each party will allow reasonable access to their books and records until the closing of the Merger; (d)
each party will maintain in confidence any non-public information received from the other party; (e) individuals who are employed
on a full time basis by Lexington at the time of the Merger will remain employees of the Surviving Corporation; (f) each of Lexington
and DSS will not and will use its reasonable best efforts not to permit any of its affiliates to take any action that could prevent
the Merger from being treated as a reorganization within the meaning of Section 368 of the Code; (g) each party will give prompt
notice of the occurrence of any of the following: (i) any event the occurrence, or non-occurrence of which could reasonably be
expected to result in any representation or warranty contained in the Merger Agreement to be untrue or inaccurate in any material
respect (or in the case of any representation or warranty qualified by its terms by materiality, then untrue or inaccurate in any
respect); (ii) any failure of DSS, Lexington or Merger Sub, as the case may be, to comply with or satisfy in any material respect
any covenant, condition or agreement to be complied with or satisfied by it, (iii) any notice or communication from any person
alleging that the consent of such person is required in connection with the Merger or the Merger Agreement, (iv) any notice or
other communication from any governmental authority in connection with the Merger or other transactions contemplated by the Merger
Agreement, (v) the occurrence of a default or event that, with notice or lapse of time or both, will become a default under a material
contract of either party, and (vi) any change that would be considered reasonably likely to result in a Lexington Material Adverse
Effect or DSS Material Adverse Effect, as the case may be, or is likely to impair in any material respect the ability of either
DSS or Lexington to consummate the transactions contemplated by the Merger Agreement; (h) DSS will use its reasonable best efforts
to cause the shares of DSS Common Stock to be issued pursuant to the Merger to be approved for listing on the NYSE MKT; (i) neither
party shall, nor permit their respective subsidiaries to issue or cause the publication of any press release or public announcement
with respect to the Merger or other transactions contemplated by the Merger Agreement without the consent of the other party, which
consent shall not be unreasonably withheld, conditioned or delayed; (j) each party will continue to indemnify its own present and
former directors and officers (as further described below); and (k) the parties will take all action to appoint certain individuals
to serve on the board of directors of DSS and as officers of DSS (as described above).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>No Solicitation </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subject to certain
exceptions described below, prior to the completion of the Merger or the earlier termination of the Merger Agreement, each of DSS
and Lexington has agreed that it will not, and it will not authorize or permit its subsidiaries and/or their respective officers,
directors, employees, investment bankers, attorneys, accountants and other advisors or representatives to directly or indirectly:
(a) solicit, initiate, induce or take any action to facilitate, encourage, solicit, initiate or induce any action relating to,
or the submission of any Lexington Acquisition Proposal (as defined below) or DSS Acquisition Proposal (as defined below), as the
case may be; (b) enter into, participate or engage in discussions or negotiations in any way with any person concerning any Lexington
Acquisition Proposal or DSS Acquisition Proposal, as the case may be; (c) furnish to any person (other than the other party) any
information relating to the other party or its subsidiaries or afford to any person (other than the other party) access to the
business, properties, assets, books, records or other information, or to any personnel of either party or its subsidiaries, with
the intent to induce or solicit the making, submission or announcement of, or the intent to encourage or assist, a Lexington Acquisition
Proposal or DSS Acquisition Proposal, as the case may be or the making of any proposal that would reasonably be expected to lead
to a Lexington Acquisition Proposal or DSS Acquisition Proposal, as the case may be; (d) approve, enforce or recommend a Lexington
Acquisition Proposal or DSS Acquisition Proposal, as the case may be; (e) enter into any agreement in principle, letter of intent,
term sheet, merger agreement, acquisition agreement or other similar instrument or contract relating to a Lexington Acquisition
Proposal or a DSS Acquisition Proposal, as the case may be, or requiring either party to abandon or terminate the Merger Agreement;
or (f) grant any approval pursuant to any &ldquo;moratorium,&rdquo; &ldquo;control share acquisition,&rdquo; &ldquo;business combination,&rdquo;
&ldquo;fair price&rdquo; or other form of anti-takeover law to any person or transaction (other than the Merger) or waiver or release
any standstill or similar agreement with respect to the equity securities of either party. &ldquo;Lexington Acquisition Proposal&rdquo;
means, in summary any offer, proposal, discussions, negotiations by any person in a transaction or series of related transactions
relating to issuance, sale or other disposition of securities representing 20% or more of the voting power or economic interests
of Lexington or its subsidiaries. &ldquo;DSS Acquisition Proposal&rdquo; means any offer, proposal, discussions, negotiations by
any person in a transaction or series of related transactions relating to issuance, sale or other disposition of securities representing
20% or more of the voting power or economic interests of DSS or its subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">Notwithstanding
the foregoing, in the event that either Lexington or DSS receives a Lexington Acquisition Proposal or a DSS Acquisition Proposal,
the board of directors of each company may under certain circumstances change its recommendation for approval of the Merger if,
after reviewing with outside counsel, either board determines that such Lexington Acquisition Proposal or DSS Acquisition Proposal,
as the case may be, is a superior proposal or an event, development or change in circumstances that occurs or arises following
the date of the Merger Agreement, and/or the failure to effect a board recommendation change would be inconsistent with such company&rsquo;s
board of directors&rsquo; fiduciary duties to its stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">&ldquo;<B>Lexington
Acquisition Proposal</B>&rdquo; means </FONT>any offer, proposal, discussions, negotiations, indication of interest or inquiry
(whether in writing or otherwise)&nbsp;by any person (other than DSS or any affiliate thereof) in a transaction or series of related
transactions (other than the transactions contemplated by the Merger Agreement) relating to: (i) any issuance, sale or other disposition
of (including by way of merger, consolidation, business combination, share exchange, recapitalization, joint venture, partnership
or any similar transaction) securities (or options, rights or warrants to purchase, or securities convertible into or exchangeable
for, such securities) representing 20% or more of the voting power or economic interests of Lexington or any subsidiary (including,
for the avoidance of doubt, any issuance of equity securities of Lexington), (ii) any direct or indirect sale, transfer, acquisition
or disposition of more than 20% of the consolidated assets of Lexington and its subsidiaries taken as a whole (measured by the
fair market value thereof), including by way of purchase of stock or other equity interests of the subsidiaries or (iv) any merger,
consolidation, share exchange, business combination, recapitalization, reorganization, liquidation, joint venture, dissolution
or any similar transaction involving Lexington or any subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">&ldquo;</FONT><B>DSS
Acquisition Proposal</B><FONT STYLE="color: black">&rdquo;</FONT> means any offer, proposal, discussions, negotiations, indication
of interest or inquiry (whether in writing or otherwise) by any person (other than Lexington or any affiliate thereof) in a transaction
or series of related transactions (other than the transactions contemplated by the Merger Agreement) relating to: (i) any issuance,
sale or other disposition of (including by way of merger, consolidation, business combination, share exchange, recapitalization,
joint venture, partnership or any similar transaction) securities (or options, rights or warrants to purchase, or securities convertible
into or exchangeable for, such securities) representing 20% or more of the voting power or economic interests of DSS or any subsidiary
(including, for the avoidance of doubt, any issuance of equity securities of DSS, (ii) any tender offer, exchange offer, stock
purchase or other transaction in which, if consummated, any person or <FONT STYLE="color: black">&ldquo;</FONT>group<FONT STYLE="color: black">&rdquo;</FONT>
(as such term is defined under the Securities Exchange Act of 1934, as amended (the &ldquo;<B>Exchange Act</B>&rdquo;)) shall acquire
beneficial ownership (as such term is defined in Rule 13d-3 under the Exchange Act), or the right to acquire beneficial ownership,
of 20% or more of the voting power or economic interests of DSS or any subsidiary, (iii) any direct or indirect sale, transfer,
acquisition or disposition of more than 20% of the consolidated assets of DSS and its subsidiaries taken as a whole (measured by
the fair market value thereof), including by way of purchase of stock or other equity interests of the subsidiaries or (iv) any
merger, consolidation, share exchange, business combination, recapitalization, reorganization, liquidation, joint venture, dissolution
or any similar transaction involving DSS or any subsidiary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">&ldquo;</FONT><B>Lexington
Superior Proposal</B><FONT STYLE="color: black">&rdquo;</FONT> means any bona fide offer or proposal that constitutes a Lexington
Acquisition Proposal on terms that the Lexington board of directors (or any committee thereof) shall have determined in good faith
(after <FONT STYLE="color: black">consultation</FONT> with its financial advisor and outside legal counsel), taking into account
all relevant legal (including conditions), financial, regulatory, timing and other aspects of such Lexington Acquisition Proposal,
is reasonably likely to be consummated and would be more favorable to Lexington&rsquo;s stockholders (in their capacity as such)
than the Merger, if consummated (including after taking into account any changes to the terms of this Agreement proposed by DSS
in response to such Lexington Acquisition Proposal); provided that, for purposes of the definition of <FONT STYLE="color: black">&ldquo;</FONT>Lexington
Superior Proposal,<FONT STYLE="color: black"> &ldquo;</FONT> the references to <FONT STYLE="color: black">&ldquo;</FONT>20%<FONT STYLE="color: black">&rdquo;</FONT>
in the definition of <FONT STYLE="color: black">&ldquo;</FONT>Lexington Acquisition Proposal<FONT STYLE="color: black">&rdquo;</FONT>
shall be deemed to be references to <FONT STYLE="color: black">&ldquo;</FONT>more than 50%.<FONT STYLE="color: black">&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">&ldquo;</FONT><B>DSS
Superior Proposal</B><FONT STYLE="color: black">&rdquo;</FONT> means any bona fide offer or proposal that constitutes a DSS Acquisition
Proposal on terms that the DSS board of directors (or any committee thereof) shall have determined in good faith (after <FONT STYLE="color: black">consultation</FONT>
with its financial advisor and outside legal counsel), taking into account all relevant legal (including conditions), financial,
regulatory, timing and other aspects of such DSS Acquisition Proposal, is reasonably likely to be consummated and would be more
favorable to DSS&rsquo;s stockholders (in their capacity as such) than the Merger, if consummated (including after taking into
account any changes to the terms of this Agreement proposed by Lexington in response to such DSS Acquisition Proposal); provided
that, for purposes of the definition of <FONT STYLE="color: black">&ldquo;</FONT>DSS Superior Proposal,<FONT STYLE="color: black">&rdquo;</FONT>,
the references to <FONT STYLE="color: black">&ldquo;</FONT>20%<FONT STYLE="color: black">&rdquo;</FONT> in the definition of <FONT STYLE="color: black">&ldquo;</FONT>DSS
Acquisition Proposal<FONT STYLE="color: black">&rdquo;</FONT> shall be deemed to be references to <FONT STYLE="color: black">&ldquo;</FONT>more
than 50%.<FONT STYLE="color: black">&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Board Recommendations </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Merger Agreement,
subject to the exceptions set forth below, (i) the Lexington board of directors has agreed to recommend that Lexington stockholders
vote in favor of the Merger (&ldquo;<B>Lexington Board Recommendation</B>&rdquo;) and (ii) the DSS board of directors has agreed
to recommend that DSS stockholders vote in favor of the Merger (the &ldquo;<B>DSS Board Recommendation</B>&rdquo;). Subject to
the exceptions described below, the Merger Agreement provides that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">neither the Lexington board of directors
nor the DSS board of directors will (i) fail to make the Lexington Board Recommendation or the DSS Board Recommendation, as applicable,
(ii) withdraw, amend or modify in a manner adverse to the other company, the Lexington Board Recommendation or the DSS Board Recommendation,
as applicable, or (iii) recommend, adopt, endorse or approve a Lexington Acquisition Proposal or DSS Acquisition Proposal, as the
case may be, and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">neither the Lexington board
of directors nor the </FONT>DSS<FONT STYLE="color: black"> board of directors will resolve, agree or publicly propose to take any
of the actions described above. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Each of the foregoing actions
is referred to as a &ldquo;<B>Recommendation Change</B>&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The restrictions set
forth above will not prohibit the DSS board of directors or the Lexington board of directors, as the case may be, from effecting
a Recommendation Change if Lexington or DSS, as applicable, has determined in good faith, after consulting with outside legal counsel,
that (i) it has received a Lexington Superior Proposal or DSS Superior Proposal, as the case may be or (ii) a failure to take action
would be inconsistent with its fiduciary duties, and certain other conditions are met.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Approval of Stockholders </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Each of DSS and Lexington has agreed to
take all action necessary for the purpose of obtaining the required stockholder approval of the Merger, as promptly as practicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Indemnification of Directors and Officers </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
provides that all rights to indemnification with respect to acts or omissions occurring at or prior to the completion of the Merger
(including any acts or omissions arising out of or pertaining to the Merger) existing in favor of each present and former director,
officer or employee of Lexington or any of its subsidiaries as provided in their respective certificates of incorporation or bylaws
or indemnification agreements will remain in effect in accordance with their respective terms. The Merger Agreement provides that
DSS and Merger Sub will continue to indemnify and hold harmless each present and former director (or member of any committee of
a board of directors), officer, employee or agent of Lexington or any of its subsidiaries, with respect to acts, investigation
or omissions occurring or alleged to have occurred before or after the completion of the Merger, including advancing expenses to
the fullest extent allowed by applicable law in effect on the date of the Merger Agreement or as amended to increase the scope
of permitted indemnification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
provides that DSS will continue to indemnify and hold harmless each present and former director or officer of DSS or any of its
subsidiaries, with respect to acts or omissions occurring or alleged to have occurred before or at the completion of the Merger,
to the fullest extent permitted under applicable law and in DSS&rsquo;s certificate of incorporation and bylaws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
provides that, prior to the completion of the Merger, <FONT STYLE="color: black">DSS will purchase and maintain a directors&rsquo;
and officers&rsquo; liability insurance policy, and, if such policy does not cover certain of DSS&rsquo;s directors, officers and
employees for events occurring at or prior to the Effective Time, DSS shall purchase and obtain a six (6) year extended reporting
period or tail policy covering each for events occurring at or prior to the Effective Time, at DSS&rsquo;s expense. </FONT>Such
policy must contain terms no less favorable than the policies maintained by DSS or Lexington, as applicable, as of the date of
the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Conditions to the Completion of the Merger </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The obligations of
each of DSS and Lexington to consummate the Merger are subject to the satisfaction or waiver of certain additional conditions,
including, among other things, (a) the stockholders of DSS have approved the issuance of DSS Common Stock and the stockholders
of Lexington have approved the Merger and the Merger Agreement; (b) the registration statement on Form S-4 of which this proxy
statement/prospectus forms a part has become effective; (c) each party will allow reasonable access to their books and records
until the closing of the Merger; (d) each party will maintain in confidence any non-public information received from the other
party; (e) DSS will use reasonable best efforts to ensure that individuals who are employed on a full time basis by Lexington or
its subsidiaries immediately prior to the Effective Time will remain employees of the Surviving Corporation or its subsidiaries
upon the Effective Time (without limiting the ability of the Surviving Corporation, DSS or any of its subsidiaries to terminate
the employment of such Lexington&rsquo;s employees); (f) DSS will use its reasonable best efforts to cause the shares of DSS Common
Stock to be issued pursuant to the Merger to be approved for listing on the NYSE MKT; (g) each party will continue to indemnify
its own present and former directors (or members of any committee of a board of directors), officers, employees and agents; (h)
following the closing of the Merger, DSS shall purchase and maintain a directors&rsquo; and officers&rsquo; liability insurance
policy, and, if such policy does not cover certain of DSS&rsquo;s directors, officers and employees for events occurring at or
prior to the Effective Time, DSS shall purchase and obtain a six (6) year extended reporting period or tail policy covering each
for events occurring at or prior to the Effective Time, at DSS&rsquo;s expense; (i) the parties will take all necessary actions
to increase the size of the board of directors of DSS and appoint certain individuals to serve on the board of directors of DSS
and as officers of DSS; (j) if Lexington has at least $7,500,000 in cash (including amounts paid for certain professional fees,
not to exceed $1,000,000 in the aggregate) and it and its subsidiaries shall have no indebtedness for borrowed money, DSS shall
issue an additional 2,500,000 DSS Common Stock to Lexington&rsquo;s stockholders. In addition, if Lexington has at least $7,500,000
in cash (including amounts paid or accrued for certain professional fees, not to exceed $1,000,000 in the aggregate) and it and
its subsidiaries shall have no indebtedness for borrowed money, DSS shall issue a number of additional shares of DSS Common Stock
to Lexington&rsquo;s stockholders calculated by dividing any cash held by Lexington in excess of $7,500,000 (up to $1,500,000)
by $3.00 (any such shares referred to as the &ldquo;<B>Additional Shares</B>&rdquo;); (k) DSS has issued and sold between 833,333
and 1,000,000 shares of DSS Common Stock for a net aggregate purchase price of between $2,500,000 and $3,000,000 (the &ldquo;<B>Private
Placement</B>&rdquo;). If Lexington was the investor in the Private Placement, the shares of DSS Common Stock issued in the Private
Placement to Lexington will be exchanged upon the closing of the Merger with shares of common stock of DSS (the &ldquo;<B>Exchanged
Shares</B>&rdquo;); (l) immediately following the closing of the Merger, DSS shall use its best efforts to file a registration
statement on Form S-3 for the exercise of the warrants (and the shares of common stock issuable thereunder) issued in connection
of the Merger; and (m) the parties shall use commercially reasonable efforts to enable Lexington to receive a written tax opinion,
dated as of the closing date, to the effect that, on the basis of the facts, representations and assumptions set forth or referred
to in such opinion, for United States federal income tax purposes the Merger more likely than not will constitute a &ldquo;reorganization&rdquo;
within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, however, such opinion shall not be a condition
to closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Termination of the Merger Agreement </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
may be terminated at any time prior to the closing of the Merger, as follows: (a) by mutual written consent of DSS, Merger Sub
and Lexington; (b) by either DSS or Lexington if the closing has not occurred on or before March 15, 2013; (c) by either DSS or
Lexington if any law enacted by a governmental authority prohibits the consummation of the Merger, or any governmental authority
has issued an order or taken any other action which restrains, enjoins or otherwise prohibits the Merger; (d) by either DSS or
Lexington if the other party&rsquo;s stockholders do not approve the Merger (but only with respect to the issuance of the merger
consideration), unless the failure to obtain approval is attributable to a failure on the part of such party seeking to terminate
the Agreement; (e) by DSS if (i) the Lexington board of directors has effected a Recommendation Change, (ii) the board of directors
of Lexington or any authorized committee has failed to present or recommend the approval of the Merger Agreement and the Merger
to the stockholders, (iii) Lexington shall have entered or caused itself or its subsidiaries to enter, into any letter of intent,
agreement in principle, term sheet, merger agreement, acquisition agreement or other similar agreement related to any Lexington
Acquisition Proposal or (iv) Lexington shall have breached any term of the non-solicitation provision of the Merger Agreement;
(f) by Lexington if (i) the DSS board of directors has effected a Recommendation Change, (ii) the board of directors of DSS or
any authorized committee has failed to present or recommend the approval of the Merger Agreement and the Merger to the stockholders,
(iii) DSS shall have entered or caused itself or its subsidiaries to enter, into any letter of intent, agreement in principle,
term sheet, merger agreement, acquisition agreement or other similar agreement related to any DSS Acquisition Proposal or (iv)
DSS shall have breached any term of the non-solicitation provision of the Merger Agreement; (g) by either party if the other party,
or in the case of Lexington, DSS or Merger Sub, is in material breach of its obligations or representations or warranties under
the Agreement; (h) by either DSS or Lexington if prior to obtaining stockholder approval such party determines to enter into a
definitive agreement relating to a Lexington Superior Proposal or a DSS Superior Proposal, as the case may be; or (i) by Lexington,
at any time, upon payment to DSS of the Lexington Termination Fee (as defined below).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Termination Fees and Expenses </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
provides that, subject to certain exceptions discussed below, DSS shall pay the professional fees incurred by Lexington in connection
with the Merger Agreement and the transactions contemplated hereby (such fees not to exceed $1,000,000), except that, in the event
that the Merger Agreement is validly terminated by either DSS or Lexington, DSS&rsquo;s share of such professional fees shall not
exceed $50,000. In addition, DSS shall not incur fees and expenses in excess of $1,000,000, in the aggregate, for attorney, accountant
and other professionals (other than fees and expenses for any broker, financial advisor or investment banker identified to Lexington)
regarding services provided to DSS in connection with the consummation of the transactions contemplated by the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event that either
(a) Lexington terminates the Merger Agreement because (i) it determines to enter into a definitive agreement relating to a Lexington
Acquisition Proposal that the board of directors of Lexington has determined constitutes a Lexington Superior Proposal or (ii)
Lexington, at any time, upon payment of the Lexington Termination Fee (as hereinafter defined) or (b) DSS or Lexington validly
terminates the Merger Agreement if the Lexington stockholders have not approved the Merger or by DSS if the Lexington board of
directors have effected a Recommendation Change, then Lexington shall pay to DSS a fee (the &ldquo;<B>Lexington Termination Fee</B>&rdquo;)
equal to $5,000,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event that (i)
Lexington terminates the Merger Agreement because the DSS board of directors have effected a Recommendation Change or (ii) DSS
determines to enter into a definitive agreement relating to a DSS Acquisition Proposal that the board of directors has determined
constitutes a DSS Superior Proposal, then DSS shall pay to Lexington a fee (the &ldquo;<B>DSS Termination Fee</B>&rdquo;) equal
to the sum of (x) $3,000,000 plus (y) 5% of the consideration paid to all security holders of DSS in connection with a DSS Superior
Proposal, in the same form as such consideration is paid.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event that the
Merger Agreement is terminated by DSS because (a) the Merger is not consummated on or before March 15, 2013, (b) if the DSS stockholders
have not approved the Merger, or (c) if neither DSS nor Merger Sub is in material breach of its obligations or representations
under the Merger Agreement and a DSS Acquisition Proposal has either previously been publicly announced (or has become publicly
known) or has been proposed or communicated to DSS and a definitive agreement with respect to such DSS Acquisition Proposal has
been signed or consummated within six (6) months following the termination of the Merger Agreement, then DSS shall pay to Lexington
the DSS Termination Fee. Notwithstanding the foregoing, with respect to this termination only each reference to 20% in the definition
of DSS Acquisition Proposal shall be deemed to be a reference to 35%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event that the
Merger Agreement is terminated by Lexington because (a) the Merger is not consummated on or before March 15, 2013, or (b) if Lexington
is not in material breach of its obligations or representations under the Merger Agreement, and a Lexington Acquisition Proposal
has either previously been publicly announced (or has become publicly known) or has been proposed or communicated to Lexington
and a definitive agreement with respect to such Lexington Acquisition Proposal has been signed or consummated within six (6) months
following the termination of the Agreement, then Lexington shall pay to DSS the Lexington Termination Fee. Notwithstanding the
foregoing, with respect to this termination only each reference to 20% in the definition of DSS Acquisition Proposal shall be deemed
to be a reference to 35%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Amendments </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
may be amended only by the written agreement of DSS, Merger Sub and Lexington at any time prior to the completion of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Governing Law </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
is governed by the laws of the State of New York, except to the extent required under Delaware law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Escrow Agreement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As a condition to the
closing of the Merger Agreement, DSS, Lexington Representative and a mutually acceptable agent shall enter into an escrow agreement
(the &ldquo;<B>Escrow Agreement</B>&rdquo;). Pursuant to the Escrow Agreement, at the Effective Time, DSS shall deposit the 7,100,000
Escrow Shares into an escrow account to be released to the holders of Lexington Common Stock (pro rata on a fully-diluted basis
as of the Effective Time) if and when the closing price per share of DSS Common Stock exceeds $5.00 per share (as adjusted for
stock splits, stock dividends and similar events) for 40 trading days within a continuous 90 trading day period following the closing
of the Merger. If within one year following the Closing of the Merger, such threshold is not achieved, the shares of DSS Common
Stock held in escrow shall be cancelled and returned to the treasury of DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Voting and Support Agreements </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 1, 2012,
concurrently with the execution of the Merger Agreement, certain stockholders of DSS, including certain directors and officers,
representing 10.86% of DSS&rsquo;s shares of common stock issued and outstanding (collectively, the &ldquo;<B>Key DSS Stockholders</B>&rdquo;)
entered into voting and support agreements (collectively, the &ldquo;<B>DSS Voting Agreement</B>&rdquo;), pursuant to which the
Key DSS Stockholders have agreed, among other things, to vote all shares of common stock of DSS owned by them in favor of the adoption
of the Merger Agreement, the approval of the Merger and the approval of the transactions contemplated by the Merger Agreement and
any actions required in furtherance thereof, including approval of the amendments to the certificate of incorporation of DSS, the
creation of a staggered board and the approval of the issuance of the merger consideration. The DSS Voting Agreement will terminate
upon the earliest to occur of: (i)&nbsp;the mutual written consent of Lexington and the Key DSS Stockholder; (ii) the Effective
Time; (iii) the date of termination of the Merger Agreement in accordance with its terms; and (iv)&nbsp;the date on which an amendment
to the Merger Agreement to increase the merger consideration is effected without the consent of such Key DSS Stockholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 1, 2012,
concurrently with the execution of the Merger Agreement, certain stockholders of Lexington, representing 11.99% of Lexington&rsquo;s
capital stock issued and outstanding (collectively, the &ldquo;<B>Key Lexington Stockholders</B>&rdquo;) entered into voting agreements
(collectively, the &ldquo;<B>Lexington Voting Agreement</B>&rdquo;), pursuant to which the Key Lexington Stockholders have agreed,
among other things, to vote all shares of capital stock of Lexington owned by them in favor of the approval of the Merger Agreement,
the approval of the Merger and the approval of the transactions contemplated by the Merger Agreement and any actions required in
furtherance thereof. In addition, the Key Lexington Stockholders have agreed not to seek appraisal or dissenters&rsquo; rights
under Delaware General Corporation Law. The Lexington Voting Agreement will terminate upon the earliest to occur of: (i)&nbsp;the
mutual written consent of DSS, Merger Sub and the Key Lexington Stockholder; (ii) the Effective Time; (iii) the date of termination
of the Merger Agreement in accordance with its terms; and (iv)&nbsp;the date on which an amendment to the Merger Agreement to decrease
the merger consideration is effected without the consent of such Key Lexington Stockholder. The forms of the DSS Voting Agreement
and Lexington Voting Agreement are attached hereto as <U>Annex B-1</U> and <U>Annex B-2</U>, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INFORMATION ABOUT THE COMPANIES </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Document Security Systems, Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS was formed in New
York in 1984 and, in 2002, chose to strategically focus on becoming a developer and marketer of secure technologies. DSS specializes
in fraud and counterfeit protection for all forms of printed documents and digital information. DSS holds numerous patents for
optical deterrent technologies that provide protection of printed information from unauthorized scanning and copying. DSS operates
three production facilities, a security and commercial printing facility, a packaging facility and a plastic card facility where
DSS produces secure and non-secure documents for its customers. DSS licenses its anti-counterfeiting technologies to printers and
brand-owners. In addition, DSS has a digital division which provides cloud computing services for its customers, including disaster
recovery, back-up and data security services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to 2006, DSS&rsquo;s
primary revenue source in its document security division was derived from the licensing of its technology. In 2006, DSS began a
series of acquisitions designed to expand its ability to produce its products for end-user customers. In 2006, DSS acquired Plastic
Printing Professionals, Inc., a privately held plastic cards manufacturer located in the San Francisco, California area, referred
to herein as the DSS Plastics Group. In 2008, DSS acquired substantially all of the assets of DPI of Rochester, LLC, a privately
held commercial printer located in Rochester, New York, referred to herein as Secuprint or DSS Printing Group. In 2010, DSS acquired
Premier Packaging Corporation, a privately held packaging company located in the Rochester, New York area. Premier Packaging is
also referred to herein as the DSS Packaging Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In May 2011, DSS acquired
all of the capital stock of ExtraDev, Inc., a privately held information technology and cloud computing company located in the
Rochester, New York area. ExtraDev is also referred to herein as the DSS Digital Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In 2011, DSS rebranded
as &ldquo;DSS&rdquo; and now do business in four operating segments as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS Printing Group</B>
&mdash; Provides secure and commercial printing services for end-user customers along with technical support for DSS&rsquo;s technology
licensees. The division produces a wide array of printed materials such as security paper, vital records, prescription paper, birth
certificates, receipts, manuals, identification materials, entertainment tickets, secure coupons, parts tracking forms, brochures,
direct mailing pieces, catalogs, and business cards. The division also provides the basis of research and development for the DSS&rsquo;s
security printing technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS Plastics Group
</B>&mdash; Manufactures laminated and surface printed cards which can include magnetic stripes, bar codes, holograms, signature
panels, invisible ink, micro fine printing, guilloche patterns, Biometric, Radio Frequency Identification (RFID) and watermarks
for printed plastic documents such as ID cards, event badges, and driver&rsquo;s licenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS Packaging Group
</B>&mdash; Produces custom paperboard packaging serving clients in the pharmaceutical, beverage, photo packaging, toy, specialty
foods and direct marketing industries, among others. The division incorporates DSS&rsquo;s security technologies into printed packaging
to help companies prevent or deter brand and product counterfeiting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS Digital Group
</B>&mdash; Provides data center centric solutions to businesses and governments delivered via the &ldquo;cloud&rdquo;. This division
is also developing proprietary digital data security technologies based on the DSS&rsquo;s optical deterrent technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Lexington Technology Group, Inc. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">Lexington
is a private intellectual property monetization company that recently acquired a patent portfolio of six patents and four pending
patent applications relating to technology invented by Thomas Bascom (the &ldquo;<B>Bascom Portfolio</B>&rdquo;). </FONT>Lexington
is focused on the economic benefits of intellectual property assets through acquiring or internally developing patents or other
intellectual property assets (or interests therein) and then monetizing such assets through a variety of value enhancing initiatives,
including, but not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">licensing, </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">customized technology solutions (such
as applications for medical electronic health records), </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">strategic partnerships, and </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">litigation.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 3, 2012,
Lexington, through its wholly-owned subsidiary, Bascom Research, LLC (&ldquo;<B>Bascom Research</B>&rdquo;), initiated patent infringement
lawsuits in the United States District Court for the Eastern District of Virginia against five companies, including Facebook, Inc.
and LinkedIn Corporation, for unlawfully using systems that incorporate features claimed in patents owned by Bascom Research. The
patents-in-suit relate to the data structure used by social and business networking web sites and Web 2.0 corporate intranets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>DSSIP, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Merger Sub is a wholly-owned
subsidiary of DSS and was incorporated in Delaware on September 20, 2012 solely for the purpose of facilitating the Merger. Merger
Sub has not carried on any activities to date, except for activities incidental to its formation and activities undertaken in connection
with the transactions contemplated by the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE SPECIAL MEETING OF DSS STOCKHOLDERS
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Date, Time and Place </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS special meeting
of stockholders, will be held on ____________, at [&bull;]:[&bull;] a.m., local time, at [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Purpose of the DSS Special Meeting </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The DSS special meeting will be held for
the following purposes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 4%; text-align: justify">1.</TD>
    <TD STYLE="width: 93%; text-align: justify">To approve a merger, including, but not limited to, the issuance of shares of DSS Common Stock and DSS Preferred Stock (or, if Proposal 2 below is not approved, $.02 Warrants) and Warrants (and the shares of DSS Common Stock issuable upon conversion of the DSS Preferred Stock and exercise of the Warrants) to the Lexington stockholders in connection with the merger contemplated by the Agreement and Plan of Merger, dated as of October 1, 2012, by and among DSS, Lexington and DSSIP, Inc., a wholly-owned subsidiary of DSS;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">2.</TD>
    <TD STYLE="text-align: justify">To amend DSS&rsquo;s amended and restated certificate of incorporation to authorize a class of preferred stock<FONT STYLE="color: black"> and establish the associated rights and preferences thereof</FONT>;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">3.</TD>
    <TD STYLE="text-align: justify">To amend DSS&rsquo;s amended and restated certificate of incorporation to <FONT STYLE="color: black">implement a staggered board of directors</FONT>; </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">4.</TD>
    <TD STYLE="text-align: justify">To amend DSS&rsquo;s amended and restated certificate of incorporation to effect a reverse stock split of DSS&rsquo;s issued and outstanding common stock within the range of one-for-two to one-for-four (with the exact amount, if any, to be determined prior to the completion of the merger based on the requirement of the NYSE MKT);</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">5.</TD>
    <TD STYLE="text-align: justify">To approve the Document Security Systems, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan, as approved by the DSS board of directors on _____________;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">6.</TD>
    <TD STYLE="text-align: justify">To approve the adjournment of the DSS special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of any of the proposals referred to in (1) through (5) above; and</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">7.</TD>
    <TD STYLE="text-align: justify">To conduct any other business as may properly come before the DSS special meeting or any adjournment or postponement thereof.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>DSS Record Date; Shares Entitled to
Vote </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS board of directors
has fixed [&bull;] as the record date for the determination of stockholders entitled to notice of, and to vote at, the DSS special
meeting and any adjournment or postponement thereof. Only holders of record of shares of DSS Common Stock at the close of business
on the record date are entitled to notice of, and to vote at, the DSS special meeting. At the close of business on the record date,
DSS had outstanding and entitled to vote [&bull;] shares of common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS Common Stock
is the only class of securities entitled to vote at the DSS special meeting. Each share of DSS Common Stock outstanding on the
record date entitles the holder thereof to one vote on each matter properly brought before the DSS special meeting, exercisable
in person or by proxy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Quorum </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In order to conduct
the business described above at the DSS special meeting, DSS must have a quorum present. Stockholders who hold a majority of the
DSS Common Stock outstanding as of the close of business on the record date for the DSS special meeting must be present either
in person or by proxy in order to constitute a quorum to conduct business at the DSS special meeting. As of the record date, there
were [&bull;] shares of DSS Common Stock outstanding and entitled to vote at the DSS special meeting. Accordingly, the presence,
in person or by proxy, of the holders of [&bull;] shares of DSS Common Stock will be required in order to establish a quorum.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Required Vote </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The proposals being
submitted for approval by the DSS stockholders at the DSS special meeting will be approved or rejected on the basis of certain
specific voting thresholds. In particular:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the approval of the Securities Issuance
Proposal requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock present and entitled to vote
on the matter either in person or by proxy at the DSS special meeting;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the approval of the Preferred Stock Creation
Proposal requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock outstanding and entitled
to vote on the matter either in person or by proxy at the DSS special meeting;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the approval of the Staggered Board Proposal
requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock outstanding and entitled to vote on
the matter either in person or by proxy at the DSS special meeting;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the approval of the Reverse Stock Split
Proposal requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock outstanding and entitled
to vote on the matter either in person or by proxy at the DSS special meeting; </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the approval of the 2013 Equity Incentive
Plan Proposal requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock present and entitled
to vote on the matter either in person or by proxy at the DSS special meeting; and </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 36pt"></TD><TD STYLE="width: 31.5pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the approval of the adjournment of the
DSS special meeting, if necessary, to solicit proxies if there are not sufficient votes in favor of any of the DSS Proposals, requires
the affirmative vote of the holders of a majority of the DSS Common Stock present and entitled to vote on the matter either in
person or by proxy at the DSS special meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Only the approval
of the Securities Issuance Proposal is a required condition to the completion of the Merger. If any of the other proposals are
not approved by the DSS stockholders, the Merger may still be completed.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Counting of Votes; Treatment of Abstentions
and Incomplete Proxies </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a DSS stockholder
fails to submit a proxy as instructed on the enclosed proxy card or fails to vote at the DSS special meeting, such stockholder&rsquo;s
shares will not be counted as present for the purpose of determining the presence of a quorum, which is required to transact business
at the DSS special meeting, and will have no effect on the outcome of DSS Proposals No. 1 (Securities Issuance Securities), No.
5 (2013 Equity Incentive Plan Proposal) and No. 6 (adjournment to solicit additional proxies, if necessary). However, the failure
to submit a proxy or vote at the DSS special meeting will have the same effect as voting AGAINST DSS Proposals No. 2 (Preferred
Stock Creation Proposal), No. 3 (Staggered Board Proposal) and No. 4 (Reverse Stock Split Proposal).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a DSS stockholder
submits a proxy and affirmatively elects to abstain from voting, that proxy will be counted as present for the purpose of determining
the presence of a quorum for the DSS special meeting, but will not be voted at the DSS special meeting. As a result, such abstention
will have the same effect as voting AGAINST DSS Proposal Nos. 1, 2, 3, 4, 5 and 6.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a DSS stockholder
submits a proxy card without indicating how such stockholder wishes to vote, the shares of DSS Common Stock represented by such
proxy card will be counted as present for the purpose of determining the presence of a quorum for the DSS special meeting and all
of such shares will be voted FOR Proposal Nos. 1, 2, 3, 4, 5 and 6.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Voting by DSS Directors and Executive
Officers </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of ___________,
2013, the latest practicable date before the printing of this proxy statement/prospectus, directors and executive officers of DSS
beneficially owned and were entitled to vote [&bull;] shares of DSS Common Stock, or approximately [&bull;]% of the total outstanding
voting power of DSS. It is expected that DSS&rsquo;s directors and executive officers will vote their shares FOR the approval of
the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Voting of Proxies by Registered Holders
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Giving a proxy means
that a DSS stockholder authorizes the persons named in the enclosed proxy card to vote the stockholder&rsquo;s shares at the DSS
special meeting in the manner such stockholder directs. If you are a registered DSS stockholder (that is, you hold your stock in
your own name), you may vote in person at the DSS special meeting or vote by submitting your proxy (i) through the Internet, (ii)
by telephone or (iii) by marking, signing and dating the enclosed proxy card and returning it by mail in the postage-paid envelope
provided. Whether or not you plan to attend the DSS special meeting, DSS urges you to vote by proxy to ensure that your vote is
counted. You may still attend the DSS special meeting and vote in person even if you have already voted by proxy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>To vote in person, come to the DSS special meeting and DSS will give you a ballot when you arrive.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>To vote using a proxy card, simply follow the instructions included in the enclosed proxy card to vote by Internet or telephone
or complete, sign and date the enclosed proxy card and return it promptly in the postage-paid envelope provided. If your proxy
is received before the DSS special meeting, your proxy will be voted as you direct.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Shares Held in Street Name </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If your shares of DSS
Common Stock are held in street name in a stock brokerage account or by another nominee, you must provide the record holder of
your shares with instructions on how to vote the shares. Please follow the voting instructions provided by your broker or other
nominee. You may not vote shares of DSS Common Stock held in street name by returning a proxy card directly to DSS or by voting
in person at the DSS special meeting unless you provide a legal proxy, which you must obtain from your broker or other nominee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Brokers or other nominees
who hold shares of DSS Common Stock in street name for a beneficial owner typically have the authority to vote in their discretion
on routine proposals, even when they have not received instructions from beneficial owners. However, brokers or other nominees
are not allowed to exercise their voting discretion on matters that are determined to be non-routine without specific instructions
from the beneficial owner. Broker non-votes are shares held by a broker or other nominee that are represented at the DSS special
meeting, but with respect to which the broker or other nominee is not instructed by the beneficial owner of such shares to vote
on the particular proposal and the broker or other nominee does not have discretionary voting power on such proposal. Therefore,
if you are a DSS stockholder and hold your shares in street name, you should instruct your broker or other nominee on how to vote
your shares to ensure that your shares are voted with respect to each of the DSS Proposals. Broker non-votes will be counted for
purposes of determining whether a quorum exists at the DSS special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Revocability of Proxies and Changes
to a DSS Stockholder&rsquo;s Vote </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you are a DSS stockholder
and wish to change your vote with respect to any proposal, you may do so by revoking your proxy at any time prior to the commencement
of voting with respect to such proposal at the DSS special meeting by:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">sending a written notice stating that you would like to revoke your proxy to DSS&rsquo;s Corporate
Secretary at Document Security Systems, Inc., at 28 Main Street East, Suite 1525, Rochester, New York 14614;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">voting on a later date by the Internet or telephone;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">submitting new proxy instructions on a new proxy card with a later date; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">attending the DSS special meeting and voting in person (but note that your attendance alone will
not revoke your proxy).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you are a DSS stockholder
of record, revocation of your proxy or voting instructions by written notice must be received by DSS&rsquo;s Corporate Secretary
by no later than the close of business on ___________, 2013, although you may also revoke your proxy by attending the DSS special
meeting and voting in person. <B>However, if your shares are held in street name by a broker or other nominee and you have instructed
such broker or other nominee to vote your shares, you must follow directions received from your broker or other nominee in order
to change those voting instructions.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Solicitation of Proxies </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS will bear its own
cost and expense of preparing, assembling, printing, and mailing this proxy statement/prospectus, any amendments thereto, the proxy
card, and any additional information furnished to the DSS stockholders. DSS will bear any fees paid to the SEC in connection with
the filing of this proxy statement/prospectus and the related Registration Statement on Form S-4. DSS may also reimburse brokerage
houses and other custodians, nominees, and fiduciaries for their costs of soliciting and obtaining proxies from beneficial owners
of DSS Common Stock, including the costs of reimbursing brokerage houses and other custodians, nominees, and fiduciaries for their
costs of forwarding this proxy statement/prospectus and other solicitation materials to such beneficial owners. In addition, proxies
may be solicited without extra compensation by directors, officers, and employees of each of DSS and Lexington by mail, telephone,
fax, or other methods of communication. DSS has retained [&bull;] to assist DSS in the solicitation of proxies from DSS stockholders
in connection with the DSS special meeting. [&bull;] will receive a fee of [&bull;] as compensation for its services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Delivery of Proxy Materials to Households
Where Two or More DSS Stockholders Reside </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The SEC has adopted
rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements with respect
to two or more stockholders sharing the same address by delivering a single proxy statement/prospectus addressed to those stockholders.
This process, which is commonly referred to as householding, potentially means extra convenience for stockholders and cost savings
for companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In connection with
the DSS special meeting, a number of brokers with account holders who are DSS stockholders will be householding DSS proxy materials.
As a result, a single proxy statement/prospectus will be delivered to multiple stockholders sharing an address unless contrary
instructions have been received from the applicable stockholders. Once a DSS stockholder receives notice from its broker that they
will be householding communications to such stockholder&rsquo;s address, householding will continue until such stockholder is notified
otherwise or until such stockholder revokes its consent. If, at any time, a DSS stockholder no longer wishes to participate in
householding and would prefer to receive a separate proxy statement/prospectus, such stockholder should notify its broker or contact
DSS&rsquo;s Corporate Secretary at Document Security Systems, Inc., 28 East Main Street, Suite 1525, Rochester, NY 14614. DSS stockholders
who currently receive multiple copies of this proxy statement/prospectus at their address and would like to request householding
of their communications should contact their broker.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Attending the DSS Special Meeting </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All DSS stockholders
as of the record date, or their duly appointed proxies, may attend the DSS special meeting. If you are a registered DSS stockholder
(that is, if you hold your stock in your own name) and you wish to attend the DSS special meeting, please bring your proxy and
evidence of your stock ownership, such as your most recent account statement, to the DSS special meeting. You should also bring
valid picture identification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If your shares are
held in street name in a stock brokerage account or by another nominee and you wish to attend the DSS special meeting, you need
to bring a copy of a brokerage or bank statement to the DSS special meeting reflecting your stock ownership as of the record date.
You should also bring valid picture identification.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DSS PROPOSALS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>DSS Proposal No. 1: Approval of the
Issuance of DSS Common Stock, DSS Preferred Stock (or, if the Preferred Stock Creation Proposal is not approved, $.02 Warrants)
and Warrants in connection with the Merger</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger and subject to the Beneficial Ownership Condition, each outstanding Lexington Common Stock and each outstanding Lexington
Preferred Stock (other than shares of Lexington Common Stock and Lexington Preferred Stock held in treasury or owned by DSS or
any direct or indirect wholly-owned subsidiary of DSS or Lexington that will be canceled and retired at the Effective Time) will
be automatically converted into (i) shares of DSS Common Stock, (ii) Warrants (as described below) to purchase DSS Common Stock,
and (iii) a pro rata portion of the Escrow Shares and, as applicable, shares of DSS Preferred Stock, determined by multiplying
each of (x) 17,250,000 shares plus the number of Additional Shares and Exchanged Shares, if any, (y) 4,859,894 warrants, and (z)
7,100,000 shares by a fraction, the numerator of which shall be one and the denominator of which shall be the sum of (A) the number
of shares of Lexington Common Stock plus (B) the number of Lexington Preferred Stock, in each case issued and outstanding immediately
prior to the Effective Time (such fraction referred to as the &ldquo;<B>Common Stock Exchange Ratio</B>&rdquo;). At the Effective
Time of the Merger, DSS will issue to the holders of Lexington Common Stock and Lexington Preferred Stock (on a <I>pro rata</I>
as-converted basis) an aggregate of 4,859,894 Warrants to purchase an aggregate of 4,859,894 shares of DSS Common Stock with an
exercise price of $4.80 per share and a term of five years commencing upon the closing of the Merger. Upon the consummation of
the Merger, only the holders of Lexington Preferred Stock who would, after giving effect to the Merger and receipt of the merger
consideration, beneficially own more than 9.99% of DSS Common Stock (the &ldquo;<B>Beneficial Ownership Condition</B>&rdquo;) shall
receive for each share of Lexington Preferred Stock they hold the same merger consideration as outlined above except that such
holders shall receive a combination of DSS Common Stock and DSS Preferred Stock that is convertible into (or if the proposal to
authorize DSS Preferred Stock is not approved, $.02 Warrants exercisable for) that number of shares of DSS Common Stock they would
have received if they had been a holder of Lexington Common Stock immediately prior to the Effective Time in such amounts that
would enable such holders, after giving effect to the Merger, to beneficially own no more than 9.99% of DSS Common Stock upon consummation
of the Merger. Those holders of Lexington Preferred Stock who do not meet the Beneficial Ownership Condition and will not receive
DSS Preferred Stock or $.02 Warrants, will receive DSS Common Stock and the other types of merger consideration in exchange for
their Lexington Preferred Stock based on the Common Stock Exchange Ratio.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, at
the Effective Time, up to an aggregate of 3,600,000 outstanding and unexercised options to purchase Lexington Common Stock
will be assumed by DSS and each such option will convert into an option to purchase or acquire shares of DSS Common Stock (i)
in a number equal to the number of shares of Lexington Common Stock subject to the option immediately prior to the
Effective Time multiplied by 0.556 (the &ldquo;<B>Option Exchange Ratio</B>&rdquo;) and (ii) with an exercise price per share
equal to the exercise price of the applicable option immediately prior to the Effective Time divided by the Option Exchange
Ratio, with the number of shares in (i) and the price per share in (ii) rounded up or down to the next whole share number or
tenth (0.1) of a cent, as the case may be, in a manner such that, after taking into account such rounding, both (A) the
excess of the aggregate fair market value of the shares subject to the new option over the aggregate exercise price for such
shares does not exceed the excess of the aggregate fair market value of the shares subject to the old option over the
aggregate exercise price for such shares immediately prior to the Effective Time, and (B) the ratio on a per option basis of
the exercise price to the fair market value of the shares subject to the option is not increased.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger will have
no effect on the number of shares of DSS Common Stock held by current DSS stockholders as of immediately prior to the completion
of the Merger (subject to any changes in outstanding shares of DSS Common Stock as a result of the proposed reverse stock split
described in the Reverse Stock Split Proposal below). However, it is expected that upon completion of the Merger, such shares will
represent only an aggregate of approximately 44% of the outstanding shares of common stock of the combined company calculated on
a fully diluted basis (without taking into account shares of DSS Common Stock held by Lexington stockholders prior to the completion
of the Merger). For example, if you are a DSS stockholder and hold 5% of the outstanding shares of DSS Common Stock calculated
on a fully diluted basis immediately prior to the completion of the Merger and do not also hold shares of Lexington capital stock
or warrants, then upon completion of the Merger you will hold an aggregate of approximately 2.20% of the outstanding shares of
common stock of the combined company calculated on a fully diluted basis as of immediately following the completion of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under NYSE MKT rules
and regulations, a company listed on the NYSE MKT is required to obtain stockholder approval prior to the issuance of common stock
or of securities convertible into or exercisable for common stock, in connection with the acquisition of another company, if the
number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares
of the issuing company&rsquo;s common stock outstanding before such issuance in connection with such proposed acquisition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The aggregate number
of shares of DSS Common Stock (on a fully diluted basis) to be issued in connection with the Merger will exceed 20% of the shares
of DSS Common Stock outstanding before such issuance. For this reason, DSS must obtain the approval of the DSS stockholders, in
accordance with the NYSE MKT rules and regulations, for the issuance of shares of DSS Common Stock to Lexington stockholders in
connection with the Merger. Accordingly, DSS is asking its stockholders to approve the issuance of DSS Common Stock in connection
with the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Required Vote; Recommendation of
the DSS Board of Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Approval of this Securities
Issuance Proposal requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock present and entitled
to vote on the matter either in person or by proxy at the DSS special meeting. A failure to submit a proxy or vote at the DSS special
meeting will result in your shares not being counted as present for the purpose of determining the presence of a quorum, which
is required to transact business at the DSS special meeting, and will have no effect on the outcome of this Securities Issuance
Proposal. However, for purposes of the vote on this Securities Issuance Proposal, an abstention will be counted as present for
the purpose of determining a quorum, but will have the same effect as voting &ldquo;AGAINST&rdquo; this Securities Issuance Proposal,
and a &ldquo;broker non-vote&rdquo; will have no effect on the outcome of this Securities Issuance Proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE DSS BOARD OF DIRECTORS RECOMMENDS
A VOTE &ldquo;FOR&rdquo;<BR>
THE SECURITIES ISSUANCE PROPOSAL.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: black"><B>DSS Proposal
No. 2: </B></FONT><B>Approval of an Amendment to DSS&rsquo;s Amended and Restated Certificate of Incorporation to Authorize a Class
of Preferred Stock<FONT STYLE="color: black"> </FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>General </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s Certificate
currently authorizes the issuance of 200,000,000 shares of common stock, par value $0.02 per share. The DSS&rsquo;s board of directors
is asking DSS&rsquo;s stockholders to approve a proposal to amend the DSS&rsquo;s Certificate to establish a class of Series A
Convertible Preferred Stock having [&bull;] authorized and issued shares (the &ldquo;<B>DSS Preferred Stock</B>&rdquo;), in the
form attached hereto as <U>Annex E</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Purpose </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.45pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">As part of the merger
consideration, at the Effective Time, the Lexington Preferred Stock will be automatically converted into the right to receive DSS
Preferred Stock, determined by multiplying each of (x) 17,250,000 shares plus the number of Additional Shares and Exchanged Shares,
if any, (y) 4,859,894 warrants, and (z) 7,100,000 shares by the Common Stock Exchange Ratio. Upon the consummation of the Merger,
only the holders of Lexington Preferred Stock who would, after giving effect to the Merger and receipt of the merger consideration,
beneficially own more than 9.99% of DSS Common Stock (the &ldquo;<B>Beneficial Ownership Condition</B>&rdquo;) shall receive for
each share of Lexington Preferred Stock they hold the same merger consideration except that such holders shall receive a combination
of DSS Common Stock and DSS Preferred Stock that is convertible into that number of shares of DSS Common Stock they would have
received if they had been a holder of Lexington Common Stock immediately prior to the Effective Time in such amounts that would
enable such holders, after giving effect to the Merger, to beneficially own no more than 9.99% of DSS Common Stock upon consummation
of the Merger. Those holders of Lexington Preferred Stock who do not meet the Beneficial Ownership Condition and will not receive
DSS Preferred Stock or $.02 Warrants, will receive DSS Common Stock and the other types of merger consideration in exchange for
their Lexington Preferred Stock based on the Common Stock Exchange Ratio.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The approval of this
Preferred Stock Creation Proposal by the DSS stockholders was not made a condition to the completion of the Merger. If this proposal
to authorize DSS Preferred Stock is not approved, in lieu of DSS Preferred Stock, Lexington stockholders will receive $.02 Warrants
exercisable for DSS Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">For a more complete
discussion of what Lexington stockholders will receive in connection with the Merger and the formula that will be used to calculate
the Common Stock Exchange Ratio, see the sections entitled &ldquo;The Merger&mdash;What Lexington Stockholders Will Receive in
the Merger&rdquo; and &ldquo;The Merger Agreement&mdash;Merger Consideration&rdquo; beginning on pages 74 and 97, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Terms of the Preferred Stock</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS Preferred Stock
will have the powers, preferences and privileges and other rights as will be set forth in a Certificate of Amendment to the Certificate
of Incorporation of DSS to be filed by DSS prior to closing attached hereto as <U>Annex E</U>, which rights include, among other
things, the right to participate in any dividends and distributions paid to common stockholders on an as-converted basis, pro rata
with the holders of DSS Common Stock. Upon the occurrence any Liquidation Event (as such term is defined in the Certificate of
Amendment), after the payment of all debts and liabilities of DSS, any remaining assets shall be distributed pro rata to the holders
of DSS Common Stock and DSS Preferred Stock on an as-converted basis. The DSS Preferred Stock will be non-voting, except as required
by law and in certain defined instances, including in connection with a fundamental transaction. Each one share of DSS Preferred
Stock shall be convertible into one share of DSS Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Required Vote; Recommendation of
the DSS Board of Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Approval of this Preferred
Stock Creation Proposal requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock outstanding
and entitled to vote on the matter either in person or by proxy at the DSS special meeting. For purposes of the vote on this Preferred
Stock Creation Proposal, an abstention, a &ldquo;broker non-vote,&rdquo; or a failure to submit a proxy or vote at the DSS special
meeting will have the same effect as voting &ldquo;AGAINST&rdquo; this Preferred Stock Creation Proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE DSS BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT DSS STOCKHOLDERS VOTE &ldquo;FOR&rdquo; THE PREFERRED STOCK CREATION PROPOSAL.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>DSS Proposal No. 3: Approval of an Amendment
to DSS&rsquo;s Amended and Restated Certificate of Incorporation to Implement a Staggered Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Overview</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Proposal 3, the Staggered
Board Proposal, to be presented at the DSS special meeting asks DSS stockholders to approve a staggered board for DSS as provided
in the proposed amendment to the amended and restated certificate of incorporation of DSS attached as <U>Annex G</U> to this joint
proxy statement/prospectus the &ldquo;<B>Staggered Board Amendment</B>&rdquo;). The Staggered Board Proposal provides for a board
of directors divided into three classes of directors serving staggered three&ndash;year terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If DSS&rsquo;s stockholders
approve the Staggered Board Proposal upon the completion of the Merger, the board of directors of DSS will be divided into three
classes, Class I to be comprised of David Klein, Ira A. Greenstein and Jeffrey Ronaldi, Class II to be comprised of Robert B. Bzdick,
Peter Hardigan and an additional member to be designated by Lexington (reasonably acceptable to DSS) and Class III to be comprised
of Warren Hurwitz, Robert B. Fagenson and an additional member to be designated by Lexington (reasonably acceptable to DSS). The
three directors constituting the Class I directors would serve until the DSS annual meeting of stockholders for 2013; the three
directors constituting the Class II directors would serve until the DSS annual meeting of stockholders for 2014; and the three
directors constituting the Class III directors would serve until the DSS annual meeting of stockholders for 2015. At each annual
meeting starting with the first annual meeting in 2013, directors would be elected to succeed those whose terms expire, with each
newly elected director to serve for a three-year term. If DSS&rsquo;s stockholders do not approve the Staggered Board Proposal,
then the board of directors of DSS following the Merger shall initially consist of eight (8) directors, four of whom as designated
by Lexington and the other four as designated by DSS, provided, that, prior to the closing of the Merger, DSS and Lexington will
jointly identify a ninth person to be nominated as a member of the board of directors of DSS following the Effective Time. Approval
of the Staggered Board Proposal, however, is not required to consummate the Merger and the transactions contemplated thereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The foregoing description
of the Staggered Board Amendment is not intended to be complete and is qualified in its entirety by reference to the complete text
of the Staggered Board Amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Reasons for and Effects of the Classified
Board Proposal </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As part of the negotiation
of the Merger Agreement, DSS agreed to include the Staggered Board Amendment in the DSS&rsquo;s Certificate and bylaws, subject
to the approval of its stockholders, if required, so long as approval of the proposal by the DSS stockholders was not made a condition
to the completion of the Merger. As a result, the Merger Agreement provides that the Merger is not conditioned on the approval
by DSS stockholders of the Staggered Board Amendment. The Staggered Board Amendment, however, is conditioned on the consummation
of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The board of directors
of DSS believes that the Staggered Board Amendment may be advantageous to DSS for several reasons. First, the Staggered Board Amendment
may enhance continuity and stability in the policies formulated by the DSS board because directors would serve three-year rather
than one-year terms. Establishing three-year terms may also increase DSS&rsquo;s ability to attract and retain desirable directors.
In addition, a staggered board may decrease the likelihood that a proposal to acquire DSS would succeed that the then existing
board of DSS believed would prevent stockholders of DSS from receiving the full value of their investments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Staggered Board
Proposal, however, may discourage individuals or entities from purchasing shares of DSS&rsquo;s Common Stock in order to obtain
actual control of DSS by electing their own slate of directors or to achieve some other goal, such as the repurchase of their shares
at a premium or a restructuring of DSS, by threatening to obtain such control. It may have such effect because the provisions of
the Staggered Board Amendment could delay the purchaser&rsquo;s ability to obtain control of the DSS board in a relatively short
period of time. The delay may arise because under the Staggered Board Proposal, it will generally take a purchaser (or any other
individual or entity) two annual meetings (as contrasted with a single meeting under the DSS&rsquo;s Certificate and bylaws that
will be in effect if the Staggered Board Proposal is not approved) to elect a majority of the board unless directors have been
removed from office during their terms, regardless of whether such purchaser acquires a majority of the common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the same reasons,
the adoption of the Staggered Board Proposal may also deter certain mergers, tender offers, proxy contests or other future takeover
attempts which holders of some or a majority of the common stock of DSS may deem to be in their best interests. The Staggered Board
Proposal would delay stockholders who are not in agreement with the policies of the DSS board of directors or who desire that DSS
effect a merger or other business combination, including a merger with a substantial stockholder, from electing or removing a majority
of the board for two years and cause for removal of a majority of the board existed. The Staggered Board Proposal applies to every
election of directors, whether or not a change in substantial ownership of DSS is contemplated or shall have occurred. Increasing
the terms of directors to three years may render more difficult the removal for up to three years of any individual director that
management, a majority of the board of directors or a majority of the stockholders believe should be removed, whether or not a
change of substantial ownership of DSS is contemplated or shall have occurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The board of directors
of DSS has no knowledge of any present effort to change the expected composition of the DSS board of directors as of the time of
the Merger, to gain control of DSS after the Merger, or to organize a proxy contest with respect to DSS. Moreover, there has been
no problem in the past or at the present time with board continuity or stability at DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The board of directors
of DSS presently has no reason to believe that the DSS board of directors will adopt, or recommend to the stockholders of DSS for
their adoption, any further amendments to DSS&rsquo;s Certificate or bylaws following the adoption of Staggered Board Amendment
set forth in <U>Annex G</U> that would affect the ability of third parties to take over or change control of DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Required Vote; Recommendation of
the DSS Board of Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Approval of this Staggered
Board Proposal requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock outstanding and entitled
to vote on the matter either in person or by proxy at the DSS special meeting. For purposes of the vote on this Staggered Board
Proposal, an abstention, a &ldquo;broker non-vote,&rdquo; or a failure to submit a proxy or vote at the DSS special meeting will
have the same effect as voting &ldquo;AGAINST&rdquo; this Staggered Board Proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE DSS BOARD OF DIRECTORS UNANIMOUSLY
RECOMMENDS THAT DSS STOCKHOLDERS VOTE &ldquo;FOR&rdquo; THE STAGGERED BOARD PROPOSAL.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>DSS Proposal No. 4: Approval of an Amendment to DSS&rsquo;s
Amended and Restated Certificate of Incorporation to Effect a Reverse Stock Split of DSS Common Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Overview</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS board of directors
has unanimously approved a proposal to amend the DSS Certificate to effect a reverse stock split of the issued and outstanding
shares of DSS Common Stock at a reverse stock split ratio ranging from one-for-two to one-for-four, with the exact ratio to be
determined by DSS prior to the completion of the Merger. The DSS board of directors has recommended that this proposal be presented
to the DSS stockholders for approval in the event that it is needed to comply with NYSE MKT&rsquo;s continued listing requirements.
The text of the form of proposed amendment to the DSS Certificate to effect a reverse stock split of the issued and outstanding
shares of DSS Common Stock is attached to this proxy statement/prospectus as <U>Annex F</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The proposed amendment
to the DSS Certificate will effect a reverse stock split of the issued and outstanding shares of DSS Common Stock within the range
of one-for-two to one-for-four, with the exact number within such range to be determined by DSS prior to the completion of the
Merger. The DSS board of directors believes that stockholder approval of an amendment granting this discretion, rather than approval
of a specified ratio, provides the appropriate flexibility to react to then-current market conditions and NYSE MKT&rsquo;s requirements
for continued listing, therefore, is in the best interests of DSS and its stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">By approving this amendment,
DSS stockholders will (i) approve a series of amendments to the DSS Certificate pursuant to which any whole number of outstanding
shares of DSS Common Stock between and including two and four will be combined into one share of DSS Common Stock and (ii) authorize
the DSS board of directors to (a) file only one such amendment, as determined immediately prior to the completion of the Merger
in the manner described herein and (b) abandon each amendment not selected. In addition, DSS may elect not to undertake a reverse
stock split.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If, following approval
by the DSS stockholders, it is determined that an amendment to the DSS Certificate to effect a reverse stock split is in the best
interests of DSS and its stockholders, the reverse stock split will become effective upon filing one such amendment with the New
York State Department of State, Division of Corporations. Such amendment will contain the number of shares within the range set
forth in this Reverse Stock Split Proposal to be combined into one share of DSS Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If, following approval
by the DSS stockholders, a reverse stock split is undertaken, the number of issued and outstanding shares of DSS Common Stock will
be reduced in accordance with a reverse stock split ratio determined immediately prior to the completion of the Merger within the
range set forth in this Reverse Stock Split Proposal. Except for adjustments that may result from the treatment of fractional shares,
as described below, each stockholder will hold the same percentage of DSS Common Stock outstanding immediately following the reverse
stock split as such stockholder held immediately prior to the reverse stock split and immediately prior to the completion of the
Merger. The par value of DSS Common Stock will remain unchanged at $0.02 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Reasons for the Reverse Stock Split</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.75in">The DSS board of
directors approved the proposal authorizing the reverse stock split because it believes that a reverse stock split may allow
the combined company to become listed on the NYSE MKT, which listing is a condition to the completion of the Merger (as
discussed below under the section entitled &ldquo;NYSE MKT Requirements for Listing&rdquo;), and the DSS board of directors
also believes that the increased market price of DSS Common Stock expected to result from the implementation of a reverse
stock split will improve the marketability and liquidity of DSS Common Stock. From June 5, 2012 to October 18, 2012, the DSS
Common Stock had a closing price of $3.00 or above for each trading day. On November 19, 2012, the closing price of DSS Common
Stock was $2.73. If the DSS Common Stock continues to trade below $3.00 at the time of the Merger, DSS anticipates that
it will need to undertake a reverse stock split.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>NYSE MKT Requirements for Listing</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS Common Stock is
currently listed on the NYSE MKT. Lexington shares of its capital stock are not publicly traded. According to applicable NYSE MKT
rules, in a transaction constituting a &ldquo;reverse merger&rdquo; in which an issuer combines with a non-listed entity, resulting
in a change of control of the issuer and potentially allowing the non-listed entity to obtain a NYSE MKT, the issuer must apply
for initial inclusion on the a NYSE MKT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Merger Agreement
requires that DSS use its reasonable best efforts to cause the shares of DSS Common Stock to be approved, at or prior to the completion
of the Merger, for listing (subject only to notice of issuance) on the NYSE MKT at and following the completion of the Merger,
and the listing of the shares of DSS Common Stock issuable pursuant to the Merger Agreement is a condition to Lexington&rsquo;s
obligation to complete the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The listing standards
of the NYSE MKT require, among other things, a $3.00 per share minimum bid upon completion of the Merger. As of the date of the
mailing of this proxy statement/prospectus, DSS has filed an initial listing application for the NYSE MKT in connection with the
Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS board of directors
expects that a reverse stock split of DSS Common Stock, if effected, will increase the market price of DSS Common Stock so that
the combined company is able to achieve the initial listing requirements for the NYSE MKT upon completion of the Merger and thereafter
maintain compliance with the NYSE MKT bid price listing standard of $1.00 per share. In determining the exact ratio for the reverse
stock split, DSS intends to use a ratio from within the range of one-for-two to one-for-four that would result in a per share price
of greater than $3.00 per share following the reverse stock split. Notwithstanding the foregoing, there can be no assurance that
the market price per share following the Merger and the reverse stock split will remain in excess of the minimum bid price for
a sustained period of time. In addition, there can be no assurance that the DSS Common Stock, or the common stock of the combined
company following the completion of the Merger, will not be delisted due to a failure to meet other continued listing requirements
even if the market price per share of DSS Common Stock on a post-reverse-stock-split basis remains in excess of the minimum bid
requirement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Additionally, the DSS
board of directors believes that a listing on the NYSE MKT for the shares of common stock of the combined company may provide a
broader market for the common stock of the combined company and facilitate the use of the common stock of the combined company
in financing and other transactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Potential Decreased Investor Interest</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On [&bull;], 2013,
the latest practicable date before the printing of this proxy statement/prospectus, DSS Common Stock closed at $[&bull;] per share.
An investment in DSS Common Stock may not appeal to brokerage firms that are reluctant to recommend lower-priced stocks to their
clients. Investors may also be dissuaded from purchasing lower-priced stocks because the brokerage commissions, as a percentage
of the total transaction, tend to be higher for such stocks. Moreover, analysts at many brokerage firms do not monitor the trading
activity or otherwise provide coverage of lower-priced stocks. Also, the DSS board of directors believes that most investment funds
are reluctant to invest in lower-priced stocks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There are risks associated
with the reverse stock split, including that the reverse stock split may not result in an increase in the per share price of DSS
Common Stock. There is no assurance that (i) the market price per share of DSS Common Stock following the reverse stock split will
rise in proportion to the reduction in the number of shares of DSS Common Stock outstanding before the reverse stock split, (ii)
the reverse stock split will result in a market price per share of DSS Common Stock that will attract brokers and investors who
do not trade in lower-priced stocks, (iii) the reverse stock split will result in a market price per share of DSS Common Stock
that will increase the ability of DSS to attract and retain employees, (iv) the market price per share following the Merger and
the reverse stock split will remain in excess of the minimum bid price for a sustained period of time required by NYSE MKT, or
(v) DSS will otherwise meet the listing requirements for the NYSE MKT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The market price per
share of DSS Common Stock will also be based on the performance of DSS and other factors, some of which are unrelated to the number
of shares of DSS Common Stock outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If the reverse stock
split is effected and the market price per share of DSS Common Stock declines, the percentage decline as an absolute number and
as a percentage of the overall market capitalization of DSS may be greater than would occur in the absence of a reverse stock split.
Furthermore, the liquidity of DSS Common Stock could be adversely affected by the reduced number of shares of DSS Common Stock
that will be outstanding following the reverse stock split.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Effects of the Reverse Stock Split</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Following the effective
date of the reverse stock split, each DSS stockholder will own a reduced number of shares of DSS Common Stock. However, the reverse
stock split will affect all of the DSS stockholders uniformly and will not, in and of itself, affect any DSS stockholder&rsquo;s
percentage ownership interests in DSS, except to the extent that the reverse stock split results in any of the DSS stockholders
owning a fractional share, as described below. Proportionate voting rights and other rights and preferences of the DSS stockholders
will not be affected by the reverse stock split, in and of itself, except to the extent that the reverse stock split results in
any of the DSS stockholders owning a fractional share, as described below. For example, a holder of 2% of the voting power of the
outstanding shares of DSS Common Stock immediately prior to the reverse stock split will continue to hold 2% of the voting power
of the outstanding shares of DSS Common Stock immediately following the reverse stock split and immediately prior to the completion
of the Merger. The number of DSS stockholders of record will not be affected by the reverse stock split, except to the extent that
any DSS stockholder holds only a fractional share following the reverse stock split and receives cash for such fractional share
following the reverse stock split, as described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The amendment to the
DSS Certificate to effect the reverse stock split, in and of itself, will not change the number of authorized shares of DSS Common
Stock. As a result, one of the effects of the reverse stock split will be to effectively increase the proportion of authorized
shares of DSS Common Stock which are unissued relative to those which are issued. This could result in DSS or the combined company
having the ability to issue more shares, unless required by the NYSE MKT, without further stockholder approval. The increased proportion
of unissued authorized shares to issued shares could be used by the DSS board of directors to make more difficult, and thereby
discourage, delay or prevent, an attempt to acquire control of DSS. For example, the shares could be privately placed with investors
who might support the DSS board of directors in opposing a hostile takeover. The issuance of new shares also could be used to dilute
the stock ownership and voting power of a third party seeking to effect a change in the composition of the board of directors or
contemplating a tender offer or other transaction for the combination of DSS with another company. While the amendment to the DSS
Certificate to effect a reverse stock split may have potential antitakeover effects, it is not prompted by any specific effort
or takeover threat currently perceived by the DSS board of directors or management. Neither DSS nor Lexington have any current
plan, commitment, arrangement, understanding, or agreement, written or oral, to issue shares of DSS Common Stock, other than in
connection with the Merger, to satisfy obligations under outstanding options and warrants to purchase shares of DSS Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The reverse stock split
will reduce the number of shares of DSS Common Stock available for issuance under DSS&rsquo;s equity incentive plans in proportion
to the reverse stock split ratio selected within the range set forth in this proposal. DSS also has certain outstanding options
to purchase DSS Common Stock. Under the terms of the outstanding DSS stock options, the reverse stock split will effect a reduction
in the number of shares of DSS Common Stock issuable upon exercise of such outstanding stock options in proportion to the reverse
stock split ratio and will effect a proportionate increase in the exercise price of such outstanding stock options. In connection
with the reverse stock split, the number of shares of DSS Common Stock issuable upon exercise of outstanding DSS stock options
will be rounded to the nearest whole share and no cash payment will be made in lieu of any fractional shares of DSS Common Stock
that would otherwise be issuable pursuant to such options. The reverse stock split will not in and of itself change the value of
a DSS stock option.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS Common Stock is
currently registered under Section 12(b) of the Exchange Act, and DSS is subject to the periodic reporting and other requirements
of the Exchange Act. The reverse stock split will not affect the registration of DSS Common Stock under the Exchange Act. If the
reverse stock split is implemented, and the combined company&rsquo;s initial listing application with the NYSE MKT is approved,
DSS Common Stock will continue to be reported on the NYSE MKT under the symbol &ldquo;DSS&rdquo; (although NYSE MKT will likely
add the letter &ldquo;D&rdquo; to the end of the trading symbol for a period of 20 trading days to indicate that the reverse stock
split has occurred).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
provides estimates of the number of shares of DSS Common Stock authorized, issued and outstanding, reserved for issuance, and authorized
but neither issued nor reserved for issuance at the following times:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>prior to the reverse stock split and the completion of the Merger;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>giving effect to a one-for-two reverse stock split but prior to the completion of the Merger; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD>giving effect to a one-for-four reverse stock split but prior to the completion of the Merger.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares <BR> Authorized</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Shares<BR> Issued and <BR> Outstanding<SUP>(1)</SUP></B></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><B>Shares <BR> Reserved <BR> for <BR> Issuance<SUP>(2)</SUP></B></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Shares<BR> Authorized but <BR> Neither Issued nor <BR> Reserved for Issuance</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 37%; font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt">Prior to the reverse stock split</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">200,000,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">21,705,967</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">6,205,936</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">172,088,097</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt">Giving effect to a one-for-two reverse stock split</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,852,984</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,102,968</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">186,044,048</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt">Giving effect to a one-for-four reverse stock split</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,000,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,426,492</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,551,484</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">193,022,024</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 23.9pt; text-indent: 0.75pt; color: Red">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 23.9pt; text-indent: 0.75pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(1)</TD><TD STYLE="text-align: justify">These estimates assume 21,705,967 shares of DSS Common Stock issued and outstanding as of immediately
prior to the completion of the Merger, which was the number of shares of DSS Common Stock issued and outstanding as of October
1, 2012, the date of the Merger Agreement, and such estimates do not include the shares of DSS Common Stock issuable to Lexington
stockholders in connection with the Merger.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(2)</TD><TD STYLE="text-align: justify">Includes the number of shares reserved for issuance for option available under the DSS Amended
and Restated 2004 Employee Stock Option Plan and the DSS Amended and Restated 2004 Non-Executive Director Stock Option Plan, and
for outstanding warrants and shares issuable upon conversion of debt securities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger, each share of Lexington capital stock will be converted into the right to receive a number of shares of DSS Common
Stock or DSS Preferred Stock (or, if the Preferred Stock Creation Proposal is not approved, $.02 Warrants), as applicable, and
Warrants as described elsewhere in this proxy statement/prospectus. As of [&bull;], the last practicable date before the printing
of this proxy statement/prospectus, [&bull;] shares of DSS Common Stock were outstanding calculated on a fully diluted basis and
[&bull;] shares of Lexington capital stock were outstanding calculated on a fully diluted basis. Because the Common Stock Exchange
Ratio gives effect to the reverse stock split, if the Merger had been completed as of [&bull;], assuming a reverse stock split
ratio of one-for-two, each share of Lexington capital stock would have converted into and been exchanged for the right to receive
[&bull;] shares of DSS Common Stock, which would have resulted in an aggregate issuance of [&bull;] shares of DSS Common Stock
calculated on a fully diluted basis. If the Merger had been completed as of [&bull;], assuming a reverse stock split ratio of one-for-four,
each share of Lexington capital stock would have converted into and been exchanged for the right to receive [&bull;] shares of
DSS Common Stock, which would have resulted in an aggregate issuance of [&bull;] shares of DSS Common Stock calculated on a fully
diluted basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Effective Date</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The reverse stock split
will become effective on the date of filing of the certificate of amendment to the DSS Certificate with the New York State Department
of State, Division of Corporations. Except as explained below with respect to fractional shares, on the effective date of the reverse
stock split, shares of DSS Common Stock issued and outstanding immediately prior to such effective date will be combined and converted,
automatically and without any action on the part of the DSS stockholders, into new shares of DSS Common Stock in accordance with
the reverse stock split ratio determined immediately prior to the completion of the Merger within the range set forth in this Reverse
Stock Split Proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Fractional Shares</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS will not issue
fractional shares in connection with the Reverse Stock Split. Instead, any fractional share resulting from the Reverse Stock Split
will be rounded up to the nearest whole share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Exchange of Stock Certificates</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As soon as practicable
following the effective date of the reverse stock split, DSS stockholders will be notified that the reverse stock split has been
effected. DSS&rsquo;s transfer agent will act as exchange agent for purposes of implementing the exchange of stock certificates.
Holders of pre-reverse stock split shares will be asked to surrender to the exchange agent certificates representing pre-reverse
stock split shares in exchange for certificates representing post-reverse stock split shares in accordance with the procedures
to be set forth in a letter of transmittal to be sent by the exchange agent. No new certificates will be issued to a DSS stockholder
until such stockholder has surrendered such stockholder&rsquo;s outstanding certificate(s), together with the properly completed
and executed letter of transmittal to the exchange agent. <B>DSS stockholders should not destroy any DSS stock certificates and
should not submit any such certificates until requested to do so.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Accounting Consequences</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The par value per share
of DSS Common Stock will remain unchanged at $0.02 per share following the reverse stock split. As a result, on the effective date
of the reverse stock split, the stated capital on DSS&rsquo;s balance sheet attributable to DSS Common Stock will be reduced proportionally,
based on the reverse stock split ratio, from its present amount, and the additional paid-in capital account shall be credited with
the amount by which the stated capital is reduced. The per share common stock net income or loss and net book value will be increased
because there will be fewer shares of DSS Common Stock outstanding. DSS does not anticipate that any other accounting consequences
will arise as a result of the reverse stock split.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Material U.S. Federal Income Tax
Consequences of the Reverse Stock Split</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following discussion
summarizes the anticipated material U.S. federal income tax consequences of the reverse stock split. This summary is based upon
current provisions of the Code, existing Treasury Regulations, and current administrative rulings and court decisions, all of which
are subject to change and to differing interpretations, possibly with retroactive effect. Any such change could alter the tax consequences
to DSS or the DSS stockholders, as described in this summary. This summary is not binding on the IRS, and there can be no assurance
that the IRS (or a court, in the event of an IRS challenge) will agree with the conclusions stated herein. No ruling has been or
will be requested from the IRS in connection with the reverse stock split.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This discussion is
not intended to be a complete analysis or description of all potential U.S. federal income tax consequences of the reverse stock
split. Moreover, this discussion does not address U.S. federal income tax consequences of the reverse stock split that may vary
with individual circumstances. In addition, the discussion set forth below does not address any U.S. federal non-income tax or
any state, local or foreign tax consequences of the reverse stock split and does not address the tax consequences of any transaction
other than the reverse stock split.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The reverse stock split
is expected to qualify as a &ldquo;recapitalization&rdquo; within the meaning of Section 368(a) of the Code. Assuming the reverse
stock split so qualifies, the following consequences will result:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">no gain or loss will be recognized by DSS as a result of the reverse stock split;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">a DSS stockholder generally will recognize no gain or loss upon the receipt of DSS Common Stock
in the reverse stock split;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">a DSS stockholder&rsquo;s aggregate tax basis in the post-reverse stock split shares of DSS Common
Stock received in the reverse stock split will be equal to the aggregate tax basis of the pre-reverse stock split shares of DSS
Common Stock exchanged therefor; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">a DSS stockholder&rsquo;s holding period of the post-reverse stock split shares of DSS Common Stock
received in the reverse stock split will include such stockholder&rsquo;s holding period of the pre-reverse stock split shares
exchanged therefor.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>DSS stockholders
are advised and expected to consult their own tax advisors regarding the U.S. federal income tax consequences of the reverse stock
split in light of their personal circumstances and the consequences of the reverse stock split under U.S. federal non-income tax
laws and state, local, and foreign tax laws.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>No Appraisal Rights</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the NYBCL, DSS
stockholders are not entitled to appraisal rights with respect to the proposed amendment to the DSS Certificate to effect the reverse
stock split and DSS will not independently provide the DSS stockholders with any such rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Required Vote; Recommendation of
the DSS Board of Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The approval of
this Reverse Stock Split Proposal will be necessary to enable the combined company to become listed on the NYSE MKT upon
completion of the Merger, if DSS&rsquo;s stock price remains below $3.00 per share prior to the Merger. Since June 5, 2012,
the DSS Common Stock had a closing price of $3.00 or above for each trading day. On November 19, 2012, the closing price of DSS
Common Stock was $2.73. If the DSS Common Stock continues to trade at or above $3.00 at the time of the Merger, DSS does
not anticipate that it will need to undertake a reverse stock split, even if DSS obtains stockholder approval to do so.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Approval of this Reverse
Stock Split Proposal requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock outstanding and
entitled to vote on the matter either in person or by proxy at the DSS special meeting. For purposes of the vote on this Reverse
Stock Split Proposal, an abstention, a &ldquo;broker non-vote,&rdquo; or a failure to submit a proxy or vote at the DSS special
meeting will have the same effect as voting &ldquo;AGAINST&rdquo; this Reverse Stock Split Proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 23.9pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 23.9pt; text-align: center"><B>THE DSS BOARD OF DIRECTORS
RECOMMENDS A VOTE &ldquo;FOR&rdquo; THE<BR>
REVERSE STOCK SPLIT PROPOSAL.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>DSS Proposal No. 5: Approval of the Document Security Systems,
Inc. 2013 Employee, Director and Consultant Equity Incentive Plan </B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>General </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 13.85pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The 2013 Employee,
Director and Consultant Equity Incentive Plan, or the 2013 Plan, was approved by the DSS board of directors on ____________.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The 2013 Plan is being
submitted to you for approval at the special meeting in order to ensure favorable federal income tax treatment for grants of incentive
stock options under Section 422 of the Code and eligibility under Rule 162(m) of the Code to receive a U.S. federal income tax
reduction with respect to compensation earned upon exercise of options under the 2013 Plan. Approval by DSS&rsquo;s stockholders
of the 2013 Plan is also required by the listing rules of the NYSE MKT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The 2013 Plan replaces
DSS&rsquo;s Amended and Restated 2004 Employee Stock Option Plan and Amended and Restated 2004 Non-Executive Director Stock Option
Plan which will be terminated with the remaining ____ and ____ authorized shares thereunder, respectively, cancelled if the stockholders
approve the 2013 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The proposed number
of shares subject to the 2013 Plan is ________.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Generally shares of
common stock reserved for awards under the 2013 Plan that lapse or are canceled will be added back to the share reserve available
for future awards. However, shares of common stock tendered in payment for an award or shares of common stock withheld for taxes
will not be available again for grant. The 2013 Plan provides that no participant may receive awards for more than _________ shares
of common stock in any fiscal year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS board of directors,
the Compensation and Management Resources Committee and management all believe that the effective use of stock-based long-term
incentive compensation is vital to DSS&rsquo;s ability to achieve strong performance in the future. The 2013 Plan will maintain
and enhance the key policies and practices adopted by DSS&rsquo;s management and its board of directors to align employee and stockholder
interests. In addition, DSS&rsquo;s future success depends, in large part, upon DSS&rsquo;s ability to maintain a competitive position
in attracting, retaining and motivating key personnel. Accordingly, the DSS board of directors believes that approval of the 2013
Plan is in DSS&rsquo;s best interests and those of its stockholders and recommends a vote &ldquo;FOR&rdquo; the approval of the
2013 Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a
brief summary of the 2013 Plan. This summary is qualified in its entirety by reference to the text of the 2013 Plan, a copy of
which is attached as <U>Annex H</U> to this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Material Features of the 2013
Plan </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Eligibility.</B>&nbsp;&nbsp;The
2013 Plan allows DSS, under the direction of its Compensation and Management Resources Committee, to make grants of stock options,
restricted and unrestricted stock awards and other stock-based awards to employees, consultants and directors who, in the opinion
of the Compensation and Management Resources Committee, are in a position to make a significant contribution to DSS&rsquo;s long-term
success. The purpose of these awards is to attract and retain key individuals, further align employee and stockholder interests,
and to closely link compensation with DSS&rsquo;s performance. The 2013 Plan provides an essential component of the total compensation
package, reflecting the importance that DSS places on aligning the interests of key individuals with those of DSS stockholders.
All employees, directors and consultants of DSS and its affiliates are eligible to participate in the 2013 Plan. As of November
19, 2012, there were 104 individuals eligible to participate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Stock Options.</B>&nbsp;&nbsp;Stock
options granted under the 2013 Plan may either be incentive stock options, which are intended to satisfy the requirements of Section
422 of the Code, or non-qualified stock options, which are not intended to meet those requirements. Incentive stock options may
be granted to employees of DSS and its affiliates. Non-qualified options may be granted to employees, directors and consultants
of DSS and its affiliates. The exercise price of a stock option may not be less than 100% of the fair market value of DSS common
stock on the date of grant. If an incentive stock option is granted to an individual who owns more than 10% of the combined voting
power of all classes of the DSS capital stock, the exercise price may not be less than 110% of the fair market value of DSS common
stock on the date of grant and the term of the option may not be longer than five years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Award agreements for
stock options include rules for exercise of the stock options after termination of service. Options may not be exercised unless
they are vested, and no option may be exercised after the end of the term set forth in the award agreement. Generally, stock options
will be exercisable for three months after termination of service for any reason other than death or total and permanent disability,
and for 12 months after termination of service on account of death or total and permanent disability</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Restricted Stock.</B>&nbsp;&nbsp;Restricted
stock is common stock that is subject to restrictions, including a prohibition against transfer and a substantial risk of forfeiture,
until the end of a &ldquo;restricted period&rdquo; during which the grantee must satisfy certain vesting conditions. If the grantee
does not satisfy the vesting conditions by the end of the restricted period, the restricted stock is forfeited. During the restricted
period, the holder of restricted stock has the rights and privileges of a regular stockholder, except that the restrictions set
forth in the applicable award agreement apply. For example, the holder of restricted stock may vote and receive dividends on the
restricted shares; but he or she may not sell the shares until the restrictions are lifted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Other Stock-Based
Awards.</B>&nbsp;&nbsp;The 2013 Plan also authorizes the grant of other types of stock-based compensation including, but not limited
to stock appreciation rights, phantom stock awards, and stock unit awards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Plan Administration.</B>&nbsp;&nbsp;In
accordance with the terms of the 2013 Plan, the DSS board of directors has authorized its Compensation and Management Resources
Committee to administer the 2013 Plan. In accordance with the provisions of the 2013 Plan, the Compensation and Management Resources
Committee determines the terms of awards, including:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">which employees, directors and consultants will be granted awards;</TD></TR>                                                                                                                                                                                <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the number of shares subject to each award;</TD></TR>                                                                                                                                                         <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the vesting provisions of each award;</TD></TR>                                                                                                                                                   <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">the termination or cancellation provisions applicable to awards; and</TD></TR>                                                                                                                                                                                  <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">all other terms and conditions upon which each award may be granted in accordance with the 2013
Plan.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, the Compensation
and Management Resources Committee may, in its discretion, amend any term or condition of an outstanding award provided (i) such
term or condition as amended is permitted by the 2013 Plan, and (ii) any such amendment shall be made only with the consent of
the participant to whom such award was made, if the amendment is adverse to the participant; and provided, further, that, without
the prior approval of our stockholders, options and stock appreciation rights will not be repriced, replaced or regranted through
cancellation or by lowering the exercise price of a previously granted award.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Stock Dividends
and Stock Splits.</B>&nbsp;&nbsp;If DSS common stock shall be subdivided or combined into a greater or smaller number of shares
or if we issue any shares of common stock as a stock dividend, the number of shares of DSS common stock deliverable upon exercise
of an option issued or upon issuance of an award shall be appropriately increased or decreased proportionately, and appropriate
adjustments shall be made in the purchase price per share to reflect such subdivision, combination or stock dividend.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Corporate Transactions.</B>&nbsp;&nbsp;Upon
a merger or other reorganization event, the DSS board of directors, may, in its sole discretion, take any one or more of the following
actions pursuant to the 2013 Plan, as to some or all outstanding awards:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">provide that all outstanding options shall be assumed or substituted by the successor corporation;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">upon written notice to a participant provide that the participant&rsquo;s unexercised options will
terminate immediately prior to the consummation of such transaction unless exercised by the participant;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">in the event of a merger pursuant to which holders of DSS common stock will receive a cash payment
for each share surrendered in the merger, make or provide for a cash payment to the participants equal to the difference between
the merger price times the number of shares of DSS common stock subject to such outstanding options, and the aggregate exercise
price of all such outstanding options, in exchange for the termination of such options;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">provide that outstanding awards shall be assumed or substituted by the successor corporation, become
realizable or deliverable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon the merger
or reorganization event.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Amendment and Termination.</B>&nbsp;&nbsp;The
2013 Plan may be amended by DSS stockholders. It may also be amended by the DSS board of directors, provided that any amendment
approved by the DSS board of directors which is of a scope that requires stockholder approval as required by the rules of the NYSE
MKT, in order to ensure favorable federal income tax treatment for any incentive stock options under Code Section 422, or for any
other reason, is subject to obtaining such stockholder approval. In addition, if the NYSE MKT amends its corporate governance rules
so that such rules no longer require stockholder approval of &ldquo;material amendments&rdquo; of equity compensation plans, then,
from and after the effective date of such an amendment to the NYSE MKT rules, no amendment of the 2013 Plan which (i) materially
increases the number of shares to be issued under the 2013 Plan (other than to reflect a reorganization, stock split, merger, spin
off or similar transaction); (ii) materially increases the benefits to participants, including any material change to: (a) permit
a repricing (or decrease in exercise price) of outstanding options, (b) reduce the price at which awards may be offered, or (c)
extend the duration of the 2013 Plan; (iii) materially expands the class of participants eligible to participate in the 2013 Plan;
or (iv) expands the types of awards provided under the 2013 Plan shall become effective unless stockholder approval is obtained.
The 2013 Plan expires on __________.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>U.S. Federal Income
Tax Considerations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The material federal
income tax consequences of the issuance and exercise of stock options and other awards under the 2013 Plan, based on the current
provisions of the Code and regulations, are as follows. Changes to these laws could alter the tax consequences described below.
This summary assumes that all awards granted under the 2013 Plan are exempt from or comply with, the rules under Section 409A of
the Code related to nonqualified deferred compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 96%; border-collapse: collapse; margin-left: 0.25in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; font-weight: bold">Incentive Stock Options:</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 84%; text-align: justify">Incentive stock options are intended to qualify for treatment under Section 422 of the Code. An incentive stock option does not result in taxable income to the optionee or deduction to DSS at the time it is granted or exercised, provided that no disposition is made by the optionee of the shares acquired pursuant to the option within two years after the date of grant of the option nor within one year after the date of issuance of shares to the optionee (referred to as the &ldquo;<B>ISO holding period</B>&rdquo;). However, the difference between the fair market value of the shares on the date of exercise and the option price will be an item of tax preference includible in &ldquo;alternative minimum taxable income&rdquo; of the optionee. Upon disposition of the shares after the expiration of the ISO holding period, the optionee will generally recognize long term capital gain or loss based on the difference between the disposition proceeds and the option price paid for the shares. If the shares are disposed of prior to the expiration of the ISO holding period, the optionee generally will recognize taxable compensation, and DSS will have a corresponding deduction, in the year of the disposition, equal to the excess of the fair market value of the shares on the date of exercise of the option over the option price. Any additional gain realized on the disposition will normally constitute capital gain. If the amount realized upon such a disqualifying disposition is less than fair market value of the shares on the date of exercise, the amount of compensation income will be limited to the excess of the amount realized over the optionee&rsquo;s adjusted basis in the shares.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Non-Qualified Options:</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">Options otherwise qualifying as incentive stock options, to the extent the aggregate fair market value of shares with respect to which such options are first exercisable by an individual in any calendar year exceeds $100,000, and options designated as non-qualified options will be treated as options that are not incentive stock options.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">A non-qualified option ordinarily will not result in income to the optionee or deduction to DSS at the time of grant. The optionee will recognize compensation income at the time of exercise of such non-qualified option in an amount equal to the excess of the then value of the shares over the option price per share. Such compensation income of optionees may be subject to withholding taxes, and a deduction may then be allowable to DSS in an amount equal to the optionee&rsquo;s compensation income.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">An optionee&rsquo;s initial basis in shares so acquired will be the amount paid on exercise of the non-qualified option plus the amount of any corresponding compensation income. Any gain or loss as a result of a subsequent disposition of the shares so acquired will be capital gain or loss.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 96%; border-collapse: collapse; margin-left: 0.25in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; font-weight: bold">Stock Grants:</TD>
    <TD STYLE="width: 1%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 84%; text-align: justify">With respect to stock grants under the 2013 Plan that result in the issuance of shares that are either not restricted as to transferability or not subject to a substantial risk of forfeiture, the grantee must generally recognize ordinary income equal to the fair market value of shares received. Thus, deferral of the time of issuance will generally result in the deferral of the time the grantee will be liable for income taxes with respect to such issuance. We generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">With respect to stock grants involving the issuance of shares that are restricted as to transferability and subject to a substantial risk of forfeiture, the grantee must generally recognize ordinary income equal to the fair market value of the shares received at the first time the shares become transferable or are not subject to a substantial risk of forfeiture, whichever occurs earlier. A grantee may elect to be taxed at the time of receipt of shares rather than upon lapse of restrictions on transferability or substantial risk of forfeiture, but if the grantee subsequently forfeits such shares, the grantee would not be entitled to any tax deduction, including as a capital loss, for the value of the shares on which he previously paid tax. The grantee must file such election with the Internal Revenue Service within 30 days of the receipt of the shares. DSS generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">Stock Units:</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">The grantee recognizes no income until the issuance of the shares. At that time, the grantee must generally recognize ordinary income equal to the fair market value of the shares received. DSS generally will be entitled to a deduction in an amount equal to the ordinary income recognized by the grantee.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The amounts of future
grants under the 2013 Plan are not determinable as awards under the 2013 Plan and will be granted at the sole discretion of the
Compensation and Management Resources Committee, or other delegated persons and DSS cannot determine at this time either the persons
who will receive awards under the 2013 Plan or the amount or types of any such awards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 19, 2012,
the closing market price per share of our common stock was $2.73, as reported by the NYSE MKT.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Required Vote; Recommendation of
the DSS Board of Directors </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The affirmative vote
of the holders of a majority of the shares of DSS Common Stock present and entitled to vote on the matter either in person or by
proxy at the DSS special meeting is required to approve the 2013 Equity Incentive Plan. Abstentions will be counted &ldquo;AGAINST&rdquo;
this proposal.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THE DSS BOARD OF DIRECTORS RECOMMENDS
A VOTE &ldquo;FOR&rdquo; THE APPROVAL OF THE 2013 EQUITY INCENTIVE PLAN PROPOSAL.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 13.85pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 13.85pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>DSS Proposal No. 6: Approval of the
Adjournment of the DSS Special Meeting, if Necessary, to Solicit Additional Proxies if There Are Not Sufficient Votes in Favor
of the DSS Proposals</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS is asking its stockholders
to vote on a proposal to approve the adjournment of the DSS special meeting, if necessary, to solicit additional proxies if there
are not sufficient votes in favor of any of the DSS Proposals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Required Vote; Recommendation of
the DSS Board of Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Approval of the adjournment
of the DSS special meeting, if necessary, to solicit additional proxies if there are not sufficient votes in favor of any of the
DSS Proposals requires the affirmative vote of the holders of a majority of the shares of DSS Common Stock present and entitled
to vote either in person or by proxy at the DSS special meeting. A &ldquo;broker non-vote&rdquo; or a failure to submit a proxy
or vote at the DSS special meeting will have no effect on the outcome of the vote for this DSS Proposal No. 6. For purposes of
the vote on this DSS Proposal No. 6, an abstention will have the same effect as a vote &ldquo;AGAINST&rdquo; such proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 23.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 23.9pt; text-align: center"><B>THE DSS BOARD OF DIRECTORS
RECOMMENDS A VOTE &ldquo;FOR&rdquo; THE ADJOURNMENT OF THE DSS SPECIAL MEETING, IF NECESSARY, TO SOLICIT ADDITIONAL PROXIES IF
THERE ARE NOT SUFFICIENT VOTES IN FAVOR OF ANY OF THE DSS PROPOSALS.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>



<P STYLE="margin: 0"></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DSS&rsquo;S BUSINESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Document Security Systems,
Inc. (&ldquo;<B>DSS</B>&rdquo;) was formed in New York in 1984 and, in 2002, chose to strategically focus on becoming a developer
and marketer of secure technologies. DSS specializes in fraud and counterfeit protection for all forms of printed documents and
digital information. DSS holds numerous patents for optical deterrent technologies that provide protection of printed information
from unauthorized scanning and copying. DSS operates three production facilities, a security and commercial printing facility,
a packaging facility and a plastic card facility - where DSS produces secure and non-secure documents for DSS&rsquo;s customers.
DSS licenses its anti-counterfeiting technologies to printers and brand-owners. In addition, DSS has a digital division which provides
cloud computing services for its customers, including disaster recovery, back-up and data security services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to 2006, DSS&rsquo;s
primary revenue source in its document security division was derived from the licensing of its technology. In 2006, DSS began a
series of acquisitions designed to expand its ability to produce its products for end-user customers. In 2006, DSS acquired Plastic
Printing Professionals, Inc. (&ldquo;<B>P3</B>&rdquo;), a privately held plastic cards manufacturer located in the San Francisco,
California area. P3 is also referred to herein as the DSS Plastics Group. In 2008, DSS acquired substantially all of the assets
of DPI of Rochester, LLC, a privately held commercial printer located in Rochester, New York, referred to herein as Secuprint or
DSS Printing Group. In 2010, DSS acquired Premier Packaging Corporation (&ldquo;<B>Premier Packaging</B>&rdquo;), a privately held
packaging company located in the Rochester New York area. Premier Packaging is also referred to herein as the DSS Packaging Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In October 2009, in
an effort to focus more resources on DSS&rsquo;s core businesses, DSS sold the assets and liabilities associated with the business
of Legalstore.com (&ldquo;<B>Legalstore</B>&rdquo;), a part of one of DSS&rsquo;s wholly-owned subsidiaries Lester Levin Inc. Legalstore
was an internet company that sold legal documents and supplies. Legalstore was sold to Internet Media Services, Inc. (&ldquo;<B>Internet
Media Services</B>&rdquo; or &ldquo;<B>IMS</B>&rdquo;) in exchange for 7,500,000 shares of common stock of Internet Media Services.
In October 2010, DSS distributed its shares of Internet Media Services in the form of a dividend to the DSS stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In May 2011, DSS acquired
all of the capital stock of ExtraDev, Inc. (&ldquo;<B>ExtraDev</B>&rdquo;), a privately held information technology and cloud computing
company located in the Rochester, New York area. ExtraDev had approximately $837,000 in revenue for the calendar year ended December
31, 2010. ExtraDev is also referred to herein as the DSS Digital Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Effective January 16,
2012, the DSS board of directors amended its bylaws to increase the number of directors from seven to eight. On February 20, 2012,
DSS appointed John Cronin to serve as a director to fill the vacancy created by such increase. Mr. Cronin became a director effective
on February 21, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 20, 2012,
as part of DSS&rsquo;s long-term strategy to maximize the development and value of its intellectual property, DSS entered into
an engagement letter with ipCapital Group, Inc. (&ldquo;<B>ipCapital</B>&rdquo;) for the provision of certain IP strategic consulting
services to be performed by ipCapital during 2012. Also, on February 20, 2012, DSS entered into a second consulting agreement with
ipCapital for the provision of strategic advice with respect to the development of DSS Digital Group&rsquo;s infrastructure and
cloud computing business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 20, 2012,
DSS entered into a one-year consulting agreement with Century Media Group for investor relations services, for the purpose of increasing
DSS&rsquo;s exposure to the investment community.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In 2011, DSS integrated
its corporate brand and now does business in four operating segments as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><U>DSS Printing
Group</U></B> &mdash; Provides secure and commercial printing services for end-user customers along with technical support for
DSS&rsquo;s technology licensees. The division produces a wide array of printed materials such as security paper, vital records,
prescription paper, birth certificates, receipts, manuals, identification materials, entertainment tickets, secure coupons, parts
tracking forms, brochures, direct mailing pieces, catalogs, business cards, etc. The division also provides the basis of research
and development for its security printing technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><U>DSS Plastics
Group</U> &mdash; </B>Manufactures laminated and surface printed cards which can include magnetic stripes, bar codes, holograms,
signature panels, invisible ink, micro fine printing, guilloche patterns, Biometric, Radio Frequency Identification (RFID) and
watermarks for <FONT STYLE="color: black">printed plastic documents such as ID cards, event badges, and driver&rsquo;s licenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><U>DSS Packaging
Group</U></B> &mdash; Produces custom paperboard packaging serving clients in the pharmaceutical, beverage, photo packaging, toy,
specialty foods and direct marketing industries, among others. <FONT STYLE="color: black">The division incorporates DSS&rsquo;s
security technologies into printed packaging to help companies prevent or deter brand and product counterfeiting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><U>DSS Digital Group</U>
&mdash; </B>Provides data center centric solutions to businesses and governments delivered via the &ldquo;cloud&rdquo;. This division
is also developing proprietary digital data security technologies based on DSS&rsquo;s optical deterrent technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>DSS&rsquo;s Core Products, Technology
and Services</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s core business
is counterfeit prevention, brand protection and validation of authentic print media, including government-issued documents, aerospace
industry spare parts documents, packaging, ID Cards and licenses. DSS believes it is a leader in the research and development of
optical deterrent technologies and has commercialized these technologies with a suite of products that offer DSS&rsquo;s customers
an array of document security solutions. DSS provides document security technology to security printers, corporations, consumer
product companies and governments worldwide, and for protection of currency, vital records and documents, certifications, travel
documents, prescription and medical forms, consumer products, pharmaceutical packaging and school transcripts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s products
can be delivered on paper, plastic, packaging, or digitally via DSS&rsquo;s AuthentiGuard<SUP>&reg;</SUP> DX&trade; product suite.
DSS believes that its continued efforts in the field of digital security and technology greatly expands the reach and potential
market for its AuthentiGuard<SUP>&reg;</SUP> DX&trade; digital products and enterprise solutions. DSS believes that its AuthentiGuard<SUP>&reg;</SUP>
DX&trade; solution significantly changes the economics of document security for many customers as it eliminates the requirement
to utilize pre-printed forms while allowing customers to leverage existing investments in their information technology infrastructure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Technologies</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Optical deterrent features
such as DSS&rsquo;s are utilized mainly by the large worldwide security printers for the protection of important printed documents,
such as currency, vital records, and identification documents. Many of these features such as micro-printing were developed pre-1980
as they were designed to be effective on the imaging devices of the day which were mainly photography mechanisms. With the advent
of modern day scanners, digital copiers, digital cameras and easy to use imaging software such as Adobe Photoshop many of the pre-1980
optical deterrents such as micro-printing are no longer used or are much less effective in the prevention of counterfeiting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unlike some of its
competitors, DSS technologies are developed to defeat today&rsquo;s modern imaging systems. Almost all of DSS&rsquo;s products
and processes are built to thwart scanners and digital copiers and DSS believes that its products are the most effective in doing
so in the market today. In addition, DSS&rsquo;s technologies do not require expensive hardware or software add-ons to authenticate
a document, but instead require simple, inexpensive hand-held readers which can be calibrated to particular hidden design features.
DSS&rsquo;s technologies are literally ink on paper that is printed with a particular method to hide selected things from a scanner&rsquo;s
&ldquo;eye&rdquo; or distort what a scanner &ldquo;sees.&rdquo; These attributes make DSS&rsquo;s anti-scanning technologies very
cost effective versus other current offerings on the market since DSS&rsquo;s technologies are imbedded during the normal printing
process, thereby significantly reducing the costs to implement the technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s primary
anti-counterfeiting products and technologies are marketed under the following trade names:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: center">&bull;</TD>
    <TD STYLE="width: 86%">AuthentiGuard&trade; DX&trade;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&bull;</TD>
    <TD>AuthentiGuard<SUP>&reg; </SUP>Laser Moir&eacute;&trade;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&bull;</TD>
    <TD>AuthentiGuard<SUP>&reg; </SUP>Prism&trade;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&bull;</TD>
    <TD>AuthentiGuard<SUP>&reg;</SUP> Pantograph 4000&trade;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&bull;</TD>
    <TD>AuthentiGuard<SUP>&reg; </SUP>Phantom&trade;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&bull;</TD>
    <TD>AuthentiGuard<SUP>&reg; </SUP>VeriGlow&trade;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&bull;</TD>
    <TD>AuthentiGuard<SUP>&reg;</SUP> Survivor 21&trade;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&bull;</TD>
    <TD>AuthentiGuard<SUP>&reg;</SUP> Block-Out&trade;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="width: 7%; text-align: center">&bull;</TD>
    <TD>AuthentiGuard<SUP>&reg;</SUP> MicroPerf&trade;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Intellectual Property</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Patents</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s ability
to compete effectively depends in part on its ability to maintain the proprietary nature of its technology, products and manufacturing
processes. DSS principally relies upon patent, trademark, trade secrets and contract law to establish and protect its proprietary
rights. During its development, DSS has expended a significant percentage of its resources on research and development in an effort
to become a market leader with the ability to provide its customers effective solutions against an ever changing array of counterfeit
risks. <FONT STYLE="color: black">DSS&rsquo;s position in the security print market is based on its technologies and products.
DSS dedicates two staff members to research and development of print technologies, digital graphic files, and printing techniques
that allows it to expand its ability to combat a wide variety of counterfeiting and brand protection issues. In 2011 and 2010,
DSS spent approximately $285,000 and $265,000 respectively, on research and development which is comprised mainly of compensation
costs, materials and third-party services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Based largely on these
efforts, DSS currently holds numerous patents and has numerous patent applications in process, including provisional and Patent
Cooperation Treaty (&ldquo;<B>PCT</B>&rdquo;) patent applications and applications that have entered the National Phase in various
countries including the United States, Canada, Europe, Japan, Brazil, Israel, Mexico, Indonesia and South Africa. These applications
cover DSS&rsquo;s technologies, including its AuthentiGuard<FONT STYLE="color: black"><SUP>&reg; </SUP></FONT>On-Demand and ADX,
AuthentiGuard<FONT STYLE="color: black"><SUP>&reg;</SUP></FONT> Prism<FONT STYLE="color: black">&trade;, </FONT>AuthentiGuard<FONT STYLE="color: black"><SUP>&reg;</SUP></FONT>
Phantom<FONT STYLE="color: black">&trade;</FONT>, AuthentiGuard<FONT STYLE="color: black"><SUP>&reg; </SUP></FONT>ObscuraScan<FONT STYLE="color: black">&trade;</FONT>,
AuthentiGuard<FONT STYLE="color: black"><SUP>&reg;</SUP></FONT> Survivor 21<FONT STYLE="color: black">&trade;</FONT>, AuthentiGuard<FONT STYLE="color: black"><SUP>&reg;</SUP></FONT>
VeriGlow<FONT STYLE="color: black">&trade; </FONT>products, and several other anti-counterfeiting and authentication technologies
in development.<FONT STYLE="color: black"> DSS&rsquo;s issued patents have remaining durations ranging from 2 to 15 years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Trademarks</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS has registered
its &ldquo;AuthentiGuard&rdquo; mark, as well as its &ldquo;Survivor 21&rdquo; electronic check icon with the United States Patent
and Trademark Office. A trademark application is pending in Canada for &ldquo;AuthentiGuard.&rdquo; AuthentiGuard<SUP>&reg;</SUP>
is registered in several European countries including the United Kingdom. DSS has registered its &ldquo;DSS&rdquo; mark in the
United States and several foreign countries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Websites</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The primary website
DSS maintains is <I>www.dsssecure.com</I>, which describes DSS, its history, its patented document security solutions, its major
product offerings, and its targeted vertical markets. The website provides detailed product offerings of each of DSS&rsquo;s divisions
- Printing, Packaging, Plastics and Digital. In addition, DSS maintains the website <I>www.protectedpaper.com</I>, an e-commerce
site that markets and sells DSS&rsquo;s patented security paper, hand-held security verifiers and custom security documents to
end users worldwide. In addition to the active websites, DSS owns over 40 domain names for future use or for strategic competitive
reasons.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Markets and Competition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The security print
market is comprised of a few very large companies and an increasing number of small companies with specific technology niches.
The expansion of this market is primarily due to the fact that counterfeiting has expanded significantly as advancing technologies
in digital duplication and scanning combined with increasingly sophisticated design software has enabled easier reproduction of
original documents, vital records and IDs, packaging, and labels. <FONT STYLE="color: black">DSS&rsquo;s competitors include Standard
Register Company, which specializes in printing security technologies for the check and forms and medical industries; and De La
Rue Plc, that specializes in printing secure currency, tickets, labels, lottery tickets and vital records for governments and Fortune
500 companies. Large Office Equipment Manufacturers, called OEMs, such as Sharp, Xerox Canon, Ricoh, Hewlett Packard and Eastman
Kodak are developing &ldquo;smart copier&rdquo; technology that recognizes particular graphical images and produces warning words
or distorted copies. Some of the OEMs are also developing user assigned and variable pantograph &ldquo;hidden word&rdquo; technologies
in which users can assign a particular hidden word in copy, such as &ldquo;void&rdquo; that is displayed when a copy of such document
is made. In addition, other competing hidden word technologies are being marketed by competitors such as NoCopi Technologies which
sells and markets secure paper products, and Graphic Security Systems Corporation, which markets scrambled indicia.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The commercial printing
industry in the US includes around 35,000 companies with approximately $90 billion of aggregate annual revenue (Source: <U>http://www.firstresearch.com/industryanalysis/commercialprinting.html</U>).
Several competitors such as RR Donnelley and Canadian printer Quebecor World have multibillion dollar revenues, but DSS believes
most printers considered &ldquo;large&rdquo;&nbsp;have annual revenues under $1 billion and the majority of commercial printers
are small or midsized businesses that operate&nbsp;one production plant, employ fewer than 20 people, and have annual revenue under
$5 million. Despite continuing consolidation, the industry is&nbsp;highly fragmented; the largest 50 companies hold only about
30 percent of the market.<FONT STYLE="color: black"> </FONT>DSS competes primarily with locally-based printing companies in the
Rochester and Western New York markets. Most of DSS&rsquo;s competitors in these markets are privately-held, single location operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s plastics
division competes with several regional companies including Bristol ID, AbNote (formerly Arthur Blanks), LaserCard Corporation
and L-1 Identity Solutions. DSS&rsquo;s plastics division primarily delivers its products through a dealer network, but also provides
products to end-user customers. Competition in the plastic card industry is primarily based on production capabilities based on
specialized equipment, geographic location, quality and service. In addition, competition is increasingly influenced by proprietary
or niche offerings provided by competitors, such as RFID, biometric, read-write, and security features built-into the plastic card.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">DSS&rsquo;s
packaging division</FONT> competes with a significant number of national, regional and local companies, many of which are independent
and privately-held. The largest competitors in this market are primarily focused on the long-run print order market. They include
large integrated paper companies such as Rock-Tenn Company, Caraustar Industries, Inc., Graphic Packaging Holding Company and Mead
Westvaco.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In general, changes
in prevailing United States economic conditions significantly impact the general commercial printing industry. To the extent weakness
in the United States economy causes local and national corporations to reduce their spending on advertising and marketing materials,
the demand for commercial printing services may be adversely affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Customers</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During 2011, one customer
accounted for 19% of DSS&rsquo;s consolidated revenue. As of December 31, 2011, this customer accounted for 18% of DSS&rsquo;s
trade accounts receivable balance. During 2010, two customers accounted for 25% and 10% of DSS&rsquo;s total revenue from continuing
operations, respectively. As of December 31, 2010, these customers accounted for 37% and 7% of DSS&rsquo;s trade accounts receivable
balance, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Raw Materials</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
primary raw materials DSS uses in its businesses are paper corrugated paperboard, plastic sheets, and ink. DSS negotiates with
leading suppliers to maximize its purchasing efficiencies and uses a wide variety of paper grades, formats, ink formulations and
colors. Recent strengthening of economic conditions, combined with paper industry capacity reductions, have caused paper and paperboard
prices to increase in 2011, and DSS believes increases in future years are expected. Except for certain packaging customers where
DSS enters into annual contracts, for which changes in paperboard pricing is absorbed by DSS, DSS has historically passed substantially
all increases and decreases to its customers, although there can be no assurances that DSS will continue to do so in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Environmental Compliance</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; background-color: white">It
is DSS&rsquo;s policy to conduct its operations in accordance with all applicable laws, regulations and other requirements. While
it is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation
and other compliance efforts that DSS may undertake in the future, in the opinion of management, compliance with the present environmental
protection laws, before taking into account estimated recoveries from third parties, will not have a material adverse effect on
DSS&rsquo;s consolidated annual results of operations, financial position or cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Employees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of November 19, 2012,
DSS had a total of 107 employees, all of which are full-time. It is important that DSS continues to retain and attract qualified
management and technical personnel. DSS employees are not covered by any collective bargaining agreement, and DSS believes that
its relations with its employees are generally good.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Government Regulation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">In
light of the events of September 11, 2001 and the subsequent war on terrorism, governments, private entities and individuals have
become more aware of, and concerned with, the problems related to counterfeit documents. Homeland Security remains a high priority
in the United States. This new heightened awareness may result in new laws or regulations which could impact DSS&rsquo;s business.
DSS believes, however, that any such laws or regulations would be aimed at requiring or promoting anti-counterfeiting capabilities,
and therefore would likely have a positive impact on its business plans. For example, in</FONT> 2007, federal legislation was enacted
that required hospitals, physicians and pharmacies to use tamperproof paper to fill all Medicaid prescriptions. Initially, the
requirement, which was part 7002(b) of the &ldquo;U.S. Troop Readiness, Veterans&rsquo; Care, Katrina Recovery and Iraq Accountability
Appropriations Act of 2007&rdquo;, was effective April 1, 2008.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Document Security Systems
plays an active role with the Document Security Alliance group, as one of DSS&rsquo;s senior management members sits on various
committees of that group and has been involved in design recommendations for important United States documents. This group of security
industry specialists was formed by the United States Secret Service to evaluate and recommend security solutions to the federal
government for the protection of credentials and vital records.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DSS&rsquo;S MANAGEMENT&rsquo;S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>This discussion
of DSS&rsquo;s financial condition and results of operations should be read together with the financial statements and notes contained
elsewhere in this proxy statement/prospectus. Certain statements in this section and other sections are forward-looking. While
DSS believes these statements are accurate, its business is dependent on many factors, some of which are discussed the section
entitled &ldquo;Risk Factors&rdquo; and DSS&rsquo;s Business. Many of these factors are beyond DSS&rsquo;s control and any of these
and other factors could cause actual results to differ materially from the forward-looking statements made in this proxy statement/prospectus.
See the section entitled &ldquo;Risk Factors&rdquo; for further information regarding these factors. DSS undertakes no obligation
to release publicly the results of any revisions to the statements contained in this section to reflect events or circumstances
that occur subsequent to the date of this proxy statement/prospectus. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS was formed in New
York in 1984 and, in 2002, chose to strategically focus on becoming a developer and marketer of secure technologies. DSS specializes
in fraud and counterfeit protection for all forms of printed documents and digital information. DSS holds numerous patents for
optical deterrent technologies that provide protection of printed information from unauthorized scanning and copying. DSS operates
three production facilities &mdash; a security and commercial printing facility, a packaging facility and a plastic card facility
&mdash; where DSS produces secure and non-secure documents for its customers. DSS licenses its anti-counterfeiting technologies
to printers and brand-owners. In addition, DSS has a digital division which provides cloud computing services for its customers,
including disaster recovery, back-up and data security services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Prior to 2006, DSS&rsquo;s
primary revenue source in its document security division was derived from the licensing of its technology. In 2006, DSS began a
series of acquisitions designed to expand its ability to produce its products for end-user customers. In 2006, DSS acquired P3,
a privately held plastic cards manufacturer located in the San Francisco, California area. P3 is also referred to herein as the
DSS Plastics Group. In 2008, DSS acquired substantially all of the assets of DPI of Rochester, LLC, a privately held commercial
printer located in Rochester, New York, referred to herein as Secuprint or DSS Printing Group. In 2010, DSS acquired Premier Packaging,
a privately held packaging company located in the Rochester, New York area. Premier Packaging is also referred to herein as the
DSS Packaging Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In October 2009, in
an effort to focus more resources on its core businesses, DSS sold the assets and liabilities associated with the business of Legalstore,
an internet company that sold legal documents and supplies, to Internet Media Services in exchange for 7,500,000 shares of common
stock of Internet Media Services. In October 2010, DSS distributed its shares of Internet Media Services in the form of a dividend
to DSS&rsquo;s stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In May 2011, DSS acquired
all of the capital stock of ExtraDev, a privately held information technology and cloud computing company located in the Rochester,
New York area. ExtraDev had approximately $837,000 in revenue for the calendar year ended December 31, 2010. ExtraDev is also referred
to herein as the DSS Digital Group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Effective January 16,
2012, DSS&rsquo;s board of directors amended its bylaws to increase the number of directors from seven to eight. On February 20,
2012, DSS appointed John Cronin to serve as a director to fill the vacancy created by such increase. Mr. Cronin became a director
effective on February 21, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 20, 2012,
as part of its long-term strategy to maximize the development and value of its intellectual property, DSS entered into an engagement
letter with ipCapital for the provision of certain IP strategic consulting services to be performed by ipCapital during 2012. Also,
on February 20, 2012, DSS entered into a second consulting agreement with ipCapital for the provision of strategic advice with
respect to the development of DSS Digital Group&rsquo;s infrastructure and cloud computing business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 20, 2012,
DSS entered into a one year consulting agreement with Century Media Group for investor relations services, for the purpose of increasing
its exposure to the investment community.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In 2011, DSS integrated
its corporate brand and now do business in four operating segments as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>DSS Printing Group</U></B> &mdash;
Provides secure and commercial printing services for end-user customers along with technical support for DSS&rsquo;s technology
licensees. The division produces a wide array of printed materials such as security paper, vital records, prescription paper, birth
certificates, receipts, manuals, identification materials, entertainment tickets, secure coupons, parts tracking forms, brochures,
direct mailing pieces, catalogs, business cards, etc. The division also provides the basis of research and development for its
security printing technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>DSS Plastics Group</U> &mdash; </B>Manufactures
laminated and surface printed cards which can include magnetic stripes, bar codes, holograms, signature panels, invisible ink,
micro fine printing, guilloche patterns, Biometric, RFID and watermarks for <FONT STYLE="color: black">printed plastic documents
such as ID cards, event badges, and driver&rsquo;s licenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>DSS Packaging Group</U></B> &mdash;
Produces custom paperboard packaging serving clients in the pharmaceutical, beverage, photo packaging, toy, specialty foods and
direct marketing industries, among others. <FONT STYLE="color: black">The division incorporates DSS&rsquo;s security technologies
into printed packaging to help companies prevent or deter brand and product counterfeiting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>DSS Digital Group</U> &mdash; </B>Provides
data center centric solutions to businesses and governments delivered via the &ldquo;cloud&rdquo;. This division is also developing
proprietary digital data security technologies based on DSS&rsquo;s optical deterrent technologies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><B><I>Results of Operations for the Three
and Nine Months Ended September 30, 2012 Compared to the Three and Nine Months Ended September 30, 2011</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This discussion should
be read in conjunction with the financial statements and footnotes contained in this quarterly report and in our Annual Report
on Form 10-K for the year ended December 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Revenue </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months<BR>
Ended&nbsp;September<BR>
30,&nbsp;2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months<BR>
Ended<BR>
September&nbsp;30,<BR>
2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic">Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 34%; padding-left: 9pt">Printing</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">693,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">832,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-17</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">2,214,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">2,342,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-5</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,188,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,576,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,858,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,796,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">54</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Plastic IDs and cards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">774,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">757,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,254,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,087,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Licensing and digital solutions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">509,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">451,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">13</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,340,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">952,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">41</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left; padding-left: 0.25in">Total Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4,164,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,616,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">11,666,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">9,177,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the three months
ended September 30, 2012, revenue was $4.2 million, an increase of $548,000, or 15% from the three months ended September 30, 2011.
The revenue increase was primarily due to increases in packaging and licensing and digital solutions revenues. DSS&rsquo;s packaging
group saw increased order activity from its largest customers during the quarter while DSS&rsquo;s licensing and digital solutions
sales reflected increased usage of DSS&rsquo;s security technology from its licensees. For the first nine months of 2012, revenue
has increased 27% over the first nine months in 2011, primarily due to the 54% increase in DSS&rsquo;s packaging group&rsquo;s
sales along with a 41% increase in revenue from DSS&rsquo;s technology licensing and digital solutions groups, which was primarily
the result of DSS&rsquo;s acquisition of ExtraDev in May of 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Cost of Revenue and Gross Profit </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months <BR>Ended&nbsp;September<BR> 30,&nbsp;2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months<BR> Ended<BR> September&nbsp;30,<BR> 2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic">Costs of revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 34%; padding-left: 9pt">Printing</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">429,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">699,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-39</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">1,568,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">2,083,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-25</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,640,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,125,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">46</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,471,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,763,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">62</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Plastic IDs and cards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">433,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">454,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-5</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,263,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,231,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Licensing and digital solutions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">139,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">68,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">104</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">256,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">87,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">194</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left; padding-left: 0.25in">Total cost of revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,641,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,346,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,558,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,164,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">23</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Printing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">264,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">133,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">646,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">259,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">149</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">548,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">451,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,387,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,033,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Plastic IDs and cards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">341,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">303,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">991,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">856,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">16</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Licensing and digital solutions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">370,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">383,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-3</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,084,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">865,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: left; padding-left: 0.25in">Total gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,523,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,270,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4,108,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,013,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left; padding-left: 0.25in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: left; padding-left: 0.25in">Gross profit percentage</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">37</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the three months
ended September 30, 2012, gross profit increased 20% to $1,523,000 as compared to the three months ended September 30, 2011. The
increase in gross profit was primarily due a 98% increase in gross profits in DSS&rsquo;s printing group, which benefited from
a favorable product sales mix as DSS focused on higher margin projects, along with a 22% increase in gross profits in DSS&rsquo;s
packaging group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the first nine
months of 2012, DSS&rsquo;s gross profit has increased 36% over the first nine months of 2011. DSS saw a significant increase in
gross profits from its printing groups as it has benefited from a lower cost structure and a more favorable product mix. In addition,
each of DSS&rsquo;s packaging and plastics groups realized gross profit gains as a result of their revenue gains. Finally, gross
profits from licensing and digital solutions sales increased 25% primarily due to the addition of gross profits from DSS&rsquo;s
acquisition of ExtraDev, which occurred in May 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Operating Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months<BR> Ended&nbsp;September&nbsp;30,<BR> 2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: left">Operating Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 34%; text-align: left; padding-left: 9pt">Sales, general and administrative compensation</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">1,065,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">1,080,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-1</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">3,176,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">2,684,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">18</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Professional Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">594,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">219,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">171</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">968,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">582,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">67,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">127,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-47</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">234,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">413,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-43</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Rent and utilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">140,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">195,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-28</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">438,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">547,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-20</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt">Other</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">208,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">212,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">699,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">575,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">22</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,074,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,833,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,515,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,801,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: left">Other Operating Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Non-production depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">97,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">94,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Research and development, including research and development costs paid by equity instruments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">174,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">83,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">545,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">208,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">162</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Stock based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">196,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">114,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">72</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">449,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">319,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">41</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt">Amortization of intangibles</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">76,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">71,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">228,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">205,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">479,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">299,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">60</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,319,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">826,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">60</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-style: italic; text-align: left; padding-left: 0.25in">Total Operating Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,553,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,132,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6,834,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,627,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Sales, general and
administrative compensation</U> costs, excluding stock base compensation, increased in 2012 as compared to 2011 primarily due to
the addition of employees as a result of DSS&rsquo;s acquisition of its cloud computing division in May 2011, offset by reductions
of personnel in DSS&rsquo;s printing and packaging divisions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Professional fees</U>
during the three and nine months ended September 30, 2012 increased from the corresponding 2011 periods due to an increase in intellectual
property consulting and investor relations costs, and approximately $461,000 of legal, accounting and consulting fees incurred
in the third quarter of 2012 associated with DSS&rsquo;s proposed merger with Lexington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Sales and marketing
</U>costs during the three and nine months ended September 30, 2012 decreased from the corresponding periods of 2011, as DSS significantly
decreased its marketing costs, including costs incurred during 2011 to redesign DSS&rsquo;s logo, websites, sales collateral and
trade-show booths, which did not re-occur in 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Rent and utilities</U>
expenses in 2012 have decreased due to the elimination of rent at DSS&rsquo;s packaging division as a result of that division&rsquo;s
purchase of its facility in August 2011, offset by an increase in rent due to DSS&rsquo;s acquisition of ExtraDev in May 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Other</U> operating
expenses consists primarily of equipment maintenance and repairs, office supplies, IT support, bad debt expense and insurance costs.
Other expenses for the first nine months of 2012 include a one-time placement agent fee related to the placement of a convertible
note and subsequent conversion in March 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Research and development</U>
costs consist primarily of compensation costs for research personnel, third-party research costs, and consulting costs. During
the three and nine months ended September 30, 2012, DSS&rsquo;s research and development costs increased 110% and 162%, respectively,
primarily due to payments and stock based compensation costs for warrants issued to ipCapital, a third party consulting firm assisting
DSS with its goal of increasing its intellectual property portfolio of patents and trade secrets in the security field. DSS expects
to continue to see a significant increase in research and develop costs over the next 12 to 18 months which DSS hopes will result
in an increase in security product and licensing sales, and an increase in the value of its patent asset portfolio.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Stock based compensation</U>
includes expense charges for all stock based awards to employees, directors and consultants, except for stock based compensation
allocated to research and development. Such awards include option grants, warrant grants, and restricted stock awards. Stock based
compensation for the three months ended September 30, 2012 increased 72% from the three months ended September 30, 2011, primarily
due to the estimated value of warrants issued in February 2012 to DSS&rsquo;s investor relations provider and warrants issued to
a consultant in July 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Amortization of
intangibles</U> expense increases in 2012 compared to 2011 are due to the increase in DSS&rsquo;s other intangible asset basis
due to the acquisition of ExtraDev in May 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Other Income and Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months<BR> Ended&nbsp;September<BR>
30,&nbsp;2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Other income (expense):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 34%; text-align: left; padding-left: 9pt">Change in fair value of derivative liability</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 8%; text-align: right">361,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">-100</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(51,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(61,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-16</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(177,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(170,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Amortizaton of note discount</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(11,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">100</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(249,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">100</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other income (expense), net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(62,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(61,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(426,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">191,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-323</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>Amortization
of note discount</U></FONT><FONT STYLE="font-size: 10pt"> <FONT STYLE="color: black"> </FONT></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">On
February 29, 2012, DSS entered into a convertible note. The holder of the note had the right to convert the principal and any interest
due under the note into shares of DSS&rsquo;s common stock at a conversion price of $3.30 per share. In conjunction with this conversion
option, DSS recorded a beneficial conversion feature of approximately $216,000 which DSS will expense over the term of the note.
In March 2012, the holder exercised the conversion option on the note. Pursuant to the conversion, DSS issued an aggregate of 175,710
shares of its common stock to the holder for full payment of note and accrued interest. In conjunction with the conversion, DSS
recorded a note discount amortization expense of the entire $216,000 of remaining unamortized debt discount expense during the
first quarter of 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>Change
in fair value of derivative liability</U></FONT><FONT STYLE="font-size: 10pt"><I> </I></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">In
late 2010, DSS issued various financial instruments to an investor in connection with a stock purchase agreement, which contained
certain provisions that resulted in a derivative liability. On February 18, 2011 DSS entered into certain amendments with the investor
for the purpose of modifying the terms of the financial instruments that among other things eliminated the provisions of the warrants
that had created the derivative liabilities. As a result, DSS determined the fair value of the derivative liability as of the modification
date of February 18, 2011 and recorded the change in fair value of the derivative liability since December 31, 2010 of $360,922
in the statement of operations.</FONT><FONT STYLE="font-size: 10pt; color: black"> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>Net Loss and Loss per Share</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Three&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months<BR> Ended&nbsp;September<BR>
30,&nbsp;2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Nine&nbsp;Months<BR> Ended&nbsp;September<BR> 30,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 34%; text-align: left; padding-bottom: 2.5pt">Net loss</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 2.5pt double; text-align: right">(1,096,000</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 2.5pt double; text-align: right">(757,000</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 2.5pt double; text-align: right">45</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">%</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 2.5pt double; text-align: right">(3,165,000</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 8%; border-bottom: Black 2.5pt double; text-align: right">(2,267,000</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; border-bottom: Black 2.5pt double; text-align: right">40</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net loss per share, basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.05</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.04</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.15</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.12</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Weighted average common shares outstanding, basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">20,822,351</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,474,173</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">7</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">20,536,448</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">19,435,930</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">6</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended September 30, 2012, DSS had a net loss of $1,096,000, representing a 45% increase from the net loss during the three months
ended September 30, 2011. The increase in net loss was significantly impacted by $461,000 of expenses incurred by DSS during the
2012 for legal, accounting and consulting costs associated with DSS&rsquo;s proposed merger with Lexington. Absent these costs,
net loss would have been approximately $635,000 during the three months ended September 30, 2012, a 16% improvement from the three
months ended September 30, 2011, and reflect the 20% increase in gross profits during the quarter along with a decrease in most
operating expense categories.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the nine months
ended September 30, 2012, DSS had a net loss of $3,165,000 representing a 40% increase from the net loss during the nine months
ended September 30, 2011. The increase in net loss was primarily due to three items: 1) $227,000 amortization of note discount
expense recorded in the first quarter of 2012; 2) a $361,000 one-time other income recorded in the first quarter of 2011 due to
a change in the fair value of a derivative liability; and 3) the $461,000 of expenses incurred by DSS during the third quarter
of 2012 for legal, accounting and consulting costs associated with DSS&rsquo;s proposed merger with Lexington. These three items
in aggregate amounted to $1,049,000. Absent these items, net loss during the first nine months of 2012 would have decreased approximately
7%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Results of Operations for the Fiscal Years Ended December
31, 2011 and 2010 </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Revenue</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left">Year&nbsp;Ended</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left">Year&nbsp;Ended</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">December&nbsp;31,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">December&nbsp;31,&nbsp;&nbsp;2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">% change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-style: italic">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic">Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%">Printing</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">3,227,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">4,697,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">-31</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,940,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,753,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Plastic IDs and cards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,769,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,291,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Licensing and digital solutions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,447,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">641,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">126</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: left">Total Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13,383,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">13,382,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 4.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Revenue &mdash;
</I></B>For the year ended December 31, 2011, revenue was approximately $13.4 million, nearly identical to revenue for the year
ended December 31, 2010. Printing revenue declined 31% which was primarily the result of a significant decline in external sales
at DSS&rsquo;s commercial printing division, driven by the general decline in DSS&rsquo;s commercial printing business that began
in the second half of 2010 caused by the loss of a large direct mail customer along with a strategic reduction in the level of
low profit margin commercial printing that DSS has determined does not fit its long-term business model. In addition, DSS increased
the usage of its production capacity for the internal printing for its packaging division.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s packaging
revenue increased 3% during 2011 as compared to 2010 while DSS&rsquo;s plastics division revenue increased 21%. Packaging revenue
increased as a result of 12 months of revenue being recognized in 2011 compared to approximately ten and a half months in 2010.
Plastics division sales benefited from increases in sales of higher priced cards such as RFID cards and secure driver&rsquo;s licenses.
DSS&rsquo;s technology licensing and digital solutions sales reflect approximately $666,000 in sales from DSS&rsquo;s acquisition
of ExtraDev in May 2011. Otherwise, technology licensing revenue increased 21% in 2011 as compared to 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Gross profit</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year&nbsp;Ended<BR> December&nbsp;31,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year&nbsp;Ended<BR> December&nbsp;31,&nbsp;2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: justify">Costs of revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; text-align: justify; padding-left: 9pt">Printing</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">2,928,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">3,799,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">-23</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt">Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,431,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,387,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt">Plastic IDs and cards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,698,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,505,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 9pt">Licensing and digital solutions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">154,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2980</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: justify; padding-left: 0.25in">Total cost of revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,211,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,696,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-5</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: justify">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt">Printing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">299,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">898,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-67</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt">Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,509,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,366,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt">Plastic IDs and cards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,071,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">786,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 9pt">Licensing and digital solutions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,293,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">636,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">103</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: justify; padding-left: 0.25in">Total gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">4,172,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,686,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year&nbsp;Ended <BR> December&nbsp;31,&nbsp;2011</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year&nbsp;Ended <BR> December&nbsp;31,&nbsp;2010</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 61%; text-align: justify; padding-left: 9pt">Gross profit percentage:</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">31</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">28</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">11</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Gross Profit
&mdash; </I></B>Costs of revenue decreased 5% in 2011 as compared to 2010 as a result of reduced equipment leasing costs and a
general reduction in costs of sales due to an improvement in the mix of product sales during 2011, as DSS focused on higher margin
sale opportunities, and due to lower labor costs at DSS Printing. As a result, gross profit increased 13% during 2011. The increase
in gross profit was primarily due to the significant increases in gross profits in DSS&rsquo;s packaging and plastics divisions
due to favorable product sales mixes for each, along with a decrease in equipment lease costs which further favorably impacted
the Plastics division. These increases were partially offset by a 67% decrease in gross profits from DSS&rsquo;s printing division,
which reflects the impact of the significant declines in commercial printing revenues causing fixed costs of sales to be a much
larger percentage of cost of sales than comparable 2010 levels. Gross profits from licensing and digital sales increased 103% primarily
due to the addition of gross profits from DSS&rsquo;s new acquisition, ExtraDev, which occurred in May 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Operating Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year&nbsp;Ended <BR> December&nbsp;31,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year&nbsp;Ended <BR> December&nbsp;31,&nbsp;2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: justify">Operating Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; text-align: left; padding-left: 9pt">Sales, general and administrative compensation</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">3,782,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">3,431,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">10</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Professional Fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">758,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">603,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Sales and marketing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">519,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">238,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">118</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">285,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">265,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Rent and utilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">693,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">659,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt">Other</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">803,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">642,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">25</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,840,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,838,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: left">Other Operating Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 9.35pt">Depreciation and software amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">123,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">140,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-12</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Stock based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">399,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">423,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-6</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Impairment of patents</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">377,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-100</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt">Amortization of intangibles</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">284,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">803,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-65</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">806,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,743,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-54</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-style: italic; text-align: left">Total Operating Expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7,646,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">7,581,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Sales,
general and administrative compensation</U></FONT> &mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif">costs were
10% higher during 2011 as compared to 2010 which reflect additions in sales and marketing personnel made during 2011 along with
the addition of seven people from DSS&rsquo;s digital division.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Professional
fees</U></FONT> &mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif">increased 26% during 2011 primarily due to increases
in consulting fees, investor relations costs and legal fees.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Sales
and marketing</U></FONT> &mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif">increased 118% during 2011 as DSS incurred
increased travel and entertainment costs associated with a larger direct sales force, increased costs associated with internet
based advertising, and higher costs due to an increase in trade show presence.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Research
and development</U></FONT> &mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif">costs consist primarily of compensation
costs for research personnel and direct costs for the use of third-party printers&rsquo; facilities to test DSS&rsquo;s technologies
on equipment that DSS does not have access to internally. Research and development costs increased due to an increase in compensation
costs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Rent
and utilities</U></FONT> &mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif">expenses have increased primarily as
a result of the acquisition of ExtraDev in May 2011. In addition, in September 2011, DSS purchased its packaging division building
which reduced rent expense for that division.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Other
</U></FONT>&mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif">operating expenses are primarily equipment maintenance
and repairs, office supplies, IT support, bad debt expense and insurance costs. Other expenses increased in 2011 as compared to
2010 primarily due to a $215,000 reversal of expense which had occurred during the third quarter of 2010 which did not occur in
the third quarter of 2011. Otherwise, other operating expenses decreased approximately 7% during 2011.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Stock
based compensation</U></FONT> &mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif">includes expense charges for all
stock based awards to employees, directors and consultants. Such awards include option grants, warrant grants, and restricted stock
awards. Stock based compensation in 2011 was approximately $399,000 as compared to $423,000 in 2010 due to a general reduction
in the fair value of awards made in previous periods.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Impairment
of patent</U></FONT> &mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">$377,000 was recognized in
2010 as a result of adverse decisions in DSS&rsquo;s patent infringement case against the ECB which caused DSS to reduce the estimated
cash flows that supported DSS&rsquo;s capitalized patent acquisition based intangible asset.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Amortization
of intangibles</U></FONT> &mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">expense decreased 65%
in 2011 as compared to 2010 due to the reduction in DSS&rsquo;s net capitalized patent acquisition and defense costs asset and
completion of amortization of intangibles in the Plastics division early in 2011, offset by increases in intangible asset amortization
as a result of the acquisition of other intangible assets in conjunction with DSS&rsquo;s acquisition of ExtraDev in May 2011.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Other Income and expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year&nbsp;Ended <BR> December&nbsp;31,&nbsp;2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year&nbsp;Ended <BR> December&nbsp;31,&nbsp;2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify">Other income (expense):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; text-align: justify; padding-left: 9pt">Change in fair value of derivative liability</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">361,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">100</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(259,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(290,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-11</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt">Amortization of note discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(420,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-100</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt">Loss in equity investment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(121,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-100</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 9pt">Other income</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">143,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-100</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Other income (expense), net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">102,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(688,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-115</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Change
in fair value of derivative liability</U></FONT> &mdash;<FONT STYLE="font-family: Times New Roman, Times, Serif"><I> </I><FONT STYLE="color: black">in
late 2010, DSS issued various financial instruments to an investor in connection with a stock purchase agreement which contained
certain provisions that resulted in a derivative liability. On February 18, 2011 DSS entered into certain amendments with the investor
for the purpose of modifying the terms of the financial instruments that among other things eliminated the provisions of the financial
instruments that had created the derivative liabilities. As a result, DSS determined the fair value of the derivative liability
as of the modification date of February 18, 2011 and recorded the change in fair value of the derivative liability from December
31, 2010 of $360,922 in the statement of operations. </FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Interest
expense</U></FONT> &mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">during 2011, interest expense
decreased as a result of a decreased in interest rates achieved by DSS due to the refinancing and paydowns of certain debts during
2011, with the highest rates of interest.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Amortization
of note discount</U></FONT> &mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">during 2009, DSS entered
into two convertible notes that had conversion features at below fair value and therefore, a beneficial conversion feature. Accordingly,
DSS determined that a total of approximately $420,000 of note discount had been created as a result of the beneficial conversion
features and a warrant issued with the debt. DSS was amortizing this expense over the expected life of the convertible notes. On
November 29, 2010, the holder exercised the conversion feature of the $350,000 Convertible Note for 218,750 shares of common stock,
par value $0.02 which retired the debt in full. In conjunction with the conversion, DSS recognized approximately $63,000 of note
discount expense. On December 24, 2010, the holder of the note exercised the conversion feature of the $450,000 Convertible Note
for 260,116 shares of common stock, par value $0.02 which retired the debt in full. In conjunction with the conversion, DSS recognized
approximately $200,000 of note discount expense. There was no note discount expense in 2011.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><U>Loss
in equity investment</U></FONT><I> </I>&mdash; <FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">DSS recognized
gains or losses on its investment in Internet Media Services, the entity that purchased Legalstore from DSS in October 2009 under
the equity method of accounting for investments. During 2010, DSS recorded a cumulative loss in its investment of $121,000. On
September 23, 2010, DSS&rsquo;s board of directors declared a dividend pursuant to which DSS distributed to its stockholders of
record on October 8, 2010 on a pro-rata basis an aggregate of 7,500,000 shares of common stock of Internet Media Services. As a
result, DSS has recorded a dividend of approximately $229,000 which was the book value of the investment as of September 23, 2010.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black"><U>Other
Income</U> </FONT>&mdash;<FONT STYLE="color: black"> in March 2010, DSS received notification that it was due approximately $143,000
for New York State Qualified Emerging Technology Company (&ldquo;<B>QETC</B>&rdquo;) refundable tax credits for the tax year ended
2008 which DSS received in April 2010. DSS did not receive any QETC refundable tax credits during 2011.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Income Taxes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year Ended <BR> December 31, 2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year Ended <BR> December 31, 2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">% change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 61%; text-align: justify">Income tax benefit, net</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(150,000</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">(1,122,000</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">-87</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While DSS did not have
taxable income during 2011 and 2010, respectively, DSS did recognize deferred tax benefits associated with acquisitions made during
each period. In 2011, DSS recognized a $169,000 deferred tax benefit during 2011. As a result of its acquisition of ExtraDev a
temporary difference between the book fair value and tax basis for the equipment and other intangible assets acquired was created
resulting in a deferred tax liability and additional goodwill. With the increase in deferred tax liability DSS reduced the deferred
tax asset valuation account and recognized a deferred tax benefit. DSS recognized a $1,141,000 deferred tax benefit during 2010.
As a result of its acquisition of Premier Packaging a temporary difference between the book fair value and tax basis for the equipment
and other intangible assets acquired was created resulting in a deferred tax liability and additional goodwill. With the increase
in deferred tax liability DSS reduced the deferred tax asset valuation account and recognized a deferred tax benefit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Net Loss and Loss Per Share</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year&nbsp;Ended <BR> December&nbsp;31,&nbsp;2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Year&nbsp;Ended <BR> December&nbsp;31,&nbsp;2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">%&nbsp;change</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 61%; text-align: left; padding-bottom: 2.5pt">Net loss</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right">(3,222,000</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right">(3,463,000</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; text-align: right">-7</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net loss per share, basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.17</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.20</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-15</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Weighted average common shares outstanding, basic and diluted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,454,046</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17,755,141</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During 2011, DSS had
a net loss of $3,222,000, representing a 7% decrease from the net loss of 2010. The decrease in net loss was primarily the result
of an increase in DSS&rsquo;s gross profit due to an improved product sales mix and an increase in net other income, offset by
an increase in operating expenses and a significant decrease in deferred tax benefit. Without the impact of the difference in deferred
tax benefit between 2011 and 2010, DSS&rsquo;s net loss would have reflected a year over year decrease of approximately 27%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Liquidity and Capital Resources</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS has historically
met its liquidity and capital requirements primarily through the private placement of equity securities and debt financings. As
of September 30, 2012, DSS had cash of approximately $1.0 million. In addition, DSS had approximately $580,000 available to its
Packaging and Digital division under revolving credit lines.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the first nine
months of 2012, DSS increased its cash position and reduced its debt by selling shares of its common stock and issuing shares of
its common stock pursuant to debt conversions and warrant exercises. On February 13, 2012, DSS sold 967,740 shares of common stock
for net proceeds of approximately $2,700,000 in a private placement of equity. On February 29, 2012, DSS entered into an agreement
whereby an existing commercial term note in the original principal amount of $650,000 was sold and transferred to an investor for
a purchase price of $578,396, the outstanding principal at the time of the sale. In connection with the sale and transfer of the
commercial term note, DSS agreed to structure the note as a convertible note at a conversion price of $3.30 per share. In March
2012, the holder converted the full amount of the remaining indebtedness under the note, in exchange for 175,710 shares of DSS&rsquo;s
common stock, and the note was retired. In July 2012, DSS received approximately $500,000 from the exercise of warrants. In addition,
in October 2012, DSS sold 833,651 shares of common stock for net proceeds of approximately $2,500,000 in a private placement of
equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Operating Cash Flow</U>
&ndash; <FONT STYLE="color: black">During the first nine months of 2012, DSS used approximately $2,080,000 of cash for operations,
a 3% increase from DSS&rsquo;s use of cash for operations during the first nine months of 2011, which generally reflect a difference
in the timing of cash flows from accounts receivables and an increase in prepayments in 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Investing Cash Flow</U>
-<FONT STYLE="color: black"> During the first nine months of 2012, DSS spent approximately $109,000 on equipment additions at its
packaging and plastic divisions, and paid approximately $104,000 of legal and consulting costs which were capitalized as patent
assets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Financing Cash Flows</U>
- During the first nine months of 2012, <FONT STYLE="color: black">DSS raised approximately $3.3 million from the sale of equity
in a private placement, as described above, and from the exercise of warrants made by certain holders. In addition, DSS made scheduled
debt and capitalized lease payments during the first nine months of 2012 of approximately $493,000 and paid down the balance of
its packaging division&rsquo;s revolving line of credit by approximately $221,000. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><U>Future Capital Needs</U>
- <FONT STYLE="color: black">As of September 30, 2012, DSS had cash of approximately $1.0 million and in October 2012, DSS received
$2,500,000 from a private placement of its common shares. In addition, DSS had approximately $519,000 available to its Packaging
division under a revolving credit line. DSS</FONT> believes that its current cash, working capital and availability of funds under
its credit line resources provide it sufficient resources in order to fund its operations and meet its obligations for at least
the next twelve months. However, if expected revenues in the second half of 2012 do not materialize and if <FONT STYLE="color: black">DSS</FONT>
cannot generate sufficient cash from its operations in the future, <FONT STYLE="color: black">DSS</FONT> may need to raise additional
funds in order to fund its working capital needs and pursue its growth strategy. However, there is no guarantee we will be able
to raise such funds if necessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Off-Balance Sheet Arrangements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS does not have any
off-balance sheet arrangements that have, or are reasonably likely to have, an effect on its financial condition, financial statements,
revenues or expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Inflation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although DSS&rsquo;s
operations are influenced by general economic conditions, DSS does not believe that inflation has had a material effect on its
results of operations during the first six months of 2012, or 2011 and 2010 as DSS is generally able to pass the increase in its
material and labor costs to its customers, or absorb them as DSS improves the efficiency of its operations.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Critical Accounting Policies</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of
financial statements and related disclosures in conformity with GAAP requires management to make judgments, assumptions and estimates
that affect the amounts reported in DSS&rsquo;s consolidated financial statements and accompanying notes. DSS&rsquo;s consolidated
financial statements for the fiscal year ended December 31, 2011 describe the significant accounting policies and methods used
in the preparation of the consolidated financial statements. Estimates are used for, but not limited to, the accounting for the
allowance for doubtful accounts and sales returns, goodwill impairments, inventory allowances, revenue recognition, stock based
compensation valuations, the valuation of intangible assets, and allocation of assets in business combinations. Actual results
could differ from these estimates. The following critical accounting policies are impacted significantly by judgments, assumptions
and estimates used in the preparation of DSS&rsquo;s consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Long Lived Assets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS reviews long-lived
assets and certain identifiable intangibles for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying
amount of an asset to future net undiscounted cash flows expected to be generated by the asset. If such assets are considered to
be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair
value of the assets. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the
assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Fixed assets are carried
at cost. Depreciation is computed over the estimated useful life of five to seven years using the straight-line depreciation method.
Leasehold improvements are amortized over the shorter of their useful life or the lease term. Intangible assets consist primarily
of royalty rights, contractual rights, customer list, and patent acquisition, application and defense costs. Amortization is computed
over the estimated useful life of five to twenty years using the straight-line depreciation method. For patent related assets,
the remaining legal life of the patent is used as the estimate useful life unless circumstances determine that the useful life
will be less than the legal life. Long-lived assets to be held and used by DSS are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be recoverable. DSS periodically evaluates the recoverability
of its long-lived assets based on estimated future cash flows from and the estimated fair value of such long-lived assets, and
provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the long-lived asset.<B><I>
</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Goodwill</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Goodwill
is the excess of cost of an acquired entity over the fair value of amounts assigned to assets acquired and liabilities assumed
in a business combination. Goodwill is subject to impairment testing at least annually and will be tested for impairment between
annual tests if an event occurs or circumstances change that would indicated the carrying amount may be impaired. ASC Topic 350
provides an entity with the option to first assess qualitative factors to determine whether the existence of events or circumstances
leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount.
If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair
value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. If the
two-step impairment test is necessary, a fair-value-based test is applied at the reporting unit level, which is generally one level
below the operating segment level. The test compares the fair value of an entity&rsquo;s reporting units to the carrying value
of those reporting units. This test requires various judgments and estimates. DSS estimates the fair value of the reporting unit
using a market approach in combination with a discounted operating cash flow approach. Impairment of goodwill is measured as the
excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets and liabilities of the reporting
unit. An adjustment to goodwill will be recorded for any goodwill that is determined to be impaired. DSS tests goodwill for impairment
at least annually in conjunction with preparation of its annual business plan, or more frequently if events or circumstances indicate
it might be impaired. ASU 2010-28 modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying
amounts. For those reporting units, an entity is required to perform Step 2 of the goodwill impairment test if it is more likely
than not that a goodwill impairment exists. In determining whether it is more likely than not that a goodwill impairment exists,
an entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist. DSS performed
the annual assessment and has determined that no impairment is necessary during the nine months ended September 30, 2012 or the
years ended December 31, 2011 and 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Other Intangible Assets and Patent Defense
Costs</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other intangible assets
consists of costs associated with the application, acquisition and defense of DSS&rsquo;s patents, contractual rights to patents
and trade secrets associated with DSS&rsquo;s technologies, a non-exclusive licensing agreement, and customer lists obtained as
a result of acquisitions. DSS&rsquo;s patents and trade secrets are for document anti-counterfeiting and anti-scanning technologies
and processes that form the basis of DSS&rsquo;s document security business. Patent application costs are capitalized and amortized
over the estimated useful life of the patent, which generally approximates its legal life. External legal costs incurred to defend
DSS&rsquo;s patents are capitalized to the extent of an evident increase in the value of the patents and an expected successful
outcome. Patent defense costs are expensed at the point when it is determined that the outcome is expected to be unsuccessful.
DSS capitalizes the cost of an appeal until it is determined that the appeal will be unsuccessful. DSS&rsquo;s capitalized patent
defense costs expenses are analyzed for impairment based on the expected eventual outcome of the legal action and recoverability
of proceeds or added economic value of the patent in excess of the costs. Legal actions related to the same patent defense case
are unified into one asset group for the purposes on the impairment analysis. DSS amortizes its other intangible assets over their
estimated useful lives. Patents are amortized over the remaining legal life, up to 20 years. Intangible asset amortization expense
is generally classified as an operating expense. DSS believes that the decision to incur patent costs is discretionary as the associated
products or services can be sold prior to or during the application process. DSS accounts for other intangible amortization as
an operating expense, unless the underlying asset is directly associated with the production or delivery of a product. To date,
the amount of related amortization expense for other intangible assets directly attributable to revenue recognized is not material.
There was no impairment charges during the year ended December 31, 2011. Impairment of patent acquisition costs of $377,000 was
recognized in the fourth quarter of 2010 as a result of adverse decisions in DSS&rsquo;s patent infringement case against the ECB
which caused DSS to reduce the estimated cash flows that supported DSS&rsquo;s capitalized patent acquisition based intangible
asset.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Conventional Convertible Debt</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">When the convertible
feature of the conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized
as a beneficial conversion feature (&ldquo;<B>BCF</B>&rdquo;). Prior to the determination of the BCF, the proceeds from the debt
instrument were first allocated between the convertible debt and any embedded or detachable free standing instruments that are
included, such as common stock warrants. DSS recorded a BCF as a debt discount pursuant to FASB ASC Topic 470-20. In those circumstances,
the convertible debt will be recorded net of the discount related to the BCF. DSS amortizes the discount to interest expense over
the life of the debt using the effective interest method.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Revenue Recognition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.35pt">Sales of security
and commercial printing products, packaging, and plastic cards are recognized when a product or service is delivered, shipped or
provided to the customer and all material conditions relating to the sale have been substantially performed. DSS recognizes revenue
from printing technology licenses once all the following criteria for revenue recognition have been met: (1) persuasive evidence
of an agreement exists; (2) the right and ability to use the product or technology has been rendered; (3) the fee is fixed and
determinable and not subject to refund or adjustment; and (4) collection of the amounts due is reasonably assured.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27.35pt">For digital solutions
sales, revenue is recognized in accordance with the FASB ASC 985-605. Accordingly, revenue is recognized when all of the following
conditions are satisfied: (1) there is persuasive evidence of an arrangement; (2) the service or product has been provided to the
customer; (3) the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of DSS&rsquo;s fees
is reasonably assured. DSS recognizes cloud computing revenue, including data backup, recovery and security services, on a monthly
basis, beginning on the date the customer commences use of DSS&rsquo;s services. Professional services are recognized in the period
services are provided.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Business Combinations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">Business
combinations and non-controlling interests are recorded in accordance with the Business Combination Topic of the FASB ASC. Under
the guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition.
The excess of the purchase price over the estimated fair values is recorded as goodwill. If the fair value of the assets acquired
exceeds the purchase price and the liabilities assumed then a gain on acquisition is recorded. Under the guidance, all acquisition
costs are expensed as incurred and in-process research and development costs are recorded at fair value as an indefinite-lived
intangible asset. The application of business combination and impairment accounting requires the use of significant estimates and
assumptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Share-Based Payments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS measures compensation
cost for stock awards at fair value and recognize compensation expense over the service period for which awards are expected to
vest. <FONT STYLE="color: black">DSS uses the Black-Scholes-Merton option pricing model for determining the estimated fair value
for stock-based awards. The</FONT> Black-Scholes-Merton model requires the use of subjective assumptions which determine the fair
value of stock-based awards, including the option&rsquo;s expected term and the price volatility of the underlying stock. For equity
instruments issued to consultants and vendors in exchange for goods and services DSS determines the measurement date for the fair
value of the equity instruments issued at the earlier of (i)&nbsp;the date at which a commitment for performance by the consultant
or vendor is reached or (ii)&nbsp;the date at which the consultant or vendor&rsquo;s performance is complete. In the case of equity
instruments issued to consultants, the fair value of the equity instrument is recognized over the term of the consulting agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of each
option award is estimated on the date of grant utilizing the Black Scholes Option Pricing Model that uses the assumptions noted
in the following table.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: left">Year&nbsp;Ended&nbsp;December&nbsp;31,</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%; text-align: justify">Volatility</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">55.0</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">54.3</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Expected option term</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">4.71 years</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">3.8 years</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">Risk-free interest rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.1</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.5</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Expected forfeiture rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify">Expected dividend yield</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Income Taxes</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Deferred tax assets
and liabilities are determined based on temporary differences between income and expenses reported for financial reporting and
tax reporting. FASB ASC 740 requires that a valuation allowance be established when management determines that it is more likely
than not that all or a portion of a deferred tax asset will not be realized. DSS evaluates the realizability of its net deferred
tax assets on an annual basis and a valuation allowance is provided or released, as necessary. Since DSS has had cumulative losses
in recent years, the accounting guidance suggests that DSS should not look to future earnings to support the realizability of the
net deferred tax asset. As a result, as of the nine months ended September 30, 2012 and the years ended December 31, 2011 and 2010,
DSS has elected to record a valuation allowance to reduce net deferred tax assets to zero.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS believes that the
accounting estimates related to deferred tax valuation allowances are &ldquo;critical accounting estimates&rdquo; because: (1)
the need for valuation allowance is highly susceptible to change from period to period due to changes in deferred tax asset and
deferred tax liability balances, (2) the need for valuation allowance is susceptible to actual operating results and (3) changes
in the tax valuation allowance can have a material impact on the tax provisions/benefit in the consolidated statements of operations
and on deferred income taxes in the consolidated balance sheets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Investment Valuation and Deconsolidation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; text-indent: 0.5in">On
October 8, 2009, DSS entered into an Asset Purchase Agreement with Internet Media Services whereby DSS sold the assets and liabilities
of Legalstore, a division of DSS, in exchange for 7,500,000 shares of common stock of Internet Media Services. <FONT STYLE="color: black">DSS
recorded its investment in Internet Media Services as an equity method investment at the fair market value of the business sold.
</FONT>Management determined that the transaction did not qualify as a non-monetary exchange due to the exception noted in FASB
ASC 845-10 (A transfer of assets to an entity in exchange for an equity interest in that entity). Management determined that the
transaction qualified as a derecoginition of a subsidiary under FASB ASC 810-10-40. Therefore, DSS accounted for the deconsolidation
of a subsidiary (&ldquo;<B>the business</B>&rdquo;) by recording the consideration received at fair market value and recognizing
a gain in net income measured as the difference between: the fair value of the consideration received (7,500,000 shares of common
stock of Internet Media Services or a 37% interest) and the carrying value of the assets and liabilities sold. Given that the consideration
received was not readily measurable because of the lack of activity in Internet Media Services shares prior to the transaction,
DSS determined that the value of the &ldquo;business transferred&rdquo; was more readily measurable by determining the fair market
value of the business transferred based on a discounted cash flow model. DSS recorded the equity method investment at fair value.
Under the equity method investment DSS is required to account for the difference between the cost of an investment and the amount
of the underlying equity in net assets of an investee as if the investee were a consolidated subsidiary. If the investor is unable
to relate the difference to specific accounts of the investee (<I>e.g.</I>, property and equipment), the difference should be considered
to be the same as goodwill. Investors should not amortize goodwill associated with equity method investments after the date FASB
ASC 350 is initially applied by the entity in its entirety. DSS determined that given the lack of activity in Internet Media Services
shares prior to the transaction, the difference between the cost of the investment (fair market value) and the underlying equity
interest is attributable to goodwill. DSS reported the activity in operating loss and not as discontinued operations because the
operations and cash flows of the component had not been eliminated from the ongoing operations of the entity as a result of the
equity method investment and because DSS had significant continuing involvement in the operations of Internet Media Services after
the disposal transaction because of its ownership percentage and board representation.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white; text-indent: 0.5in">On
September 23, 2010, DSS&rsquo;s board of directors declared a dividend which provided for the distribution by DSS to its stockholders
of record on October 8, 2010, on a pro-rata basis, of its 7,500,000 shares of stock in Internet Media Services. The dividend was
recorded at approximately $229,000 which was the book value of the investment as of September 23, 2010.<B><I> </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Fair Value of Financial Instruments</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Fair value is defined
as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. The Fair Value Measurement Topic of the FASB ASC establishes a three-tier fair value hierarchy which prioritizes
the inputs used in measuring fair value.&nbsp;The hierarchy gives the highest priority to unadjusted quoted prices in active markets
for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).
These tiers include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Level 1, defined as observable inputs
such as quoted prices for identical instruments in active markets;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Level 2, defined as inputs other than
quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments
in active markets or quoted prices for identical or similar instruments in markets that are not active; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Level 3, defined as unobservable inputs
in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived
from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The carrying amounts
reported in the balance sheet of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate
fair value because of the immediate or short-term maturity of these financial instruments. The fair value of revolving credit lines,
notes payable and long-term debt approximates their carrying value as the stated or discounted rates of the debt reflect recent
market conditions. Derivative instruments are recorded as assets and liabilities at estimated fair value based on available market
information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Derivative
Instruments &mdash; </I></B>DSS </FONT>maintains an overall interest rate risk management strategy that incorporates the use of
interest rate swap contracts to minimize significant fluctuations in earnings that are caused by interest rate volatility. <FONT STYLE="color: black">DSS
has two interest rate swaps that change variable rates into fixed rates on two term loans. These swaps qualify as Level 2 fair
value financial instruments. These swap agreements are not held for trading purposes and DSS does not intend to sell the derivative
swap financial instruments. DSS records the interest swap agreements on the balance sheet at fair value because the agreements
qualify as a cash flow hedges under accounting principles generally accepted in the United States of America</FONT><FONT STYLE="color: red">.
</FONT><FONT STYLE="color: black">Gains and losses on these instruments are recorded in other comprehensive income (loss) until
the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are reclassified from accumulated
other comprehensive income (loss) (AOCI) to the Consolidated Statement of Operations on the same line item as the underlying transaction.
The valuations of the interest rate swaps have been derived from proprietary models of the bank based upon recognized financial
principles and reasonable estimates about relevant future market conditions and may reflect certain other financial factors such
as anticipated profit or hedging, transactional, and other costs. The notional amounts of the swaps decrease over the life of the
agreements. DSS is exposed to a credit loss in the event of nonperformance by the counter parties to the interest rate swap agreements.
However, DSS does not anticipate non-performance by the counter parties. The cumulative net loss attributable to this cash flow
hedge recorded in accumulated other comprehensive income and other liabilities at December 31, 2011 was approximately $111,000
($26,000 - December 31, 2010).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 12pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 12pt">&#9;DSS has notional
amounts of approximately $2,143,000 as of December 31, 2011 on its interest rate swap agreements for its Citizens Bank debt. <FONT STYLE="color: black">DSS
has two interest rate swaps that change variable rates into fixed rates on two term loans and the terms of these instruments are
</FONT>as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 12pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Notional Amount</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Variable<BR>
Rate</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Fixed<BR>
Cost</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: left">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid">Maturity Date</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 18%; text-align: right">950,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">4.02</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">5.70</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 37%; text-align: center">February 1, 2015</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,193,445</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3.42</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5.865</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">August 30, 2021</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 12pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS accounts for warrants
and other rights to acquire capital stock with exercise price reset features, or &ldquo;down-round&rdquo; provisions, as derivative
liabilities. Similarly, down-round provisions for issuances of common stock are also accounted for as derivative liabilities. These
derivative liabilities are measured at fair value with the changes in fair value at the end of each period reflected in current
period income or loss. The fair value of derivative liabilities is estimated using a binomial model or Monte Carlo simulation to
model the financial characteristics, depending on the complexity of the derivative being measured. A Monte Carlo simulation provides
a more accurate valuation than standard option valuation methodologies such as the Black-Scholes-Merton binomial option models
when derivatives include changing exercise prices or different alternatives depending on average future price targets. In computing
the fair value of the derivatives, DSS uses significant judgments, which, if incorrect, could have a significant negative impact
to DSS&rsquo;s consolidated financial statements. The input values for determining the fair value of the derivatives include observable
market indices such as interest rates, and equity indices as well as unobservable model-specific input values such as certain volatility
parameters. Future changes in the fair value of the derivatives liabilities, if any, will be recorded in the statement of operations
as gains or losses from derivative liabilities. The derivative liability resulting from the warrant is classified as a Level 3
measurement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Recent Accounting Pronouncements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In May 2011, the FASB
issued Accounting Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in United States GAAP and IFRS. This update results in common principles and requirements for measuring
fair value and for disclosing information about fair value measurements in accordance with United States GAAP and IFRS.&nbsp;ASU
2011-04 is required to be applied prospectively in interim and annual periods beginning after December 15, 2011. Early application
is not permitted. The adoption of ASU 2011 is not expected to have a material impact on the consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In June&nbsp;2011 the
Financial Accounting Standards Board issued Accounting Standards Update No.&nbsp;2011-05, Presentation of Comprehensive Income.
This standard eliminates the option to report other comprehensive income and its components in the statement of changes in equity.
DSS may elect to present items of net income and other comprehensive income in one continuous statement or in two consecutive statements.
Each component of net income and each component of other comprehensive income, together with totals for comprehensive income and
its two parts &ndash; net income and other comprehensive income &ndash; would need to be displayed under either alternative, and
the statements would need to be presented with equal prominence as the other primary financial statements. This standard does not
change 1) the items that constitute net income and other comprehensive income, 2) when an item of other comprehensive income must
be reclassified to net income, or 3) the computation for earnings per share - which will continue to be based on net income. This
standard is effective for fiscal years beginning after December&nbsp;15, 2011, and DSS is currently evaluating which presentation
option it will utilize for comprehensive income in its consolidated financial statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In September&nbsp;2011
the Financial Accounting Standards Board issued Accounting Standards Update No.&nbsp;2011-08, Intangibles &ndash; Goodwill and
Other (Topic 350), Testing Goodwill for Impairment. The revised standard is intended to reduce the cost and complexity of the annual
goodwill impairment test by providing the option of performing a &ldquo;qualitative&rdquo; assessment to determine whether further
impairment testing is necessary. Under this standard, DSS has the option to first assess qualitative factors to determine whether
the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting
unit is less than its carrying amount. If, after assessing the totality of events or circumstances, DSS determines that it is not
more likely than not that the fair value of a reporting unit is less than its carrying amount, performing the two-step impairment
test under Topic 350 is unnecessary. However, if DSS concludes otherwise, it is required to perform the first step of the two-step
impairment test, as described in Topic 350. If the carrying amount of a reporting unit exceeds its fair value under the first step,
DSS is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any.
DSS also has the option to bypass the qualitative assessment for any reporting unit in any period and to proceed directly to performing
the first step of the two-step goodwill impairment test. DSS may resume performing the qualitative assessment in any subsequent
period. This standard is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after
December&nbsp;15, 2011, and early adoption is permitted. The adoption of this standard will not have a material impact on DSS&rsquo;s
consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON&rsquo;S BUSINESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Overview</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington was formed
in May 2012 to maximize the economic benefits of intellectual property assets through acquiring or internally developing patents
or other intellectual property assets (or interests therein) and then monetize such assets through a variety of value enhancing
initiatives, including, but not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">licensing,</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">customized technology solutions (such as applications for medical electronic health records),</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">strategic partnerships, and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">litigation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington&rsquo;s management
team and board of directors are comprised of accomplished inventors, experienced investors and individuals that it believes have
demonstrated success in generating returns from patent monetization. Lexington&rsquo;s management team has access to leading patent
attorneys, patent brokers, company liquidators and others who will assist Lexington in exploring, acquiring, developing and monetizing
intellectual property assets. Lexington believes that the depth and experience of its management provides Lexington with important
competitive strengths as it seeks to execute and expand its business model.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Through its wholly-owned
subsidiary Bascom Research, Lexington currently develops software applications based on the Bascom Portfolio that are focused on
applying computational and data structures to complex data sets in the medical field. Lexington has a strategic relationship with
LinkSpace, LLC and a consulting agreement with Mednest LLC, a professional technology incubation advisor, to develop medical-related
software applications in the radio-frequency identification, or RFID, and electronic health record space. Lexington intends to
attempt to enter into sponsored research agreements and partnerships with other companies and universities in order to further
develop applications for the technology relating to the Bascom Portfolio.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 3, 2012,
Bascom Research initiated patent infringement lawsuits in the United States District Court for the Eastern District of Virginia
against five companies, including Facebook, Inc. and LinkedIn Corporation, for unlawfully using systems that incorporate features
claimed in patents owned by Bascom Research.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">While Lexington&rsquo;s
present operations are limited to developing its applications for medical electronic health records and prosecuting its initial
claims relating to the Bascom patents, its plan of operation over the next 12 months, in addition to developing its applications
and continuing the prosecution of such claims, will be to expand its business through acquisition of additional patent and other
intellectual property assets that it will seek to monetize.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington was incorporated
under the laws of the state of Delaware on May 10, 2012 under the name Snip Inc. On September 10, 2012, Snip Inc. changed its name
to Lexington, Inc. Lexington is a holding company that owns 100% of the membership interests of Bascom Research. Bascom was incorporated
in Virginia on June 6, 2012 under the name of Bascom Linking Intellectual Property, LLC, for the purpose of acquiring and/or developing
patented technologies and intellectual property. On August 29, 2012, Bascom Linking Intellectual Property, LLC changed its name
to Bascom Research, LLC. Lexington&rsquo;s principal offices are located in New York City.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Background of the Bascom Portfolio</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 9, 2012, Lexington
completed the purchase of six patents and four pending patent applications from Thomas Bascom pursuant to a Patent Purchase Agreement,
dated as of June 20, 2012, by and between Mr. Bascom and Bascom Research. The patent portfolio relates to technology covering the
data structure used by social and business networking web sites and Web 2.0 corporate intranets. The purchase price for such patent
portfolio was $2.1 million in cash plus a portion of any future cash compensation received by Lexington in consideration for the
sale, licensing and/or enforcement of the acquired patents, subject to certain conditions. In addition, Lexington granted Mr. Bascom
the right to convert any such future cash payments into equity of Lexington at a price to be mutually agreed upon by Lexington
and Mr. Bascom. Such right to convert shall terminate upon the earlier of (1) the business day immediately prior to the date that
Lexington executes a definitive agreement with any other person to complete a public offering of securities, to become subject
to the Securities Exchange Act of 1934, as amended, or the Exchange Act, or the Securities Act or to effect a merger or other transaction
whereby Lexington will become a public company or a direct or indirect subsidiary of a public company or (2) the business day immediately
prior to the date that Lexington or any successor entity or parent company files a registration statement with respect to any of
the foregoing. In connection with such Patent Purchase Agreement, Lexington entered into a license agreement, dated as of July
9, 2012, with LinkSpace LLC (&ldquo;<B>LinkSpace</B>&rdquo;), a company controlled by Mr. Bascom, pursuant to which Lexington granted
to LinkSpace a royalty-free, perpetual, non-exclusive (without the right to sublicense) worldwide license under the acquired patents
relating to software, products or services designed, made, sold, offered for sale, imported or distributed by or for LinkSpace
or LinkSpace&rsquo;s affiliates (each, a &ldquo;<B>Licensed Product</B>&rdquo;) and any integrated system that incorporates or
includes a Licensed Product and in which system, the Licensed Product would be cited as an essential element of any infringement
contention concerning such system.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The patents in the
Bascom Portfolio disclose &ldquo;relationships with attributes&rdquo; and relate to the data structures used by social and business
networking sites and web 2.0 corporate intranets. The Bascom Portfolio was developed by Thomas Bascom, the founder and Chief Executive
Officer of LinkSpace, LLC, a software company focused on developing a platform for efficient user sharing and collaboration via
relationship linking. The patents specifically relate to establishing a relationship between two or more objects (e.g., user profiles,
documents, articles, data entries, etc.) with the ability to describe/customize and display the characteristics of the relationship.
The technology was developed to establish contextual relationships among distributed information (both commercial and military)
originally developed for use in the telecom sector and general corporate management, and later for the homeland security market.
The Linkspace technology was patented beginning in 2001 and has been actively prosecuted and expanded. Currently, the Bascom Portfolio
is comprised of six patents and four pending patent applications as summarized below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Issued Patents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>U.S. Patents</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 10%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Patent</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Serial<BR> Number</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 48%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Title</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Date&nbsp;Filed</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 11%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Date<BR> Issued</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">7,111,232</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">10/090,740</TD>
    <TD>&nbsp;</TD>
    <TD>Method and system for making document objects available to users of a network</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>3/6/2002</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>9/19/2006</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">7,139,974</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">10/090,739</TD>
    <TD>&nbsp;</TD>
    <TD>Framework for managing document objects stored on a network</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>3/6/2002</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>11/21/2006</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">7,158,971</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">10/118,918</TD>
    <TD>&nbsp;</TD>
    <TD>Method for searching document objects on a network</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>4/10/2002</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>1/2/2007</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">7,386,792</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">10/050,515</TD>
    <TD>&nbsp;</TD>
    <TD>System and method for collecting, storing, managing and providing categorized information related to a document object</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>1/18/2002</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>6/10/2008</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">7,389,241</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">10/118,093</TD>
    <TD>&nbsp;</TD>
    <TD>Method for users of a network to provide other users with access to link relationships between documents</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>4/9/2002</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>6/17/2008</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">7,702,521</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold">11/978,658</TD>
    <TD>&nbsp;</TD>
    <TD>Method for users of a network to provide other users with access to link relationships between documents</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>10/30/2007</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>4/20/2010</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>U.S. Pending applications</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 13%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Serial<BR> Number</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 12%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Date&nbsp;Filed</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 49%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Title</TD>
    <TD STYLE="width: 2%; font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 20%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: center">Status</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">11/979,260</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>10/31/2007</TD>
    <TD>&nbsp;</TD>
    <TD>System and method for collecting, storing, managing and providing categorized information related to a document object</TD>
    <TD>&nbsp;</TD>
    <TD>Pending</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">11/543,862</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>10/6/2006</TD>
    <TD>&nbsp;</TD>
    <TD>Method for searching document objects on a network</TD>
    <TD>&nbsp;</TD>
    <TD>Pending</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">11/601,645</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>11/20/2006</TD>
    <TD>&nbsp;</TD>
    <TD>Framework for managing document objects stored on a network</TD>
    <TD>&nbsp;</TD>
    <TD>Pending</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">13/432,642</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>3/28/2012</TD>
    <TD>&nbsp;</TD>
    <TD>Method for searching document objects on a network (Continuation of 7,158,971)</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>&nbsp;Pending</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Background on Intellectual Property
Asset Enforcement Market</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The United States patent
system grants the holder of a patent the exclusive right to exclude others from practicing the patented technology for the term
of the patent, and leaves the holder to his, her or its own devices to enforce these rights when such patented technology is infringed
upon by others. The term of a patent is the maximum period during which it can be maintained into force. Under current United States
law, the term of a patent is 20 years from the earliest claimed filing date (which can be extended via Patent Term Adjustment and
Patent Term Extension). For applications filed before June 8, 1995, the term is 17 years from the issue date or 20 years from the
earliest claimed domestic priority date, the longer term applying.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Aggrieved patent holders
may seek to bring enforcement actions against the infringing parties. They may engage attorneys on a full-fee basis, or enter into
a contingency agreement. In a contingency arrangement, attorneys seek a portion of the revenue derived from licensing the patented
technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Lexington&rsquo;s Initial Litigation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As one of the means
of realizing the value of the Bascom Portfolio, <FONT STYLE="font-weight: normal">Bascom Research,</FONT> a wholly-owned subsidiary
of <FONT STYLE="font-weight: normal">Lexington, </FONT>filed patent infringement lawsuits on October 3, 2012 against five companies,
including<B> </B><FONT STYLE="font-weight: normal">Facebook, Inc.</FONT><B> </B>and<B> </B><FONT STYLE="font-weight: normal">LinkedIn
Corporation</FONT><B>, </B>in the United States District Court for the Eastern District of Virginia. At issue are several patents
that are instrumental to social and business networking technology. This patented technology has been commercialized by Mr. Bascom&rsquo;s
previous company, LinkSpace, and is a means of organizing data and relationships, and sharing information in a computer network.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Bascom Research believes
that the defendants are in violation of key patents covering this technology, and is seeking a judgment of infringement, injunctive
relief and appropriate damages. Bascom&rsquo;s innovations cover the manner in which users and application developers on the Facebook
and other platforms make connections between &ldquo;objects&rdquo; such as photos, people, events and pages &ndash; which is the
very essence of Facebook&rsquo;s business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The patents that are
the subject of the lawsuits are:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S. Patent No. 7,111,232 (&ldquo;<B>the
&lsquo;232 Patent</B>&rdquo;), entitled Method and system for making document objects available to users of a network;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S. Patent No. 7,139,974 (&ldquo;<B>the
&lsquo;974 Patent</B>&rdquo;), entitled FRAMEWORK FOR MANAGING DOCUMENT OBJECTS STORED ON A NETWORK;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S. Patent No. 7,389,241 (&ldquo;<B>the
&lsquo;241 Patent</B>&rdquo;), entitled METHOD FOR USERS OF A NETWORK TO PROVIDE OTHER USERS WITH ACCESS TO LINK RELATIONSHIPS
BETWEEN DOCUMENTS; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S. Patent No. 7,158,971 (&ldquo;<B>the
&lsquo;971 Patent</B>&rdquo;), entitled METHOD FOR SEARCHING DOCUMENT OBJECTS ON A NETWORK.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to Facebook,
Inc. and LinkedIn Corporation, the other defendants in the cases are: Jive Software, Inc., BroadVision, Inc. and Novell, Inc. The
cases are:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Bascom Research, LLC v. Facebook, Inc.,
Civil Action No: 1:12-cv-1111-LMB-JFA;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Bascom Research, LLC v. LinkedIn Corporation.,
Civil Action No: 1:12-cv-1112-LMB-JFA;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Bascom Research, LLC v. Novell, Inc.,
Civil Action No: 1:12-cv-1113-LMB-JFA;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Bascom Research, LLC v. Jive Software,
Inc., Civil Action No: 1:12-cv-1114-LMB-JFA; and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Bascom Research, LLC v. BroadVision, Inc.,
Civil Action No: 1:12-cv-1115-LMB-JFA.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The court dockets for
the cases, including the parties&rsquo; briefs, are publicly available on the Public Access to Court Electronic Records website
(&ldquo;<B>PACER</B>&rdquo;), <I>www.pacer.gov</I>, which is operated by the Administrative Office of the U.S. Courts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Although Lexington&rsquo;s
intention is to expand its business through the acquisition of additional patent and intellectual property assets, the viability
of Lexington currently depends on the outcome of this lawsuit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Commercial Development of the Bascom
Research Patents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to the
enforcement of the Bascom Portfolio, Lexington&rsquo;s Bascom Research division is pursuing research and development of the Bascom
patents for commercial applications in the healthcare industry. Lexington&rsquo;s intent is to develop software applications based
on the Bascom Portfolio that are focused on applying Bascom&rsquo;s patented computational and data structures to address the need
to effectively link complex data sets in the medical field. In its initial project, Lexington entered into a strategic relationship
with LinkSpace, LLC and a consulting agreement with Mednest LLC, a professional technology incubation advisor, to develop a software
application for medical RFID device tracking and patient data in electronic health records. This integrated framework will enable
patient data to be stored securely in a distributed suite of devices in compliance with state and federal regulations. The project
goal is to develop a software system capable of linking authenticated therapeutic modules (drugs/devices) with wireless information
from medical devices, integrated into a framework that enables secure storage and manipulation of patient records while maintaining
efficiency with medical providers&rsquo; practices. Through this partnership, we intend to finalize development of a clinical trial
prototype which we intend to deploy in pilot studies at hospitals in 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Growth Strategy</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington intends to
continue to seek to generate license revenue and related cash flows from monetization of the Bascom Portfolio and in developing
its applications for medical electronic health records.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington also intends
to acquire additional intellectual property assets and monetize the value therefrom, although it is not a party to any agreement
or understanding to acquire any such assets as of the date of this prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A key element of Lexington&rsquo;s
business plan will be its ability to provide liquidity to inventors and other intellectual property holders by allowing them to
sell all of, or interests in, such intellectual property to Lexington in exchange for cash or other interests. Such other interests
could include interests in existing intellectual property litigation claims. Leveraging the extensive experience of Lexington&rsquo;s
management, through engaging in a robust due diligence and risk underwriting process aimed at evaluating the merits and potential
value of these assets, Lexington seeks to structure its investments in these assets in a manner that will create the potential
for Lexington to achieve superior risk-adjusted returns. Lexington believes that its capital resources and potential access to
capital, together with the strength of its management team in the intellectual property arena, will allow Lexington to assemble
a portfolio of quality assets with short- and long-term revenue opportunities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Beyond potential licensing
or other revenue Lexington may receive from companies that make use of its intellectual property, Lexington believes there are
further opportunities to generate revenue from companies that could improve their products and revenue through the addition of
Lexington&rsquo;s technology to their products. In addition to being a potential revenue source for Lexington, this aspect of Lexington&rsquo;s
business may lead to further innovations and new intellectual property being developed, which it will seek to retain and monetize.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Competition</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington expects
to encounter significant competition from others seeking to acquire interests in intellectual property assets and monetize such
assets. Most of Lexington&rsquo;s competitors have much longer operating histories, and significantly greater financial and human
resources, than it has. Entities such as VirnetX (NYSE:VHC), Acacia Research Corporation (NASDAQ:ACTG), Altitude Capital Partners,
Intellectual Ventures, Coller IP, RPX Corporation (NASDAQ:RPXC), Vringo, Inc. (NYSE MKT:VRNG), Rembrandt IP Management and others
presently market themselves as being in the business of creating, acquiring, licensing or leveraging the value of intellectual
property assets. Lexington expects others to enter the market as the true value of intellectual property is increasingly recognized
and validated. In addition, competitors may seek to acquire the same or similar patents and technologies that it may seek to acquire,
making it more difficult for Lexington to realize the value of its assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Relationship with Hudson Bay Master
Fund Ltd.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Hudson Bay is the
principal stockholder of Lexington and holds significant control rights with respect to the management of its business and assets.
On June 12, 2012, Lexington consummated a private placement transaction with Hudson Bay whereby Hudson Bay purchased Senior Secured
Notes of Lexington in the aggregate principal amount of $1,500,000 as well as 10,514,386 shares of Lexington&rsquo;s common and
warrants to purchase 3,942,858 shares of common stock for $1,577.14. On July 16, 2012, 10,409,242 of such shares of common stock
were exchanged for 10,409,242 shares of Series A Convertible Preferred Stock pursuant to an exchange agreement dated as of July
16, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The shares of Series
A Preferred may be converted into shares of Lexington Common Stock. The conversion formula is subject to adjustments and anti-dilution
protections, including but not limited to, adjusting the conversion price to account for the issuance of additional securities
by Lexington below the existing conversion price and for stock splits, stock dividends and recapitalizations of Lexington&rsquo;s
capital stock. The holders of the Series A Preferred are entitled to vote the shares of Series A Preferred on an as converted
basis, giving Hudson Bay effective control over Lexington, and as the Series A Preferred holder, Hudson Bay is entitled to vote
together with the holders of the common stock as a single class on all matters. As the holder of Series A Preferred, Hudson Bay
also has the right to vote separately as a class to elect a majority of Lexington&rsquo;s board of directors and the terms of
the Series A Preferred restricts Lexington from performing certain actions without the prior consent of Hudson Bay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At Hudson Bay&rsquo;s
option, the shares of the Series A Preferred are also subject to redemption upon certain triggering events such as (i) Lexington&rsquo;s
failure or refusal to convert the Series A Preferred into shares of common stock, (ii) Lexington&rsquo;s failure to have a sufficient
number of authorized shares of common stock reserved for conversion of the Series A Preferred, (iii) any default, redemption or
acceleration of any indebtedness of Lexington or its subsidiaries, (iv) Lexington voluntarily commences a bankruptcy proceeding
on Lexington&rsquo;s behalf, Lexington consents to involuntary bankruptcy, appointment of a receiver, trustee, assignee, liquidator
or similar official for bankruptcy purposes, a general assignment for the benefit of creditors or admit in writing that Lexington
is generally unable to pay its debts as they become due, or (v) a judgment against Lexington in an amount in excess of $250,000.
In addition, pursuant to the terms of the Series A Preferred, Lexington&rsquo;s board of directors must obtain written approval
from Hudson Bay to issue any capital stock superior, pari-passu or junior in rank to the Series A Preferred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to its terms,
the Senior Secured Note matures on June 12, 2014 and accrues interest at a rate of 0.28%, with interest being payable on the first
calendar day of each quarter after the issuance date. In the event of default, the interest rate will increase to 10%. The Senior
Secured Note is also subject to redemption rights, whereby upon the occurrence of an event of default or a change in control of
Lexington, Hudson Bay may request redemption of the Senior Secured Note in cash at a price equal to 100% of the then outstanding
principal and accrued interest under the Senior Secured Note. The Senior Secured Note ranks senior to all outstanding and future
indebtedness of Lexington and is secured by a first priority perfected security interest in all of Lexington and its subsidiaries&rsquo;
assets (including the Bascom Portfolio).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Employees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of September 30,
2012, Lexington had two full-time employees and four part-time employees. None of Lexington&rsquo;s employees are subject to a
collective bargaining agreement, and Lexington believes its employee relations to be good.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Property and Facilities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington leases its
principal executive offices at 375 Park Avenue, 26th Floor, New York, New York. Lexington pays $170 per month for its headquarters
space.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington&rsquo;s
subsidiary, Bascom Research also leases offices at McLean, Virginia. Lexington&rsquo;s lease term ends on June 2013. Lexington
pays $1,375 per month for this space.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Legal Proceedings</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other than Lexington&rsquo;s
subsidiary Bascom Research&rsquo;s litigation against Facebook, Inc., LinkedIn Corporation, Novell, Inc., Jive Software, Inc.
and BroadVision, Inc. as described herein, Lexington is not currently a party to any legal proceedings.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Corporate Information</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington is headquartered
in New York, New York and was incorporated in Delaware in May 2012. Lexington&rsquo;s principal offices are located at 375 Park
Avenue, 26th Floor, New York, New York 10152 and its telephone number is (888) 862 9249. Lexington&rsquo;s principal website is
<I>www.lex-tg.com</I>. The information on or that can be accessed through Lexington&rsquo;s website is not part of this proxy
statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON&rsquo;S MANAGEMENT&rsquo;S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>This discussion
of Lexington&rsquo;s financial condition and results of operations should be read together with the consolidated financial statements
and notes contained elsewhere in this proxy statement/prospectus. Certain statements in this section and other sections are forward-looking.
While Lexington believes these statements are accurate, its business is dependent on many factors, some of which are discussed
in the sections entitled &ldquo;Risk Factors&rdquo; and &ldquo;Lexington&rsquo;s Business.&rdquo; Many of these factors are beyond
Lexington&rsquo;s control and any of these and other factors could cause actual results to differ materially from the forward-looking
statements made in this proxy statement/prospectus. See the section entitled &ldquo;Risk Factors&rdquo; for further information
regarding these factors. Lexington undertakes no obligation to release publicly the results of any revisions to the statements
contained in this report to reflect events or circumstances that occur subsequent to the date of this proxy statement/prospectus.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Overview and Plan of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington is a recently
formed development stage company and has generated no revenues to date. Lexington&rsquo;s strategic objective is to maximize,
for inventors and investors, the economic benefits of intellectual property assets. Lexington&rsquo;s business model is to leverage
the extensive background and expertise of its management and advisors to acquire or internally develop patents and other intellectual
property assets (or interests therein), and to then monetize these assets through a variety of value-enhancing initiatives, including,
but not limited to, licensing, customized technology solutions, strategic partnerships and litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Since its inception
in May 2012, Lexington has been engaged in the following activities:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">securing initial debt and equity
                                                                   capital from its founding stockholders, including Hudson Bay;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">performing due diligence on,
                                                                   negotiating and completing the purchase of the Bascom Portfolio;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">recruiting management team,
                                                                   board of directors and advisors;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">establishing a physical location
                                                                   from which to operate;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">establishing systems of internal
                                                                   control over financial reporting and implementation of financial
                                                                   operation systems;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">securing subsequent equity
                                                                   capital from private investors;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">developing Lexington&rsquo;s
                                                                   business plan as described herein and planning for future business
                                                                   activities;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">selecting registered independent
                                                                   auditing firm and undertaking an audit of financial statements
                                                                   from inception through June 30, 2012;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">initiating and prosecuting
                                                                   lawsuit against those Lexington believes infringe on the Bascom
                                                                   Portfolio; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">identifying and pursuing general
                                                                   and specific strategic opportunities and engaging in discussions
                                                                   intended to further develop the opportunities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington&rsquo;s
financial operating results for the period from inception through June 30, 2012 reflect some of these activities, which activities
are discussed in further detail in the section of this prospectus captioned &ldquo;Lexington&rsquo;s Business.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington&rsquo;s
plan of operation for the foreseeable future will be to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">continue prosecution of the
                                                                   litigation against five companies, including Facebook, Inc.,
                                                                   LinkedIn Corporation, Novell, Inc., Jive Software, Inc. and
                                                                   BroadVision, Inc., for patent infringement regarding four patents
                                                                   included in the Bascom Portfolio, with a goal of achieving
                                                                   a positive verdict or settlement (including, potentially, a
                                                                   licensing arrangement on terms beneficial to Lexington); and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">&bull;</TD><TD STYLE="text-align: justify">to the extent that time and
                                                                   resources allow, seek strategic opportunities and seek to acquire
                                                                   or internally develop additional intellectual property assets
                                                                   that Lexington will then seek to monetize.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Corporate History</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington was incorporated
under the laws of the state of Delaware on May 10, 2012 under the name Snip Inc. On September 10, 2012, Snip Inc. changed its
name to Lexington Technology Group, Inc. Lexington is a holding company that owns 100% of the membership interests of Bascom Research.
Bascom was incorporated in Virginia on June 6, 2012 under the name of Bascom Linking Intellectual Property, LLC, for the purpose
of acquiring and/or developing patented technologies and intellectual property. On August 29, 2012, Bascom Linking Intellectual
Property, LLC changed its name to Bascom Research, LLC. Bascom Research is the current holder of the Bascom Portfolio, through
which Lexington is prosecuting its initial litigation relating to the Bascom Portfolio and through which Lexington will also seek
to acquire and monetize other intellectual property assets in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 12, 2012,
Lexington completed a financing transaction in which it raised $3,627,486 of gross proceeds upon the issuance of senior notes
(the &ldquo;<B>Notes</B>&rdquo;) together with 16,571,429 shares of common stock and 6,214,286 common stock purchase warrants
(the &ldquo;<B>Warrants</B>&rdquo;). The Notes bear interest at the rate of 0.28% per annum, payable once annually on a stated
principal amount of $3,625,000. The Notes mature on June 12, 2014, at which time Lexington is required to redeem them for a single
balloon payment in the principal $3,625,000 plus any unpaid interest. The Note holders have the right to require Lexington to
redeem the Notes in the event of a change of control or in event of default at a redemption price, pursuant to a formula equal
to the unpaid principal amount and any accrued and unpaid interest. Pursuant to the Note Purchase Agreement, in the event Lexington
completes a subsequent financing transaction, Lexington is obligated to deliver a notice of offer to redeem the principal amount
of the Notes plus accrued and unpaid interest to the note holders. On August 16, 2012, Lexington sold shares of common stock in
a subsequent financing transaction. The Note holders consented to waive the requirements for Lexington to deliver such notice
solely with this specific sale of common stock that occurred on August 16, 2012. The Warrants are exercisable for a period of
seven years from their date of issuance at an exercise price of $0.75 per share. The Note Warrants also feature full ratchet anti-dilution
protection in the event that Lexington issues equity or equity-linked securities at issuance or exercise prices below the exercise
price contained in the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Recent Developments</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 9, 2012, Lexington
completed the purchase of six patents and four pending patent applications from Thomas Bascom pursuant to a Patent Purchase Agreement,
dated as of June 20, 2012, by and between Mr. Bascom and Bascom Research. The patent portfolio relates to technology covering
the data structure used by social and business networking web sites and Web 2.0 corporate intranets. The purchase price for such
patent portfolio was $2.1 million in cash plus a portion of any future cash compensation received by Lexington in consideration
for the sale, licensing and/or enforcement of the acquired patents, subject to certain conditions. In addition, Lexington granted
Mr. Bascom the right to convert any such future cash payments into equity of Lexington at a price to be mutually agreed upon by
Lexington and Mr. Bascom. Such right to convert shall terminate upon the earlier of (1) the business day immediately prior to
the date that Lexington executes a definitive agreement with any other person to complete a public offering of securities, to
become subject to the Securities Exchange Act of 1934, as amended, or the Exchange Act, or the Securities Act or to effect a merger
or other transaction whereby Lexington will become a public company or a direct or indirect subsidiary of a public company or
(2) the business day immediately prior to the date that Lexington or any successor entity or parent company files a registration
statement with respect to any of the foregoing. In connection with such Patent Purchase Agreement, Lexington entered into a license
agreement, dated as of July 9, 2012, with LinkSpace LLC (&ldquo;<B>LinkSpace</B>&rdquo;), a company controlled by Mr. Bascom,
pursuant to which Lexington granted to LinkSpace a royalty-free, perpetual, non-exclusive (without the right to sublicense) worldwide
license under the acquired patents relating to software, products or services designed, made, sold, offered for sale, imported
or distributed by or for LinkSpace or LinkSpace&rsquo;s affiliates (each, a &ldquo;<B>Licensed Product</B>&rdquo;) and any integrated
system that incorporates or includes a Licensed Product and in which system, the Licensed Product would be cited as an essential
element of any infringement contention concerning such system.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 16, 2012,
Lexington entered into an exchange agreement whereby Lexington offered to all of its stockholders a right to exchange up to 99%
of their shares of common stock for the same number of shares of Series A Preferred Stock, $0.0001 par value and provided the
holders of its Warrants the right to elect to exchange the common stock underlying such Warrants for Series A Preferred Stock.
On such date, common stockholders exchanged 13,925,154 shares of common stock for 13,925,154 shares of Series A Preferred Stock.
The exchange did not have any impact on Lexington&rsquo;s consolidated financial statements as the benefit of exchanging the common
stock for the Series A Preferred Stock is nominal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On July 26, 2012,
Lexington sold additional senior notes to a related party for $750,000 in face value bearing interest at the rate of 0.28% per
annum and payable on June 12, 2014. Simultaneously, on the same date, Lexington issued 3,428,571 shares of common stock and warrants
to acquire 1,285,714 shares of common stock at an exercise price of $0.75 per share with a term of seven years. The shares of
the common stock (including the common stock underlying the warrants) are convertible into Series A Preferred Stock at the option
of the holder in accordance with the exchange agreement in place as of July 16, 2012. Such warrants are subject to full ratchet
anti-dilution protection if Lexington sells shares or share-indexed financing instruments at less than the $0.75 exercise price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 9, 2012
all 7,500,000 outstanding warrants were exercised at a price of $0.75 per share for total proceeds of $5,625,000. Lexington issued
4,114,287 shares of Series A Preferred Stock and 3,385,713 shares of common stock upon the exercise of such warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 16, 2012,
Lexington sold 3,617,983 shares of common stock in a private placement to certain investors for $1.50 per share for gross proceeds
of approximately $5,427,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended September 30, 2012, the Company converted $0.9 million of Notes into 625,136 shares of common stock at a conversion price
of $1.50 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 1, 2012,
Lexington entered into an Agreement and Plan of Merger with Document Security Systems, Inc., a New York corporation (&ldquo;<B>DSS</B>&rdquo;),
and DSSIP, Inc., a Delaware corporation and wholly-owned subsidiary of DSS (&ldquo;<B>Merger Sub</B>&rdquo;) and Hudson Bay Master
Fund Ltd., as representative of Lexington&rsquo;s stockholders (&ldquo;<B>Lexington Representative</B>&rdquo;), pursuant to which
Merger Sub will merge with and into Lexington, with Lexington being the surviving corporation and will continue its existence
as a wholly-owned subsidiary of DSS through an exchange of capital stock of Lexington for capital stock of DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Results of Operations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
reflects Lexington&rsquo;s consolidated operating results for the three months ended September 30, 2012 and from May 10, 2012
(Inception) through June 30, 2012 ($ in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Three months</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Period from</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Period from</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">ended</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">May 10, 2012</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">May 10, 2012</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">September 30,</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(inception) through</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(inception) through</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">June 30,2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">September 30,2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 55%; text-align: left; padding-left: 9pt">Officers' compensation</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">375</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">8</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">383</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Legal and professional fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">345</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">165</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">510</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">General and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt">Amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">98</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">98</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Loss from operations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(964</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(173</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,137</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Other expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">435</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">30</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">465</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Change in fair value of warrant liability</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,322</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5,331</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Total other expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">435</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">39</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">474</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Net loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(6,721</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(212</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(6,933</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Operating Expenses</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington is a development
stage corporation with limited operations and did not have revenues for the periods ended September 30, 2012 or June 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Operating expenses
were $0.9 million and $0.2 million for the periods ended September 30, 2012 and June 30, 2012, respectively. Operating expenses
for the period ended June 30, 2012 mainly constituted of legal and professional fees related to start-up related legal costs.
Operating expenses for the period ended September 30, 2012 were primarily related to defending Lexington&rsquo;s patent portfolio
and DSS merger related expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Interest Expense and Amortization of
Note Discount</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Interest expense and
amortization of debt discount was $0.4 million and $0.03 million for the periods ended September 30, 2012 and June 30, 2012, respectively.
Interest expense relates to issuance of $3.6 million and $0.8 million in long-term senior notes on June 12, 2012 and July 26,
2012. The Notes bear interest at the rate of 0.28% per annum, payable once annually on a stated principal amount. The Notes mature
on June 12, 2014 and July 26, 2014, respectively, at which time Lexington is required to redeem them for a single balloon payment
plus any unpaid interest. Contractual interest expense and amortization of debt discount on the Notes amounted to $0.03 million
for the period ended June 30, 2012. During the period ended September 30, 2012, Lexington converted $0.9 million of notes into
625,136 shares of common stock at a conversion price of $1.50 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Change in Fair Value of Warrant Liability
and Exercise of Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Note Warrants
featured &ldquo;full ratchet&rdquo; anti-dilution protection in the event that Lexington issued equity or equity linked
securities at issuance or exercise prices below the exercise price featured in the Note Warrants. Lexington determined that
the Note Warrants were not indexed&nbsp;to its own stock and therefore required liability classification at fair value, On
August 1, 2012, the warrant holders elected to accelerate the expiration date of all the subscription warrants to August 9,
2012. Lexington determined that the fair value of the Note Warrants amounted to an aggregate $0.3 million on their date
of issuance and $5.6 million on the date such warrants were exercised for $5.6 million in cash at an exercise price of $0.75
per share. The increase in fair value of the warrants resulted in a $5.3 million change in fair value of warrant liability
from May 10, 2012 through September 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Critical Accounting Estimates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington&rsquo;s
consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United
States of America. Preparation of these financial statements requires us to make judgments and estimates. Some accounting policies
have a significant impact on amounts reported in these financial statements. A summary of significant accounting policies and
a description of accounting policies that are considered critical may be found in the audited consolidated financial statements
and notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Intangible Assets</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 20,
2012, Bascom entered in to a non-binding patent purchase agreement (&ldquo;PPA&rdquo;) with an unrelated individual to
purchase certain patents and patent applications for a cash consideration of $2.1 million. The transaction was finalized on
July 9, 2012. Amortization is provided using straight-line method over the estimated useful life of five years of the
patents. Amortization expense for these patents and patent applications for the three months ended September 30, 2012, for
the period ended May 10, 2012 (inception) through June 30, 2012 and for the period ended May 10, 2012 (inception) through
September 30, 2012 was approximately $0.1 million, 0 and approximately $0.01 million, respectively. Estimated amortization
expense for each of the next five years through July 2016 is approximately $.4 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company evaluated
the ASC 805 &ldquo;Business Combinations&rdquo; (&ldquo;ASC 805&rdquo;) guidance and determined that the acquisition of patents
and patent applications is considered as asset acquisitions as there were no productive inputs or processes that accompanied the
patents for them to be used in conducting a business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Purchased intangible
assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. If circumstances require an intangible asset to be tested for possible impairment,
the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value.
If the carrying value of the intangible asset is not recoverable on an undiscounted cash flow basis, impairment is recognized
to the extent that the carrying value exceeds its fair value. Fair value is to be determined through various valuation techniques
including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. As
of September 30, 2012 there were no events or changes in circumstances that indicate that the carrying amount of the intangible
assets may not be recoverable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Common Stock Purchase Warrants </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington accounted
for the issuance of common stock purchase warrants issued in connection with capital financing transactions in accordance with
the provisions of ASC 815 &ldquo;Derivative and Hedging&rdquo; (&ldquo;ASC 815&rdquo;). Lexington classifies as equity any contract
that (i)&nbsp;requires physical settlement or net-share settlement or (ii)&nbsp;gives Lexington a choice of net-cash settlement
or settlement in its own shares (physical settlement or net-share settlement). Lexington classifies as assets or liabilities any
contract that (i)&nbsp;requires net-cash settlement (including a requirement to net-cash settle the contract if an event occurs
and if that event is outside of Lexington&rsquo;s control) or (ii)&nbsp;gives the counterparty a choice of net-cash settlement
or settlement in shares (physical settlement or net-share settlement). Lexington also classify as liabilities, any contracts that
contain variable settlement provisions that cannot be measured as explicit or implicit inputs in a standard option pricing model.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Liquidity and Capital Resources</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At September 30, 2012,
cash totaled $12.3 million. Working capital was $9.4 million as of September 30, 2012 primarily due various financing transactions
in which Lexington raised aggregate proceeds of $15.1 million through the issuance of senior notes, common stock and common stock
purchase warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The change in cash for the periods presented
was comprised of the following ($ in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 93%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Three months</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Period from</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Period from</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">ended</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">May 10, 2012</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">May 10, 2012</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">September 30,</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(inception) through</TD><TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">(inception) through</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">June 30,2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">September 30,2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 55%; text-align: left">Net cash used in operating activities</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(662</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">(662</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Cash flow used in investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,175</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,175</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Cash flow provided from financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">11,471</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">3,627</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">15,098</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total cash flow</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">8,634</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">7,254</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">25,184</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Operating Activities</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 38.5pt">During the periods
ended September 30, 2012 and June 30, 2012, Lexington&rsquo;s operating activities consisted of execution of its patent defense
strategy, merger-related legal fees and other general and administrative costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 38.5pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 38.5pt"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Investing Activities</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 38.5pt">During the periods
ended September 30, 2012 and June 30, 2012, Lexington&rsquo;s sole investing activity was the purchase of the Bascom patent portfolio
for approximately $2.2 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 9.9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Financing Activities</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the periods
ended September 30, 2012 and June 30, 2012, Lexington&rsquo;s financing activities consisted of various transactions in which
it raised aggregate proceeds of $15.1 million through the issuance of senior notes, common stock and common stock purchase warrants.
The increase in Lexington&rsquo;s financing activities was primarily attributable to Lexington&rsquo;s requirement to obtain significant
amounts of capital to support its operations prior to the commencement of a revenue stream or other liquidity events. Because
of the nature of Lexington&rsquo;s business, capital is required to support substantial legal costs, as well as, Lexington&rsquo;s
normal operating costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Through the proposed
merger with DSS, Lexington may have access to the combined companies&rsquo; cash resources.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Contractual Obligations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington&rsquo;s
significant commitments and contingencies relates the senior notes of $3.4 million that mature on in June and July of 2014, at
which time Lexington is required to redeem them for a single balloon payment in the principal plus any unpaid interest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Off Balance Sheet Transactions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 38.5pt">Lexington is not
party to any off balance sheet transactions. Lexington has no guarantees or obligations other than those which arise out of normal
business operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Recently Issued Accounting Pronouncements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Lexington does not expect the adoption
of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or
cash flows.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>MANAGEMENT OF THE COMBINED COMPANY FOLLOWING
THE MERGER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Executive Officers and Directors </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Executive Officers and Directors of the Combined Company
Following the Merger </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS board of directors
is currently composed of eight (8) directors. Pursuant to the Merger Agreement, following the completion of the Merger, the board
of directors of the combined company is expected to be composed of nine (9) directors, four (4) of whom are current directors
of DSS and five (5) of whom are designees of Lexington. If DSS&rsquo;s stockholders do not approve the Staggered Board Proposal,
then the board of directors of DSS following the Merger shall initially consist of eight (8) directors, four of whom as designated
by Lexington and the other four as designated by DSS, provided, that, prior to the closing of the Merger, DSS and Lexington will
jointly identify a ninth person to be nominated as a member of the board of directors of DSS following the Effective Time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
lists the names, ages as of November 19, 2012, and positions of the individuals who are expected to serve as executive officers
and directors of the combined company upon completion of the Merger (assuming the Staggered Board Proposal is approved):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 95%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 33%; border-bottom: black 1pt solid; font-weight: bold">Name</TD>
    <TD STYLE="width: 2%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 7%; border-bottom: black 1pt solid; font-weight: bold; text-align: center">Age</TD>
    <TD STYLE="width: 2%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 56%; border-bottom: black 1pt solid; font-weight: bold; text-align: center">Position</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Jeffrey Ronaldi</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">47</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Chief Executive Officer and Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Peter Hardigan</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">37</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Chief Investment Officer and Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Philip Jones</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">43</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Chief Financial Officer</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Robert B. Bzdick</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">57</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Executive Vice President and Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Robert B. Fagenson</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">63</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Warren Hurwitz</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">48</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">Ira A. Greenstein</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">52</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">David Klein</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">48</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">[TO BE NAMED LATER]</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-left: 10pt; text-indent: -10pt">[TO BE NAMED LATER]</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Director</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Jeffrey Ronaldi
</B>has served has Lexington&rsquo;s Chief Executive Officer since November 9, 2012. He also <FONT STYLE="color: black">has served
since July 2011 as Managing Director at HPR Capital, LLC; since January 2008 he has also served as Managing Partner of CTD Group,
LLC and since June 2005, he has served as Managing Director of SSL Services, LLC. From November 2008 to November 2010, he served
as Chief Executive Officer at Turtle Bay Technologies, an intellectual property management firm that provides strategic capital,
asset management services and guidance for intellectual property owners. Since August 2008, Mr. Ronaldi has provided consulting
services to Juridica Investments Ltd., a closed-end investment fund listed on the Alternative Investment Market (AIM) of the London
Stock Exchange.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS believes that
Mr. Ronaldi&rsquo;s experience with Turtle Bay Technologies and management of intellectual property qualifies him to serve on
DSS&rsquo;s board of directors following the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Peter Hardigan
</B>has served as Lexington&rsquo;s Chief Operating Officer and a director since inception. Prior to joining Lexington, from August
2011 to August 2012, Mr. Hardigan was the Chief Financial Officer and Head of Investment Management at IP Navigation Group, LLC
(IPNav), where he was responsible for financial assessment of IPNav portfolio acquisitions. From September 2007 to August 2011,
Mr. Hardigan was Principal at Charles River Associates in New York and Frankfurt, where he represented a range of Fortune 500
Companies and institutional investors involved in IP monetization. Prior to joining Charles River Associates, from February 2005
to September 2007, Mr. Hardigan was a licensing officer at Columbia Technology Ventures, where he was responsible for evaluation,
commercial development and licensing of CTV&rsquo;s life sciences portfolio. Prior to CTV, from April 1999 to July 2003, Mr. Hardigan
was a strategy consultant at Mainspring and IBM Business Consulting Services (following IBM&rsquo;s acquisition of Mainspring)
where he advised Fortune 500 life sciences, financial services, and consumer goods firms, with a focus on portfolio strategy and
business development. Mr. Hardigan holds an MBA from Columbia University and a B.A. from the University of Chicago.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS believes that
Mr. Hardigan&rsquo;s experience and leadership as an executive officer and director of Lexington and experience in intellectual
property monetization qualify him to serve on DSS&rsquo;s board of directors following the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Philip Jones</B>
joined DSS in 2005 as Controller and Principal Accounting Officer and has been DSS&rsquo;s Chief Financial Officer since May 2009.
Mr. Jones also serves as DSS&rsquo;s Vice President of Finance and Treasurer. Prior to joining DSS, Mr. Jones held financial management
positions at Zapata Corporation, a public holding company, and American Fiber Systems, a private telecom company. In addition,
Mr. Jones was a CPA at PriceWaterhouseCoopers and Arthur Andersen. Mr. Jones holds a Bachelor&rsquo;s Degree in Economics from
SUNY Geneseo and an MBA from the Rochester Institute of Technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Robert B. Bzdick
</B>joined DSS on February 17, 2010 as Chief Operating Officer after DSS&rsquo;s acquisition of its wholly-owned subsidiary, Premier
Packaging Corporation, for which Mr. Bzdick was the Chief Executive Officer. Mr. Bzdick became a director of DSS in March 2010.
Prior to founding Premier Packaging Corporation in 1989, Mr. Bzdick held positions of Controller, Sales Manager, and General Sales
Manager at the Rochester, New York division of Boise Cascade, LLC (later Georgia Pacific Corporation). Mr. Bzdick has over 29
years of experience in manufacturing and operations management in the printing and packaging industry.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Bzdick brings
his considerable packaging and printing industry experience to DSS. Mr. Bzdick serves as the Chief Operating Officer of DSS, a
position that will continue to be integral to DSS&rsquo;s growth as it continues to integrate its production and processes between
DSS&rsquo;s printing, paper and packaging facilities. In addition, Mr. Bzdick is involved in business development for DSS&rsquo;s
secure packaging initiatives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Robert B. Fagenson
</B>spent the majority of his career at the New York Stock Exchange, where he was Managing Partner of one of the largest specialist
firms operating on the exchange trading floor. Having sold his firm and subsequently retired from that business in 2007, he has
since been the Chief Executive Officer of Fagenson &amp; Co., Inc., a 50 year old broker dealer that is engaged in institutional
brokerage as well as investment banking and money management. On March 1, 2012, Fagenson &amp; Co., Inc. transferred its brokerage
operations, accounts and personnel to National Securities Corporation and now operates as a branch office of that firm. On April
4, 2012, Mr. Fagenson was elected Chairman of the Board of National Holdings Corporation (OTCBB: NHLD) which is the parent of
National Securities Corporation, a full line broker dealer with offices around the United States.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During his career
as a member of the New York Stock Exchange beginning in 1973, Mr. Fagenson has served as a Governor on the trading floor and was
elected to the NYSE Board of Directors in 1993, where he served for six years, eventually becoming Vice Chairman of the Board
in 1998 and 1999. He returned to the NYSE Board in 2003 and served as a director until the Board was reconstituted with only non-industry
directors in 2004.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Fagenson has previously
served on the boards of a number of public companies and is presently the Non-Executive Chairman of the board of directors of
DSS. He has served as a director for DSS since 2004 and as the board of director&rsquo;s Non-Executive Chairman since 2008. He
is also a member of the board of directors of Cash Technologies Corp., and is also a director of the National Organization of
Investment Professionals (NOIP).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to his
business related activities, Mr. Fagenson serves as Vice President and a director of New York Services for the Handicapped, Treasurer
and director of the Centurion Foundation, Director of the Federal Law Enforcement Officers Association Foundation, Treasurer and
director of the New York City Police Museum and as a member of the Board of the Sports and Arts in Schools Foundation. He is a
member of the alumni boards of both the Whitman School of Business and the Athletic Department at Syracuse University. He also
serves in a voluntary capacity on the boards and committees of many civic, social and community organizations. Mr. Fagenson received
his B.S. degree in Transportation Sciences &amp; Finance from Syracuse University in 1970.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS believes
that Mr. Fagenson's extensive experience in serving on boards of directors and his leadership experience he gained by serving
as Chief Executive Officer of Fagenson &amp; Co., Inc., as well as his extensive knowledge of public company governance
derived from his many years of service on the board of and as vice chairman of The New York Stock Exchange, qualifies him to
serve on DSS&rsquo;s board of directors following the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Warren Hurwitz
</B>has served since March 2005 as a partner of Altitude Capital Partners, a private investment fund that
he co-founded that is focused on investing in, enforcing and protecting the rights of intellectual property assets. Prior to co-founding
Altitude Capital Partners, from May 2001 to June 2004, Mr. Hurwitz was a Senior Vice President at HSBC Capital (USA), the U.S.
private equity arm of HSBC Group. Mr. Hurwitz received his B.A. degree in Economics from the State University of New York at Albany
and his MBA from Fordham University.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS believes that
Mr. Hurwitz&rsquo;s experience with Altitude Capital Partners and the investment, enforcement and protection of intellectual property
rights qualify him to serve on DSS&rsquo;s board of directors following the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Ira A. Greenstein
</B>is President of IDT Corporation (NYSE: IDT), a provider of wholesale and retail telecommunications services. Prior to joining
IDT in January 2000, Mr. Greenstein was a partner in the law firm of Morrison &amp; Foerster LLP from February 1997 to November
1999, where he served as the chairman of the firm&rsquo;s New York Business Department. Concurrent to his tenure at Morrison &amp;
Foerster, Mr. Greenstein served as General Counsel and Secretary of Net2Phone, Inc. from January 1999 to November 1999. Prior
to 1997, Mr. Greenstein was an associate in the New York and Toronto offices of Skadden, Arps, Meagher &amp; Flom LLP. Mr. Greenstein
also served on the Securities Advisory Committee to the Ontario Securities Commission from 1992 through 1996. From 1991 to 1992,
Mr. Greenstein served as counsel to the Ontario Securities Commission. Mr. Greenstein currently serves on the Board of Advisors
of the Columbia Law School Center on Corporate Governance. Mr. Greenstein received a B.S. from Cornell University and a J.D. from
Columbia University Law School. Mr. Greenstein was appointed to DSS&rsquo;s board of directors in September 2004.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Greenstein provides
DSS with significant public company management experience, particularly in regards to legal and corporate governance matters,
mergers and acquisitions, and strategic planning. In addition, Mr. Greenstein&rsquo;s extensive legal experience has provided
DSS insights and guidance throughout DSS&rsquo;s patent litigation initiatives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>David Klein </B>has
served as Senior Vice President, Treasurer of Constellation Brands, Inc., a Delaware corporation, since March 2009. From September
2004 until March 2009, Mr. Klein served in the capacities of Vice President, Business Development and Chief Financial Officer
of Constellation Europe, for Constellation Brands. In his current role, Mr. Klein is responsible for the quantitative management
of risk, improving company-wide cash flow generation and the management of capital structure. Mr. Klein&rsquo;s previous contributions
at Constellation Brands include lead roles in several international acquisitions and divestitures, as well as conceptualizing
and executing Constellation&rsquo;s United Kingdom distribution joint venture. Preceding his tenure at Constellation Brands, Mr.
Klein was Chief Financial Officer at Montana Mills Bread Co., Inc., a Delaware corporation where he was involved with the transformation
from private to public company and the subsequent sale of Montana Mills Bread Co., Inc. to Krispy Kreme Doughnuts Inc. Mr. Klein
joined the DSS Board in April 2012. Mr. Klein holds a Bachelor&rsquo;s Degree in Economics from SUNY Geneseo and an MBA from SUNY
Buffalo.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Klein provides
DSS with experience in the areas of strategic marketing and fiscal planning, and has a proven track record of success in developing
and executing complex and effective corporate strategies during his professional career.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Composition of the Board of Directors and Director Independence
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon completion of
the Merger, the combined company will have a nine (9) member board of directors, comprised of <FONT STYLE="color: black">Robert
B. Fagenson, Ira A. Greenstein, Robert B. Bzdick and David Klein</FONT>, all of whom are currently members of the DSS board of
directors, and <FONT STYLE="color: black">Jeffrey Ronaldi, Peter Hardigan and Warren Hurwitz</FONT>, all of whom are designees
of Lexington, and two<FONT STYLE="color: black"> other directors will be designated by Lexington (reasonably acceptable to DSS)
on or prior to filing of the first amendment to this proxy statement/prospectus. However, if DSS&rsquo;s stockholders do not approve
the Staggered Board Proposal, then the board of directors of DSS following the Merger shall initially consist of eight (8) directors,
four of whom are designated by Lexington and the other four are designated by DSS, as described above, provided that, prior to
closing DSS and Lexington will jointly designate a ninth person to be nominated for a position on the board of directors of DSS
following the Effective Time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If DSS&rsquo;s stockholders
approve the Staggered Board Proposal upon the completion of the Merger, the board of directors of DSS will be divided into three
classes, Class I to be comprised of David Klein, Ira A. Greenstein and Jeffrey Ronaldi, Class II to be comprised of Robert B.
Bzdick, Peter Hardigan and an additional member to be designated by Lexington and Class III to be comprised of Warren Hurwitz,
Robert B. Fagenson and an additional member to be designated by Lexington. The three directors constituting the Class I directors
would serve until the DSS annual meeting of stockholders for 2013; the three directors constituting the Class II directors would
serve until the DSS annual meeting of stockholders for 2014; and the three directors constituting the Class III directors would
serve until the DSS annual meeting of stockholders for 2015. At each annual meeting starting with the first annual meeting in
2013, directors would be elected to succeed those whose terms expire, with each newly elected director to serve for a three-year
term. If DSS&rsquo;s stockholders do not approve the Staggered Board Proposal, then the board of directors of DSS following the
Merger shall initially consist of eight (8) directors, four of whom as designated by Lexington and the other four as designated
by DSS, provided, that, prior to the closing of the Merger, DSS and Lexington will jointly identify a ninth person to be nominated
as a member of the board of directors of DSS following the Effective Time. Approval of the Staggered Board Proposal, however,
is not required to consummate the Merger and the transactions contemplated thereby.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each of Robert B.
Fagenson, Warren Hurwitz, Ira A. Greenstein and David Klein, the directors of the combined company following the completion of
the Merger, will be deemed &ldquo;independent&rdquo; in accordance with the standards set by the NYSE MKT as well as Rule 10A-3
promulgated under the Securities Exchange Act of 1934, as amended, or the Exchange Act. Accordingly, the board of directors of
the combined company will be comprised of a majority of independent directors as required by the NYSE MKT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Committees of the Board of Directors</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">DSS
has established three standing committees: (1) the Audit Committee, (2) the Compensation and Management Resources Committee and
(3) the Nominating and Corporate Governance Committee. Each committee operates under a charter that has been approved by the DSS
board of directors, and which is available on DSS&rsquo;s website at <U>http://www.dsssecure.com</U></FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif">in
the Corporate Governance section. It is expected that the following appointments will be made:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Compensation and Management
Resources Committee: Messrs. Ira A. Greenstein (Chairman), Robert B. Fagenson and [____________].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Audit Committee: Messrs.
David Klein (Chairman), Robert B. Fagenson and Warren Hurwitz.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Nominating and Corporate
Governance Committee: Messrs. Ira A. Greenstein (Chairman), David Klein and [____________].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Audit Committee </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS has separately
designated an Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934. The Audit
Committee is responsible for, among other things, the appointment, compensation, removal and oversight of the work of DSS&rsquo;s
independent registered public accounting firm, overseeing the accounting and financial reporting process of DSS and reviewing
related person transactions. The DSS board of directors has determined that</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Mr. Klein is an &ldquo;audit
committee financial expert&rdquo; as defined in Item 407(d)(5)(ii) of Regulation S-K of the Securities Act of 1933. Each of the
members of this Committee is an independent director (as defined under Section 803 of the NYSE MKT Company Guide).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Compensation and Management Resources
Committee </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The purpose of the
Compensation and Management Resources Committee is to discharge the board of directors&rsquo; responsibilities relating to executive
compensation, succession planning for DSS&rsquo;s executive team, and to review and make recommendations to the board of directors
regarding employee benefit policies and programs, incentive compensation plans and equity-based plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Resources Committee is responsible for, among other things, (a) reviewing all compensation arrangements for the executive
officers of DSS and (b) administering DSS&rsquo;s stock option plans. Each of the members of the Compensation and Management Resources
Committee is an independent director (as defined under Section 803 of the NYSE MKT Company Guide).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The duties and responsibilities
of the Compensation and Management Resources Committee in accordance with its charter are to review and discuss with management
and the board of directors objectives, philosophy, structure, cost and administration of DSS&rsquo;s executive compensation and
employee benefit policies and programs; no less than annually, review and approve, with respect to the Chief Executive Officer
and the other executive officers (a) all elements of compensation, (b) incentive targets, (c) any employment agreements, severance
agreements and change in control agreements or provisions, in each case as, when and if appropriate, and (d) any special or supplemental
benefits; make recommendations to the board of directors with respect to DSS&rsquo;s major long-term incentive plans, applicable
to directors, executives and/or non-executive employees and consultants of DSS and approve (a) individual annual or periodic equity-based
awards for the Chief Executive Officer and other executive officers and (b) an annual pool of awards for other employees with
guidelines for the administration and allocation of such awards; recommend to the board of directors for its approval a succession
plan for the Chief Executive Officer, addressing the policies and principles for selecting a successor to the Chief Executive
Officer, both in an emergency situation and in the ordinary course of business; review programs created and maintained by management
for the development and succession of other executive officers and any other individuals identified by management or the Compensation
and Management Resources Committee; review the establishment, amendment and termination of employee benefits plans, review employee
benefit plan operations and administration; and any other duties or responsibilities expressly delegated to the Compensation and
Management Resources Committee by the board of directors from time to time relating to the Committee&rsquo;s purpose.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Resources Committee may request any officer or employee of DSS or DSS&rsquo;s outside counsel to attend a meeting of
the Compensation and Management Resources Committee or to meet with any members of, or consultants to, the Compensation and Management
Resources Committee. DSS&rsquo;s Chief Executive Officer does not attend any portion of a meeting where the Chief Executive Officer&rsquo;s
performance or compensation is discussed, unless specifically invited by the Compensation and Management Resources Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Compensation and
Management Resources Committee has the sole authority to retain and terminate any compensation consultant to be used to assist
in the evaluation of director, Chief Executive Officer or other executive officer compensation or employee benefit plans, and
shall have sole authority to approve the consultant&rsquo;s fees and other retention terms. The Compensation and Management Resources
Committee also has the authority to obtain advice and assistance from internal or external legal, accounting or other experts,
advisors and consultants to assist in carrying out its duties and responsibilities, and has the authority to retain and approve
the fees and other retention terms for any external experts, advisors or consultants.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Nominating and Corporate
Governance Committee </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 13.85pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Nominating and
Corporate Governance Committee is responsible for overseeing the appropriate and effective governance of DSS, including, among
other things, (a) nominations to the board of directors and making recommendations regarding the size and composition of the board
of directors and (b) the development and recommendation of appropriate corporate governance principles. Each of the members of
this Committee is an independent director (as defined under Section 803 of the NYSE MKT Company Guide). The Nominating and Corporate
Governance Committee does not have a formal policy that requires it to consider any director candidates that might be recommended
by stockholders, but adheres to DSS&rsquo;s bylaws provisions and the SEC rules relating to proposals by stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Board Leadership Structure and
Risk Oversight</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Currently, the positions
of Chief Executive Officer and Chairman of the board of directors are held by two different individuals. Robert B. Fagenson currently
serves as Chairman of the board of directors and Patrick A. White currently serves as Chief Executive Officer of DSS and as a
member of the board of directors (until December 1, 2012). Although no formal policy currently exists, the board of directors
determined that the separation of these positions would allow the Chief Executive Officer to devote his time to the daily execution
of DSS&rsquo;s business strategies and Mr. Fagenson to devote his time to the long-term strategic direction of DSS. DSS&rsquo;s
senior management manages the risks facing DSS under the oversight and supervision of the board of directors. While the full board
of directors is ultimately responsible for risk oversight at DSS, two of DSS&rsquo;s board of directors committees assist the
board of directors in fulfilling its oversight function in certain areas of risk. The Audit Committee assists the board of directors
in fulfilling its oversight responsibilities with respect to risk in the areas of financial reporting and internal controls. The
Nominating and Corporate Governance Committee assists the board of directors in fulfilling its oversight responsibilities with
respect to risk in the area of corporate governance. Other general business risks such as economic and regulatory risks are monitored
by the full board of directors. While the board of directors oversees DSS&rsquo;s risk management, management is responsible for
day-to-day oversight of risk management processes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Compensation Risk Assessment</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s Compensation
and Management Resources Committee considered whether DSS&rsquo;s compensation program encouraged excessive risk taking by employees
at the expense of long-term value. Based upon its assessment, the Compensation and Management Resources Committee does not believe
that DSS&rsquo;s compensation program encourages excessive or inappropriate risk-taking. The Compensation and Management Resources
Committee believes that the design of DSS&rsquo;s compensation program does not motivate imprudent risk-taking.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Code of Ethics</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS has adopted a
code of Ethics that establishes the standards of ethical conduct applicable to all directors, officers and employees of DSS. A
copy of the Code of Ethics covering all of DSS&rsquo;s employees, directors and officers, is available on the Investors/Corporate
Governance section of DSS&rsquo;s website at <I>www.dsssecure.com</I>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Section 16(a) Beneficial Ownership
Reporting Compliance </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Section 16(a) of the
Exchange Act requires DSS&rsquo;s executive officers and directors, and persons who beneficially own more than ten percent of
our equity securities (&ldquo;<B>Reporting Persons</B>&rdquo;) to file reports of ownership and changes in ownership with the
SEC. Based solely on DSS&rsquo;s review of copies of such reports and representations from the Reporting Persons, DSS believes
that during the fiscal year ended December 31, 2011, all Reporting Persons were in compliance with the applicable requirements
of Section 16(a) of the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Related Person Transactions </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>DSS</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 29, 2011,
DSS used proceeds received from a commercial term note entered into with lender Neil Neuman to pay in full all sums owed under
a credit agreement dated January 4, 2008, between DSS and Fagenson &amp; Co., Inc. (&ldquo;<B>Fagenson &amp; Co.</B>&rdquo;),
as agent for certain lenders. The Fagenson &amp; Co. credit agreement was terminated in its entirety on June 29, 2011 and DSS
has no further obligations thereunder. Director Robert B. Fagenson was a principal of Fagenson &amp; Co.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 22, 2011,
DSS entered into a consulting agreement with Alan Harrison, a then member of DSS&rsquo;s board of directors, for consulting services
with respect to Secuprint Inc., a wholly-owned subsidiary of DSS. Mr. Harrison received a consulting fee of $9,000 per month during
the term of the agreement which expired on December 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Robert B. Bzdick,
who serves as both a director of DSS and as DSS&rsquo;s Chief Operating Officer, is a member of Bzdick Properties, LLC. On August
30, 2011, Premier Packaging Corporation (&ldquo;<B>PPC</B>&rdquo;), a wholly-owned subsidiary of DSS, entered into a purchase
and sale agreement with Bzdick Properties, LLC, a New York limited liability company (&ldquo;<B>Bzdick Properties</B>&rdquo;),
to purchase commercial real property in Victor, New York, for $1.5 million. The purchase price included a $150,000 subordinated
promissory note from DSS to Bzdick Properties. Prior to the purchase, and since February 2010, PPC leased the property from Bzdick
Properties under a lease at a rate of $13,333 per month. The promissory note to Bzdick Properties accrued interest at a rate of
9.5% per annum and matured on March 31, 2012, at which time the promissory note was paid-off in full, and Bzdick Properties was
paid $150,000. Robert B. Bzdick, a director and Chief Operating Officer of DSS, is a member of Bzdick Properties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 20, 2012,
DSS and ipCapital Group, Inc., a Delaware corporation (&ldquo;<B>ipCapital</B>&rdquo;), entered into an engagement letter for
the provision of certain IP strategic consulting services by ipCapital. Fees payable for consulting services will range from $240,000
to $365,000 for the 2012 calendar year. In addition to cash fees, DSS issued ipCapital a five-year warrant to purchase up to 100,000
shares of DSS Common Stock at an exercise price of $4.62 per share. Also, on February 20, 2012, DSS entered into a three-year
consulting arrangement with ipCapital for strategic advice on the development of DSS&rsquo;s digital group infrastructure and
cloud computing business strategy and issued ipCapital a five-year warrant to purchase up to 200,000 shares of DSS Common Stock
at an exercise price of $4.50 per share in consideration therefor. The warrants vest and become exercisable as to one-third of
the shares subject to the warrants on the first, second and third anniversary of the date of issuance. John Cronin, a director
of DSS, is Chairman, Managing Director and a 42% owner of ipCapital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Lexington</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Hudson Bay is the
principal stockholder of Lexington and holds significant control rights with respect to the management of its business and assets.
On June 12, 2012, Lexington consummated a private placement transaction with Hudson Bay whereby Hudson Bay purchased Senior Secured
Notes of Lexington in the aggregate principal amount of $1,500,000 as well as 10,514,386 shares of Lexington&rsquo;s common and
warrants to purchase 3,942,858 shares of common stock for $1,577.14. On July 16, 2012, 10,409,242 of such shares of common stock
were exchanged for 10,409,242 shares of Series A Convertible Preferred Stock pursuant to an exchange agreement dated as of July
16, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The shares of Series
A Preferred may be converted into shares of Lexington Common Stock. The conversion formula is subject to adjustments and anti-dilution
protections, including but not limited to, adjusting the conversion price to account for the issuance of additional securities
by Lexington below the existing conversion price and for stock splits, stock dividends and recapitalizations of Lexington&rsquo;s
capital stock. The holders of the Series A Preferred are entitled to vote the shares of Series A Preferred on an as converted
basis, giving Hudson Bay effective control over Lexington, and as the Series A Preferred holder, Hudson Bay is entitled to vote
together with the holders of the common stock as a single class on all matters. As the holder of Series A Preferred, Hudson Bay
also has the right to vote separately as a class to elect a majority of Lexington&rsquo;s board of directors and the terms of
the Series A Preferred restricts Lexington from performing certain actions without the prior consent of Hudson Bay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At Hudson Bay&rsquo;s
option, the shares of the Series A Preferred are also subject to redemption upon certain triggering events such as (i) Lexington&rsquo;s
failure or refusal to convert the Series A Preferred into shares of common stock, (ii) Lexington&rsquo;s failure to have a sufficient
number of authorized shares of common stock reserved for conversion of the Series A Preferred, (iii) any default, redemption or
acceleration of any indebtedness of Lexington or its subsidiaries, (iv) Lexington voluntarily commences a bankruptcy proceeding
on Lexington&rsquo;s behalf, Lexington consents to involuntary bankruptcy, appointment of a receiver, trustee, assignee, liquidator
or similar official for bankruptcy purposes, a general assignment for the benefit of creditors or admit in writing that Lexington
is generally unable to pay its debts as they become due, or (v) a judgment against Lexington in an amount in excess of $250,000.
In addition, pursuant to the terms of the Series A Preferred, Lexington&rsquo;s board of directors must obtain written approval
from Hudson Bay to issue any capital stock superior, pari-passu or junior in rank to the Series A Preferred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to its terms,
the Senior Secured Note matures on June 12, 2014 and accrues interest at a rate of 0.28%, with interest being payable on the first
calendar day of each quarter after the issuance date. In the event of default, the interest rate will increase to 10%. The Senior
Secured Note is also subject to redemption rights, whereby upon the occurrence of an event of default or a change in control of
Lexington, Hudson Bay may request redemption of the Senior Secured Note in cash at a price equal to 100% of the then outstanding
principal and accrued interest under the Senior Secured Note. The Senior Secured Note ranks senior to all outstanding and future
indebtedness of Lexington and is secured by a first priority perfected security interest in all of Lexington and its subsidiaries&rsquo;
assets (including the Bascom Portfolio).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Director Compensation </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">It is currently expected
that the non-employee director compensation will be reviewed by the Compensation and Management Resources Committee of the board
of directors of the combined company following the completion of the Merger and may be subject to change.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Director Compensation Table: Combined
Company Directors from DSS</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth cash compensation and the value of stock options awards granted to DSS&rsquo;s non-employee directors who will continue
as directors for the combined company for their service in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 85%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">Name</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Fees Earned or<BR> Paid in Cash</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Stock<BR> Awards</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><B>Option<BR> Awards<SUP>(1)</SUP></B></TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Total</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">($)</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">($)</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">($)</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">($)</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-align: left; text-indent: -10pt; padding-left: 10pt">Robert B. Fagenson</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">36,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">&mdash;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">21,200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">57,200</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Ira A. Greenstein</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">21,200</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">33,200</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">David Klein<B><SUP>(2)</SUP></B></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.7pt; color: Red"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.7pt; color: Red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.7pt; color: Red">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 2%">(1)</TD>
    <TD STYLE="width: 97%">Represents the total grant date fair value of option awards computed in accordance with FASB ASC 718.
    DSS&rsquo;s policy and assumptions made in the valuation of share-based payments are contained in Note 7 to DSS&rsquo;s financial
    statements for the year ended December 31, 2011.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>(2)</TD>
    <TD>Mr. Klein was appointed as a director of DSS on June 14, 2012.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Director Compensation Table: Combined
Company Directors from Lexington</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The directors of Lexington
that will continue as directors of the combined company did not receive any compensation from Lexington during the fiscal year
2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Executive Compensation </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Summary Compensation Table </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth the compensation earned by DSS&rsquo;s Chief Executive Officer and its two other most highly compensated executive
officers who were serving at the end of 2011, referred to herein collectively as the &ldquo;named executive officers&rdquo; for
services rendered to DSS for the years ended December 31, 2011 and 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 98%; border-collapse: collapse">
<TR STYLE="vertical-align: top; font-size: 10pt">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Name
    and <BR>
    Principal<BR>
    Position</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Year</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Salary</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Bonus</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Stock<BR>
    Awards</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Option<BR>
    Awards<SUP>(1)</SUP></B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>All
    Other</B></FONT><BR>
    <FONT STYLE="font-size: 10pt"><B>Compensation<SUP>(2)</SUP></B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom; font-size: 10pt"><FONT STYLE="font-size: 10pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; font-size: 10pt">
    <TD STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">($)</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">($)</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">($)</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">($)</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">($)</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">($)</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="width: 24%; font-size: 10pt"><FONT STYLE="font-size: 10pt">Patrick A. White,<BR> </FONT></TD>
    <TD STYLE="width: 2%; text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%; text-align: center; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">2011</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">198,450</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">12,000</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">39,000</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">14,688</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">249,450</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Chief Executive Officer <SUP>(3)</SUP>&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">2010</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">198,630</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">16,599</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">211,365</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White; font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Philip Jones<BR> </FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">2011</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">120,000</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">30,000</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">150,000</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Chief Financial Officer&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">2010</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">120,000</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">164,600</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">284,600</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White; font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Robert B. Bzdick</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">2011</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">240,000</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">33,270</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">19,324</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">292,594</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Chief Operating Officer</FONT></TD>
    <TD STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">2010</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">205,500</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">14,076</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">219,576</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: top; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">(1)</TD>
    <TD STYLE="width: 97%">Represents the total grant date fair value of option awards computed in accordance with FASB ASC 718.
    DSS&rsquo;s policy and assumptions made in the valuation of share-based payments are contained in Note 7 to DSS&rsquo;s financial
    statements for the year ended December 31, 2011.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">(2)</TD>
    <TD STYLE="width: 97%">Includes health insurance premiums and automobile expenses paid by DSS.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(3)</TD>
    <TD>Effective December 1, 2012, Mr. White&rsquo;s employment with DSS was terminated and he will continue to serve as a consultant
    of DSS.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Narrative Disclosure to Summary Compensation Table</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Patrick A. White
Employment Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 10, 2004,
DSS entered into a five-year employment agreement with Patrick A. White to serve as DSS&rsquo;s Chief Executive Officer. The agreement
automatically renews for successive one-year terms unless either party gives notice to the other at least 60 days prior to the
expiration of the then current term of its desire to terminate the agreement. Under the agreement, Mr. White was entitled to an
initial annual base salary of $150,000, with automatic increases of not less than 10% per year. Mr. White also was granted a five
year option to purchase 30,000 shares of DSS Common Stock which expired unexercised in June 2009. In the event that Mr. White
is terminated without cause, or his duties are materially changed without his consent or there is a change of control of DSS,
he will be entitled to 18 months&rsquo; salary. The agreement also contains a non-competition provision made by Mr. White in favor
of DSS for a period of one year following termination or during any applicable severance period, up to 18 months. Mr. White waived
his annual salary increases in each of 2008, 2009, 2010 and 2011. On July 1, 2011, Mr. White was granted a five year option to
purchase 30,000 shares of DSS Common Stock, at an exercise price of $3.50 per share, which vests as to one-third of the shares
subject to the option in equal installments on each of July 1, 2012, 2013 and 2014. On April 11, 2012, DSS entered into a letter
agreement with Mr. White which extended the term of his employment, under the same terms and conditions as his original agreement.
Mr. White currently earns an annual base salary of $200,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS and Mr. White
entered into a First Amendment to his employment agreement, effective as of October 1, 2012 (the &ldquo;<B>White Amendment</B>&rdquo;),
which amended certain terms and provisions of the employment agreement. The White Amendment provides that, among other things,
Mr. White&rsquo;s employment term will continue, unless otherwise terminated as provided in the employment agreement, until the
later of (i) December 31, 2012, or (ii) the closing date, termination or expiration of the Merger. Additionally, the White Amendment
amended the employment agreement in order to comply with the requirements of Section 409A of the Internal Revenue Code of 1986,
as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Furthermore, in conjunction
with the termination of Mr. White&rsquo;s employment as the Chief Executive Officer of the DSS, effective December 1, 2012, DSS
and Mr. White entered into an Amended Consulting Agreement (the &ldquo;<B>White Amended Consulting Agreement</B>&rdquo;) and a
Confidentiality, Non-Competition, Non-Solicitation and Intellectual Property Agreement (the &ldquo;<B>White Confidentiality and
Non-Compete Agreement</B>&rdquo;), both dated November 15, 2012, and both having an effective date of December 1, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The White
Amended Consulting Agreement replaces a consulting agreement previously entered into between DSS and White, dated October 1,
2012. The term of the White Amended Consulting Agreement will commence on December 1, 2012 continue until March 1, 2015.
Pursuant to the White Amended Consulting Agreement, Mr. White will provide consulting services to DSS as requested by the
DSS&rsquo;s Chief Executive Officer, up to a maximum of 60 hours per month. As consideration for the performance of the
consulting services, Mr. White shall be paid the sum of $14,166.67 per month for the 15 month period commencing from December
1, 2012 through February 28, 2014 and, thereafter, Mr. White will be paid the sum of $11,666.67 per month for the remaining
12 months of the consulting term. In addition to the above-described monthly payments, White will be paid a bonus of $40,000
on or before December 7, 2012 and, on September 21, 2012, Mr. White was granted options to acquire 50,000 shares of DSS
Common Stock at an exercise price of $4.26 per share. On November 19, 2012, DSS cancelled Mr. White&rsquo;s September 21,
2012 options grant, and reissued him options to acquire 50,000 shares of DSS Common Stock at an exercise price of $3.00 per
share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the White Confidentiality
and Non-Compete Agreement, Mr. White has agreed, among other things, not to (i) disclose certain Confidential Information (as
defined in the White Confidentiality and Non-Compete Agreement) related to DSS; (ii) while engaged with DSS, and for a period
of one year from and after the termination of the White Amended Consulting Agreement, engage in certain competitive activities
relating to DSS&rsquo;s business (as defined in the White Confidentiality and Non-Compete Agreement); or (iii)(a) solicit any
Customer (as defined in the White Confidentiality and Non-Compete Agreement) of DSS that has purchased or licensed the DSS&rsquo;s
intellectual property, products or services, (b) solicit any employee of DSS to become an employee of any other business or business
entity, or (c) at any time without DSS&rsquo;s prior written consent, discuss, publish or otherwise divulge any Confidential Information..</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Robert B. Bzdick
Employment Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 12, 2010,
DSS entered into a five-year employment agreement with Robert B. Bzdick to serve as Chief Operating Officer of DSS. The agreement
automatically renews for a successive five-year term unless either party gives notice to the other at least 90 days prior to the
expiration of the then current term of its desire to terminate the agreement. Under the agreement, Mr. Bzdick is entitled to an
annual base salary of $240,000 and an annual bonus of 10% of the adjusted net income of the DSS&rsquo;s packaging division. If
DSS elects not to renew the agreement for an additional five years for any reason except for cause, DSS will be obligated to pay
Mr. Bzdick $100,000 per year and health insurance premiums for Mr. Bzdick and his family for five years. The agreement also provides
for non-competition covenants by Mr. Bzdick in favor of DSS for the longer of (i) one year after the term of employment, or (ii)
any period during which Mr. Bzdick receives severance payments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October
1, 2012, DSS and Mr. Bzdick entered into Amendment No. 1 to his employment agreement (the &ldquo;<B>Bzdick
Amendment</B>&rdquo;) which amended certain terms and provisions of his employment agreement (as amended, the
&ldquo;<B>Bzdick Employment Agreement</B>&rdquo;). The Bzdick Amendment will be effective on the date of the consummation of
the Merger. Pursuant to the Bzdick Amendment, among other things, (i) the term of the Bzdick Employment Agreement is reduced
from February 12, 2015 to December 31, 2014, which agreement shall be renewed automatically for a succeeding period of five
years on the same terms and conditions as set forth therein, unless either party, at least 90 days prior to the expiration of
the term of the Bzdick Employment Agreement, provides written notice to the other party of its intention not to renew the
Bzdick Employment Agreement; (ii) if DSS elects not to renew the initial term of the Bzdick Employment Agreement, DSS will
pay Mr. Bzdick $300,000, which shall be payable as follows: $100,000 on the first anniversary of such non-renewal, and
$50,000 on each of the second through fifth anniversaries after such non-renewal; and (iii) Mr. Bzdick&rsquo;s salary is
decreased from $240,000 to $200,000. Upon the consummation of the Merger, DSS will pay to Mr. Bzdick a bonus equal to $50,000
and on September 21, 2012, DSS granted options to Mr. Bzdick to acquire 150,000 shares of DSS common stock at an exercise
price of $4.26 per share, which options will vest in full upon the consummation of the Merger. On November 19, 2012, DSS
cancelled Mr. Bzdick&rsquo;s September 21, 2012 options grant, and reissued him options to purchase 150,000 shares of DSS
common stock at an exercise price of $3.00 per share, which options will vest in full upon the consummation of the Merger. In
addition, DSS granted Mr. Bzdick options to purchase an additional 100,000 shares of DSS common stock at an exercise price
of $3.00 per share, which will vest ratably over 12 calendar quarters. That grant occurred on November 19, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon
consummation of the Merger, Mr. Bzdick will be permitted to sell up to 300,000 shares of DSS common stock that he currently
owns, pursuant to a 10b5-1 plan previously approved by DSS&rsquo;s board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Executive Compensation Table: Combined Company Executive
Officers from DSS</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth cash compensation and the value of stock options awards granted to DSS&rsquo;s executive officers that will continue
as executive officers of the combined company for their service in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>Name
    and <BR>
    Principal <BR>
    Position</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>Year</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>Salary</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>Bonus</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>Stock<BR>
    Awards</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>Option<BR>
    Awards <SUP>(1)</SUP></B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>All
    Other<BR>
    Compensation</B></FONT></TD>
    <TD NOWRAP STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" NOWRAP STYLE="border-bottom: black 1pt solid; font-weight: bold; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt"><B>Total</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center"><FONT STYLE="font-size: 9pt">($)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center"><FONT STYLE="font-size: 9pt">($)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center"><FONT STYLE="font-size: 9pt">($)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center"><FONT STYLE="font-size: 9pt">($)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center"><FONT STYLE="font-size: 9pt">($) <SUP>(2)</SUP></FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD COLSPAN="3" STYLE="text-align: center"><FONT STYLE="font-size: 9pt">($)</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 22%; text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">Philip Jones</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%; text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt">2011</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">120,000</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 7%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">30,000</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 2%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">150,000</FONT></TD>
    <TD STYLE="width: 1%; text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>Chief Financial
    Officer</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">2010</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">120,000</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">164,600</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">284,600</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; vertical-align: bottom"><FONT STYLE="font-size: 9pt">Robert B. Bzdick</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; vertical-align: bottom"><FONT STYLE="font-size: 9pt">2011</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">240,000</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">33,270</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">19,324</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">292,594</FONT></TD>
    <TD STYLE="text-align: right; vertical-align: bottom"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>Chief Operating Officer</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">2010</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">205,500</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">&mdash;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">14,076</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 9pt">219,576</FONT></TD>
    <TD><FONT STYLE="font-size: 9pt">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">(1)</TD>
    <TD STYLE="width: 97%">Represents the total grant date fair value of option awards computed in accordance with FASB ASC 718.
    DSS&rsquo;s policy and assumptions made in the valuation of share-based payments are contained in Note 7 to DSS&rsquo;s financial
    statements for the year ended December 31, 2011.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 3%">(2)</TD>
    <TD STYLE="width: 97%">Includes health insurance premiums and automobile expenses paid by DSS.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>



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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following are
summaries of the material terms of the employment agreements of Philip Jones and Robert B. Bzdick with DSS that will be in effective
upon the consummation of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Philip Jones</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On October 1, 2012, DSS and
Philip Jones, Chief Financial Officer of DSS, entered into a letter agreement (the &ldquo;<B>Jones Letter
Agreement</B>&rdquo;) and a Confidentiality, Non-Competition, Non-Solicitation and Intellectual Property Agreement (the
&ldquo;<B>Jones Confidentiality and Non-Compete Agreement</B>&rdquo;), both of which will be effective on the date of the
consummation of the Merger. Under the Jones Letter Agreement, upon termination of Mr. Jones&rsquo;s employment for any reason
by DSS, DSS will pay Mr. Jones (or, in the case of his death, his estate) (i) any unpaid base salary earned through the date
of termination payable when otherwise due in accordance with DSS&rsquo;s regular payroll practices and any accrued but unused
vacation in accordance with DSS&rsquo;s policy; (ii) any unreimbursed expenses incurred through the date of termination; and
(iii) all other payments, benefits or fringe benefits to which Mr. Jones may be entitled. In the event Mr. Jones&rsquo;s
employment with DSS is terminated by DSS without Cause (as defined in the Jones Letter Agreement), or by Mr. Jones for Good
Reason (as defined in the Jones Letter Agreement), and provided Mr. Jones executes a customary general release, DSS will pay
to Mr. Jones, (1) his current base salary following the date of his termination, payable in equal biweekly installments in
accordance with DSS&rsquo;s regular payroll practices, for an additional 12 months; and (2) certain medical benefits premiums
pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (&ldquo;<B>COBRA</B>&rdquo;), for the
first twelve months of such COBRA coverage. On November 19, 2012, DSS granted Mr. Jones options to acquire 100,000 shares of
DSS common stock at an exercise price of $3.00 per share, to vest ratably over 12 calendar quarters. The November 19, 2012
grant replaces an options grant previously made to Jones on September 21, 2012, pursuant to which Mr. Jones was granted
options to acquire 25,000 shares of DSS common stock at an exercise price of $4.26 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Under the Jones Confidentiality and Non-Compete
Agreement, Mr.&nbsp;Jones has agreed, among other things, not to (i)&nbsp;disclose certain Confidential Information (as defined
in the Jones Confidentiality and Non-Compete Agreement) related to DSS; (ii)&nbsp;while engaged with DSS, and for a period of
one year from and after the date of termination of engagement with DSS, engage in certain competitive activities relating to the
development of software and/or cloud computing solutions in the areas of brand protection, secure printing solutions and redaction
software solutions, or relating to anti-counterfeiting or authentication technologies, in any geographical area in which DSS or
any of its subsidiaries marketed such products, technologies or services; or (iii)(a) solicit any Customer (as defined in the
Jones Confidentiality and Non-Compete Agreement) of DSS that has purchased or licensed DSS&rsquo;s intellectual property, products
or services, (b) solicit any employee of DSS to become an employee of any other business or business entity, or (c) at any time
without DSS&rsquo;s prior written consent, discuss, publish or otherwise divulge any confidential information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Robert B. Bzdick</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">On
October 1, 2012, </FONT>DSS and Robert B. Bzdick, Chief Operating Officer of DSS, entered into Amendment No. 1 to Employment Agreement
(the &ldquo;<B>Bzdick Amendment</B>&rdquo;) which amended certain terms and provisions of his Employment Agreement, effective
as of February 12, 2010, (as amended, the &ldquo;<B>Bzdick Employment Agreement</B>&rdquo;). The Bzdick Amendment will be effective
on the date of the consummation of the Merger. Pursuant to the Bzdick Amendment, among other things, (i) the term of the Bzdick
Employment Agreement is reduced from February 12, 2015 to December 31, 2014, which agreement shall be renewed automatically for
a succeeding period of five years on the same terms and conditions as set forth therein, unless either party, at least 90 days
prior to the expiration of the term of the Bzdick Employment Agreement, provides written notice to the other party of its intention
not to renew the Bzdick Employment Agreement; (ii) if DSS elects not to renew the initial term of the Bzdick Employment Agreement,
DSS will pay Mr. Bzdick $300,000, which shall be payable as follows: $100,000 on the first anniversary of such non-renewal, and
$50,000 on each of the second through fifth anniversaries after such non-renewal; and (iii) Mr. Bzdick&rsquo;s salary is decreased
from $240,000 to $200,000. Upon the consummation of the Merger, DSS will pay to Mr. Bzdick a bonus equal to $50,000 and on September
21, 2012, DSS granted options to Mr. Bzdick to acquire 150,000 shares of DSS common stock at an exercise price of $4.26 per share,
which options will vest in full upon the consummation of the Merger. Upon consummation of the Merger, Mr. Bzdick will be permitted
to sell up to 300,000 shares of DSS common stock pursuant to a 10b5-1 plan approved by the DSS&rsquo;s board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November
19, 2012, DSS cancelled Mr. Bzdick&rsquo;s September 21, 2012 options grant, and reissued him options to purchase 150,000
shares of DSS common stock at an exercise price of $3.00 per share, which options will vest in full upon consummation of the
Merger. In addition, on November 19, 2012, DSS granted Mr. Bzdick options to purchase an additional 100,000 shares of DSS
common stock at an exercise price of $3.00 per share, which will vest ratably over 12 calendar quarters.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Executive Compensation: Combined Company Executive Officers
from Lexington</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The executive officers
of Lexington that will continue as executive officers of the combined company did not receive any compensation from Lexington
during the fiscal year 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following are
summaries of the material terms of the existing employment agreements of <FONT STYLE="color: black">Jeffrey Ronaldi</FONT> and
Peter Hardigan with Lexington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Jeffrey Ronaldi Employment Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 20,
2012, Lexington entered into an employment agreement with Jeffrey Ronaldi, Lexington&rsquo;s Chief Executive Officer (the &ldquo;<B>Ronaldi
Agreement</B>&rdquo;). The Ronaldi Agreement has an initial term of three years, commencing on November 9, 2012, and is automatically
renewable for additional consecutive one year terms, unless at least ninety days written notice is given by either Lexington or
Mr.&nbsp;Ronaldi prior to the commencement of the next renewal term.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Ronaldi Agreement
provides for an annual base salary of $350,000, effective November&nbsp;9, 2012 and an annual discretionary bonus of at least
20% of Mr. Ronaldi&rsquo;s base salary, based upon Mr. Ronaldi&rsquo;s and Lexington&rsquo;s achievement of annual performance
objectives, as determined by the board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon commencement
of the Ronaldi Agreement, Lexington will grant to Mr. Ronaldi 100,000 shares of its common stock, vesting immediately. Lexington
will also grant to Mr. Ronaldi a non-statutory option to purchase up to 1,800,000 shares of its common stock, at an exercise price
of $1.67 per share. One half of the option shall vest in 12 equal quarterly tranches, beginning February 15, 2013 and on each
May 15, August 15, November 15 and February 15 thereafter through November 15, 2015. Vesting of the remaining one half of the
option shall not commence unless and until the Merger is completed. Following the completion of the Merger, the remaining one
half of the options shall vest in 12 equal tranches, with a tranche to vest on the last day of each calendar quarter commencing
on the last day of the calendar quarter in which the Merger is completed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Ronaldi Agreement
also provides for Mr. Ronaldi&rsquo;s participation in all benefit programs Lexington establishes and makes available to its executive
employees, and for reimbursement to Mr. Ronaldi for reasonable travel, entertainment, mileage and other business expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Ronaldi Agreement
is terminable by Lexington for cause or upon thirty days prior written notice without cause, and terminable at Mr.&nbsp;Ronaldi&rsquo;s
election upon thirty days prior written notice. If Lexington terminates Mr.&nbsp;Ronaldi without cause, then Lexington will pay
Mr.&nbsp;Ronaldi: (i)&nbsp;a lump sum amount equal to his base salary for the balance of the then-remaining term of the Ronaldi
Agreement, but no less than six months&rsquo; base salary (ii) Lexington&rsquo;s share of the cost of health insurance coverage
pursuant to COBRA for the then-remaining term of the Ronaldi Agreement and (iii) reimbursement of business expenses incurred by
Mr. Ronaldi prior to termination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Ronaldi Agreement
also includes certain confidentiality, non-compete and non-solicitation provisions effective for a period of twelve months following
the termination of Mr.&nbsp;Ronaldi&rsquo;s employment with Lexington.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Peter Hardigan Employment Agreement</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On November 20,
2012, Lexington entered into an amended employment agreement with Peter Hardigan (the <B>&ldquo;Amended Hardigan Agreement</B>&rdquo;).
The Amended Hardigan Agreement expressly supersedes the terms of the previous employment agreement, dated August 7, 2012, between
Lexington and Mr. Hardigan. The Amended Hardigan Agreement has an initial term of one year, commencing on August 1, 2012, and
is automatically renewable for additional consecutive one year terms, unless at least ninety days written notice is given by either
Lexington or Mr.&nbsp;Hardigan prior to the commencement of the next renewal term.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Amended Hardigan
Agreement provides for an annual base salary of $250,000, effective August&nbsp;1, 2012 and an annual discretionary bonus of at
least 20% of Mr.&nbsp;Hardigan&rsquo;s base salary, based upon Mr. Hardigan&rsquo;s and Lexington&rsquo;s achievement of annual
performance objectives, as determined by the board of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon commencement
of the Amended Hardigan Agreement, Lexington will grant to Mr. Hardigan 100,000 shares of its common stock, vesting
immediately. Lexington will also grant to Mr. Hardigan a non-statutory option to purchase up to 1,800,000 shares of its
common stock, at an exercise price of $1.67 per share. One half of the option shall vest in 12 equal quarterly tranches, with
the first tranche having vested as of November 15, 2012, and the remaining tranches vesting on each of February 15, May 15, August 15, and November 15 thereafter through August 15, 2015. Vesting of the remaining
one half of the option shall not commence unless and until the Merger is completed. Following the completion of the Merger,
the remaining one half of the options shall vest in 12 equal tranches, with a tranche to vest on the last day of
each calendar quarter commencing on the last day of the calendar quarter in which the Merger is completed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Amended Hardigan
Agreement also provides for Mr. Hardigan&rsquo;s participation in all benefit programs Lexington establishes and makes available
to its executive employees, and for reimbursement to Mr. Hardigan for reasonable travel, entertainment, mileage and other business
expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Amended Hardigan
Agreement is terminable by Lexington for cause or upon thirty days prior written notice without cause, and terminable at Mr.&nbsp;Hardigan&rsquo;s
election upon thirty days prior written notice. If Lexington terminates Mr.&nbsp;Hardigan without cause, then Lexington will pay
Mr.&nbsp;Hardigan: (i)&nbsp;a lump sum amount equal to his base salary for the balance of the then-remaining term of the Amended
Hardigan Agreement, but no less than six months&rsquo; base salary, (ii) Lexington&rsquo;s share of the cost of health insurance
coverage pursuant to COBRA for the then-remaining term of the Amended Hardigan Agreement and (iii) reimbursement of business expenses
incurred by Mr. Hardigan prior to termination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Amended Hardigan
Agreement also includes certain confidentiality, non-compete and non-solicitation provisions effective for a period of twelve
months following the termination of Mr.&nbsp;Hardigan&rsquo;s employment with Lexington.&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Outstanding Equity Awards at Fiscal Year-End</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
summarizes the equity awards DSS has made to its named executive officers, which are outstanding as of December 31, 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-size: 10pt">
    <TD NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Name</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Number
    of<BR> Securities<BR> Underlying<BR> Unexercised<BR> Options</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Number
    of<BR> Securities<BR> Underlying<BR> Unexercised<BR> Options</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Number
    of<BR> Shares of<BR> Stock That<BR> Have Not<BR> Vested</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Market<BR>
    Value<BR> of Shares of<BR> Stock That<BR> Have Not<BR> Vested</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Option<BR>
    Exercise<BR> Price</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Option<BR>
    Expiration<BR> Date</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; font-size: 10pt">
    <TD STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">(#)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">(#)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">(#)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">($)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">($)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; font-size: 10pt">
    <TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">Exercisable</FONT></TD><TD NOWRAP STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">Un-exercisable</FONT></TD><TD NOWRAP STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD NOWRAP STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="width: 22%; text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Philip
    Jones</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 10%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">25,000</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 10%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 10%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 10%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="width: 10%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">6.00</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 10%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">5/2/2012</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent; font-size: 10pt">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">33,333</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">16,667</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>(1)</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">4.00</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">2/11/2014</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">25,000</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>(4)</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">63,750</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent; font-size: 10pt">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">16,667</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">33,333</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>(2)</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">3.29</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">1/28/2015</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">16,667</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">33,333</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>(2)</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">4.00</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">1/28/2015</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent; font-size: 10pt">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">6,667</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">13,333</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>(3)</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">3.23</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">6/10/2015</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">Patrick White<SUP>(5)</SUP>&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">30,000</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>(6)</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">3.50</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">7/01/2016</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent; font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">Robert B. Bzdick</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><SUP>&nbsp;</SUP></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%">(1)</TD>
    <TD STYLE="width: 96%">Vests as to one-third of the shares subject to the option in equal installments on each of 2/12/2010,
    2/12/2011, and 2/12/2013.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%">(2)</TD>
    <TD STYLE="width: 96%">Vests as to one-third of the shares subject to the option in equal installments on each of 1/28/2011,
    1/28/2012, and 1/28/2013.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%">(3)</TD>
    <TD STYLE="width: 96%">Vests as to one-third of the shares subject to the option in equal installments on each of 6/10/2011,
    6/10/2012, and 6/10/2013.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%">(4)</TD>
    <TD STYLE="width: 96%">Vests upon a change in control of DSS or certain other material events to DSS.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>(5)</TD>
    <TD>Mr. White resigned as Chief Executive Officer of DSS effective December 1, 2012 and will continue to serve as a consultant
    to DSS.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 3%">(6)</TD>
    <TD STYLE="width: 96%">Vests as to one-third of the shares subject to the option in equal installments on each of 7/01/2012,
    7/01/2013, and 7/01/2014.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Pension Benefits and Deferred Compensation Plans</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS does not provide
defined benefit pension benefits or non-qualified deferred compensation plans. DSS does maintain qualified 401(k) plans.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Equity Compensation Plan Information</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of December 31,
2011, securities issued and securities available for future issuance under DSS&rsquo;s Amended and Restated 2004 Employee Stock
Option Plan and DSS&rsquo;s Amended and Restated 2004 Non-Executive Director Stock Option Plan were as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-size: 10pt">
    <TD NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Plan Category</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Restricted
    stock <BR> to be<BR> issued upon<BR> vesting</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Number
    of securities<BR> to<BR> be issued upon <BR> exercise<BR> of outstanding <BR> options,<BR> warrants and rights</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Weighted
    <BR> average<BR> exercise price of<BR> outstanding <BR> options,<BR> warrants and <BR> rights</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 10pt"><FONT STYLE="font-size: 10pt">Number
    of <BR> securities<BR> remaining<BR> available for<BR> future issuance<BR> (under<BR> equity <BR> compensation<BR> Plans (excluding<BR>
    securities reflected <BR> in<BR> column (a &amp; b))</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; font-size: 10pt">
    <TD STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">(a)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">(b)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">(c)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">(d)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Equity
    compensation plans approved by security holders</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent; font-size: 10pt">
    <TD STYLE="width: 36%; text-align: left; text-indent: -10pt; padding-left: 20pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Employee
    Plan</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 12%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">107,352</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 14%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">1,168,648</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="width: 12%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">4.18</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 14%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">296,376</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 20pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Director
    Plan</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">177,000</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">4.79</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">23,000</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent; font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Equity
    compensation plans not approved by security holders</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -10pt; padding-left: 20pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Contractual
    warrant grants for services</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">376,760</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">6.65</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent; font-size: 10pt">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Total</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">107,352</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">1,722,408</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">$</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">4.78</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">319,376</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<!-- Field: Page; Sequence: 204; Value: 1 -->
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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DSS SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth information as of November 19, 2012, regarding the beneficial ownership of DSS Common Stock by (i) each person known
by the DSS board of directors to own beneficially 5% or more of the outstanding shares of DSS Common Stock, (ii) each director
of DSS, (iii) DSS&rsquo;s named executive officers, and (iv) all of DSS&rsquo;s directors and executive officers as a group. Information
with respect to beneficial ownership is based solely on a review of DSS&rsquo;s capital stock transfer records and on publicly
available filings made with the SEC by or on behalf of the stockholders listed below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Percentage of beneficial
ownership is calculated in relation to the 21,705,967 shares of DSS Common Stock that were outstanding as of November 19, 2012.
Beneficial ownership is determined in accordance with the rules of the SEC, which generally attribute beneficial ownership of
securities to persons who possess sole or shared voting or investment power with respect to those securities, and includes shares
of DSS Common Stock issuable pursuant to the exercise of stock options or other securities that are exercisable or convertible
into shares of DSS Common Stock within 60 days of November 19, 2012. Options to purchase shares of DSS Common Stock that are exercisable
within 60 days of November 19, 2012 are considered beneficially owned by the person holding such options for the purpose of computing
ownership of such person, but are not treated as outstanding for the purpose of computing the beneficial ownership of any other
person. Unless otherwise indicated, to DSS&rsquo;s knowledge, the persons or entities identified in the table below have sole
voting and investment power with respect to all shares shown as beneficially owned by them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid"><B>Name and Address of Beneficial Owner
    <SUP>(1)</SUP></B></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of Shares <BR>of
    Common <BR>Stock Beneficially Owned</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Percentage
                                                                                                         of Common</B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Stock<SUP>(2)</SUP></B></P></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><B><I>Five percent or more beneficial owners: </I></B>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD>None</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><B><I>Named Executive Officers and Directors </I></B>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="width: 64%; text-align: left">Patrick White</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">892,600</TD><TD NOWRAP STYLE="width: 1%; text-align: left">(3)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">4.10</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">David Wicker</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">229,834</TD><TD NOWRAP STYLE="text-align: left">(4)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.05</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Philip Jones</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">168,333</TD><TD NOWRAP STYLE="text-align: left">(5)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">David Klein</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8,333</TD><TD NOWRAP STYLE="text-align: left">(6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Robert B. Fagenson</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,058,500</TD><TD NOWRAP STYLE="text-align: left">(7)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.87</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Ira A. Greenstein</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">52,333</TD><TD NOWRAP STYLE="text-align: left">(8)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">Robert O&rsquo;Brian</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">29,000</TD><TD NOWRAP STYLE="text-align: left">(9)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Robert B. Bzdick</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">673,770</TD><TD NOWRAP STYLE="text-align: left">(10)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.08</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: transparent">
    <TD STYLE="text-align: left">John Cronin</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,000</TD><TD NOWRAP STYLE="text-align: left">(11)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><B><I>All executive officers and directors as a group (9 persons) </I></B>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,112,704</TD><TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14.34</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">*</TD>
    <TD STYLE="width: 93%">Does not exceed 1%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(1)</TD>
    <TD>The business address of the individuals is c/o Document Security Systems, Inc., 28 East Main Street, Suite 1525, Rochester,
    New York 14614.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(2)</TD>
    <TD>Based upon 21,705,967 shares of DSS Common Stock issued and outstanding on November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(3)</TD>
    <TD>Includes 80,000 shares of DSS Common Stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(4)</TD>
    <TD>Includes 105,000 shares of DSS Common Stock issuable upon the exercise of stock options exercisable within 60 days of
    November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(5)</TD>
    <TD>Includes 163,333 shares of DSS Common Stock issuable upon the exercise of stock options exercisable within 60 days of
    November 19, 2012.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%">(6)</TD>
    <TD STYLE="width: 93%">Includes 8,333 shares of DSS Common Stock issuable upon the exercise of stock options exercisable within
    60 days of November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(7)</TD>
    <TD>Includes 49,000 shares of DSS Common Stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012, 100,000 shares of DSS Common Stock held by Mr. Fagenson&rsquo;s wife and an aggregate of 100,000 shares of DSS Common
    Stock held in trusts for Mr. Fagenson&rsquo;s two adult children, of which Mr. Fagenson is trustee. Mr. Fagenson disclaims
    beneficial ownership of the 100,000 shares of DSS Common Stock held by his wife and the 100,000 shares of DSS Common Stock
    held in trusts for Mr. Fagenson&rsquo;s two adult children.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(8)</TD>
    <TD>Includes 52,333 shares of DSS Common Stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(9)</TD>
    <TD>Includes 29,000 shares of DSS Common Stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(10)</TD>
    <TD>Includes 158,333 shares of Common stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(11)</TD>
    <TD>Includes 5,000 shares of Common stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth the beneficial ownership of Lexington capital stock as of November 19, 2012, by (i) each person or entity who is known
by Lexington to own beneficially more than 5% of the outstanding shares of Lexington capital stock, (ii) each director of Lexington,
(iii) each of Lexington&rsquo;s named executive officers, and (iv) all directors and named executive officers of Lexington as
a group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Percentage of beneficial
ownership is calculated in relation to the 14,062,825 shares of Lexington Common Stock and 17,913,727 Lexington Preferred Stock
that were outstanding as of November 19, 2012. Beneficial ownership is determined in accordance with the rules of the SEC, which
generally attribute beneficial ownership of securities to persons who possess sole or shared voting or investment power with respect
to those securities, and includes shares of Lexington capital stock issuable pursuant to the exercise of stock options or preferred
stock and other securities that are exercisable or convertible into shares of Lexington capital stock within 60 days of November 19, 2012. Shares of Lexington common stock issuable upon conversion of preferred stock that is convertible within 60 days of November 19, 2012 are considered beneficially owned by the person holding such preferred stock for the purpose of computing ownership of
such person, but are not treated as outstanding for the purpose of computing the beneficial ownership of any other person. Unless
otherwise indicated, to Lexington&rsquo;s knowledge, the persons or entities identified in the table below have sole voting and
investment power with respect to all shares shown as beneficially owned by them.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Common Stock</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Preferred Stock</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid"><B>Name and Address of Beneficial Owner
    <SUP>(1)</SUP></B></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount of<BR> Beneficial<BR>
    Ownership</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Percent of<BR> Class</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount of<BR> Beneficial<BR>
    Ownership</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Percent of<BR> Class</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; font-style: italic; text-indent: -10pt; padding-left: 10pt">5% Stockholders</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; font-style: italic; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%; text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Hudson Bay Master
                                             Fund, Ltd. <SUP>(2)</SUP></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">777
                                                                                                                                                                Third
                                                                                                                                                                Avenue</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">New
                                                                                                                                                                                                                                                        York,
                                                                                                                                                                                                                                                        NY
                                                                                                                                                                                                                                                        10017&nbsp;</P></TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">9,428,672</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">40.3</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">9,360,100</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">52</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Four Kids Investment Funds
                                 LLC<BR>
(Alan Honig TR) <SUP>(3)</SUP></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">17582
                                                                                                                                                                      Bocaire
                                                                                                                                                                      Way</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Boca
                                                                                                                                                                                                                                                               Raton,
                                                                                                                                                                                                                                                               FL
                                                                                                                                                                                                                                                               33487&nbsp;</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,475,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17.6</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Barry Honig <SUP>(4)</SUP></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">4400
                                                                                                                                   Biscayne
                                                                                                                                   Boulevard
                                                                                                                                   Suite
                                                                                                                                   850</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Miami,
                                                                                                                                                                                                                                            FL
                                                                                                                                                                                                                                            33137&nbsp;</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,154,999</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25.8</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,045,056</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">1960480 BT <SUP>(5)</SUP></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">2515
                                                                                                                                  McKinney
                                                                                                                                  Ave</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Suite
                                                                                                                                                                                                                           1000</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dallas,
                                                                                                                                                                                                                                                                                                             TX
                                                                                                                                                                                                                                                                                                             75201&nbsp;</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,028,572</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26.4</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,992,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">28</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Iroquois Master Fund, Ltd.
                                 <SUP>(6)</SUP></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">641
                                                                                                                                                  Lexington
                                                                                                                                                  Ave.
                                                                                                                                                  26th
                                                                                                                                                  Floor</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">New
                                                                                                                                                                                                                                                       York,
                                                                                                                                                                                                                                                       NY
                                                                                                                                                                                                                                                       10022&nbsp;</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,766,665</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12.6</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Frost Gamma Investments Trust
                                 <SUP>(7)</SUP></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">4400
                                                                                                                                                     Biscayne
                                                                                                                                                     Boulevard</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Suite
                                                                                                                                                                                                                                                    850</P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Miami,
                                                                                                                                                                                                                                                                                                                                     FL
                                                                                                                                                                                                                                                                                                                                     33137</P></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,738,226</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12.4</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; text-indent: -10pt; padding-left: 10pt">Named Executive
    Officers and Directors</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; font-style: italic; text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Peter Hardigan<SUP> (8)</SUP></TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">197,857</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1.4</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt">Jeffrey Ronaldi</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">100,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">*</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: -10pt; padding-left: 10pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; text-indent: -10pt; padding-left: 10pt">All officers and
    directors as a group (2 persons)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">297,857</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.1</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&mdash;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;* &nbsp;&nbsp;Does not exceed 1% of the class</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(1) Unless otherwise indicated, the address
of each listed stockholder is c/o Lexington Technology Group, Inc., 375 Park Avenue, 26th Floor, New York, New York 10152.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(2) Includes 9,360,100 shares of common
stock issuable upon conversion of preferred stock held by Hudson Bay Master Fund Ltd. Hudson Bay Capital Management, L.P., the
investment manager of Hudson Bay Master Fund Ltd., has voting and investment power over these securities. Sander Gerber is the
managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management, L.P. Sander Gerber
disclaims beneficial ownership over these securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(3) Alan Honig acts as the custodian and
trustee of Four Kids Investment Funds LLC and has voting and investment power over these securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(4) Includes 344,285 shares of common
stock held by Mr. Honig, 397,651 shares of common stock and 1,022,528 shares of common stock issuable upon conversion of preferred
stock held by GRQ Consultants, Inc. 401K, and 1,368,007 shares of common stock and 1,022,528 shares of common stock issuable upon
conversion of preferred stock held by GRQ Consultants, Inc. Roth 401K FBO Barry Honig. Mr. Honig is the trustee of GRQ Consultants,
Inc. 401K and GRQ Consultants, Inc. Roth 401K FBO Barry Honig, and, in such capacity, has voting and dispositive power over the
securities held by such entities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(5) Includes 4,992,000 shares of common
stock issuable upon conversion of preferred stock held by 1960480 BT, LLC. Ryan Lane, the managing member of 1960480 BT,
has voting and investment power over these securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(6) Iroquois Capital Management L.L.C.,
or Iroquois Capital, is the investment manager of Iroquois Master Fund Ltd., or IMF. Consequently, Iroquois Capital has voting
control and investment discretion over securities held by IMF. As managing members of Iroquois Capital, Joshua Silverman and Richard
Abbe make voting and investment decisions on behalf of Iroquois Capital in its capacity as investment manager to IMF. As a result
of the foregoing, Messrs. Silverman and Abbe may be deemed to have beneficial ownership (as determined under Section 13(d) of
the Exchange Act) of the securities held by IMF. Notwithstanding the foregoing, Messrs. Silverman and Abbe disclaim such beneficial
ownership.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(7) Dr. Philip Frost is the trustee of
Frost Gamma Investments Trust and, in such capacity, has voting and dispositive power over the securities held for the account
of Frost Gamma Investments Trust.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(8) Includes options to purchase up
to 75,000 shares of Lexington Common Stock that are exercisable within 60 days of November 19, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>



<P STYLE="margin: 0"></P>
<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT OF THE COMBINED COMPANY FOLLOWING THE MERGER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
sets forth information as of November 19, 2012, regarding the beneficial ownership of the combined company upon completion of the
Merger by (i) each person known by the management of DSS and Lexington that is expected to become the beneficial owner of 5% of
the common stock of the combined company upon completion of the Merger, (ii) each director and named executive officer of the combined
company, and (iii) all directors and named executive officers of the combined company as a group.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Information with respect
to beneficial ownership is based solely on a review of DSS capital stock transfer records and on publicly available filings made
with the SEC by or on behalf of the stockholders listed below and on Lexington&rsquo;s stock ledger. Unless otherwise indicated
in the footnotes, the address for each listed stockholder is: c/o Lexington Technology Group, Inc., 375 Park Avenue, 26th Floor,
New York, New York 10152.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#9;The percent of
common stock before the merger is based on 21,705,967 shares of DSS Common Stock that were outstanding as of November 19, 2012.
The percent of common stock of the combined company after the merger is based on 49,842,645 shares of common stock of the combined
company outstanding upon completion of the Merger on an as-converted basis with respect to the DSS Preferred Stock issued in connection
with the Merger and assumes that the Exchange Ratio to be used in connection with the Merger is approximately 1.02 shares of DSS
common stock and DSS Warrants for each share of Lexington capital stock (without giving effect to the proposed reverse stock split
described elsewhere in this proxy statement/prospectus) and that Lexington has at least $9,000,000 at the Effective Time of the
Merger (and accordingly, the maximum amount of Additional Shares are issued). Shares of DSS Common Stock subject to stock options
and warrants that are currently exercisable or exercisable within 60 days after November 19, 2012 are treated as outstanding and
beneficially owned by the holder of such options for the purpose of computing the percentage ownership of the combined company&rsquo;s
common stock of such holder, but are not treated as outstanding for the purpose of computing the percentage ownership of the combined
company&rsquo;s common stock of any other stockholder. Shares of Lexington common stock subject to options that are currently
exercisable or exercisable within 60 days of November 19, 2012 are treated as outstanding and beneficially owned by the holder
of such options for the purpose of computing the percentage ownership of the combined company&rsquo;s common stock of such holder,
but are not treated as outstanding for the purpose of computing the percentage ownership of the combined company&rsquo;s common
stock of any other stockholder. Unless otherwise indicated, DSS and Lexington believe that each of the persons named in this table
has sole voting and investment power with respect to all shares shown as beneficially owned by them.&#9;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; font-size: 10pt">
    <TD NOWRAP STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">Before&nbsp;the&nbsp;Merger</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">After&nbsp;the&nbsp;Merger</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; font-size: 10pt">
    <TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">Name and Address of Beneficial<BR> Owner</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">Amount
    of<BR> Beneficial<BR>
    Ownership</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">Percent<BR>
    of<BR> Class</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">Amount
    of<BR> Beneficial<BR>
    Ownership</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; font-size: 10pt"><FONT STYLE="font-size: 10pt">Percent
    of<BR> Class</FONT></TD><TD NOWRAP STYLE="font-weight: bold; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"><I>5% Stockholders (Preferred)</I></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="width: 45%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">Hudson Bay Master Fund, Ltd.</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 10%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="width: 2%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 10%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 10%; text-align: right; font-size: 10pt">5,147,606</TD><TD STYLE="width: 2%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="width: 10%; text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">99</FONT></TD><TD STYLE="width: 2%; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">777 Third Avenue</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">New York, NY 10017</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">1960480 BT, LLC (10)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">47,467</TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">1</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">2515 McKinney Ave</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Suite 1000</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">Dallas, TX 75201</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">5% Stockholders
    (Common)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="font-weight: bold; font-style: italic; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">Hudson Bay Master Fund, Ltd.</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">725,805</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(<FONT STYLE="font-size: 10pt">3)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">3.3</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">5,146,606</TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">(9)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">9.99</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">777 Third Avenue</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
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    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">New York, NY 10017</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">1960480 BT, LLC</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">5,055,630</TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">(10)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">9.99</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">2515 McKinney Ave</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Suite 1000</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Dallas, TX75201</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">Barry Honig</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">161,290</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(17)<FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">4,377,867</TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">(11)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">8.65</TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">4400 Biscayne Boulevard</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Suite 850</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">Miami, FL 33137</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
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    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
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    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">Four Kids Investment Funds LLC (Alan Honig)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">2,511,680</TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">(12)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">5.00</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">4400 Biscayne Boulevard</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">Suite 850</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">Miami, FL 33137</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Named
    Executive Officers and Directors:</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Philip
    Jones (1)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">163,333</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(4)<FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">163,333</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(4)<FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">David
    Klein (1)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">8,333</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(5)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">8,333</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(5)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Robert
    B. Fagenson (1)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">1,058,500</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(6)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">4.87</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">1,058,500</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(6)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">2.12</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Ira A.
    Greenstein (1)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">52,333</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(7)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">52,333</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(7)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Robert
    B. Bzdick (1)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">673,770</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(8)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">3.08</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">673,770</FONT></TD><TD STYLE="text-align: left; font-size: 10pt">(8)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">1.35</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Peter
    Hardigan (2)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">141,344</TD><TD STYLE="text-align: left; font-size: 10pt">(13)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Warren
    Hurwitz (2)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"></TD><TD STYLE="text-align: right; font-size: 10pt">*</TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 10pt">
    <TD STYLE="text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">Jeffrey
    Ronaldi (2)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">&mdash;</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">101,482</TD><TD STYLE="text-align: left; font-size: 10pt">(14)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">*</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt"></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 10pt">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; text-indent: -10pt; padding-left: 10pt; font-size: 10pt"><FONT STYLE="font-size: 10pt">All
    executive officers and directors as a group (8 persons)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">1,956,270</TD><TD STYLE="text-align: left; font-size: 10pt">(15)<FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt"><FONT STYLE="font-size: 10pt">8.84</FONT></TD><TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">%</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">2,199,096</TD><TD STYLE="text-align: left; font-size: 10pt">(16)</TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; font-size: 10pt"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; font-size: 10pt">4.37</TD><TD NOWRAP STYLE="text-align: left; font-size: 10pt">%<FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">*</TD>
    <TD STYLE="text-align: justify">Does not exceed 1%</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(1)</P></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The business address of each listed
stockholder is c/o Document Security Systems, Inc., 28 East Main Street, Suite 1525, Rochester, New York 14614.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(2)</TD>
    <TD STYLE="text-align: justify">The business address of each listed stockholder is c/o Lexington Technology Group, Inc., 375 Park Avenue, 26th Floor, New York, New York 10152.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(3)</TD>
    <TD STYLE="text-align: justify">Includes 241,935 shares of common stock issuable upon the exercise of warrants exercisable within 60 days of November 19, 2012.</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; width: 0.25in">(4)</TD>
    <TD STYLE="text-align: justify">Includes 163,333 shares of DSS common stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(5)</TD>
    <TD STYLE="text-align: justify">Includes 8,333 shares of DSS common stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(6)</TD>
    <TD STYLE="text-align: justify">Includes 49,000 shares of DSS common stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012, 100,000 shares of DSS common stock held by Mr. Fagenson&rsquo;s wife and an aggregate of 100,000 shares of DSS common stock held in trusts for Mr. Fagenson&rsquo;s two adult children, of which Mr. Fagenson is trustee. Mr. Fagenson disclaims beneficial ownership of the 100,000 shares of DSS common stock held by his wife and the 100,000 shares of DSS common stock held in trusts for Mr. Fagenson&rsquo;s two adult children.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(7)</TD>
    <TD STYLE="text-align: justify">Includes 52,333 shares of DSS common stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(8)</TD>
    <TD STYLE="text-align: justify">Includes 158,333 shares of DSS common stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(9)</TD>
    <TD STYLE="text-align: justify">Includes 1,442,018 shares of common stock issuable upon the exercise of warrants that will be issued in connection with the Merger, 2,106,697 shares of common stock to be held in escrow for up to one year after the closing of the Merger and to be released upon certain conditions, and 241,935 shares of common stock issuable upon the exercise of warrants exercisable within 60 days of November 19, 2012. In addition to any shares of DSS common stock that Hudson Bay and its affiliates will hold after the Merger, Hudson Bay Master Fund Ltd. will hold shares of DSS preferred stock convertible into 5,206,928 shares of DSS common stock. In accordance with the Certificate of Designations, Preferences and Rights of Series A Convertible Preferred Stock with respect to the DSS preferred stock to be filed by DSS prior to the consummation of the Merger and the terms of the DSS warrants to be received in connection with the Merger, Hudson Bay may not convert any of the DSS preferred stock or exercise its warrants to purchase DSS common stock to the extent that after giving effect to such conversion or exercise, as the case may be, Hudson Bay (together with its affiliates) would have acquired, through conversion of DSS preferred stock, exercise of DSS warrants or otherwise, beneficial ownership of a number of shares of DSS common stock that exceeds 9.99% of the number of shares of DSS common stock outstanding immediately after giving effect to such conversion, excluding for purposes of such determination, shares of DSS common stock issuable upon conversion of the DSS preferred stock or exercise of the DSS warrants that have not been converted or exercised. Hudson Bay Capital Management, L.P., the investment manager of Hudson Bay Master Fund Ltd., has voting and investment power over these securities. Sander Gerber is the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson Bay Capital Management, L.P. Sander Gerber disclaims beneficial ownership over these securities.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(10)</TD>
    <TD STYLE="text-align: justify">Includes 769,068 shares of common stock issuable upon the exercise of warrants that will be
    issued in connection with the Merger, and 1,123,560 shares of common stock to be held in escrow for up to one year after the
    closing of the Merger and to be released upon certain conditions. In addition to any shares of DSS common stock that 1960480
    BT and its affiliates will hold after the Merger, 1960480 BT will hold shares of DSS preferred stock convertible into 79,105
    shares of DSS common stock. In accordance with the Certificate of Designations, Preferences and Rights of Series A
    Convertible Preferred Stock with respect to the DSS preferred stock to be filed by DSS prior to the consummation of the
    Merger and the terms of the DSS warrants to be received in connection with the Merger, 1960480 BT may not convert any of the
    DSS preferred stock or exercise its warrants to purchase DSS common stock to the extent that after giving effect to such
    conversion or exercise, as the case may be, 1960480 BT (together with its affiliates) would have acquired, through conversion
    of DSS preferred stock, exercise of DSS warrants or otherwise, beneficial ownership of a number of shares of DSS common stock
    that exceeds 9.99% of the number of shares of DSS common stock outstanding immediately after giving effect to such
    conversion, excluding for purposes of such determination, shares of DSS common stock issuable upon conversion of the DSS
    preferred stock or exercise of the DSS warrants that have not been converted or exercised. Ryan Lane, the managing member of
    1960480 BT, has voting and investment power over these securities.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 0.25in; text-align: justify">(11)</TD>
    <TD STYLE="text-align: justify">Includes 635,464 shares of common stock issuable upon the exercise of warrants that will be issued in connection with the Merger, and 928,373 shares of common stock to be held in escrow for up to one year after the closing of the Merger and to be released upon certain conditions. Includes 216,589 shares of common stock, 52,655 shares of common stock issuable upon exercise of warrants and 76,925 shares of common stock to be held in escrow to be issued to Mr. Honig in connection with the Merger, 893,431 shares of common stock, 217,202 shares of common stock issuable upon exercise of warrants and 317,318 shares of common stock to be held in escrow to be issued to GRQ Consultants, Inc. 401K in connection with the Merger, and 1,503,880 shares of common stock, 365,608 shares of common stock issuable upon exercise of warrants and 534,130 shares of common stock to be held in escrow to be issued to GRQ Consultants, Inc. Roth 401K FBO. Mr. Honig is the trustee of GRQ Consultants, Inc. 401K and GRQ Consultants, Inc. Roth 401K FBO Barry Honig, and, in such capacity, has voting and dispositive power over the securities held by such entities.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(12)</TD>
    <TD STYLE="text-align: justify">Includes 378,526 shares of common stock issuable upon the exercise of warrants that will be issued in connection with the Merger, and 553,002 shares of common stock to be held in escrow for up to one year after the closing of the Merger and to be released upon certain conditions. Alan Honig acts as the custodian and trustee of Four Kids Investment Funds LLC and has voting and investment power over these securities.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(13)</TD>
    <TD STYLE="text-align: justify">Includes 18,672 shares of common stock issuable upon the exercise of warrants that will be issued in connection with the Merger, and 27,279 shares of common stock to be held in escrow for up to one year after the closing of the Merger and to be released upon certain conditions. Also includes options to purchase 441,333 shares of common stock of DSS that will vest upon the consummation of the Merger.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(14)</TD>
    <TD STYLE="text-align: justify">Includes 15,198 shares of common stock issuable upon the exercise of warrants that will
    issued     in connection with the Merger, and 22,204 shares of common stock to be held in escrow for up to one year after the
    closing of the Merger and to be released upon certain conditions.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(15)</TD>
    <TD STYLE="text-align: justify">Includes 431,333 shares of DSS common stock issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(16)</TD>
    <TD STYLE="text-align: justify">Includes 448,000 shares of DSS common stock
        issuable upon the exercise of stock options exercisable within 60 days of November 19, 2012, 33,870 shares of common stock issuable
        upon the exercise of warrants that will be issued in connection with the Merger, and 49,483 shares of common stock to be held in
        escrow for up to one year after the closing of the Merger and to be released upon certain conditions.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">(17)</TD>
    <TD STYLE="text-align: justify">Includes 80,645 shares of DSS common stock
        issuable upon the exercise of stock warrants exercisable within 60 days of November 19, 2012.</TD></TR>

</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DESCRIPTION OF CAPITAL STOCK </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The authorized capital
stock of DSS consists of 200,000,000 shares of common stock, par value $0.02 per share. DSS is seeking stockholder approval pursuant
to this proxy statement/prospectus to effect a reverse stock split of DSS issued and outstanding common stock, pursuant to which
any whole number of outstanding shares between and including two and four would be combined and reclassified into one share of
DSS Common Stock (with the exact reverse stock split ratio within such range to be determined by DSS prior to the completion of
the Merger).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Common Stock </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of ___________,
2013, the latest practicable date before the printing of this proxy statement/prospectus, there were [&bull;] shares of DSS Common
Stock outstanding, held of record by [&bull;] stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS stockholders
are entitled to one vote for each share held on matters submitted to a vote of the stockholders and do not have cumulative voting
rights. The DSS stockholders are entitled to receive proportionately any dividends that may be declared by the DSS board of directors.
Upon DSS&rsquo;s liquidation, dissolution or winding up, the holders of DSS&rsquo;s common stock are entitled to receive proportionately
DSS&rsquo;s net assets available after the payment of all debts and other liabilities. Holders of DSS Common Stock have no preemptive,
subscription, redemption or conversion rights. DSS&rsquo;s outstanding shares of common stock are fully paid and non-assessable.
The rights, preferences and privileges of the holders of DSS Common Stock are subject to, and may be adversely affected by, the
rights of the holders of shares of any series of preferred stock which DSS has designated and issued or which DSS may designate
and issue in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Preferred Stock </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS Certificate
does not authorize preferred stock. DSS is seeking stockholder approval pursuant to this proxy statement/prospectus to amend the
DSS Certificate to authorize a class of preferred stock and establish the associated rights and preferences thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon the consummation
of the Merger, only the holders of Lexington Preferred Stock who would, after giving effect to the Merger and receipt of the merger
consideration, meet the Beneficial Ownership Condition shall receive for each share of Lexington Preferred Stock they hold the
same merger consideration as the holders of Lexington Common Stock except that such holders shall receive a combination of DSS
Common Stock and DSS Preferred Stock that is convertible into (or if the proposal to authorize DSS Preferred Stock is not approved,
$.02 Warrants exercisable for) that number of shares of DSS Common Stock they would have received if they had been a holder of
Lexington Common Stock immediately prior to the Effective Time in such amounts that would enable such holders, after giving effect
to the Merger, to beneficially own no more than 9.99% of DSS Common Stock upon consummation of the Merger. Those holders of Lexington
Preferred Stock who do not meet the Beneficial Ownership Condition and will not receive DSS Preferred Stock or $.02 Warrants, will
receive DSS Common Stock and the other types of merger consideration in exchange for their Lexington Preferred Stock based on the
Common Stock Exchange Ratio. In the event DSS&rsquo;s stockholders approve the issuance of the merger consideration, but do not
approve the authorization of the DSS Preferred Stock, then the holders of Lexington Preferred Stock that satisfy the Beneficial
Ownership Condition shall receive warrants to purchase DSS Common Stock with an exercise price of $.02 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Subject to the
conditions described above, upon completion of the Merger, each share of then-outstanding Lexington Preferred Stock (total
17,913,727 shares outstanding) will be automatically converted into the right to receive the same number of shares of DSS
Preferred Stock, which 17,913,727 shares, as of November 19, 2012, shall be convertible into an aggregate of 17,913,727  shares
of DSS Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS Preferred Stock
will have the powers, preferences and privileges and other rights as will be set forth in a Certificate of Amendment to the Certificate
of Incorporation of DSS to be filed by DSS subsequent to closing, which rights include, among other things, the right to participate
in any dividends and distributions paid to common stockholders on an as-converted basis, pro rata with the holders of DSS Common
Stock. Upon the occurrence of any Liquidation Event (as such term is defined in the Certificate of Amendment), after the payment
of all debts and liabilities of DSS, any remaining assets shall be distributed pro rata to the holders of DSS Common Stock and
DSS Preferred Stock on an as-converted basis. The DSS Preferred Stock will be non-voting, except as required by law and in certain
defined instances, including in connection with a fundamental transaction. Each share of DSS Preferred Stock shall be initially
convertible into one share of DSS Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Warrants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&#9;</B>As of
[&bull;], 2013, the latest practicable date before the printing of this proxy statement/prospectus, there were warrants to purchase
[&bull;] of DSS Common Stock outstanding at a weighted-average exercise price of $[&bull;] per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Warrants to be issued in connection with the Merger</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 13.85pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#9;In connection
with the Merger, DSS will issue to the holders of Lexington capital stock (on a pro rata as-converted basis) an aggregate of 4,859,894
warrants to purchase an aggregate of 4,859,894 shares of DSS Common Stock with an exercise price of $4.80 per share, subject to
equitable adjustment in the event of a reverse stock split, and a term of five years commencing upon the closing of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 13.85pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event DSS&rsquo;s
stockholders approve the issuance of the merger consideration, but do not approve the authorization of the DSS Preferred Stock,
then the holders of Lexington Preferred Stock that satisfy the Beneficial Ownership Condition shall receive warrants to purchase
DSS Common Stock with an exercise price of $0.02 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I>$.02 Warrants and New Warrants </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The $.02 Warrants and
the New Warrants (collectively, the &ldquo;<B>Warrants</B>&rdquo;) have an exercise price of $.02 and $4.80 per share, respectively,
and are exercisable at any time after the date of issuance (the &ldquo;<B>Issuance Date</B>&rdquo;) until the expiration date (the
&ldquo;<B>Expiration Date</B>&rdquo;), which date shall be 10 years from the Issuance Date in the case of the $.02 Warrants and
five years from the Issuance Date in the case of the New Warrants. The Warrants may be exercised in whole or in part, by paying
DSS cash, check or wire transfer. Notwithstanding, if at any time between the three month anniversary of the Issuance Date and
the Expiration Date, there is not an effective registration statement registering the resale of the shares issuable under the Warrants
(the &ldquo;<B>Warrant Stock</B>&rdquo;) then the holder may elect to exercise the Warrant, or a portion thereof, and to pay for
the Warrant Stock by way of cashless exercise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except under certain
circumstances, no holder may exercise its Warrants or $.02 Warrants if such exercise would result in such holder beneficially owning
in excess of 9.99% of the number of shares of DSS common stock outstanding immediately after giving effect to the issuance of shares
of common stock upon exercise of the Warrant. In addition, under certain circumstances, a holder of the $.02 Warrants will be entitled
to participate in any distribution of DSS&rsquo;s assets (or the right to acquire its assets) or any declared cash dividend, to
the same extent such holder would have participated therein if such holder had held the shares of common stock acquirable upon
complete exercise of the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Warrants are subject
to adjustments for stock splits and certain fundamental transactions. The $.02 Warrants provide that DSS will not declare or effect
any stock split, subdivision, dividend or combination of its common stock while any portion of such warrant remains exercisable
unless DSS simultaneously effects a reduction on the par value per share of its common to permit the exercise in full of any remaining
portion of such warrant after giving effect to such adjustments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event of any
distribution by DSS to its holders of common stock, each holder of a $.02 Warrant will be entitled to participate in such distribution
to the same extent that such holder would have participated if it had held the number of shares of common stock acquirable upon
complete exercise of the warrant at the time of the distribution. Each holder of a New Warrant, in the event of any such distribution,
will be entitled to a reduction in the then current exercise price of their warrant equal to the fair market value of such distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">All other terms of
the $.02 Warrant and the New Warrant are identical.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>New York Statutory Business Combinations
Provisions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Section 912 of the
New York Business Corporation Law prohibits any &ldquo;business combination&rdquo; (defined to include a variety of transactions,
including mergers, sales or dispositions of assets, issuances of stock, liquidations, reclassifications and benefits from the corporation,
including loans or guarantees) with, involving or proposed by any &ldquo;interested shareholder&rdquo; for a period of five years
after the date on which the interested shareholder became an interested shareholder. &ldquo;Interested shareholder&rdquo; is defined
generally as any person who, directly or indirectly, beneficially owns 20% or more of the outstanding voting stock of a New York
corporation. These restrictions do not apply, however, to any business combination with an interested shareholder if the business
combination, or the purchase of stock by the interested shareholder that caused the shareholder to become an interested shareholder,
was approved by the board of directors of the New York corporation prior to the date on which the interested shareholder became
an interested shareholder. After the five-year period, a business combination between a New York corporation and the interested
shareholder is prohibited unless either the &ldquo;fair price&rdquo; provisions set forth in Section 912 are complied with or the
business combination is approved by a majority of the outstanding voting stock not beneficially owned by the interested shareholder
or its affiliates and associates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A New York corporation
may adopt an amendment to its bylaws, approved by the affirmative vote of a majority of votes of the outstanding voting stock,
excluding the voting stock of interested shareholders and their affiliates and associates, expressly electing not to be governed
by Section 912. The amendment will not, however, be effective until 18 months after the shareholder vote and will not apply to
any business combination with a shareholder who was an interested shareholder on or prior to the effective date of the amendment.
DSS&rsquo;s bylaws do not contain a provision electing not to be governed by Section 912.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>UNAUDITED PRO FORMA COMBINED FINANCIAL
STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following unaudited
pro forma combined financial data is intended to show how the Merger might have affected historical financial statements if the
Merger had been completed on January 1, 2011, for the purposes of the statements of operations, and September 30, 2012, for the
purposes of the balance sheet, and was prepared based on the historical financial statements and results of operations reported
by DSS and Lexington. The following should be read in conjunction with the audited historical financial statements of DSS and
Lexington and the notes thereto beginning on pages F-<FONT STYLE="text-underline-style: none; color: windowtext">1</FONT>&nbsp;and
F-<FONT STYLE="text-underline-style: none; color: windowtext">50</FONT>, respectively, the sections entitled &ldquo;DSS&rsquo;s
Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo; beginning on page&nbsp;141&nbsp;and
&ldquo;Lexington&rsquo;s Management&rsquo;s Discussion and Analysis of Financial Condition and Results of Operations&rdquo; beginning
on page 167, and the other information contained in this proxy statement/prospectus. The following information does not give effect
to the proposed reverse stock split of DSS common stock described in DSS Proposal No. <FONT STYLE="text-underline-style: none; color: windowtext">4</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Accounting Treatment of the Merger</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">U.S. Generally Accepted
Accounting Principles (hereafter&nbsp;&mdash;&nbsp;GAAP), require that for each business combination, one of the combining entities
shall be identified as the acquirer, and the existence of a controlling financial interest shall be used to identify the acquirer
in a business combination. In a business combination effected primarily by exchanging equity interests, the acquirer usually is
the entity that issues its equity interests. However, it is sometimes not clear which party is the acquirer. In these situations,
the acquirer for accounting purposes may not be the legal acquirer (i.e., the entity that issues its equity interest to effect
the business combination).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If a business combination
has occurred, but it is not clear which of the combining entities is the acquirer, GAAP requires considering additional factors
in making that determination. These factors include the relative voting rights of the combined entity after the business combination,
the existence of a large minority voting interest in the combined entity, the composition of the governing body of the combined
entity, the composition of senior management in the combined entity and the relative size of the combining entities. While no hierarchy
is provided to explain how to assess factors that influence the identification of the acquirer in a business combination, effectively
concluding that no one of the criteria is more significant than any other, it is reasonable to conclude that the entity with largest
percentage of voting rights after the business combination is most like to be considered the acquirer, unless other mitigating
factors are present.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The
stockholders of Lexington will hold the largest percentage of the voting shares on a fully dilutive basis after the
completion of the Merger at 56% of the combined entity. The percentages of ownership include the 7,100,000 shares held in
escrow, which are eligible to be voted while in escrow. <FONT STYLE="color: black">If the escrow shares are terminated (which
will be determined after 1 year of the deal being consummated), Lexington stockholders would own  46% and DSS stockholders
would own 54% on a fully diluted basis. Lexington stockholders will represent the larger minority voting interest in the
combined entity at 46% compared to DSS&rsquo;s organized group (consisting of management and the board) at 12%. After the
closing of the acquisition, senior management of the combined entity is expected to include four officers: the Chief
Executive Officer and Chief Investment Officer from Lexington, and the Chief Financial Officer and Chief Operating Officer
from DSS. </FONT>Based on the aforementioned, and after taking in consideration all relevant facts and circumstances (which
included, among others, the relative voting rights of the combined entity on a fully diluted basis, the larger minority
voting interest, and the composition of the senior management), we came to a conclusion that, Lexington is the accounting
acquirer, as it is defined in FASB Topic ASC 805 &ldquo;Business Combinations.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Because DSS will be
issuing equity interests in order to acquire Lexington that results in a change of control in the combined entity, the transaction
will be accounted for as a reverse acquisition. In the post-combination consolidated financial statements, Lexington&rsquo;s assets
and liabilities will be presented at its pre-combination carrying amounts, and DSS&rsquo;s assets and liabilities will be measured
and recorded at fair value in accordance with ASC 805. In addition, the consolidated equity will reflect DSS&rsquo;s common and
preferred stock (if any), at par value, as DSS is the legal acquirer. The total consolidated equity will consist of Lexington&rsquo;s
equity just before the merger, along with DSS issued and outstanding common stock prior to the transaction at the quoted price
the day the transaction is consummated. Goodwill will be allocated to each reporting unit that is expected to benefit from the
synergies created by the business combination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Generally, in reverse
acquisitions according to ASC 805-40, the financial statements of the combined entity are a continuation of the financial statements
of the accounting acquirer, which as determined above, is Lexington. However, <FONT STYLE="color: black">assessment of whether
predecessor financial statements are required is separate from the identification of the accounting acquirer. Given that Lexington
has limited historical operations, consisting of no revenue and only administrative expense, while DSS has experienced significant
operating results in historical periods that would be included in comparative financial statements, management believes predecessor
financial statement presentation is appropriate, where DSS is the predecessor. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">With respect to unaudited
pro forma combined financial statements to be presented in the combined entity&rsquo;s registration statement as required by Rule
8-05 of Regulation S-X and footnotes to the financial statements of future periodic filings as required by ASC 805, the combined
entity will present pro forma financial information showing the effects of the acquisition in columnar format including pro forma
adjustments and results. Despite the fact that Lexington has only been in existence since May 2012, pro forma operating financial
information will assume the merger took place on the first day of the most recently completed fiscal year in order to accommodate
predecessor accounting as discussed above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The summary unaudited
pro forma combined balance sheet as of September 30, 2012 combines the historical balance sheets of DSS and Lexington as of September
30, 2012 and gives pro forma effect to the Merger as if it had been completed on September 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The summary unaudited
pro forma statements of operations for the year ended December 31, 2011 and the period from January 1, 2012 through September 30,
2012 gives pro forma effect to the Merger as if it had been completed on January 1, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The historical financial
data has been adjusted to give pro forma effect to events that are (i) directly attributable to the Merger, (ii) factually supportable,
and (iii) with respect to the statements of operations, expected to have a continuing impact on the combined results. The pro forma
adjustments are preliminary and based on management&rsquo;s estimates of the fair value and useful lives of the assets acquired
and liabilities assumed and have been prepared to illustrate the estimated effect of the acquisition and certain other adjustments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The unaudited pro forma
combined financial statements are presented for illustrative purposes only, and are not necessarily indicative of the financial
condition or results of operations of future periods or the financial condition or results of operations that actually would have
been realized had the entities been combined during the periods presented. In addition, as explained in more detail in the accompanying
notes to the unaudited pro forma combined financial statements, the preliminary acquisition-date fair value of the identifiable assets acquired
and liabilities assumed reflected in the unaudited pro forma combined financial statements is subject to adjustment and may vary
from the actual amounts that will be recorded upon completion of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Purchase Price Allocation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In accordance
with the accounting treatment of the Merger as a reverse acquisition, the fair value of the outstanding equity of the
accounting acquiree immediately prior to the Merger is used to calculate the purchase price of the net assets by the combined
company. The purchase price is allocated to the fair value of the acquired company&rsquo;s assets and liabilities on the date
of the Merger, with any remainder assigned to goodwill. The pro-forma unaudited balance sheet as of September 30, 2012
presented below reflects the allocation of the preliminary estimated purchase price of approximately $78 million which is the
expected estimated fair value of DSS&rsquo;s outstanding common stock on the date of the Merger based on share price of $3.75
and the outstanding stock of DSS as of September 30, 2012. The final purchase price allocation will depend significantly on
DSS&rsquo;s future share price and the final estimate of the fair value of the intangible assets acquired, and consequently,
might significantly differ from the values presented in these pro-forma statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Preliminary Purchase Price Allocation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">($ -in thousands)</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 87%; text-align: left">Current assets, net of current liabilities</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">309</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,759</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">234</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other intangible asset</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,919</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Goodwill</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">69,776</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">80,997</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Long-term debt and other long-term liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,726</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total estimated purchase price</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">78,271</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Expected fair value of DSS common stock&nbsp; at the date of Merger</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">78,271</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Unaudited Pro Forma Consolidated Balance Sheet as of September
30, 2012 ($- in thousands) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Historical</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Lexington<BR>
Technology Group,<BR>
Inc.</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Document Security<BR>
Systems, Inc.</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Pro Forma<BR>
Adjustments</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">Notes</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Pro- Forma<BR>
Consolidated</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;&nbsp;&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;&nbsp;&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;&nbsp;&nbsp;&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;&nbsp;&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">ASSETS</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 24%; font-weight: bold; text-align: left">Total current assets</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">12,261</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">4,191</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: center">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">16,452</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,759</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,759</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">234</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">234</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">Goodwill</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,323</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66,453</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">3</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,776</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Other intangible assets, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,077</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,919</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">1</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">8,996</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">14,338</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">13,426</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">71,453</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">99,217</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">LIABILITIES AND STOCKHOLDERS' EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Total current liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">389</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,882</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">337</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">2</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">4,608</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Long-term debt, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,449</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,132</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">456</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">4</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,037</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Interest rate swap hedging liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">138</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">138</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Deferred tax liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">123</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(123</TD><TD STYLE="text-align: left">)</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">4</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Stockholders' equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Preferred stock, $.02 par value</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">102</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">5</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">104</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Common stock, $.02 par value</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">417</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">463</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">5</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">881</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18,428</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,212</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">27,475</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">2,6</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">99,115</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accumulated other comprehensive loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(138</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">138</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">6</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Accumulated deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(6,931</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(46,340</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">42,605</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">6</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(10,666</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Total stockholders' equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">11,500</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">7,151</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">70,783</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">89,434</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total liabilities and stockholders' equity</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">14,338</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">13,426</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">71,453</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">99,217</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Unaudited Pro Forma Consolidated Statement of Operations,
for the year ended December 31, 2011 ($- in thousands, except per share and per share data)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Historical</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Lexington<BR> Technology Group,<BR> Inc.</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Document&nbsp;Security<BR> Systems, Inc.</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR>
Adjustments</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Notes</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Pro Forma<BR> consolildated</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 24%">Revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">13,384</TD><TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 8%; text-align: center">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">13,384</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Cost of revenue</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">9,212</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">9,212</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: right">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,172</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,172</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,076</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,735</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">2</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,811</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">285</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">285</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt; padding-bottom: 1pt">Amortization of intangibles</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">285</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">500</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">1</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">785</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in; padding-bottom: 1pt">Operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">7,646</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">4,235</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">11,881</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,474</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,235</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,709</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Other income (expense):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(259</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(259</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Change in fair value of derivative liability</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">361</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">361</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Loss before income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,372</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,235</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,607</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Income tax benefit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(151</TD><TD STYLE="text-align: left; border-bottom: Black 1pt solid">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: right; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(151</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">-</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(3,221</TD><TD STYLE="text-align: left; border-bottom: Black 2.5pt double">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(4,235</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(7,456</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net loss per share -basic and diluted:</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.17</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.21</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Weighted average common shares outstanding, basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">-</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">19,454,046</TD><TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: right; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">16,082,164</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2.5pt">7</TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">35,536,210</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<!-- Field: Page; Sequence: 220; Value: 1 -->
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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Unaudited Pro Forma Consolidated Statement of Operations,
for the nine month period ended September 30, 2012 ($- in thousands, except per share and per share data)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Historical</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Lexington&nbsp;Technology<BR>
    Group, Inc.</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Document
    Security<BR>
    Systems, Inc.</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Pro
    Forma<BR> Adjustments</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">Notes</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Pro
    Forma<BR> consolildated</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">(From May 10, 2012<BR> (Inception)
    through<BR> September 30, 2012)</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 24%"><FONT STYLE="font-size: 8pt">Revenue</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 14%; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 14%; text-align: right"><FONT STYLE="font-size: 8pt">11,666</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-size: 8pt">11,666</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Cost of revenue</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">7,558</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">7,558</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">Gross profit</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">4,108</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">4,108</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Operating expenses:</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Selling, general and administrative</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">1,039</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">6,061</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">7,100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Research and development</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">545</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">545</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Amortization of intangibles</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">98</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">228</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">375</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">1</FONT></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">701</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Operating expenses</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">1,137</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">6,834</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">375</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">8,346</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Operating loss</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(1,137</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(2,726</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(375</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(4,238</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Other income (expense):</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Interest expense</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(465</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(176</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(641</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-size: 8pt">Change in fair value of derivative liability</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(5,329</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(5,329</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Amortizaton of note discount</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(249</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(249</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">Loss before income taxes</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(6,931</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(3,151</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(375</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">(10,457</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Income tax expense</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">14</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">14</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">Net loss</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">(6,931</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">(3,165</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">(375</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">(10,471</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">Net loss per share -basic
    and diluted:</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(0.73</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(0.15</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-size: 8pt">(0.29</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">Weighted average common
    shares outstanding, basic and diluted</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">9,424,022</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">20,536,448</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">16,082,164</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: center; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">7</FONT></TD><TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"><FONT STYLE="font-size: 8pt">36,618,612</FONT></TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Notes to Unaudited Pro Forma Consolidated Statements of Operations
and Balance Sheet</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">1.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This pro forma adjustment represents
the additional amortization expense as a result of the long-lived intangible assets acquired in the Merger, assuming the Merger
occurred at the beginning of the most recently completed fiscal year, January 1, 2011. The acquired intangible assets have an estimated
aggregate fair value of $6,919,000 and a weighted average remaining useful life of 10 years. The $5,000,000 pro forma adjustment
represents the estimated difference between the fair value and the carrying value of DSS&rsquo;s patent assets, customer lists
and non-compete agreements on the date of acquisition. As a result, the increase in amortization expense for the year ended December
31, 2011 is $500,000, and the increase in amortization expense for the nine month period ended September 30, 2012 is $375,000.
See the preliminary purchase price allocation table on page 204.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For these pro forma
consolidated financial statements of operations and balance sheet we assume that there was no sign of impairment of long-lived
intangible assets throughout the periods presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">2.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This pro-forma adjustment represents
direct, incremental costs of the Merger including (1) fees paid to Palladium Capital who acted as an advisor to DSS in the Merger,
comprising of cash of $182,000 and the expected fair value of 786,678 shares of DSS Common Stock that will be issued upon the closing
of the Merger with an estimated fair value of approximately $2,950,000 to Palladium Capital, and (2) cash bonuses of $155,000 and
$448,000 of stock based compensation expense related to the fair value of options issued to executives and senior managers upon
closing of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">3.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This pro forma adjustment represents
the estimated goodwill acquired as a result of the Merger. For the purposes of the Merger, since Lexington is determined to be
the accounting acquirer and DSS is determined to be the accounting acquiree, the consideration effectively transferred is measured
based on the expected fair value of the common stock of DSS outstanding immediately prior to the closing of the Merger. For the
purposes of the accompanying pro forma combined financial data, the estimated fair value of DSS common stock is $3.75 per share
and the number of shares outstanding is based on the 20,872,316 shares outstanding at September 30, 2012. The goodwill adjustment
represents the excess of the purchase price over the fair value of the tangible and intangible assets acquired less liabilities
assumed. See the preliminary purchase price allocation table on page 204.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">4.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This pro-forma adjustment represents
the change in the fair value of DSS long-term liabilities. The adjustment in a convertible note held by DSS was determined by the
difference in the carrying amount of the convertible note as of September 30, 2012 compared to the estimated fair value of the
convertible common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">5.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This pro forma adjustment presents
the effect on the common stock and preferred stock (if approved), at par, of the combined company that reflects DSS as the legal
acquirer and Lexington as the legal acquiree in the Merger. As a result, the common stock and preferred stock (if approved) share
number will be adjusted to include the shares issued to the shareholders of Lexington and to Palladium Capital as an advisor on
the date of the Merger. The following shares outstanding:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 85%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.25in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">As of September 30, 2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 87%; text-align: left">Document Security Systems</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">20,872,316</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Document Security Systems shares of common stock expected to be issued to former Lexington Technology Group stockholders</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,395,486</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Document Security Systems shares of common stock issued to Palladium Capital in conjunction with the Merger</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">786,678</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total common stock outstanding, pursuant to the Merger</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,054,480</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Par value per share of common stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Common stock, at par</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">881,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Document Security Systems shares of preferred stock (if approved) expected to be issued to former Lexington Technology Group stockholders</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,195,073</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Par value per share of preferred stock</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">0.02</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Preferred stock, at par</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">104,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">6.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
pro forma adjustment presents the effect of business combination accounting on additional paid-in capital, accumulated
deficit and accumulated other comprehensive loss of the combined company that reflect Lexington as the accounting acquirer
and DSS as the accounting acquiree in the Merger. As a result, in the post-combination consolidated financial statements,
additional paid-in capital will reflect Lexington&rsquo;s paid-in capital amounts immediately prior to the Merger, plus the
fair value of the outstanding common stock of DSS just prior to the Merger and the fair value of equity securities issued to
Palladium Capital. Accumulated deficit will only reflect the balance of Lexington prior to the Merger. The accumulated
deficit and accumulated other comprehensive loss of DSS will be cancelled in conjunction with the Merger. (See the
preliminary purchase price allocation table on page 204.)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">7.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
post-combination consolidated pro-forma equity will reflect DSS Common Stock and DSS Preferred Stock (if approved), including that
issued to Lexington and Palladium Capital as DSS is the legal acquirer. Shares used to calculate the unaudited pro-forma
basis and diluted loss per share were computed by adding the shares assumed to be issued upon the Merger to the weighted
average number of shares outstanding of DSS for the year ended December 31, 2011 and the nine months ended September 30,
2012, respectively. Potentially dilutive securities issuable under preferred stock agreements (if approved), convertible debt
agreements, options, warrants, and restricted stock agreements were excluded from the calculations of diluted earnings per
share because their inclusion would have been anti-dilutive to DSS&rsquo;s losses in the respective periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">For the year ended<BR> December 31, 2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 77%; font-weight: bold; text-align: left; padding-bottom: 1pt">Net loss &ndash;($ -in thousands)</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 20%; border-bottom: Black 1pt solid; text-align: right">(7,456</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Weighted average of Document Security Systems shares of common stock outstanding for the period:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">19,454,046</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Weighted average of Document Security Systems shares of common stock expected to be issued to former Lexington Technology Group stockholders, as of January 1, 2011</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,395,486</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Less: Escrow shares</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,100,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Weighted average of Document Security Systems shares of common stock issued to Palladium Capital, as of January 1, 2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">786,678</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">35,536,210</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Basic and diluted net loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.21</TD><TD STYLE="text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid">For the nine months ended<BR> September 30, 2012</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 72%; font-weight: bold; text-align: left; padding-bottom: 1pt">Net loss &ndash;($ -in thousands)</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="width: 25%; border-bottom: Black 1pt solid; text-align: right">(10,471</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Weighted average of Document Security Systems shares of common stock outstanding for the period</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">20,536,448</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Weighted average of Document Security Systems shares of common stock expected to be issued to former Lexington Technology Group stockholders, as of January 1, 2011.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">22,395,486</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Less: Escrow shares</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(7,100,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">Weighted average of Document Security Systems shares of common stock issued to Palladium Capital, as of January 1, 2011</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">786,678</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,618,612</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Basic and diluted net loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(0.29</TD><TD STYLE="text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>COMPARISON OF RIGHTS OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DSS STOCKHOLDERS AND LEXINGTON STOCKHOLDERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>General</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Certain Differences Between the Rights
of DSS Stockholders and Lexington Stockholders</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following is a
summary of the material differences between the current rights of DSS stockholders and the current rights of Lexington stockholders.
Although DSS and Lexington believe that this summary covers the material differences between the two companies&rsquo; stockholder
rights, this summary may not contain all of the information that is important to you. This summary is not intended to be a complete
discussion of the respective rights of DSS stockholders and Lexington stockholders, and it is qualified in its entirety by reference
to the DGCL, NYBCL and the various documents of DSS and Lexington referred to in this summary. In addition, the characterization
of some of the differences in the rights of DSS stockholders and Lexington stockholders as material is not intended to indicate
that other differences do not exist or are not important. DSS and Lexington urge you to carefully read this entire proxy statement/prospectus,
the relevant provisions of the DGCL, NYBCL and the other documents referred to in this proxy statement/prospectus for a more complete
understanding of the differences between the rights of a DSS stockholder and the rights of a Lexington stockholder. DSS has filed
with the SEC its documents referenced in this comparison of stockholder rights and will send copies of these documents to you,
without charge, upon your request. See the section entitled &ldquo;Where You Can Find Additional Information&rdquo; beginning on
page 224.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 49%; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS</TD>
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 47%; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Lexington</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Authorized Capital Stock</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify; text-indent: -13.5pt"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT>&nbsp;&nbsp;&nbsp;The
        DSS Certificate authorizes DSS to issue 200,000,000 shares of common stock, par value $0.02 per share. In addition, DSS is seeking
        stockholder approval pursuant to this proxy statement/prospectus to amend the DSS Certificate to implement a reverse stock split
        of DSS&rsquo;s outstanding common stock.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -13.5pt">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt; text-align: justify; text-indent: -13.5pt"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT>&nbsp;&nbsp;&nbsp;No
        shares of preferred stock are authorized. DSS is seeking stockholder approval pursuant to this proxy statement/prospectus to amend
        the DSS Certificate to authorize a class of preferred stock and establish the associated rights and preferences thereof.</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12.6pt; text-align: justify; text-indent: -12.6pt"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT>&nbsp;&nbsp;&nbsp;The
        Lexington Certificate authorizes Lexington to issue 129,000,000 shares of its capital stock divided into two classes: 100,000,000
        shares of common stock, par value $0.0001 per share, and 29,000,000 shares of preferred stock, par value $0.0001 per share.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12.6pt; text-align: justify; text-indent: -12.6pt">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12.6pt; text-align: justify; text-indent: -12.6pt"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;The
        Lexington Certificate also allows Lexington to issue any class of its preferred stock in any series.</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Stockholder Action by Written Consent</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The DSS Bylaws allow stockholders to act by written consent.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Lexington Bylaws allow Lexington
stockholders to act by written consent.&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Dividends</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 49%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The DSS bylaws provide that dividends may be declared and paid out of any funds available therefor, as often, in such amounts, and at such time or times as the board of directors may determine, provided, however, that DSS is not insolvent when such dividend is paid or rendered insolvent by the payment of such dividend.</TD>
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 47%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The Lexington Bylaws provide that the board of directors shall have full power and discretion, subject to the provisions of the Lexington Certificate, to determine what, if any, dividends or distributions shall be declared and paid or made.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Rights on Liquidation</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The DSS Certificate and Bylaws do not provide guidelines for liquidation rights.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The Lexington Certificate provides that upon the liquidation of Lexington, whether voluntary or involuntary, holders of common stock will be entitled to receive ratably all assets of Lexington available for distribution to stockholders, subject to any preferential rights of any then outstanding preferred stock.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Supermajority Vote Requirements</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">The DSS Certificate and Bylaws do not describe any supermajority vote requirements.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The Lexington Certificate and Bylaws do not describe any supermajority vote requirements.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Conversion Rights</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The DSS Certificate sets forth that the DSS board of directors may designate preferred stock and in connection with such designation fix conversion rights.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The Lexington Certificate and Bylaws do not describe any supermajority vote requirements.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Number of Directors and Elections</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
        DSS Bylaws provides that the board of directors will consist of no less than three (3) and no more than eight (8) members unless
        and until otherwise determined by vote of a majority of the entire board of directors. The number of directors shall not be less
        than three (3), unless all of the outstanding shares are owned beneficially and of record by less than three (3) shareholders,
        in which event the number of directors shall not be less than the number of shareholders.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2.25pt">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
        DSS Bylaws provide that any vacancy of the board of directors of DSS will be filled by a majority vote of the directors then in
        office, at any regular meeting or special meeting of the board of directors called for that purpose.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2.25pt">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The DSS Bylaws provide that
        directors shall be elected by a majority of the votes cast at a meeting of shareholders, by the holders entitled to vote in the
        election.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
        Lexington Bylaws provide that the number of directors constituting the entire board of directors shall be until such time as the
        board of directors determines otherwise, one (1). The number of directors may be increased or decreased by the unanimous action
        of the whole board of directors, but no decrease may shorten the term of an incumbent director.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
        Lexington Bylaws provide that directors are elected at the annual meeting of the stockholders and the persons receiving a plurality
        of the votes cast shall be elected. Each director will hold office until his successor is elected and is qualified.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Voting Rights</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 49%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The DSS Bylaws provide that each shareholder shall have one vote for every share of stock registered under his or her name on the books of the Corporation.</TD>
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 47%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The Lexington Certificate provides that the holders of the common stock are entitled to one vote for each share held at all meetings of stockholders. The voting rights of the holders of common stock are subject to and qualified by the rights of the holders of preferred stock of any series as may be designated by the board of directors upon any issuance of the preferred stock or any series.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Stockholder Proposals and Nominations
        for Candidates for Election</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">The DSS Bylaws provide guidelines for the submission of stockholder nominations and proposals by DSS stockholders.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">The Lexington Bylaws do not provide guidelines for the submission of stockholder nominations and proposals by Lexington stockholders.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Adjournment of a Stockholder Meeting</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The DSS Bylaws provide that whether or not a quorum is present, a majority in voting power of the shareholders present in person or by proxy and entitled to vote may adjourn any meeting to a time and place as they shall decide. Notice of any adjourned meeting need not be given. At any adjourned meeting, whether adjourned once or more, any business may be transacted that might have been transacted at the meeting of which it is an adjournment. Additional business may also be transacted if proper notice shall have been given.</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">The Lexington Bylaws provide that unless the board of directors, after an adjournment is taken, shall fix a new record date for an adjourned meeting or unless the adjournment is for more than 30 days, notice of an adjourned meeting need not be given if the date and time, place, if any, and the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting, to which the meeting shall be adjourned are announced at the meeting at which the adjournment is taken.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Removal of Directors</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The DSS Bylaws provide that any director may be removed
with or without cause at any time by the shareholders, at a special meeting of the shareholders called for that purpose, and may
be removed for cause by action of the board of directors. If a director was elected by a voting group of shareholders, only the
shareholders of that voting group may participate in the vote to remove that director.&nbsp;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Lexington Bylaws provide that
        any director or the entire board of directors may be removed at any time, with or without cause, by the holders of a majority of
        the shares then entitled to vote at an election of directors.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Restrictions on Transfers</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 49%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The DSS Bylaws provide that upon (a) receipt of the certificate
        representing the shares to be transferred, either duly endorsed or accompanied by proper evidence of succession, assignment or
        authority to transfer, (b) payment of any required transfer taxes, and (c) payment of any reasonable charge the board of directors
        may have established, the surrendered certificate shall be canceled and a new certificate or certificates shall be issued to the
        person(s) entitled to it.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="width: 47%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Lexington Bylaws provide that
        transfers of shares shall be made only on the records of Lexington kept at an office of Lexington or by the transfer agent designated
        by Lexington to transfer shares. Transfers of shares may be made only by the record holder, or by the record holder's legal representative
        authorized by a power of attorney duly executed and filed with the secretary or with the transfer agent appointed by the board
        of directors and, in the case of certificated shares, upon the surrender of the certificate or certificates for such shares properly
        endorsed and payment of all taxes thereon. The board of directors may make such additional rules and regulations concerning the
        issue, transfer, and registration of certificates for shares or uncertificated shares as it may deem necessary but that are not
        inconsistent with the Lexington bylaws.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Amendment of Charter and Bylaws</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
        DSS Bylaws provide that the board of directors shall have power to make, adopt, alter, amend and repeal, from time to time, Bylaws
        of DSS; provided, however, that the shareholders entitled to vote may alter, amend or repeal Bylaws made by the board of directors,
        except that the board of directors shall have no power to change the quorum for meetings of shareholders or of the board of directors,
        or to change any provisions of the Bylaws with respect to the removal of directors or the filling of vacancies in the board of
        directors resulting from the removal by the shareholders. If any Bylaw regulating an impending election of directors is adopted,
        amended or repealed by the board of directors, there shall be set forth in the notice of the next meeting of shareholders for the
        election of directors, the Bylaw so adopted, amended or repealed, together with a concise statement of the changes made.</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
        Lexington Bylaws provide that Bylaws may be adopted, amended or repealed by the board of directors, provided the conferral of such
        power on the board of directors shall not divest the stockholders of the power, or limit their power, to adopt, amend or repeal
        Bylaws.</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
        Lexington Certificate may be amended upon approval of the written consent of the stockholders of Lexington in accordance with Section
        228 of the Delaware General Corporation Law.</FONT></P>
        <P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&#9;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 49%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
DSS Certificate may be amended by a vote of the board of directors followed by a vote of a majority of all outstanding shares
entitled to vote thereon at a meeting of the shareholders.</FONT>&nbsp;</P></TD>
    <TD STYLE="width: 4%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 47%; padding-right: 5.4pt; padding-left: 0.5in; font-size: 10pt; font-weight: bold; text-align: justify; text-indent: -0.25in">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Differences between New York and Delaware
Corporate Law</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS is incorporated
under the laws of the State of New York and Lexington is incorporated under the laws of the State of Delaware. Upon completion
of the Merger, the certificate of incorporation and bylaws of DSS in effect immediately prior to the effective time of the Merger
will be the certificate of incorporation and bylaws of the combined company. Consequently, the rights of Lexington stockholders
who receive shares of DSS Common Stock as a result of the Merger will be governed by New York law, DSS&rsquo;s amended and restated
certificate of incorporation (DSS&rsquo;s &ldquo;<B>Certificate</B>&rdquo;) and DSS&rsquo;s amended and restated bylaws (DSS&rsquo;s
&ldquo;<B>Bylaws</B>&rdquo;). The following discussion summarizes certain material differences between the rights of holders of
DSS Common Stock and Lexington Common Stock resulting from the differences in their governing documents and New York and Delaware
law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This discussion does
not purport to be a complete statement of the rights of holders of DSS Common Stock under applicable New York law, DSS&rsquo;s
Certificate and DSS&rsquo;s Bylaws or the rights of holders of DSS Common Stock under applicable New York law, Lexington&rsquo;s
certificate of incorporation (Lexington&rsquo;s &ldquo;<B>Certificate</B>&rdquo;) and Lexington&rsquo;s bylaws (Lexington&rsquo;s
&ldquo;<B>Bylaws</B>&rdquo;), and is qualified in its entirety by reference to the governing corporate documents of DSS and Lexington
and applicable law. See &ldquo;Where You Can Find More Information&rdquo; beginning on page 224.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Capital Stock</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. DSS&rsquo;s
Certificate authorizes 200,000,000 shares of common stock, par value $0.02 per share. As of November 19, 2012, there were 21,705,967
shares of DSS Common Stock issued and outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. Lexington&rsquo;s
Certificate authorizes 100,000,000 shares of common stock, par value $0.0001 per share, and 29,000,000 shares of preferred stock,
par value $0.0001 per share. As of November 19, 2012, there were 14,062,825 shares of Lexington Common Stock and 17,913,727 shares
of Lexington Preferred Stock issued and outstanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Board of Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. New York
law states that the board of directors must consist of one or more directors. The number of directors constituting the board may
be fixed by the bylaws, or by action of the stockholders or of the board under the specific provisions of a bylaw adopted by the
stockholders. DSS&rsquo;s Bylaws provide that the board of directors shall consist of not less than three (3) and no more than
eight (8) directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. The
DGCL provides that the board of directors of a Delaware corporation must consist of one or more directors. The certificate of incorporation
or bylaws of a corporation may fix the number of directors. Lexington&rsquo;s Bylaws provide that the number of directors shall
be one (1). The Lexington Bylaws provide that the number of directors may be reduced or increased from time to time by the unanimous
action of the whole board of directors, but no decrease may shorten the tem of an incumbent director.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Removal of Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. As described
above under &ldquo;&mdash;Board of Directors,&rdquo; DSS&rsquo;s Bylaws provide that a director of DSS may be removed by the shareholders
with or without cause or by the board of directors with cause.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. As
described above under &ldquo;&mdash;Board of Directors,&rdquo; Lexington&rsquo;s Bylaws provide that any director or the entire
board of directors may be removed at any time, with or without cause, by the holders of a majority of the shares then entitled
to vote at an election of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Filling Vacancies on the Board of
Directors</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. Under New
York law, vacancies occurring on the board of directors by reason of the removal of directors without cause may be filled only
by a vote of the stockholders unless the certificate of incorporation or bylaws provide otherwise. Pursuant to the DSS&rsquo;s
Bylaws, vacancies on the board of directors, whether caused by resignation, death, removal or otherwise, shall be filled by majority
vote of the remaining directors. Pursuant to New York law, a director elected to fill a vacancy, unless elected by the stockholders,
shall hold office until the next meeting of stockholders at which the election of directors is in the regular order of business,
and until such director&rsquo;s successor has been elected and qualified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. The
DGCL provides that all vacancies, including vacancies resulting from newly created directorships due to an increase in the number
of directors, may be filled only by a vote of a majority of directors then holding office, whether or not a quorum. The Lexington
Bylaws provide that any vacancy arising from an increase in the number of directors or otherwise may be filled by the unanimous
vote of the directors then in office or by a sole remaining director, subject in each case to the approval of the holders of a
majority of the shares then entitled to vote at an election of directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Amendment of Certificate of Incorporation</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. Under New
York law, subject to limited exceptions, amendments to the certificate of incorporation must be approved by vote of a majority
of all outstanding shares entitled to vote on the proposed amendment, except that provisions of the certificate of incorporation
requiring a greater or class vote may only be amended by such greater or class vote. In addition, an amendment that negatively
affects in certain ways holders of shares of a class or series requires authorization by a majority of the votes of all outstanding
shares of the affected class or series. DSS&rsquo;s Certificate does not contain any general requirements with regard to amendments
of the Certificate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. The
DGCL provides that a corporation&rsquo;s certificate of incorporation may be amended by the holders of a majority of the corporation&rsquo;s
outstanding capital stock. Lexington&rsquo;s Certificate does not contain any general requirements with regard to amendments of
the Certificate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>



<P STYLE="margin: 0"></P>
<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Amendment of Bylaws</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. New York
law provides that the bylaws of a business corporation may be amended or repealed by a majority of the votes cast by the shares
at the time entitled to vote in the election of any directors. However, if so provided in the certificate of incorporation or a
bylaw adopted by the stockholders, bylaws may also be adopted, amended or repealed by the board of directors by such vote as may
be therein specified, but any bylaw adopted by the board of directors may be amended or repealed by the stockholders entitled to
vote thereon, as described in the preceding sentence.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s Bylaws
provide that the board of directors shall have power to make, adopt, alter, amend and repeal, from time to time, by-laws of DSS;
provided, however, that the shareholders entitled to vote may alter, amend or repeal bylaws made by the board of directors, except
that the board of directors shall have no power to change the quorum for meetings of shareholders or of the board of directors,
or to change any provisions of the bylaws with respect to the removal of directors or the filling of vacancies in the board of
directors resulting from the removal by the shareholders. If any bylaw regulating an impending election of directors is adopted,
amended or repealed by the board of directors, there shall be set forth in the notice of the next meeting of shareholders for the
election of directors, the bylaw so adopted, amended or repealed, together with a concise statement of the changes made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. Lexington&rsquo;s
Certificate and Bylaws provide that the board of directors is authorized to adopt, amend or repeal any of the bylaws of Lexington,
subject to the right of the stockholders of the corporation to adopt, amend or repeal any bylaw.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Notice of Stockholder Meetings</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. In accordance
with New York law, DSS&rsquo;s Bylaws provide that written notice of any stockholders&rsquo; meeting must be given to each stockholder
entitled to vote not less than 10 nor more than 60 days before the meeting date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. In
accordance with the DGCL, Lexington&rsquo;s Bylaws provide that written notice of any stockholders&rsquo; meeting must be given
to each stockholder not less than 10 nor more than 60 days before the meeting date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Right to Call Special Meeting of
Stockholders</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. Under New
York law, a special meeting of stockholders may be called by (i) the person or persons authorized to do so by the certificate of
incorporation or bylaws or (ii) the board of directors. DSS&rsquo;s Bylaws authorize the calling of a special meeting of stockholders
by any two or more directors, the Chairman or the President or the holders of no less than 10% of all the shares entitled to vote
at the meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. Under
the DGCL, a special meeting of stockholders may be called by (i) the board of directors or (ii) any other person authorized to
do so in the certificate of incorporation or the bylaws. Lexington&rsquo;s Bylaws authorize the calling of a special meeting of
stockholders by the board or directors, the Chairman of the board of directors or the President and shall be called by the President
or the Secretary upon unanimous written consent of the directors. Lexington&rsquo;s stockholders do not have the ability to call
a special meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Stockholder Nominations and Proposals</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. DSS&rsquo;s
Bylaws set forth provisions regarding the procedure for the submission of stockholder proposals in advance of stockholder meetings,
providing that the stockholder must have given timely notice thereof in writing, either by personal delivery or by United States
mail, postage prepaid, to the Secretary of the DSS not later than 90 days prior to the meeting anniversary date of the immediately
preceding annual meeting or if no annual meeting was held for any reason in the preceding year, 90 days prior to the first Wednesday
in December. A stockholder's notice to the Secretary shall set forth as to each matter the stockholder proposes to bring before
the meeting (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (ii) the name and record address of the stockholder proposing such business, (iii) the class
and number of shares of the Company which are beneficially owned by the stockholder and (iv) any material interest of the stockholder
in such business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. The
Lexington Certificate and Bylaws do not provide any guidance regarding stockholder nominations and proposals.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Indemnification of Officers, Directors
and Employees</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. Under Section
722 of the NYBCL, a corporation may indemnify its directors and officers made, or threatened to be made, a party to any action
or proceeding related to service as a director or officer, except for stockholder derivative suits, if the director or officer
acted in good faith and for a purpose that he or she reasonably believed to be in, or, in the case of service to another corporation
or enterprise, not opposed to the best interests of the corporation, and, in addition in criminal proceedings, had no reasonable
cause to believe his or her conduct was unlawful. In the case of stockholder derivative suits, the corporation may indemnify a
director or officer if he or she acted in good faith for a purpose that he or she reasonably believed to be in, or, in the case
of service to another corporation or enterprise, not opposed to the best interests of the corporation, except that no indemnification
may be made in respect of (i) a threatened action, or a pending action that is settled or otherwise disposed of, or (ii) any claim,
issue or matter as to which such individual has been adjudged to be liable to the corporation, unless and only to the extent that
the court in which the action was brought, or, if no action was brought, any court of competent jurisdiction, determines, upon
application, that, in view of all the circumstances of the case, the individual is fairly and reasonably entitled to indemnity
for the portion of the settlement amount and expenses as the court deems proper. Any individual who has been successful on the
merits or otherwise in the defense of a civil or criminal action or proceeding will be entitled to indemnification. Except as provided
in the preceding sentence, unless ordered by a court pursuant to Section 724 of the NYBCL, any indemnification under the NYBCL
as described in the immediately preceding paragraph may be made only if, pursuant to Section 723 of the NYBCL, indemnification
is authorized in the specific case and after a finding that the director or officer met the requisite standard of conduct by the
disinterested directors if a quorum is available, or, if the quorum so directs or is unavailable, by (i) the board of directors
upon the written opinion of independent legal counsel or (ii) the stockholders. Further, New York law permits a corporation to
purchase directors and officers insurance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS&rsquo;s Bylaws
provide DSS shall indemnify each person made or threatened to be made a party to any action or proceeding, whether civil or criminal,
by reason of the fact that such person or such person's testator or intestate is or was a director, officer or employee of DSS,
or serves or served at the request of DSS, any other corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise in any capacity, against judgment, fines, penalties, amounts paid in settlement and reasonable expenses, including attorneys'
fees, incurred in connection with such action or proceeding, or any appeal therein, provided that no such indemnification shall
be made if a judgment or other final adjudication adverse to such person establishes that his or her acts were committed in bad
faith or were the result of active and deliberate dishonesty and were material to the cause of action so adjudicated, or that he
or she personally gained in fact a financial profit or other advantage to which he or she was not legally entitled, and provided
further that no such indemnification shall be required with respect to any settlement or other non-adjudicated disposition of any
threatened or pending action or proceeding unless DSS has given its prior consent to such settlement or other disposition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. Under
Section 145 of the DGCL, a corporation may indemnify a director, officer, employee or agent of the corporation (or a person who
is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise) against expenses (including attorneys&rsquo; fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by the person if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. In the case of an action brought by or in the right of a corporation, the corporation
may indemnify a director, officer, employee or agent of the corporation (or a person who is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise)
against expenses (including attorneys&rsquo; fees) actually and reasonably incurred by him if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification may be
made in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation
unless and only to the extent a court finds that, in view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnification for such expenses as the court shall deem proper. The indemnification provisions of the DGCL require
indemnification of a director or officer who has been successful on the merits in defense of any action, suit or proceeding that
he was a party to by virtue of the fact that he is or was a director or officer of the corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Lexington Certificate
provides that Lexington shall indemnify, to the fullest extent permitted by Delaware law, any and all persons whom it shall have
power to indemnify under the DGCL. The indemnification provided in the Lexington Certificate is not deemed to be exclusive of any
other rights to which those seeking indemnification may be entitled whether as a matter of law, under any bylaw or Lexington, by
agreement, by vote of stockholder or disinterested directors of Lexington or otherwise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Anti-Takeover Provisions</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. Section
912 of the NYBCL generally provides that a New York corporation may not engage in a business combination with an interested stockholder
for a period of five years following the interested stockholder&rsquo;s becoming such. Such a business combination would be permitted
where it is approved by the board of directors before the interested stockholder&rsquo;s becoming such. Covered business combinations
include certain mergers and consolidations, dispositions of assets or stock, plans for liquidation or dissolution, reclassifications
of securities, recapitalizations and similar transactions. An interested stockholder is generally a stockholder owning at least
20% of a corporation&rsquo;s outstanding voting stock. In addition, New York corporations may not engage at any time with any interested
stockholder in a business combination other than: (i) a business combination approved by the board of directors before the stock
acquisition, or where the acquisition of the stock had been approved by the board of directors before the stock acquisition; (ii)
a business combination approved by the affirmative vote of the holders of a majority of the outstanding voting stock not beneficially
owned by the interested stockholder at a meeting called for that purpose no earlier than five years after the stock acquisition;
or (iii) a business combination in which the interested stockholder pays a formula price designed to ensure that all other stockholders
receive at least the highest price per share that is paid by the interested stockholder and that meets certain other requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">A corporation may opt
out of the interested stockholder provisions described in the preceding paragraph by expressly electing not to be governed by such
provisions in its bylaws, which must be approved by the affirmative vote of a majority of votes of the outstanding voting stock
of such corporation and is subject to further conditions. However, DSS&rsquo;s Bylaws do not contain any provisions electing not
to be governed by Section 912 NYBCL. Under DSS&rsquo;s bylaws, any corporate action other than the election of directors (which
requires the affirmative vote of a plurality of shares entitled to vote) to be taken by vote of the shareholders, shall be authorized
by a majority of votes cast at a meeting of shareholders by the holders of shares entitled to vote thereon.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. Under
the DGCL, a corporation is prohibited from engaging in any business combination with an interested stockholder or any entity if
the transaction is caused by the interested stockholder for a period of three years from the date on which the stockholder first
becomes an interested stockholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">There is an exception
to the three-year waiting period requirement if:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">prior to the stockholder becoming an interested
stockholder, the board of directors approves the business combination or the transaction in which the stockholder became an interested
stockholder;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">upon the completion of the transaction
in which the stockholder became an interested stockholder, the interested stockholder owns at least 85% of the voting stock of
the corporation other than shares held by directors who are also officers and certain employee stock plans; or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">the business combination is approved by
the board of directors and by the affirmative vote of two-thirds of the outstanding voting stock not owned by the interested stockholder
at a meeting.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DGCL defines the
term &ldquo;business combination&rdquo; to include transactions such as mergers, consolidations or transfers of 10% or more of
the assets of the corporation. The DGCL defines the term &ldquo;interested stockholder&rdquo; generally as any person who (together
with affiliates and associates) owns (or in certain cases, within the past three years did own) 15% or more of the outstanding
voting stock of the corporation. A corporation can expressly elect not to be governed by the DGCL&rsquo;s business combination
provisions in its certificate of incorporation or bylaws, but Lexington has not done so.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Lexington Bylaws
provide that except as otherwise provided by law, any corporate action to be taken by a vote of the stockholders, other than the
election of directors, shall be authorized by the affirmative vote of a majority of the shares present or represented by proxy
at the meeting and entitled to vote on the subject matter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Stockholder Approval of a Merger</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. Under Section
903 of the NYBCL, the consummation by a corporation of a merger or consolidation requires the approval of the board of directors
and (i) a majority of the votes of all outstanding shares entitled to vote thereon for corporations in existence on February 22,
1998 where the certificate of incorporation expressly provides therefor, or corporations incorporated after February 22, 1998,
and (ii) two-thirds of the votes of all outstanding shares entitled to vote thereon, for all other corporations. Because DSS was
incorporated prior to February 22, 1998 and its Certificate does not provide for a majority of the votes to be sufficient for the
approval of a merger, the vote of two-thirds of all outstanding shares of DSS are required for the approval of a merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. Under
the DGCL, a merger must be approved by the board of directors and by a majority (unless the certificate of incorporation requires
a higher percentage) of the outstanding stock of the corporation entitled to vote. However, no vote of stockholders of a constituent
corporation surviving a merger is required (unless the corporation provides otherwise in its certificate of incorporation) if (i)
the merger agreement does not amend such constituent corporation&rsquo;s certificate of incorporation, (ii) each share of stock
of such constituent corporation outstanding immediately before the merger is to be an identical outstanding or treasury share of
the surviving corporation after the merger and (iii) the number of shares to be issued by the surviving corporation in the merger
does not exceed 20% of the shares of such constituent corporation outstanding immediately before the merger. Lexington&rsquo;s
Certificate is silent regarding merger voting requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Stockholder Action Without A Meeting</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. Under New
York law, whenever stockholders are required or permitted to take any action by vote, such action may, in lieu of a meeting, be
taken by unanimous written consent of holders of all outstanding shares entitled to vote on such action. If the certificate of
incorporation so permits, any such action may be taken by written consent of the holders of outstanding shares having not less
than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled
to vote thereon were present and voted. However, DSS&rsquo;s Certificate does not address actions by written consent; therefore
any such action can be taken only by unanimous written consent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. Under
the DGCL, unless otherwise provided in a corporation&rsquo;s certificate of incorporation, any action that may be taken at a meeting
of stockholders may be taken without a meeting, without prior notice and without a vote if the holders of outstanding stock, having
not less than the minimum number of votes that would be necessary to authorize such action, consent in writing. However, Lexington&rsquo;s
Certificate does not address actions by written consent; therefore any action of stockholders may be taken without a meeting, without
prior notice, and without a vote if the holders of outstanding stock, having not less than the minimum number of votes that would
be necessary to authorize such action, consent in writing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Dissenters&rsquo; Rights</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. Under New
York law, stockholders may, under certain circumstances, exercise a right of dissent from certain limited corporate actions and
obtain payment for the fair value of their shares. For example, subject to certain exceptions, dissenters&rsquo; rights are available
under New York law to any stockholder of a constituent corporation in the event of a merger if such stockholder is entitled to
vote upon the merger or if the corporation is a subsidiary that is merged with its parent. One of the exceptions under New York
law to the general rule described in the preceding sentence, that stockholders have dissenters&rsquo; rights with respect to a
merger if such stockholder is entitled to vote upon the merger, is that, under New York law, stockholders do not have dissenters&rsquo;
rights with respect to a merger if, on the record date, the stock held by such stockholders is listed on a national securities
exchange or designated as a national market system security on an interdealer quotation system by the National Association of Securities
Dealers, Inc. Neither DSS&rsquo;s Certificate nor DSS&rsquo;s Bylaws grant any dissenters&rsquo; rights in addition to the statutorily
prescribed rights. Stockholders who desire to exercise their dissenters&rsquo; rights must satisfy all of the conditions and requirements
set forth in the NYBCL in order to maintain these rights and obtain any payment due in respect of the exercise of these rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. Under
the DGCL, a stockholder of a corporation participating in certain major corporate transactions may, under varying circumstances,
be entitled to appraisal rights pursuant to which the stockholder may receive cash in the amount of the fair market value of his
or her shares in lieu of the consideration he or she would otherwise receive in the transaction. Unless a corporation&rsquo;s certificate
of incorporation provides otherwise, these appraisal rights are not available:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 38.2pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">with respect to the sale, lease or exchange
of all or substantially all of the assets of the corporation,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 38.2pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">with respect to a merger or consolidation
by a corporation the shares of which either are listed on a national securities exchange or designated as a national market system
security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or are held of record by more
than 2,000 holders, if the terms of the merger or consolidation allow the stockholders to receive only shares of the surviving
corporation or shares of any other corporation that either are listed on a national securities exchange or designated as a national
market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc. or are held of
record by more than 2,000 holders, plus cash in lieu of fractional shares, or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 38.2pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">to stockholders of the corporation surviving
a merger if no vote of the stockholders of the surviving corporation is required to approve the merger and if some other conditions
are met.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Dividends</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>DSS</I>. Under New
York law, a corporation may declare and pay dividends or make other distributions, except when the corporation is currently insolvent
or would thereby be made insolvent, or when the declaration, payment or distribution would be contrary to any restrictions contained
in the certificate of incorporation. DSS&rsquo;s Certificate does not address dividends. DSS&rsquo;s Bylaws provide that DSS&rsquo;s
board of directors has the power to declare and pay dividends upon shares of DSS&rsquo;s Common Stock as provided by New York law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>Lexington</I>. The
Lexington board of directors has full power and discretion to determine what, if any, dividends or distributions shall be declared
and paid or made.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEGAL MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The validity of the
shares of common stock offered hereby by DSS will be passed upon by Troutman Sanders LLP, New York, New York. Certain federal income
tax consequences of the Merger will be passed upon by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., New York, New York.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXPERTS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The financial statements
of DSS as of December 31, 2011 and 2010, and for each of the two years in the period ended December 31, 2011, included in this
proxy statement/prospectus have been audited by Freed Maxick CPAs, P.C., an independent registered public accounting firm, as set
forth in their report thereon appearing elsewhere herein, and are included in reliance upon such report given on the authority
of such firm as experts in accounting and auditing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The financial
statements of Lexington as of June 30, 2012, included in this proxy statement/prospectus have been so included in reliance on
the report of Marcum LLP, an independent registered public accounting firm, given on the authority of said firm as experts
in auditing and accounting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FUTURE STOCKHOLDER PROPOSALS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Stockholders who wish
to present proposals for inclusion in DSS&rsquo;s proxy materials for the 2013 Annual Meeting of Stockholders may do so by following
the procedures set forth in DSS&rsquo;s by-law provisions relating to stockholder proposals. Stockholders must submit such proposals
in writing to Document Security Systems, Inc., Attention: Robert B. Fagenson, Chairman of the Board, at 28 East Main Street, Rochester,
New York, 14614. DSS may, subject to SEC review and guidelines, decline to include any proposal in our proxy materials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Stockholders who wish
to make a proposal at the 2013 Annual Meeting of Stockholders, other than one that will be included in our proxy materials, must
notify us and submit such proposal by March 16, 2013. The proxies that management solicits for the meeting will confer discretionary
authority to vote on the stockholder&rsquo;s proposal only if it is properly brought before the meeting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>WHERE YOU CAN FIND ADDITIONAL INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS files annual, quarterly
and current reports, proxy statements and other information with the SEC. You may read and copy any of this information at the
SEC&rsquo;s public reference room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 or 202-942-8090
for further information on the public reference room. DSS&rsquo;s SEC filings are also available to the public on the website maintained
by the SEC at <I>www.sec.gov</I>. The reports and other information filed by DSS with the SEC are also available at DSS&rsquo;s
website at <I>www.dsssecure.com</I>. The information contained on the SEC website and the DSS&rsquo;s website is specifically not
incorporated by reference into this proxy statement/prospectus, and should not be considered to be a part of this proxy statement/prospectus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS has filed with
the SEC a Registration Statement on Form S-4 of which this proxy statement/prospectus forms a part. The registration statement
registers certain securities of DSS to be issued to Lexington stockholders in connection with the Merger. The registration statement,
including the exhibits and annexes attached thereto, contains additional relevant information about the securities of DSS.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This document is a
prospectus and a proxy statement of DSS for the DSS special meeting. You should rely only on the information contained in this
proxy statement/prospectus to vote your shares at the DSS special meeting. DSS has not authorized anyone to give any information
or make any representation about the Merger or DSS that is different from, or in addition to, the information or representations
contained in this proxy statement/prospectus. Therefore, if anyone does give you information or representations of this sort, you
should not rely on it or them. The information contained in this proxy statement/prospectus speaks only as of the date of this
document unless the information specifically indicates that another date applies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">You can obtain documents
from DSS by requesting them in writing or by telephone from DSS at the following address:</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; font-size: 10pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Document Security Systems, Inc.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">First Federal Plaza</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white">28
        East Main Street, Suite 1525</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white">Rochester,
        New York 14614</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Attn: Chief Executive Officer</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="background-color: white">(585)
        325-3610</FONT></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If you are a DSS stockholder,
you may also obtain the documents referred to in this proxy statement/prospectus by requesting them in writing or by telephone
from [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;] or DSS&rsquo;s proxy solicitor at the address and the telephone number
listed below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt; text-align: center">[PROXY SOLICITOR]</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="text-transform: uppercase; background-color: white"><B>DOCUMENT
SECURITY SYSTEMS, Inc. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; background-color: white"><FONT STYLE="background-color: white"><B>INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0; font-weight: bold; text-align: justify; width: 90%">AS OF SEPTEMBER 30, 2012 AND DECEMBER 31, 2011 AND <BR>
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2012 AND SEPTEMBER 30, 2011 (UNAUDITED)</TD>
    <TD STYLE="width: 10%; padding-left: 8.65pt; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.12in; text-align: justify">Consolidated Balance Sheets as of September 30, 2012 (Unaudited) and December 31, 2011 (Audited)</TD>
    <TD STYLE="padding-left: 8.65pt; text-decoration: none; text-align: left"><FONT STYLE="color: windowtext">F-2</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.12in; text-align: justify">Consolidated Statements of Operations and Comprehensive Loss <BR>
for the three and nine months ended September 30, 2012 and 2011 &nbsp;(Unaudited)</TD>
    <TD STYLE="padding-left: 8.65pt; text-decoration: none; text-align: left"><FONT STYLE="color: windowtext">F-3</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.12in; text-align: justify">Consolidated Statements of Cash Flows for the nine months ended September 30, 2012 and 2011&nbsp;(Unaudited)</TD>
    <TD STYLE="padding-left: 8.65pt; text-decoration: none; text-align: left"><FONT STYLE="color: windowtext">F-4</FONT></TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.12in; text-align: justify">Notes to Interim Consolidated Financial Statements&nbsp;(Unaudited)</TD>
    <TD NOWRAP STYLE="padding-left: 8.65pt; text-align: left">F-5&mdash;F-16</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0; font-weight: bold; text-align: justify">AS OF DECEMBER 31, 2011 AND 2010 AND <BR>
FOR THE PERIOD ENDED DECEMBER 31, 2011 AND DECEMBER 31, 2011 (AUDITED)</TD>
    <TD STYLE="padding-left: 8.65pt; text-align: left">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.12in; text-decoration: none; text-align: justify"><FONT STYLE="color: windowtext">Report of Independent Registered Public Accounting Firm</FONT></TD>
    <TD STYLE="padding-left: 8.65pt; text-align: left">F-17</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.12in; text-decoration: none; text-align: justify"><FONT STYLE="color: windowtext">Consolidated Balance Sheets</FONT></TD>
    <TD STYLE="padding-left: 8.65pt; text-align: left">F-18</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.12in; text-decoration: none; text-align: justify"><FONT STYLE="text-underline-style: none; color: windowtext">Consolidated Statements of Operations</FONT> and Comprehensive Loss</TD>
    <TD STYLE="padding-left: 8.65pt; text-align: left">F-19</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.12in; text-decoration: none; text-align: justify"><FONT STYLE="color: windowtext">Consolidated Statements of Cash Flows</FONT></TD>
    <TD STYLE="padding-left: 8.65pt; text-decoration: none; text-align: left"><FONT STYLE="color: windowtext">F-</FONT>20</TD>
    </TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.12in; text-decoration: none; text-align: justify"><FONT STYLE="color: windowtext">Statements of Changes in Stockholders&rsquo; Equity </FONT></TD>
    <TD STYLE="padding-left: 8.65pt; text-decoration: none; text-align: left"><FONT STYLE="color: windowtext">F-</FONT>21</TD>
    </TR>
<TR STYLE="background-color: White">
    <TD STYLE="vertical-align: bottom; padding-left: 0.12in; text-decoration: none; text-align: justify"><FONT STYLE="color: windowtext">Notes to the Consolidated Financial Statements</FONT></TD>
    <TD NOWRAP STYLE="vertical-align: bottom; padding-left: 8.65pt; text-align: left">F-22&mdash;F-49</TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;<BR></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>DOCUMENT SECURITY SYSTEMS,
INC.&nbsp; AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Consolidated Balance Sheets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>As of</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">September&nbsp;30,&nbsp;2012</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December&nbsp;31,&nbsp;2011</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">(Unaudited)</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">ASSETS</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Current assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; padding-left: 9pt">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">1,022,924</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">717,679</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Accounts receivable, net of allowance of&nbsp; $76,000 ($76,000- 2011)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,659,145</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,595,750</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Inventory</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,115,550</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">783,442</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Prepaid expenses and other current assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">393,857</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">95,399</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,191,476</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,192,270</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,758,828</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,019,829</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">234,057</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">244,356</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Goodwill</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,322,799</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,322,799</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Other intangible assets, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,918,703</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,043,212</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">13,425,863</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">12,822,466</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">LIABILITIES AND STOCKHOLDERS' EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Current liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,849,192</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,666,963</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accrued expenses and other current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,131,342</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,142,629</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Revolving lines of credit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">542,956</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">763,736</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Short-term loan from related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Current portion of long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">333,083</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">460,598</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Current portion of capital lease obligations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">25,026</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">88,172</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,881,599</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,272,098</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Long-term debt, net of unamortized discount of $55,000 ($88,000-2011)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,131,573</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,819,783</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Interest rate swap hedging liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">138,359</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,688</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Capital lease obligations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,133</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Deferred tax liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">122,938</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">108,727</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Commitments and contingencies (see Note 6)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Stockholders' equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Common stock, $.02 par value;&nbsp; 200,000,000 shares authorized, 20,872,316 shares issued and outstanding (19,513,132 in 2011)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">417,445</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">390,262</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">53,212,067</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,395,241</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accumulated other comprehensive loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(138,359</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(110,688</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Accumulated deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(46,339,759</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(43,174,778</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Total stockholders' equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">7,151,394</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,500,037</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total liabilities and stockholders' equity</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">13,425,863</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">12,822,466</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">See accompanying notes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Consolidated Statements of Operations
and Comprehensive Loss</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">For&nbsp;The&nbsp;Three&nbsp;Months&nbsp;Ended&nbsp;September
    30,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center">For&nbsp;The&nbsp;Nine&nbsp;Months&nbsp;Ended&nbsp;September
    30,</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 52%; padding-left: 9pt">Printing</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">692,554</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">831,468</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,214,297</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,342,463</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,188,331</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,575,948</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,858,176</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,795,599</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Plastic IDs and cards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">774,297</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">757,489</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,253,667</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,087,196</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Licensing and digital solutions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">508,941</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">451,254</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,340,192</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">951,669</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Total revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,164,123</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,616,159</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,666,332</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,176,927</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Costs of revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Printing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">428,912</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">698,715</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,568,132</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,082,810</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,639,735</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,124,973</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,470,834</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,762,941</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Plastic IDs and cards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">433,271</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">453,932</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,262,984</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,231,079</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Licensing and digital solutions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">138,719</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">67,778</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">255,731</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">86,877</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in; padding-bottom: 1pt">Total costs of revenue</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,640,637</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,345,398</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">7,557,681</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">6,163,707</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,523,486</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,270,761</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,108,651</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,013,220</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,302,695</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,976,913</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,060,627</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,212,788</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">173,833</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">83,387</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">544,966</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">208,498</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; padding-bottom: 1pt">Amortization of intangibles</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">76,026</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">71,376</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">228,078</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">205,416</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 27pt; padding-bottom: 1pt">Operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,552,554</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,131,676</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">6,833,671</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,626,702</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,029,068</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(860,915</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,725,020</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,613,482</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Other income (expense):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Change in fair value of derivative liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">360,922</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(51,387</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(60,531</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(176,992</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(169,711</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Amortizaton of note discount</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(11,058</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(248,758</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Loss before income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,091,513</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(921,446</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,150,770</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,422,271</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Income tax (benefit) expense, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">4,737</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(164,394</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">14,211</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(154,920</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Net loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(1,096,250</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(757,052</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(3,164,981</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(2,267,351</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Other comprehensive loss:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Interest rate swap (loss) gain</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(5,179</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(27,671</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">3,678</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Comprehensive loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(1,101,429</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(757,052</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(3,192,652</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(2,263,673</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net loss per share -basic and diluted:</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(0.05</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(0.04</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(0.15</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">(0.12</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Weighted average common shares outstanding, basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">20,822,351</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">19,474,173</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">20,536,448</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">19,435,930</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">See accompanying notes</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>DOCUMENT SECURITY SYSTEMS,
INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>Consolidated Statements of
Cash Flows</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center"><B>For the Nine Months Ended September
30,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 76%; text-align: left; padding-left: 0.25in">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(3,164,981</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">(2,267,351</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Adjustments to reconcile net loss to net cash used by operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 27pt">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">598,010</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">534,292</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 27pt">Stock based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">631,466</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">319,106</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 27pt">Amortization of note discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">248,758</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 27pt">Change in fair value of derivative liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(360,922</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 27pt">Deferred tax benefit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(169,131</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">(Increase) decrease in assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 36pt">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(63,395</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">491,497</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 36pt">Inventory</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(332,108</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(442,421</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 36pt">Prepaid expenses and other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(181,330</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,208</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Increase (decrease) in liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 36pt">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">182,229</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(300,291</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 36pt">Accrued expenses and other liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,924</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">67,820</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net cash used by operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,078,427</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,017,193</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from investing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Purchase of property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(108,931</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(497,709</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Purchase of other intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(103,569</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(26,313</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0.25in">Acquisition of business</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">61,995</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Net cash used by investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(212,500</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(462,027</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Net payments on revolving lines of credit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(220,780</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(11,883</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Payment of short-term loan from related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(150,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in">Payments of long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(269,056</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(245,183</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in">Payments of capital lease obligations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(74,279</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(72,927</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Issuance of common stock, net of issuance costs</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">3,310,287</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(206,851</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net cash provided (used) by financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2,596,172</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(536,844</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Net increase (decrease) in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">305,245</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,016,064</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt">Cash beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">717,679</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">4,086,574</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt">Cash end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">1,022,924</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">1,070,510</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">See accompanying notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES</B><BR>
<B>NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS</B><BR>
<B>September 30, 2012</B><BR>
<B>(Unaudited)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>1.</B></TD><TD STYLE="text-align: justify"><B>Basis of Presentation and Significant Accounting Policies</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying unaudited
condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles
for interim financial information and with the instructions to Form 10-Q and Rule 8.03 of Regulation S-X for smaller reporting
companies. Accordingly, these statements do not include all of the information and footnotes required by U.S. generally accepted
accounting principles for complete financial statements. In the opinion of management, the accompanying balance sheets and related
interim statements of operations and comprehensive loss and cash flows include all adjustments, consisting only of normal recurring
items necessary for their fair presentation in accordance with U.S. generally accepted accounting principles. All significant intercompany
transactions have been eliminated in consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Interim results are
not necessarily indicative of results expected for a full year. For further information regarding Document Security Systems, Inc.&rsquo;s
(the &ldquo;Company&rdquo;) accounting policies, refer to the audited consolidated financial statements and footnotes thereto included
in the Company's Form 10-K for the fiscal year ended December 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">The
preparation of financial statements in conformity with accounting principles generally accepted in the United States (U.S. GAAP)
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ materially from those estimates and assumptions. </FONT>In preparing these
financial statements, the Company has evaluated events and transactions for potential recognition or disclosure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white"><B><I>Plan
of Merger - </I></B>On October 1, 2012, the Company entered into an Agreement and Plan of Merger ("Merger Agreement"),
pursuant to which, once the merger commences, DSSIP, Inc., a wholly owned subsidiary of the Company ("Merger Sub"), will
merge with and into Lexington Technology Group, Inc. ("Lexington"), with Lexington being the surviving corporation which will
continue its existence as a wholly-owned subsidiary of the Company through an exchange of capital stock of Lexington for
capital stock of the Company (the "Merger").</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Earnings Per
Common Share</I></B><FONT STYLE="color: black"> - </FONT>The Company presents basic and diluted earnings per share. Basic earnings
per share reflect the actual weighted average of shares issued and outstanding during the period. Diluted earnings per share are
computed including the number of additional shares that would have been outstanding if dilutive potential shares had been issued.
In a loss year, the calculation for basic and diluted earnings per share is considered to be the same, as the impact of potential
common shares is anti-dilutive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of September 30,
2012 and 2011, there were up to 4,319,020 and 3,271,853, respectively, of shares potentially issuable under convertible debt agreements,
options, warrants, restricted stock agreements and employment agreements that could potentially dilute basic earnings per share
in the future. These shares were excluded from the calculation of diluted earnings per share because their inclusion would have
been anti-dilutive to the Company&rsquo;s losses in the respective periods.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Concentration
of Credit Risk -</I></B><FONT STYLE="color: black"> The Company maintains its cash in bank deposit accounts, which at times may
exceed federally insured limits.&nbsp; The Company believes it is not exposed to any significant credit risk as a result of any
non-performance by the financial institutions. During the nine months ended September 30, 2012 and 2011, one customer accounted
for 26% and 15%, respectively, of the Company&rsquo;s consolidated revenue. As of September 30, 2012 and 2011, this customer accounted
for 22% and 20%, respectively, of the Company&rsquo;s trade accounts receivable balance. The risk with respect to trade receivables
is mitigated by credit evaluations we perform on our customers, the short duration of our payment terms for the significant majority
of our customer contracts and by the diversification of our customer base. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Conventional
Convertible Debt</I><FONT STYLE="color: black"> -</FONT></B><FONT STYLE="color: black">When the convertible feature of
the conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized
as a beneficial conversion feature (&ldquo;BCF&quot;). Prior to the determination of the BCF, the proceeds from the
debt instrument are first allocated between the convertible debt and any detachable free standing instruments that are
included, such as common stock warrants. The Company records a BCF as a debt discount pursuant to FASB ASC Topic 470-20. In
those circumstances, the convertible debt will be recorded net of the discount related to the BCF.  The Company amortizes the
discount to interest expense over the life of the debt using the effective interest method. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Derivative
Instruments - </I></B>The </FONT>Company maintains an overall interest rate risk management strategy that incorporates the use
of interest rate swap contracts to minimize significant fluctuations in earnings that are caused by interest rate volatility. <FONT STYLE="color: black">The
Company has two interest rate swaps that change variable rates into fixed rates on a term loan and promissory note with RBS Citizens,
N.A. These swaps qualify as Level 2 fair value financial instruments. These swap agreements are not held for trading purposes and
the Company does not intend to sell the derivative swap financial instruments. The Company records the interest swap agreements
on the balance sheet at fair value because the agreements qualify as cash flow hedges under accounting principles generally accepted
in the United States of America. Gains and losses on these instruments are recorded in other comprehensive income (loss) until
the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are reclassified from accumulated
other comprehensive income (loss) (AOCI) to the Consolidated Statement of Operations on the same line item as the underlying transaction.
The valuations of the interest rate swaps have been derived from proprietary models of the bank based upon recognized financial
principles and reasonable estimates about relevant future market conditions and may reflect certain other financial factors such
as anticipated profit or hedging, transactional, and other costs. The notional amounts of the swaps decrease over the life of the
agreements. The Company is exposed to a credit loss in the event of non-performance by the counter parties to the interest rate
swap agreements. However, the Company does not anticipate non-performance by the counter parties. The fair value of interest rate
swap hedging liabilities as of September 30, 2012 amounted to $138,359 ($110,688 - December 31, 2011) and the net loss attributable
to this cash flow hedge recorded during the nine months ended September 30, 2012 amounted to $27,671 ($3,678 gain - 2011).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Fair Value of
Financial Instruments</I></B> - Financial instruments include cash, which is a short term investment and its carrying amount is
a reasonable estimate of fair value, interest rate swaps as discussed above, notes payable and a convertible note payable. <FONT STYLE="color: #252525">Notes
payable are valued based on rates currently available to financial institutions for debt with similar terms and remaining maturities.
</FONT>The carrying value approximates the fair value of these debt instruments as of September 30, 2012 and December 31, 2011.
The convertible note payable is recorded at its face amount, net of an unamortized discount for a beneficial conversion feature
and has an estimated fair value of approximately $1,082,000 ($663,000 - December 31, 2011) based on the underlying shares the note
can be converted into at the trading price on September 30, 2012. Since the underlying shares are trading in an active, observable
market, the fair value measurement qualifies as a Level 1 input.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Reclassifications</I></B>
- Certain prior year amounts have been reclassified to conform to the current year presentation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Recent Accounting
Pronouncements </I></B>- <FONT STYLE="color: black">In May 2011, the </FONT>Financial Accounting Standards Board (<FONT STYLE="color: black">FASB)
issued Accounting Standards Update (ASU) No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value
Measurement and Disclosure Requirements in U.S. GAAP and IFRS.&nbsp;&nbsp;This update results in common principles and requirements
for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and IFRS.&nbsp;&nbsp;ASU
2011-04 is required to be applied prospectively in interim and annual periods beginning after December 15, 2011.&nbsp;&nbsp; The
adoption of ASU 2011-04 did not have a material impact on the consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In September&nbsp;2011
the FASB issued ASU No.&nbsp;2011-08, Intangibles &ndash; Goodwill and Other (Topic 350), Testing Goodwill for Impairment to allow
entities an option to first assess qualitative factors to determine whether it is necessary to perform the two-step quantitative
goodwill impairment test. Under that option, an entity no longer would be required to calculate the fair value of a reporting unit
unless the entity determines, based on that qualitative assessment, that it is more likely than not that its fair value is less
than its carrying amount. The amendments in this update are effective for annual and interim goodwill impairment tests performed
for fiscal years beginning after December&nbsp;15, 2011. <FONT STYLE="color: black">The adoption of ASU 2011-08 did not have a
material impact on the consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In June&nbsp;2011 the
Financial Accounting Standards Board issued Accounting Standards Update No.&nbsp;2011-05, Presentation of Comprehensive Income.
This standard eliminates the option to report other comprehensive income and its components in the statement of changes in equity.
The Company may elect to present items of net income and other comprehensive income in one continuous statement or in two consecutive
statements. Each component of net income and each component of other comprehensive income, together with totals for comprehensive
income and its two parts &ndash; net income and other comprehensive income &ndash; would need to be displayed under either alternative,
and the statements would need to be presented with equal prominence as the other primary financial statements. This standard does
not change 1) the items that constitute net income and other comprehensive income, 2) when an item of other comprehensive income
must be reclassified to net income, or 3) the computation for earnings per share, which will continue to be based on net income.
<FONT STYLE="color: black">The adoption of ASU 2011-05 did not have a material impact on the consolidated financial statements.
</FONT>In December 2011, the FASB issued ASU 2011-12, &ldquo;Deferral of the Effective Date for Amendments to the Presentation
of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No.&nbsp;2011-05.&rdquo;
This update indefinitely defers the provision of ASU 2011-05, &ldquo;Presentation of Comprehensive Income,&rdquo; that required
entities to present reclassification adjustments out of accumulated other comprehensive income by component in the statement of
operations. The effective date for this update follows the ASU 2011-05, which is fiscal years, and interim periods within those
years, beginning after December&nbsp;15, 2011. The Company is currently evaluating the impact of adopting ASU 2011-12 will have
on the consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In December 2011, the
FASB issued ASU 2011-11, &ldquo;Disclosures About Offsetting Assets and Liabilities.&rdquo; This update creates new disclosure
requirements about the nature of an entity&rsquo;s rights of offsetting and related arrangements associated with its financial
instruments and derivative instruments. The disclosure requirements in this update are effective for annual reporting periods,
and interim periods within those years, beginning on or after January&nbsp;1, 2013. The Company is currently evaluating the impact
this update will have on its disclosures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>2.</B></TD><TD STYLE="text-align: justify"><B>Inventory</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Inventory consisted of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 60%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">September&nbsp;30,</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December&nbsp;31,</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left">Finished Goods</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">464,552</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">421,965</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Work in process</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">146,733</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">73,669</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Raw Materials</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">504,265</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">287,808</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">1,115,550</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">783,442</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>3.</B></TD><TD STYLE="text-align: justify"><B>Other Intangible Assets</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Other intangible assets
include patent application costs, which consist of costs associated with the application, acquisition and defense of the Company&rsquo;s
patents, contractual rights to patents and trade secrets associated with the Company&rsquo;s technologies, customer lists and non-compete
agreements obtained as a result of acquisitions. The Company&rsquo;s patents and trade secrets are for document anti-counterfeiting
and anti-scanning technologies and processes that form the basis of the Company&rsquo;s document security business. Patent application
costs are capitalized and amortized over the estimated useful life of the patent, which generally approximates its legal life.
The Company accounts for other intangible amortization as an operating expense, unless the underlying asset is directly associated
with the production or delivery of a product. Costs incurred to renew or extend the term of recognized intangible assets, including
patent annuities and fees, are expensed as incurred. To date, the amount of related amortization expense for other intangible assets
directly attributable to revenue recognized is not material.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Other intangible assets are comprised of
the following:<BR>
<BR>
</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 92%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">September&nbsp;30,&nbsp;2012</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">December&nbsp;31,&nbsp;2011</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Useful&nbsp;Life</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Gross&nbsp;Carrying<BR>
    Amount</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Accumulated<BR>
    Amortizaton</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Net&nbsp;Carrying<BR>
    Amount</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Gross&nbsp;Carrying<BR>
    Amount</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Accumulated<BR>
    Amortizaton</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Net&nbsp;Carrying<BR>
    Amount</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 25%; text-align: left"><FONT STYLE="font-size: 8pt">Acquired intangibles</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 8%; text-align: center"><FONT STYLE="font-size: 8pt">5 -10 years</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 8pt">2,405,300</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 8pt">1,182,839</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 8pt">1,222,461</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 8pt">2,405,300</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 8pt">999,761</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 8%; text-align: right"><FONT STYLE="font-size: 8pt">1,405,539</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Patent application costs</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Varied (1)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">946,714</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">250,472</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">696,242</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">843,145</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">205,472</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-size: 8pt">637,673</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">3,352,014</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">1,433,311</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">1,918,703</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">3,248,445</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">1,205,233</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-size: 8pt">2,043,212</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5.4pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(1)- patent rights are amortized over their expected useful
life which is generally the legal life of the patent. As of September 30, 2012, the weighted average remaining useful life of these
assets in service was approximately 11.75 years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Amortization expense for the nine months
ended September 30, 2012 amounted to $228,078 ($205,416 &ndash; 2011). Approximate expected amortization for each of the five succeeding
fiscal years is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 40%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 72%; text-align: left">2013</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 25%; text-align: right">295,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">295,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">210,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2016</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">176,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">2017</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">163,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>4.</B></TD><TD STYLE="text-align: justify"><B>Short-Term and Long-Term Debt</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Revolving Credit
Lines - </I></B><FONT STYLE="color: black">The Company entered into a credit facility agreement with RBS Citizens, N.A. (&ldquo;Citizens
Bank&rdquo;) in connection with the Company&rsquo;s acquisition of Premier Packaging (&ldquo;Premier&rdquo;). As amended on July
26, 2011, the credit facility agreement provides Premier with a revolving credit line of up to $1,000,000.&nbsp;&nbsp;The revolving
line bears interest at 1 Month LIBOR plus 3.75% (3.97% as of September 30, 2012) and matures on May 31, 2013. As of September 30,
2012, the revolving line had a balance of $481,009 ($669,785 - December 31, 2011).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On May 12, 2011, in
conjunction with the Company&rsquo;s acquisition of ExtraDev, Inc. (&ldquo;ExtraDev&rdquo;), the Company assumed revolving credit
lines and open credit card accounts totaling approximately $239,000, comprised of a $100,000 revolving line of credit with a bank
at 4.75% with an outstanding balance of $63,000, a $100,000 revolving line of credit with a bank at 8.09% with an outstanding balance
of $86,000, and various credits cards with an aggregate outstanding balance of approximately $90,000. All of the credit lines are
secured by personal guarantees of the former ExtraDev owners. The line of credit with the $86,000 balance was paid in full during
the year ended December 31, 2011 and the line of credit was closed. As of September 30, 2012, the balance of the revolving line
of credit at 4.5% was $39,252 and outstanding balances on credit cards were $22,695, $61,947 in aggregate ($93,951 - December 31,
2011).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Short-Term Loan
from Related Party - </I></B><FONT STYLE="color: black">The Company issued a promissory note (the &ldquo;DSS Note&rdquo;) to Bzdick
Properties, LLC (&ldquo;Bzdick Properties&rdquo;) in connection with the purchase of the Premier real estate, totaling $150,000.
One of the members of Bzdick Properties is Robert Bzdick, who also serves as a director and chief operating officer of the Company.
The DSS Note accrued interest at a rate of 9.5% per annum and permitted prepayment of principal without penalty. The DSS Note called
for interest only payments during its term with a balloon payment due at the scheduled maturity date of March 31, 2012. The DSS
Note was secured by a guaranty agreement running from Premier to Bzdick Properties and was subordinated to the Citizens Bank loan
documents. The DSS Note was paid off in full on March 23, 2012 ($150,000 - December 31, 2011). Interest expense on the short-term
loan from related party amounted to $3,240 for the nine months ended September 30, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><B><I>Long-Term
Debt - </I></B><FONT STYLE="color: black">On December 30, 2011, the Company issued a $575,000 convertible note in order to refinance
a traditional note payable that now matures on December 29, 2013, and carries an interest rate of 10% per annum. Interest is payable
quarterly, in arrears. The convertible note can be converted at any time during the term at Lender&rsquo;s option into a total
of 260,180 shares of the Company&rsquo;s common stock at a conversion price of $2.21 per share. In conjunction with the issuance
of the convertible note, the Company determined a beneficial conversion feature existed amounting to approximately $88,000, which
was recorded as a debt discount and will be amortized over the term of the note. The note is secured by all of the assets (excluding
assets leased) of Secuprint, Inc., (&ldquo;Secuprint&rdquo;), a subsidiary of the Company, is subject to various events of default,
and had a balance of $575,000 as of September 30, 2012 ($575,000 - December 31, 2011).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 12, 2010,
in conjunction with the credit facility agreement with Citizens Bank, the Company entered into a term loan with Citizens Bank for
$1,500,000. &nbsp;&nbsp;&nbsp;As amended on July 26, 2011, the term loan now requires monthly principal payments of $25,000 through
maturity of February 2015. Interest accrues at 1 Month LIBOR plus 3.75% (3.97% at September 30, 2012).&nbsp;&nbsp;The Company entered
into an interest rate swap agreement to lock into a 5.7% effective interest rate over the remaining life of the amended term loan.
As of September 30, 2012, the balance of the term loan was $725,000 ($950,000 - December 31, 2011).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 29, 2011, the
Company and Plastic Printing Professionals, Inc. (&ldquo;P3&rdquo;), a wholly owned subsidiary of the Company, entered into a Commercial
Term Note (the &ldquo;Note&rdquo;) with Neil Neuman (&ldquo;Neuman&rdquo;) whereby the Company borrowed $650,000 from Neuman. The
Note called for monthly payments of $13,585, an interest rate of 6.5% per annum, a term of forty-eight months and a final balloon
payment of $100,000 on August 1, 2015. The proceeds from the Note were used to pay in full all sums owed by the Company under a
Related Party Credit Agreement executed between the Company and Fagenson &amp; Co., Inc., as agent for certain lenders, including
Neuman, dated January 4, 2008. Upon such payment the Credit Agreement between the Company and Fagenson &amp; Co., Inc. was terminated
in its entirety. As of December 31, 2011, the Note had a balance of $599,462. On February 29, 2012, the Company entered into a
Purchase, Amendment and Escrow Agreement (the &ldquo;Purchase Agreement&rdquo;) with Barry Honig (&ldquo;Honig&rdquo;), Neil Neuman
(&ldquo;Neuman&rdquo;) and Grushko &amp; Mittman, P.C. The Purchase Agreement provided, among other things, for the sale of the
Note to Honig for a purchase price of $578,396, which was the outstanding principal balance on February 29, 2012. In connection
with the sale and transfer of the Note to Honig, the Company agreed to amend certain terms of the Note pursuant to an allonge entered
into on February 29, 2012 (the &ldquo;Allonge&rdquo;). Under the Purchase Agreement any security interest in the Note terminated
at the closing of the purchase of the Note; accordingly, Honig did not possess a security interest in any assets of the Company
as a result of his purchase of the Note. Pursuant to the Allonge, the maturity date of the Note was extended to July 1, 2013. Honig
had the right to convert the principal and any interest due under the Note into shares of the Company&rsquo;s common stock at a
conversion price of $3.30 per share, subject to adjustment upon certain corporate events as set forth in the Allonge. In conjunction
with this conversion option, the Company recorded a beneficial conversion feature of approximately $216,000, which was recorded
as a discount to the debt.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the first fiscal
quarter of 2012, Honig exercised the conversion option on the Note. Pursuant to the conversion, the Company issued an aggregate
of 175,710 shares of its common stock to Honig for full payment of Note and accrued interest amounting to $579,843. In conjunction
with the conversion, the Company recorded a note discount amortization expense of the entire $216,000 of remaining unamortized
debt discount expense during the first fiscal quarter of 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Promissory Note
-</I></B><FONT STYLE="color: black; background-color: white"> </FONT>On August 30, 2011, the Company&rsquo;s wholly owned subsidiary
Premier purchased the packaging plant it occupies in Victor, New York for $1,500,000, which was partially financed with a $1,200,000
promissory note obtained by Premier from Citizens Bank (&ldquo;Promissory Note&rdquo;). The Promissory Note calls for monthly payments
of principal and interest in the amount of $7,658, which includes interest, calculated as 1 month LIBOR plus 3.15% (3.37% at September
30, 2012). Concurrently with the transaction, the Company entered into an interest rate swap agreement to lock into a 5.865% effective
interest rate for the life of the loan.&nbsp; The Promissory Note matures in August 2021 at which time a balloon payment of the
remaining principal balance of $919,677 is due. As of September 30, 2012, the Promissory Note had a balance of $1,176,463 ($1,192,914
- December 31, 2011).</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Term Note<FONT STYLE="font-weight: normal; font-style: normal">
- On October 8, 2010, the Company amended the Credit Facility Agreement with Citizens Bank to add a Standby Term Loan Note pursuant
to which Citizens Bank will provide Premier with up to $450,000 towards the funding of eligible equipment purchases. In October
2011, the Standby Term Loan Note was converted into a Term Note payable in monthly installments of $887 plus interest over 5 years.
As of September 30, 2012, the balance under this Term Note was $43,481 ($51,467 - December 31, 2011). </FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-weight: normal; font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-weight: normal; font-style: normal">All<FONT STYLE="color: black">
of the Citizens Bank credit facilities are secured by all of the assets of Premier, and are also secured through cross guarantees
by the Company and two of its other wholly owned subsidiaries, Plastic Printing Professionals, Inc. (&ldquo;P3&rdquo;) and Secuprint.
</FONT></FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under the Citizens
Bank credit facilities, Premier is subject to various covenants including fixed charge coverage ratio, tangible net worth and current
ratio covenants. In June 2012, Premier was notified that it was not in compliance with certain financial covenants as of December
31, 2011 and March 31, 2012, including a failure to maintain the required fixed charge coverage ratio and a disallowance of transfers
from Premier to one of the Company&rsquo;s other subsidiaries. In August 2012, the Company received a waiver as of December 31,
2011 and March 31, 2012 from Citizens Bank, relating to the above-mentioned financial covenants. Premier Packaging was in compliance
with the covenants as of September 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>5.</B></TD><TD STYLE="text-align: justify"><B>Stockholders&rsquo;
                                                                                             Equity</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0pt 0; text-indent: 0.5in; text-align: justify"><B><I>Stock Issued in Private Placements</I></B> - <FONT STYLE="font: 10pt Times New Roman, Times, Serif">On
February 13, 2012, the Company completed the sale of $3,000,000 of investment units (the &ldquo;Units&rdquo;) in a private placement.
A total of 30 Units were sold, at a price of $100,000 per Unit. Each Unit consisted of (i) 32,258 shares of the Company&rsquo;s
common stock, and (ii) a five-year warrant to purchase up to 16,129 shares of the Company&rsquo;s common stock at an exercise
price of $3.10 per share. <FONT STYLE="color: black">The private placement resulted in aggregate cash proceeds to the Company
of $3,000,000. In connection with the private placement, the Company paid a placement agent fee of $210,000 and issued to the
placement agent a five-year warrant to purchase up to an aggregate of 58,064 shares of Common Stock at an exercise price of $3.10.
The placement agent warrant had a fair value of $177,000.</FONT></FONT></P>



<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Stock
Warrants -</I></B> <FONT STYLE="color: black">On February 20, 2012, the Company and ipCapital Group, Inc.
(&ldquo;ipCapital&rdquo;) entered into an engagement letter (the &ldquo;ipCapital Engagement Letter&rdquo;) for the provision
of certain IP strategic consulting services by ipCapital for the 2012 calendar year (the &ldquo;Services&rdquo;). The
managing director and 42% owner of ipCapital, John Cronin, is also a director of the Company. Fees will range from $240,000
to $365,000 for services provided in 2012. In addition the Company issued ipCapital a five-year warrant (the
&ldquo;Warrant&rdquo;) to purchase up to 100,000 shares of the Company&rsquo;s common stock at an exercise price of $4.62 per
share (the &ldquo;Warrant Stock&rdquo;). The Warrant vests and becomes exercisable to the extent of 33 1/3 percent of the
Warrant Stock upon each of the first, second and third anniversary dates, respectively, of the Issuance Date. The warrant is
valued using the Black Scholes Merton option pricing model at each reporting period through the earlier of the completion of
services or the expiration of the service term. The warrant was valued at approximately $190,000 as of September 30, 2012. In
addition, on February 20, 2012, the Company entered into a second consulting arrangement with ipCapital (the
&ldquo;ipCapital Consulting Agreement&rdquo;) for which ipCapital will provide strategic advice to the Company&rsquo;s senior
management team on the development of the Company&rsquo;s Digital Group infrastructure and cloud computing business strategy.
The ipCapital Consulting Agreement has a three year term. As ipCapital&rsquo;s sole source of compensation under the
ipCapital Consulting Agreement, the Company issued ipCapital a five-year warrant (the &ldquo;Consulting Warrant&rdquo;) to
purchase up to 200,000 shares of the Company&rsquo;s common stock at an exercise price of $4.50 per share (the
&ldquo;Consulting Warrant Stock&rdquo;). The Consulting Warrant vests and becomes exercisable to the extent of 33 1/3 percent
of the Consulting Warrant Stock upon each of the first, second and third anniversary dates, respectively, of the Consulting
Warrant Issuance Date. The warrant is valued using the Black Scholes-Merton option pricing model at each reporting period
through the requisite service period, in this case the vesting period. The warrant was valued at approximately $386,000 as of
September 30, 2012. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Also, on February 20,
2012, the Company entered into consulting arrangement with Century Media Group for the provision of investor relations services.
As compensation Century Media Group will receive a fee of $10,000 per month for the one year term, plus the Company issued Century
Media Group a 14-month warrant (the &ldquo;Century Media Warrant&rdquo;) to purchase up to 250,000 shares of the Company&rsquo;s
common stock at exercise prices of $4.50, $4.75, $5.00, $5.25 and $6.00 for each 50,000 shares subject to the Century Media Warrant.
The Century Media Warrant vested in full on the date of issuance. The Company calculated the fair value of the warrant at approximately
$248,000, using the Black Scholes-Merton option pricing model. Expense for consulting services is being recorded over the 12-month
service term.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On July 30, 2012, the Company issued as compensation to a consultant a five-year warrant to purchase 45,000 shares of the
Company's common stock at an exercise price of $4.00. One-third of the option vested on July 30, 2012, one-third of the option
will vest on July 30, 2013, and the remaining one-third will vest on July 30, 2014. The Company valued the option at approximately
$92,000 using the Black-Sholes-Merton option pricing model and will expense it in accordance with the service period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the nine months
ended September 30, 2012, a total of 215,734 shares of common stock were issued by the Company upon the exercise of warrants in
exchange for aggregate proceeds of approximately $609,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Restricted Stock
</I></B>- During the nine months ended September 30, 2012, the Company granted two restricted stock awards to an employee. The
first award grants the employee 30,000 shares of common stock that vest ratably over four years and has a grant date fair value
of $101,400. Expense related to the first grant is being recorded on a straight-line basis as shares vest. The second award grants
the employee 100,000 shares of common stock that vest in four tranches upon reaching net sales goals. The grant date fair value
of the second award amounted to $338,000. As of September 30, 2012, no expense was recorded for the second award as vesting was
determined to be remote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Stock
Options</I></B> - The Company records stock-based payment expense related to these options based on the grant date fair value
in accordance with FASB ASC 718. During the nine months ended September 30, 2012, the Company issued options to purchase up
to an aggregate of 40,000 shares of its common stock to its non-executive board members at an exercise price of $2.55 per
share. The fair value of these options amounted to approximately $40,000 determined by utilizing the Black Scholes Merton
option pricing model. On September 21, 2012, the Company issued options to purchase up to an aggregate of 280,000 shares of
its common stock to certain of its employees and senior management at an exercise price of $4.26 per share that will vest
upon the closing of the proposed merger, as described in Note 9. The grant date fair value of these options determined by
utilizing the Black Scholes Merton option pricing model amounted to approximately $470,000. The Company believes vesting is
likely and is recording of stock based compensation expense over the implicit service period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Stock-Based Compensation
-</I><FONT STYLE="color: black"> </FONT></B>Stock-based compensation includes expense charges for all stock-based awards to employees,
directors and consultants. Such awards include option grants, warrant grants, and restricted stock awards. During the nine months
ended September 30, 2012, the Company had stock compensation expense of approximately $631,000 or $0.03 per share ($319,000; $0.02
per share - 2011).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of September 30, 2012, there was approximately $1,342,000 of total unrecognized compensation costs
(excluding $932,000 that vest upon the occurrence of certain events) related to options and restricted stock granted under the
Company&rsquo;s stock option plans, which the Company expects to recognize over the weighted average period of approximately one
year.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Stock Option
Plans</I> </B>- During the second quarter of 2012, a proposal to increase the number of shares under the 2004 Employee Stock Option
Plan from 1,700,000 to 3,400,000 and a proposal to increase the number of shares under the 2004 Non-Executive Director Stock Option
Plan from 200,000 to 500,000 was approved by the Company&rsquo;s stockholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>6.</B></TD><TD STYLE="text-align: justify"><B>Commitments and Contingencies</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Legal Matters</I></B><I>
-</I>On August 1, 2005, the Company commenced a suit in the European Court of First Instance in Luxembourg against the ECB alleging
patent infringement by the ECB and claimed unspecified damages (the &ldquo;ECB Litigation&rdquo;). The Company brought the suit
in the European Court of First Instance in Luxembourg.&nbsp;&nbsp; The Company alleged that all Euro banknotes in circulation infringed
the Company&rsquo;s European Patent 0 455 750B1 (the &ldquo;Patent&rdquo;) which covered a method of incorporating an anti-counterfeiting
feature into banknotes or similar security documents to protect against forgeries by digital scanning and copying devices.&nbsp;&nbsp;The
Court of First Instance in Luxembourg ruled on September 5, 2007 that it does not have jurisdiction to rule on the patent infringement
claim. In 2006, the Company received notices that the ECB had filed separate claims in each of the United Kingdom, The Netherlands,
Belgium, Italy, France, Spain, Germany, Austria and Luxembourg courts&nbsp;seeking the invalidation of the Patent.&nbsp;&nbsp;Proceedings
were commenced by the ECB before each of the national courts seeking revocation and declarations of invalidity of the Patent. On
August 20, 2008, the Company entered into an agreement (the &ldquo;Trebuchet Agreement&rdquo;) with Trebuchet Capital Partners,
LLC (&ldquo;Trebuchet&rdquo;) under which Trebuchet agreed to pay substantially all of the litigation costs associated with validity
proceedings in eight European countries relating to the Patent. The Company provided Trebuchet with the sole and exclusive right
to manage infringement litigation relating to the Patent in Europe, including the right to initiate litigation in the name of the
Company, Trebuchet or both and to choose whom and where to sue, subject to certain limitations set forth in the Trebuchet Agreement.
In consideration for Trebuchet's funding obligations, the Company assigned and transferred a 49% interest in the Company's rights,
title and interest in the Patent to Trebuchet which allowed Trebuchet to have a separate and distinct interest in and share of
the Patent, along with the right to sue and recover in litigation, settlement or otherwise and to collect royalties or other payments
under or on account of the Patent. In addition, the Company and Trebuchet agreed to equally share all proceeds generated from litigation
relating to the Patent,&nbsp;including judgments and licenses or other arrangements entered into in settlement of any such litigation.
On July 7, 2011, Trebuchet and the Company entered into a series of related agreements and general releases wherein Trebuchet effectively
ended its ongoing participation in the ECB Litigation, except for its continuing involvement in the final settlement of fees that
may become payable as a result of the infringement case in The Netherlands described below. The Trebuchet Agreement executed in
August 2008 will remain in full force and effect, in its entirety, until Trebuchet makes any and all final payments that may become
due in connection with The Netherlands infringement case.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In a series
of court decisions spanning from March 2007 through December 2010, the Patent was invalidated in each of the United Kingdom,
Germany, France, The Netherlands, Belgium, Luxembourg, Austria and Italy. The Company did not further appeal these decisions.
&nbsp; On March 24, 2010 the Spanish Court ruled that the Patent was valid. The decision in Spain is currently under appeal
by the ECB.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the course of
the litigation, the losing party in the ECB Litigation, in certain jurisdictions, was responsible for the prevailing party&rsquo;s
legal fees and disbursements. As of September30, 2012, the Company has recorded as accrued liabilities approximately &euro;132,000
($170,000) for the Germany case and approximately &euro;175,000 ($225,000) for the Netherlands case for such fees. In addition,
the ECB formally requested the Company to pay attorneys and court fees for the Court of First Instance case in Luxembourg in the
amount of &euro;93,752 ($121,000) as of September 30, 2012, which, unless the amount is settled will be subject to an assessment
procedure that has not been initiated. The Company will accrue the assessed amount, if any, as soon as it is reasonably estimable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 18, 2010,
Trebuchet, on behalf of the Company, filed an infringement suit in the Netherlands against the ECB and two security printing entities
with manufacturing operations in the Netherlands, Joh. Enschede Banknotes B.V and Koninklijke Joh. Enschede B.V.&nbsp; The Netherlands
Court determined in December 2010 that the patent was invalid in The Netherlands, and the infringement case was terminated by Trebuchet.
Trebuchet remains responsible for cost and fee reimbursements associated with the case when such amounts are determined and fixed
by order of the Dutch Court.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On
October 24, 2011 the Company initiated a law suit against Coupons.com Incorporated (&ldquo;Coupons.com&rdquo;). The suit was filed
in the United States District Court, Western District of New York, located in Rochester, New York. Coupons.com is a Delaware corporation
having its principal place of business located in Mountain View, California. In the Coupons.com suit, the Company alleges breach
of contract, misappropriation of trade secrets, unfair competition and unjust enrichment, and is seeking in excess of $10 million
in money damages from Coupons.com for those claims. In a motions decision rendered on August 20, 2012, the District Court judge
dismissed the Company&rsquo;s unfair competition and unjust enrichment claims. The Company&rsquo;s breach of contract and misappropriation
of trade secrets claims remain intact as of the date of this report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition to the
foregoing, we are subject to other legal proceedings that have arisen in the ordinary course of business and have not been finally
adjudicated. Although there can be no assurance in this regard, in the opinion of management, none of the legal proceedings to
which we are a party, whether discussed herein or otherwise, will have a material adverse effect on our results of operations,
cash flows or our financial condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt; color: black"><B><I>Merger
Termination Fees</I></B></FONT> &ndash;&nbsp; <FONT STYLE="font-size: 10pt; color: black">Pursuant to the Merger Agreement the
Company entered into on October 1, 2012, if the Merger agreement is terminated at any time prior to the closing of the Merger,
as follows: (a) by mutual written consent of DSS, Merger Sub and Lexington; (b) by either DSS or Lexington if the closing has not
occurred on or before March 15, 2013; (c) by either DSS or Lexington if any law enacted by a governmental authority prohibits the
consummation of the Merger, or any governmental authority has issued an order or taken any other action which restrains, enjoins
or otherwise prohibits the Merger; (d) by either DSS or Lexington if the other party&rsquo;s stockholders do not approve the Merger,
unless the failure to obtain approval is attributable to a failure on the part of such party seeking to terminate the Agreement;
(e) by DSS if (i) the Lexington&rsquo;s board of directors changes its recommendation for approval of the Merger, (ii) the board
of directors of Lexington or any authorized committee has failed to present or recommend the approval of the Merger Agreement and
the Merger to the stockholders, (iii) Lexington shall have entered or caused itself or its subsidiaries to enter, into any letter
of intent, agreement in principle, term sheet, merger agreement, acquisition agreement or other similar agreement related to any
Lexington Acquisition Proposal or (iv) Lexington shall have breached any term of the non-solicitation provision of the Merger Agreement;
(f) by Lexington if (i) the DSS board of directors changes their recommendation for approval of the Merger, (ii) the board of directors
of DSS or any authorized committee has failed to present or recommend the approval of the Merger Agreement and the Merger to the
stockholders, (iii) DSS shall have entered or caused itself or its subsidiaries to enter, into any letter of intent, agreement
in principle, term sheet, merger agreement, acquisition agreement or other similar agreement related to any DSS Acquisition Proposal
or (iv) DSS shall have breached any term of the non-solicitation provision of the Merger Agreement; (g) by either party if the
other party, or in the case of Lexington, DSS or Merger Sub, is in material breach of its obligations or representations or warranties
under the Agreement; (h) by either DSS or Lexington if prior to obtaining stockholder approval such party determines to enter into
a definitive agreement relating to a superior proposal; or (i) by Lexington, at any time, upon payment to DSS of a fee equal to
$5,000,000. Under certain circumstances, if the Merger is terminated by either DSS or Lexington, then DSS shall pay to Lexington,
a termination fee in cash equal to the sum of (i) $3,000,000 plus (ii) 5% of the consideration paid to all security holders of
DSS in connection with a superior proposal in the same form as such consideration is paid to such security holders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="font-size: 10pt; color: black"><B><I>Contingent
Litigation Payments</I></B></FONT> &ndash;&nbsp;<FONT STYLE="font-size: 10pt; color: black">Pursuant to an agreement made in December
2004, the Company is required to share the economic benefit derived from settlements, licenses or subsequent business arrangements
that the Company obtains from any infringer of patents formerly owned by the Wicker Family.&nbsp;&nbsp;For infringement matters
involving certain U.S. patents, the Company will be required to disburse 30% of the settlement proceeds.&nbsp;&nbsp;For infringement
matters involving certain foreign patents, the Company will be required to disburse 14% of the settlement proceeds.&nbsp;&nbsp;These
payments do not apply to licenses or royalties derived from patents that the Company has developed or obtained from persons other
than the Wicker Family.&nbsp; In addition, in May 2005, the Company entered into an agreement with its legal counsel in charge
of the Company&rsquo;s litigation with the European Central Bank which called for a $150,000 contingent payment to the legal counsel
upon a successful ruling or settlement on the Company&rsquo;s behalf in that litigation. As of September 30, 2012, there has been
no settlement amounts related to these agreements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">On
October 21, 2011, the Company entered into a contingency legal fee agreement with Nixon Peabody LLP (the &ldquo;Contingency Agreement&rdquo;),
in connection with its law suit against Coupons.com. Under the Contingency Agreement, the Company would pay Nixon Peabody LLP 33
1/3% of any settlements or damages awards collected from Coupons.com in connection with the suit. Under the Contingency Agreement,
the Company is responsible for payment of out-of-pocket charges and disbursements of Nixon Peabody LLP necessarily accrued during
the prosecution of the suit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><B><I>Contingent
Purchase Price</I></B>&nbsp;-In December, 2008, the Company acquired substantially all of the assets of DPI of Rochester, LLC in
which the Company guaranteed up to $50,000 to certain parties depending on whether certain conditions occurred within five years
of the acquisition.&nbsp;&nbsp; As of September 30, 2012, the Company considers the likelihood that the payment will be required
as remote.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in; background-color: white"><B><I>Facility
Operating Lease</I></B> - In July 2012, the Company entered into an amended facility lease at its current location that will accommodate
the Company corporate offices as well as the Digital division. The commencement date of the amended lease was October 1, 2012.
The amended facility lease will expire September 30, 2015, and future lease payments are expected to be approximately $39,000 in
2012, $157,000 in 2013, $169,000 in 2014 and $133,000 in 2015.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>7.</B></TD><TD STYLE="text-align: justify"><B>Supplemental Cash Flow Information</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Supplemental cash flow information for the
nine months ended September 30, 2012 and 2011 is approximately as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 82%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2012</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left">Cash paid for interest</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">174,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 12%; text-align: right">333,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Non-cash investing and financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Beneficial conversion feature issued with convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">216,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Conversion of debt and accrued interest to equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">580,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Warrant issued for prepaid consulting services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">248,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Loss from change in fair value of interest rate swap derivative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">28,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Equity issued for acquisition</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">274,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Refinance of related party revolving line of credit and accrued interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">650,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Retirement of derivative warrant liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,506,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt">Property and plant acquired with debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,350,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>8.</B></TD><TD STYLE="text-align: justify"><B>Segment Information</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company's businesses
are organized, managed and internally reported as four operating segments.&nbsp;&nbsp; In the second quarter of 2011, the Company
acquired ExtraDev for its DSS Digital Group and the Company launched a new corporate identity and logo, along with a new website
that grouped the Company under four distinct divisions. In conjunction with this, the Company determined that an expansion of its
segment reporting to align with the new internal structure was appropriate. A summary of the four reportable segments follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 17%; font-weight: bold"><FONT STYLE="color: black"><B>DSS Printing</B></FONT></TD>
    <TD STYLE="width: 1%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 82%; text-align: justify">Licenses security printing technologies and manufactures and sells secure documents such as vital records, transcripts, safety paper, secure coupons, voter ballots, event tickets, among others.&nbsp;&nbsp; In addition, sells general commercial printing services utilizing digital and offset printing capabilities.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">DSS Plastics</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">Manufactures and sells secure and non-secure plastic printed products such as ID cards, event badges and passes, and loyalty and gift cards, among others.&nbsp;&nbsp; &nbsp;Plastic cards include RFID chips, magnetic strips with variable data, and high quality graphics with overt and covert security features.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">DSS Packaging</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Manufactures and sells secure and non-secure custom paperboard packaging serving clients in the pharmaceutical, beverage, photo packaging, toy, specialty foods and direct marketing industries, among others.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">DSS Digital</TD>
    <TD>&nbsp;</TD>
    <TD>Develops, installs, hosts and services IT services including remote server and application hosting, cloud computing, secure document systems, back-up and disaster recovery services and customer program development services.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">Approximate
information concerning the Company&rsquo;s operations by reportable segment for the three and nine months ended September 30, 2012
and 2011 is as follows. The Company relies on intersegment cooperation and management does not represent that these segments, if
operated independently, would report the results contained herein:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Three&nbsp;months&nbsp;ended&nbsp;September&nbsp;30,&nbsp;2012</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Printing</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Plastics</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS<BR> Packaging</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Digital</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Corporate</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 28%; text-align: left; padding-bottom: 1pt">Revenues from external customers</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">869,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">774,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">2,188,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">333,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">4,164,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Revenue from other operating segments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">133,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">12,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">145,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Depreciation and amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">39,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">47,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">97,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">24,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">208,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net income (loss)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">20,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">49,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">118,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(91,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(1,193,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(1,097,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Three&nbsp;months&nbsp;ended&nbsp;September&nbsp;30,&nbsp;2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Printing</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Plastics</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS<BR> Packaging</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Digital</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Corporate</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 28%; text-align: left; padding-bottom: 1pt">Revenues from external customers</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">986,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">757,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">1,576,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">297,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">3,616,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Revenue from other operating segments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">244,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">244,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Depreciation and amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">39,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">44,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">90,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">9,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">183,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net income (loss)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(448,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(33,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">120,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">19,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(415,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(757,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Nine&nbsp;months&nbsp;ended&nbsp;September&nbsp;30,&nbsp;2012</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Printing</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Plastics</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS<BR> Packaging</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Digital</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Corporate</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 28%; text-align: left; padding-bottom: 1pt">Revenues from external customers</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">2,746,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">2,250,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">5,858,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">813,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">11,666,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Revenue from other operating segments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">411,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">91,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">502,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Depreciation and amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">113,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">135,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">291,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">57,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">598,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net income (loss)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(232,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">58,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">152,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(198,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(2,945,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(3,165,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Identifiable assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,018,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,003,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">7,540,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,043,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">822,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">13,426,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">Nine&nbsp;months&nbsp;ended&nbsp;September&nbsp;30,&nbsp;2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Printing</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Plastics</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS<BR> Packaging</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">DSS&nbsp;Digital</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Corporate</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 28%; text-align: left; padding-bottom: 1pt">Revenues from external customers</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">2,901,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">2,087,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">3,796,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">393,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"></TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid">$</TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid">9,177,000</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Revenue from other operating segments</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">633,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">633,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Depreciation and amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">113,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">142,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">263,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">14,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">534,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(1,312,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(12,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(51,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(4,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(888,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(2,267,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Identifiable assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,237,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,233,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">7,609,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">713,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,017,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">13,809,000</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B>9.</B></TD><TD STYLE="text-align: justify"><B>Subsequent Events</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>Merger Agreement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 1, 2012,
Document Security Systems, Inc., a New York corporation (&ldquo;DSS&rdquo;), entered into an Agreement and Plan of Merger (the
&ldquo;Merger Agreement&rdquo;) with DSSIP, Inc., a Delaware corporation and wholly-owned subsidiary of DSS (&ldquo;Merger Sub&rdquo;),
and Lexington Technology Group, Inc., a Delaware corporation (&ldquo;Lexington&rdquo;), and Hudson Bay Master Fund Ltd., as representative
of Lexington&rsquo;s stockholders (&ldquo;Lexington Representative&rdquo;) solely for certain purposes (as described in the Merger
Agreement), pursuant to which Merger Sub will merge with and into Lexington, with Lexington being the surviving corporation (the
&ldquo;Surviving Corporation&rdquo;) and will continue its existence as a wholly-owned subsidiary of DSS through an exchange of
capital stock of Lexington for capital stock of DSS (the &ldquo;Merger&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington is a private
intellectual property monetization company that acquired a patent portfolio of six patents and four pending patent applications
relating to technology invented by Thomas Bascom (the &ldquo;Bascom Portfolio&rdquo;). Lexington is focused on the economic benefits
of intellectual property assets through acquiring or internally developing patents or other intellectual property assets (or interests
therein) and then monetizing such assets through a variety of value enhancing initiatives, including, but not limited to: licensing,
customized technology solutions (such as applications for medical electronic health records), strategic partnerships and litigation.
Through its wholly-owned subsidiary Bascom Research, LLC (&ldquo;Bascom Research&rdquo;), Lexington currently develops software
applications based on the Bascom Portfolio that are focused on applying computational and data structures to complex data sets
in the medical field. Lexington has a strategic relationship with LinkSpace, LLC, a contextual search company, and a consulting
agreement with Mednest LLC, a professional technology incubation advisor, to develop medical-related software applications in the
RFID and electronic health record space. Lexington intends to attempt to enter into sponsored research agreements and partnerships
with other companies and universities in order to further develop applications for the technology relating to the Bascom Portfolio.
On October 3, 2012, Bascom Research initiated patent infringement lawsuits in the United States District Court for the Eastern
District of Virginia against five companies, including Facebook, Inc. and LinkedIn Corporation, for unlawfully using systems that
incorporate features claimed in patents owned by Bascom Research.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the terms
of the Merger Agreement, upon completion of the Merger (the &ldquo;Effective Time&rdquo;) and subject to the Beneficial Ownership
Condition (as defined below), each share of then-issued and outstanding common stock of Lexington, par value $0.0001 per share
(&ldquo;Lexington Common Stock&rdquo;) and each share of then-issued and outstanding Series A Convertible Preferred Stock of Lexington,
par value $0.0001 per share (&ldquo;Lexington Preferred Stock&rdquo;) (other than shares of Lexington Common Stock and Lexington
Preferred Stock held in treasury or owned by DSS or any direct or indirect wholly owned subsidiary of DSS or Lexington that will
be canceled and retired at the Effective Time) will be automatically converted into (i) the right to receive shares of DSS common
stock, par value $0.02 per share (&ldquo;DSS Common Stock&rdquo;), (ii) Warrants (as described below), (iii) shares of DSS Common
Stock to be held in escrow (as described below, the &ldquo;Escrow Shares&rdquo;) and, as applicable, shares of DSS&rsquo;s Series
A Convertible Preferred Stock (&ldquo;DSS Preferred Stock&rdquo;), determined by multiplying each of (x) 17,250,000 plus the number
of Additional Shares (as defined below) and Exchanged Shares (as defined below), if any, (y) 4,859,894, and (z) 7,100,000 by a
fraction, the numerator of which shall be one and the denominator of which shall be the sum of (A) the number of shares of Lexington
Common Stock plus (B) the number of shares of Lexington Preferred Stock, in each case issued and outstanding immediately prior
to the Effective Time (such fraction referred to as the &ldquo;Common Stock Exchange Ratio&ldquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">At the Effective Time
of the Merger, DSS will issue to the holders of Lexington Common Stock and Lexington Preferred Stock (on a&nbsp;<I>pro rata</I>&nbsp;as-converted
basis) an aggregate of 4,859,894 warrants to purchase an aggregate of 4,859,894 shares of DSS Common Stock with an exercise price
of $4.80 per share and a term of five years commencing upon the closing of the Merger (the &ldquo;Warrants&rdquo;). As a condition
to the closing of the Merger, DSS, Lexington Representative and American Stock Transfer &amp; Trust Company, LLC, as escrow agent,
will enter into an escrow agreement (the &ldquo;<B>Escrow Agreement</B>&rdquo;). Pursuant to the Escrow Agreement, at the Effective
Time, DSS shall deposit the Escrow Shares into an escrow account to be released to the holders of Lexington Common Stock (pro
rata on a fully-diluted basis as of the Effective Time) if and when the closing price per share of DSS Common Stock exceeds $5.00
per share (as adjusted for stock splits, stock dividends and similar events) for 40 trading days within a continuous 90 trading
day period following the closing of the Merger. If within one year following the closing of the Merger, such threshold is not
achieved, the shares of DSS Common Stock held in escrow shall be cancelled and returned to the treasury of DSS.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon the consummation
of the Merger, only the holders of Lexington Preferred Stock who would, after giving effect to the Merger and receipt of the merger
consideration, beneficially own more than 9.99% of DSS Common Stock (the &ldquo;Beneficial Ownership Condition&rdquo;) shall receive
for each share of Lexington Preferred Stock they hold the same merger consideration as outlined above except that such holders
shall receive a combination of DSS Common Stock and DSS Preferred Stock that is convertible into (or if the proposal to authorize
DSS Preferred Stock is not approved by the stockholders, $.02 Warrants (as defined below) exercisable for) that number of shares
of DSS Common Stock they would have received if they had been a holder of Lexington Common Stock immediately prior to the Effective
Time in such amounts that would enable such holders, after giving effect to the Merger, to beneficially own no more than 9.99%
of DSS Common Stock upon consummation of the Merger.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Those holders of Lexington
Preferred Stock who do not exceed the Beneficial Ownership Condition and accordingly will not receive DSS Preferred Stock or $.02
Warrants (as defined below), will receive DSS Common Stock and the other types of merger consideration in exchange for their Lexington
Preferred Stock based on the Common Stock Exchange Ratio. In the event DSS&rsquo;s stockholders approve the issuance of the merger
consideration, but do not approve the authorization of the DSS Preferred Stock, then the holders of Lexington Preferred Stock that
satisfy the Beneficial Ownership Condition shall receive warrants to purchase DSS Common Stock with an exercise price of $0.02
per share (the &ldquo;$.02 Warrants&rdquo;). Each $.02 Warrant is exercisable at any time after the date of issuance for a period
of ten years. If at any time between the three month anniversary of the issuance date and the expiration date, there is no effective
registration statement registering the resale of the shares issuable under the Warrants, then the holder may elect to exercise
the Warrants, or a portion thereof, by way of a cashless exercise. Except under certain circumstances, no holder may exercise its
Warrants or $.02 Warrants if such exercise would result in such holder beneficially owning in excess of 9.99% of the number of
shares of DSS common stock outstanding immediately after giving effect to the issuance of shares of common stock upon exercise
of the Warrant. In addition, under certain circumstances, a holder of the Warrants will be entitled to participate in any distribution
of DSS&rsquo;s assets (or the right to acquire its assets) or any declared cash dividend, to the same extent such holder would
have participated therein if such holder had held the shares of common stock acquirable upon complete exercise of the Warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The DSS Preferred Stock
will have the powers, preferences and privileges and other rights as will be set forth in a Certificate of Amendment to the Certificate
of Incorporation of DSS to be filed by DSS subsequent to closing, which rights include, among other things, the right to participate
in any dividends and distributions paid to common stockholders on an as-converted basis, pro rata with the holders of DSS Common
Stock. Upon the occurrence of any Liquidation Event (as such term is defined in the Certificate of Amendment), after the payment
of all debts and liabilities of DSS, any remaining assets shall be distributed pro rata to the holders of DSS Common Stock and
DSS Preferred Stock on an as-converted basis. The DSS Preferred Stock will be non-voting, except as required by law and in certain
defined instances, including in connection with a fundamental transaction. Each share of DSS Preferred Stock shall be initially
convertible into one share of DSS Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No fractional shares
of DSS Common Stock or DSS Preferred Stock will be issued in connection with the Merger. Instead, each Lexington stockholder who
would be otherwise entitled to receive a fractional share will receive from DSS, in lieu thereof, the next highest whole number
shares of DSS Common Stock or DSS Preferred Stock, as applicable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Immediately following
the completion of the Merger, the former stockholders of Lexington are expected to own approximately 55% of the outstanding common
and preferred stock of the combined company (on a fully-diluted basis including the escrow shares) and the current stockholders
of DSS are expected to own approximately 45% of the outstanding common stock of the combined company (on a fully-diluted basis
including the escrow shares) (without taking into account any shares of DSS Common Stock held by Lexington&rsquo;s stockholders
prior to the completion of the Merger). The shareholders of Lexington will hold the largest percentage of the voting shares on
a dilutive basis after the completion of the Merger at 55% of the combined entity.&nbsp; The percentages of ownership include
the 7,100,000 shares held in escrow, which are eligible to be voted while in escrow.&nbsp; <FONT STYLE="color: black">If the escrow
shares are terminated (which will be determined after 1 year of the deal being consummated), Lexington shareholders would own
a 45%, with DSS shareholders owning 55%. Lexington shareholders will represent the larger minority voting interest in the combined
entity at 45% compared to DSS&rsquo;s organized group (consisting of management and the board) at 12%.&nbsp; After the closing
of the acquisition, senior management of the combined entity is expected to include five officers; the CEO, CIO and CTO from Lexington,
and the CFO and COO from DSS, resulting in more members of senior management representing Lexington including the chief decision
marker. </FONT>Based on the aforementioned, and after taking in consideration all relevant facts and circumstances (which included,
among others, the relative voting rights of the combined entity on a diluted basis, the larger minority voting interest, and the
composition of the senior management), the Company came to a conclusion that, Lexington is the accounting acquirer, as it is defined
in FASB Topic ASC 805 &ldquo;Business Combinations.&rdquo;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company intends
to file a Form S-4 Registration Statement with the Securities and Exchange Commission (&ldquo;SEC&rdquo;) regarding the proposed
Merger as soon as practicable. The Merger requires approval by the stockholders of both Lexington and DSS. The Company currently
estimates that the Merger will be consummated during the first half of 2013.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company has incurred
approximately $461,000 of professional fees associated with the Merger. These costs are expensed as incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>Private Placement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Concurrently with
the execution of the Merger Agreement, on October 1, 2012, DSS entered into subscription agreements with certain accredited
investors, pursuant to which DSS agreed to issue and sell to such investors in a private placement an aggregate of 833,651
shares of its common stock, at a purchase price of $3.30 per share, for an aggregate purchase price of $2,751,048 (the
&ldquo;Private Placement&rdquo;). The Private Placement was completed on October 1, 2012. Lexington participated in the
private placement and purchased an aggregate of 218,675 shares of DSS common stock, at a purchase price of $3.30 per share,
for an aggregate purchase price of $721,628. Dawson James Securities, Inc. acted as the sole placement agent in connection
with the Private Placement and received $250,095 in fees.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Board of Directors and Stockholders</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Document Security Systems, Inc. and Subsidiaries</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We have audited the accompanying consolidated balance sheets
of Document Security Systems, Inc. and Subsidiaries as of December 31, 2011 and 2010, and the related consolidated statements of
operations and comprehensive loss, stockholders&rsquo; equity, and cash flows for the years then ended. These financial statements
are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based
on our audits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">We conducted our audits in accordance with the standards of
the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have,
nor have we been engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration
of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s internal control over financial reporting.
Accordingly we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial position of Document Security Systems, Inc. and Subsidiaries as
of December 31, 2011 and 2010, and the results of its operations and its cash flows for the years then ended, in conformity with
U.S. generally accepted accounting principles.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ FREED MAXICK CPAs, P.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0">(Formerly known as FREED MAXICK &amp; BATTAGLIA,
CPAs, PC)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Buffalo, New York</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">March 19, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC.&nbsp;
AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Consolidated Balance Sheets</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of December 31,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">ASSETS</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Current assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 74%; padding-left: 9pt">Cash</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">717,679</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">4,086,574</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts receivable, net of allowance of $76,000 ($66,000- 2010)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,595,750</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,227,877</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Inventory</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">783,442</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">601,359</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Prepaid expenses and other current assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">95,399</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">231,190</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Total current assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,192,270</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,147,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Property, plant and equipment, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,019,829</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,543,494</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">244,356</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">325,953</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">Goodwill</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,322,799</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,084,121</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Other intangible assets, net</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">2,043,212</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,847,859</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">12,822,466</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">14,948,427</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">LIABILITIES AND STOCKHOLDERS' EQUITY</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Current liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,666,963</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,828,138</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Accrued expenses and other current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,142,629</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,286,529</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Revolving lines of credit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">763,736</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">614,833</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Short-term loan from related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">150,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Current portion of long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">460,598</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">300,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Current portion of capital lease obligations</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">88,172</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">88,776</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Total current liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,272,098</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,118,276</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Revolving note from related party</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">583,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Long-term debt, net of unamortized discount of $88,000 ($0-2010)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,819,783</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,578,242</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Interest rate swap hedging liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">110,688</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">25,834</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Capital lease obligations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,133</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">98,532</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Deferred tax liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">108,727</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">89,779</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Derivative liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,866,836</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Commitments and contingencies (see Note 12)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Stockholders' equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Common stock, $.02 par value; 200,000,000 shares authorized, 19,513,132 shares issued and outstanding</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">(19,391,319 in 2010)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">390,262</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">387,825</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Additional paid-in capital</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">48,395,241</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">44,178,569</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Accumulated other comprehensive loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(110,688</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25,834</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Accumulated deficit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(43,174,778</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(39,952,632</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Total stockholders' equity</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,500,037</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">4,587,928</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total liabilities and stockholders' equity</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">12,822,466</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">14,948,427</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Consolidated Statements of Operations
and Comprehensive Loss</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">For the Years Ended December 31,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 74%; padding-left: 9pt">Printing</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">3,227,457</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">4,697,142</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,940,077</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,752,601</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Plastic IDs and cards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,769,085</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,290,788</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Licensing and digital solutions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,446,985</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">641,050</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in">Total revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,383,604</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,381,581</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">Costs of revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Printing</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,928,410</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,799,108</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 9pt">Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,430,860</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,386,829</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Plastic IDs and cards</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,698,439</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,504,844</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Licensing and digital solutions</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">154,016</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">5,476</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.25in; padding-bottom: 1pt">Total costs of revenue</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">9,211,725</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">9,696,257</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Gross profit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,171,879</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,685,324</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Operating expenses:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Selling, general and administrative</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">7,075,822</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,136,152</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Research and development</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">285,450</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">265,360</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Impairment of intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">376,481</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; padding-bottom: 1pt">Amortization of intangibles</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">284,716</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">803,468</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in; padding-bottom: 1pt">Operating expenses</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">7,645,988</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">7,581,461</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Operating loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,474,109</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,896,137</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Other income (expense):</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Change in fair value of derivative liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">360,922</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Interest expense</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(259,142</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(290,087</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Loss on equity investment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(121,393</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Amortizaton of note discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(420,385</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt; padding-bottom: 1pt">Other income</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">143,061</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Loss before income taxes</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,372,329</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(4,584,941</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Income tax benefit</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(150,183</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(1,122,091</TD><TD STYLE="text-align: left; padding-bottom: 1pt">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Net loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(3,222,146</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(3,462,850</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Other comprehensive loss:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Interest rate swap loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(84,854</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(25,834</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Comprehensive loss</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3,307,000</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(3,488,684</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Net loss per share -basic and diluted:</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.17</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(0.20</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt">Dividend per share</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">0.01</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Weighted average common shares outstanding, basic and diluted</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">19,454,046</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">17,755,141</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Consolidated Statements of Cash Flows</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Years Ended December 31,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 74%; text-align: left; padding-left: 9pt">Net loss</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(3,222,146</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">(3,462,850</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 9.35pt">Adjustments to reconcile net loss to net cash used by operating activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18pt">Depreciation and amortization</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">766,977</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,261,122</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 18pt">Stock based compensation</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">398,090</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">423,471</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18pt">Amortization of note discount</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">420,385</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 18pt">Loss on equity investment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">121,393</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18pt">Change in fair value of derivative liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(360,922</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 18pt">Deferred tax benefit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(169,131</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,141,040</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 18pt">Intangible asset impairment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">376,481</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 9.35pt">(Increase) decrease in assets:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.36in">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">701,482</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">200,339</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.36in">Inventory</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(182,083</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">86,977</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.36in">Prepaid expenses and other assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">112,911</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(101,465</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 9.35pt">Increase (decrease) in liabilities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.36in">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(229,528</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(209,516</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.36in">Accrued expenses and other current liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">59,845</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">265,450</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net cash used by operating activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,124,505</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,759,253</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from investing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Purchase of property, plant and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(523,596</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(157,422</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Purchase of other intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(72,069</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(269,729</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 9pt">Acquisition of business</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">61,995</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,000,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Net cash used by investing activities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(533,670</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,427,151</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Net (payments) borrowings on revolving lines of credit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(90,256</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">342,428</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Borrowings on long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,553,242</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Payments of long-term debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(359,399</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(250,000</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Payments of capital lease obligations</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(88,003</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(73,283</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Issuance of common stock, net of issuance costs</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(173,062</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">6,251,696</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Net cash (used) provided by financing activities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(710,720</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7,824,083</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Net (decrease) increase in cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,368,895</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,637,679</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt">Cash beginning of period</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">4,086,574</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">448,895</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt">Cash end of period</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">717,679</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">4,086,574</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Consolidated Statements of Changes in
Stockholders' Equity</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Years Ended December 31, 2011
and 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Common&nbsp;Stock</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Additional&nbsp;Paid-<BR>in&nbsp;Capital</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Accumulated&nbsp;Other<BR>Comprehensive <BR>Income</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Accumulated<BR>Deficit</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 22%; font-weight: bold; padding-bottom: 2.5pt">Balance, December 31, 2009</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">16,397,887</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">327,957</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">38,399,033</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">-</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(36,489,782</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="width: 10%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">2,237,208</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Issuance of common stock, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,729,129</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">34,583</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5,977,113</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,011,696</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of common stock for acquisition of Premier Packaging</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">735,437</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,551,966</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,566,675</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Stock based payments, net of tax effect</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">50,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">555,476</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">556,476</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Property dividend</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(228,607</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(228,607</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Conversion of debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">478,866</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">9,576</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">790,424</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">800,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other comprehensive loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25,834</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(25,834</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Derivative liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,866,836</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,866,836</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net Loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,462,850</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,462,850</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt">Balance, December 31, 2010</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">19,391,319</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">387,825</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">44,178,569</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(25,834</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(39,952,632</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">4,587,928</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of common stock, net</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">39,461</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">789</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66,146</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">66,935</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Issuance of common stock for acquisition of ExtraDev, Inc.</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">82,352</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,648</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">272,585</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">274,233</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Stock based payments, net of tax effect</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">283,565</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">283,565</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Beneficial conversion feature</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88,462</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88,462</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Other comprehensive loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(84,854</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(84,854</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Elimination of derivative liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,505,914</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,505,914</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net Loss</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,222,146</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,222,146</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 2.5pt">Balance, December 31, 2011</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">19,513,132</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">390,262</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">48,395,241</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(110,688</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">(43,174,778</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">5,500,037</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">See accompanying notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC. AND SUBSIDIARIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 1. - DESCRIPTION OF BUSINESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company develops, markets, manufactures
and sells paper and plastic products designed to protect valuable information from unauthorized scanning, copying, and digital
imaging. In addition, the Company develops, markets and sells digital information services, including data hosting, disaster recovery
and data back-up and security services. We have developed security technologies that are applied during the normal printing process.
Our technologies and products are used by federal, state and local governments, law enforcement agencies and are also applied to
a broad variety of industries as well, including financial institutions, high technology and consumer goods, entertainment and
gaming, healthcare/pharmaceutical, defense and genuine parts industries.<B> </B>Our customers use our technologies where there
is a need for enhanced security for protection and verification of critical financial instruments and vital records, or where there
are concerns of counterfeiting, fraud, identity theft, brand protection and liability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 2. - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Principles of Consolidation</I></B>
- The consolidated financial statements include the accounts of Document Security System and its subsidiaries. All intercompany
balances and transactions have been eliminated in consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Use of Estimates</I></B> -
The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United
States requires us to make estimates and assumptions that affect the amounts reported and disclosed in the financial statements
and the accompanying notes. Actual results could differ materially from these estimates. On an ongoing basis, we evaluate our estimates,
including those related to the accounts receivable, fair values of intangible assets and goodwill, useful lives of intangible assets
and property and equipment, fair values of options and warrants to purchase our common stock, </FONT>valuation of derivative liabilities
arising from issuances of common stock and associated warrants and other rights to acquire common stock in the future<FONT STYLE="color: black">,
deferred revenue and income taxes, among others. We base our estimates on historical experience and on various other assumptions
that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets
and liabilities. We engage third-party valuation consultants to assist management in the allocation of the purchase price of significant
acquisitions and the determination of the fair value of derivative liabilities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Reclassifications</I></B> - Certain prior year amounts
have been reclassified to conform to the current year presentation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Accounts Receivable</I></B> - The
Company carries its trade accounts receivable at invoice amount less an allowance for doubtful accounts.&nbsp; On a periodic basis,
the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based upon management&rsquo;s
estimates that include a review of the history of past write-offs and collections and an analysis of current credit conditions.&nbsp;
At December 31, 2011, the Company established a reserve for doubtful accounts of approximately&nbsp;$76,000 ($66,000 &ndash; 2010).
The Company does not accrue interest on past due accounts receivable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Inventory</I></B> - Inventories
consist primarily of paper, plastic materials and cards, pre-printed security paper, paperboard and fully-prepared packaging which
and are stated at the lower of cost or market on the first-in, first-out (&ldquo;FIFO&rdquo;) method.</FONT><FONT STYLE="font-size: 10pt"><B>
</B></FONT><FONT STYLE="color: black">Packaging work-in-process and finished goods included the cost of materials, direct labor
and overhead.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Property, Plant and Equipment</I>
-</B> Property, plant and equipment<B> </B>are recorded at cost. Depreciation is computed using the straight-line method over the
estimated useful lives or lease period of the assets whichever is shorter. Expenditures for renewals and betterments are capitalized.
Expenditures for minor items, repairs and maintenance are charged to operations as incurred.&nbsp; Any gain or loss upon sale or
retirement due to obsolescence is reflected in the operating results in the period the event takes place. Depreciation expense
in 2011 was approximately $482,000 ($458,000 - 2010).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Investment</I>
</B>- </FONT>On October 8, 2009, the Company entered into an Asset Purchase Agreement with Internet Media Services, Inc. (&ldquo;IMS&rdquo;)
whereby the Company sold the assets and liabilities of Legalstore.com, a division of the Company, in exchange for 7,500,000 shares
of common stock of IMS. The Company recorded its investment in IMS as an equity method investment at the fair market value of the
business sold. Management determined that the transaction qualified as a derecoginition of a subsidiary under ASC 810-10-40. The
Company recognized gains or losses on its investment under the equity method of accounting for investments. During the nine months
ended September 30, 2010, the Company recorded a cumulative loss on its investment of approximately $121,000. On September 23,
2010, the Company&rsquo;s Board of Directors declared a dividend whereas the Company distributed to its stockholders of record
on October 8, 2010 on a pro-rata basis its 7,500,000 shares of stock of IMS. As a result, the Company recorded a dividend of approximately
$229,000 which was the book value of the investment as of September 23, 2010. There was no loss on investment in IMS during the
year ended December 31, 2011 as the Company no longer owned shares in IMS as of September 23, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; background-color: white"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="color: black"><B><I>Business
Combinations </I></B><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></FONT> Business combinations and non-controlling
interests are recorded in accordance with the Business Combination Topic of the FASB ASC. Under the guidance, the assets and liabilities
of the acquired business are recorded at their fair values at the date of acquisition. The excess of the purchase price over the
estimated fair values is recorded as goodwill. If the fair value of the assets acquired exceeds the purchase price and the liabilities
assumed then a gain on acquisition is recorded. Under the guidance, all acquisition costs are expensed as incurred and in-process
research and development costs are recorded at fair value as an indefinite-lived intangible asset. The application of business
combination and impairment accounting requires the use of significant estimates and assumptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="font-size: 10pt"><B><I>Goodwill
-</I></B></FONT><FONT STYLE="color: black"> </FONT><FONT STYLE="font-size: 10pt">Goodwill is the excess of cost of an acquired
entity over the fair value of amounts assigned to assets acquired and liabilities assumed in a business combination. Goodwill</FONT>
<FONT STYLE="font-size: 10pt">is<FONT STYLE="font-family: Times New Roman, Times, Serif"> subject to impairment testing at least
annually and will be tested for impairment between annual tests if an event occurs or circumstances change that would indicated
the carrying amount may be impaired. ASC Topic 350 provides an entity with the option to first assess qualitative factors to determine
whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of
a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines
it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step
impairment test is unnecessary. If the two-step impairment test is necessary, a fair-value-based test is applied at the reporting
unit level, which is generally one level below the operating segment level. The test compares the fair value of an entity's reporting
units to the carrying value of those reporting units. This test requires various judgments and estimates. The Company estimates
the fair value of the reporting unit using a market approach in combination with a discounted operating cash flow approach. Impairment
of goodwill is measured as the excess of the carrying amount of goodwill over the fair values of recognized and unrecognized assets
and liabilities of the reporting unit. An adjustment to goodwill will be recorded for any goodwill that is determined to be impaired.
The Company tests goodwill for impairment at least annually in conjunction with preparation of its annual business plan, or more
frequently if events or circumstances indicate it might be impaired. </FONT>ASU 2010-28 modifies Step 1 of the goodwill impairment
test for reporting units with zero or negative carrying amounts.&nbsp; For those reporting units, an entity is required to perform
Step 2 of the goodwill impairment test if it is more likely than not that a goodwill impairment exists.&nbsp; In determining whether
it is more likely than not that a goodwill impairment exists, an entity should consider whether there are any adverse qualitative
factors indicating that an impairment may exist.&nbsp; The Company performed the annual assessment and has determined that no impairment
is necessary during the years ended December 31, 2011 and 2010.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt"><B><I>Other
Intangible Assets, Patent Defense Costs and</I></B></FONT><FONT STYLE="color: black"> </FONT><FONT STYLE="font-size: 10pt"><B><I>Patent
Application Costs</I></B></FONT><FONT STYLE="color: black">&ndash; </FONT><FONT STYLE="font-size: 10pt">Other intangible assets
consists of costs associated with the application, acquisition and defense of the Company&rsquo;s patents, contractual rights to
patents and trade secrets associated with the Company&rsquo;s technologies, customer lists and non-compete agreements obtained
as a result of acquisitions. The Company&rsquo;s patents and trade secrets are for document anti-counterfeiting and anti-scanning
technologies and processes that form the basis of the Company&rsquo;s document security business. Patent application costs are
capitalized and amortized over the estimated useful life of the patent, which generally approximates its legal life. External legal
costs incurred to defend the Company&rsquo;s patents are capitalized to the extent of an evident increase in the value of the patents
and an expected successful outcome. Patent defense costs are expensed at the point when it is determined that the outcome is expected
to be unsuccessful. The Company capitalizes the cost of an appeal until it is determined that the appeal will be unsuccessful.
The Company&rsquo;s capitalized patent defense costs expenses are analyzed for impairment based on the expected eventual outcome
of the legal action and recoverability of proceeds or added economic value of the patent in excess of the costs. Legal actions
related to the same patent defense case are unified into one asset group for the purposes on the impairment analysis. Intangible
asset amortization expense is classified as an operating expense. The Company believes that the decision to incur patent costs
is discretionary as the associated products or services can be sold prior to or during the application process. The Company accounts
for other intangible amortization as an operating expense, unless the underlying asset is directly associated with the production
or delivery of a product. Costs incurred to renew or extend the term of recognized intangible assets, including patent annuities
and fees, are expensed as incurred. To date, the amount of related amortization expense for other intangible assets directly attributable
to revenue recognized is not material.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Impairment of Long-Lived Assets
-</I></B> </FONT>The Company accounts for long-lived assets and certain identifiable intangibles for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be
held and used is measured by a comparison of the carrying amount of an asset to future net undiscounted cash flows expected to
be generated by the asset including its ultimate disposition. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Fair value
is determined based on discounted cash flows or appraised values, depending on the nature of the assets. An impairment of patent
acquisition costs of $377,000 was recognized in the fourth quarter of 2010 as a result of adverse decisions in the Company&rsquo;s
patent infringement case against the ECB which caused the Company to reduce the estimated cash flows that supported the Company&rsquo;s
capitalized patent acquisition based intangible asset. No impairments were recognized during the year ended December 31, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Fair Value of Financial Instruments</I></B>
- Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The Fair Value Measurement Topic of the FASB ASC establishes a three-tier
fair value hierarchy which prioritizes the inputs used in measuring fair value.&nbsp;The hierarchy gives the highest priority to
unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to
unobservable inputs (Level 3 measurements). These tiers include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.2in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.2in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such
as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that
are not active; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.2in"></TD><TD STYLE="width: 0.2in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD>Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop
its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant
value drivers are unobservable.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 10pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The carrying amounts reported in the balance
sheet of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate fair value because of
the immediate or short-term maturity of these financial instruments. The fair value of revolving credit lines, notes payable and
long-term debt approximates their carrying value as the stated or discounted rates of the debt reflect recent market conditions.
Derivative instruments are recorded as assets and liabilities at estimated fair value based on available market information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Derivative
Instruments- </I></B>The </FONT>Company maintains an overall interest rate risk management strategy that incorporates the use
of interest rate swap contracts to minimize significant fluctuations in earnings that are caused by interest rate volatility. <FONT STYLE="color: black">The
Company has two interest rate swaps that change variable rates into fixed rates on two term loans (See Note 6). These swaps
qualify as Level 2 fair value financial instruments. These swap agreements are not held for trading purposes and the Company
does not intend to sell the derivative swap financial instruments. The Company records the interest swap agreements on the
balance sheet at fair value because the agreements qualify as a cash flow hedges under accounting principles generally
accepted in the United States of America. Gains and losses on these instruments are recorded in other comprehensive income
(loss) until the underlying transaction is recorded in earnings. When the hedged item is realized, gains or losses are
reclassified from accumulated other comprehensive income (loss) (AOCI) to the Consolidated Statement of Operations on the
same line item as the underlying transaction. The valuations of the interest rate swaps have been derived from proprietary
models of the bank based upon recognized financial principles and reasonable estimates about relevant future market
conditions and may reflect certain other financial factors such as anticipated profit or hedging, transactional, and other
costs. The notional amounts of the swaps decrease over the life of the agreements. The Company is exposed to a credit loss in
the event of nonperformance by the counter parties to the interest rate swap agreements. However, the Company does not
anticipate non-performance by the counter parties. The cumulative net loss attributable to this cash flow hedge recorded in
accumulated other comprehensive income and other liabilities at December 31, 2011, was approximately $111,000 ($26,000-
December 31, 2010).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company has notional amounts of approximately
$2,143,000 as of December 31, 2011 on its interest rate swap agreements for its Citizens Bank debt. <FONT STYLE="color: black">The
Company has two interest rate swaps that change variable rates into fixed rates on two term loans and the terms of these instruments
are </FONT>as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><BR STYLE="mso-special-character: line-break">
</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Notional Amount</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Variable Rate</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Fixed Cost</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Maturity Date</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%">$</TD>
    <TD STYLE="width: 22%; text-align: right">950,000</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 22%; text-align: right">4.02</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 22%; text-align: right">5.70</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 22%; text-align: right">February 1, 2015</TD><TD STYLE="width: 2%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>$</TD>
    <TD STYLE="text-align: right">1,193,445</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.42</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.865</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">August 30, 2021</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company accounts for warrants and other
rights to acquire capital stock with exercise price reset features, or &ldquo;down-round&rdquo; provisions, as derivative liabilities.
Similarly, down-round provisions for issuances of common stock are also accounted for as derivative liabilities. These derivative
liabilities are measured at fair value with the changes in fair value at the end of each period reflected in current period income
or loss. The fair value of derivative liabilities is estimated using a binomial model or Monte Carlo simulation to model the financial
characteristics, depending on the complexity of the derivative being measured. A Monte Carlo simulation provides a more accurate
valuation than standard option valuation methodologies such as the Black-Scholes-Merton or binomial option models when derivatives
include changing exercise prices or different alternatives depending on average future price targets. In computing the fair value
of the derivatives, the Company uses significant judgments, which, if incorrect, could have a significant negative impact to the
Company&rsquo;s consolidated financial statements.&nbsp;&nbsp;The input values for determining the fair value of the derivatives
include observable market indices such as interest rates, and equity indices as well as unobservable model-specific input values
such as certain volatility parameters. Future changes in the fair value of the derivatives liabilities, if any, will be recorded
in the statement of operations as gains or losses from derivative liabilities. The derivative liability resulting from the warrant
is classified as a Level 3 measurement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Conventional
Convertible Debt</I> -</B></FONT>When the convertible feature of the conventional convertible debt provides for a rate of conversion
that is below market value, this feature is characterized as a beneficial conversion feature (&ldquo;BCF&quot;). Prior to the determination
of the BCF, the proceeds from the debt instrument are first allocated between the convertible debt and any detachable free standing
instruments that are included, such as common stock warrants. The Company records a BCF as a debt discount pursuant to FASB ASC
Topic 470-20. In those circumstances, the convertible debt will be recorded net of the discount related to the BCF. We amortize
the discount to interest expense over the life of the debt using the effective interest method. During 2010, the holders of both
of the Company&rsquo;s convertible notes totaling $800,000 exercised the conversion features of the respective convertible notes
for an aggregate of 478,866 shares of the Company&rsquo;s common stock, which retired the debt in full. In conjunction with the
conversions, the Company recognized approximately $420,000 of unamortized note discount expense during 2010. There was no note
discount expense in 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Share-Based
Payments </I></B>-</FONT> Compensation cost for stock awards are measured at fair value and recognize compensation expense over
the service period for which awards are expected to vest. <FONT STYLE="color: black">The Company uses the Black-Scholes-Merton
option pricing model for determining the estimated fair value for stock-based awards. The</FONT> Black-Scholes-Merton model requires
the use of subjective assumptions which determine the fair value of stock-based awards, including the option&rsquo;s expected term
and the price volatility of the underlying stock. For equity instruments issued to consultants and vendors in exchange for goods
and services the Company determines the measurement date for the fair value of the equity instruments issued at the earlier of
(i)&nbsp;the date at which a commitment for performance by the consultant or vendor is reached or (ii)&nbsp;the date at which the
consultant or vendor&rsquo;s performance is complete. In the case of equity instruments issued to consultants, the fair value of
the equity instrument is recognized over the term of the consulting agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.35pt"><FONT STYLE="font-size: 10pt; color: black"><B><I>Revenue
Recognition</I></B></FONT> <B>- </B><FONT STYLE="font-size: 10pt; color: black">Sales of security and commercial printing products,
packaging, and plastic cards are recognized when a product or service is delivered, shipped or provided to the customer and all
material conditions relating to the sale have been substantially performed. The Company recognizes revenue from printing technology
licenses once all the following criteria for revenue recognition have been met: (1) persuasive evidence of an agreement exists;
(2) the right and ability to use the product or technology has been rendered; (3) the fee is fixed and determinable and not subject
to refund or adjustment; and (4) collection of the amounts due is reasonably assured.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.35pt">For digital solutions sales, revenue is
recognized in accordance with the FASB ASC 985-605. Accordingly, revenue is recognized when all of the following conditions are
satisfied: (1) there is persuasive evidence of an arrangement; (2) the service or product has been provided to the customer; (3)
the amount of fees to be paid by the customer is fixed or determinable; and (4) the collection of our fees is reasonably assured.
We recognize cloud computing revenue, including data backup, recovery and security services, on a monthly basis, beginning on the
date the customer commences use of our services. Professional services are recognized in the period services are provided.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 27.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Advertising Costs</I></B>&ndash; Generally
consist of online, keyword advertising with Google with additional amounts spent on certain print media in targeted industry publications<I>.</I>
Advertising costs were $70,000 in 2011 <FONT STYLE="color: black">($</FONT>32,000 <FONT STYLE="color: black">&ndash; 2010)</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Research and Development</I></B>&ndash;
Research and development costs are expensed as incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Foreign Currency-</I></B> Net gains and losses resulting
from transactions denominated in foreign currency are recorded as other income or loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Income Taxes</I></B> - The Company
recognizes estimated income taxes payable or refundable on income tax returns for the current year and for the estimated future
tax effect attributable to temporary differences and carry-forwards. Measurement of deferred income items is based on enacted tax
laws including tax rates, with the measurement of deferred income tax assets being reduced by available tax benefits not expected
to be realized. We recognize penalties and accrued interest related to unrecognized tax benefits in income tax expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Earnings Per Common Share</I></B>
- The Company presents basic and diluted earnings per share. Basic earnings per share reflect the actual weighted average of shares
issued and outstanding during the period. Diluted earnings per share are computed including the number of additional shares that
would have been outstanding if dilutive potential shares had been issued. In a loss year, the calculation for basic and diluted
earnings per share is considered to be the same, as the impact of potential common shares is anti-dilutive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black">For the years ended December 31,
2011 and 2010, there were up to 3,205,693 and 2,767,131, respectively, of shares potentially issuable under convertible debt agreements,
options, warrants and restricted stock agreements that could potentially dilute basic earnings per share in the future that were
excluded from the calculation of diluted earnings per share because their inclusion would have been anti-dilutive to the Company&rsquo;s
losses in the respective years. </FONT>On February 13, 2012, the Company issued <FONT STYLE="color: black">967,740 shares in a
private placement.</FONT> In addition, in 2012, the Company issued<FONT STYLE="color: black"> 541,934</FONT> warrants in a private
placement, 550,000 warrants for consulting services, and up to 175,272 shares potentially issuable under a convertible debt agreement,
all of which would potentially dilute basic earnings per share in the future.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Comprehensive Loss </I></B>-Comprehensive loss is defined
as the change in equity of the Company during a period from transactions and other events and circumstances from non-owner sources.
It consists of net (loss) income and other gains and losses affecting stockholders&rsquo; equity that, under GAAP, are excluded
from net income. The change in fair value of interest rate swaps were the only item impacting accumulated other comprehensive loss
for the years ended December 31, 2011 and 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Concentration of Credit Risk</I></B>
- The Company maintains its cash in bank deposit accounts, which at times may exceed federally insured limits.&nbsp; The Company
believes it is not exposed to any significant credit risk as a result of any non-performance by the financial institutions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">During 2011 one customer accounted for 19%
of the Company&rsquo;s consolidated revenue. As of December 31, 2011, this customer accounted for 18% of the Company&rsquo;s trade
accounts receivable balance. During 2010 two customers accounted for 25% and 10% of the Company&rsquo;s total revenue from continuing
operations, respectively. As of December 31, 2010, these customers accounted for 37% and 7% of the Company&rsquo;s trade accounts
receivable balance, respectively. The risk with respect to trade receivables is mitigated by credit evaluations we perform on our
customers, the short duration of our payment terms for the significant majority of our customer contracts and by the diversification
of our customer base.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Recent
Accounting Pronouncements</I></B></FONT> -<FONT STYLE="color: black"> In May 2011, the FASB issued Accounting Standards Update
No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements
in U.S. GAAP and IFRS.&nbsp;&nbsp;This update results in common principles and requirements for measuring fair value and for disclosing
information about fair value measurements in accordance with U.S. GAAP and IFRS.&nbsp;&nbsp;ASU 2011-04 is required to be applied
prospectively in interim and annual periods beginning after December 15, 2011.&nbsp;&nbsp;Early application is not permitted.&nbsp;&nbsp;The
adoption of ASU 2011 is not expected to have a material impact on the consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In June&nbsp;2011 the Financial Accounting
Standards Board issued Accounting Standards Update No.&nbsp;2011-05, Presentation of Comprehensive Income. This standard eliminates
the option to report other comprehensive income and its components in the statement of changes in equity. The Company may elect
to present items of net income and other comprehensive income in one continuous statement or in two consecutive statements. Each
component of net income and each component of other comprehensive income, together with totals for comprehensive income and its
two parts &ndash; net income and other comprehensive income &ndash; would need to be displayed under either alternative, and the
statements would need to be presented with equal prominence as the other primary financial statements. This standard does not change
1) the items that constitute net income and other comprehensive income, 2) when an item of other comprehensive income must be reclassified
to net income, or 3) the computation for earnings per share - which will continue to be based on net income. This standard is effective
for fiscal years beginning after December&nbsp;15, 2011, and the Company is currently evaluating which presentation option it will
utilize for comprehensive income in its consolidated financial statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In September&nbsp;2011 the Financial Accounting
Standards Board issued Accounting Standards Update No.&nbsp;2011-08, Intangibles &ndash; Goodwill and Other (Topic 350), Testing
Goodwill for Impairment. The revised standard is intended to reduce the cost and complexity of the annual goodwill impairment test
by providing the option of performing a &ldquo;qualitative&rdquo; assessment to determine whether further impairment testing is
necessary. Under this standard, the Company has the option to first assess qualitative factors to determine whether the existence
of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is
less than its carrying amount. If, after assessing the totality of events or circumstances, the Company determines that it is not
more likely than not that the fair value of a reporting unit is less than its carrying amount, performing the two-step impairment
test under Topic 350 is unnecessary. However, if the Company concludes otherwise, it is required to perform the first step of the
two-step impairment test, as described in Topic 350. If the carrying amount of a reporting unit exceeds its fair value under the
first step, the Company is required to perform the second step of the goodwill impairment test to measure the amount of the impairment
loss, if any. The Company also has the option to bypass the qualitative assessment for any reporting unit in any period and to
proceed directly to performing the first step of the two-step goodwill impairment test. The Company may resume performing the qualitative
assessment in any subsequent period. This standard is effective for annual and interim goodwill impairment tests performed for
fiscal years beginning after December&nbsp;15, 2011, and early adoption is permitted. The adoption of this standard will not have
a material impact on the Company&rsquo;s consolidated financial statements.<BR STYLE="mso-special-character: line-break">
</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 3. &ndash; INVENTORY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Inventory consisted
of the following at December 31, 2011:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 60%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 74%; text-align: left">Finished Goods</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">421,965</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">193,346</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Work in process</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">73,669</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">86,776</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Raw Materials</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">287,808</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">321,237</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">783,442</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">601,359</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 4. - EQUIPMENT AND LEASEHOLD IMPROVEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Equipment and leasehold improvements consisted
of the following at December 31:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-autospace: none; font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Estimated<BR>
Useful&nbsp;Life</B></P></TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Purchased</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Under&nbsp;Capital<BR>
Leases</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Purchased</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Under<BR>
Capital <BR>Leases</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: right">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 33%; text-align: left">Machinery &amp; equipment</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right; width: 18%">5-7 years</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,943,401</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">369,114</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">2,514,045</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">369,114</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Building</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">39 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,345,523</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Land</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">185,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Leasehold improvements</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">up to 13 years (1)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">741,919</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">741,919</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Furniture &amp; fixtures</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">7 years</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">104,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">104,709</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Software &amp; websites</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">3 years</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">356,125</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">356,125</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Total cost</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,676,677</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">369,114</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">3,716,798</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">369,114</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Less accumulated depreciation</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,822,506</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">203,456</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,391,693</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">150,725</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Net</TD>
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">3,854,171</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">165,658</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">2,325,105</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">218,389</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(1) Expiration of lease term</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 5. - INTANGIBLE ASSETS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B><I>Goodwill
</I></B></FONT><B><I>-</I></B><FONT STYLE="font-family: Times New Roman, Times, Serif"> The Company performs an annual fair value
test of its recorded goodwill for its reporting units using a discounted cash flow and capitalization of earnings approach. As
of December 31, 2011, the Company had goodwill of approximately $3,323,000 ($3,084,000 December 31, 2010) attributable to the Company&rsquo;s
printing division ($631,000) , packaging division ($1,768,000), plastics division ($685,000) and digital division ($239,000), respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Other Intangible Assets</I></B> -
Other intangible assets are comprised of the following at December&nbsp;31:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-autospace: none">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Useful&nbsp;Life</B></P></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">Gross&nbsp;Carrying <BR>Amount</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">Accumulated<BR>Amortizaton</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">Net&nbsp;Carrying<BR>Amount</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">Gross&nbsp;Carrying<BR>Amount</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">Accumulated<BR>Amortizaton</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">Net&nbsp;Carrying<BR>Amount</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 20%; text-align: left">Acquired intangibles</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right; width: 7%">5 -10 years</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,405,300</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">999,761</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,405,539</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">2,038,300</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">815,177</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">1,223,123</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Patent acquisition and defense costs</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">Varied</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,729,889</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4,729,889</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Patent application costs</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none; text-align: right">Varied (1)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">843,145</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">205,472</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">637,673</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">843,693</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">218,957</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">624,736</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-autospace: none">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">3,248,445</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">1,205,233</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">2,043,212</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">7,611,882</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">5,764,023</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">1,847,859</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(1)- patent rights are amortized over their expected useful
life which is generally the legal life of the patent. As of December 31, 2011 the weighted average remaining useful life of these
assets in service was 12 years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Actual amortization expense for the years
ended December 31, 2011 amounted to approximately $285,000 ($803,000 -2010). Expected amortization for each of the next five years
is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; margin-left: 0">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 87%; text-align: right">2012</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">291,515</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">291,515</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: right">2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">291,515</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">206,348</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: right">2016</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">171,815</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right; padding-bottom: 1pt">Thereafter</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">790,504</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">2,043,212</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I><U>Acquired Intangible Assets &ndash;</U></I>
Acquired intangibles are recorded by the Company in conjunction with business combinations. In May 2011, the Company acquired intangible
assets associated with its acquisition of ExtraDev as described in Note 8. The Company valued these intangible assets were valued
at $408,000 and consist of customer lists, amortized over the expected life of 10 years, and a non-compete agreement, amortized
over the expected life of 5 years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><I><U>Patent Application Costs</U><B> -
</B></I>On an ongoing basis, the Company submits formal and provisional patent applications with the United States, Canada and
countries included in the Patent Cooperation Treaty (PCT). The Company capitalizes these costs and amortizes them over the patents&rsquo;
estimated useful life.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><FONT STYLE="background-color: white"><I><U>Patent
Acquisition and Defense Costs</U><B>- </B></I></FONT>Included in the Company&rsquo;s capitalized patent defense costs are costs
associated with the acquisition of certain rights associated with patents that the Company is defending.&nbsp;&nbsp;In December
2004, the Company entered into an agreement with the Wicker Family in which Document Security Systems obtained the legal ownership
of technology (including patent ownership rights) previously held by the Wicker Family.&nbsp;&nbsp;At that time, the agreement
with the Wicker Family provided that the Company would retain 70% of the future economic benefit derived from settlements, licenses
or subsequent business arrangements from any infringer of the Wicker patents that Document Security Systems chooses to pursue.&nbsp;&nbsp;The
Wicker Family was to receive the remaining 30% of such economic benefit.&nbsp;&nbsp;In February 2005, the Company further consolidated
its ownership of the Wicker Family based patents and its rights to the economic benefit of infringement settlements when the Company
purchased economic interests and legal ownership from approximately 45 persons and entities that had purchased various rights in
Wicker Family technologies over several decades. &nbsp; The Company issued an aggregate of 541,460 shares of its common stock for
the rights of the interest holders and secured 100% ownership of a US Patent and approximately 16% of additional economic rights
to settlements with infringers of the Wicker Family&rsquo;s foreign patents.&nbsp;&nbsp;The value of the shares of common stock
was determined based upon the closing price of the shares of the Company&rsquo;s common stock on the American Stock Exchange on
February 15, 2005 of $7.25 per share was, $ 3,905,672 net of expenses.&nbsp;&nbsp;&nbsp;The Company amortized these costs over
the weighted average expected life of the patents underlying the acquired rights, which was 6.75 years as of the date of acquisition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">Patent defense
costs were comprised of legal cost associated with the Company&rsquo;s patent infringement suit against the ECB which the Company
commenced in 2005.&nbsp;&nbsp;The Company based it decision to defer the costs associated with this case on the principal that
successful patent defense costs are capitalizable.&nbsp;&nbsp;During the course of the ECB litigation, the most significant events
in the case were challenges of patent validity by the ECB in nine jurisdictions in Europe as a core component of its defense.&nbsp;&nbsp;The
Company believed that the ECB&rsquo;s challenge of patent validity represented the biggest hurdle to a successful outcome of the
overall infringement case.&nbsp;&nbsp;During the course of the ECB litigation, the Company spent approximately $4,247,000 on legal
and related court cost associated with defending the patent in these jurisdictions.&nbsp;&nbsp;&nbsp;The Company amortized these
costs over the expected life of the patent which expired as of January 2010.&nbsp;&nbsp;&nbsp;During the course of the ECB litigation,
the Company analyzed the recoverability of its capitalized patent defense costs.&nbsp;&nbsp;The Company used the potential proceeds
from its ECB Litigation as the primary source of future cash flows.&nbsp;&nbsp;Specifically, the Company used assumptions of banknote
production volumes during the alleged infringement period and estimated banknote production costs from third party sources to determine
the estimated total costs of the production of the Euro banknotes in each year of infringement.&nbsp;&nbsp;The Company then applied
a royalty rate that the Company generally charges international licensees and that the Company believes is consistent with industry
standards to determine the amount that would be due to the Company if the ECB had licensed the technology from the Company on the
Company&rsquo;s standard licensing terms.&nbsp;&nbsp;&nbsp;The Company uses this amount as an estimate of the gross proceeds it
could receive from a successful outcome of the litigation in all jurisdictions.&nbsp;&nbsp;The Company then allocated these potential
proceeds by the percent of circulation of each jurisdiction in which the Company has ongoing litigation to determine the potential
proceeds of a successful outcome in the jurisdictions where the patent has been held as valid or where the patent validity has
not yet been determined.&nbsp;&nbsp;Finally, the Company used a probability factor in its analysis that discounts these potential
future proceeds that takes into account the different status levels of each jurisdiction.&nbsp;&nbsp;&nbsp;Thus, the Company determined
a probability based cash flow which is compared to the net patent defense costs balance to determine whether an impairment of these
costs has occurred.&nbsp;&nbsp;&nbsp;&nbsp;As of December 31, 2010, the net unamortized balance of acquired patent assets was $377,000,
which was recorded in the corporate segment. As a result of the losses in the appeal of two court decisions in the fourth quarter
of 2010 related to the Company&rsquo;s infringement case against the ECB (as described in Note 12- Legal Proceedings), the Company&rsquo;s
management determined that an impairment of this asset occurred as it is more likely than not that the Company would not receive
proceeds from infringement litigation in these non-European jurisdictions, and the remaining balance was considered impaired. As
of December 31, 2011, there were no longer any unamortized patent defense costs or patent acquisition costs reflected on the Company&rsquo;s
balance sheet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 6. &ndash; SHORT TERM AND LONG TERM DEBT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Revolving Credit Lines- </I></B>On
February 12, 2010, the Company entered into a Credit Facility Agreement with RBS Citizens, N.A. (&ldquo;Citizens Bank&rdquo;) in
connection with the Company&rsquo;s acquisition of Premier Packaging (&ldquo;Premier&rdquo;) pursuant to which Citizens Bank provided
Premier with a revolving credit line of up to $1,000,000.&nbsp;&nbsp; The revolving line of credit is&nbsp;accessible by Premier
subject to certain terms, scheduled to mature on July 13, 2011 and is payable in monthly installments of interest only beginning
on March 1, 2010. Interest accrued at 1 Month LIBOR plus 3.75% (4.02% at December 31, 2011).&nbsp;&nbsp; On July 26, 2011, the
Company entered into a Second Amended and Restated Credit Facility Agreement with Citizens (the &ldquo;Second Credit Facility Agreement&rdquo;)
for the purpose of amending the Amended and Restated Credit Facility Agreement dated as of October 8, 2010, as amended on February
24, 2011 (the &ldquo;Original Credit Facility Agreement&rdquo;). The Second Credit Facility Agreement provides for a revolving
line of credit up to $1,000,000 to Premier. The effect of the Second Credit Facility Agreement was the elimination of the &ldquo;borrowing
base&rdquo; component of the Original Revolving Note and the extension of the maturity date to May 31, 2012. As of December 31,
2011, the revolving line had a balance of $669,785 ($614,833 -2010).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On May 12, 2011, in conjunction with the
Company&rsquo;s acquisition of ExtraDev, the Company assumed revolving credit lines and open credit card accounts totaling approximately
$239,000, comprising of a $100,000 revolving line of credit with a bank at 4.75% with an outstanding balance of $63,000, a $100,000
revolving line of credit with a bank at 8.09% with an outstanding balance of $86,000, and various credits cards with an aggregate
outstanding balance of approximately $90,000. The line of credit with the $86,000 balance was paid in full during the year ended
December 31, 2011 and the line of credit was closed. All of the credit lines are secured by personal guarantees of the former ExtraDev
owners. In accordance with the purchase agreement with ExtraDev, the Company committed to paying these balances within 90 days
of acquisition. In August, the Company reached an informal agreement with the former owners of ExtraDev whereas the Company would
make monthly payments against the balances of these accounts of at least $25,000 in order to pay-down these liabilities. As of
December 31, 2011, the aggregate balance of the ExtraDev credit lines was $93,951.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Short-Term Loan from Related Party
- </I></B><FONT STYLE="color: black; background-color: white">The DSS Note issued to Bzdick Properties, totaling $150,000, matures
on March 31, 2012, and accrues interest at an annualized rate of 9.5% per annum. Prepayment of principal may be made without penalty.
The DSS Note calls for interest only payments during its term with a balloon payment due at maturity, and will be secured by a
guaranty agreement running from Premier to Bzdick Properties.&nbsp;&nbsp;The DSS Note is subordinated to the Citizens loan documents.
One of the members of Bzdick Properties is Robert Bzdick, who also serves as a director and chief operating officer of DSS, and
as such is a related party to both DSS and Premier. The Company paid approximately $3,000 interest on this loan during the year
ended Decemember 31, 2011. </FONT>As of December 31, 2011, the Note had a balance of $150,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white"><B><I>Long-Term
Debt - </I></B>On December 9, 2009, the Company entered into a $575,000 promissory note with an accredited investor
(&ldquo;Note&rdquo;) which matures November 24, 2012 and accrues interest at 10% annually, payable
quarterly.&nbsp;&nbsp;&nbsp;The Note is secured by the assets of the Company&rsquo;s wholly owned subsidiary, Secuprint Inc.
(a/k/a DSS Printing Group). &nbsp; Under the terms of the Note, the Company is required to comply with various covenants. <FONT STYLE="color: black">On
December 30, 2011, the Company refinanced this Note with a Convertible Note which matures on December 29, 2013, and carries
an interest rate of 10% per annum. Interest is payable quarterly in arrears commencing on March 31, 2012. The Convertible
Note for $575,000 can be converted at any time during the term at Lender&rsquo;s option into a total of 260,180 of the
Company&rsquo;s common stock at $2.21 per share. In conjunction with the Convertible Note, the Company determined a
beneficial conversion feature existed amounting to approximately $88,000 which was recorded as a debt discount and will be
amortized over the term of the Note. The Note is secured by all of the assets (excluding assets leased) of Secuprint and is
subject to various events of default.</FONT> As of December 31, 2011, the balance of the Note was $575,000 ($575,000-2010).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On February 12, 2010, in conjunction with
the Credit Facility Agreement, the Company entered into a term loan with Citizens Bank for $1,500,000. &nbsp;&nbsp;The proceeds
of the term loan were used to partially satisfy the purchase price of Premier. The Credit Facility Agreement contains customary
representations and warranties, affirmative and negative covenants, including&nbsp;financial covenants (fixed charge coverage ratio,
tangible net worth, and current ratio requirements) and events of default and is secured by all of the assets of Premier.&nbsp;&nbsp;
The $1,500,000 term loan was scheduled to mature on March 1, 2013 and was payable in 35 monthly payments of $25,000 plus interest
commencing March 1, 2010 and a payment of $625,000 on the 36 month.&nbsp;&nbsp;Interest was accruing at 1 Month LIBOR plus 3.75%
(4.02% at December 31, 2011).&nbsp;&nbsp;The Company subsequently entered into an interest rate swap agreement (See Note 2) to
lock into a 5.6% effective interest over the life of the term loan. On July 26, 2011, the Company entered into the Second Credit
Facility Agreement for the purpose of amending the Original Credit Facility Agreement. The Second Credit Facility Agreement provides
for a loan of $1,075,000 to Premier. The Company subsequently amended the interest rate swap agreement to lock into a 5.7% effective
interest over the life of the amended loan. The effect of the Second Credit Facility Agreement was the extension of the payment
term of the Original Note to February 1, 2015 and the elimination of the $625,000 balloon payment originally due on July 1, 2013
under the Original Note. As of December 31, 2011, the balance of the Note was approximately $950,000 ($1,250,000 -2010).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On June 29, 2011, the Company and P3 entered
into a Commercial Term Note (the &ldquo;Note&rdquo;) with Neil Neuman (&rdquo;Neuman&rdquo;) whereby the Company borrowed $650,000
from Neuman. The applicable interest rate under the Note is 6.5% per annum, and the term is forty-eight months (the &ldquo;Term&rdquo;).
Commencing on August 1, 2011, the Company will pay monthly installments of $13,585 for the Term of the Note, and a final balloon
payment of $100,000 on August 1, 2015. Any reasonable expense incurred by Neuman (including reasonable attorneys&rsquo; fees and
disbursements) in connection with the administration or enforcement of the Note shall be paid by the Company and, if not timely
paid, shall earn interest at the same rate as the principal. The Company may prepay all or a portion of the outstanding principal
balance prior to maturity at any time, without penalty. The Note is collateralized by all of the machinery and equipment of P3.
Neuman is neither an affiliate of, nor a related party to, the Company or P3. The proceeds from the Note were used to pay in full
all sums owed by the Company under a Related Party Credit Agreement executed between the Company and Fagenson &amp; Co., Inc.,
as agent for certain lenders, including Neuman, dated January 4, 2008. Upon such payment the Credit Agreement between the Company
and Fagenson &amp; Co., Inc. was terminated in its entirety. As of December 31, 2011, the Note had a balance of $599,462. See Subsequent
Event footnote 15 for Amendment and Purchase of this Note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">On December 9,
2009, the Company used the proceeds from a $350,000 Convertible Note and a $575,000 Promissory Note (collectively, the &ldquo;Notes&rdquo;),
respectively, to pay in full a $900,000 Term Note.&nbsp;&nbsp;&nbsp;The $350,000 Convertible Note was set to mature on November
24, 2012, accrued interest at 10% and was convertible into up to 218,750 shares of Document Security Systems common stock.&nbsp;&nbsp;The
$575,000 Promissory Note matures on November 24, 2012 accrues interest at 10%, payable quarterly.&nbsp;&nbsp;&nbsp;Both Notes are
secured with equal rights by the assets of the Company&rsquo;s wholly owned subsidiary, DPI. In conjunction with the convertible
note, the Company determined a beneficial conversion feature existed amounting to approximately $94,000 which was recorded as discount
on debt and was being amortized over the term of the Note.&nbsp;&nbsp;On November 29, 2010, the holder exercised the conversion
feature of the $350,000 Convertible Note for 218,750 shares of the Company&rsquo;s common stock, par value $0.02 which retired
the debt in full.&nbsp;&nbsp;In conjunction with the conversion, the Company recognized approximately $63,000 of note discount
expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">On December 30,
2009, the Company used the proceeds from a $450,000 Convertible Note (&ldquo;Note&rdquo;) to pay in full $450,000 due under a previous
Related Party Credit Facility due to the Company&rsquo;s CEO.&nbsp;&nbsp;&nbsp;The $450,000 Note was set to mature on June 23,
2012, accrued interest at 8%, and was convertible into up to 260,116 shares of the Company&rsquo;s common stock, and was secured
by the accounts receivable of the Company, excluding the accounts receivable of the Company&rsquo;s wholly owned subsidiaries,
P3 and Secuprint.&nbsp;&nbsp;&nbsp;In conjunction with the Note, the Company issued to the holders of the Note warrants to purchase
up to 65,000 shares of the Company&rsquo;s common stock within five years at $2.00 per share.&nbsp;&nbsp;The estimated fair market
value of these warrants was determined using the Black Scholes-Merton option pricing model at approximately $72,000, which was
recorded as discount on debt and is being amortized over the term of the Note.&nbsp;&nbsp;Furthermore, in conjunction with this
Note, the Company determined a beneficial conversion feature existed amounting to approximately $257,000, which was recorded as
discount on debt and is being amortized over the term of the Note.&nbsp;&nbsp;&nbsp;In addition, the Company recorded expense of
approximately $110,000 for the fair value of 40,000 warrants to purchase the shares of the Company&rsquo;s common stock at $2.00
issuable under the terms of the&nbsp;&nbsp;Note as a result of the Company&rsquo;s failure to timely file a registration statement
for the shares issuable upon conversion of the Note and underlying the warrants, respectively,&nbsp;&nbsp;&nbsp;On December 24,
2010, the holder of the Note exercised the conversion feature of the Note for 260,116 shares of the Company&rsquo;s common stock,
par value $0.02 which retired the debt in full.&nbsp;&nbsp;In conjunction with the conversion, the Company recognized approximately
$200,000 of note discount expense.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Promissory Note-</I></B><FONT STYLE="color: black; background-color: white">
On August 30, 2011, the Company&rsquo;s wholly owned subsidiary Premier entered into a Purchase and Sale Agreement (the &ldquo;Purchase
Agreement&rdquo;) with Bzdick Properties, LLC, a New York limited liability company (&ldquo;Bzdick Properties&rdquo;), to purchase
the packaging plant at 6 Framark Drive, Victor, NY, (the &ldquo;Real Estate&rdquo;). The Real Estate transaction closed simultaneously
with the execution of the Purchase Agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="background-color: white">The
purchase price for the Real Estate was $1,500,000. The purchase price consisted of a $150,000 cash down payment, a $150,000 subordinated
promissory note (the &ldquo;DSS Note&rdquo;) from DSS to Bzdick Properties, and a $1,200,000 loan obtained by Premier from Citizens
Bank. The Citizens loan documents for the Real Estate transaction consisted of a Promissory Note (the &ldquo;Citizens Promissory
Note&rdquo;), an Amended and Restated Promissory Note (the &ldquo;Citizens Amended and Restated Note&rdquo;), a Mortgage and Security
Agreement (the &ldquo;Citizens Mortgage&rdquo;), a Consolidation, Modification and Extension Agreement (the &ldquo;Citizens Consolidation&rdquo;),
a Guaranty Agreement (the &ldquo;Citizens Guaranty&rdquo;) and an Indemnity Agreement (the &ldquo;Citizens Indemnity&rdquo;), each
executed on August 30, 2011. Monthly payments of principal and interest in the amount of $7,658 and interest of 1 month LIBOR plus
3.15% (3.42% at December 31, 2011) are due under the Citizens Amended and Restated Note. Concurrently with the transaction, the
Company entered into an interest rate swap agreement (See Note 2) to lock into a 5.865% effective interest rate for the life of
the loan.&nbsp; The Citizens Promissory Note matures in 10 years at which time a balloon payment of the remaining principal balance
of $919,677 is due. As of December 31, 2011, the Citizens Promissory Note had a balance of $1,192,914.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="background-color: white">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Term Note -</I></B> On October 8,
2010, the Company amended the Credit Facility Agreement with Citizens Bank to add a Standby Term Loan Note pursuant to which Citizens
Bank will provide Premier with up to $450,000 towards the funding of eligible equipment purchases. In October 2011, the Standby
Term Loan Note was converted into a Term Note payable in monthly installments of $887 plus interest over 5 years. As of December
31, 2011, the balance under this Note was $51,000 ($53,000 at December 31, 2010).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Revolving Note - Related Party</I></B>
<B><I>- </I></B>On January 4, 2008, the Company entered into a Credit Facility Agreement with Fagenson and Co., Inc., as agent,
a related party to Robert B. Fagenson, the Chairman of the Company's Board of Directors (the &ldquo;Fagenson Credit Agreement&rdquo;
or &ldquo;Credit Facility&rdquo;). Under the Fagenson Credit Agreement, as amended on December 11, 2009, the Company could borrow
up to a maximum of $1,000,000 from time to time up until January 4, 2012. Any amount borrowed by the Company pursuant to the Fagenson
Credit Agreement had annual interest rate of 2% above LIBOR and was secured by the Common Stock of P3, the Company's wholly owned
subsidiary. Interest was payable quarterly in arrears and the principal was payable in full at the end of the term under the Fagenson
Credit Agreement. As of December 31, 2010, the revolving note -related party had a balance of $583,000. On June 29, 2011, the Credit
Facility, along with accrued interest, was paid in full from the proceeds of a Commercial Term Note as described above under Long-Term
Debt, along with approximately $119,000 of interest payments to related parties by the Company to the lenders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-weight: normal">All of
the Citizens Bank credit facilities are subject to various covenants including fixed charge converage ratio, tangible net worth
and current ratio. The Citizen Bank obligations are secured by all of the assets of Premier Packaging and are also secured through
cross guarantees by the Company and its other wholly owned subsidiaries, P3 and Secuprint.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white">A summary of scheduled principal
payments of  long term debt, not including revolving notes and short term loan from related party, subsequent to December
31, 2011 are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 30%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 76%; text-align: center">2012</TD><TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: left">&nbsp;</TD><TD STYLE="width: 15%; text-align: right">460,598</TD><TD STYLE="width: 3%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,045,500</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">481,057</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: center">2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">276,384</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: center">2016</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">36,854</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Thereafter</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">1,068,450</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">3,368,843</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 7. - STOCKHOLDERS&rsquo; EQUITY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Stock Issued
in Private Placements</I></B> - </FONT>On February 12, 2010, the Company acquired all of the outstanding common stock of Premier
Packaging from Robert B.&nbsp;and Joan T. Bzdick for $2,000,000 in cash and 735,437 shares of the Company's common stock which
was valued at $2,566,675.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On February 17, 2010, the Company completed the sale of 20 investment units in a private placement pursuant to subscription agreements
with six accredited investors.&nbsp;&nbsp;Each investment unit was comprised of 5,000 shares of the Company&rsquo;s common stock
and five year warrants to purchase 1,000 shares of common stock at an exercise price of $3.50 per share. In the transaction, the
Company sold 20 investment units for $15,000 per unit for gross cash proceeds of $300,000, consisting of 100,000 shares of common
stock and warrants to purchase an aggregate of 20,000 shares of common stock.&nbsp;&nbsp;In connection with these sales EKN Financial
Services Inc., a registered broker-dealer, acted as non-exclusive placement agent.&nbsp;&nbsp;EKN Financial Services, Inc. received
a cash fee in the aggregate of $30,000 as commission for these sales.&nbsp;On February 17, 2010, the&nbsp;Company also sold 20
investment units for gross cash proceeds of $270,000, consisting of an aggregate of 100,000 shares of common stock and warrants
to purchase an aggregate of 20,000 shares of common stock.&nbsp;&nbsp;&nbsp;No placement agent fees were paid on these sales. On
February 23, 2010, the Company issued 304,000 shares of common stock pursuant to the exercise of warrants in which the Company
received proceeds of $608,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">On July 21,
2010 and July 22, 2010, Document Security Systems entered into subscription agreements with twenty two accredited investors. Under
these subscription agreements the Company issued an aggregate of 413,787 shares of common stock and five-year warrants to purchase
up to 82,753 shares of common stock, in consideration of an aggregate of $1,200,000. The warrants are exercisable at $3.75 per
share.</FONT><FONT STYLE="font-size: 12pt"> </FONT><FONT STYLE="font-size: 10pt">The Company paid Aegis Capital Corp., for its
services as placement agent, a 7% commission, and a 3% non-accountable expense allowance, in the aggregate amount of $120,000.
In addition, we issued the placement agent five year warrants to purchase 41,379 shares of common stock, exercisable at $3.75 per
share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On February 18, 2011, the Company entered into an Amended and
Restated Agreement (&ldquo;Amended Agreement&rdquo;) with Fletcher International, Ltd. (&ldquo;Fletcher&rdquo;) for the purpose
of modifying the terms of an agreement (&ldquo;Original Agreement&rdquo;) previously entered into between the Company and Fletcher
on December 31, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Under the Original Agreement, Fletcher purchased
$4,000,000 of the Company&rsquo;s common stock (756,287 shares) at a price of approximately $5.29 per share on December 31, 2010
(the &ldquo;Initial Investment&rdquo;). In conjunction with the Initial Investment, Fletcher received a warrant (the &ldquo;Initial
Warrant&rdquo;) to purchase up to $4,000,000 of the Company&rsquo;s common stock at a price of approximately $5.29 per share at
any time until December 31, 2019, subject to adjustment as set forth in the Initial Warrant. Under the Original Agreement, Fletcher
also received the right to make additional equity investments of up to $4,000,000 in total (the &ldquo;Later Investments&rdquo;)
by May 2, 2011 at the average of the daily volume-weighted price of the Company&rsquo;s common stock in the calendar month preceding
each Later Investment notice date at prices no lower than approximately $4.76 per share and no greater than approximately $6.35
per share, subject to adjustment as set forth in the Original Agreement. The warrants issued to Fletcher had down-round and anti-dilution
provisions as of December 31, 2010, and were considered derivative liabilities recorded at fair value. The down-round provisions
result in the number of shares to be issued determined on a variable that is not an input to the fair value of a &ldquo;fixed-for-fixed&rdquo;
option. Under the Original Agreement, Fletcher also received a second warrant (the &ldquo;Second Warrant&rdquo;) to purchase shares
of the Company&rsquo;s common stock with an aggregate purchase price of up to the total dollar amount of the Later Investments
at a per-share exercise price of 120% of the per-share price paid in the final Later Investment to occur, subject to adjustment
as set forth in the Second Warrant. The Initial Warrant and the Second Warrant each also had a cashless exercise provision.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Under the Amended Agreement, the purchase
price for the Initial Investment made on December 31, 2010 was increased to $5.38 per share, increasing the aggregate purchase
price paid by Fletcher for the Initial Investment from $4,000,000 to $4,068,825. The Initial Warrant received by Fletcher was amended
and reissued (the &ldquo;Amended Initial Warrant&rdquo;) entitling Fletcher to purchase newly-issued shares of common stock at
$5.38 per share (the &ldquo;Warrant Price&rdquo;) at any time until February 18, 2020 (the &ldquo;Warrant Term&rdquo;), up to an
aggregate purchase price of $4,300,000 (the &ldquo;Warrant Amount&rdquo;). Under the Amended Agreement, Fletcher also received
the right to make additional equity investments (&ldquo;Later Investments&rdquo;) of up to $4,068,000 (the &ldquo;Aggregate Later
Investment Amount&rdquo;) provided notice was given to the Company prior to July 2, 2011 of Fletcher&rsquo;s intention to make
the Later Investment. The Second Warrant received by Fletcher was amended (the &ldquo;Amended Second Warrant&rdquo;, and together
with the Amended Initial Warrant, the &ldquo;Warrants&rdquo;) to fix the Warrant Price at $5.38 per share. The Second Warrant entitled
Fletcher to purchase newly-issued shares of common stock up to the aggregate purchase price of the Later Investments. The Amended
Initial Warrant and the Amended Second Warrant each had a cashless exercise provision. Fletcher did not make the Later Investment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with the Amended Agreement,
the Company filed a registration statement with the Securities and Exchange Commission (&ldquo;SEC&rdquo;) covering the Initial
Investment of 756,287 shares and 799,256 shares underlying the Initial Warrant. &nbsp;On March 14, 2011, the Company and Fletcher
executed further amendments to the Amended and Restated Agreement and Warrants addressing stockholder approval and pricing provisions
relating to Change of Control (as defined therein). The March 14, 2011 amendments were executed by the Company and Fletcher in
response to an NYSE Amex inquiry, and were required to solidify NYSE Amex approval of the Company&rsquo;s additional listing applications,
which approval was received from NYSE Amex on March 15, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Certain events, such as dividends, stock
splits, and other events specified in the Amended Agreement and in the Warrants could have resulted in additional shares of Common
Stock being issued to Fletcher, adjustments being made to the terms of the Later Investments, the Initial Warrant or the Second
Warrant, or other results, in each case as set forth in the Amended Agreement, the Amended Initial Warrant and the Amended Second
Warrant. The terms of the Amended Agreement granted Fletcher certain participation rights in certain later equity issuances by
the Company (except for certain exclusions) and certain other rights upon a change of control, in each case as set forth in the
Amended Agreement, the Amended Initial Warrant and the Amended Second Warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Proceeds from the transaction were used
primarily for sales and marketing, product development, and working capital. The Company paid WM Smith &amp; Co., as placement
agent, a cash placement fee of 6% of all cash investments received under the Amended Agreement, or in the case of the cashless
exercise of the Warrants, common stock equal to 6% of the shares issued to Fletcher in conjunction with the cashless exercise.
During the first quarter of 2011, the Company paid $240,000 in accrued placement agent fees.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Derivative Liabilities</I></B> -The financial instruments
issued to Fletcher on December 31, 2010 had down-round and anti-dilution provisions as of December 31, 2010, which are considered
a derivative liability recorded at fair value. The down-round provisions result in the number of shares to be issued determined
on a variable that is not an input to the fair value of a &ldquo;fixed-for-fixed&rdquo; option. The Company recognized the derivative
liability at the fair value at inception and on each reporting date. The derivative liabilities were considered Level 3 liabilities
on the fair value hierarchy as the determination of fair value includes various assumptions about the Company&rsquo;s future activities
and the Company&rsquo;s stock prices and historical volatility as inputs. To determine the fair value of the various components
of the Fletcher investments, the Company selected the binomial option model and the Monte Carlo Simulation to model the financial
characteristics of the various components. The derivative liabilities were initially recorded in the consolidated balance sheet
upon issuance as of December 31, 2010 at a fair value of $3,866,836. Future changes in the fair value of the derivative liabilities,
if any, were recorded in the statement of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The components of the derivative liability,
measured at fair value, are summarized as follows at December 31:<BR>
&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 50%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 82%; text-align: left">Initial Warrant</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 15%; text-align: right">3,482,486</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Later Investment Rights</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">384,350</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">3,866,836</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On February 18, 2011and March 14, 2011, the Company entered
into certain amendments with Fletcher for the purpose of modifying the terms of the previous agreement entered into between the
Company and Fletcher on December 31, 2010. As a result of the amendments, the down-round and anti-dilution provisions were eliminated;
therefore, the Company determined that the derivative liabilities that existed under the terms of the original agreement no longer
existed. As a result, the Company determined the fair value of the derivative liability financial instruments as of the modification
date of February 18, 2011 and recorded the change in fair value of the derivative liabilities since December 31, 2010 amounting
to $360,922 which is reflected in the statement of operations. With the elimination of the derivative liability provision, the
Company re-classed the fair value of the financial instruments amounting to $3,505,914 from derivative liability to additional
paid in capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The table below provides a reconciliation
of the beginning and ending balances for the derivative liability measured at fair value using significant unobservable inputs
(Level 3). There were no assets as of December 31, 2011 measured using significant unobservable inputs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><BR>
Fair Value Measurements Using Significant Unobservable Inputs (Level 3):&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 50%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Derivative Liability</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Balance January 1, 2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 79%; text-align: left">Initial Warrant</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 18%; text-align: right">3,482,486</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Later Investment Rights</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">384,350</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Balance, December 31, 2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,866,836</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 9.35pt">Change in fair value</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(360,922</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0; padding-left: 9.35pt">Reclass to equity on date of amendment that eliminated derivative liabilities to net proceeds</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(3,505,914</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Balance, December 31, 2011</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">-</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Stock Warrants</I></B></FONT>
-<FONT STYLE="color: black"> </FONT>From time to time, the Company issues warrants in conjunction with the sale of its common stock
in private placements, and to certain consultants for services. During 2011, the Company did not issue any warrants. <FONT STYLE="color: black">During
2010, in conjunction with the private placements described above, the Company issued warrants to purchase up to an aggregate of
922,009 shares of the Company&rsquo;s common stock at exercise prices ranging from $3.50 to $5.38, as described above.&nbsp;&nbsp;In
addition, in connection with the Fletcher Investment (as described above), the Company issued a contingent warrant&nbsp;&nbsp;for
the purchase of up to the amount of the Later Investment of the Company&rsquo;s common stock at a price contingent on the purchse
price of the Later Investment, but not less than $5.71 per share.&nbsp;&nbsp;In addition, during 2010, the Company issued to the
holders of a Convertible Note warrants to purchase up to 40,000 shares of the Company&rsquo;s common stock within five years at
$2.00 per share as compensation for a registration rights penalty.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following is a summary with respect
to warrants outstanding and exercisable at December&nbsp;31, 2011 and 2010 and activity during the years then ended:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 95%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Weighted</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Weighted</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Average</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Average</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Exercise</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">Exercise</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Warrants</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Price</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Warrants</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Price</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%">Outstanding January 1</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">1,891,631</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">6.26</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; text-align: right">1,318,020</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 10%; text-align: right">6.15</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Granted during the year</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">962,009</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.02</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(71,896</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.65</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(363,398</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.16</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Lapsed</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(327,222</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11.75</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(25,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">12.59</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt">Outstanding at December 31</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,492,513</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">5.23</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,891,631</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">6.26</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Exercisable&nbsp; at December 31</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,492,513</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">5.23</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">1,891,631</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">6.26</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Weighted average months remaining</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">58.5</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">44.2</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Stock Options </I></B>- The Company
has two stock-based compensation plans. The 2004 Employees&rsquo; Stock Option Plan (the &ldquo;2004 Plan&rdquo;) provides for
the issuance of up to a total of 1,700,000 shares of common stock authorized to be issued for grants of options, restricted stock
and other forms of equity to employees and consultants. Under the terms of the 2004 Plan, options granted thereunder may be designated
as options which qualify for incentive stock option treatment (&ldquo;ISOs&rdquo;) under Section 422A of the Internal Revenue Code,
or options which do not qualify (&ldquo;NQSOs&rdquo;). The exercise price for options granted under the Director Plan is 100% of
the fair market value of the Common Stock on the date of grant. The Non-Executive Director Stock Option Plan (the &ldquo;Director
Plan&rdquo;) provides for the issuance of up to a total of 200,000 shares of common stock authorized to be issued for options grants
for non-executive directors and advisors. Under the terms of the Director Plan, an option to purchase (a) 5,000 shares of our common
stock shall be granted to each non-executive director upon joining the Board of Directors and (b) 5,000 shares of our common stock
plus an additional 1,000 shares of our common stock for each year that the applicable director has served on the Board of Directors,
up to a maximum of 10,000 shares per year shall be granted to each non-executive director thereafter on January 2nd of each year;
provided that any non-executive director who has not served as a director for the entire year immediately prior to January 2nd
shall receive a pro rata number of options based on the time the director has served in such capacity during the previous year.
Both Plans were adopted by the Company&rsquo;s shareholders. Generally, the Company issues employee options that vest over three
years and expire after five years and issues director options that vest over one year and expire  after five years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt"><B><I>Stock-Based
Compensation</I></B></FONT><B> <FONT STYLE="color: red">&ndash;</FONT></B> <FONT STYLE="font-size: 10pt">The Company records stock-based
payment expense related to these options based on the grant date fair value in accordance with FASB ASC 718. Stock-based compensation
includes expense charges for all stock-based awards to employees, directors and consultants. Such awards include option grants,
warrant grants, and restricted stock awards. During the year ended December 31, 2011, the Company had stock compensation expense
of approximately $399,000 or $0.02 per share ($423,000 or $0.02 per share -2010). As of December 31, 2011, there was approximately
$393,000 of total unrecognized compensation costs (excluding the $907,000 that vest upon the occurrence of certain events such
as the achievement of revenue targets or change of control) related to non-vested options granted under the Company&rsquo;s stock
option plans which the Company expects to recognize compensation costs over the weighted average period of 1.2 years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>



<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following is a summary with respect
to options outstanding at December&nbsp;31, 2011 and 2010 and activity during the years then ended:</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 92%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2004 Employee Plan</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Non-Executive Director Plan</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of<BR>
 Options</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted<BR>
Average<BR>
Exercise Price</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted<BR>
Average Life<BR>
Remaining</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Number of<BR>
Options</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted<BR>
Average<BR>
Exercise Price</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted<BR>
Average Life<BR>
Remaining</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(in years)</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">(in years)</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 28%">Outstanding at December 31, 2009</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">639,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">6.29</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">132,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">6.74</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.5in">Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">185,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.40</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.45</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.5in">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0.5in">Forfeited</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(150,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">5.54</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">7.14</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.25in">Outstanding at December 31, 2010:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">673,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.66</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">157,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.61</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.5in">Granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">692,648</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.24</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">40,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5.52</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.5in">Exercised</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(10,000</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.00</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0.5in">Forfeited</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(187,500</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9.73</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(20,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">12.65</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 0.25in; padding-bottom: 2.5pt">Outstanding at December 31, 2011:</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">1,168,648</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; border-bottom: Black 2pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">4.18</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right">3.6</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">177,000</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">4.79</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right">2.2</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in; padding-bottom: 2.5pt">Exercisable at December 31, 2011:</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">287,300</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; border-bottom: Black 2pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">4.48</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right">2.1</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">137,000</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">4.58</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right">1.7</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 9pt; text-indent: -9pt">Aggregate Intrinsic Value of outstanding options at December 31, 2011</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">-</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">31,600</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 9pt; text-indent: -9pt">Aggregate Intrinsic Value of exercisable options at December 31, 2011</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">-</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">31,600</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 4.5pt">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;Included in these amounts are earn-out
options issued to the previous owners of ExtraDev with a contractual term of 5 years, to purchase an aggregate of 450,000 shares
of common stock at an exercise price of $4.50 per share that will be vested if the Company&rsquo;s Digital division achieves certain
annual revenue targets by the end of fiscal year 2016. The fair value of the earn-out options amounted to $594,000. If the annual
revenue targets are met or are deemed probable to occur, then the Company will record stock based compensation expense. As of
December 31, 2011 vesting is considered remote. All options granted to the owners of ExtraDev were classified as compensation
for post combination services since the vesting of each grant is based on length of employment, with all unvested options forfeiting
upon termination of employment, therefore, the fair value of these equity instruments was not considered a component of the purchase
price of the ExtraDev acquisition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The weighted-average grant date fair value
of options granted during the year ended December 31, 2011 was $1.35 ($1.38 -2010). The aggregate grant date fair value of options
that vested during the year was approximately $157,000 ($128,000 -2010). There were 10,000 options exercised on a cashless basis
during 2011. There were no options exercised during 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">The fair value
of each option award is estimated on the date of grant utilizing the Black-Scholes-Merton Option Pricing Model. The Company estimated
the expected volatility of the Company&rsquo;s common stock at the grant date using the historical volatility of the Company&rsquo;s
common stock over the most recent period equal to the expected stock option term. The risk-free interest rate assumption was determined
using the equivalent U.S. Treasury bonds yield. <FONT STYLE="color: black">The Company estimates pre-vesting option forfeitures
at the time of grant. The Company has had minimal pre-vesting forfeitures in the past. </FONT>The Company has never paid any cash
dividends and does not anticipate paying any cash dividends in the foreseeable future. Therefore, the Company assumed an expected
dividend yield of zero.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="background-color: white">The
following table shows our assumptions used to compute the share-based compensation expense for stock options and warrants granted
during the years ended December 31, 2011 and 2010:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="margin-left: 0.7in; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%">Volatility</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">55.0</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">54.3</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Expected option term</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">4.71 years</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">3.8 years</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Risk-free interest rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.1</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.5</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Expected forfeiture rate</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Expected dividend yield</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">%</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">0.0</TD><TD STYLE="text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Restricted
Stock Issued to Employees </I></B></FONT>&ndash;<FONT STYLE="color: black"> Restricted common stock is issued under the 2004 Plan
for services to be rendered and may not be sold, transferred or pledged for such period as determined by our Compensation Committee.
Restricted stock compensation cost is measured as the stock&rsquo;s fair value based on the quoted market price at the date of
grant. The restricted shares issued reduce the amount available under the employee stock option plans. Compensation cost is recognized
only on restricted shares that will ultimately vest. The Company estimates the number of shares that will ultimately vest at each
grant date based on historical experience and adjust compensation cost and the carrying amount of unearned compensation based on
changes in those estimates over time. Restricted stock compensation cost is recognized ratably over the requisite service period
which approximates the vesting period. An employee may not sell or otherwise transfer unvested shares and, in the event that employment
is terminated prior to the end of the vesting period, any unvested shares are surrendered to us. We have no obligation to repurchase
any restricted stock. </FONT>As of December 31, 2011, there are 25,000 restricted shares issued to employees that will vest only
upon the occurrence of certain events prior to May 3, 2012, which include, among other things a change of control of the Company
or other merger or acquisition of the Company, the achievement of certain financial goals. These 25,000 shares, if vested, would
result in the recording of stock based compensation expense of approximately $312,000, the grant date fair value, over the period
beginning when any of the contingent vesting events is deemed to be probable over the expected requisite service period. As of
December 31, 2011, vesting is not considered probable and no compensation expense has been recognized related to the performance
grants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Restricted
Stock Issued in Acquisition- </I></B></FONT>In May 2011, the Company issued an aggregate of 82,352 restricted shares of the Company&rsquo;s
common stock, pursuant to the Company&rsquo;s 2004 Employee Stock Option Plan, as amended, valued at $3.33 per share to the owners
of ExtraDev, which the Company acquired. Such restricted stock vests in equal installments annually over four years. The restricted
stock granted to the owners of ExtraDev was classified as consideration for the acquisition of ExtraDev at a fair value of approximately
$274,000, which upon termination any unvested restricted stock shall immediately vest.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following is a summary of activity of
restricted stock during the years ended at December&nbsp;31, 2011 and 2010:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.5in">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Weighted-average <BR>
Grant Date Fair<BR>
Value</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 76%">Restricted shares outstanding, December 31, 2009</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">85,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">7.61</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 10pt">Restricted shares granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 10pt">Restricted shares vested</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-indent: 10pt">Restricted shares forfeited</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(40,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">2.10</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Restricted shares outstanding, December 31, 2010</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">12.50</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 10pt">Restricted shares granted</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">82,352</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3.33</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 10pt">Restricted shares vested</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-indent: 10pt">Restricted shares forfeited</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(20,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">12.50</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Restricted shares outstanding, December 31, 2011</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">107,352</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">5.46</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 8.&nbsp;&nbsp;&ndash;BUSINESS COMBINATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>ExtraDev, Inc.</I></B> -On May 12,
2011, the Company entered into an agreement (&ldquo;Agreement&rdquo;) to purchase all the issued and outstanding common stock of
ExtraDev pursuant to which the Company purchased 10,000 shares of ExtraDev common stock, par value $.01 per share, from each of
ExtraDev&rsquo;s two owners, representing all of ExtraDev&rsquo;s issued and outstanding common stock. Subsequent to the acquisition,
ExtraDev became a part of the Company&rsquo;s Digital division.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Agreement provided that as consideration
for the purchase of the ExtraDev common stock, the Company would acquire all of the assets of ExtraDev in exchange for the assumption
of all the liabilities of Extradev, employment agreements with the two owners of Extradev, and an aggregate of 94,336 restricted
shares of the Company&rsquo;s common stock valued at $3.33 per share and five-year options to purchase an aggregate of 65,664 shares
of the Company&rsquo;s common stock, at an exercise price of $3.33 per share, were granted to the owners of ExtraDev pursuant to
the Company&rsquo;s 2004 Employee Stock Option Plan, as amended. Such restricted stock and options vest in equal installments annually
over four years and are subject to adjustment based upon ExtraDev&rsquo;s working capital deficit as set forth in its final financial
statements, which were provided within 30 days of closing. A subsequent contractual adjustment resulted in a reduction in the aggregate
number of restricted shares issued to the two ExtraDev owners to 82,352 and an increase in the aggregate number of options issued
to the ExtraDev owners to 77,648. The fair value of the restricted shares was approximately $274,000 and shall vest immediately
upon termination. Therefore, restricted shares were recorded as consideration transferred. The options were valued using the Black-Scholes-Merton
Option Pricing Model at approximately $121,000. The options granted are based on the length of employment with all unvested options
forfeiting upon termination of employment. Therefore they are being recorded as post combination compensation expense and not a
component of the purchase price of the acquisition. The fair value of these instruments will be expensed pro-ratably over the 4-year
vesting period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The acquisition was accounted for as a
business combination, whereby the Company measured the identifiable assets acquired and liabilities assumed based on the
acquisition date fair value. The Company is required to recognize and measure any related goodwill acquired in the business
combination or a gain from a bargain purchase. Goodwill totaling approximately $239,000 represents the excess of the purchase
price over the fair value of tangible and identifiable intangible assets acquired, which included customer lists of $258,000
and non-compete agreements of $150,000 less the liabilities assumed. <FONT STYLE="color: black; background-color: white">The Company
recognized a deferred tax liability of approximately $169,000  as a result of the acquisition, due to the
temporary differences between the book fair value and the net tax basis relating to the equipment and other intangibles
acquired. </FONT>The goodwill recorded with this transaction has been recorded in the Company&rsquo;s Digital division and is
not deductible for income taxes. The goodwill is due primarily to expected benefit that combining established cloud based
computing capabilities with the Company&rsquo;s digital security technologies will allow the Company to bring its digital
products to market quicker and at more competitive pricing than without the acquisition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The allocation of the purchase price and
the fair values of the assets acquired and their associated useful lives and liabilities were estimated by management as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.3in">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Estimated&nbsp;Useful<BR>
 Lives</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; padding-bottom: 2.5pt">Fair value of consideration transferred</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 2.5pt double; text-align: right">274,232</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Fair value of assets acquired and liabilities assumed:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 20pt">Cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">61,995</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 20pt">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">69,355</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 20pt">Prepaid expenses</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">10,050</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 20pt">Computer equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">85,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3 to 7 years</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 20pt">Other intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">408,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5 to 10 years</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; text-indent: 20pt">Goodwill</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">238,678</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-indent: 20pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: right">Fair value of assets acquired</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">873,078</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 20pt">Liabilities assumed:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 20pt">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">68,353</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 20pt">Outstanding credit card balances</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">90,207</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 20pt">Revolving credit lines</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">148,952</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 20pt">Accrued liabilities and deferred revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">122,203</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 20pt">Deferred tax liability</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">169,131</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: right">Fair value of liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">598,846</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 2.5pt">Total Purchase Price</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">274,232</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Set forth below is the unaudited pro-forma
revenue, operating loss, net loss and loss per share of the Company as if ExtraDev had been acquired by the Company as of January
1, 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center">Unaudited</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">For the Year Ended December 31</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold">Revenue</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,734,161</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">14,218,606</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Net Loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,183,326</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,431,304</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Basic and diluted loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.16</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.19</TD><TD STYLE="text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">In conjunction
with the acquisition of ExtraDev completed on May 12, 2011, ExtraDev&rsquo;s two owners entered into five-year employment agreements
(with an option to renew for three years on mutually agreed upon terms) with the Company (the &ldquo;Employment Agreements&rdquo;),
pursuant to which Michael Roy (former ExtraDev owner) will serve as the President and Timothy Trueblood (former ExtraDev owner)
will serve as the Chief Technology Officer of the Company&rsquo;s&nbsp;&nbsp;newly-formed Digital Division (&ldquo;Digital&rdquo;),
each at an annual base salary of $100,000. Under the Employment Agreements, each of the former ExtraDev shareholders will be eligible
for an annual (i) earn-out bonus based upon Digital&rsquo;s earnings, before interest, taxes depreciation and amortization for
the prior year as described in the Employment Agreements payable within days of the end of the year and (ii) earn-out options to
purchase common stock of the Company at an exercise price of $4.50 per share under the Company&rsquo;s Option Plan that vest if
Digital achieves certain annual revenue targets by the end of fiscal year 2016. Both the earn-out bonus and earn-out options will
be recorded as post combination compensation expense, if earned, since both are based on length of employment and forfeit upon
termination. The Employment Agreements also provide for health care insurance for each former ExtraDev shareholder and his family.
The Company may terminate the Employment Agreements at any time upon 30 days notice, in which event, any vested earn-out options
will be exercisable for 90 days and the former ExtraDev shareholders will be entitled to receive an annualized salary of $50,000
and continued health insurance coverage for the remainder of the term of the Employment Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">ExtraDev was a
privately owned company founded in 1998 and headquartered in Rochester, NY.&nbsp;&nbsp;ExtraDev provides data center centric solutions
to businesses and governments. &nbsp; The acquisition of ExtraDev is expected to enhance the Company&rsquo;s digital security solutions
capabilities, including the ability of the Company to offer its digital security products in a &ldquo;cloud computing&rdquo; format.&nbsp;&nbsp;ExtraDev
had approximately $837,000 in revenue for the year ended December 31, 2010 and lost $10,000 on a tax basis.&nbsp;&nbsp;&nbsp;The
acquisition did not create a significant subsidiary in accordance with the Securities and Exchange Commission Regulation S-X 210.1-2(w).&nbsp;&nbsp;Since
the date of the acquisition, ExtraDev has generated approximately $666,000 of revenue and experienced net loss of approximately
$34,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Premier Packaging Corp.</I></B> -On
February 12, 2010, the Company acquired all of the outstanding common stock of Premier Packaging from Robert B.&nbsp;and Joan T.
Bzdick for $2,000,000 in cash and 735,437 shares of the Company's common stock with a value of $2,566,675 at February 12, 2010.&nbsp;
In addition, the purchase price was subject to increase if the capital gains tax rate that was in effect as of February 12, 2010
is retroactively increased by legislation or otherwise whereas the seller&rsquo;s tax on its gain increases, which did not occur.
&nbsp; In addition, the seller had registration rights for its shares to which the Company was subject to registration penalties
of up to $5,000 per month after 120 days, which the sellers waived.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The acquisition has been accounted for as
a business combination, whereby the Company measured the identifiable assets acquired and liabilities assumed based on the acquisition
date fair value. The Company incurred approximately $30,000 of acquisition related legal and professional fees that were expensed
in the period in which they were incurred. The Company is required to recognize and measure any related goodwill acquired in the
business combination or a gain from a bargain purchase. Management determined that the fair value of the assets acquired and liabilities
assumed was less than the purchase price resulting in the recording of goodwill. Goodwill totaling approximately $1,768,000 represents
the excess of the purchase price over the fair value of tangible and identifiable intangible assets acquired, which included $861,000
for customer relationships and $511,000 for non-compete agreement, and is due primarily to expected increased market penetration
from future products in the secure packaging market and synergies expected from combining packaging capabilities of Premier Packaging
with the printing capabilities of the Company&rsquo;s Printing division. Subsequent to the acquisition, Premier became part of
the Company&rsquo;s DSS Packaging division. <FONT STYLE="color: black; background-color: white">The Company recognized a deferred
tax liability of approximately $1,141,000 along with additional goodwill as a result of the acquisition, due to the temporary differences
between the book fair value and the net tax basis relating to the equipment and other intangibles acquired. </FONT>The goodwill
recorded with the transaction is not deductible for income taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company engaged a valuation expert,
The Financial Valuation Group, to assist management in determining the fair value of the assets acquired. The allocation of the
purchase price and the estimated useful lives associated with the acquired assets and liabilities is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.3in">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Estimated Useful</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">Lives</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; text-align: left; padding-bottom: 2.5pt">Fair value of the consideration transferred</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="width: 12%; text-align: right; border-bottom: Black 2.5pt double">4,566,675</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="width: 1%; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD NOWRAP STYLE="width: 12%; text-align: right; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>Fair value of assets acquired and liabilities assumed:&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 20pt">Cash</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">5,290</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 20pt">Accounts receivable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,284,227</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 20pt">Inventories</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">504,162</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 20pt">Machinery and equipment</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,557,500</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">3 to 7 years</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 20pt">Other intangible assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,372,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">5 to 10 years</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-indent: 20pt">Goodwill</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,768,400</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: right">Total Assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">6,491,579</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 20pt">Liabilities assumed:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 20pt">Accounts payable</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">448,128</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 20pt">Revolving credit lines</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">277,645</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 20pt">Deferred tax liability</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,141,040</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 20pt">Accrued Liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">58,091</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: right">Total Liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">1,924,904</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total prelimary purchase price</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4,566,675</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: left">&nbsp;</TD><TD NOWRAP STYLE="text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Set forth below is the unaudited proforma
revenue, operating loss, net loss and loss per share of the Company as if Premier Packaging had been acquired by the Company as
of January 1, 2010. Premier results for the year ended December 31, 2011 are included in the <FONT STYLE="color: black">accompanying</FONT>
Consolidated Statement of Operations and Comprehensive Loss.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Unaudited <BR>
Year Ended <BR>
December 31, 2010</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 80%; font-weight: bold">Revenue</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 17%; text-align: right">14,265,949</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Operating Loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,961,963</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Net Loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(3,530,487</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Basic and diluted loss per share</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.20</TD><TD STYLE="text-align: left">)</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Subsequent to the acquisition, Premier Packaging
had sales of $5,753,000 and profit of $54,000 during the year ended December 31,2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 9. &ndash; OTHER INCOME </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company received $143,000 during 2010
for New York State Qualified Emerging Technology Company (&ldquo;QETC&rdquo;) refundable tax credits. The Company did not receive
any QETC refundable tax credits during 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;<B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 10. - INCOME TAXES </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Following is a summary of the components
giving rise to the income tax provision (benefit) for the years ended December&nbsp;31:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0in; text-indent: 0in; text-align: justify"><B>The
provision (benefit) for income taxes consists of the following:</B></P>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in">Currently payable:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 0.25in">Federal</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0.25in">State</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total currently payable</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Deferred:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; padding-left: 0.25in">Federal</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(1,138,075</TD><TD STYLE="width: 1%; text-align: left">)</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">(1,150,430</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt; padding-left: 0.24in">State</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(272,176</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(274,396</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Total deferred</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,410,251</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(1,424,826</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Less increase in allowance</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,260,068</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">302,735</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Net deferred</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(150,183</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,122,091</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 20pt">Total income tax provision (benefit)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(150,183</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(1,122,091</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0in; text-indent: 0in; text-align: justify"><B>Individual
components of deferred taxes are as follows:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; margin-left: 0in; text-indent: 0in; text-align: justify"></P>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left"></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Deferred tax assets:&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; text-align: left; text-indent: 10pt">Net operating loss carry forwards</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">13,131,941</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">11,909,891</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 10pt">Equity issued for services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">576,761</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">801,204</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-indent: 10pt">Other</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">144,172</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">138,291</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-indent: 10pt; padding-left: 0.25in">Total</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13,852,874</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12,849,386</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 10pt">Less valuation allowance</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(12,804,923</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(11,903,718</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: 20pt">Gross deferred tax assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right">1,047,951</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right">945,668</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">Deferred tax liabilities:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 10pt">Goodwill and other intangibles</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right">245,898</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right">87,452</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: 10pt">Depreciation and amortization</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">910,780</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">947,995</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 20pt">Gross deferred tax liabilities</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right">1,156,678</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left"></TD><TD STYLE="text-align: right">1,035,447</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: 20pt">Net deferred tax liabilities</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(108,727</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(89,779</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">During 2010, the Company acquired the stock
of Premier Packaging.&nbsp;&nbsp;As part of the business combination, various intangible assets and equipment with fair market
values of $1,372,000 and $1,557,500, respectively, were recorded along with&nbsp;a deferred tax liability of approximately $1,141,000.
As a result of the business combination, the Company determined that its valuation allowance could be reduced by this amount.&nbsp;
In accordance with ASC 805 the Company recognized the related deferred tax benefit in the tax provision and not as a component
of acquisition accounting.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">During 2011, the Company acquired the stock
of ExtraDev Inc. As part of the business combination, various intangible assets and equipment with fair market values of $408,000
and $85,000, respectively, were recorded along with a deferred tax liability of approximately $169,000. As a result of the business
combination, the Company determined that its valuation allowance could be reduced by this amount.&nbsp; In accordance with ASC
805 the Company recognized the related deferred tax benefit in the tax provision and not as a component of acquisition accounting.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company has approximately $35,247,000
in net operating loss carryforwards (&ldquo;NOLs&rdquo;) available to reduce future taxable income, of which approximately $1,412,000
is subject to change of control limitations that generally restricts the utilization of the NOL per year and $909,000 of the NOL
will be allocated to contributed capital when subsequently realized. Due to the uncertainty as to the Company&rsquo;s ability to
generate sufficient taxable income in the future and utilize the NOLs before they expire, the Company has recorded a valuation
allowance accordingly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The excess tax benefits associated with
stock option exercises are recorded directly to stockholders&rsquo; equity only when realized. As a result, the excess tax benefits
available in net operating loss carryforwards but not reflected in deferred tax assets was approximately $1,019,000. These carryforwards
expire at various dates from 2022 through 2031.&nbsp; In addition, a portion of the valuation allowance amounting to approximately
$318,000 will be recorded as a reduction to additional paid in capital in the event it is determined that a valuation allowance
is no longer considered necessary. Stock options granted by the Company in prior years as compensation for services were forfeited
in 2011, this resulted in the reversal of $380,000 of deferred tax assets and a corresponding reduction of the valuation allowance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The differences between the United States
statutory federal income tax rate and the effective income tax rate in the accompanying consolidated statements of operations are
as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 76%; text-align: left">Statutory United States federal rate</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">34</TD><TD STYLE="width: 1%; text-align: left">%</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 9%; text-align: right">34</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">State income taxes net of federal benefit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">4.0</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Permanent differences</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2.9</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(6.5</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Other</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(0.1</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Change in valuation reserves</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(36.9</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(7.1</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 0.12in">Effective tax rate</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">4.5</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">24.4</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">At December&nbsp;31,
2011 and 2010, the total unrecognized tax benefits of $446,000 have been netted against the related deferred tax assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company recognizes interest accrued
and penalties related to unrecognized tax benefits in tax expense. During the years ended December 31, 2011 and 2010 the Company
recognized no interest and penalties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company files income tax returns in
the U.S. federal jurisdiction and various states. The tax years 2008-2011 generally remain open to examination by major taxing
jurisdictions to which the Company is subject.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 11. - DEFINED CONTRIBUTION PENSION PLAN </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company maintains qualified Employee
savings plans (the &ldquo;401(k) Plans&rdquo;) which qualify as deferred salary arrangements under Section 401(k) of the Internal
Revenue Code which covers its employees at its Document Security Systems, P3, Secuprint and Premier Packaging subsidiaries. Employees
generally become eligible to participate in the Plan immediately following the employee&rsquo;s hire date. Employees may contribute
up to 20% of their pay to the Plan, subject to the limitations of the Internal Revenue Code. Commencing July 1, 2011, the Company
matched up to 1% of the employee&rsquo;s salary. The matching contribution for 2011 was approximately $25,000 ($25,000 -2010).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 12. &ndash; COMMITMENTS AND CONTINGENCIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Facilities</I></B> - The Company leases
a total of approximately 45,000 square feet of office space and data center for its administrative offices and its printing, plastics
and digital facilities at monthly rentals aggregating approximately $49,000. The leases expire at various dates through July 2014,
although renewal options exist to extend lease agreements for up to an additional 60 months. <FONT STYLE="background-color: white">On
August 30, 2011, the Company&rsquo;s wholly owned subsidiary Premier entered into a Purchase and Sale Agreement to purchase the
Company&rsquo;s packaging plant at 6 Framark Drive, Victor, NY, from Bzdick Properties, </FONT>a Company owned by the Company&rsquo;s
COO Bob Bzdick, a related party (See Note 6)<FONT STYLE="background-color: white">. Premier was leasing the Real Estate from Bzdick
Properties under a lease which was set to expire in January 2020 at a rental rate of $13,333 per month.&nbsp;&nbsp;The Real Estate
transaction resulted from the exercise of a purchase option under the existing lease, and the lease was terminated on August 30,
2011.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Equipment Leases&nbsp;</I></B> - The
Company leases office equipment, digital and offset presses, laminating and finishing equipment for its various printing operations.
The leases may be capital leases or operating leases and are generally for a term of 36 to 60 months. The leases expire at various
dates through July 2016.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The following table summarizes the Company&rsquo;s
lease commitments. Included in payments made for facilities operating leases during the year ended December 31, 2011 are related
party payments made to Mr. Bob Bzdick for our Packaging division facility of approximately $107,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 85%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Operating Leases</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP>&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Capital Leases</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Equipment</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Facilities</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">Total</TD><TD NOWRAP STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: center">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; text-align: left; padding-bottom: 2.5pt">Payments made in 2011</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="width: 12%; text-align: right; border-bottom: Black 2.5pt double">107,052</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="width: 12%; text-align: right; border-bottom: Black 2.5pt double">625,218</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 2.5pt double">&nbsp;</TD><TD STYLE="width: 12%; text-align: right; border-bottom: Black 2.5pt double">599,806</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="width: 1%; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="width: 12%; text-align: right; border-bottom: Black 2.5pt double">1,225,024</TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Future minimum lease commitments:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.72in">2012</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">101,803</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">411,454</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">417,215</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">828,669</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.72in">2013</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6,282</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">295,088</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">416,366</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">711,454</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.72in">2014</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">245,100</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">179,398</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">424,498</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.72in">2015</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,300</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">228,300</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.72in">2016</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">54,450</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">-</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">54,450</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt">Total future minimum lease commitments</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">108,085</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">1,234,392</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">1,012,979</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double">2,247,371</TD><TD STYLE="text-align: left; padding-bottom: 2.5pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Less amount representing interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(8,780</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 2.5pt; padding-left: 9pt; text-indent: -9pt">Present value of future minimum lease commitments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">99,305</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Less current portion</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid">&nbsp;</TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid">(88,172</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Long term portion</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left; border-bottom: Black 2pt double">$</TD><TD STYLE="text-align: right; border-bottom: Black 2pt double">11,133</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt; color: black"><B><I>Employment
Agreements - </I></B>The Company has employment agreements with four members of its management team with terms ranging from one
to 10 years through February 2020. The agreements provide for severance payments in the event of termination for certain causes.</FONT>
<FONT STYLE="font-size: 10pt">As of December 31, 2011, the minimum annual severance payments under these </FONT>employment agreements
are, in aggregate, approximately $1,660,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Related Party Consulting Payments
</I></B><I>- </I>During the year ended December 31, 2011, the Company paid approximately $40,000 in consulting fees to a member
of its board. The consulting agreement was terminated on December 30, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Contingent Litigation Payment &ndash;</I></B>In
May 2005, the Company made an agreement with its legal counsel in charge of the Company&rsquo;s litigation with the European Central
Bank which capped the fees for all matters associated with that litigation at $500,000 plus expenses, and a $150,000 contingent
payment upon a successful ruling or settlement on the Company&rsquo;s behalf in that litigation. The Company will record the $150,000
in the period in which the Company has determined that a successful ruling or settlement is probable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, pursuant to an agreement made
in December 2004, the Company is required to share the economic benefit derived from settlements, licenses or subsequent business
arrangements that the Company obtains from any infringer of patents formerly owned by the Wicker Family. For infringement matters
involving certain U.S. patents, the Company will be required to disburse 30% of the settlement proceeds. For infringement matters
involving certain foreign patents, the Company will be required to disburse 14% of the settlement proceeds. These payments do not
apply to licenses or royalties to patents that the Company has developed or obtained from persons other than the Wicker Family.
As of December 31, 2011, there have been no settlement amounts related to these agreements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition, in conjunction with the Company&rsquo;s
litigation against Coupons.com, the Company&rsquo;s counsel in the case has agreed to represent the Company on a contingency fee
basis, except for approximately $40,000 of legal fees incurred prior to the filing of the case for preliminary research and investigation
of the merits of the case. Under the contingency fee arrangement, the Company has agreed to pay its counsel 33 1/3% of all sums
paid to the Company, whether obtained by settlement, arbitration award, court proceedings or otherwise, pursuant to the case. The
fees described above do not include out-of-pocket charges and disbursements which will be the responsibility of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black"><B><I>Legal Proceedings</I></B></FONT>
&mdash;<I> </I>On August 1, 2005, the Company commenced a suit in the European Court of First Instance in Luxembourg against the
ECB alleging patent infringement by the ECB and claimed unspecified damages (the &ldquo;ECB Litigation&rdquo;). The Company brought
the suit in the European Court of First Instance in Luxembourg.&nbsp;&nbsp; The Company alleged that all Euro banknotes in circulation
infringe the Company European Patent 0 455 750B1 which covers a method of incorporating an anti-counterfeiting feature into banknotes
or similar security documents to protect against forgeries by digital scanning and copying devices.&nbsp;&nbsp;In 2006, the Company
received notices that the ECB had filed separate claims in each of the United Kingdom, The Netherlands, Belgium, Italy, France,
Spain, Germany, Austria and Luxembourg courts&nbsp;seeking the invalidation of the Patent.&nbsp;&nbsp;Proceedings were commenced
before each of the national courts seeking revocation and declarations of invalidity of the Patent. On August 20, 2008, the Company
entered into an agreement with Trebuchet Capital Partners, LLC (&ldquo;Trebuchet&rdquo;) under which Trebuchet agreed to pay substantially
all of the litigation costs associated with validity proceedings in eight European countries relating to the Patent. The Company
provided Trebuchet with the sole and exclusive right to manage infringement litigation relating to the Patent in Europe, including
the right to initiate litigation in the name of the Company, Trebuchet or both and to choose whom and where to sue, subject to
certain limitations set forth in the Trebuchet Agreement. In consideration for Trebuchet's funding obligations, the Company assigned
and transferred a 49% interest in the Company's rights, title and interest in the Patent to Trebuchet which allows Trebuchet to
have a separate and distinct interest in and share of the Patent, along with the right to sue and recover in litigation, settlement
or otherwise and to collect royalties or other payments under or on account of the Patent. In addition, the Company and Trebuchet
agreed to equally share all proceeds generated from litigation relating to the Patent,&nbsp;including judgments and licenses or
other arrangements entered into in settlement of any such litigation. On July 7, 2011, Trebuchet and the Company entered into a
series of agreements wherein Trebuchet effectively ended its ongoing participation in the ECB litigation, except for continuing
involvement in the final settlement of fees that may become payable as a result of the infringement case in the Netherlands described
below. The original agreement with Trebuchet will remain in effect until Trebuchet makes any and all final payments that may become
due in the Netherland infringement case.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On March 26, 2007, the High Court of Justice,
Chancery Division, Patents Court in London, England ruled that the Patent was deemed invalid in the United Kingdom, and on March
19, 2008 this decision was upheld on appeal.&nbsp;&nbsp; As a result of these decisions, the Company paid the ECB costs for both
court cases in the amount of &#8356;356,490. On March 27, 2007 the Bundespatentgericht of the Federal Republic of Germany ruled
that the German part of the Patent was valid, having considered the English Court&rsquo;s decision.&nbsp;&nbsp;However, on July
6, 2010, the Company was notified that the German Court had reversed the ruling on appeal and the Patent was deemed invalid in
Germany. The Court of First Instance in Luxembourg ruled on September 5, 2007 that it does not have jurisdiction to rule on the
patent infringement claim. On January 9, 2008 the French Court held that the Patent was invalid in France and on March 10, 2010,
this decision was upheld on appeal. &nbsp; On March 12, 2008 the Dutch Court ruled that the Patent was valid in the Netherlands.&nbsp;&nbsp;
However, on December 21, 2010 the Dutch Court reversed the ruling on appeal and the Patent was deemed invalid in the Netherlands.
On November 3, 2009, the Belgium Court held that the Patent was invalid in Belgium. On November 17, 2009, the Austrian Court held
that the Patent was invalid in Austria. &nbsp; On March 24, 2010 the Spanish Court ruled that the Patent was valid. The decision
is being appealed by the ECB. In July 2010, the Company was notified that the Italian Court deemed the patent invalid. The decision
was not appealed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In certain jurisdictions in the ECB Litigation,
the losing party is responsible for the other party&rsquo;s legal fees, subject to court approval. The Company paid a total of
&#8356;356,490 to the ECB for the United Kingdom case. Trebuchet paid for the costs reimbursements due, if any, for all of the
other jurisdictions involved, except for approximately &euro;156,000 for the Germany case, of which approximately &euro;132,000
($170,000 at December 31, 2011) is due as of December 31, 2011, and approximately &euro;175,000 ($226,000 at December 31, 2011)
for the Netherlands case, for which Trebuchet transferred funds to the Company for disbursement of these amounts in July 2011,
which the Company has recorded as accrued liabilities at December 31, 2011. In addition, the ECB formally requested the Company
to pay attorneys and court fees for the Court of First Instance case in Luxembourg in the amount of &euro;93,752 ($121,000 at December
31, 2011) which, unless the amount is settled will be subject to an assessment procedure that has not been initiated. The Company
will accrue the assessed amount, if any, as soon as it is reasonably estimable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On February 18, 2010, Trebuchet, on behalf
of the Company, filed an infringement suit in the Netherlands against the ECB and two security printing entities with manufacturing
operations in the Netherlands, Joh. Enschede Banknotes B.V and Koninklijke Joh. Enschede B.V.&nbsp; Upon determination on December
21, 2010, that the patent was invalid in the Netherlands, the infringement case was terminated by Trebuchet. Trebuchet is responsible
for costs reimbursement associated with the case, if any, when determined by the Dutch Court.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; background-color: white">On October 24,
2011 the Company initiated a law suit against Coupons.com Incorporated (&ldquo;Coupons.com&rdquo;). The suit was filed in the United
States District Court, Western District of New York, located in Rochester, New York. Coupons.com is a Delaware corporation having
its principal place of business located in Mountain View, California. In the Coupons.com suit, the Company alleges breach of contract,
misappropriation of trade secrets, unfair competition and unjust enrichment, and is seeking in excess of $10 million in money damages
from Coupons.com for those claims.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In addition to the foregoing, we are subject
to other legal proceedings that have arisen in the ordinary course of business and have not been finally adjudicated. Although
there can be no assurance in this regard, in the opinion of management, none of the legal proceedings to which we are a party,
whether discussed herein or otherwise, will have a material adverse effect on our results of operations, cash flows or our financial
condition.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 13. - SUPPLEMENTAL CASH FLOW INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: center; vertical-align: top; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">2011</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: center; vertical-align: top; border-bottom: Black 1pt solid">2010</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 76%; text-align: left">Cash paid for interest</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">352,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 9%; text-align: right">302,000</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left">Non-cash investing and financing activities:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Beneficial conversion features of convertible debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">88,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Retirement of derivative liability instruments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,506,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Refinance of related party revolving line of credit and accrued interest</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">650,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Building and land acquired with debt</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,350,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Equity issued for acqusition</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">274,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,567,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Conversion of debt to equity</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">800,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Equity issued for severance agreements</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">74,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt">Non-monetary dividend</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">229,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Equity issued for prepaid services</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">115,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Accrued placement agent fees</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">240,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Issuance of derivative liability instruments</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,867,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Interest rate swap loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">85,000</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">26,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>NOTE 14. - SEGMENT INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company's businesses are organized,
managed and internally reported as four operating segments.&nbsp;&nbsp; In the second quarter of 2011, the Company acquired ExtraDev
for its Digital division and the Company launched a new corporate identity and logo, along with a new website that grouped the
Company under four distinct divisions. In conjunction with this, the Company determined that an expansion of its segment reporting
to align with the new internal structure was appropriate. Prior year amounts have been restated to conform to current presentation.
A summary of the four reportable segments follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 16%; font-weight: bold">DSS Printing</TD>
    <TD STYLE="width: 84%">Licenses security printing technologies and manufactures and sells secure documents such as vital records, transcripts, safety paper, secure coupons, voter ballots, event tickets, among others.&nbsp;&nbsp; In addition, sells general commercial printing services utilizing digital and offset printing capabilities.&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">DSS Plastics</TD>
    <TD>Manufactures and sells secure and non-secure plastic printed products such as ID cards, event badges and passes, and loyalty and gift cards, among others.&nbsp;&nbsp;&nbsp; Plastic cards include RFID chips, magnetic strips with variable data, high quality graphics with overt and covert security features.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">DSS Packaging</TD>
    <TD><FONT STYLE="color: black">Manufactures and sells secure and non-secure </FONT>custom paperboard packaging serving clients in the pharmaceutical, beverage, photo packaging, toy, specialty foods and direct marketing industries, among others.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">DSS Digital</TD>
    <TD>Develops, installs, hosts and services IT services including remote server and application hosting, cloud computing, secure document systems, back-up and disaster recovery services and customer program development services.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Approximate information concerning the Company&rsquo;s
operations by reportable segment for years ended December 31, 2011 and 2010 is as follows.&nbsp; The Company relies on intersegment
cooperation and management does not represent that these segments, if operated independently, would report the results contained
herein:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Year ended
    December 31, 2011</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">DSS
    Printing</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">DSS
    Plastics</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">DSS
    <BR> Packaging</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">DSS
    Digital</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Corporate</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Total</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="width: 28%; text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Revenues
    from external customers</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">4,009,000</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2,769,000</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">5,940,000</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">666,000</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">13,384,000</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Interest Expense</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">8,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">17,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">116,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">13,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">105,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">259,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Stock based compensation</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">399,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">399,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Change in fair
    value of derivative liability</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">361,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">361,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Depreciation and
    amortization</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">141,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">226,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">360,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">23,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">17,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">767,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Net (loss) profit</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(1,636,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(126,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">92,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(34,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(1,518,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(3,222,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Capital Expenditures</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">15,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">307,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">1,552,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">72,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">1,946,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Identifiable assets</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">1,459,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2,106,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">7,381,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">872,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">1,004,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">12,822,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Revenues from transactions
    with other operating segments of the Company</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">769,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">769,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Income tax (benefit)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(150,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(150,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Year ended
    December 31, 2010</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">DSS
    Printing</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">DSS
    Plastics</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">DSS
    <BR>
    Packaging</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">DSS
    Digital</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Corporate</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Total</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="width: 28%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Revenues from external customers</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">5,338,000</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2,291,000</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">5,753,000</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 9%; text-align: right; padding-bottom: 1pt; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt">$<FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="width: 9%; text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">13,382,000</FONT></TD><TD STYLE="width: 1%; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Interest Expense and amortization of
    note discount</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">34,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">78,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; padding-bottom: 1pt; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">598,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">710,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Stock based compensation</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; padding-bottom: 1pt; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">115,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">115,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Impairment of patent acquisition costs
    and other intangible assets</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">377,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; padding-bottom: 1pt; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">377,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Depreciation and amortization</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">656,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">299,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">299,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">7,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">1,261,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Net (loss) profit</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(2,150,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(483,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">54,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(884,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(3,463,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Capital Expenditures</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">53,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">6,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">1,629,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">270,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">1,958,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Identifiable assets</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">2,401,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">1,956,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">6,465,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">4,126,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">14,948,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Revenues from transactions with other
    operating segments of the Company</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">326,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">110,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">436,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Other income, net</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">143,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">143,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Loss on equity investment</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(121,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(121,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Income tax (benefit)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(1,122,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">(1,122,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">Stock based compensation</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">224,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">18,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">181,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">423,000</FONT></TD><TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">International revenue, which consists of
sales to customers with operations in Canada, Western Europe, Latin America, Africa, Middle East and Asia comprised 3% of total
revenue for 2011, (2%- 2010). Revenue is allocated to individual countries by customer based on where the product is shipped to,
location of services performed or the location of equipment that is under an annual maintenance agreement. The Company had no long-lived
assets in any country other than the United States for any period presented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Major Customers</I></B> &ndash; During
2011 one customer accounted for 19% of the Company&rsquo;s consolidated revenue. As of December 31, 2011, this customer accounted
for 18% of the Company&rsquo;s trade accounts receivable balance. During 2010 two customers accounted for 25% and 10% of the Company&rsquo;s
total revenue from continuing operations, respectively. As of December 31, 2010, these customers accounted for 37% and 7% of the
Company&rsquo;s trade accounts receivable balance, respectively. The risk with respect to trade receivables is mitigated by credit
evaluations we perform on our customers, the short duration of our payment terms for the significant majority of our customer contracts
and by the diversification of our customer base.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><B>NOTE 15. &ndash; SUBSEQUENT EVENTS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black">&nbsp;</FONT>On
February 13, 2012, the Company completed the sale of $3,000,000 of investment units (the &ldquo;Units&rdquo;) in a private placement
(the &ldquo;Offering&rdquo;) pursuant to subscription agreements (each a &ldquo;Subscription Agreement&rdquo;, and collectively,
the &ldquo;Subscription Agreements&rdquo;) with three accredited investors (the &ldquo;Investors&rdquo;). A total of 30 Units were
sold, at a price of $100,000 per Unit. Each Unit consists of (i) 32,258 shares of the Company&rsquo;s common stock, par value $.02
per share (the &ldquo;Common Stock&rdquo;), and (ii) a five-year warrant to purchase up to 16,129 shares of Common Stock at an
exercise price of $3.10 per share (each individually a &ldquo;Warrant&rdquo;, and collectively, the &ldquo;Warrants&rdquo;). The
Warrants (and Placement Agent Warrants described below) contain a provision for cashless exercise in the event that a registration
statement is not effective<FONT STYLE="color: black">&nbsp;</FONT>for the resale by the holder of all of the Warrant Stock issuable
upon exercise of the Warrant. <FONT STYLE="color: black">The Offering resulted in aggregate cash proceeds to the Company of $3,000,000.
A total of 967,740 shares of Common Stock were sold, and Warrants to purchase up to an additional 483,870 shares of Common Stock
(the &ldquo;Warrant Stock&rdquo;) were issued to the Investors in the Offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company entered into a Registration
Rights Agreement with the Investors whereby the Company has agreed to file a registration statement (the &ldquo;Registration&rdquo;)
with the Securities and Exchange Commission (the &ldquo;SEC&rdquo;) within 30 days of closing for the Common Stock sold in the
Offering and the Warrant Stock underlying the Warrants. The Company has 60 days (or 90 days if the Registration is subject to a
full review by the SEC) from closing to have the Registration declared effective by the SEC. If the Company fails to file the Registration
in a timely manner, have the Registration declared effective in a timely manner, or maintain its effectiveness, the Company will
be required to pay to each holder an amount in cash equal to 1% of the aggregate purchase price of such holder on the date of each
such failure and each 30 days thereafter until cured with interest thereon at the rate of 1% per month except no such payments
will be due with respect to any period during which all of such holder&rsquo;s registrable securities may be sold under Rule 144.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">In connection with the Offering, the Company
paid a placement agent fee of $210,000 to Palladium Capital Advisors, LLC (the &ldquo;Placement Agent&rdquo;), and issued a five-year
warrant to the Placement Agent (the &ldquo;Placement Agent Warrant&rdquo;) to purchase up to an aggregate of 58,064 shares of Common
Stock at an exercise price of $3.10 per share pursuant to a one-year placement agent agreement (the &ldquo;Placement Agreement&rdquo;)
with the Placement Agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On February 20, 2012, the Company and ipCapital
Group, Inc. (&ldquo;ipCapital&rdquo;) entered into an engagement letter (the &ldquo;ipCapital Engagement Letter&rdquo;) for the
provision of certain IP strategic consulting services by ipCapital for the 2012 calendar year (the &ldquo;Services&rdquo;). Fees
will range from $240,000 to $365,000 for services provided in 2012. In addition the Company issued ipCapital a five-year warrant
(the &ldquo;Warrant&rdquo;) to purchase up to 100,000 shares of the Company&rsquo;s common stock at an exercise price of $4.62
per share (the &ldquo;Warrant Stock&rdquo;). The Warrant vests and becomes exercisable to the extent of 33 1/3 percent of the Warrant
Stock upon each of the first, second and third anniversary dates, respectively, of the Issuance Date. In addition, on February 20, 2012, the Company entered into a second consulting arrangement
with ipCapital (the &ldquo;ipCapital Consulting Agreement&rdquo;) for which ipCapital will provide strategic advice to the Company&rsquo;s
senior management team on the development of the Company&rsquo;s Digital Group infrastructure and cloud computing business strategy.
The ipCapital Consulting Agreement has a three year term. As ipCapital&rsquo;s sole source of compensation under the ipCapital
Consulting Agreement, the Company issued ipCapital a five-year warrant (the &ldquo;Consulting Warrant&rdquo;) to purchase up to
200,000 shares of the Company&rsquo;s common stock at an exercise price of $4.50 per share (the &ldquo;Consulting Warrant Stock&rdquo;).
The Consulting Warrant vests and becomes exercisable to the extent of 33 1/3 percent of the Consulting Warrant Stock upon each
of the first, second and third anniversary dates, respectively, of the Consulting Warrant Issuance Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Also, on February 20, 2012, the
Company entered into consulting arrangement with Century Media Group for the provision of investor relations services. As
compensation Century Media will receive a fee of $10,000 per month for the one year term, plus the Company issued Century
Media a 14-month warrant (the &ldquo;Century Media Warrant&rdquo;) to purchase up to 250,000 shares of the Company&rsquo;s
common stock at exercise prices of $4.50, $4.75, $5.00, $5.25 and $6.00 for each 50,000 shares subject to the Century Media
Warrant. The Century Media Warrant vested in full on the date of issuance. The Company calculated the fair value of the
warrant at approximately $241,000, using the Black Scholes-Merton option pricing model, in the first quarter
of 2012. Expense for consulting services will be recorded over the 14-month service term.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On February 20, 2012, the Company&rsquo;s
Board of Directors unanimously appointed John Cronin as a director of the Company, to fill a vacancy on the Board created pursuant
to amended by-laws of the Company adopted on January 16, 2012 whereby the number of Board seats was increased from seven members
to eight members. The appointment was effective on February 21, 2012, and Mr. Cronin will serve as a director of the Company until
the next annual meeting of shareholders. Mr. Cronin is Chairman, Managing Director and a 42% owner of ipCapital which, on February
20, 2012, entered into the ipCapital Engagement Letter and the ipCapital Consulting Agreement with the Company, as described above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">On February 29, 2012, the Company entered
into a Purchase, Amendment and Escrow Agreement (the &ldquo;Purchase Agreement&rdquo;) with Barry Honig (&ldquo;Honig&rdquo;),
Neil Neuman (&ldquo;Neuman&rdquo;) and Grushko &amp; Mittman, P.C. The Purchase Agreement provides, among other things, for the
sale of a commercial term note, dated June 29, 2011, among the Company, Plastic Printing Professionals, Inc., a wholly owned subsidiary
of the Company, and Neuman, as lender, in the original principal amount of $650,000 (the &ldquo;Note&rdquo;) (See Note 6) to Honig
for a purchase price of $578,396. In connection with the sale and transfer of the Note to Honig, the Company agreed to amend certain
terms of the Note pursuant to an allonge entered into on February 29, 2012 (the &ldquo;Allonge&rdquo;). Under the Purchase Agreement
any security interest in the Note terminated at the closing of the purchase of the Note; accordingly, Honig does not possess a
security interest in any assets of the Company as a result of his purchase of the Note. Pursuant to the Allonge, the maturity date
of the Note was extended to July 1, 2013. Honig has the right to convert the principal and any interest due under the Note into
shares of the Company&rsquo;s common stock at a conversion price of $3.30 per share, subject to adjustment upon certain corporate
events as set forth in the Allonge. In conjunction with this conversion option, the Company recorded a beneficial conversion feature
of $216,000 which the Company will expense over the term of the Note.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONDENSED CONSOLIDATED FINANCIAL STATEMENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AS OF SEPTEMBER 30, 2012 AND JUNE 30,
2012 (Unaudited) AND </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FOR THE THREE MONTHS ENDED SEPTEMBER
30, 2012 (Unaudited), </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FOR THE PERIOD FROM MAY 10, 2012 (INCEPTION)
THROUGH JUNE 30, 2012 AND</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FOR THE PERIOD FROM MAY 10, 2012 (INCEPTION)
THROUGH SEPTEMBER 30, 2012 (Unaudited)</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center; width: 90%">Table of Contents</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center; width: 10%">Page</TD>
    </TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: top; background-color: #CCFFCC">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Condensed Consolidated Balance Sheets as of September 30, 2012 and June 30, 2012 (unaudited)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">F-51</TD>
    </TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: top; background-color: #CCFFCC">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Condensed Consolidated Statements of Operations for the three months ended September 30, 2012 (unaudited),
for the period from May 10, 2012 (inception) to June 30, 2012 and for the period from May 10, 2012 (inception) to September,
30, 2012 (unaudited)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">F-52</TD>
    </TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: top; background-color: #CCFFCC">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Condensed Consolidated Statement of Changes in Stockholders&rsquo; Equity for the period from May 10,
2012 (inception) to June 30, 2012 and for the three months ended September 30, 2012 (unaudited)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">F-53</TD>
    </TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: top; background-color: #CCFFCC">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2012 (unaudited),
for the period from May 10, 2012 (inception) to June 30, 2012 and for the period from May 10, 2012 (inception) to September, 30,
2012 (unaudited)</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">F-54</TD>
    </TR>
<TR STYLE="vertical-align: top; background-color: white">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">&nbsp;</TD>
    </TR>
<TR STYLE="vertical-align: top; background-color: #CCFFCC">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">Notes to Condensed Consolidated Financial Statements</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">F-55&mdash;F-64</TD>
    </TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AS OF JUNE 30, 2012 AND</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FOR THE PERIOD FROM MAY 10, 2012 (INCEPTION)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>THROUGH JUNE 30, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="padding-left: 8.65pt; text-align: justify; width: 90%">Report of Independent Registered Public Accounting Firm</TD>
    <TD STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right; width: 10%">F-65</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 0.7pt; padding-left: 0.7pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="padding-left: 8.65pt; text-align: justify">Consolidated Balance Sheet as of June 30, 2012</TD>
    <TD STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right">F-66</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 0.7pt; padding-left: 0.7pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="padding-left: 8.65pt; text-align: justify">Consolidated Statement of Operations for the period from May 10, 2012 (inception) to June 30, 2012</TD>
    <TD STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right">F-67</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 0.7pt; padding-left: 0.7pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="padding-left: 8.65pt; text-align: justify">Consolidated Statement of Changes in Stockholders&rsquo; Equity for the period from May 10, 2012 (inception) to June 30, 2012</TD>
    <TD STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right">F-68</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 0.7pt; padding-left: 0.7pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="padding-left: 8.65pt; text-align: justify">Consolidated Statement of Cash Flows for the period from May 10, 2012 (inception) to June 30, 2012</TD>
    <TD STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right">F-69</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="padding-right: 0.7pt; padding-left: 0.7pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: #CCFFCC">
    <TD STYLE="padding-left: 8.65pt; text-align: justify">Notes to Consolidated Financial Statements</TD>
    <TD NOWRAP STYLE="padding-right: 0.1in; padding-left: 0.7pt; text-align: right">F-70&mdash;F-78</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <TD NOWRAP STYLE="width: 100%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">LEXINGTON TECHNOLOGY GROUP, INC. AND SUBSIDIARY</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(A Development Stage Company)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">CONDENSED CONSOLIDATED BALANCE SHEETS</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">($ IN THOUSANDS)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">September 30,</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">June 30,</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">2012</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">2012</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">(unaudited)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"></TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold">ASSETS</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Current Assets:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 74%; font-size: 10pt; padding-left: 0.24in">Cash</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">12,261</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">3,627</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">Intangible assets, net of accumulated amortization</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.36in">of $98 and 0, respectively</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,077</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">45</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Total assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">14,338</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,672</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">LIABILITIES AND STOCKHOLDERS' EQUITY</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Current Liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">Accounts payable and accrued expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">389</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">218</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Senior notes payable - related parties, net of deferred</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">debt discount of $989 and $1,164, respectively</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,449</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,461</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Warrant liability</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">252</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.36in">Total liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,838</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,931</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Stockholders' Equity</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">Preferred stock - 29,000,000 shares authorized; par</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.24in">value $0.00001 per share.</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">Series A preferred stock - 27,225,000 shares authorized;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.24in">par value $0.00001 per share; 17,913,727 and 0 shares</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">issued and outstanding, respectively.</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">Common stock - 100,000,000 shares authorized; par value</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.24in">$0.00001 per share; 13,864,825 and 16,571,529 shares</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">issued and outstanding, respectively.</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Additional paid-in capital</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">18,428</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">951</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Deficit accumulated during the development stage</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(6,931</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(212</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.36in">Total stockholders' equity</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">11,500</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">741</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Total liabilities and stockholders' equity</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">14,338</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,672</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">The accompanying notes are an integral part of the condensed consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 100%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">LEXINGTON TECHNOLOGY GROUP, INC. AND SUBSIDIARY</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(A Development Stage Company)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">($ IN THOUSANDS)</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Three months <BR>ended <BR>September 30, <BR>2012 <BR>(unaudited)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Period from <BR>May 10, 2012 <BR>(inception) through <BR>June 30,2012</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Period from <BR>May 10, 2012 <BR>(inception) through <BR>September 30,2012 <BR>(unaudited)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Operating expenses:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; font-size: 10pt; text-align: left; padding-left: 0.12in">Officers' compensation</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">375</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">8</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">383</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Legal and professional fees</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">345</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">165</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">510</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">General and administrative</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">146</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">146</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">Amortization</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">98</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">98</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">Loss from operations</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">964</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">173</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">1,137</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Other expenses:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">Interest</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">435</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">30</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">465</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Change in fair value of warrant liability</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,320</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">9</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,329</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">Total other expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,755</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">39</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,794</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Net loss</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(6,719</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(212</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(6,931</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">The accompanying notes are an integral part of the condensed
consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 100%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">LEXINGTON TECHNOLOGY GROUP, INC. AND SUBSIDIARY</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(A Development Stage Company)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">($ IN THOUSANDS)</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"><FONT STYLE="font-size: 8pt">Deficit</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"><FONT STYLE="font-size: 8pt">accumulated</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"><FONT STYLE="font-size: 8pt">Additional</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"><FONT STYLE="font-size: 8pt">during</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center"><FONT STYLE="font-size: 8pt">Total</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Series
    A Preferred</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Common</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">paid-in</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">development</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">stockholders'</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Share</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Amount</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Shares</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">Amount</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">capital</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">stage</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-size: 8pt">equity</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt"><B>Balance - May 10,
    2012 (inception)</B></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in; width: 30%"><FONT STYLE="font-size: 8pt">Issuance of shares
    of common stock for cash on May 16, 2012 at $0.00001</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">100</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 1%; font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="width: 7%; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt">Issuance of shares of common
    stock in connection with May 10,2012, senior note offering - closed on June 12, 2012 at a commitment date fair value of $0.057</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">16,571,429</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">2</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">951</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">953</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt">Net loss</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">(212</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">(212</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt"><B>Balance - June 30,
    2012</B></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">16,571,529</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">2</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">951</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">(212</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">741</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt">Exchange of 13,925,154 shares
    of common stock into series A preferred stock</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">13,799,440</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">1</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">(13,799,440</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">)(1)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt">Issuance of shares of common
    stock in connection with May 10, 2012, senior notes offering - closed on July 26, 2012 at a commitment date fair value of
    $0.057</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">3,428,571</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">195</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">195</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt">Exercise of warrants for preferred
    and common stock on August 9, 2012</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">4,114,287</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">1</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">3,387,713</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">5,624</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">5,625</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt">Reclassification of warrant
    liability upon exercise of warrants</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">5,625</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">5,625</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt">Issuance of shares of common stock for cash
    on August 16, 2012 at $1.50 per share, net of issuance cost of $381</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">3,651,316</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">5,096</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">5,096</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt">Conversion of senior notes
    into shares of common stock</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">625,136</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">-</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">937</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">937</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt">Net loss</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">(6,719</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">(6,719</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.12in; text-indent: -0.12in"><FONT STYLE="font-size: 8pt"><B>Balance - September
    30, 2012 (unaudited)</B></FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">17,913,727</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">2</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">13,864,825</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">1</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">18,428</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">(6,931</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">)</FONT></TD><TD STYLE="font-size: 10pt"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">$</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right"><FONT STYLE="font-size: 8pt">11,500</FONT></TD><TD STYLE="font-size: 10pt; text-align: left"><FONT STYLE="font-size: 8pt">&nbsp;</FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">The accompanying notes are an integral part of the condensed consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.65pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="width: 100%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">LEXINGTON TECHNOLOGY GROUP, INC. AND SUBSIDIARY</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">(A Development Stage Company)</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; font-weight: bold; text-align: center">CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center">($ IN THOUSANDS)</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.65pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.65pt; text-align: center"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Three months <BR>ended <BR>September 30, <BR>2012 <BR>(unaudited)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Period from <BR>May 10, 2012 <BR>(inception) through <BR>June 30,2012</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Period from <BR>May 10, 2012 <BR>(inception) through <BR>September 30,2012 <BR>(unaudited)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 61%; font-size: 10pt; text-align: left">Net loss</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">(6,719</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">(212</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">(6,931</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Adjustment to reconcile net loss to net</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">cash used in operating activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Amortization - intangibles</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">98</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">98</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Accretion of note discount</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">423</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">30</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">453</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Change in fair value of warrant liability</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,320</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,329</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Changes in operating assets and</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.24in">liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">Increase in accounts payable and</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.36in">accrued expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">216</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">173</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">389</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Net cash used in operating activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(662</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(662</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Cash flow used in investing activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Acquisition of intangible assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(2,175</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(2,175</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Cash flow from financing activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Proceeds from issuance of senior</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">notes and common shares to related</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">parties on July 26, 2012 and on</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.24in">June 2012 private placement</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">750</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,627</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">4,377</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">Proceeds from exercise of warrants</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,625</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5,625</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Net proceeds from issuance of shares</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.24in">of common stock</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,096</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">5,096</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Cash flow provided from financing</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; padding-left: 0.12in">activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">11,471</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,627</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">15,098</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Net increase in cash</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">8,634</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,627</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">12,261</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Cash at the beginning of the period</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">3,627</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Cash at the end of the period</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">12,261</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,627</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">12,261</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Supplemental Disclosure of Cash Flow Information:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Cash paid for income taxes</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Cash paid for interest</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Non-Cash investing and financing activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Liability - Patents</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">45</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">Conversion of senior notes into shares of</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">common stock</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">937</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">937</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Reclassification of warrant liability upon</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">exercise of warrants</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">305</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">305</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.65pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.65pt; text-align: center">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.65pt; text-align: center">The accompanying notes are an integral part of the condensed consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of September 30, 2012 and for the period from May 10, 2012 (inception) through</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012 and
for the three months period ended September 30, 2012 -Unaudited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 &ndash; ORGANIZATION AND NATURE
OF BUSINESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Organization &amp; Business Activities
</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington Technology
Group, Inc. (&quot;LTG&quot; or the &ldquo;Parent&rdquo;), was incorporated as a Delaware corporation on May 10, 2012 under the
name Snip Inc. On September 10, 2012, Snip Inc. changed its name to Lexington Technology Group, Inc. LTG is a holding company that
owns 100% of the membership interests of Bascom Research, LLC (&ldquo;Bascom&rdquo;). Bascom was incorporated in Virginia on June
6, 2012 under the name of Bascom Linking Intellectual Property, LLC, for the purpose of acquiring and/or developing patented technologies
and intellectual property. On August 29, 2012, Bascom Linking Intellectual Property, LLC changed its name to Bascom Research, LLC.
LTG and its wholly-owned subsidiary Bascom are herein collectively referred to as the &ldquo;Company&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On October 1, 2012,
the Company and Hudson Bay Master Fund Ltd. (as representative of Lexington&rsquo;s stockholders solely for certain purposes) entered
into an Agreement and Plan of Merger with Document Security Systems, Inc. Under the planned merger, LTG will execute a &ldquo;reverse
merger&rdquo; with Document Security Systems and its wholly-owned subsidiary, DSSIP. Lexington will survive the merger as a wholly-owned
subsidiary of DSS, a publically traded company, while LTG shareholders will receive DSS equity consideration. The merger has been
approved both by the board of directors of DSS and the board of directors of Lexington. The completion of the proposed merger is
subject to a number of conditions, including but not necessarily limited to, the approval of the public company&rsquo;s stockholders.
There is no assurance that the proposed merger will actually be consummated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; LIQUIDITY, MANAGEMENT&rsquo;S
BUSINESS PLANS AND GOING CONCERN</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying condensed
consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and
settlement of liabilities in the normal course of business. The Company, as a development stage enterprise, has not commenced its
planned operations. The business will require significant amounts of capital to sustain operations and make the investments it
needs to execute its longer term business plan. The Company has cash of $12.2 million and net working capital of $9.4 million at
September 30, 2012. The Company&rsquo;s cash and working capital amounts were derived from the proceeds of an initial financing
transaction in which raised aggregate proceeds of $4.3 million (Note 4) through the issuance of senior notes, common stock and
common stock purchase warrants to founding stockholders, proceeds of $5.6 million from the exercise of warrants by the investors
and net proceeds of $5.1 million from the private place of shares of Company&rsquo;s common stock. The Company&rsquo;s net loss
for the three months ended September 30, 2012, for the period of May 10, 2012 (inception) through June 30, 2012 and for the period
of May 10, 2012 (inception) through September 30, 2012 was $6.7 million, $0.2 and $6.9 million, respectively and deficit accumulated
by the Company from inception amounted to $6.9 million. During the three month period ended September 30, 2012, the Company used
$2.1 million of its available funds to purchase certain patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: windowtext">Management
believes that the Company has sufficient liquidity to sustain operation through next twelve months; however, there is significant
uncertainty as to whether the Company will be successful in its efforts to commence its planned operations or that the commencement
of planned operations, should that occur, will enable the Company to achieve its business objective of becoming a profitable enterprise.
Management also cannot provide any assurance that unforeseen circumstances that could occur at anytime within the next twelve months
or thereafter will not increase the need for the Company to raise capital on an immediate basis. Although Management believes that
the Company can raise capital by issuing additional debt and/or equity securities, the Company has not secured any commitments
for new financing at this time and cannot provide any assurance that new financing will be available on commercially acceptable
terms, if at all. These matters raise substantial doubt about the Company&rsquo;s ability to continue as a going concern. The accompanying
condensed consolidated financial statements do not include any adjustments that might necessary should the Company be unable to
continue as a going concern.</FONT> &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of September 30, 2012 and for the period from May 10, 2012 (inception) through</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012 and
for the three months period ended September 30, 2012 -Unaudited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 3 &ndash; SUMMARY OF SIGNIFCANT
ACCOUNTING POLICIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Principles of Consolidation</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The consolidated financial
statements include the accounts of LTG and its wholly-owned subsidiary. All intercompany balances and transactions have been eliminated
in consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Cash and Cash Equivalents</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For purposes of the
statement of cash flows, the Company considers financial instruments with maturities of less than three months when purchased to
be cash equivalents. There are no cash equivalents as of the balance sheet date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Use of Estimates </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America (&ldquo;US GAAP&rdquo;)
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates. Key accounting estimates include&nbsp;the
assumptions used to calculate the fair values of securities issued in the financing transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Development Stage Reporting</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is a development
stage enterprise as defined in Accounting Standards Codification (&ldquo;ASC&rdquo;) 915 &ldquo;Development Stage Entities&rdquo;
(&ldquo;ASC 915&rdquo;). <FONT STYLE="color: windowtext">The Company is currently attempting to raise additional funds it would
use to purchase intellectual properties and implement its operating plan. Accordingly, the Company has not yet commenced its fully
planned operations. The Company is subject to all of the risks and uncertainties</FONT> that are typical in the life-cycle stage
of its business. There is no assurance that the Company will be successful in its efforts to commence its fully planned operations
or that the commencement will actually result in the realization of its business objectives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Intangible Assets</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts
for purchases of intangible assets in accordance with the provisions of ASC 350 &ldquo;Intangibles&rdquo; (&ldquo;ASC 350&rdquo;)
and ASC 360 &ldquo;Fixed Assets&rdquo; (&ldquo;ASC 360&rdquo;). The useful lives of intangible assets are determined at the date
of purchase and are periodically evaluated for reasonableness. The assets will be tested for impairment at least annually, if determined
to have an indefinite life, or whenever events or changes in circumstances indicate that the carrying amount may no longer be recoverable.
Costs to investigate potential purchases of intangible assets will be treated as expense when incurred, until or unless the purchase
of the respective assets will be deemed viable, after which time the costs to further investigate and purchase the assets will
be capitalized. Subsequent to purchase, legal and associated costs incurred in prosecuting alleged infringements of the patents
will be recognized as expense when incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Concentrations of Risk</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Financial instruments
that potentially subject the Company to significant concentrations of credit risk consist of cash. At times, the Company&rsquo;s
cash balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;)
insurance limits. As of September 30, 2012, the Company had cash and cash equivalent balances of $12.0 million in excess of the
federally insured limit of $250,000. All of the Company's cash in banks at September 30, 2012 was deposited in a non-interest bearing
checking account.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Common Stock Purchase Warrants </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company accounts
for the issuance of common stock purchase warrants issued in connection with capital financing transactions in accordance with
the provisions of ASC 815 &ldquo;Derivatives and Hedging&rdquo; (&ldquo;ASC 815&rdquo;). The Company classifies as equity any contracts
that (i)&nbsp;require physical settlement or net-share settlement, or (ii)&nbsp;gives the Company a choice of net-cash settlement
or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities
any contracts that (i)&nbsp;require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs
and if that event is outside the control of the Company), or (ii)&nbsp;gives the counterparty a choice of net-cash settlement or
settlement in shares (physical settlement or net-share settlement). &nbsp;The Company also classifies as liabilities, any contracts
that contain variable settlement provisions that cannot be measured as explicit or implicit inputs in a standard option pricing
model. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of September 30, 2012 and for the period from May 10, 2012 (inception) through</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012 and
for the three months period ended September 30, 2012 -Unaudited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As more fully described
in Note 4, the Company classified certain common stock purchase warrants that contain variable settlement provisions as liabilities
in the accompanying consolidated balance sheet as of June 30, 2012. On August 1, 2012, the warrant holders elected to accelerate
the expiration date of all the subscription warrants to August 9, 2012. On August 9, 2012, all the outstanding common stock purchase
warrants were exercised and accordingly fair value of such warrants on the date of exercise were classified to additional paid-in
capital.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Fair Value Measurement</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company adopted
Financial Accounting Standards Board (&ldquo;FASB&rdquo;) ASC 820, &ldquo;Fair Value Measurements and Disclosures&rdquo; (&ldquo;ASC
820&rdquo;), for assets and liabilities measured at fair value on a recurring basis. ASC 820 establishes a common definition for
fair value to be applied to existing US GAAP that requires the use of fair value measurements which establishes a framework for
measuring fair value and expands disclosure about such fair value measurements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ASC 820 defines fair
value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable
inputs and minimize the use of unobservable inputs. These inputs are prioritized below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify"><I>Level 1</I>: Observable inputs
such as quoted market prices in active markets for identical assets or liabilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify"><I>Level 2</I>: Observable market
based inputs or unobservable inputs that are corroborated by market data.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify"><I>Level 3</I>: Unobservable
inputs for which there is little or no market data, which require the use of the reporting entity&rsquo;s own assumptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The carrying amounts
reported in the balance sheet for cash, prepaid expenses, accounts payable, and accrued expenses approximate their estimated fair
value based on the short-term maturity of these instruments. The carrying amount of the notes payable at September 30, 2012, approximate
their respective fair value based on the Company&rsquo;s incremental borrowing rate. As described in Note 5, the Company measured
the fair value of the warrant liability using the Binomial Lattice option pricing model, which requires the use of significant
assumptions. Accordingly, the warrant liability is classified in level 3 of the valuation hierarchy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, FASB ASC
825-10-25 &ldquo;Fair Value Option&rdquo; was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value
measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items
at fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
provides the assets and liabilities at fair value measured as of September 30, 2012 and June 30, 2012 (in thousands):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Fair value measured at September 30, 2012</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total carrying value at September 30, 2012</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Quoted prices in active markets <BR>(Level 1)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Significant other observable inputs (Level 2)</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Significant unobservable inputs (Level 3)</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%; font-size: 10pt; text-align: justify">Cash</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">12261</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">12261</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Fair value measured at June 30, 2012</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total carrying value at June 30, 2012</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Quoted prices in active markets <BR>(Level 1)</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Significant other observable inputs (Level 2)</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Significant unobservable inputs (Level 3)</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%; font-size: 10pt; text-align: justify">Cash</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">3,627</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">3,627</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Warrant liability</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">252</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">252</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of September 30, 2012 and for the period from May 10, 2012 (inception) through</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012 and
for the three months period ended September 30, 2012 -Unaudited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The table below provides
a reconciliation of the beginning and ending balances for the liabilities measured using fair significant unobservable inputs (Level
3).&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Balance &ndash; May 10, 2012 (inception)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 87%; font-size: 10pt; text-align: justify">Warrant liability recognized on June 12, 2012</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">243</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Change in fair value of warrant liability on June 30, 2012</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">9</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Balance &ndash; June 30, 2012</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">252</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Warrant liability recognized on July 26, 2012</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">53</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Change in fair value of warrant liability on August 9, 2012</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">5320</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Reclassification of warrant liability on August 9, 2012</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(5,625</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Balance &ndash; September 30, 2012</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Income Taxes</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Income taxes are accounted
for under the asset and liability method in accordance with ASC 740, Income Taxes (&ldquo;ASC 740&rdquo;). Deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial carrying amounts
of existing assets and liabilities and their respective tax bases as well as operating loss and tax credit carry forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation
allowance to the extent that the recoverability of the asset is unlikely to be recognized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts
for uncertain tax positions in accordance with ASC 740, which prescribes a recognition threshold and measurement process for financial
statement recognition and measurement of a tax position taken or expected to be taken in a return. Management has evaluated and
concluded that there were no material uncertain tax positions requiring recognition in the Company&rsquo;s financial statements
as of September 30, 2012 and June 30, 2012. The Company does not expect any significant changes in the unrecognized tax benefits
within twelve months of the reporting date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Interest costs and
penalties related to income taxes are classified as interest expense and selling, general and administrative costs, respectively,
in the Company's consolidated financial statements. For the period from May 10, 2012 (inception) to September 30, 2012, the Company
did not recognize any interest or penalties related to income taxes. The Company will file income tax returns in the U.S. federal
jurisdiction and states in which it does business. These tax returns will be subject to examination by tax authorities for three
years from the date the returns are filed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Legal reserves </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company&rsquo;s
policy is to recognize a liability for a contingency when it is probable that a liability has been incurred and when the amount
of loss can be reasonably estimated. When a range of probable loss can be estimated, the Company accrues the most likely amount
of such loss, and if such amount is not determinable, then the Company accrues the minimum of the range of probable loss.&nbsp;
&nbsp;Reserves related to legal proceedings are established and maintained, if applicable. The determination of these reserve amounts
requires significant judgment on the part of management. The Company&rsquo;s management considers many factors including, but not
limited to: the amount of the claim; the basis and validity of the claim; previous results in similar cases; and legal precedents
and case law. Each legal proceeding is reviewed with counsel, if applicable,&nbsp;in each accounting period and the reserve is
adjusted as deemed appropriate by management. As of September 30, 2012 and June 30, 2012, there was no litigation against the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of September 30, 2012 and for the period from May 10, 2012 (inception) through</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012 and
for the three months period ended September 30, 2012 -Unaudited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Recently Issued Accounting Pronouncements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management does not
believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a significant effect
to the accompanying consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Subsequent Events</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management has evaluated
subsequent events to determine if events or transactions occurring through the date these consolidated financial statements were
issued, require potential adjustment to or disclosure in the consolidated financial statements and has concluded that no subsequent
events have occurred except as described in Note 7 that would require recognition in the consolidated financial statements or disclosure
in the notes to the consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 4 &ndash; INTANGIBLE ASSETS, NET</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt"><B><I>Purchase
of Patents:</I></B></FONT> <FONT STYLE="font-size: 10pt">On June 20, 2012, Bascom entered in to a non-binding patent purchase agreement
(&ldquo;PPA&rdquo;) with an unrelated individual to purchase certain patents and patent applications for a cash consideration of
$2.1 million. The transaction was finalized on July 9, 2012. Amortization is provided using straight-line method over the estimated
useful life of five years of the patents. Amortization expense for these patents and applications for the three months ended September
30, 2012, for the period ended May 10, 2012 (inception) through June 30, 2012 and for the period ended May 10 2012 (inception)
through September 30, 2012 was approximately $0.1 million, 0 and approximately $0.01 million, respectively.</FONT> <FONT STYLE="font-size: 10pt">Estimated
amortization expense for each of the next five years through July 2016 is approximately $.4 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-align: justify; text-indent: 30pt">The Company
evaluated the ASC 805 &ldquo;Business Combinations&rdquo; (&ldquo;ASC 805&rdquo;) guidance and determined that the acquisition
of patents and patent applications is considered as asset acquisitions as there were no productive inputs or processes that accompanied
the patents for them to be used in conducting a business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-align: justify; text-indent: 30pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Purchased intangible
assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount of an asset may not be recoverable. If circumstances require an intangible asset to be tested for possible impairment, the
Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying value. If
the carrying value of the intangible asset is not recoverable on an undiscounted cash flow basis, impairment is recognized to the
extent that the carrying value exceeds its fair value. Fair value is to be determined through various valuation techniques including
discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. As of September
30, 2012 there were no events or changes in circumstances that indicate that the carrying amount of the intangible assets may not
be recoverable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 5 &ndash; FINANCING TRANSACTIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>June 12, 2012 Financing Transaction</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the sole
directors&rsquo; consent on May 30, 2012, on June 12, 2012, the Company completed first closing of a financing transaction in which
it raised $3.6 million of gross proceeds upon the issuance of senior notes (the &ldquo;Notes&rdquo;) with 16,571,429 shares of
common stock (the &ldquo;Shares&rdquo;) at a fair value of approximately $0.057 per share and 6,214,286 common stock purchase warrants
(the &ldquo;Note Warrants&rdquo;) with a fair value of $0.039 per warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Notes bear interest
at the rate of 0.28% per annum, payable once annually on a stated principal amount of $3.6 million. The Notes mature on June 12,
2014, at which time the Company is required to redeem them for a single balloon payment in the principal $3.6 million plus any
unpaid interest. The Notes do not contain any financial statement covenants, however there are standard events of default. In the
event of a default, which is not subsequently cured or waived, the interest rate would increase to a rate of 10% per annum. At
the option of the note holders and upon notice, the entire unpaid principal balance together with all accrued interest thereon
would be immediately due and payable. The note holders have the right to require the Company to redeem the Notes in the event of
a change of control or in event of default at a redemption price, pursuant to a formula equal to the unpaid principal amount and
any accrued and unpaid interest. As of the initial closing, a number of shares of common stock have been authorized and reserved
for issuance which equals or exceeds 130% of the maximum number of shares of common stock issuable upon exercise of the Note Warrants
without taking into account any limitation on the exercise of the Note Warrants. Pursuant to the note agreement, in the event the
Company completes a subsequent financing transaction, the Company is obligated to deliver a notice of offer to redeem the principal
amount of the Notes plus accrued and unpaid interest to the note holders. On August 16, 2012, the Company sold shares of common
stock in a subsequent financing transaction. The note holders consented to waive the requirements for the Company to deliver such
notice solely with this specific sale of common stock that occurred on August 16, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of September 30, 2012 and for the period from May 10, 2012 (inception) through</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012 and
for the three months period ended September 30, 2012 -Unaudited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Note Warrants are
exercisable for a period of seven years from their date of issuance at an exercise price of $0.75 per share. The Note Warrants
also feature full ratchet anti-dilution protection in the event that the Company issues equity or equity linked securities at issuance
or exercise prices below the exercise price featured in the Note Warrants. The Company conducted a classification assessment of
the Note Warrants in accordance with the applicable provisions of ASC 815. The Company determined that the Note Warrants are not
indexed&nbsp;to the Company&rsquo;s own stock and therefore require liability classification at fair value in the accompanying
consolidated balance sheet. &nbsp;&nbsp;The Company allocated the proceeds received in this transaction in accordance with the
applicable provisions of ASC 470 &ldquo;Debt&rdquo; (&ldquo;ASC 470&rdquo;). Accordingly, the Company allocated $1.0 million to
the Shares by recording an increase to par value and additional paid-in-capital in stockholders equity, $0.2 million to the Note
Warrants as a warrant liability and the remaining proceeds of $2.4 million to the Notes. The discount on the Notes, which amounts
to $1.2 million on the date of the financing transaction, is being accreted over the term of the Notes to the contractual maturity
amount of $3.6 million. Accretion is being recorded as a periodic increase to the Notes balance and component of interest expense
in the accompanying consolidated statement of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management determined
that the fair value of the June 12, 2012 Note Warrants amounted to approximately $243,000, $252,000 and $4,661,000 million on their
date of issuance, and subsequently on June 30, 2012 and on August 9, 2012, respectively. <FONT STYLE="color: windowtext">Change
to the fair value of the Note Warrants of approximately $9,000 was recorded as a loss on change in fair value of warrant liability
in the statement of operations in the same reporting period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 1, 2012,
the warrant holders elected to accelerate the expiration date of all the subscription warrants to August 9, 2012. <FONT STYLE="color: windowtext">On
August 9, 2012, all outstanding Note Warrants from the June 12, 2012 Financing Transaction were exercised for common stock. The
exercise of the Note Warrants resulted in the reclassification of the associated Warrant Liability of approximately $4,661,000
(at fair value) as equity. Change to the fair value of the Note Warrants of approximately $4,408,000 was recorded as a loss on
change in fair value of warrant liability in the statement of operations in the same reporting period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company used the
Binomial Lattice model to compute the fair value of the Note Warrants. The key assumptions used to calculate the fair values of
the Note Warrants on the date of issuance, on June 30, 2012 and the exercise date of August 9, 2012 are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid">June 12, 2012 Note Warrant</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Date of issuance <BR>June 12, 2012</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Reporting date <BR>June 30, 2012</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Exercise Date <BR>August 9, 2012</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 61%; font-size: 10pt; text-align: justify">Market price of common stock</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">0.057</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">0.057</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">1.50</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Exercise price of Note Warrants</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">0.75</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">0.75</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">0.75</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Contractual term</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7 years</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">6.95 years</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.00 years</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Expected volatility</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">120</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">124</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">124</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Expected dividend yield</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Risk free interest rate</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1.12</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1.11</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.01</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of the
Company&rsquo;s common stock as of the commitment date of the financing transaction was based on sales of identical shares that
the Company made to unrelated parties for cash at later dates. The Company, where appropriate, adjusted the selling price of the
shares as of the date of issuance based on an analysis performed by management. The results of the analysis, which gives effect
to intervening events that affected the price of the Company&rsquo;s shares were assessed for reasonableness by comparing the proceeds
allocated to each instrument in the transaction, to the discounted carrying value of the note and the resulting yield to maturity,
which amounted to 20% per annum. The life of the Note Warrants is equal to the contractual life. The expected stock price volatility
computed by management was determined by examining the historical volatilities of similar companies for a number of periods at
least equal to the contractual term of the Note Warrants since the Company does not have any trading history for its common stock.
The risk-free interest rate assumption is based on U.S. Treasury instruments whose term was consistent with the expected term of
the Note Warrants. The expected dividend assumption is based on the Company&rsquo;s history and expectation of dividend payouts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of September 30, 2012 and for the period from May 10, 2012 (inception) through</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012 and
for the three months period ended September 30, 2012 -Unaudited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>July 26, 2012 Financing Transaction</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the sole
director&rsquo;s consent on May 30, 2012, the Company, on July 26, 2012, sold additional senior notes to a related party for $750,000
in face value bearing interest at the rate of 0.28% per annum and payable on June 12, 2014. The commitment date of this transaction
is May 10, 2012. Simultaneously, on the same date, the Company issued 3,428,571 shares of common stock and warrants to acquire
1,285,714 shares of common stock at an exercise price of $0.75 per share with a life of seven years. The shares of the common stock
(including the common stock underlying the warrants) are convertible into Series A Preferred Stock at the option of the holder
in accordance with the exchange agreement in place as of July 16, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The warrants issued
in connection with July 26, 2012 funds raised by issuing senior notes, are subject to full ratchet anti-dilution protection if
the Company sells shares or share-indexed financing instruments at less than the $0.75 exercise price. The warrants issued in this
financing arrangement did not meet the conditions for equity classification and are required to be classified as a derivative liability,
at fair value using Binomial Lattice option-pricing model.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The proceeds from the
notes payable will be allocated among the fair valuation of the warrants, shares of the common stock and the remaining balance
to the notes payable in accordance with the provisions of ASC 470.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company conducted
a classification assessment of the Note Warrants in accordance with the applicable provisions of ASC 815. The Company determined
that the Note Warrants are not indexed&nbsp;to the Company&rsquo;s own stock and therefore require liability classification at
fair value in the accompanying consolidated balance sheet. &nbsp;&nbsp;The Company allocated the proceeds received in this transaction
in accordance with the applicable provisions of ASC 470 &ldquo;Debt&rdquo; (&ldquo;ASC 470&rdquo;). Accordingly, the Company allocated
$0.2 million to the Shares by recording an increase to par value and additional paid-in-capital in stockholders equity, $0.1 million
to the Note Warrants as a warrant liability and the remaining proceeds of $0.5 million to the Notes. The discount on the Notes,
which amounts to $0.3 million on the date of the financing transaction, is being accreted over the term of the Notes to the contractual
maturity amount of $0.8 million. Accretion is being recorded as a periodic increase to the Notes balance and component of interest
expense in the accompanying consolidated statement of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management determined
that the fair value of the July 26, 2012 Note Warrants amounted to approximately $53,000 on their date of issuance and approximately
964,000 on August 9, 2012. On August 1, 2012, the warrant holders elected to accelerate the expiration date of all the subscription
warrants to August 9, 2012. <FONT STYLE="color: windowtext">On August 9, 2012, all outstanding Note Warrants from the July 26,
2012 Financing Transaction were exercised for common stock. The exercise of Note Warrants resulted in the reclassification of the
associated Warrant Liability of approximately 964,000 (at fair value) as equity. Change to the fair value of the Note Warrants
of approximately $912,000 was recorded as a loss on change in fair value of warrant liability in the statement of operations in
the same reporting period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company used the
Binomial Lattice model to compute the fair value of the Note Warrants. The key assumptions used to calculate the fair values of
the Note Warrants on the date of issuance and the exercise date of August 9, 2012 are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>July 26, 2012 Note Warrant</B></P></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Date of issuance <BR>July 26, 2012</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Exercise date <BR>August 9, 2012</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 74%; font-size: 10pt; text-align: justify">Market price of common stock</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">0.057</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">1.50</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Exercise price of Note Warrants</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">0.75</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">0.75</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Contractual term</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">7 years</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.00 years</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Expected volatility</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">124</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">124</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify">Expected dividend yield</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify">Risk free interest rate</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1.12</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">0.1</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of September 30, 2012 and for the period from May 10, 2012 (inception) through</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012 and
for the three months period ended September 30, 2012 -Unaudited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of the
Company&rsquo;s common stock as of the commitment date of the financing transaction was based on sales of identical shares that
the Company made to unrelated parties for cash at later dates. The Company adjusted the selling price of the shares as of the date
of issuance based on an analysis performed by management. The results of the analysis, which gives effect to intervening events
that affected the price of the Company&rsquo;s shares were assessed for reasonableness by comparing the proceeds allocated to each
instrument in the transaction, to the discounted carrying value of the note and the resulting yield to maturity, which amounted
to 20% per annum. The life of the Note Warrants is equal to the contractual life. The expected stock price volatility computed
by management was determined by examining the historical volatilities of similar companies for a number of periods at least equal
to the contractual term of the Note Warrants since the Company does not have any trading history for its common stock. The risk-free
interest rate assumption is based on U.S. Treasury instruments whose term was consistent with the expected term of the Note Warrants.
The expected dividend assumption is based on the Company&rsquo;s history and expectation of dividend payouts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Note Debt Discount and Interest</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contractual interest
expense on the Notes was immaterial for the period of May 10, 2012 (inception) through September 30, 2012. Accretion recorded as
a component of interest expense amounted to $30,000 for the period of May 10, 2012 (inception) through June 30, 2012 and approximately
$422,000 for the three months ended September 30, 2012. During the three months ended September 30, 2012, the Company converted
approximately $.937,000 of senior notes into 625,136 shares of the Company&rsquo;s common stock at $1.50 per share (see Note 6).
Due to conversion of senior notes, the Company proportionately accelerated accretion of discount and recorded as interest expense.
The remaining note discount of approximately $989,000 will be accreted through the contractual term of the senior notes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 6 &ndash; CAPITAL STRUCTURE AND
STOCKHOLDERS&rsquo; DEFICIENCY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Preferred Stock</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: windowtext">On
July 13, 2012 the</FONT> Company filed a Certificate of Designation with the Secretary of State of Delaware to authorize the issuance
of up to 29,000,000 shares (27,225,000 authorized for Series A) of preferred stock, par value $0.0001 which have been designated
as Series A Preferred Stock with such rights and preferences designated in the Company&rsquo;s Certificate of Designation (the
&ldquo;Series A Preferred Stock&rdquo;). In the event of any liquidation, dissolution, or winding up of the Corporation, whether
voluntary or involuntary, or in the event of its insolvency, and after provision for payment of all debts and liabilities of the
Company in accordance with the Delaware General Corporation Law, any remaining assets of the Company shall be distributed pro rata
to the holders of common stock and the holders of Series A Preferred Stock as if the Series A Preferred Stock had been converted
into shares of common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-align: justify; text-indent: 30pt">On July 16,
2012, the Company entered into an exchange agreement whereby the Company offered to all of its stockholders a right to exchange
up to 99% of their shares of common stock for the same number of shares of Series A Preferred Stock, $0.0001 par value and gave
the holders of its warrants the right to elect to exchange the common stock underlying such warrants for Series A Preferred Stock.
On the same date common stock holders exchanged 13,799,440 shares of $0.0001 par value common stock into 13,799,440 shares of Series
A Preferred Stock with a par value of $0.0001 per share. <FONT STYLE="color: windowtext">The exchange did not have any impact on
the Company&rsquo;s consolidated financial statements as the benefit of exchanging the common for the preferred is nominal. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">The
holders of Series A Preferred Stock will be entitled to vote together with the holders of the common stock and as a single class
on all matters submitted for a vote of holders of common stock. When voting together with the holders of common stock, each share
of Series A Preferred Stock shall entitle the holder thereof to such number of votes per share on each such action as will equal
the number of shares of common stock into which each share of such Series A Preferred Stock is then convertible. In the event of
any liquidation, dissolution, or winding up of the Company and after provision for payment of all debts and liabilities of the
Company, any remaining assets of the Company shall be distributed pro rata to the holders of common stock and the holders of Series
A Preferred Stock as if the Series A Preferred Stock had been converted into shares of common stock</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of September 30, 2012 and for the period from May 10, 2012 (inception) through</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012 and
for the three months period ended September 30, 2012 -Unaudited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Common Stock</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The authorized common
stock of the Company consists of 100,000,000 shares of common stock with par value of $0.0001.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The voting, dividend
and liquidation rights of the holders of the common stock are subject to and qualified by the rights of the holders of the preferred
stock of any series. The holders of common stock are entitled to one vote for each share held at all the meetings of stockholders.
Upon the dissolution or liquidation of the Company, holders of common stock will be entitled to receive ratably all the assets
of the Company available for distribution, subject to any preferential rights of any then outstanding preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 9, 2012 all
7,500,000 outstanding Note Warrants (see Note 5) were exercised at a price of $0.75 each for a total of $5,625,000. The Company
issued 4,114,287 shares of Series A Preferred Stock and 3,385,713 shares of common stock upon the exercise of warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 16, 2012,
the Company sold 3,651,316 shares of common stock in a private placement to certain investors for $1.50 per share for gross proceeds
of approximately $5,477,000 before selling commissions of approximately $381,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">During the three months
ended September 30, 2012, the Company converted $937,000 of notes into 625,136 common shares at a conversion price of $1.50 per
share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 7 &ndash; SUBSEQUENT EVENTS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Proposed Merger</I></B>:
On October 1, 2012, the Company entered into an Agreement and Plan of Merger (the &ldquo;Merger Agreement&rdquo;) with Document
Security Systems, Inc., a New York corporation (&ldquo;DSS&rdquo;) and a public company, DSSIP, Inc., a Delaware corporation and
wholly-owned subsidiary of DSS (&ldquo;Merger Sub&rdquo;), and Hudson Bay Master Fund Ltd., as representative the Company&rsquo;s
stockholders solely for certain purposes (as described in the Merger Agreement), pursuant to which Merger Sub will merge with and
into the Company, with the Company being the surviving corporation and will continue its existence as a wholly-owned subsidiary
of DSS through an exchange of capital stock of the Company for capital stock and warrants of DSS (the &ldquo;Merger&rdquo;).&nbsp;
The completion of the proposed Merger is subject to a number of conditions, including but not limited to, the approval of the Company&rsquo;s
stockholders and DSS&rsquo;s stockholders.&nbsp; There is no assurance that the proposed Merger will actually be consummated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">On October 1, 2012, concurrently with the
execution of the Merger Agreement, certain stockholders of LTS, representing 11.99% of LTS&rsquo;s capital stock issued and outstanding
(collectively, the &ldquo;Key LTS Stockholders&rdquo;) entered into voting agreements (collectively, the &ldquo;LTS Voting Agreement&rdquo;),
pursuant to which the Key LTS Stockholders have agreed, among other things, to vote all shares of capital stock of LTS owned by
them in favor of the approval of the Merger Agreement, the approval of the Merger and the approval of the transactions contemplated
by the Merger Agreement and any actions required in furtherance thereof. In addition, the Key LTS Stockholders have agreed not
to seek appraisal or dissenters&rsquo; rights under Delaware General Corporation Law. The LTS Voting Agreement will terminate upon
the earliest to occur of: (i) the mutual written consent of DSS, Merger Sub and the Key LTS Stockholder; (ii) the Effective Time;
(iii) the date of termination of the Merger Agreement in accordance with its terms; and (iv) the date on which an amendment to
the Merger Agreement to decrease the merger consideration is effected without the consent of such Key LTS Stockholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify">Under certain circumstances, if the Merger
is terminated by either DSS or LTS in connection with or due to DSS entering into an alternate transaction constituting a superior
proposal, then DSS is required to pay to LTS a termination fee in cash equal to the sum of (i) $3,000,000 plus (ii) 5% of the consideration
paid to all security holders of DSS in connection with such superior proposal in the same form as such consideration is paid to
such security holders;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>As of September 30, 2012 and for the period from May 10, 2012 (inception) through</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>September 30, 2012 and
for the three months period ended September 30, 2012 -Unaudited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><B><I>Patent Infringement Lawsuits:</I></B>
On October 3, 2012 LTS, initiated patent infringement lawsuits in the United States District Court for the Eastern District of
Virginia against five companies, including Facebook, Inc. and LinkedIn Corporation, for unlawfully using systems that incorporate
features claimed in patents owned by Bascom Research. The patents-in-suit relate to the data structure used by social and business
networking web sites and Web 2.0 corporate intranets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><B><I>DSS Private Placement:</I></B> Concurrently
with the execution of the Merger Agreement, on October 1, 2012, DSS entered into subscription agreements with certain accredited
investors, pursuant to which DSS agreed to issue and sell to such investors in a private placement an aggregate of 833,651 shares
of its common stock, at a purchase price of $3.30 per share, for an aggregate purchase price of $2,751,048 (the &ldquo;Private
Placement&rdquo;). The Private Placement was completed on October 1, 2012. LTS participated in the private placement and purchased
an aggregate of 218,675 shares of DSS common stock, at a purchase price of $3.30 per share, for an aggregate purchase price of
$721,628.</P>

<P STYLE="color: #A0A0A4; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><B><I>Jeffrey Ronaldi Employment Agreement:</I></B>&nbsp;
On November 20, 2012, the Company entered into an employment agreement with Jeffrey Ronaldi, LTG&rsquo;s Chief Executive Officer
(the &ldquo;Ronaldi Agreement&rdquo;). The Ronaldi Agreement has an initial term of three years, commencing on November 9, 2012,
and is automatically renewable for additional consecutive one year terms, unless at least ninety days written notice is given by
either LTG or Mr. Ronaldi prior to the commencement of the next renewal term.&nbsp; The Ronaldi Agreement provides for an annual
base salary of $350,000, effective November 9, 2012 and an annual discretionary bonus of at least 20% of Mr. Ronaldi&rsquo;s base
salary, based upon Mr. Ronaldi&rsquo;s and LTG&rsquo;s achievement of annual performance objectives, as determined by the board
of directors.&nbsp; Upon commencement of the Ronaldi Agreement, LTG will grant to Mr. Ronaldi 100,000 shares of its common stock,
vesting immediately.&nbsp; LTG will also grant to Mr. Ronaldi a non-statutory option to purchase up to 1,800,000 shares of its
common stock, at an exercise price of $1.67 per share. One half of the option shall vest in 12 equal quarterly tranches, beginning
February 15, 2013 and on each May 15, August 15, November 15 and February 15 thereafter through November 15, 2015. Vesting of the
remaining one half of the option shall not commence unless and until the Merger is completed. Following the completion of the Merger,
the remaining one half of the options shall vest in 12 equal tranches, with a tranche to vest on the last day of each calendar
quarter commencing on the last day of the calendar quarter in which the Merger is completed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in; text-align: justify"><B><I>Peter Hardigan Employment Agreement:<FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">&nbsp;
</FONT></I></B><FONT STYLE="font: 10pt Times New Roman, Times, Serif; color: black">On November 20, 2012, the Company entered
into an amended employment agreement with Peter Hardigan (the &ldquo;Amended Hardigan Agreement&rdquo;). The Amended Hardigan
Agreement expressly supersedes the terms of the previous employment agreement, dated August 7, 2012, between LTG and Mr. Hardigan.
The Amended Hardigan Agreement has an initial term of one year, commencing on August 1, 2012, and is automatically renewable for
additional consecutive one year terms, unless at least ninety days written notice is given by either LTG or Mr. Hardigan prior
to the commencement of the next renewal term.&nbsp; The Amended Hardigan Agreement provides for an annual base salary of $250,000,
effective August 1, 2012 and an annual discretionary bonus of at least 20% of Mr. Hardigan&rsquo;s base salary, based upon Mr.
Hardigan&rsquo;s and LTG&rsquo;s achievement of annual performance objectives, as determined by the board of directors.&nbsp;
Upon commencement of the Amended Hardigan Agreement, LTG will grant to Mr. Hardigan 100,000 shares of its common stock, vesting
immediately. LTG will also grant to Mr. Hardigan a non-statutory option to purchase up to 1,800,000 shares of its common stock,
at an exercise price of $1.67 per share. One half of the option shall vest in 12 equal quarterly tranches, with the first tranche
having vested as of November 15, 2012, and the remaining tranches vesting on each of February 15, May 15, August 15, and November
15 thereafter through August 15, 2015. Vesting of the remaining one half of the option shall not commence unless and until the
Merger is completed. Following the completion of the Merger, the remaining one half of the options shall vest in 12 equal tranches,
with a tranche to vest on the last day of each calendar quarter commencing on the last day of the calendar quarter in which the
Merger is completed.</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">To the Board of Directors and Stockholders of</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Lexington Technology Group, Inc. and Subsidiary</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying consolidated
balance sheet of Lexington Technology Group, Inc. and Subsidiary (a development stage company) (the &ldquo;Company&rdquo;) as of
June 30, 2012 and the related consolidated statements of operations, changes in stockholders&rsquo; equity and cash flows for the
period from May 10, 2012 (inception) through June 30, 2012. These consolidated financial statements are the responsibility of the
Company&rsquo;s management. Our responsibility is to express an opinion on these financial statements based on our audit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audit in accordance with
generally accepted accounting standards as established by the Auditing Standards Board (United States) and in accordance with the
auditing standards of the Public Company Accounting Oversight Board (United States).&nbsp; Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.&nbsp;
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.
Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company&rsquo;s
internal control over financial reporting. Accordingly, we express no such opinion.&nbsp; An audit also includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation.&nbsp; We
believe that our audit provides a reasonable basis for our opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In our opinion, the consolidated financial
statements referred to above present fairly, in all material respects, the consolidated financial position of Lexington Technology
Group, Inc and Subsidiary (a development stage company) as of June 30, 2012, and the results of its operations and its cash flows
for the period from May 10, 2012 (inception) through June 30, 2012, in conformity with accounting principles generally accepted
in the United States of America.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The accompanying consolidated financial
statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated
financial statements, the Company is a development stage enterprise that has not commenced its planned operations as of June 30,
2012. Accordingly, the Company is subject to all of the risks and uncertainties that are typical in the life-cycle stage of its
business, such uncertainties include whether or not the Company will be able to raise the capital resources it will need to execute
its longer term business plans. There is no assurance that Company will be successful in its efforts to commence its planned operations
or that the commencement of planned operations, should that occur, will enable the Company to reach its business objective of becoming
a profitable enterprise. These conditions raise substantial doubt about the Company&rsquo;s ability to continue as a going concern.
Management&rsquo;s plans regarding these matters also are described in Note 2. The consolidated financial statements do not include
any adjustments that might be necessary should the Company be unable to continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ Marcum <FONT STYLE="font-variant: small-caps">llp</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">New York, NY&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">September 11, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">LEXINGTON TECHNOLOGY GROUP, INC. AND SUBSIDIARY</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">(A Development Stage Company)</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">CONSOLIDATED BALANCE SHEET</P>



<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">June 30, 2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; padding-left: 0.12in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">ASSETS</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">Current assets:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; font-size: 10pt; padding-left: 0.36in">Cash</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">3,627,486</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">Other assets:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.36in">Intangible assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">45,000</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 0.12in">Total assets</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,672,486</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">LIABILITIES AND STOCKHOLDERS' DEFICIENCY</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Current liabilities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.36in">Accounts payable and accrued expenses</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">218,224</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Senior notes payable- related part<FONT STYLE="color: windowtext">ies, </FONT> net of deferred debt discount of $1,164,280</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">2,460,720</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.12in">Warrant liability</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">252,501</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.36in">Total liabilities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">2,931,445</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0in">Stockholders' equity</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">Series A Convertible Preferred stock, $0.0001 par value; 27,225,000 shares</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.36in">authorized; no shares issued and outstanding</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.24in">Common stock, $0.0001 par value, 100,000,000 shares authorized;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.36in">16,571,529 shares issued and outstanding</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,657</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.24in">Additional paid-in capital</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">951,421</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.24in">Deficit accumulated during the development stage</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(212,037</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in"></TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.36in">Total stockholders' equity</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">741,041</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 0.12in">Total liabilities and stockholders' equity</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,672,486</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part
of the consolidated financial statements</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">LEXINGTON TECHNOLOGY GROUP, INC. AND SUBSIDIARY</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">(A Development Stage Company)</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">CONSOLIDATED STATEMENT OF OPERATIONS</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">For the period
from May 10, 2012 (inception) to June 30, 2012</P>



<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">Operating expenses:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 85%; font-size: 10pt; text-align: left; padding-left: 0.12in">Officer&rsquo;s compensation</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">7,500</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.12in">Legal and professional fees</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">165,188</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 0.24in">Loss from operations</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">172,688</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;Other (expenses)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.12in">Interest expense</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(29,970</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.12in">Change in fair value of warrant liability</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(9,379</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 0.24in">Total other (expenses)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">(39,349</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Net loss</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(212,037</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">The accompanying notes are an integral part
of the consolidated financial statements</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">LEXINGTON TECHNOLOGY GROUP, INC. AND SUBSIDIARY</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">(A Development Stage Company)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CONSOLIDATED STATEMENT OF CHANGES IN </B> <B>STOCKHOLDERS' EQUITY</B></P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">For the period from May 10, 2012 (inception) to June 30, 2012</P>



<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; text-align: center">Common Stock</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: center">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Shares</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Amount</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Additional paid-in capital</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: center; border-bottom: Black 1pt solid">Deficit accumulated during development stage</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Total stockholders' equity</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold">Balance - May 10, 2012 (inception)</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 35%; font-size: 10pt; text-align: left">Issuance of shares of common stock for cash on May 16, 2012 at $0.0001</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">100</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 10%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">Issuance of shares of common stock for cash on June 12, 2012 at fair value of $0.057</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">16,571,429</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">1,657</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">951,421</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">953,078</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Net loss</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(212,037</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(212,037</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 2.5pt">Balance - June 30, 2012</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">16,571,529</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">1,657</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">951,421</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(212,037</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">(741,041</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">)</TD></TR>
</TABLE>


<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">The accompanying notes are an integral part
of the consolidated financial statements&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>



<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">LEXINGTON TECHNOLOGY GROUP, INC. AND SUBSIDIARY</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">(A Development Stage Company)</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">CONSOLIDATED STATEMENT OF CASH FLOWS</P>

<P STYLE="text-align: center; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">For the period from May 10, 2012 (inception) to June 30, 2012</P>



<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Cash Flows from Operating Activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 85%; font-size: 10pt; text-align: left">&nbsp;&nbsp;&nbsp;Net loss</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(212,037</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;&nbsp;Adjustments to reconcile net loss to net cash (used in) provided by operating activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Non-cash interest</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">29,434</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Change in fair value of warrant liability</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">9,379</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in operating assets and liabilities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts payable and accrued expenses</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">173,224</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash (used in) provided by provided by operating activities</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Cash Flows Provided from Financing Activities</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Proceeds from senior notes payable with common stock and common stock purchase <BR>&#9; &#9;warrants in private placement transaction</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">3,627,486</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left">Net increase in cash</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">3,627,486</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt">Cash at beginning of the period</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">Cash at end of the period</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">3,627,486</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Supplemental Disclosure of Cash Flow Information:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for income taxes</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash paid for interest</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">-</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Non&ndash;cash investing activities:</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Liability &ndash; Patent purchase</TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 10pt; text-align: right">45,000</TD><TD STYLE="padding-bottom: 2.5pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0">The accompanying notes are an integral part
of the consolidated financial statements&nbsp;&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Period from May 10, 2012 (inception)
to June 30, 2012</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 &ndash; ORGANIZATION AND NATURE
OF BUSINESS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Organization &amp; Business Activities
</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Lexington Technology
Group, Inc. (&quot;LTG&quot; or the &ldquo;Parent&rdquo;), was incorporated as a Delaware corporation on May 10, 2012 under the
name Snip Inc. On September 10, 2012, Snip Inc. changed its name to Lexington Technology Group, Inc. LTG is a holding company that
owns 100% of the membership interests of Bascom Research, LLC (&ldquo;Bascom&rdquo;). Bascom was incorporated in Virginia on June
6, 2012 under the name of Bascom Linking Intellectual Property, LLC, for the purpose of acquiring and/or developing patented technologies
and intellectual property. On August 29, 2012, Bascom Linking Intellectual Property, LLC changed its name to Bascom Research, LLC.
LTG and its wholly owned subsidiary Bascom are herein collectively referred to as the &ldquo;Company&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 2 &ndash; LIQUIDITY, MANAGEMENT&rsquo;S
BUSINESS PLANS AND GOING CONCERN</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The accompanying consolidated
financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of
liabilities in the normal course of business. &nbsp;The Company, as a development stage enterprise, has not commenced its planned
operations. The business will require significant amounts of capital to sustain operations and make the investments it needs to
execute its longer term business plan. The Company has cash of $3,627,486 and net working capital of $3,409,262 at June 30, 2012.
The Company&rsquo;s cash and working capital amounts were derived from the proceeds of an initial financing transaction in which
raised aggregate proceeds of $3,627,486 (Note 4) through the issuance of senior notes, common stock and common stock purchase warrants
to founding stockholders. The Company&rsquo;s net loss for the period of May 10, 2012 (inception) through June 30, 2012 and accumulated
deficit each amounted to $212,037. &nbsp;Subsequent to June 30, 2012, the Company used $2,100,000 of its available funds to purchase
certain patents, and raised additional proceeds of (i) $5,625,000 upon the exercise of warrants, (ii) $750,000 under a second closing
of the same senior notes, common shares and warrants described herein and (iii) $5,427,000 in a private placement of its common
stock at $1.50 per share. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management believes
that the Company has sufficient liquidity to sustain operation through next twelve months; however, there is significant uncertainty
as to whether the Company will be successful in its efforts to commence its planned operations or that the commencement of planned
operations, should that occur, will enable the Company to achieve its business objective of becoming a profitable enterprise.&nbsp;
Management also cannot provide any assurance that unforeseen circumstances that could occur at anytime within the next twelve months
or thereafter will not increase the need for the Company to raise capital on an immediate basis. &nbsp;Although Management believes
that the Company can raise capital by issuing additional debt and/or equity securities, the Company has not secured any commitments
for new financing at this time and cannot provide any assurance that new financing will be available on commercially acceptable
terms, if at all. These matters raise substantial doubt about the Company&rsquo;s ability to continue as a going concern. &nbsp;The
accompanying consolidated financial statements do not include any adjustments that might necessary should the Company be unable
to continue as a going concern.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 3 &ndash; SUMMARY OF SIGNIFCANT
ACCOUNTING POLICIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Principles of Consolidation</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The consolidated financial
statements include the accounts of LTG and its wholly-owned subsidiary. All intercompany balances and transactions have been eliminated
in consolidation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Cash and Cash Equivalents</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For purposes of the
statement of cash flows, the Company considers financial instruments with maturities of less than three months when purchased to
cash equivalents. There are no cash equivalents as of the balance sheet date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Period from May 10, 2012 (inception)
to June 30, 2012</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Use of Estimates </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The preparation of
financial statements in conformity with accounting principles generally accepted in the United States of America (&ldquo;US GAAP&rdquo;)
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from those estimates. Key accounting estimates include&nbsp;the
assumptions used to calculate the fair values of securities issued in the financing transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Development Stage Reporting</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is a development
stage enterprise as defined in Accounting Standards Codification (&ldquo;ASC&rdquo;) 915 &ldquo;Development Stage Entities (&ldquo;ASC
950&rdquo;). <FONT STYLE="color: windowtext">The Company is currently attempting to raise additional funds it would use to purchase
intellectual properties and implement its operating plan. Accordingly, the Company has not yet commenced its planned operations.
The Company is subject to all of the risks and uncertainties</FONT> that are typical in the life-cycle stage of its business. There
is no assurance that the Company will be successful in its efforts to commence its planned operation or that the commencement of
its planned operations will actually result in the realization of its business objectives.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Intangible Assets</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company intends
to account for purchases of intangible assets in accordance with the provisions of ASC 350 &ldquo;Intangibles&rdquo; (&ldquo;ASC
350&rdquo;) and ASC 360 &ldquo;Fixed Assets&rdquo; (&ldquo;ASC 360&rdquo;). The useful lives of intangible assets will be determined
at the date of purchase and periodically evaluated for reasonableness. The assets will be tested for impairment at least once annually,
if determined to have an indefinite life, or whenever events or changes in circumstances indicate that the carrying amount may
no longer be recoverable. Costs to investigate potential purchases of intangible assets will be treated as expense when incurred,
until or unless the purchase of the respective assets will be deemed viable, after which time the costs to further investigate
and purchase the assets will be capitalized. Subsequent to purchase, legal and associated costs incurred in prosecuting alleged
infringements of the patents will be recognized as expense when incurred.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Concentrations of Risk</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Financial instruments
that potentially subject the Company to significant concentrations of credit risk consist of cash. At times, the Company&rsquo;s
cash balances may be uninsured or in deposit accounts that exceed the Federal Deposit Insurance Corporation (&ldquo;FDIC&rdquo;)
insurance limits. As of June 30, 2012, the Company had cash and cash equivalent balances of $3,377,486 in excess of the federally
insured limit of $250,000. All of the Company's cash in banks at June 30, 2012 was deposited in a non-interest bearing checking
account.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Common Stock Purchase Warrants </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">The Company accounts
for the issuance of common stock purchase warrants issued in connection with capital financing transactions in accordance with
the provisions of ASC 815 &ldquo;Derivative and Hedging&rdquo; (&ldquo;ASC 815&rdquo;). The Company classifies as equity any contracts
that (I)&nbsp;require physical settlement or net-share settlement or (ii)&nbsp;gives the Company a choice of net-cash settlement
or settlement in its own shares (physical settlement or net-share settlement). The Company classifies as assets or liabilities
any contracts that (I)&nbsp;require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs
and if that event is outside the control of the Company) or (ii)&nbsp;gives the counterparty a choice of net-cash settlement or
settlement in shares (physical settlement or net-share settlement). &nbsp;The Company also classifies as liabilities, any contracts
that contain variable settlement provisions that cannot be measured as explicit or implicit inputs in a standard option pricing
model. &nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As more fully described
in Note 4, the Company classified certain common stock purchase warrants that contain variable settlement provisions as liabilities
in the accompanying consolidated balance sheet as of June 30, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Period from May 10, 2012 (inception)
to June 30, 2012</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Fair Value Measurement</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company adopted
Financial Accounting Standards Board (&ldquo;FASB&rdquo;) Accounting Standards Codification (&ldquo;ASC&rdquo;) 820, &ldquo;Fair
Value Measurements and Disclosures&rdquo; (&ldquo;ASC 820&rdquo;), for assets and liabilities measured at fair value on a recurring
basis. ASC 820 establishes a common definition for fair value to be applied to existing US GAAP that require the use of fair value
measurements which establishes a framework for measuring fair value and expands disclosure about such fair value measurements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">ASC 820 defines fair
value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. Additionally, ASC 820 requires the use of valuation techniques that maximize the use of observable
inputs and minimize the use of unobservable inputs. These inputs are prioritized below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify"><I>Level 1</I>: Observable inputs
such as quoted market prices in active markets for identical assets or liabilities</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify"><I>Level 2</I>: Observable market
based inputs or unobservable inputs that are corroborated by market data</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2in; text-align: justify"><I>Level 3</I>: Unobservable
inputs for which there is little or no market data, which require the use of the reporting entity&rsquo;s own assumptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The carrying amounts
reported in the balance sheet for cash, prepaid expenses, accounts payable, and accrued expenses approximate their estimated fair
market value based on the short-term maturity of these instruments. The carrying amount of the notes payable at June 30, 2012,
approximate their respective fair value based on the Company&rsquo;s incremental borrowing rate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, FASB ASC
825-10-25 &ldquo;Fair Value Option&rdquo; was effective for January 1, 2008. ASC 825-10-25 expands opportunities to use fair value
measurements in financial reporting and permits entities to choose to measure many financial instruments and certain other items
at fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.2in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The following table
provides the assets and liabilities at fair value measured as of June 30, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="14" STYLE="font-size: 10pt; font-weight: bold; text-align: center">Fair value measured at June 30, 2012</TD><TD STYLE="font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; text-align: justify">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Total carrying value at June 30, 2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid">Quoted prices in active markets <BR>(Level 1)</TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Significant other observable inputs (Level 2)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Significant unobservable inputs (Level 3)</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; font-size: 10pt; text-align: justify; padding-left: 5.4pt">Cash</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">3,627,486</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">3,627,486</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify; padding-left: 5.4pt">Warrant liability</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">252,501</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">-</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">$</TD><TD STYLE="font-size: 10pt; text-align: right">252,501</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The carrying amounts
of cash and accounts payable and accrued liabilities approximate fair value due to the short maturities of these instruments. As
described in Note 4, the Company measured the fair value of the warrant liability using the Binomial Lattice option pricing model,
which requires the use of significant assumptions. Accordingly, the warrant liability is classified in level 3 of the valuation
hierarchy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Income Taxes</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Income taxes are accounted
for under the asset and liability method in accordance with ASC 740, Income Taxes (&ldquo;ASC 740&rdquo;). Deferred tax assets
and liabilities are recognized for the future tax consequences attributable to differences between the financial carrying amounts
of existing assets and liabilities and their respective tax bases as well as operating loss and tax credit carry forwards. Deferred
tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the periods in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in
tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation
allowance to the extent that the recoverability of the asset is unlikely to be recognized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Period from May 10, 2012 (inception)
to June 30, 2012</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company accounts
for uncertain tax positions in accordance with ASC 740, which prescribes a recognition threshold and measurement process for financial
statement recognition and measurement of a tax position taken or expected to be taken in a return. Management has evaluated and
concluded that there were no material uncertain tax positions requiring recognition in the Company&rsquo;s financial statements
as of June 30, 2012. The Company does not expect any significant changes in the unrecognized tax benefits within twelve months
of the reporting date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Interest costs and
penalties related to income taxes are classified as interest expense and selling, general and administrative costs, respectively,
in the Company's consolidated financial statements. For the period from May 10, 2012 (inception) to June 30, 2012, the Company
did not recognize any interest or penalties related to income taxes. The Company will file income tax returns in the U.S. federal
jurisdiction and states in which it does business. These tax returns will be subject to examination by tax authorities for three
years from the date the returns are filed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Recently Issued Accounting Pronouncements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management does not
believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a significant effect
to the accompanying consolidated financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Subsequent Events</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management has evaluated
subsequent events to determine if events or transactions occurring through the date these consolidated financial statements were
available to be issued, require potential adjustment to or disclosure in the consolidated financial statements and has concluded
that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in
the notes to the consolidated financial statements (See Note 7).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 4 - FINANCING TRANSACTION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 12, 2012, The
Company completed a financing transaction in which it raised $3,627,486 of gross proceeds upon the issuance of senior notes (the
&ldquo;Notes&rdquo;) with 16,571,429 shares of common stock (the &ldquo;Shares&rdquo;) at a fair value of approximately $0.057
per share and 6,214,286 common stock purchase warrants (the &ldquo;Note Warrants&rdquo;) with a fair value of $0.039 per warrant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Notes bear interest
at the rate of .28% per annum, payable once annually on a stated principal amount of $3,625,000. The notes mature on June 12, 2014,
at which time the Company is required to redeem them for a single balloon payment in the principal $3,625,000 plus any unpaid interest.
The notes do not contain any financial statement covenants, however there are standard events of default. In the event of a default,
which is not subsequently cured or waived, the interest rate would increase to a rate of 10% per annum. At the option of the note
holders and upon notice, the entire unpaid principal balance together with all accrued interest thereon would be immediately due
and payable. The note holders have the right to require the Company to redeem the notes in the event of a change of control or
in event of default at a redemption price, pursuant to a formula equal to the unpaid principal amount and any accrued and unpaid
interest. As of the initial closing, a number of shares of common stock have been authorized and reserved for issuance which equals
or exceeds 130% of the maximum number of shares of common stock issuable upon exercise of the Note Warrants without taking into
account any limitation on the exercise of the Note Warrants. Pursuant to the note agreement, in the event the Company completes
a subsequent financing transaction, the Company is obligated to deliver a notice of offer to redeem the principal amount of the
Notes plus accrued and unpaid interest to the note holders. On August 16, 2012, the Company sold shares of common stock in a subsequent
financing transaction. The note holders consented to waive the requirements for the Company to deliver such notice solely with
this specific sale of common stock that occurred on August 16, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Period from May 10, 2012 (inception)
to June 30, 2012</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&#9;The Note Warrants
are exercisable for a period of seven years from their date of issuance at an exercise price of $.75 per share. The Note Warrants
also feature full ratchet anti-dilution protection in the event that the Company issues equity or equity linked securities at issuance
or exercise prices below the exercise price featured in the Note Warrants. The Company conducted a classification assessment of
the Note Warrants in accordance with the applicable provisions of ASC 815. The Company determined that the Note Warrants are not
indexed&nbsp;to the Company&rsquo;s own stock and therefore require liability classification at fair value in the accompanying
consolidated balance sheet. &nbsp;&nbsp;The Company allocated the proceeds received in this transaction in accordance with the
applicable provisions of ASC 470 &ldquo;Debt&rdquo; (&ldquo;ASC 470&rdquo;). Accordingly, the Company allocated $950,592 to the
Shares by recording an increase to par value and additional paid-in-capital in stockholders equity, $243,122 to the Note Warrants
as a warrant liability and the remaining proceeds of $2,431,286 to the Notes. The discount on the Notes, which amounts to $1,193,714
on the date of the financing transaction, is being accreted over the term of the Notes to the contractual maturity amount of $3,625,000.
Accretion is being recorded as a periodic increase to the Notes balance and component of interest expense in the accompanying consolidated
statement of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Contractual interest
expense on the Notes amounted to $536 for the period of May 10, 2012 (inception) through June 30, 2012. Accretion recorded as a
component of interest expense amounted to $29,434 for the period of May 10, 2012 (inception) through June 30, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Management determined
that the fair value of the Note Warrants amounted to be approximately $243,000 and $253,000 on their date of issuance, and subsequently
on June 30, 2012, respectively. The Company used the Binomial Lattice model to compute the fair value of the Note Warrants. The
key assumptions used to calculate the fair values of the Note Warrants on the date of issuance and on June 30, 2012 are as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 80%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 20%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Date of issuance</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">June 12, 2012</P></TD>
    <TD STYLE="width: 20%; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Reporting date</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">June 30, 2012</P></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">Market price of common stock</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">$ 0.057</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">$ 0.057</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">Exercise price of Note Warrants</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">$0.75</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">$0.75</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">Contractual term</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">7 years</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">6.95 years</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">Expected volatility</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">120%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">124%</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">Expected dividend yield</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">0%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">0%</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify">Risk free interest rate</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">1.12%</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">1.11%</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The fair value of the
Company&rsquo;s common stock as of the commitment date of the financing transaction was based on sales of identical shares that
the Company made to unrelated parties for cash at later dates. The Company adjusted the selling price of the shares as of the date
of issuance based on an analysis performed by management. The results of the analysis, which gives effect to intervening events
that affected the price of the Company&rsquo;s shares were assessed for reasonableness by comparing the proceeds allocated to each
instrument in the transaction, to the discounted carrying value of the note and the resulting yield to maturity, which amounted
to 20% per annum. &nbsp;The life of the Note Warrants is equal to the contractual life. The expected stock price volatility computed
by management was determined by examining the historical volatilities of similar companies for a number of periods at least equal
to the contractual term of the Note Warrants since the Company does not have any trading history for its common stock. The Company
will continue to analyze the historical stock price volatility and expected term assumption as more historical data for the Company&rsquo;s
common stock becomes available. The risk-free interest rate assumption is based on U.S.&nbsp;Treasury instruments whose term was
consistent with the expected term of the Note Warrants. The expected dividend assumption is based on the Company&rsquo;s history
and expectation of dividend payouts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company will compute
the fair value of the Note Warrants at each reporting date using the Binomial Lattice model. Changes to the fair value of the Note
Warrants will be recorded as a gain (loss) in the statement of operations in the applicable reporting period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 5 &ndash; CAPITAL STRUCTURE AND
STOCKHOLDERS&rsquo; DEFICIENCY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Preferred Stock</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The authorized <FONT STYLE="color: windowtext">preferred
stock</FONT> of the Company consists of 29,000,000 shares of preferred stock with par value of $0.0001, of which 27,225,000 shares
of preferred stock are designated as Series A Preferred Stock with par value of $0.0001. As of June 30, 2012, the Company had no
outstanding shares of preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Period from May 10, 2012 (inception)
to June 30, 2012</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">The
holders of Series A Preferred Stock will be entitled to vote together with the holders of the common stock and as a single class
on all matters submitted for a vote of holders of common stock. When voting together with the holders of common stock, each share
of Series A Preferred Stock shall entitle the holder thereof to such number of votes per share on each such action as will equal
the number of shares of common stock into which each share of such Series A Preferred Stock is then convertible. In the event of
any liquidation, dissolution, or winding up of the Company and after provision for payment of all debts and liabilities of the
Company, any remaining assets of the Company shall be distributed pro rata to the holders of common stock and the holders of Series
A Preferred Stock as if the Series A Preferred Stock had been converted into shares of common stock</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Common Stock</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The authorized common
stock of the Company consists of 100,000,000 shares of common stock with par value of $0.0001.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The voting, dividend
and liquidation rights of the holders of the common stock are subject to and qualified by the rights of the holders of the preferred
stock of any series. The holders of common stock are entitled to one vote for each share held at all the meetings of stockholders.
Upon the dissolution or liquidation of the Company, holders of common stock will be entitled to receive ratably all the assets
of the Company available for distribution, subject to any preferential rights of any then outstanding preferred stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On June 12, 2012, the
Company issued 16,571,429 shares of common stock to its founding stockholders in the financing transaction discussed in Note 4.
The board of directors concurrently authorized the Company to sell up to 3,428,571 additional shares of common stock in a subsequent
closing completed on July 27, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 6 - INCOME TAXES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The income tax provision (benefit) consists
of the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Year Ended</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 65%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; border-bottom: Black 1pt solid; text-align: center">June 30, 2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold">Federal</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 50%; font: 10pt Times New Roman, Times, Serif; padding-left: 0.12in">Current <BR></TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="width: 12%; font: 10pt Times New Roman, Times, Serif; text-align: right">-0-</TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">Deferred</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(68,904</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">State and Local</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-left: 0.12in">Current <BR></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">-0-</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; padding-left: 0.12in">Deferred</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(10,133</TD><TD STYLE="font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.12in">Change in valuation allowance</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">79,037</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 0.12in">Income tax provision (benefit)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-0-</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">The Company&rsquo;s deferred tax assets
consisted of the effects of temporary differences attributable to the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Year Ended</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 65%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; border-bottom: Black 1pt solid; text-align: center">June 30, 2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left">Deferred tax assets</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 50%; font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.12in">Net operating loss carryovers</TD><TD STYLE="width: 1%; font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">$</TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">79,037</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-size: 10pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-left: 0.12in">Total deferred tax assets</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">79,037</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.12in">Valuation allowance</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">(79,037</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt">Deferred tax asset, net of valuation allowance</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-0-</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Period from May 10, 2012 (inception)
to June 30, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">As of June 30, 2012,
the Company had federal and state net operating loss carryovers of approximately $202,658, which expire in 2033.The net operating
loss carryover may be subject to limitation under Internal Revenue Code section 382, should there be a greater than 50% ownership
change as determined under the regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In assessing the realization
of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets
will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during
the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax
liabilities, projected future taxable income and taxing strategies in making this assessment. The Company has determined that,
based on objective evidence currently available, it is more likely than not that the deferred tax assets will be realized in future
periods. Accordingly, the Company has provided a valuation allowance for the full amount of the deferred tax assets at June 30,
2012. As of June 30, 2012, the change in valuation allowance is $79,037.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The expected tax expense
(benefit) based on the statutory rate is reconciled with actual tax expense (benefit) as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&#9;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 65%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt">&nbsp;</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; border-bottom: Black 1pt solid; text-align: center">June 30, 2012</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 50%; font-size: 10pt; text-align: left; padding-left: 0.05in">Statutory federal income tax rate</TD><TD STYLE="width: 1%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right">(34.0</TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left">%)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">State taxes, net of federal tax benefit</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">(5.0</TD><TD STYLE="font-size: 10pt; text-align: left">%)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-left: 0.05in">Warrant liability</TD><TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; text-align: right">1.7</TD><TD STYLE="font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Change in valuation allowance</TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-size: 10pt; text-align: right">37.3</TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; text-align: left">%</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; padding-bottom: 1pt; padding-left: 0.05in">Income tax provision (benefit)</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: right">-0-</TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; text-align: left">%</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 7 - SUBSEQUENT EVENTS</B></P>

<P STYLE="color: #A0A0A4; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Series A Convertible
Preferred Stock:</I></B><FONT STYLE="color: #A0A0A4"> </FONT><FONT STYLE="color: windowtext">On July 13, 2012 the</FONT> Company
filed a Certificate of Designation with the Secretary of State of Delaware to authorize the issuance of up to 29,000,000 shares
of preferred stock, par value $0.0001 which have been designated as Series A Preferred Stock with such rights and preferences designated
in the Company&rsquo;s Certificate of Designation (the &ldquo;Series A Preferred Stock&rdquo;). In the event of any liquidation,
dissolution, or winding up of the Corporation, whether voluntary or involuntary, or in the event of its insolvency, and after provision
for payment of all debts and liabilities of the Company in accordance with the Delaware General Corporation Law, any remaining
assets of the Company shall be distributed pro rata to the holders of common stock and the holders of Series A Preferred Stock
as if the Series A Preferred Stock had been converted into shares of common stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-align: justify; text-indent: 30pt"><B><I>Conversion
of Common Stock into Preferred Stock</I></B>: On July 16, 2012, the Company entered into an exchange agreement whereby the Company
offered to all of its stockholders a right to exchange up to 99% of their shares of common stock for the same number of shares
of Series A Preferred Stock, $0.0001 par value and gave the holders of its warrants the right to elect to exchange the common stock
underlying such warrants for Series A preferred stock. On the same date common stock holders exchanged 13,925,154 shares of $0.0001
par value common stock into 13,925,154 shares of Series A Preferred Stock with a par value of $0.0001 per share. <FONT STYLE="color: windowtext">The
exchange did not have any impact on the Company&rsquo;s consolidated financial statements as the benefit of exchanging the common
for the preferred is nominal. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt"><B><I>Purchase
of Patents:</I></B></FONT> <FONT STYLE="font-size: 10pt">On June 20, 2012, Bascom entered in to a non-binding patent purchase agreement
(&ldquo;PPA&rdquo;) with an unrelated individual to purchase certain patents and patent applications for a cash consideration of
$2.1 million. The closing of the transaction was subject to certain seller&rsquo;s compliance obligations to be fulfilled within
14 days of the PPA and certain other conditions. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.05pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.05pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Period from May 10, 2012 (inception)
to June 30, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.05pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-align: justify; text-indent: 30pt">On July 9, 2012,
the Company completed the purchase for total cash consideration of $2.1 million with possible future cash payments within 30 days
after each calendar quarter where the Company pays to the seller a portion of cash compensation received by the Company in consideration
for the sale, licensing and/or endorsement by the Company of the patents in cash. The future cash payments are subject to certain
conditions pursuant to the PPA. In addition, the seller is granted the right to convert possible future cash payments into equity
of the Company pursuant to the term set forth in PPA.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-align: justify; text-indent: 30pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-align: justify; text-indent: 30pt">The Company
evaluated the ASC 805 &ldquo;Business Combination&rdquo; (&ldquo;ASC 805&rdquo;) guidance and determined that the acquisition of
patents and patent applications is considered as asset acquisitions as there were no productive inputs or processes that accompanied
the patents for them to be used in conducting a business.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 6pt; text-align: justify; text-indent: 30pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Additional Private
Placement: </I></B> Pursuant to the sole director&rsquo;s consent on May 30, 2012, the Company, on July 26, 2012, sold additional
senior notes to a related party for $750,000 in face value bearing interest at the rate of .28% per annum and payable on June 12,
2014. Simultaneously, on the same date, the Company issued 3,428,571 shares of common stock and warrants to acquire 1,285,714 shares
of common stock at an exercise price of $0.75 per share with a life of seven years. The shares of the common stock (including the
common stock underlying the warrants) are convertible into Series A Preferred Stock at the option of the holder in accordance with
the exchange agreement in place as of July 16, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The warrants issued
in connection with July 26, 2012 funds raised by issuing senior notes, are subject to full ratchet anti-dilution protection if
the Company sells shares or share-indexed financing instruments at less than the $0.75 exercise price. The warrants issued in this
financing arrangement did not meet the conditions for equity classification and are required to be classified as a derivative liability,
at fair value using Binomial Lattice option-pricing model.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The proceeds from the
notes payable will be allocated among the fair valuation of the warrants, shares of the common stock and the remaining balance
to the notes payable in accordance with the provisions of ASC 470.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Employment Agreements:
</I></B>On July 26, 2012, the Company entered into an employment agreement, effective August 1, 2012, with its chief executive
officer for a term of one year. The term of the employment agreement is automatically renewable for additional one-year periods.
In accordance with the agreement, the base salary of the chief executive officer is $225,000 per annum. In addition, the Company
agreed to pay $150,000 as a signing bonus payable in two equal installments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 7, 2012,
the Company entered into an employment agreement, effective August 1, 2012, with its chief operating officer for a term of one
year. The term of the employment agreement is automatically renewable for additional one-year periods. In accordance with the agreement,
the base salary of the chief operating officer is $225,000 per annum. In addition, the Company agreed to pay $150,000 as a signing
bonus payable in installments of $100,000 and 50,000, respectively.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On August 22, 2012,
the Company entered into a consulting agreement, effective May 14, 2012, with its chairman of the board, who also serves as president,
secretary and treasurer of the Company, for a term effective until the next annual meeting of the Company. In accordance with the
agreement, the Company will pay a consulting fee in the amount of $5,000 per month for services rendered up to 10 hours per month.
For additional hours, the Company will pay $450 an hour.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Warrants Exercise:</I></B><I>
</I>On August 9, 2012 all 7,500,000 outstanding warrants were exercised at a price of $0.75 each for a total of $5,625,000. The
Company issued 4,114,287 shares of Series A preferred stock and 3,385,713 shares of common stock upon the exercise of warrants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Sale of Common
Stock:</I></B> On August 16, 2012, the Company sold 3,617,983 shares of common stock in a private placement to certain investors
for $1.50 per share for gross proceeds of approximately $5,427,000 before selling commissions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>LEXINGTON TECHNOLOGY GROUP, INC. AND
SUBSIDIARY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(A Development Stage Company)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Notes to Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>For the Period from May 10, 2012 (inception)
to June 30, 2012</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B><I>Proposed Merger:
</I></B>The Company is currently negotiating a possible merger agreement with a public company. The proposed merger is intended
to involve an exchange of all outstanding equity securities of the Company for equity securities of the public company and to result
in the Company becoming a wholly-owned subsidiary of the public company. The completion of the proposed merger is subject to a
number of conditions, including but not necessarily limited to, the approval of the public company&rsquo;s stockholders. There
is no assurance that the proposed merger will actually be consummated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>


<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>ANNEX A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>AGREEMENT AND PLAN
OF MERGER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>BY AND AMONG</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>DOCUMENT SECURITY SYSTEMS,
INC.,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>DSSIP, INC.,</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>LEXINGTON TECHNOLOGY
GROUP, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>AND</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>HUDSON BAY MASTER FUND
LTD. <FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: uppercase">(as Company Representative, and <BR>
solely
for the purposes of Sections 1.16 and 6.1(E) and ARTICLE VIII)</FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">Dated as of October
1, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">EXHIBITS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 16%; padding-right: 0; padding-left: 0.12in">EXHIBIT A</TD>
    <TD STYLE="width: 84%; padding-right: 0; padding-left: 0">Form of Escrow Agreement</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0.12in">EXHIBIT B</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">Form of<FONT STYLE="font-variant: small-caps"> </FONT>Certificate of Merger</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0.12in">EXHIBIT C</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">Form of Certificate of Designations</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0.12in">EXHIBIT D</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">Form of $.02 Warrant</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0.12in">EXHIBIT E</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">Form of New Warrant</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0.12in">EXHIBITS F-1- F-6</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">Employment Amendments</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 13.5pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font-variant: small-caps">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"><FONT STYLE="font-variant: small-caps">&nbsp;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 13.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 13.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 13.5pt"><FONT STYLE="font-variant: small-caps"><U>Defined
terms index</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 50%; padding-right: 0; padding-left: 0">Acceptable NDA</TD>
    <TD STYLE="width: 50%; padding-right: 0; padding-left: 0; text-align: right">4.2(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Action</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.12</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Additional Shares</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.13</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Affiliates</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.21(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Agreement</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Agreement Press Release</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.1(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">BCL</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Business Day</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.2</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Certificate of Merger</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.3</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Closing</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.2</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Closing Date</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.2</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Code</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Common Stock Exchange Ratio</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Acquisition Proposal</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">4.2(e)(i)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Board Recommendation</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.1(e)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Capital Stock</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(c)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Certificate</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(c)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Certificates</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(c)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Common Stock</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Disclosure Schedule</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Article II</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Employee</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.4(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Employee Plans</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.16(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Indemnified Person</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.10(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Intellectual Property</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.20(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Material Adverse Effect</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Article II</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Material Contracts</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.9(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Option Plan</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.11(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Representative</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Special Meeting</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.1(e)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Stockholder</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(c)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Stockholder Approval</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.4(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Superior Proposal</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">4.2(e)(ii)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Termination Fee</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">7.3(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Company Warrants</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.3(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Confidential Information</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.2(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Conversion Shares</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">DGCL</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Effective Time</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.3</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Equitable Exceptions</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.4(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">ERISA</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.16(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">ERISA Affiliate</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.16(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Escrow Agent</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Escrow Agreement</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Escrow Shares</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.8</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Exchange Act</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.21(a)</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; width: 50%">Exchanged Shares</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right; width: 50%">5.14</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">GAAP</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.6</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Governmental Authority</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.4(d)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Insurance Policies</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.19(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Interim Period</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">4.1(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Key Employees</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">3.13(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">knowledge of the Company</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Article II</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">knowledge of the Parent</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Article III</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Liens</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.2(d)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Material Permits</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.11(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Merger</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Merger Consideration</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(c)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Merger Form 8-K</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.1(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Merger Sub</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Merger Sub Common Stock</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.12</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Most Recent Balance Sheet</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.6</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Most Recent Balance Sheet Date</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.6</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">NDA</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">4.2(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">New Warrants</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.13</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Other Filings</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.1(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Acquisition Proposal</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">4.3(e)(i)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Board Recommendation</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.1(d)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Board Recommendation Change</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">4.3(c)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Common Stock</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Disclosure Schedule</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Article III</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Employee Plans</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">3.22</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Indemnified Person</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.9(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Material Adverse Effect</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Article III</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Material Contracts</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">3.9</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Permits</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">3.10(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Preferred Stock</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent SEC Reports</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">3.5(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Special Meeting</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.1(d)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Stockholder Approval</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">3.4(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Superior Proposal</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">4.3(e)(ii)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent Termination Fee</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">7.3(c)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent&rsquo;s Most Recent Balance Sheet</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">3.6</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Parent&rsquo;s Most Recent Balance Sheet Date</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">3.6</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Parties</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Party</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">Preamble</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Person</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.18</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Personal Property</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.17(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Press Release</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.1(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Private Placement</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.13</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Proxy Statement</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.27</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; width: 50%">Registration Statement</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right; width: 50%">3.18</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Representatives</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">4.2(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Restated Parent Certificate</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">3.4(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Returns</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.15(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">S-3</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">5.14</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Securities Act</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.2(d)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Series A Stock</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.7(b)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Subsidiary</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.2(f)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Surviving Corporation</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">1.1</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0">Takeover Laws</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">4.2(a)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0">Tax</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: right">2.15(a)</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">AGREEMENT AND PLAN
OF MERGER<B> </B>(this &ldquo;<B>Agreement</B>&rdquo;), made and entered into as of  October
1, 2012 by and among DOCUMENT SECURITY
SYSTEMS, INC., a New York corporation (&ldquo;<B>Parent</B>&rdquo;), DSSIP, INC., a Delaware corporation and wholly owned Subsidiary
of Parent (&ldquo;<B>Merger Sub</B>&rdquo;), LEXINGTON TECHNOLOGY GROUP, INC., a Delaware corporation (the &ldquo;<B>Company</B>&rdquo;)
and, solely for the purposes of Sections 1.16 and 6.1(e) and Article VIII, Hudson Bay Master Fund Ltd., as representative of the
Company Stockholders (the &ldquo;<B>Company Representative</B>&rdquo;). Parent, Merger Sub and the Company are sometimes referred
to herein each individually as a &ldquo;<B>Party</B>&rdquo; and, collectively, as the &ldquo;<B>Parties</B>.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">WHEREAS, the Boards
of Directors of Parent, Merger Sub and the Company have each declared it to be advisable and in the best interests of each corporation
and their respective stockholders that Parent and the Company combine in order to advance their long-term business interests;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">WHEREAS, the Boards
of Directors of Parent, Merger Sub and the Company have each approved this Agreement and the merger of Merger Sub with and into
the Company (the &ldquo;<B>Merger</B>&rdquo;), in accordance with the Business Corporation Law of the State of New York (the &ldquo;<B>BCL</B>&rdquo;)
and the General Corporation Law of the State of Delaware (the &ldquo;<B>DGCL</B>&rdquo;) and the terms and conditions set forth
herein, which Merger will result in, among other things, the surviving company becoming a wholly owned subsidiary of Parent and
the Company stockholders becoming stockholders of Parent;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">WHEREAS, for federal
income tax purposes, it is intended that the Merger qualify as a tax-free reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the &ldquo;<B>Code</B>&rdquo;) and the regulations promulgated thereunder;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">WHEREAS, as a condition
to the willingness of, and an inducement to Company to enter into this Agreement, contemporaneously with the execution and delivery
of this Agreement certain holders of shares of Parent&rsquo;s Common Stock and the Company Common Stock have entered into voting
agreements (the &ldquo;<B>Voting Agreements</B>&rdquo;); and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">WHEREAS, as a condition
to the Closing of the transactions contemplated by this Agreement, Parent, a mutually acceptable escrow agent (the &ldquo;<B>Escrow
Agent</B>&rdquo;) and the Company Representative shall enter into an Escrow Agreement, in substantially the form attached hereto
as <U>Exhibit A</U> (the &ldquo;<B>Escrow Agreement</B>&rdquo;), as of the Closing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">NOW, THEREFORE, in
consideration of the foregoing and the mutual representations, warranties, covenants and agreements herein contained, and other
good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">ARTICLE
I<BR>
<BR>
</FONT>THE MERGER</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>The Merger</U>. At the Effective Time (as defined in Section 1.3), in accordance with the DGCL and the terms and
conditions of this Agreement, Merger Sub shall be merged with and into the Company. From and after the Effective Time, the separate
corporate existence of Merger Sub shall cease and the Company, as the surviving corporation in the Merger, shall continue its existence
under the DGCL as a wholly owned subsidiary of Parent. The Company as the surviving corporation after the Merger is hereinafter
sometimes referred to as the &ldquo;<B>Surviving Corporation</B>.&rdquo;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Closing</U>. Unless this Agreement shall have been terminated and the transactions contemplated by this Agreement
abandoned pursuant to the provisions of Article VII, and subject to the satisfaction or waiver, as the case may be, of the conditions
set forth in Article VI, the closing of the Merger and other transactions contemplated by this Agreement (the &ldquo;<B>Closing</B>&rdquo;)
shall take place at 10:00 a.m. (eastern standard time) on a date to be mutually agreed upon by the Parties (the &ldquo;<B>Closing
Date</B>&rdquo;), which date shall be no later than the second Business Day (as defined below) after all the conditions set forth
in Article VI (excluding conditions that, by their nature, cannot be satisfied until the Closing) shall have been satisfied or
waived in accordance with Section 7.5, unless another time and/or date is agreed to in writing by the Parties. The Closing shall
take place at the offices of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., 666 Third Avenue, New York, New York 10017. For
purposes of this Agreement, &ldquo;<B>Business Day</B>&rdquo; shall mean any day on which banks are permitted to be open in New
York, New York.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Effective Time</U>. Subject to the provisions of this Agreement, on the Closing Date or as soon thereafter as
is practicable the Parties shall cause the Merger to become effective by executing and filing in accordance with the DGCL a certificate
of merger with the Secretary of State of the State of Delaware in substantially the form of <U>Exhibit</U> <U>B</U><B> </B>attached
hereto (the &ldquo;<B>Certificate of Merger</B>&rdquo;), the date and time of such filing, or such later date and time as may be
agreed upon by the Parties and specified therein, being hereinafter referred to as the &ldquo;<B>Effective Time</B>.&rdquo;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.4<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Effect of the Merger</U>. At the Effective Time, the Merger shall have the effects set forth in this Agreement
and in the applicable provisions of the DGCL. Without limiting the generality of the foregoing, and subject thereto, at the Effective
Time all the assets, properties, rights, privileges, immunities, powers and franchises of the Company and Merger Sub shall vest
in the Surviving Corporation, and all debts, liabilities and duties of the Company and Merger Sub shall become the debts, liabilities
and duties of the Surviving Corporation.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.5<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Certificate of Incorporation and Bylaws of the Surviving Corporation</U>. From and after the Effective Time and
without further action on the part of the Parties, the Certificate of Incorporation and Bylaws of the Company shall be the Certificate
of Incorporation and Bylaws of the Surviving Corporation.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.6<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Directors and Officers</U>. The persons set forth on Schedule 1.6 shall be shall be the initial directors and
officers of the Surviving Corporation immediately following the Effective Time, each to hold office in accordance with the Certificate
of Incorporation and the Bylaws of the Surviving Corporation until their respective successors are duly elected or appointed and
qualified or until their death, resignation or removal in accordance with the Surviving Corporation&rsquo;s Certificate of Incorporation
and Bylaws.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.7<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Conversion of Company Common Stock, Etc</U>. At the Effective Time, by virtue of the Merger and without any action
on the part of the Parties or the holders of the following securities:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Subject to Section 1.7(b), each share of (i) the Company&rsquo;s common stock, par value $0.0001 per share (&ldquo;<B>Company
Common Stock</B>&rdquo;) and (ii) the Company&rsquo;s Series A Convertible Preferred Stock, par value $0.0001 per share (the &ldquo;<B>Series
A Stock</B>&rdquo;), issued and outstanding immediately prior to the Effective Time (other than any shares of Company Common Stock
or Series A Stock to be canceled and retired pursuant to Section 1.9) shall be converted automatically into the right to receive
that number (expressed as a decimal) of fully paid and non-assessable (A) shares of common stock of Parent, par value $0.02 per
share (the &ldquo;<B>Parent Common Stock</B>&rdquo;), (B) New Warrants (as more fully set forth in Section 1.13), (C) Escrow Shares
(as more fully set forth in Section 1.8) and, as applicable, shares of Parent Series A Convertible Preferred Stock (&ldquo;<B>Parent
Preferred Stock</B>&rdquo;), determined by multiplying each of (1) 17,250,000 plus the number of Additional Shares (as hereafter
defined) and Exchanged Shares (as hereafter defined), if any, (2) 4,859,894 and (3) 7,100,000 by a fraction, the numerator of which
shall be one and the denominator of which shall be the sum of (x) the number of shares of Company Common Stock plus (y) the number
of shares of Series A Stock, in each case issued and outstanding immediately prior to the Effective Time (such fraction referred
to as the &ldquo;<B>Common Stock Exchange Ratio</B>&rdquo;); provided, however, that the holders of Series A Stock who meet the
Beneficial Ownership Condition (as hereafter defined) shall receive for each share of Series A Stock the same Merger Consideration
as outlined above except that such holders shall receive a combination of Parent Common Stock as set forth in Section 1.7(a)(ii)(A)
above and Parent Preferred Stock that is convertible into (or if the proposal to authorize Parent Preferred Stock is not approved,
$.02 Warrants exercisable for) that number of shares of Parent Common Stock they would have received under Section 1.7(a)(ii)(A)
if they had been a holder of Company Common Stock immediately prior to the Effective Time in such amounts that would enable such
holders, after giving effect to the Merger, to beneficially own no more than 9.99% of Parent Common Stock upon consummation of
the Merger.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Notwithstanding anything to the contrary set forth herein, upon consummation of the Merger, only those holders of
Series A Stock who would, after giving effect to the Merger and receipt of the Merger Consideration, beneficially own more than
9.99% of Parent Common Stock (the &ldquo;<B>Beneficial Ownership Condition</B>&rdquo;) will receive Parent Preferred Stock or $.02
Warrants (as defined below), as applicable. Those holders of Series A Stock who do not meet the Beneficial Ownership Condition
and will not receive Parent Preferred Stock or $.02 Warrants in accordance with the previous sentence, will receive Parent Common
Stock as contemplated by Section 1.7(a)(ii)(A) and their share of the other types of Merger Consideration in exchange for their
Series A Stock based on the Common Stock Exchange Ratio. The Parent Preferred Stock to be issued to the holders of the Company
Series A Stock who meet the Beneficial Ownership Condition shall have the rights, preferences and privileges as set forth in the
Certificate of Designations as set forth in <U>Exhibit</U> <U>C</U> attached hereto. The shares of Parent Common Stock that are
issuable upon conversion of the Parent Preferred Stock are referred to herein as the &ldquo;<B>Conversion Shares</B>.&rdquo; If
Parent&rsquo;s stockholders approve the issuance of the Merger Consideration, but do not approve the authorization of the Parent
Preferred Stock, then the holders Series A Stock that satisfy the Beneficial Ownership Condition shall receive warrants to purchase
Parent Common Stock (the &ldquo;<B>$.02 Warrants</B>&rdquo;) in the form attached hereto as <U>Exhibit D</U> hereto and in accordance
with the foregoing provisions of this Section 1.7.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>From and after the Effective Time, all shares of Company Common Stock and Series A Stock (together, &ldquo;<B>Company
Capital Stock</B>&rdquo;) (other than any shares of Company Capital Stock to be canceled and retired pursuant to Section 1.9) shall
be deemed canceled and shall cease to exist, and each holder (each, a &ldquo;<B>Company Stockholder</B>&rdquo;) of a certificate
which previously represented any such share of Company Capital Stock (each, a &ldquo;<B>Company Certificate</B>&rdquo; and, collectively,
the &ldquo;<B>Company Certificates</B>&rdquo;) shall cease to have any rights with respect thereto except for the right to receive
the Merger Consideration in accordance with Section 1.16 or as otherwise set forth herein or under applicable law. The holders
of Company Capital Stock immediately prior to the Effective Time shall be entitled to receive the Merger Consideration into which
the shares of Company Capital Stock held by each of them were converted pursuant to this Section 1.7 upon delivery of the certificates
representing such shares of Company Capital Stock to Parent. The shares of Parent Common Stock and Parent Preferred Stock, together
with the Additional Shares, Exchanged Shares, Escrow Shares, New Warrants and the $.02 Warrants (if applicable) are collectively
referred to herein as the &ldquo;<B>Merger Consideration</B>.&rdquo;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.8<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Escrow</U>. At the Effective Time, Parent shall deposit, or shall cause to be deposited with the Escrow Agent,
7,100,000 shares of Parent Common Stock (the &ldquo;<B>Escrow Shares</B>&rdquo;). The Escrow Shares shall be held in an escrow
account in accordance with the terms of the Escrow Agreement and be released to the Company Stockholders (pro rata on a fully-diluted
basis as of the Effective Time) if and when the closing price per share of Parent Common Stock exceeds $5.00 per share (as adjusted
for stock splits, stock dividends and similar events) for 40 trading days within a continuous 90 trading day period following the
Closing Date. If within one year following the Closing Date, such threshold is not achieved, the shares of Parent Common Stock
constituting the Escrow Shares shall be canceled and extinguished and returned to the treasury of Parent.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.9<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Cancellation of Shares</U>. At the Effective Time, each share of Company Capital Stock either held in the Company&rsquo;s
treasury or owned by Parent or any direct or indirect wholly owned Subsidiary (as defined in Section 2.2(f)) of Parent or the Company,
in each case, immediately prior to the Effective Time, if any, shall be canceled and extinguished without any conversion thereof
or payment therefor.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.10<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Further Ownership Rights in Company Stock</U>. The Merger Consideration to be issued upon the surrender for
exchange of Company Capital Stock in accordance with the terms of this Article I shall be deemed to have been issued in full satisfaction
of all rights pertaining to such Company Capital Stock under this Article I. If, after the Effective Time, Company Certificates
are presented to Parent or Surviving Corporation for any reason, they shall be canceled and exchanged as provided in this Article
I.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.11<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Company Stock Options and Warrants</U>. At the Effective Time, there shall be no outstanding options or warrants
to purchase capital stock of the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.12<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Capital Stock of Merger Sub</U>. Each share of common stock of Merger Sub, no par value per share (the &ldquo;<B>Merger
Sub</B> <B>Common Stock</B>&rdquo;) issued and outstanding immediately prior to the Effective Time shall, from and after the Effective
Time, remain outstanding and shall constitute the only outstanding shares of common stock of the Surviving Corporation.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.13<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Issuance of Parent Warrants</U>. At the Effective Time, Parent will issue to the Company Stockholders (on a <I>pro
rata</I> as-converted basis) an aggregate of 4,859,894 warrants to purchase an aggregate of 4,859,894 shares of Parent Common Stock
with an exercise price of $4.80 per share and a term of five (5) years after the Closing Date, in the form attached hereto as <U>Exhibit
E</U> (the &ldquo;<B>New Warrants</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.14<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Adjustments to Exchange Ratios and Share Amounts</U>. Notwithstanding any other provision of this Agreement, the
Common Stock Exchange Ratio, the number of each of the Conversion Shares, the number and exercise price of the New Warrants, the
number of Additional Shares (including the purchase price therefor as set forth in Section 5.13(b)), the number of Exchanged Shares,
the Escrow Shares and the number and exercise price of the $.02 Warrants, shall not be adjusted, without the prior written consent
of the Company and Parent, provided, however, that such Common Stock Exchange Ratio, the number of each of the Conversion Shares,
the number and exercise price of the New Warrants, the number of Additional Shares (including the purchase price therefor as set
forth in Section 5.13(b)), the number of Exchanged Shares, the Escrow Shares and the number and exercise price of the $.02 Warrants
shall be equitably adjusted to reflect appropriately the effect of any stock split, reverse stock split, stock dividend (including
any dividend or distribution of securities convertible into Parent Common Stock or Company Capital Stock), extraordinary cash dividends,
reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to Parent
Common Stock or Company Capital Stock occurring on or after the date hereof and prior to the Effective Time.&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.15<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Fractional Shares</U>. No certificate or scrip representing fractional shares of Parent Common Stock, Parent
Preferred Stock, New Warrants or $.02 Warrants shall be issued upon the surrender of Company Certificates for exchange, and such
fractional share interests will not entitle the owner thereof to vote or to any other rights of a stockholder of Parent. Notwithstanding
any other provision of this Agreement, each holder of shares of Company Capital Stock who would otherwise be entitled to receive
a fraction of a share of Parent Common Stock, Parent Preferred Stock, New Warrants or $.02 Warrants (after taking into account
all Company Certificates delivered by such holder) shall receive from Parent, in lieu thereof, the next highest number of whole
shares of Parent Common Stock, Parent Preferred Stock, New Warrants or $.02 Warrants, as applicable.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.16<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Exchange of Certificates</U>. As promptly as practicable before or after the Effective Time, Parent (or its designee
or exchange agent, if reasonably determined by the parties to be necessary) will send to each Company Stockholder a letter of transmittal
(the form of which shall be mutually agreed by and between the Parent and the Company, each acting reasonably) for use in enabling
Parent to issue one or more certificates representing the prescribed number of shares of Parent Common Stock or Parent Preferred
Stock or New Warrants or $.02 Warrants, as the case may be, to which such Company Stockholder may be entitled as determined in
accordance with the provisions of this Agreement. Upon delivery of a duly executed letter of transmittal, such Company Stockholder
will be entitled to receive the portion of the Merger Consideration to which such Company Stockholder may be entitled (as determined
in accordance with the provisions of this Agreement). It is intended that such letter of transmittal will contain provisions requiring
each executing Company Stockholder thereof to (a) acknowledge and agree to be bound by the terms and conditions applicable to the
Company Stockholders, including, without limitation Section 1.7 of this Agreement, (b) confirm the appointment of the Company Representative,
(c) provide notice and contact information in order for the Escrow Agent to distribute any Escrow Shares to such Company Stockholder
in accordance with the terms of the Escrow Agreement, (d) make representations and warranties with respect to ownership of the
Company Capital Stock owned or held by such Company Stockholder at that time, and (e) waive all appraisal or dissenter&rsquo;s
rights, in each case, in a form reasonably satisfactory to Parent and as a condition precedent to Parent&rsquo;s obligation to
Merger Consideration to such Company Stockholder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.17<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Liability</U>. Notwithstanding any other provision of this Agreement, none of the Parent or the Surviving Corporation
shall be liable to a holder of shares of Company Capital Stock for any Merger Consideration or any amount of cash properly paid
to a public official pursuant to any applicable abandoned property, escheat or similar law.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.18<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Lost Certificates</U>. If any Company Certificate shall have been lost, stolen or destroyed, upon the making of
an affidavit (in form and substance reasonably acceptable to Parent) of that fact by the Person claiming such Company Certificate
to be lost, stolen or destroyed and, if reasonably required by Parent, the posting by such Person of a bond, in such reasonable
amount as Parent may direct, as indemnity against any claim that may be made against it with respect to such Company Certificate,
the Parent will issue, in exchange for such lost, stolen or destroyed Company Certificate, the applicable portion of the Merger
Consideration as contemplated by this Article I. For purposes of this Agreement, &ldquo;<B>Person</B>&rdquo; means any natural
person, Governmental Authority, corporation, general or limited partnership, limited liability company, joint venture, trust, association
or unincorporated entity of any kind.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.19<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Taking of Necessary Action; Further Action</U>. If, at any time and from time to time after the Effective Time,
any further action is necessary or desirable to carry out the purposes of this Agreement and to vest in the Surviving Corporation
full right, title and possession of all assets, properties, rights, privileges, powers and franchises of the Company and Merger
Sub, the officers and directors of the Surviving Corporation shall be and are fully authorized and directed, in the name of and
on behalf of the Company and Merger Sub, to take, or cause to be taken, all such lawful and necessary action as is not inconsistent
with this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">ARTICLE
II<BR>
<BR>
</FONT>REPRESENTATIONS AND WARRANTIES OF THE COMPANY</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as set forth
in the disclosure schedule provided by the Company to Parent on the date hereof and accepted in writing by Parent (the &ldquo;<B>Company
Disclosure Schedule</B>&rdquo;), the Company, on behalf of itself and its Subsidiaries (as defined in Section 2.2(f)) represents
and warrants to Parent that the statements contained in this Article II are true, complete and correct. The Company Disclosure
Schedule shall be arranged in paragraphs corresponding to the numbered and lettered paragraphs contained in this Article II, and
the disclosure in any paragraph shall be deemed to qualify only the corresponding paragraph of this Article II, unless a reasonable
person would determine that the disclosure contained in such paragraph contains enough information to qualify or otherwise apply
to other paragraphs of this Article II. As used in this Agreement, a &ldquo;<B>Company Material Adverse Effect</B>&rdquo;<B> </B>means
any change, event or occurrence that has a material adverse effect on the condition (financial or otherwise), business, operations,
prospects, properties, assets or liabilities of the Company and its Subsidiaries, taken as a whole; provided, that, none of the
following, in and of itself or themselves, nor any effect arising out of or resulting from the following shall constitute or be
taken into account in determining whether a Company Material Adverse Effect has occurred or may, would or could occur: (A) changes,
events, occurrences or effects generally affecting the economy or financial, credit, banking, currency, commodities or capital
markets generally in the United States or other countries or regions, including changes in currency exchange rates, interest rates,
monetary policy or inflation; (B) changes, events, occurrences or effects generally affecting the industries in which the Company
and its Subsidiaries conduct operations; (C) changes or prospective changes in law, in applicable regulations of any Governmental
Authority, in United States generally accepted accounting principles or other applicable accounting standards or changes or prospective
changes in the interpretation or enforcement of any of the foregoing, or any changes or prospective changes in general legal, regulatory
or political conditions; (D) any act of God or other calamity, national or international, political or social conditions (including
the engagement by any country in hostilities, whether commenced before or after the date hereof, and whether or not pursuant to
the declaration of a national emergency or war), or the occurrence of any military or terrorist attack (E) the negotiation, execution,
announcement or performance of this Agreement or the consummation of the transactions contemplated by the Agreement, including
the impact thereof on relationships, contractual or otherwise, with customers, suppliers, distributors, partners, employees or
regulators; (F) any action taken by the Company or its Subsidiaries that is required by this Agreement or taken at Parent's written
request, or the failure to take any action by the Company or its Subsidiaries if that action is prohibited by this Agreement; or
(G) any change resulting or arising from the identity of, or any facts or circumstances relating to, Parent, Merger Sub or their
respective Affiliates. Whenever a representation or warranty made by the Company herein refers to the &ldquo;<B>knowledge of the
Company</B>,&rdquo; or words to such effect, such knowledge shall be deemed to consist only of the actual knowledge of the executive
officers of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Organization and Qualification</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Company is a corporation duly organized, validly existing and in corporate and tax good standing under the laws
of the State of Delaware. The Company is duly qualified or licensed as a foreign corporation to conduct business, and is in corporate
and tax good standing in each jurisdiction is listed in Section 2.1(a) of the Company Disclosure Schedule, which is a complete
list of all such jurisdictions, where the character of the properties and other assets owned, leased or operated by it, or the
nature of its activities, makes such qualification or licensing necessary, except where the failure to be so qualified, licensed
or in good standing, individually or in the aggregate, has not had and would not have a Company Material Adverse Effect. Each such
jurisdiction is listed in Section 2.1(a) of the Company Disclosure Schedule.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Company has all requisite corporate power and authority to carry on the businesses in which it is engaged and
to own and use the properties owned and used by it. The Company has made available to Parent true, complete and correct copies
of its Certificate of Incorporation and Bylaws, each as amended to date. The Company is not in default under or in violation of
any provision of its Certificate of Incorporation or Bylaws.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Subsidiaries</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 2.2(a) of the Company Disclosure Schedule sets forth a true, complete and correct list of each Subsidiary
of the Company. For purposes of clarification, the Company has only one (1) Subsidiary and accordingly any reference in this Agreement
to &ldquo;Subsidiaries&rdquo; of the Company or &ldquo;each Subsidiary&rdquo; of the Company shall mean only such Subsidiary identified
on Section 2.2(a) of the Company Disclosure Schedule.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each Subsidiary of the Company is a limited liability company duly organized, validly existing and in good standing
under the laws of the State of Virginia, and is duly qualified or licensed to conduct business, and is in good standing, in each
jurisdiction listed in Section 2.2(b) of the Company Disclosure Schedule, which is a complete list of all such jurisdictions, where
the character of the properties and other assets owned, leased or operated by it, or the nature of its activities, makes such qualification
or licensing necessary, except where the failure to be so qualified, licensed or in good standing, individually or in the aggregate,
has not had and would not reasonably be expected to have a Company Material Adverse Effect.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each Subsidiary of the Company has all requisite power and authority to carry on the businesses in which it is engaged
and to own and use the properties owned and used by it. The Company has made available to Parent true, complete and correct copies
of the Certificate of Incorporation and Bylaws or similar organizational documents of each Subsidiary, each as amended to date.
No Subsidiary is in default under or in violation of any provision of its organizational documents.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as set forth on Section 2.2(d) of the Company Disclosure Schedule, all of the issued and outstanding shares
of capital stock of, or other equity interests in, each Subsidiary of the Company are: (i) duly authorized, validly issued, fully
paid, non-assessable; (ii) owned directly by the Company free and clear of all liens, claims, security interests, pledges and encumbrances
of any kind or nature whatsoever (collectively, &ldquo;<B>Liens</B>&rdquo;); and (iii) free of any restriction, including, without
limitation, any restriction which prevents the payment of dividends to the Company or any other Subsidiary of the Company, or which
otherwise restricts the right to vote, sell or otherwise dispose of such capital stock or other ownership interest, other than
restrictions under the Securities Act of 1933, as amended (the &ldquo;<B>Securities Act</B>&rdquo;) and state securities laws.
Except as set forth on Section 2.2(d) of the Company Disclosure Schedule, there are no outstanding or authorized options, warrants,
rights, agreements or commitments to which the Company or its Subsidiaries is a party or which are binding on any of them providing
for the issuance, disposition or acquisition of any capital stock of any Subsidiary of the Company. There are no outstanding stock
appreciation, phantom stock or similar rights with respect to any Subsidiary of the Company. Except as set forth on Section 2.2(d)
of the Company Disclosure Schedule, there are no voting trusts, proxies or other agreements or understandings with respect to the
voting of any capital stock of any Subsidiary of the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Company does not control, directly or indirectly, or have any direct or indirect equity participation or similar
interest in any corporation, partnership, limited liability company, joint venture, trust or other business association which is
not set forth on Section 2.2(e) of the Company Disclosure Schedule.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>For purposes of this Agreement, the term &ldquo;<B>Subsidiary</B>&rdquo; means, with respect to any Person, any corporation,
limited liability company, or other organization, whether incorporated or unincorporated, of which: (i) such Person (or any other
Subsidiary of such Person) is a general partner (excluding partnerships, the general partnerships of which held by such Person
or Subsidiary of such Person do not have a majority of the voting interest of such partnership); or (ii) at least a majority of
the securities or other equity interests having by their terms ordinary voting power to elect a majority of the board of directors,
managers, or others performing similar functions with respect to such corporation, limited liability company, or other organization,
is directly or indirectly owned or controlled by such Person or by any one or more of its Subsidiaries, or by such Person and one
or more of its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Capital Structure</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The authorized Company Capital Stock consists of (i) 100,000,000 shares of Company Common Stock; and (ii) 29,000,000
shares of Series A Stock.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>As of the date hereof: (i) 13,736,766 shares of Company Common Stock are issued and outstanding; (ii) 29,000,000
shares have been designated as Series A Stock, of which 18,039,441 shares are issued and outstanding, and 18,039,441 shares of
Company Common Stock are duly reserved for future issuance pursuant to conversions thereunder; (iii) no shares of Company Common
Stock are held in the treasury of the Company; and (iv) no shares of Company Common Stock are reserved for future issuance upon
exercise of options or warrants to purchase shares of the Company Capital Stock. Except as described above, as of the date hereof,
there are no shares of voting or non-voting capital stock, equity interests or other securities of the Company authorized, issued,
reserved for issuance or otherwise outstanding. Section 2.3(b) of the Company Disclosure Schedule sets forth a true, complete and
correct list of all holders of Company Capital Stock as of the date hereof indicating the number and class or series of Company
Capital Stock held by each of them and, for holders of Series A Stock, the number of shares of Company Common Stock (if any) into
which such Series A Stock is convertible, it being acknowledged and agreed by the parties that it is anticipated that the holders
of the Series A Stock may convert into Company Common Stock and a number of them are expected to do so on or prior to the Effective
Time.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>All outstanding shares of Company Capital Stock are, duly authorized, validly issued, fully paid and non-assessable,
and not subject to, or issued in violation of, any kind of preemptive, subscription or of similar rights, and were or will be issued
in compliance in all material respects with all applicable federal and state securities laws.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>There are no bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible
into securities having the right to vote) on any matters on which the Company stockholders may vote. Except as set forth on Section
2.3(d) of the Company Disclosure Schedule or as described in subsection (b) above, there are no outstanding securities, options,
warrants, calls, rights, commitments, agreements, arrangements or undertakings of any kind (contingent or otherwise) to which the
Company is a party or bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, additional
shares of capital stock or other voting securities of the Company or obligating the Company to issue, grant, extend or enter into
any agreement to issue, grant or extend any security, option, warrant, call, right, commitment, agreement, arrangement or undertaking.
Except as set forth in Section 2.3(d) of the Company Disclosure Schedule and as contemplated by Section 5.14, neither the Company
nor its Subsidiaries is subject to any obligation or requirement to provide funds for or to make any investment (in the form of
a loan or capital contribution) to or in any Person.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any shares
of capital stock (or options to acquire any such shares) or other security or equity interest of the Company. Except as set forth
in Section 2.3(e) of the Company Disclosure Schedule, there are no stock-appreciation rights, security-based performance units,
phantom stock or other security rights or other agreements, arrangements, commitments or understandings of any character (contingent
or otherwise) pursuant to which any Person is or may be entitled to receive any payment or other value based on the revenues, earnings
or financial performance, stock price performance or other attribute of the Company or its Subsidiaries or assets or calculated
in accordance therewith or to cause the Company or its Subsidiaries to file a registration statement under the Securities Act,
or which otherwise relate to the registration of any securities of the Company or its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as set forth in Section 2.3(f) of the Company Disclosure Schedule, there are no voting trusts, proxies or
other agreements, arrangements, commitments or understandings of any character to which the Company or its Subsidiaries or, to
the knowledge of the Company, is a party or by which the Company is bound with respect to the issuance, holding, acquisition, voting
or disposition of any shares of capital stock or other security or equity interest of the Company or its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.4<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Authority; No Conflict; Required Filings</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Company has all requisite corporate power and authority to execute and deliver this Agreement, to perform its
obligations hereunder and to consummate the Merger and other transactions contemplated hereby. The execution and delivery of this
Agreement, the performance of its obligations hereunder and the consummation of the Merger and other transactions contemplated
hereby, have been duly authorized by all corporate action on the part of the Company and no other corporate proceedings are necessary
other than, with respect to this Agreement and the Merger, the approval and adoption by the affirmative vote each of (i) the holders
of a majority of the outstanding Company Common Stock together with the holders of a majority of the outstanding shares of Series
A Stock, voting as a single class; and (ii) the holders of a majority of the outstanding shares of Series A Stock, voting separately
as a class in accordance with the DGCL and the Company&rsquo;s Certificate of Incorporation (collectively, the &ldquo;<B>Company
Stockholder Approval</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>This Agreement has been duly executed and delivered by the Company and constitutes a valid and binding obligation
of the Company, enforceable against it in accordance with its terms, subject only to: (i) the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting the enforcement of creditors&rsquo;
rights generally; (ii) general equitable principles (whether considered in a proceeding in equity or at law); (iii) an implied
covenant of good faith and fair dealing; and (iv) the extent that any provision relating to indemnity and/or contribution is contrary
to law or public policy as interpreted or applied by any court or governmental agency (collectively, the &ldquo;<B>Equitable Exceptions</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The execution and delivery of this Agreement do not, and the performance by the Company of its obligations hereunder
and the consummation of the Merger and other transactions contemplated hereby will not, conflict with or result in any violation
of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit, or require the consent of any Person to, or result in the creation
of any Liens in or upon any of the properties or other assets of the Company or its Subsidiaries under any provision of: (i) the
Certificate of Incorporation, Bylaws of the Company or other equivalent organizational documents of any of its Subsidiaries; (ii)
subject to the governmental filings and other matters referred to in paragraph (d) below, any (A) permit, license, franchise, statute,
law, ordinance or regulation or (B) judgment, decree or order, in each case applicable to the Company or its Subsidiaries, or by
which any of their respective properties or assets may be bound or affected; or (iii) any loan or credit agreement, note, bond,
mortgage, indenture, contract, agreement, lease or other instrument or obligation to which the Company or its Subsidiaries is a
party or by which any of their respective properties or assets may be bound or affected, except, in the case of clauses (ii) or
(iii) above, for any such conflicts, violations, defaults or other occurrences, if any, that could not, individually or in the
aggregate, reasonably be expected to (x) result in a Company Material Adverse Effect or (y) impair in any material respect the
ability of the Parties to consummate the Merger and the other transactions contemplated hereby on a timely basis.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>No consent, approval, order or authorization of, or registration, declaration or filing with, any government, governmental,
statutory, regulatory or administrative authority, agency, body or commission or any court, tribunal or judicial body, whether
federal, state, local or foreign (each, a &ldquo;<B>Governmental Authority</B>&rdquo;) is required by or with respect to the Company
or its Subsidiaries in connection with the execution and delivery of this Agreement or the consummation of the Merger and other
transactions contemplated hereby except for: (i) the filing of the Certificate of Merger with the Secretary of State of the State
of Delaware in accordance with the DGCL; and (ii) such consents, approvals, orders or authorizations, or registrations, declarations
or filings which if not obtained or made, could not reasonably be expected to (A) result in a Company Material Adverse Effect or
(B) impair in any material respect the ability of the Parties to consummate the Merger and the other transactions contemplated
hereby on a timely basis.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.5<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Board Approval; Required Vote</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Board of Directors of the Company has, by written consent: (i) approved and declared advisable this Agreement;
(ii) determined that the Merger and other transactions contemplated by this Agreement are advisable, fair to and in the best interests
of the Company and its stockholders; (iii) recommended to the Company stockholders (A) the approval of the Merger and the other
transactions contemplated hereby and (B) the approval and adoption of this Agreement; and (iv) directed that this Agreement be
submitted to the Company stockholders for their approval and adoption.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Company Stockholder Approval is the only vote of the holders of any class or series of the Company Capital Stock
necessary to approve and adopt this Agreement, the Merger or the other transactions contemplated hereby.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.6<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Financial Statements and Information</U>. The Company has previously made available to Parent true, complete and
correct copies of its (i) balance sheet and the related consolidated statements of income, changes in stockholders&rsquo; equity,
and cash flow for the fiscal quarter ended June 30, 2012 (the &ldquo;<B>Most Recent Balance Sheet Date</B>&rdquo;) (including the
notes thereto, the &ldquo;<B>Most Recent Balance Sheet</B>&rdquo;), and the related consolidated statements of income, changes
in stockholders&rsquo; equity, and cash flow as of the Most Recent Balance Sheet Date, including in each case the notes thereto.
Such financial statements and notes (i) fairly present the consolidated financial condition and the results of operations, changes
in stockholders&rsquo; equity and cash flow of the Company and its Subsidiaries as of the respective dates of and for the periods
referred to in such financial statements, all in accordance with generally accepted accounting principles (&ldquo;<B>GAAP</B>&rdquo;),
subject, in the case of interim financial statements, to normal recurring and non-material year-end adjustments; (ii) contain and
reflect all necessary adjustments, accruals, provisions and allowances for a fair presentation of its financial condition and the
results of its operations for the periods covered by such financial statement; and (iii) to the extent applicable, contain and
reflect adequate provisions for all reasonably anticipated liabilities for all Taxes (as defined in Section 2.15) with respect
to the periods then ended and all prior periods. The financial statements referred to in this Section 2.6 reflect the consistent
application of such accounting principles throughout the periods involved, except as disclosed in the notes to such financial statements.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.7<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Absence of Undisclosed Liabilities; Cash</U>. Except as set forth on Section 2.7 of the Company Disclosure Schedule,
the Company and its Subsidiaries do not have any liabilities or obligations required to be accrued under GAAP. At the Effective
Time, the Company and its Subsidiaries (a) will have at least $7,500,000 in cash on hand (which, for purposes of calculating such
amount, shall include the amount of Professional Fees (as defined in Section 5.13) paid prior to the Effective Time), (b) shall
have no liabilities or obligations required to be accrued under GAAP (except those set forth on Section 2.7 of the Company Disclosure
Schedule), (c) shall have no indebtedness for borrowed money, and (d) shall be solvent, able to pay each of its indebtedness as
it matures and have capital sufficient to carry on each of its businesses.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.8<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Absence of Certain Changes or Events</U>. Since the Most Recent Balance Sheet Date, except in connection with
the transactions contemplated by this Agreement, the Company and its Subsidiaries have conducted their respective businesses only
in the ordinary course of business consistent with past practice, and there has not been: (i) any action, event or occurrence which
has had, or could reasonably be expected to result in, a Company Material Adverse Effect; (ii) any action, event or occurrence
which has had a loss or liability to the Company except as set forth in Section 2.7 or (iii) any other action, event or occurrence
that would have required the consent of Parent pursuant to Section 4.1 had such action, event or occurrence taken place after the
execution and delivery of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.9<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Agreements, Contracts and Commitments</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 2.9(a) of the Company Disclosure Schedule set forth each agreement (or series of related agreements), contract
or commitment (whether written or oral) to which the Company or its Subsidiaries is a party that (i) provides for payments to third
parties which cannot be terminated by the Company without penalty or payment upon notice of thirty (30) days or less; (ii) grants
any third party rights to license, market or sell any of the Company&rsquo;s or its Subsidiaries products or services; (iii) grants
any third party &ldquo;most favored nation&rdquo; pricing status; (iv) establishes a partnership or joint venture; (vi) creates,
incurs, assumes or guarantees any obligation or indebtedness; (v) creates a security interest in, or allows for the transfer of,
any assets of the Company or its Subsidiaries, whether tangible or intangible; (vii) provides for employment or consulting; (viii)
involves any officer, director, stockholder or Affiliate (as defined in Section 2.21(a)) of the Company except for that certain
Non-Binding Term Sheet between Parent and the Company dated July 17, 2012 and the NDA (as defined below); (ix) imposes upon the
Company or its Subsidiaries any obligation of confidentiality, non-competition or non-solicitation; (x) requires the Company or
its Subsidiaries to indemnify any party thereto; (xi) could reasonably be expected to result in a Company Material Adverse Effect
in the event of default or termination of such agreement; and (xii) any other agreement which was not entered into in the ordinary
course of business (collectively, the &ldquo;<B>Company Material Contracts</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Neither the Company nor its Subsidiaries has breached, or received in writing any claim or threat that it has breached,
any of the terms or conditions of any Company Material Contract in such a manner as would permit any other party thereto to cancel
or terminate the same or to collect material damages from the Company or its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each Company Material Contract that has not expired or otherwise been terminated in accordance with its terms is
valid, binding, enforceable and in full force and effect and, to the knowledge of the Company, no other party to such contract
is in default in any material respect.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Company has made available to Parent a true, complete and correct copy of each agreement listed in Section 2.9(a)
of the Company Disclosure Schedule.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.10<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Compliance with Laws</U>. Each of the Company and its Subsidiaries has at all times complied with all federal,
state, local and foreign statutes, laws and regulations, and is not in violation of, and has not received any written claim or
notice of violation of, any such statutes, laws and regulations with respect to the conduct of its business or the ownership and
operation of its properties and other assets, except for such instances of non-compliance or violation, if any, which could not
reasonably be expected to result in a Company Material Adverse Effect.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.11<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Material Permits</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 2.11(a) of the Company Disclosure Schedule sets forth a true, complete and correct list of all federal, state,
local and foreign governmental licenses, permits, franchises and authorizations issued to or held by the Company or its Subsidiaries
(collectively, the &ldquo;<B>Material Permits</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of the Company and its Subsidiaries is in compliance in all material respects with the terms and conditions
of the Material Permits.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each Material Permit is in full force and effect and no action, proceeding, revocation proceeding, amendment procedure,
writ, injunction or claim is pending or, to the knowledge of the Company, threatened, which seeks to revoke or limit any Material
Permit.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The rights and benefits of each Material Permit will be available to the Surviving Corporation and its Subsidiaries
immediately after the Effective Time on terms substantially identical to those enjoyed by the Company and its Subsidiaries immediately
prior to the Effective Time.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.12<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Litigation</U>.<B> </B>Except as set forth in<B> </B>Section 2.12 of the Company Disclosure Schedule, there is
no suit, action, arbitration, claim, governmental or other proceeding (collectively, &ldquo;<B>Action</B>&rdquo;) pending or, to
the knowledge of the Company, threatened, against the Company or any of its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.13<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Restrictions on Business Activities</U>. Other than as contemplated by this Agreement, there is no agreement,
judgment, injunction, order or decree binding upon or otherwise applicable to the Company or its Subsidiaries which has, or could
reasonably be expected to have, the effect of prohibiting or materially impairing (i) any current or reasonably foreseeable business
practice of the Company or its Subsidiaries; or (ii) any acquisition of any Person or property by the Company or its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.14<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Employees</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 2.14(a) of the Company Disclosure Schedule sets forth a true, complete and correct list of all employees
of the Company and its Subsidiaries, along with their position and actual rate of compensation. To the knowledge of the Company,
no employee or group of employees has any plans to terminate employment with the Company or its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Neither the Company nor its Subsidiaries is a party to or bound by any collective bargaining agreement, nor has any
of them experienced any strikes, grievances, claims of unfair labor practices or other collective bargaining disputes.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as set forth in Section 2.14(c) of the Company Disclosure Schedule; neither the Company nor its Subsidiaries
is a party to any written or oral: (i) union or collective bargaining agreement; (ii) agreement with any current or former employee
the benefits of which are contingent upon, or the terms of which will be materially altered by, the consummation of the Merger
or other transactions contemplated by this Agreement; (iii) agreement with any current or former employee of the Company or its
Subsidiaries providing any term of employment or compensation guarantee extending for a period longer than one year from the date
hereof or for the payment of cash compensation in excess of $100,000 per annum; or (iv) agreement or plan the benefits of which
will be increased, or the vesting of the benefits of which will be accelerated, upon the consummation of the Merger.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.15<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Taxes</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>For purposes of this Agreement, a &ldquo;<B>Tax</B>&rdquo; means any and all federal, state, local and foreign taxes,
assessments and other governmental charges, duties, impositions and liabilities, including, without limitation, taxes based upon
or measured by gross receipts, income, profits, sales, use and occupation, value added, ad valorem, transfer, franchise, withholding,
payroll, recapture, employment, excise and property taxes, together with all interest, penalties and additions imposed with respect
to such amounts and any obligations under any agreements or arrangements with any other Person with respect to such amounts and
including any liability for Taxes of a predecessor entity.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Company and its Subsidiaries have accurately prepared and have or will timely, including within extended deadlines,
file all federal, state, local and foreign returns, estimates, information statements and reports required to be filed by it (collectively,
&ldquo;<B>Returns</B>&rdquo;) relating to any and all Taxes or any foreign financial accounts or foreign financial assets concerning
or attributable to the Company or its Subsidiaries or to their operations, and all such Returns are or will be, to the knowledge
and belief of the signer, true, complete and correct in all material respects. Copies of all such returns have been previously
provided to Parent or will be provided to Parent when filed.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of the Company and its Subsidiaries: (i) has paid all Taxes it is obligated to pay as reflected on the Returns
or otherwise; and (ii) has withheld all federal, state, local and foreign Taxes required to be withheld with respect to its employees
or otherwise.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>There is no Tax deficiency outstanding, proposed or assessed against the Company or its Subsidiaries that is not
accurately reflected as a liability on the Most Recent Balance Sheet, nor has the Company or its Subsidiaries executed any waiver
of any statute of limitations on or extending the period for the assessment or collection of any Tax.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Neither the Company nor its Subsidiaries has any liability for unpaid Taxes that has not been properly accrued for
under GAAP and reserved for on the Most Recent Balance Sheet, whether asserted or unasserted, contingent or otherwise.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(f)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Except as listed in Section 2.15 of the Company Disclosure Schedule, neither the Company nor its Subsidiaries is a party
to any agreement, plan, arrangement or other contract covering any employee or independent contractor or former employee or independent
contractor that, individually or collectively with any other such contracts, would reasonably be expected to give rise directly
or indirectly to the payment of any amount that would not be deductible pursuant to Section 280G or Section 162(m) the Code (or
any comparable provision of state or foreign tax laws) or result in the imposition of an excise tax under Section 4999 of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(g)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Neither the Company nor its Subsidiaries is, or has ever been, a party to or bound by any Tax indemnity agreement, Tax sharing
agreement, Tax allocation agreement or similar contract or agreement that obligates the Company or any of its Subsidiaries to make
any payment computed by reference to the Tax, taxable income or table loss of any person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.16<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Employee Benefit Plans</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Neither the Company nor the Subsidiary participates in any employee benefit plans (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended (&ldquo;<B>ERISA</B>&rdquo;) or any bonus, stock option, stock
purchase, incentive, deferred compensation, supplemental retirement, severance and other similar employee benefit plans, and all
unexpired severance agreements (pursuant to which any payments are still due and payable by the Company), written or otherwise
(together, the &ldquo;<B>Company Employee Plans</B>&rdquo;), for the benefit of, or relating to, any current or former employee
of the Company or its Subsidiaries or any trade or business (whether or not incorporated) which is a member or which is under common
control with the Company within the meaning of Section 414 of the Code (an &ldquo;<B>ERISA Affiliate</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(b)&#9; No contracts or other agreements
provide for any gross-up payments for any current or former employee or other service provider of the Company or any of its Subsidiaries
to cover any liability for tax under Section 4999 or 409A of the Code or similar laws, including state laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(c)&#9;Each Company Employee Plan is in
good faith compliance in all material respects, both in form and operation, with the requirements of Section 409A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.17<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Tangible Assets</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of the Company and its Subsidiaries owns or leases all tangible assets necessary for the conduct of its businesses
as currently conducted and as is reasonably foreseeable to be conducted. Each such tangible asset is in a good state of maintenance
and repair, free from material defects and in good operating condition (subject to normal wear and tear) and is suitable for the
purposes for which it presently is used.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 2.17(b) of the Company Disclosure Schedule sets forth (i) a true, complete and correct list of all items
of tangible personal property owned by the Company or its Subsidiaries as of the date hereof, or not owned by the Company or its
Subsidiaries but in the possession of or used in the business of the Company or its Subsidiaries with a book value in excess of
$10,000 (the &ldquo;<B>Personal Property</B>&rdquo;); and (ii) a description of the owner of, and any agreement relating to the
use of, each item of Personal Property not owned by the Company or its Subsidiaries and the circumstances under which such Personal
Property is used.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each item of Personal Property not owned by the Company or its Subsidiaries is in such condition that upon the return
of such property to its owner in its present condition at the end of the relevant lease term or as otherwise contemplated by the
applicable agreement between the Company or its Subsidiaries and the owner or lessor thereof, the obligations of the Company or
its Subsidiaries to such owner or lessor will be discharged.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Immediately after the Effective Time, the tangible assets owned or leased by the Surviving Corporation and/or its
Subsidiaries, together with its intangible assets, when utilized by a labor force substantially similar to that employed by the
Company and its Subsidiaries on the date hereof, will be adequate to conduct the business and operations of the Surviving Company
and its Subsidiaries as currently conducted by the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.18<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Real Property Leases</U>. Section 2.18 of the Company Disclosure Schedule sets forth all real property leases
or subleases or license agreements for the use of real property to or by the Company or its Subsidiaries, including the term of
such lease, any extension and expansion options and the rent payable under it. The Company has made available to the Parent true,
complete and correct copies of the leases and subleases (as amended to date) listed in Section 2.18 of the Company Disclosure Schedule.
With respect to each agreement listed in Section 2.18 of the Company Disclosure Schedule:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(i)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>the agreement is legal, valid, binding, enforceable and in full force and effect and will continue to be legal, valid,
binding, enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in
effect immediately prior to the Closing;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(ii)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>neither the Company nor its Subsidiaries nor, to the knowledge of the Company, any other party, is in breach or violation
of, or default under, any such agreement, and no event has occurred, is pending or, to the knowledge of the Company, is threatened,
which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by the Company or its
Subsidiaries or, to the knowledge of Company, any other under such agreement;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(iii)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>neither the Company nor its Subsidiaries has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered
any interest in any lease, sublease or license; and</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(iv)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>there are no Liens, easements, covenants or other restrictions applicable to the real property subject to such lease,
except for recorded easements, covenants and other restrictions which do not materially impair the Intended Use or the occupancy
by the Company or its Subsidiaries of the property subject thereto.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.19<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Insurance</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 2.19(a) of the Company Disclosure Schedule sets forth each insurance policy (including fire, theft, casualty,
general liability, workers compensation, business interruption, environmental, product liability and automobile insurance policies
and bond and surety arrangements) to which the Company or its Subsidiaries is a party (the &ldquo;<B>Insurance Policies</B>&rdquo;).
The Insurance Policies are in full force and effect, maintained with reputable companies against loss relating to the business,
operations and properties and such other risks as companies engaged in similar business as the Company and its Subsidiaries would,
in accordance with good business practice, customarily insure. All premiums due and payable under the Insurance Policies have been
paid on a timely basis and the Company and its Subsidiaries are in compliance in all material respects with all other terms thereof.
True, complete and correct copies of the Insurance Policies have been made available to Parent.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>There are no material claims pending as to which coverage has been questioned, denied or disputed. Neither the Company
nor its Subsidiaries has been refused insurance for which it has applied or had any policy of insurance terminated (other than
at its request), nor has the Company or its Subsidiaries received notice from any insurance carrier that: (i) such insurance will
be canceled or that coverage thereunder will be reduced or eliminated; or (ii) premium costs with respect to such insurance will
be increased, other than premium increases in the ordinary course of business applicable on their terms to all holders of similar
policies.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.20<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Intellectual Property</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Among them, the Company and its Subsidiaries have all right, title and interest in and to all patents and applications
for patent set forth on Section 2.20(b) of the Company Disclosure Schedule (collectively, the &ldquo;<B>Company Intellectual Property&rdquo;</B>).
None of the Company Intellectual Property is the subject of any pending or, to the knowledge of the Company and its Subsidiaries,
threatened or otherwise contemplated suit, action, proceeding, claim or challenge, and the Company and its Subsidiaries are unaware
of any basis therefor. None of the Company Intellectual Property is subject to any outstanding injunction, judgment, final order,
decree, ruling, settlement or Liens except as set forth in Section 2.20(a) of the Company Disclosure Schedule. None of the Company
Intellectual Property, to the knowledge of the Company and its Subsidiaries, infringes, violates, interferes with, misappropriates
or transgresses upon any right, title or interest of any third party in a manner that full enjoyment of the Company Intellectual
Property cannot be had by Parent, Merger Sub and Parent&rsquo;s Subsidiaries following the contemplated Merger.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 2.20(b) of the Company Disclosure Schedule sets forth a true, complete and correct list of each patent and
patent application owned by the Company or any of its Subsidiaries. All patents which are held by the Company or any of its Subsidiaries
and which are material to the business of the Company or any of its Subsidiaries are presumed valid pursuant to 35 U.S.C. 282.
No allegation or other contention of invalidity or unpatentability of such scheduled patents and applications has come to the attention
of the Company or any of its Subsidiaries, and to the Company&rsquo;s and its Subsidiaries&rsquo; knowledge none of such patents
and applications is invalid, undeserving of patent-grant, unenforceable, or otherwise impaired in a manner that full enjoyment
thereof cannot be had by Parent, Merger Sub and Parent&rsquo;s Subsidiaries following the contemplated Merger.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as set forth on Section 2.20(c) of the Company Disclosure Schedule, neither the Company nor any of its Subsidiaries
is a party to any license, sublicense, other agreement, or grant of rights or permission to a third party that provides any revenue
to the Company or any Subsidiary, that gives rise to any obligations or potential liabilities of the Company or its Subsidiaries,
or that relates to the Company Intellectual Property or any part thereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.21<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Additional Tax Matters</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Neither the Company nor, to the knowledge of the Company, any of its affiliates (&ldquo;<B>Affiliates</B>&rdquo;),
as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the &ldquo;<B>Exchange Act</B>&rdquo;), knows of any
fact or has taken or agreed to take any action, failed to take any action or is aware of any fact or circumstance, that could reasonably
be expected to prevent the Merger from constituting a reorganization within the meaning of Section 368(a) of the Code.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 2.21(b) of the Company Disclosure Schedule sets forth a true, complete and correct list of all Persons who,
to the knowledge of the Company, may be deemed to be Affiliates of the Company, excluding its Subsidiaries but including all directors
and executive officers of the Company as of the date hereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.22<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Continuity of Business Enterprise</U>. The Company operates at least one significant historic business line, or
owns at least a significant portion of its historic business assets, in each case within the meaning of Reg. &sect;1.368-1(d).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.23<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Certain Business Practices</U>. Neither the Company, its Subsidiaries nor, to the knowledge of the Company, any
director, officer, employee or agent of the Company or Affiliate thereof has: (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments relating to political activity; (ii) made any unlawful payment to any foreign or domestic
government official or employee or to any foreign or domestic political party or campaign or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iii) made any other unlawful payment.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.24<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Powers of Attorney</U>. There are no outstanding powers of attorney executed on behalf of the Company or its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.25<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Interested Party Transactions</U>. Since January 1, 2011, no event has occurred that would be required to be reported
by the Company as a Certain Relationship or Related Transaction pursuant to Item 404 of Regulation S-K, if the Company and its
Subsidiaries were required to report such information in periodic reports pursuant to the Exchange Act, except for Affiliates of
the Company that have made, or may make, investments in the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.26<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Books and Records</U>. The minute books and other similar records of the Company and each of its Subsidiaries
contains true, complete and correct records of all actions taken at any meetings of the Company stockholders or its Subsidiaries,
Board of Directors or any committee thereof and of all written consents in lieu of the holding of any such meeting. The books and
records of the Company and its Subsidiaries accurately reflect in all material respects the assets, liabilities, business, financial
condition and results of operations of the Company or such Subsidiary and have been maintained in accordance with good business
and bookkeeping practices.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.27<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Brokers</U>. No broker, financial advisor, investment banker or other Person is entitled to any fee, commission
or expense reimbursement in connection with the Merger or other transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.28<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Proxy Statement</U>. The information regarding the Company and the Company Subsidiaries supplied by the Company
for inclusion in the Registration Statement (and any amendment or supplement thereto), at the time the Registration Statement (and
any amendment or supplement thereto) is filed, at the time the Registration Statement (and any amendment or supplement thereto)
is declared effective by the SEC and at the Effective Time, will not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. The information regarding the Company and the Company Subsidiaries supplied by the
Company for inclusion in the proxy statement to be sent to Parent&rsquo;s stockholders in connection with the solicitation of proxies
in favor of the approval of the issuance of shares of Parent Common Stock pursuant to this Agreement (and any amendment or supplement
thereto) (the &ldquo;<B>Proxy Statement</B>&rdquo;), at the date the Proxy Statement (and any amendment or supplement thereto)
is first mailed to Parent stockholders and at the time of the Parent Special Meeting (or any adjournment or postponement thereof),
will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The representations
and warranties contained in this Section 2.28 will not apply to statements or omissions included in the Proxy Statement (and, in
each case, any amendment or supplement thereto) based upon information regarding Parent supplied to the Company in writing by Parent
for use therein.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">ARTICLE
III<BR>
<BR>
</FONT>REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as set forth
in the disclosure schedule provided by Parent to the Company on the date hereof and accepted in writing by the Company (the &ldquo;<B>Parent
Disclosure Schedule</B>&rdquo;), Parent, on behalf of itself and its Subsidiaries, represents and warrants to the Company that
the statements contained in this Article III are true, complete and correct. The Parent Disclosure Schedule shall be arranged in
paragraphs corresponding to the numbered and lettered paragraphs contained in this Article III, and the disclosure in any paragraph
shall be deemed to qualify only the corresponding paragraph of this Article III, unless a reasonable person would determine that
the disclosure contained in such paragraph contains enough information to qualify or otherwise apply to other paragraphs of this
Article III. As used in this Agreement, a &ldquo;<B>Parent Material Adverse Effect</B>&rdquo;<B> </B>means any change, event or
occurrence that has a material adverse effect on the condition (financial or otherwise), business, operations, prospects, properties,
assets or liabilities of the Parent and its Subsidiaries, taken as a whole; provided, that, none of the following, in and of itself
or themselves, nor any effect arising out of or resulting from the following shall constitute or be taken into account in determining
whether a Parent Material Adverse Effect has occurred or may, would or could occur: (A) changes, events, occurrences or effects
generally affecting the economy or financial, credit, banking, currency, commodities or capital markets generally in the United
States or other countries or regions, including changes in currency exchange rates, interest rates, monetary policy or inflation;
(B) changes, events, occurrences or effects generally affecting the industries in which the Parent and its Subsidiaries conduct
operations; (C) changes or prospective changes in law, in applicable regulations of any Governmental Authority, in United States
generally accepted accounting principles or other applicable accounting standards or changes or prospective changes in the interpretation
or enforcement of any of the foregoing, or any changes or prospective changes in general legal, regulatory or political conditions;
(D) any act of God or other calamity, national or international, political or social conditions (including the engagement by any
country in hostilities, whether commenced before or after the date hereof, and whether or not pursuant to the declaration of a
national emergency or war), or the occurrence of any military or terrorist attack (E) the negotiation, execution, announcement
or performance of this Agreement or the consummation of the transactions contemplated by the Agreement, including the impact thereof
on relationships, contractual or otherwise, with customers, suppliers, distributors, partners, employees or regulators; (F) any
action taken by the Parent or its Subsidiaries that is required by this Agreement or taken at Company's written request, or the
failure to take any action by the Parent or its Subsidiaries if that action is prohibited by this Agreement; or (G) any change
resulting or arising from the identity of, or any facts or circumstances relating to the Company or its Subsidiaries or their respective
Affiliates. Whenever a representation or warranty made by the Parent herein refers to the &ldquo;<B>knowledge of the Parent</B>,&rdquo;
or words to such effect, such knowledge shall be deemed to consist only of the actual knowledge of the executive officers of the
Parent or Merger Sub.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Organization and Qualification</U>. Parent is a corporation duly organized, validly existing and in corporate
and tax good standing under the laws of the State of New York. Except as set forth on Section 3.1 of the Parent Disclosure Schedule,
Parent is duly qualified or licensed as a foreign corporation to conduct business, and is in corporate and tax good standing, under
the laws of each jurisdiction where the character of the properties owned, leased or operated by it, or the nature of its activities,
makes such qualification or licensing necessary, except where the failure to be so qualified, licensed or in good standing, individually
or in the aggregate, has not had and would not have a Parent Material Adverse Effect. Parent has all requisite corporate power
and authority to carry on the businesses in which it is engaged and to own and use the properties owned and used by it. Parent
has made available to the Company true, complete and correct copies of its certificate of incorporation and Bylaws, each as amended
to date. Parent is not in default under or in violation of any provision of its certificate of incorporation or Bylaws.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Subsidiaries</U>. Except as set forth on Section 3.2 of the Parent Disclosure Schedule, Exhibit 21 to Parent&rsquo;s
Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2011 sets forth a true, complete and correct list of each
Subsidiary of Parent that is a Significant Subsidiary (as defined in Rule 1-02 of Regulation S-X).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Capital Structure</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The authorized capital stock of Parent consists of (i) as of the date hereof and as of immediately prior to the Closing
Date, 200,000,000 shares of Parent Common Stock; and (ii) as of the Closing Date, if approved by Parent&rsquo;s stockholders up
to 15,000,000 shares of preferred stock, $0.02 par value per share.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>As of the close of business on the date<B> </B>hereof and as of immediately prior to the Closing: (i) 21,705,967
shares of Parent Common Stock were issued and outstanding; (ii) no shares of preferred stock were issued or outstanding; (iii)
no shares of Parent Common Stock were held in the treasury of Parent; (iv) 3,120,000 shares of Parent Common Stock were duly reserved
for future issuance pursuant to stock options granted pursuant to Parent&rsquo;s Amended and Restated 2004 Employee Stock Option
Plan; (v) 500,000 shares of Parent Common Stock were duly reserved for future issuance pursuant to stock options granted pursuant
to Parent&rsquo;s Amended and Restated 2004 Non-Executive Director Stock Option Plan and (vi) 2,214,313 shares of Parent Common
Stock were duly reserved for future issuance pursuant to warrants issued by Parent. Except as described above, as of such date,
there were no shares of voting or non-voting capital stock, equity interests or other securities of Parent authorized, issued,
reserved for issuance or otherwise outstanding provided that up to 833,333 shares and 300,000 options may be issued as contemplated
by Section 4.1 (ii) (A) and (C).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>All outstanding shares of Parent Common Stock are, and all shares of Parent Common Stock and Parent Preferred Stock
to be issued in connection with the Merger (including shares of Parent Common Stock underlying the New Warrants and $.02 Warrants,
if applicable) and the New Warrants and the $.02 Warrants, if applicable will be, when issued in accordance with the terms hereof,
duly authorized, validly issued, fully paid and non-assessable, and not subject to, or issued in violation of, any kind of preemptive,
subscription or similar rights and were or will be issued in compliance in all material respects with all applicable federal and
state securities laws.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.4<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Authority; No Conflict; Required Filings</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of Parent and Merger Sub has all requisite corporate power and authority to execute and deliver this Agreement,
to perform its obligations hereunder and to consummate the Merger and other transactions contemplated hereby. The execution and
delivery of this Agreement, the performance of its obligations hereunder and the consummation of the Merger and other transactions
contemplated hereby, have been duly authorized by all corporate action on the part of Parent and Merger Sub and no other corporate
proceedings are necessary other than, with respect to the Merger, the approval and adoption of this Agreement, including, without
limitation, the issuance of the Merger Consideration, which requires the affirmative vote of the holders of Parent Common Stock
attending the meeting and entitled to vote thereon, and the adoption of amendments to the certificate of incorporation, which,
if approved by Parent&rsquo;s stockholders, shall, among other things, (i) authorize Parent Preferred Stock up to 15,000,000 shares
and establish the associated rights and preferences thereof, and (ii) institute a staggered board of directors (the &ldquo;<B>Staggered
Board</B>&rdquo; and, collectively with the amendments referred to in (i), the &ldquo;<B>Amendments</B>&rdquo;); and, in each case,
which requires the affirmative vote of the holders of outstanding shares of Parent Common Stock (collectively, the &ldquo;<B>Parent
Stockholder Approvals</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Board of Directors of each of Parent and Merger Sub has, at meetings duly called and held, by unanimous vote
of their respective directors: (i) approved and declared advisable this Agreement; (ii) determined that the Merger and other transactions
contemplated by this Agreement are advisable, fair to and in the best interests of the Parent and its stockholders; (iii) in the
case of the Board of Directors of the Parent, resolved to recommend to the Parent stockholders (A) the approval of the Merger and
the other transactions contemplated hereby, (B) the approval and adoption of this Agreement, (C) the adoption of the Amendments
and (D) the issuance of the Parent Common Stock as contemplated herein; (v) resolved that any applicable &ldquo;takeover&rdquo;
statute, regulation or law be rendered inapplicable to the transactions contemplated hereby, including, without limitation, the
Merger, and (v) directed that this Agreement be submitted to the Parent stockholders for their approval and adoption. This Agreement
has been duly executed and delivered by Parent and Merger Sub and constitutes a valid and binding obligation of Parent and Merger
Sub, enforceable against each of them in accordance with its terms, subject only to the Equitable Exceptions.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as set forth in Section 3.4(c) of the Parent Disclosure Schedule, the execution and delivery of this Agreement
do not, the performance by either Parent or Merger Sub of its obligations hereunder and the consummation of the Merger and other
transactions contemplated hereby will not, conflict with or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any obligation or to a loss of
a material benefit, or require the consent of any Person, or result in the creation of any Liens in or upon any of the properties
or other assets of Parent or any of its Subsidiaries under any provision of: (i) the Certificate of Incorporation, Bylaws or other
equivalent organizational documents of Parent or any of its Subsidiaries; (ii) subject to the governmental filings and other matters
referred to in paragraph (d) below, any (A) permit, license, franchise, statute, law, ordinance or regulation or (B) judgment,
decree or order, in each case applicable to Parent or any of its Subsidiaries, or by which any of their respective properties or
assets may be bound or affected; or (iii) any loan or credit agreement, note, bond, mortgage, indenture, contract, agreement, lease
or other instrument or obligation to which Parent or any of its Subsidiaries is a party or by which any of their respective properties
or assets may be bound or affected, except, in the case of clauses (ii) or (iii) above, for any such conflicts, violations, defaults
or other occurrences, if any, that could not, individually or in the aggregate, reasonably be expected to result in (x) a Parent
Material Adverse Effect or (y) impair in any material respect the ability of the Parties to consummate the Merger and the other
transactions contemplated hereby on a timely basis.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Authority
is required by or with respect to Parent or its Subsidiaries in connection with the execution and delivery of this Agreement or
the consummation of the Merger or other transactions contemplated hereby except for: (i) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware in accordance with the DGCL; (ii) compliance with any applicable requirements
under the Securities Act; (iii) compliance with any applicable requirements under the Exchange Act; (iv) compliance with any applicable
state securities, takeover or so-called &ldquo;Blue Sky&rdquo; Laws; (v) compliance with any applicable requirements of the Financial
Industry Regulatory Authority, Inc., the NYSE MKT or other exchange on which the Parent Common Stock is traded; and (vi) such consents,
approvals, orders or authorizations, or registrations, declarations or filings which if not obtained or made, could not reasonably
be expected to (A) result in a Parent Material Adverse Effect; or (B) impair in any material respect the ability of the Parties
to consummate the Merger and the other transactions contemplated hereby on a timely basis.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.5<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>SEC Filings; Financial Statements</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Parent has timely filed all forms, reports and documents required to be filed by Parent with the SEC since January
1, 2009, including, without limitation, all exhibits required to be filed therewith, and has made available to the Company true,
complete and correct copies of all of the same so filed (including any forms, reports and documents filed after the date hereof,
the &ldquo;<B>Parent SEC Reports</B>&rdquo;), other than the unredacted version of documents for which confidential treatment has
been granted by the SEC or for which such treatment has been applied and is pending. The Parent SEC Reports: (i) at the time filed
complied (or will comply when filed, as the case may be) in all material respects with the applicable requirements of the Securities
Act and/or the Exchange Act; and (ii) did not at the time they were filed (or, if later filed, amended or superseded, then on the
date of such later filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements contained therein, in the light of the circumstances under which they were
made, not misleading.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as set forth in Section 3.5(b) of the Parent Disclosure Schedule, each of the consolidated financial statements
(including, in each case, any related notes thereto) contained in the Parent SEC Reports, complied or will comply, as the case
may be, as to form in all material respects with the applicable published rules and regulations of the SEC with respect thereto,
was or will be prepared in accordance with GAAP applied on a consistent basis throughout the periods involved except as may otherwise
be indicated in the notes thereto or, in the case of unaudited interim financial statements, as permitted by Form 10-Q promulgated
by the SEC, and fairly presented or will fairly present, as the case may be, in all material respects, the consolidated financial
position of Parent and its Subsidiaries as at the respective dates and the consolidated results of operations and cash flows for
the periods therein indicated, except, in the case of the unaudited interim financial statements for the absence of footnotes and
normal year-end adjustments which were not and will not be material in amount.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.6<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Absence of Undisclosed Liabilities; Cash</U>. Parent and its Subsidiaries do not have any liabilities or obligations,
whether fixed, contingent, accrued or otherwise, liquidated or unliquidated and whether due or to become due, other than: (i) liabilities
reflected or reserved against on the balance sheet contained in Parent&rsquo;s Quarterly Report on Form 10-Q (the &ldquo;<B>Parent&rsquo;s
Most Recent Balance Sheet</B>&rdquo;) for the quarter ended June 30, 2012 (the &ldquo;<B>Parent&rsquo;s</B> <B>Most Recent Balance
Sheet Date</B>&rdquo;); (ii) obligations under any Parent Material Contract (as defined in Section 3.8); (iii) liabilities or obligations
incurred since Parent&rsquo;s Most Recent Balance Sheet Date in the ordinary course of business, consistent with past practice
in both type and amount; and (iv) liabilities or obligations not required to be reported by GAAP. Parent and its Subsidiaries (taken
as a whole) are solvent, able to pay each of its indebtedness as they mature and have capital sufficient to carry on each its businesses.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.7<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Absence of Certain Changes or Events</U>. Since Parent&rsquo;s Most Recent Balance Sheet Date, Parent and its
Subsidiaries have conducted their respective businesses only in the ordinary course of business consistent with past practice and
there has not been any action, event or occurrence which (i) except as otherwise set forth in Section 3.7 of the Parent Disclosure
Schedule, would require disclosure in a periodic report filed pursuant to the Exchange Act; (ii) has had, or could reasonably be
expected to result in, a Parent Material Adverse Effect; (iii) any action, event or occurrence which has had a loss or liability
to Parent in excess of $500,000 or (iv) any other action, event or occurrence that would have required the consent of Company pursuant
to Section 4.1 had such action, event or occurrence taken place after the execution and delivery of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.8<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Compliance with Laws</U>. Each of Parent and its Subsidiaries has at all times complied with all federal, state,
local and foreign statutes, laws and regulations, and is not in violation of, and has not received any written claim or notice
of violation of, any such statutes, laws and regulations with respect to the conduct of its business or the ownership and operation
of its properties and other assets, except for such instances of non-compliance or violation, if any, which could not reasonably
be expected to result in a Parent Material Adverse Effect.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.9<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Agreements, Contracts and Commitments</U>. Parent has made available to the Company true, complete and correct
copies of each agreement, contract or commitment that (i) is required to be filed as an exhibit to, or otherwise incorporated by
reference in, the Parent SEC Reports pursuant to Regulation S-K; or (ii) except as otherwise set forth in Section 3.9 of the Parent
Disclosure Schedule, which has been entered into by Parent or any of its Subsidiaries since Parent&rsquo;s Most Recent Balance
Sheet Date and is required to be filed by Parent with the SEC pursuant to Item 601(a)(1) of Regulation S-K (collectively, the &ldquo;<B>Parent
Material Contracts</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Neither Parent nor any of its Subsidiaries has breached, or received in writing any claim or threat that it has breached,
any of the terms or conditions of any Parent Material Contract in such a manner as would permit any other party thereto to cancel
or terminate the same or to collect material damages from Parent or any of its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each Parent Material Contract that has not expired or otherwise been terminated in accordance with its terms is valid,
binding, enforceable and in full force and effect and, to the knowledge of the Parent, no other party to such contract is in default
in any material respect.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.10<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Material Permits</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 3.10(a) of the Parent Disclosure Schedule sets forth a true, complete and correct list of all material federal,
state, local and foreign governmental licenses, permits, franchises and authorizations issued to or held by Parent or its Subsidiaries
(collectively, the &ldquo;<B>Parent Permits</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of the Parent and its Subsidiaries is in compliance in all material respects with the terms and conditions of
the Parent Permits.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each Parent Permit is in full force and effect and no action, proceeding, revocation proceeding, amendment procedure,
writ, injunction or claim is pending or, to the knowledge of the Parent, threatened, which seeks to revoke or limit any Parent
Permit.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The rights and benefits of each Parent Permit will be available to the Surviving Corporation and/or its Subsidiaries
immediately after the Effective Time on terms substantially identical to those enjoyed by the Parent and its Subsidiaries immediately
prior to the Effective Time.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.11<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Litigation</U>.<B> </B>Except as set forth in Section 3.11 of the Parent Disclosure Schedule, there is no Action
pending or, to the knowledge of Parent, threatened, against Parent or any of its Subsidiaries which, if decided adversely would
(i) be considered reasonably likely to result in (A) a Parent Material Adverse Effect or (B) damages payable by Parent or any of
its Subsidiaries in excess of $500,000 in the aggregate; or (ii) otherwise impair in any material respect the ability of the Parties
to consummate the Merger and other transactions contemplated by this Agreement on a timely basis.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.12<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Restrictions on Business Activities</U>. Other than as contemplated by this Agreement, there is no agreement,
judgment, injunction, order or decree binding upon or otherwise applicable to the Parent or its Subsidiaries which has, or could
reasonably be expected to have, the effect of prohibiting or materially impairing (i) any current or reasonably foreseeable business
practice of the Parent or its Subsidiaries; or (ii) any acquisition of any Person or property by the Parent or its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.13<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Employees</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 3.13(a) of the Parent Disclosure Schedule sets forth a true, complete and correct list of all key employees
of the Parent and its Subsidiaries (the &ldquo;<B>Key Employees</B>&rdquo;), along with their position and actual annual rate of
compensation. Except as set forth on Section 3.13(a) of the Parent Disclosure Schedule, all Key Employees have entered into nondisclosure/assignment
of inventions agreements with the Parent or its Subsidiaries, true, complete and correct copies of which have previously been delivered
to the Company. To the knowledge of Parent, no Key Employee or group of employees has any plans to terminate employment with the
Parent or its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as set forth in Section 3.13(b) of the Parent Disclosure Schedule, neither the Parent nor its Subsidiaries
is a party to or bound by any collective bargaining agreement, nor has any of them experienced any strikes, grievances, claims
of unfair labor practices or other collective bargaining disputes.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as set forth in Section 3.13(c) of the Parent Disclosure Schedule, neither the Parent nor its Subsidiaries
is a party to any written or oral: (i) union or collective bargaining agreement; (ii) agreement with any current or former employee
the benefits of which are contingent upon, or the terms of which will be materially altered by, the consummation of the Merger
or other transactions contemplated by this Agreement; (iii) agreement with any current or former employee of the Parent or its
Subsidiaries providing any term of employment or compensation guarantee extending for a period longer than one year from the date
hereof or for the payment of compensation in excess of $350,000 per annum; or (iv) agreement or plan the benefits of which will
be increased, or (except with respect to acceleration of certain outstanding options) the vesting of the benefits of which will
be accelerated, upon the consummation of the Merger.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.14<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Taxes</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Parent and its Subsidiaries have accurately prepared and have or will timely, including within extended deadlines,
file all Returns relating to any and all Taxes concerning or attributable to the Parent or its Subsidiaries or to their operations,
and all such Returns are or will be, to the knowledge and belief of the signer, true, complete and correct in all material respects.
Copies of all such returns have been previously provided to the Company or will be provided to the Company when filed.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of the Parent and its Subsidiaries: (i) has paid all Taxes it is obligated to pay as reflected on the Returns
or otherwise; and (ii) has withheld all federal, state, local and foreign Taxes required to be withheld with respect to its employees
or otherwise.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>There is no Tax deficiency outstanding, proposed or assessed against the Parent or its Subsidiaries that is not accurately
reflected as a liability on the Most Recent Balance Sheet, nor has the Parent or its Subsidiaries executed any waiver of any statute
of limitations on or extending the period for the assessment or collection of any Tax.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Neither the Parent nor its Subsidiaries has any liability for unpaid Taxes that has not been properly accrued for
under GAAP and reserved for as reflected in the Parent SEC Reports, whether asserted or unasserted, contingent or otherwise.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Neither the Parent nor its Subsidiaries is a party to any agreement, plan, arrangement or other contract covering
any employee or independent contractor or former employee or independent contractor that, individually or collectively with any
other such contracts, would reasonably be expected to give rise directly or indirectly to the payment of any amount that would
not be deductible pursuant to Section 280G or Section 162(m) the Code (or any comparable provision of state or foreign tax laws))
or result in the imposition of an excise tax under Section 4999 of the Code.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Neither the Parent nor its Subsidiaries is, or has ever been, a party to or bound by any Tax indemnity agreement,
Tax sharing agreement, Tax allocation agreement or similar contract or agreement that obligates the Parent or any of its Subsidiaries
to make any payment computed by reference to the Tax, taxable income or table loss of any person.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.15<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Intellectual Property</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as set forth on Section 3.15(a) of the Parent Disclosure Schedule, each of Parent and its Subsidiaries owns,
is licensed or otherwise possesses legally enforceable rights to use, all patents, registered trademarks, service marks and copyrights
as is necessary to conduct their respective businesses as presently conducted and as is reasonably foreseeable to be conducted,
the absence of which would not reasonably be expected to result in a Parent Material Adverse Effect.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>All patents, registered trademarks, service marks and copyrights, which are held by Parent and its Subsidiaries and
which are material to the business of Parent and its Subsidiaries, taken as a whole, are valid, enforceable and subsisting and
no allegation of invalidity or conflicting ownership, or inventorship with respect to patents, in whole or in part, has been received
by Parent or any of its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.16<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Brokers</U>. Except for Palladium Capital Advisors, LLC, no broker, financial advisor or investment banker is
entitled to any fee, commission or expense reimbursement in connection with the Merger or other transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Parent.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.17<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Interim Operations of Merger Sub</U>. Merger Sub was formed solely for the purpose of engaging in the transactions
contemplated by this Agreement, has engaged in no other business activities and has conducted its operations only as contemplated
in this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.18<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Registration Statement</U>. The registration statement on Form S-4 to be filed with the SEC by Parent in connection
with the issuance of Parent Common Stock pursuant to this Agreement which shall include for registration (a) the Parent Common
Stock issued pursuant to this Agreement, (b) the Parent Preferred Stock and the Parent Common Stock issuable upon the conversion
of such Parent Preferred Stock issued pursuant to this Agreement, (c) the New Warrants and, if applicable, the $.02 Warrants, and
(d) the Parent Common Stock issuable upon the exercise of any New Warrants (or $.02 Warrants, if applicable) (the &ldquo;<B>Registration
Statement</B>&rdquo;) (and any amendment or supplement thereto), at the time the Registration Statement (and any amendment or supplement
thereto) is filed, at the time the Registration Statement (and any amendment or supplement thereto) is declared effective by the
SEC and at the Effective Time, will not contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading. The Proxy Statement, at the date the Proxy Statement (and any amendment or supplement thereto) is first mailed
to Parent and Company stockholders and at the time of the Parent Special Meeting and the Company Special Meeting (or any adjournment
or postponement thereof), will not contain any untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were
made, not misleading. The representations and warranties contained in this Section 3.18 will not apply to statements or omissions
included in the Registration Statement or Proxy Statement (and, in each case, any amendment or supplement thereto) based upon information
regarding the Company or any Company Subsidiary supplied to Parent in writing by the Company for use therein (it being understood
that all other information in the Registration Statement and Proxy Statement (and, in each case, any amendment or supplement thereto)
will be deemed to have been supplied by Parent). The Registration Statement and Proxy Statement (and, in each case, any amendment
or supplement thereto) will, when filed, comply as to form in all material respects with the applicable requirements of the Exchange
Act and, subject to Section 4.3, the Proxy Statement will include the Parent Board Recommendation.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.19<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Certain Business Practices</U>. Neither the Parent, its Subsidiaries nor, to the knowledge of the Parent, any
director, officer, employee or agent of the Parent or Affiliate thereof has: (i) used any funds for unlawful contributions, gifts,
entertainment or other unlawful payments relating to political activity; (ii) made any unlawful payment to any foreign or domestic
government official or employee or to any foreign or domestic political party or campaign or violated any provision of the Foreign
Corrupt Practices Act of 1977, as amended; or (iii) made any other unlawful payment.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.20<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Powers of Attorney</U>. There are no outstanding powers of attorney executed on behalf of the Parent or its Subsidiaries.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.21<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Books and Records</U>. The minute books and other similar records of the Parent and each of its Subsidiaries contains
true, complete and correct records of all actions taken at any meetings of the Parent stockholders or its Subsidiaries, Board of
Directors or any committee thereof and of all written consents in lieu of the holding of any such meeting. The books and records
of the Parent and its Subsidiaries accurately reflect in all material respects the assets, liabilities, business, financial condition
and results of operations of the Parent or such Subsidiary and have been maintained in accordance with good business and bookkeeping
practices.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.22<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Employee Benefit Plans</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 3.22 of the Parent Disclosure Schedule sets forth the employee benefit plans (as defined in Section 3(3)
of ERISA) or any bonus, stock option, stock purchase, incentive, deferred compensation, supplemental retirement, severance and
other similar employee benefit plans, and all unexpired severance agreements (pursuant to which any payments are still due and
payable by the Parent), written or otherwise (together, the &ldquo;<B>Parent Employee Plans</B>&rdquo;), for the benefit of, or
relating to, an ERISA Affiliate.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>No contracts or other agreements provide for any gross-up payments for any current or former employee or other service
provider of the Company or any of its Subsidiaries to cover any liability for tax under Section 4999 or 409A of the Code or similar
laws, including state laws.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each Company Employee Plan is in good faith compliance in all material respects, both in form and operation, with
the requirements of Section 409A.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.23<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Tangible Assets</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of the Parent and its Subsidiaries owns or leases all material tangible assets necessary for the conduct of
its businesses as currently conducted and as is reasonably foreseeable to be conducted. Each such tangible asset is in a good state
of maintenance and repair, free from material defects and in good operating condition (subject to normal wear and tear) and is
suitable for the purposes for which it presently is used.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 3.23(b) of the Parent Disclosure Schedule sets forth (i) a true, complete and correct list of all items of
Personal Property and (ii) a description of the owner of, and any agreement relating to the use of, each item of Personal Property
not owned by the Parent or its Subsidiaries and the circumstances under which such Personal Property is used.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.24<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Real Property Leases</U>. Section 3.24 of the Parent Disclosure Schedule sets forth all real property leases or
subleases or license agreements for the use of real property to or by the Parent or its Subsidiaries, including the term of such
lease, any extension and expansion options and the rent payable under it. The Parent has delivered true, complete and correct copies
of the leases and subleases (as amended to date) listed in Section 3.24 of the Parent Disclosure Schedule With respect to each
agreement listed in Section 3.24 of the Parent Disclosure Schedule:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>the agreement is legal, valid, binding, enforceable and in full force and effect and will continue to be legal, valid,
binding, enforceable and in full force and effect immediately following the Closing in accordance with the terms thereof as in
effect immediately prior to the Closing;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>neither the Parent nor its Subsidiaries nor, to the knowledge of the Parent, any other party, is in breach or violation
of, or default under, any such agreement, and no event has occurred, is pending or, to the knowledge of the Parent, is threatened,
which, after the giving of notice, with lapse of time, or otherwise, would constitute a breach or default by the Parent or its
Subsidiaries or, to the knowledge of Parent, any other under such agreement;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>except as set forth in Section 3.24(c) of the Parent Disclosure Schedule, neither the Parent nor its Subsidiaries
has assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered any interest in any lease, sublease or license;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>there are no Liens, easements, covenants or other restrictions applicable to the real property subject to such lease,
except for recorded easements, covenants and other restrictions which do not materially impair the Intended Use or the occupancy
by the Parent or its Subsidiaries of the property subject thereto.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.25<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Insurance</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Section 3.25(a) of the Parent Disclosure Schedule sets forth each Insurance Policy to which the Parent or its Subsidiaries
is a party. The Insurance Policies are in full force and effect, maintained with reputable companies against loss relating to the
business, operations and properties and such other risks as companies engaged in similar business as the Parent and its Subsidiaries
would, in accordance with good business practice, customarily insure. All premiums due and payable under the Insurance Policies
have been paid on a timely basis and the Parent and its Subsidiaries are in compliance in all material respects with all other
terms thereof. True, complete and correct copies of the Insurance Policies have been made available to Parent.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>There are no material claims pending as to which coverage has been questioned, denied or disputed. Neither the Parent
nor its Subsidiaries has been refused insurance for which it has applied or had any policy of insurance terminated (other than
at its request), nor has the Parent or its Subsidiaries received notice from any insurance carrier that: (i) such insurance will
be canceled or that coverage thereunder will be reduced or eliminated; or (ii) premium costs with respect to such insurance will
be increased, other than premium increases in the ordinary course of business applicable on their terms to all holders of similar
policies.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.26<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Continuity of Business Enterprise</U>. It is the present intention of Parent to continue at least one significant
historic business line of the Company, or to use at least one significant portion of the Company&rsquo;s historic business assets
in a business, in each case within the meaning of Reg. &sect;1.368-1(d).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">ARTICLE
IV<BR>
<BR>
</FONT>CONDUCT OF BUSINESS PENDING THE MERGER</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Conduct of Business Pending the Merger</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of the Parent and the Company covenants and agrees with the other that, between the date hereof and the earlier
to occur of the Effective Time or such earlier time as this Agreement is terminated in accordance with Article VII (such period
being hereinafter referred to as the &ldquo;<B>Interim Period</B>&rdquo;), except as expressly required by this Agreement or unless
Parent or the Company, as applicable, shall otherwise consent in writing, which consent shall not be unreasonably withheld, conditioned
or delayed, each of the Company and its Subsidiaries, on the one hand, and the Parent and its Subsidiaries, on the other hand:
(x) shall conduct its business only in the ordinary course of business, consistent with past practice; (y) shall not take any action,
or fail to take any action, except in the ordinary course of business, consistent with past practice; and (z) shall use its reasonable
best efforts to preserve intact its business organization, properties and assets, keep available the services of its officers,
employees and consultants, maintain in effect all Company Material Contracts and the Parent Material Contracts, as applicable,
and preserve its relationships, customers, licensees, suppliers and other Persons with which it has business relations. By way
of amplification and not limitation, except as expressly permitted by this Agreement or as set forth below, neither the Company
nor its Subsidiaries, on the one hand, nor the Parent and its Subsidiaries, on the other hand, shall, during the Interim Period,
directly or indirectly, do any of the following without the prior written consent of the other:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(i)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>amend its Certificate of Incorporation, Bylaws or other equivalent organizational documents, or otherwise alter its
corporate structure through merger, liquidation, reorganization or otherwise; except with respect to Parent, in accordance with
Section 3.4(a);</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(ii)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>with respect to Parent and its Subsidiaries only, issue, transfer, pledge or encumber any shares of capital stock
of any class, or any options, warrants, convertible securities or other rights of any kind to acquire any shares of capital stock,
or any other ownership interest (except for the issuance of (A) shares of Parent Common Stock in the Private Placement (as hereinafter
defined), (B) Parent Common Stock issuable pursuant to warrants or promissory notes or (C) options by Parent to certain of its
directors, officers, employees, and consultants which such options are exercisable into no more than 300,000 shares of Parent Common
Stock);</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(iii)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>with respect to Parent and its Subsidiaries only, redeem, repurchase or otherwise acquire, directly or indirectly,
any shares of their capital stock or interest in or securities of its Subsidiaries;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(iv)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>transfer, lease, license, mortgage, pledge, encumber or incur or assume any Lien on any properties, facilities, equipment
or other tangible or intangible assets, except in the ordinary course of business and consistent with past practice;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(v)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>declare, set aside or pay any dividend or other distribution in respect of any of its capital stock or other equity
interests, except, that prior to Closing, the Company shall have the right to distribute any cash to the Company Stockholders as
provided in Section 5.13 hereof;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(vi)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>split, combine or reclassify any shares of its capital stock or other securities or equity interests, or issue any
other securities in respect of, in lieu of or in substitution for shares of its capital stock or equity interests or engage in
a spinoff transaction;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(vii)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any Person;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(viii)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>incur indebtedness for borrowed money or issue debt securities or assume, guarantee or endorse or become responsible
for the obligations of any Person, or make any loans, advances or enter into any financial commitments, except borrowings in the
ordinary course of business consistent with past practice pursuant to that certain Credit Facility Agreement, dated as of February
12, 2010, between Premier Packaging Corporation, a New York corporation, and RBS Citizens, N.A., a national banking association;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(ix)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>authorize any capital expenditure in excess of $50,000 individually or $125,000 in the aggregate;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(x)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>take or permit to be taken any action to: (A) increase employee compensation or grant any severance or termination
compensation, except in accordance with agreements entered into prior to the date of this Agreement; (B) enter into any collective
bargaining agreement; (C) with respect to Parent and its Subsidiaries only, and other than Patrick White, hire or terminate any
employees, independent contractors or consultants, having a total salary or severance package that is individually in excess of
$50,000, or that collectively is in excess of $50,000; (D) establish, adopt, enter into or amend in any material respect any bonus,
profit sharing, thrift, compensation, stock option, restricted stock, pension, retirement, deferred compensation, employment, termination,
severance or other plan, trust, fund, policy, agreement or arrangement for the benefit of any of its directors, officers or employees
or (E) approve any cashless exercise of any issued and outstanding options;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(xi)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>change any accounting policies or procedures unless required by statutory accounting principles or GAAP;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(xii)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>make any payments to any Affiliate, except normal recurring payments pursuant to any existing employment or consulting
agreement as of the date of this Agreement;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(xiii)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>fail to make any expenditures that are necessary and sufficient to maintain or, to the extent budgeted or consistent
with the past practice, improve the conditions of its properties, facilities and equipment, including, without limitation, budgeted
expenditures relating to maintenance, repair and replacement;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(xiv)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>take any action or fail to take any action permitted by this Agreement if such action or failure to take action could
reasonably be expected to result in either (A) any of their representations and warranties of set forth in this Agreement becoming
untrue or (B) any of the conditions to the Closing set forth in Article VI not being satisfied; or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(xv)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>authorize, recommend, propose, announce or enter into any agreement, contract, commitment or arrangement to do any
of the foregoing.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>During the Interim Period, each of the Parent and the Company shall, and shall cause each of its Subsidiaries to
solicit and accept customer orders in the ordinary course of business.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Solicitation of Other Proposals by Company</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Company agrees that it will, and will cause its Subsidiaries and Affiliates and each of their respective officers,
directors, employees, investment bankers, attorneys, accountants and other advisors or representatives (collectively, &ldquo;<B>Representatives</B>&rdquo;)
to, immediately cease and cause to be terminated any and all existing activities, discussions or negotiations with any persons
conducted heretofore with respect to any Company Acquisition Proposal (as defined herein). Except as expressly provided in this
Section 4.2, Company and each of its Subsidiaries and Affiliates shall not, and shall not authorize, permit or direct any of their
respective Representatives to, directly or indirectly: (i) solicit, initiate, induce or take any action to facilitate, encourage,
solicit, initiate or induce any relating to, or the submission, any Company Acquisition Proposal; (ii) enter into, participate
or engage in discussions or negotiations in any way with any Person concerning, any Company Acquisition Proposal, (iii) <FONT STYLE="color: black">furnish
to any Person (other than the Parent and its designees) any information relating to Company or any of its Subsidiaries, or afford
to any Person (other than the Parent or its designees) access to the business, properties, assets, books, records or other information,
or to any personnel, of Company or any of its Subsidiaries, in any such case, with the intent to induce or solicit the making,
submission or announcement of, or the intent to encourage or assist, a Company Acquisition Proposal or any inquiries or the making
of any proposal that would reasonably be expected to lead to a Company Acquisition Proposal, (iv) approve, endorse or recommend
a Company Acquisition Proposal; (v) enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition
agreement or other similar instrument (whether binding or not) or contract constituting or otherwise relating to a Company Acquisition
Proposal or requiring it to abandon, terminate or fail to consummate, or that is intended to or that would reasonably be expected
to result in the abandonment of, termination of or failure to consummate, the Merger (other than </FONT>executed non-disclosure
agreement having provisions no less favorable to the party hereto delivering such agreement than that certain Mutual Non-Disclosure
Agreement (the &ldquo;<B>NDA</B>&rdquo;), by and between Parent and the Company, dated as of July 19, 2012 (a<FONT STYLE="color: black">n
&ldquo;<B>Acceptable NDA</B>&rdquo;)); or (vi) grant any approval pursuant to any &quot;moratorium,&quot; &quot;control share acquisition,&quot;
&quot;business combination,&quot; &quot;fair price&quot; or other form of anti-takeover law (collectively, &ldquo;<B>Takeover Laws</B>&rdquo;),
including without limitation Section 203 of the DGCL, to any Person (other than as contemplated herein) or transaction (other than
the Merger) or any waiver or release under any standstill or any similar agreement with respect to equity securities of Company</FONT>.
Notwithstanding the foregoing sentence or any other provision of this Agreement, subject to compliance with Section 4.2(b), the
Company or its Board of Directors may enter into discussions with any Person in response to an unsolicited <U>bona</U> <U>fide</U>
written Company Acquisition Proposal by such Person, which Company Acquisition Proposal was made after the date of this Agreement
and did not result from a breach of this Section 4.2(a), if and only to the extent that and prior to engaging in any such discussions
with such Person (x) the Board of Directors of the Company determines in good faith after consultation with its outside legal counsel
and other advisors, that such Company Acquisition Proposal either constitutes or could reasonably be expected to lead to a Company
Superior Proposal and (y) the Company&rsquo;s Board of Directors receives from such Person an Acceptable NDA.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Company shall notify the Parent orally as soon as practicable, and in writing, promptly (and in any event within
24 hours) after receipt by the Company of (i) any Company Acquisition Proposal or (ii) any inquiry or request for access to the
properties, books, records or other information of the Company by any Person that relates to or could reasonably be expected to
lead to a Company Acquisition Proposal and such notice shall indicate in reasonable detail the identity of the offeror, the terms
and conditions of such proposal or inquiry and a copy of any written Company Acquisition Proposal. The Company shall promptly notify
the Parent of any discussions with any such Person regarding a Company Acquisition Proposal and shall disclose the substance of
such discussions and Company shall otherwise keep the Parent reasonably informed of the status of such Company Acquisition Proposal,
and any material changes to the terms thereof, and shall provide to the Parent as soon as practicable and in any event within 24
hours after receipt by the Parent copies of all written correspondence or other written material relating to such Company Acquisition
Proposal.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Subject to the provisions of this Section 4.2, neither the Company's Board of Directors nor any committee thereof
shall (i) (A) withhold, withdraw, amend, qualify or modify in a manner adverse to Parent, or publicly propose to withhold, withdraw,
amend, qualify or modify in a manner adverse to the Parent, the Company Board Recommendation, or (B) approve, adopt or recommend,
or publicly propose to approve, adopt or recommend, any Company Acquisition Proposal (any action described in clauses (A) and (B)
or (ii) enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement or other similar
instrument (whether binding or not) or contract constituting or otherwise relating to a Company Acquisition Proposal (other than
an Acceptable NDA).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><FONT STYLE="color: black">Notwithstanding the foregoing or anything to the contrary set forth in this Agreement,
at any time prior to obtaining the Company Stockholder Approval, Company's Board of Directors (or any committee thereof) may effect
a Company Board Recommendation Change if, at any time prior to the receipt of the Company Stockholder Approval, (1) the Company
has complied with its obligations under this Section 4.2 and (2) the Company's Board of Directors (or any committee thereof) determines
in good faith (after consultation with outside legal counsel) that as a result of a (x) Company Superior Proposal or (y) an event,
development or change in circumstances that occurs or arises following the date of this Agreement, the failure to effect a Company
Board Recommendation Change would be inconsistent with its fiduciary duties to the Company's stockholders.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><FONT STYLE="color: black">For purposes of this Agreement:</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(i)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><FONT STYLE="color: black">&ldquo;</FONT><B>Company Acquisition Proposal</B><FONT STYLE="color: black">&rdquo;</FONT>
means any offer, proposal, discussions, negotiations, indication of interest or inquiry (whether in writing or otherwise)&nbsp;
by any Person (other than Parent or any Affiliate thereof) in a transaction or series of related transactions (other than the transactions
contemplated by this Agreement) relating to: (i) any issuance, sale or other disposition of (including by way of merger, consolidation,
business combination, share exchange, recapitalization, joint venture, partnership or any similar transaction) securities (or options,
rights or warrants to purchase, or securities convertible into or exchangeable for, such securities) representing 20% or more of
the voting power or economic interests of Company or any Subsidiary (including, for the avoidance of doubt, any issuance of equity
securities of Company), (ii) any direct or indirect sale, transfer, acquisition or disposition of more than 20% of the consolidated
assets of Company and its Subsidiaries taken as a whole (measured by the fair market value thereof), including by way of purchase
of stock or other equity interests of the Subsidiaries or (iv) any merger, consolidation, share exchange, business combination,
recapitalization, reorganization, liquidation, joint venture, dissolution or any similar transaction involving the Company or any
Subsidiary.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(ii)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><FONT STYLE="color: black">&ldquo;</FONT><B>Company Superior Proposal</B><FONT STYLE="color: black">&rdquo;</FONT>
means any bona fide offer or proposal that constitutes a Company Acquisition Proposal on terms that the Company Board of Directors
(or any committee thereof) shall have determined in good faith (after <FONT STYLE="color: black">consultation</FONT> with its financial
advisor and outside legal counsel), taking into account all relevant legal (including conditions), financial, regulatory, timing
and other aspects of such Company Acquisition Proposal, is reasonably likely to be consummated and would be more favorable to Company's
stockholders (in their capacity as such) than the Merger, if consummated (including after taking into account any changes to the
terms of this Agreement proposed by the Parent in response to such Company Acquisition Proposal); provided that, for purposes of
the definition of <FONT STYLE="color: black">&ldquo;</FONT>Company Superior Proposal,<FONT STYLE="color: black"> &rdquo;</FONT>
the references to <FONT STYLE="color: black">&ldquo;</FONT>20%<FONT STYLE="color: black">&rdquo;</FONT> in the definition of <FONT STYLE="color: black">&ldquo;</FONT>Company
Acquisition Proposal<FONT STYLE="color: black">&rdquo;</FONT> shall be deemed to be references to <FONT STYLE="color: black">&ldquo;</FONT>more
than 50%.<FONT STYLE="color: black">&rdquo;</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Solicitation of Other Proposals by Parent</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Parent agrees that it will, and will cause its Subsidiaries and Affiliates and each of their respective Representatives
to, immediately cease and cause to be terminated any and all existing activities, discussions or negotiations with any persons
conducted heretofore with respect to any Parent Acquisition Proposal (as defined herein). Except as expressly provided in this
Section 4.3, Parent and each of its Subsidiaries and Affiliates shall not, and shall not authorize, permit or direct any of their
respective Representatives to, directly or indirectly,: (i) solicit, initiate, induce or take any action to facilitate, encourage,
solicit, initiate or induce any relating to, or the submission, any Parent Acquisition Proposal; (ii) enter into, participate or
engage in discussions or negotiations in any way with any Person concerning, any Parent Acquisition Proposal, (iii) <FONT STYLE="color: black">furnish
to any Person (other than the Company and its designees) any information relating to Parent or any of its Subsidiaries, or afford
to any Person (other than the Company or its designees) access to the business, properties, assets, books, records or other information,
or to any personnel, of Parent or any of its Subsidiaries, in any such case, with the intent to induce or solicit the making, submission
or announcement of, or the intent to encourage or assist, a Parent Acquisition Proposal or any inquiries or the making of any proposal
that would reasonably be expected to lead to a Parent Acquisition Proposal, (iv) approve, endorse or recommend a Parent Acquisition
Proposal; (v) enter into any agreement in principle, letter of intent, term sheet, merger agreement, acquisition agreement or other
similar instrument (whether binding or not) or Contract constituting or otherwise relating to a Parent Acquisition Proposal or
requiring it to abandon, terminate or fail to consummate, or that is intended to or that would reasonably be expected to result
in the abandonment of, termination of or failure to consummate, the Merger (other than an Acceptable NDA); or (vi) grant any approval
pursuant to any Takeover Laws (as applicable), to any Person (other than as contemplated herein) or transaction (other than the
Merger) or any waiver or release under any standstill or any similar agreement with respect to equity securities of Parent</FONT>.
Notwithstanding the foregoing sentence or any other provision of this Agreement, subject to compliance with Section 4.3(b), Parent
or its Board of Directors may enter into discussions with any Person in response to an unsolicited <U>bona</U> <U>fide</U> written
Parent Acquisition Proposal by such Person, which Parent Acquisition Proposal was made after the date of this Agreement and did
not result from a breach of this Section 4.3(a), if and only to the extent that and prior to engaging in any such discussions with
such Person (x) the Board of Directors of the Parent determines in good faith after consultation with its outside legal counsel
and other advisors, that such Parent Acquisition Proposal either constitutes or could reasonably be expected to lead to a Parent
Superior Proposal and (y) the Parent&rsquo;s Board of Directors receives from such Person an Acceptable NDA.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Parent shall notify the Company orally as soon as practicable, and in writing, promptly (and in any event within
24 hours) after receipt by the Parent of (i) any Parent Acquisition Proposal or (ii) any inquiry or request for access to the properties,
books, records or other information of the Parent by any Person that relates to or could reasonably be expected to lead to a Parent
Acquisition Proposal and such notice shall indicate in reasonable detail the identity of the offeror, the terms and conditions
of such proposal or inquiry and a copy of any written Parent Acquisition Proposal. The Parent shall promptly notify the Company
of any discussions with any such Person regarding a Parent Acquisition Proposal and shall disclose the substance of such discussions
and Parent shall otherwise keep the Company reasonably informed of the status of such Parent Acquisition Proposal, and any material
changes to the terms thereof, and shall provide to the Company as soon as practicable and in any event within 24 hours after receipt
by the Company copies of all written correspondence or other written material relating to such Parent Acquisition Proposal.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Subject to the provisions of this Section 4.3, neither the Parent's Board of Directors nor any committee thereof
shall (i) (A) withhold, withdraw, amend, qualify or modify in a manner adverse to the Company, or publicly propose to withhold,
withdraw, amend, qualify or modify in a manner adverse to the Company, the Parent Board Recommendation, or (B) approve, adopt or
recommend, or publicly propose to approve, adopt or recommend, any Parent Acquisition Proposal (any action described in clauses
(A) and (B) as well as any failure by the Company to timely respond to the commencement of (i) a tender or exchange offer relating
to any shares of Parent Common Stock by issuing a public statement reaffirming, filing a Schedule 14D-9 pursuant to Rule 14e-2
and Rule 14d-9 promulgated under the Exchange Act a statement reaffirming, and sending to Parent's stockholders, within 10 Business
Days after the commencement of such tender or exchange offer, a statement reaffirming, the Parent Board Recommendation and (in
the case of each such communication) disclosing that Parent's Board of Directors recommends rejection of such tender offer or exchange
offer or (ii) a publicly announced Parent Acquisition Proposal by issuing, within 10 Business Days after such Parent Acquisition
Proposal is announced, a press release that reaffirms the recommendation of Parent's Board of Directors that Parent's stockholders
vote in favor of the Merger and the other transactions contemplated hereby, being referred to as a <FONT STYLE="color: black">&ldquo;</FONT><B>Parent
Board Recommendation Change</B><FONT STYLE="color: black">&rdquo;</FONT>) or (ii) enter into any agreement in principle, letter
of intent, term sheet, merger agreement, acquisition agreement or other similar instrument (whether binding or not) or contract
constituting or otherwise relating to a Parent Acquisition Proposal (other than an Acceptable NDA pursuant to Section 4.3(a));
<U>provided</U>, <U>however</U>, that a <FONT STYLE="color: black">&ldquo;</FONT>stop, look and listen<FONT STYLE="color: black">&rdquo;</FONT>
communication by the Parent's Board of Directors (or committee thereof) to Parent's stockholders pursuant to Rule 14d-9(f) of the
Exchange Act, or any substantially similar communication, shall not be deemed to be a Parent Board Recommendation Change. Notwithstanding
the foregoing or anything to the contrary set forth in this Agreement, at any time prior to obtaining the Parent Stockholder Approval,
the Parent's Board of Directors (or any committee thereof) may effect a Parent Board Recommendation Change if, at any time prior
to the receipt of the Parent Stockholder Approval, (1) Parent has complied with its obligations under this Section 4.3 and (2)
the Parent's Board of Directors (or any committee thereof) determines in good faith (after consultation with outside legal counsel)
that as a result of (A) a Parent Superior Proposal<FONT STYLE="color: black"> or (B) an event, development or change in circumstances
that occurs or arises following the date of this Agreement</FONT>, the failure to effect a Parent Board Recommendation Change would
be inconsistent with its fiduciary duties to Parent's stockholders.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><FONT STYLE="color: black">Nothing in this Agreement shall prohibit Parent's Board of Directors (or any committee
thereof) from (i) taking and disclosing to Parent's stockholders a position contemplated by Rule 14e-2(a) under the Exchange Act
or complying with the provisions of Rule 14d-9 promulgated under the Exchange Act with respect to any tender offer or exchange
offer not made in violation of this <U>Section 4.3</U>, and/or (ii) making any disclosure to Parent's stockholders if Parent's
Board of Directors (or any committee thereof) determines in good faith (after consultation with its outside legal counsel) that
the failure to make such disclosure would violate applicable law or be inconsistent with its fiduciary duties to Parent's stockholders.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><FONT STYLE="color: black">For purposes of this Agreement:</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(i)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><FONT STYLE="color: black">&ldquo;</FONT><B>Parent Acquisition Proposal</B><FONT STYLE="color: black">&rdquo;</FONT>
means any offer, proposal, discussions, negotiations, indication of interest or inquiry (whether in writing or otherwise)&nbsp;
by any Person (other than Company or any Affiliate thereof) in a transaction or series of related transactions (other than the
transactions contemplated by this Agreement) relating to: (i) any issuance, sale or other disposition of (including by way of merger,
consolidation, business combination, share exchange, recapitalization, joint venture, partnership or any similar transaction) securities
(or options, rights or warrants to purchase, or securities convertible into or exchangeable for, such securities) representing
20% or more of the voting power or economic interests of Parent or any Subsidiary (including, for the avoidance of doubt, any issuance
of equity securities of Parent), (ii) any tender offer, exchange offer, stock purchase or other transaction in which, if consummated,
any person or <FONT STYLE="color: black">&ldquo;</FONT>group<FONT STYLE="color: black">&rdquo;</FONT> (as such term is defined
under the Exchange Act) shall acquire beneficial ownership (as such term is defined in Rule 13d-3 under the Exchange Act), or the
right to acquire beneficial ownership, of 20% or more of the voting power or economic interests of Parent or any Subsidiary, (iii)
any direct or indirect sale, transfer, acquisition or disposition of more than 20% of the consolidated assets of Parent and its
Subsidiaries taken as a whole (measured by the fair market value thereof), including by way of purchase of stock or other equity
interests of the Subsidiaries or (iv) any merger, consolidation, share exchange, business combination, recapitalization, reorganization,
liquidation, joint venture, dissolution or any similar transaction involving the Parent or any Subsidiary.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(ii)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><FONT STYLE="color: black">&ldquo;</FONT><B>Parent Superior Proposal</B><FONT STYLE="color: black">&rdquo;</FONT>
means any bona fide offer or proposal that constitutes a Parent Acquisition Proposal on terms that the Parent Board of Directors
(or any committee thereof) shall have determined in good faith (after <FONT STYLE="color: black">consultation</FONT> with its financial
advisor and outside legal counsel), taking into account all relevant legal (including conditions), financial, regulatory, timing
and other aspects of such Parent Acquisition Proposal, is reasonably likely to be consummated and would be more favorable to Parent's
stockholders (in their capacity as such) than the Merger, if consummated (including after taking into account any changes to the
terms of this Agreement proposed by the Company in response to such Parent Acquisition Proposal); provided that, for purposes of
the definition of <FONT STYLE="color: black">&ldquo;</FONT>Parent Superior Proposal,<FONT STYLE="color: black">&rdquo;</FONT>,
the references to <FONT STYLE="color: black">&ldquo;</FONT>20%<FONT STYLE="color: black">&rdquo;</FONT> in the definition of <FONT STYLE="color: black">&ldquo;</FONT>Parent
Acquisition Proposal<FONT STYLE="color: black">&rdquo;</FONT> shall be deemed to be references to <FONT STYLE="color: black">&ldquo;</FONT>more
than 50%.<FONT STYLE="color: black">&rdquo;</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">ARTICLE
V<BR>
<BR>
</FONT>ADDITIONAL AGREEMENTS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Filings; Stockholder Approvals</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Following the date hereof, as soon as reasonably practicable, but in no event to exceed 15 Business Days from the
date hereof (subject to the Company providing Parent necessary information in a timely manner), Parent shall prepare and file with
the SEC the Registration Statement containing the Proxy Statement (which Registration Statement and Proxy Statement shall comply
with the rules and regulations promulgated by the SEC), and each of Parent and the Company shall use its reasonable best efforts
to have the Registration Statement containing the Proxy Statement declared effective by the SEC as promptly as practicable thereafter
and to keep the Registration Statement containing the Proxy Statement effective through the Effective Time in order to permit the
consummation of the Merger. In connection with the foregoing, each party shall promptly notify the other of the receipt of all
comments of the SEC with respect to the Registration Statement containing the Proxy Statement and of any request by the SEC for
any amendment or supplement thereto or for additional information and shall promptly provide to the other party copies of all correspondence
between such party and/or any of its Representatives and the SEC with respect to the Registration Statement containing the Proxy
Statement. The Company and its representatives will be given a reasonable opportunity to be involved in the drafting of the Registration
Statement containing the Proxy Statement and any amendment or supplement thereto and any such correspondence prior to its filing
with the SEC. Parent and the Company shall each use its reasonable best efforts to promptly provide responses to the SEC with respect
to all comments received on the Registration Statement containing the Proxy Statement from the SEC. Each of Parent and the Company
shall promptly furnish to each other all information, and take all such other actions (including using its reasonable best efforts
to obtain any required consents of their respective independent auditors), as may reasonably be requested in connection with any
action by any of them in connection with the preceding sentences of this Section 5.1(a). Whenever any Party hereto learns of the
occurrence of any event or the existence of any fact which is required to be set forth in an amendment or supplement to the Registration
Statement containing the Proxy Statement pursuant to applicable law, such party shall promptly inform the other of such event or
fact and comply with all of its obligations pursuant to this Section 5.1(a) relating to effecting such amendment or supplement
to the Registration Statement containing the Proxy Statement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>As promptly as practicable after the date of this Agreement, the Parent shall prepare and file any other filings
required under the Exchange Act, the Securities Act or any other federal or state securities laws relating to the Merger and other
transactions contemplated by this Agreement (collectively, the &ldquo;<B>Other Filings</B>&rdquo;). Parent shall also take any
action (other than qualifying to do business in any jurisdiction in which it is not now so qualified or filing a general consent
to service of process) required to be taken under any applicable state securities laws in connection with the issuance of shares
of Parent Common Stock in the Merger, and the Company shall furnish all information concerning the Company and the holders of Company
Common Stock as may be reasonably required in connection with the foregoing. At least five (5) days prior to Closing, Parent shall
prepare a draft Form 8-K announcing the Closing, together with, or incorporating by reference, the financial statements prepared
by the Company and its accountant, and such other information that may be required to be disclosed with respect to the Merger in
any report or form to be filed with the SEC (&ldquo;<B>Merger Form 8-K</B>&rdquo;), which shall be in a form reasonably acceptable
to the Company and in a format acceptable for EDGAR filing. Prior to Closing, Parent and the Company shall prepare the press release
announcing the consummation of the Merger hereunder (&ldquo;<B>Press Release</B>&rdquo;). Simultaneously with the Closing, Parent
shall file the Merger Form 8-K with the SEC and distribute the Press Release. Prior to execution and delivery of this Agreement,
Parent and the Company shall prepare (1) the press release announcing the execution and delivery of this agreement (&ldquo;<B>Agreement
Press Release</B>&rdquo;) and (ii) the Current Report on Form 8-K (the &ldquo;<B>Agreement 8-K</B>&rdquo;) announcing the execution
and delivery of this Agreement and all other information required to be disclosed by the Exchange Act. Parent shall, within the
time period required by applicable securities laws, issue and distribute such Agreement Press Release and Agreement 8-K. Concurrent
with the Agreement Press Release and the Agreement 8-K, the Parent shall have publicly disclosed any material non-public information
of Parent or Parent&rsquo;s Subsidiaries that has been provided to Company or any representative thereof, whether in writing or
otherwise.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Parties shall use their respective reasonable best efforts to cause the Proxy Statement, the Registration Statement
and the Other Filings to comply in all material respects with all requirements of applicable law. Whenever any event occurs which
is required under the Securities Act, the Exchange Act or other applicable law to be set forth in an amendment or supplement to
the Proxy Statement, the Registration Statement or any Other Filing, each Party, as the case may be, shall promptly inform the
other of such occurrence, provide the other Party reasonable opportunity to review and comment, and cooperate in filing with the
SEC, its staff or any other Governmental Authority, as applicable, and/or mailing to stockholders of the Company, such amendment
or supplement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Following the date hereof, Parent will take all action necessary in accordance with the BCL and its certificate of
incorporation and bylaws to duly call, give notice of, convene and hold as promptly as practicable a special meeting of Parent&rsquo;s
stockholders (the &ldquo;<B>Parent Special Meeting</B>&rdquo;) to seek the Parent Stockholder Approval, including mailing the Proxy
Statement to its stockholders as promptly as reasonably practicable after the Registration Statement is declared effective under
the Securities Act. Parent, subject to Section 4.3(a), will use its reasonable best efforts to solicit from its stockholders proxies
in favor of the approval of the issuance of the Merger Consideration pursuant to this Agreement, the adoption of the Amendments
and any other approvals required to effect the Merger required hereunder and will take all other action necessary or advisable
to obtain the Parent Stockholder Approval. Notwithstanding anything to the contrary contained in this Agreement, Parent may adjourn
or postpone the Parent Special Meeting to the extent necessary to ensure that any necessary supplement or amendment to the Proxy
Statement (as determined by Parent in good faith and upon the advice of outside legal counsel) is provided to Parent&rsquo;s stockholders
a reasonable time in advance of the Parent Special Meeting (or at any adjournment or postponement thereof), or if as of the time
for which the Parent Special Meeting (or any adjournment or postponement thereof) is scheduled there are insufficient shares of
Parent Common Stock represented in person or by proxy to constitute a quorum necessary to conduct the business of the Parent Special
Meeting or to adopt this Agreement and approve the transactions contemplated hereby, including the Merger. Subject to Section 4.3:
(i) the Board of Directors of Parent shall recommend that Parent&rsquo;s stockholders vote in favor of the Parent Stockholder Approval,
the adoption of the Amendments and otherwise approve all actions contemplated hereby pursuant to this Agreement at the Parent Special
Meeting (or any adjournment or postponement thereof) (the &ldquo;<B>Parent Board Recommendation</B>&rdquo;); and (ii) the Proxy
Statement shall include the Parent Board Recommendation.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Following the date hereof, the Company will take all action necessary in accordance with the DGCL and its certificate
of incorporation and bylaws to duly call, give notice of, convene and hold on or prior to the date of the Parent Special Meeting,
a special meeting of the Company&rsquo;s stockholders (or seek the written consent of the Company stockholders) (the &ldquo;<B>Company
Special Meeting</B>&rdquo;) to seek the Company Stockholder Approval. The Company, subject to Section 4.2(a), will use its reasonable
best efforts to obtain the Company Stockholder Approval. Notwithstanding anything to the contrary contained in this Agreement,
the Company may adjourn or postpone the Company Special Meeting to the extent necessary to ensure that any necessary information
statement or similar communication (as determined by the Company in good faith and upon the advice of outside counsel) is provided
to the Company&rsquo;s stockholders a reasonable time in advance of the Company Special Meeting (or at any adjournment or postponement
thereof), or if as of the time for which the Company Special Meeting (or any adjournment or postponement thereof) is scheduled
there are insufficient shares of Company Stock represented in person or by proxy to constitute a quorum necessary to conduct the
business of the Company Special Meeting or to adopt this Agreement and approve the transactions contemplated hereby, including
the Merger. Except as permitted by Section 4.2(a): (i) the Board of Directors of the Company shall recommend that the Company&rsquo;s
stockholders vote in favor of (A) the adoption of this Agreement and (B) the approval of the transactions contemplated by this
Agreement, including the Merger (the &ldquo;<B>Company Board Recommendation</B>&rdquo;); and (ii) any written communication to
the Company&rsquo;s stockholders regarding the Company Special Meeting shall include the Company Board Recommendation.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Access to Information; Confidentiality</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Upon reasonable notice, each party shall (and shall cause each of its Subsidiaries to) afford to the officers, employees,
accountants, counsel and other representatives of the other reasonable access, during the Interim Period, to all its properties,
books, contracts, commitments and records and, during such period, furnish promptly to the other all information concerning its
business, properties and personnel as the requesting party may reasonably request. Each party shall make available to the other
the appropriate individuals for discussion of its business, properties and personnel as the requesting party may reasonably request.
No investigation pursuant to this Section 5.2(a) shall affect any representations or warranties of a party contained herein or
the conditions to the obligations of the other party hereto.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each party agrees to maintain in confidence any non-public information received from the other party (such information
as defined as Confidential Information in the NDA, &ldquo;<B>Confidential Information</B>&rdquo;), and to use such Confidential
Information only for purposes of consummating the transactions contemplated by this Agreement. Confidential Information will not
include items (a) through (f) set forth in Section 9 of the NDA. In the event this Agreement is terminated as provided in Article
VII hereof, each party (x) will return or cause to be returned to the other all documents and other material obtained from the
other in connection with the Merger contemplated hereby, and (y) will use its reasonable best efforts to delete from its computer
systems all documents and other material obtained from the other in connection with the Merger contemplated hereby.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Reasonable Efforts; Further Assurances</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Parent and the Company shall use their reasonable best efforts to satisfy or cause to be satisfied all of the conditions
precedent set forth in Article VI, as applicable to each of them. Each of Party and the Company, at the reasonable request of the
other, shall execute and deliver such other instruments and do and perform such other acts and things as may be necessary or desirable
for effecting completely the consummation of the Merger and other transactions contemplated by this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Subject to the terms and conditions hereof, the Company and Parent agree to use their respective reasonable best
efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective, in the most expeditious manner practicable, the Merger and other transactions contemplated by this
Agreement including, without limitation, using their respective reasonable best efforts: (i) to obtain prior to the Closing Date
all licenses, certificates, permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities
and parties to contracts with the Company or its Subsidiaries as are necessary for the consummation of the transactions contemplated
hereby; (ii) to effect all necessary registrations and filings required by any Governmental Authority (in connection with which
Parent and the Company shall cooperate with each other in connection with the making of all such registrations and filings, including,
without limitation, providing copies of all such documents to the non-filing party and its advisors prior to the time of such filing
and, if requested, will accept all reasonable additions, deletions or changes suggested in connection therewith); (iii) to furnish
to each other such information and assistance as reasonably may be requested in connection with the foregoing; and (iv) to lift,
rescind or mitigate the effects of any injunction, restraining order or other ruling by a Governmental Authority adversely affecting
the ability of any Party to consummate the Merger or other transactions contemplated hereby and to prevent, with respect to any
threatened or such injunction, restraining order or other such ruling, the issuance or entry thereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.4<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Employee Benefits</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Parent agrees it shall use reasonable best efforts to ensure that individuals who are employed on a full-time basis
by the Company or its Subsidiaries immediately prior to the Effective Time (each such employee, a &ldquo;<B>Company Employee</B>&rdquo;)
shall remain employees of the Surviving Corporation or any of its Subsidiaries upon the Effective Time; <U>provided</U>,<U> however</U>,
that this Section 5.4(a) shall not be construed to limit the ability of the Surviving Corporation, Parent or any of its Subsidiaries
to terminate the employment of any Company Employee at any time.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>After the Effective Time the Company Employees shall be eligible to participate in the employee benefit plans of
Parent to the same extent as any similarly situated and geographically located employee of Parent.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.5<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Tax Matters</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Neither the Company, Merger Sub nor the Parent shall take or knowingly fail to take any action that is otherwise
consistent with the terms of this Agreement (without regard to this Section 5.5) and compliant with applicable law that would cause
the Merger to fail to qualify as a reorganization within the meaning Section 368 of the Code. The Parent, Merger Sub and the Company
shall take any action that is required to cause the Merger to qualify as a reorganization within the meaning of Section 368(a)
of the Code; provided, such action does not otherwise affect the economics of the transaction contemplated hereunder to any of
the Parties.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Subject to applicable Tax law and the receipt of the tax opinion letter referenced in Section 5.16, each of the Company,
Merger Sub and Parent shall report the Merger as a reorganization within the meaning of Section 368 of the Code.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.6<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>[<U>Reserved</U>].</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.7<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Notification of Certain Matters</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of the Company and Parent shall give prompt notice to the other of the occurrence or non-occurrence of: (i)
any event the occurrence, or non-occurrence of which could reasonably be expected to result in any representation or warranty contained
in this Agreement to be untrue or inaccurate in any material respect (or, in the case of any representation or warranty qualified
by its terms by materiality, then untrue or inaccurate in any respect); and (ii) any failure of the Company, Parent or Merger Sub,
as the case may be, to comply with or satisfy in any material respect any covenant, condition or agreement to be complied with
or satisfied by it hereunder; <U>provided</U>, <U>however</U>, that the delivery of any notice pursuant to this Section 5.7(a)
shall not limit or otherwise affect the remedies available hereunder to the Party receiving such notice.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of the Company and Parent shall give prompt notice to the other of: (i) any notice or other communication from
any Person alleging that the consent of such Person is or may be required in connection with the Merger or other transactions contemplated
by this Agreement; (ii) any notice or other communication from any Governmental Authority in connection with the Merger or other
transactions contemplated by this Agreement; (iii) any litigation, relating to or involving or otherwise affecting the Company
or its Subsidiaries or Parent that relates to the Merger or other transactions contemplated by this Agreement; (iv) the occurrence
of a default or event that, with notice or lapse of time or both, will become a default under either a Company Material Contract
or a Parent Material Contract; and (v) any change that would be considered reasonably likely to result in a Company Material Adverse
Effect or Parent Material Adverse Effect, as the case may be, or is likely to impair in any material respect the ability of either
Parent or the Company to consummate the transactions contemplated by this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.8<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Quotation on the NYSE MKT</U>. Parent shall use its reasonable best efforts to cause the shares of Parent Common
Stock to be issued in the Merger to be approved for quotation on the NYSE MKT.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.9<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Public Announcements</U>. Except as otherwise required by applicable law, court process or the rules of the NYSE
MKT, or as provided elsewhere herein, prior to the Closing or the earlier termination of this Agreement pursuant to Article VII,
neither the Company nor Parent shall, nor shall permit any of their respective Subsidiaries to, issue or cause the publication
of any press release or other public announcement with respect to the Merger or other transactions contemplated by this Agreement
without the consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.10<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Indemnification of Parent Directors and Officers</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>From and after the Effective Time, Parent shall continue to indemnify and hold harmless each present and former director
(or member of any committee of a board of directors), officer, employee and agent of Parent or any Subsidiary of Parent (each,
together with such Person&rsquo;s heirs, executors or administrators, a &ldquo;<B>Parent Indemnified Person</B>&rdquo;) against
any and all damages, expenses, reasonable attorney&rsquo;s fees, judgments, fines, settlements and other amounts actually incurred
in connection with any Action or investigation arising out of or pertaining to matters existing or occurring at or prior to the
Effective Time (including any acts or omissions arising out of or pertaining to the Merger) or any Action instituted by any Parent
Indemnified Person to enforce this Section 5.10 or any other indemnification or advancement right of such Parent Indemnified Person,
whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent that Parent is currently permitted
to indemnify such Parent Indemnified Person under applicable law and under its certificate of incorporation and bylaws as in effect
on the date of this Agreement or as amended to increase the scope of permitted indemnification; (including the advancing of expenses
to the fullest extent permitted under applicable law); <U>provided, however</U>, that the Parent Indemnified Person to whom such
expenses are advanced shall be required to provide an undertaking to Parent to repay such advances if it is ultimately determined
that such Parent Indemnified Person is not entitled to indemnification. From and after the Effective Time, Parent will continue
to honor and fulfill all obligations of Parent or any Parent Subsidiary pursuant to any written indemnification agreements with
any Parent Indemnified Persons in effect as of the date hereof. <FONT STYLE="color: #C00000"> </FONT>In addition, Parent and the
Surviving Corporation shall maintain in effect any and all exculpation, indemnification and advancement of expenses provisions
of Parent&rsquo;s and any of its Subsidiaries&rsquo; certificate of incorporation and by-laws or similar organization documents
in effect immediately prior to the Effective Time (including any acts or omissions arising out of or pertaining to the Merger)
or in any indemnification agreements of Parent or its Subsidiaries with any Parent Indemnified Person in effect as of the date
hereof, and shall not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights
thereunder of any individuals who at the Effective Time were Parent Indemnified Persons, and all rights to indemnification in respect
of any Action pending or asserted or any claim made within such period shall continue until the disposition of such Action or resolution
of such claim.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>From and after the Effective Time, Parent shall purchase and maintain a directors&rsquo; and officers&rsquo; liability
insurance policy or policies, and, if such policy or policies do not cover the Parent Indemnified Persons for events occurring
at or prior to the Effective Time, the Parent shall purchase and obtain a six (6) year extended reporting period or tail policy
or policies covering each for events occurring at or prior to the Effective Time, which insurance shall be of at least the same
coverage and amounts and contain terms and conditions which are no less advantageous to each Parent Indemnified Person than the
coverage, amounts, terms and conditions of the directors&rsquo; and officers&rsquo; liability insurance policy maintained by Parent
and its Subsidiaries as of the date of this Agreement. For the avoidance of doubt, the Parent shall bear the burden and cost of
obtaining such policy or policies.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The rights of each Parent Indemnified Person hereunder shall be in addition to, and not in limitation of, any other
rights such Parent Indemnified Person may have under the certificate of incorporation and bylaws of Parent or any other similar
organizational documents of Parent or any of its Subsidiaries, any other indemnification agreement or arrangement , the BCL or
otherwise. This Section 5.10 shall survive the consummation of the Merger, and is intended to be for the benefit of, and shall
be enforceable by, the Parent Indemnified Persons, their heirs and personal representatives, shall be binding on Parent, the Surviving
Corporation and their successors and assigns and may not be amended, altered or repealed after the Effective Time without the prior
written consent of the affected Parent Indemnified Persons. In the event that Parent, the Surviving Corporation or any of their
successors or assigns: (i) consolidates with or merges into any other Person and shall not be the continuing or surviving corporation
or entity in such consolidation or merger; or (ii) transfers all or substantially all of its properties and assets to any Person,
then, and in each case, proper provision shall be made so that the successors and assigns of Parent or the Surviving Corporation
(as the case may be) are obligated to honor the indemnification obligations set forth in this Section 5.10. Nothing in this Agreement
is intended to, shall be construed to or shall release, waive or impair any rights to directors&rsquo; and officers&rsquo; insurance
claims under any policy that is or has been in existence with respect to Parent or any of the Parent Subsidiaries or their respective
officers, directors and employees, it being understood and agreed that the indemnification provided for in this Section 5.10 is
not prior to, or in substitution for, any such claims under any such policies.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.11<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Indemnification of Company Directors and Officers</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Parent and Merger Sub agree that all rights to exculpation, indemnification and advancement of expenses for acts
or omissions occurring at or prior to the Effective Time (including any acts or omissions arising out of or pertaining to the Merger),
whether asserted or claimed prior to, at or after the Effective Time, now existing in favor of the current or former directors,
officers or employees, as the case may be, of the Company or its Subsidiaries as provided in their respective certificates of incorporation
or by-laws or other organization documents or in any agreement shall survive the Merger and shall continue in full force and effect
in accordance with their respective terms. Parent and the Surviving Corporation shall maintain in effect any and all exculpation,
indemnification and advancement of expenses provisions of the Company&rsquo;s and any of its Subsidiaries&rsquo; certificate of
incorporation and by-laws or similar organization documents in effect immediately prior to the Effective Time or in any indemnification
agreements of the Company or its Subsidiaries with any of their respective current or former directors, officers or employees in
effect as of the date hereof, and shall not amend, repeal or otherwise modify any such provisions in any manner that would adversely
affect the rights thereunder of any individuals who at the Effective Time were current or former directors, officers or employees
of the Company or any of its Subsidiaries, and all rights to indemnification in respect of any Action pending or asserted or any
claim made within such period shall continue until the disposition of such Action or resolution of such claim.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>From and after the Effective Time, Parent and the Surviving Corporation shall continue to indemnify and hold harmless
each present and former director (or member of any committee of a board of directors), officer, employee or agent of the Company
or any of its Subsidiaries (each, together with such Person&rsquo;s heirs, executors or administrators, a &ldquo;<B>Company Indemnified
Person</B>&rdquo;) against any and all damages, expenses, attorney&rsquo;s fees, judgments, fines, settlements and other amounts
actually and reasonably incurred in connection with any Action or investigation arising out of or pertaining to any action or omission
occurring or alleged to have occurred whether before or after the Effective Time (including acts or omissions in connection with
such Persons serving as an officer, director (or member of any committee of a board of directors), employee, agent or other fiduciary
in any entity if such service was at the request or for the benefit of the Company, and any acts or omissions arising out of or
pertaining to the Merger), or any Action instituted by any Company Indemnified Person to enforce this Section 5.11, including,
in each case, the advancing of expenses to the fullest extent permitted under applicable law in effect on the date of this Agreement
or as amended to increase the scope of permitted indemnification; <U>provided</U>, <U>however</U>, that the Company Indemnified
Person to whom such expenses are advanced shall be required to provide an undertaking to Parent to repay such advances if it is
ultimately determined that such Company Indemnified Person is not entitled to indemnification.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>From and after the Effective Time, Parent shall purchase and maintain a directors&rsquo; and officers&rsquo; liability
insurance policy or policies, and, if such policy or policies do not cover the Company's current or former directors for events
occurring at or prior to the Effective Time, the Parent shall purchase a six (6) year extended reporting period or tail policy
or policies covering the Company&rsquo;s current and former directors and officers for events occurring at or prior to the Effective
Time, which insurance shall be of at least the same coverage and amounts and contain terms and conditions which are no less advantageous
to the Company&rsquo;s current and former directors and officers than the coverage, amounts, terms and conditions of the directors&rsquo;
and officers&rsquo; liability insurance policy maintained by the Company as of the date of this Agreement. For the avoidance of
doubt, the Parent shall bear the burden and cost of obtaining such policy or policies and shall provide the Company with a copy
thereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The rights of each Company Indemnified Person hereunder shall be in addition to, and not in limitation of, any other
rights such Company Indemnified Person may have under the certificate of incorporation and bylaws of the Company or any other similar
organizational documents of the Company or any of its Subsidiaries or the Surviving Corporation, any other indemnification agreement
or arrangement, the DGCL or otherwise. This Section 5.11 shall survive the consummation of the Merger, and is intended to be for
the benefit of, and shall be enforceable by, the Company Indemnified Persons, their heirs and personal representatives, shall be
binding on Parent, the Surviving Corporation and their successors and assigns and may not be amended, altered or repealed after
the Effective Time without the prior written consent of the affected Company Indemnified Persons. In the event that Parent, the
Surviving Corporation or any of their successors or assigns: (i) consolidates with or merges into any other Person and shall not
be the continuing or surviving corporation or entity in such consolidation or merger; or (ii) transfers all or substantially all
of its properties and assets to any Person, then, and in each case, proper provision shall be made so that the successors and assigns
of Parent or the Surviving Corporation (as the case may be) are obligated to honor the indemnification obligations set forth in
this Section 5.11. Nothing in this Agreement is intended to, shall be construed to or shall release, waive or impair any rights
to directors&rsquo; and officers&rsquo; insurance claims under any policy that is or has been in existence with respect to the
Company or any of its Subsidiaries or their respective officers, directors and employees, it being understood and agreed that the
indemnification provided for in this Section 5.11 is not prior to, or in substitution for, any such claims under any such policies.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.12<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Directors and Officers of Parent.</U> Parent and the Company shall take all necessary action (including, but not
limited to, an amendment to the Parent&rsquo;s bylaws increasing the size of its Board of Directors to nine members) so that following
the Effective Time, the Board of Directors of the Parent shall consist of nine directors, five of whom shall be designated by the
Company and four of whom shall be designated by Parent.&nbsp; The directors designated by Parent shall be: Robert Fagenson, Ira
Greenstein, Robert Bzdick and David Klein, and the five directors designated by the Company shall be Jeff Ronaldi, Will Rosellini,
Peter Hardigan, Warren Hurwitz and one other person to be designated by the Company (reasonably acceptable to Parent) on or prior
to the filing of the first amendment to the Proxy Statement.&nbsp; If Parent&rsquo;s stockholders approve the proposal to amend
the Certificate of Incorporation of Parent to provide for a Staggered Board, the members of the class coming up for election in
the annual meetings of stockholders for 2013 (&ldquo;Class I&rdquo;), 2014 (&ldquo;Class II&rdquo;) and 2015 (&ldquo;Class III&rdquo;)
shall be David Klein, <FONT STYLE="color: #1F497D">Ira Greenstein</FONT> and Will Rosellini for Class I, Robert Bzdick, Peter Hardigan,
and the Company&rsquo;s fifth designee for Class II and Warren Hurwitz, Jeff Ronaldi, and <FONT STYLE="color: #1F497D">Robert Fagenson</FONT>
for Class III.&nbsp; If Parent&rsquo;s stockholders do not approve the proposal to amend the Certificate of Incorporation of Parent
to provide for a Staggered Board, then the Board of Directors of the Parent following the Effective Time shall initially consist
of eight directors, four of whom shall be the persons designated by the Company above and the other four shall be the persons designated
by Parent above; provided, that, prior to Closing, Parent and the Company shall jointly identify a ninth person to be nominated
for a position on the board of directors of Parent following the Effective Time. The following persons will serve as executive
officers of Parent immediately following the Effective Time:&nbsp; Will Rosellini (Chief Executive Officer), Peter Hardigan (Chief
Investment Officer), Phillip Jones (Chief Financial Officer) and Robert Bzdick (Executive Vice President).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.13<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Additional Issuance of Parent Common Stock</U>. At the Effective Time, if the Company has at least $7,500,000
in cash on hand (which, for purposes of calculating such amount, shall include amounts, not to exceed $1,000,000 in the aggregate,
paid prior to the Effective Time to the attorneys, accountants and other professionals regarding services to the Company in connection
with the transactions contemplated hereby (collectively, &ldquo;<B>Professional Fees</B>&rdquo;)) and the Company and its Subsidiaries
have no liabilities or obligations required to be accrued under GAAP (except those set forth on Section 2.7 of the Company Disclosure
Schedule), then Parent shall issue an additional 2,500,000 shares of Parent Common Stock to the Company Stockholders. In addition,
if at the Effective Time, the Company has more than $7,500,000 in cash on hand (which, for purposes of calculating such amount,
shall include the amount of Professional Fees paid prior to the Effective Time) and the Company and its Subsidiaries have no liabilities
or obligations required to be accrued under GAAP (except those set forth on Section 2.7 of the Company Disclosure Schedule), then
Parent shall issue a number of additional shares of Parent Common Stock to the Company Stockholders to be determined by dividing
such excess by $3.00, provided that if such excess is more than $1,500,000 (i.e., the Company has more than $9,000,000 in cash
on hand which, for purposes of calculating such amount, shall include the amount of Professional Fees paid prior to the Effective
Time), the Parent shall not be obligated to issue any additional shares of Parent Common Stock with respect to such excess over
$1,500,000 (such shares along with the 2,500,000 shares referenced in the prior sentence, collectively the &ldquo;<B>Additional
Shares</B>&rdquo;). The Company shall have the right, but not the obligation, to distribute any cash in excess of $9,000,000 (which,
for purposes of calculating such amount, shall include the amount of Professional Fees paid prior to the Effective Time) to its
stockholders immediately prior to the Closing Date. By way of example only, if the Company has $8,000,000 in cash on hand (which,
for purposes of calculating such amount shall include the amount of Professional Fees paid prior to the Effective Time) at the
Effective Time, then Parent shall issue (i) 2,500,000 shares of Parent Common Stock, plus (ii) 166,667 shares of Parent Common
Stock to the Company Stockholders. For the avoidance of doubt, for purposes of calculating whether the Company has satisfied the
condition of having $7,500,000 in cash or is entitled to Additional Shares, the Company shall receive a credit for all payments
of Professional Fees made by the Company prior to the Closing Date for which Parent would have been required to pay under Section
7.3(a) hereof assuming the Closing of the Merger has occurred.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.14<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Private Placement</U>. Prior to execution of this Agreement, Parent has issued and sold to the Company (or at
the Company&rsquo;s option one or more investors) between 833,333 and 1,000,000 shares of Parent Common Stock for an aggregate
net purchase price to Parent of between $2,500,000 and $3,000,000 (the &ldquo;<B>Private Placement</B>&rdquo;). If the Company
was the investor in any shares of Parent Common Stock in the Private Placement, then, at Closing, Parent shall issue an additional
number of shares of Parent Common Stock equal to the number of shares of Parent Common Stock purchased by the Company in the Private
Placement and the shares of Parent Common Stock sold to the Company in the Private Placement shall be cancelled and extinguished
at Closing (any such shares issued in lieu of cancelled shares shall be referred to herein as &ldquo;<B>Exchanged Shares</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.15<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Warrant Registration</U>. Immediately following the Closing, Parent shall use its best efforts to file a registration
statement on Form S-3 (the &ldquo;<B>S-3</B>&rdquo;) with the SEC for the exercise of the New Warrants and the $.02 Warrants, if
applicable, and the sale of the shares of Parent Common Stock issuable thereunder and cause such S-3 to become effective.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.16<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Tax Opinion</U>. The Parties shall use commercially reasonable efforts to enable the Company to receive a written
opinion, in form and substance reasonably acceptable to it, dated as of the Closing Date to the effect that, on the basis of the
facts, representations and assumptions set forth or referred to in such opinion, for United States federal income tax purposes
the Merger more likely than not will constitute a &ldquo;reorganization&rdquo; within the meaning of Section 368(a) of the Code.
In rendering such opinion, such counsel shall be entitled to rely upon customary assumptions and representations reasonably satisfactory
to such counsel, including representations set forth in certificates of officers of Parent, Merger Sub and the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.17<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Professional Fees</U>. On or prior to the Closing, each of the Company and Parent shall submit to the other a
statement of all Professional Fees paid or accrued by the Company or Parent and its Subsidiaries in connection with the transactions
contemplated hereby and such amounts shall constitute all of the Professional Fees of such party for purposes of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">ARTICLE
VI<BR>
</FONT>CONDITIONS OF MERGER</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Conditions to Obligation of Each Party to Effect the Merger</U>. The obligations of each Party to effect the Merger
and consummate the other transactions contemplated hereby shall be subject to the satisfaction at or prior to the Closing of the
following conditions, any of which may be waived in writing by the Party entitled to the benefit thereof, in whole or in part,
to the extent permitted by the applicable law:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Stockholder Approval</U>. The Parent Stockholder Approval (but only for the issuance of the Merger Consideration,
except the authorization of the Parent Preferred Stock) and the Company Stockholder Approval shall have been obtained (it not being
a condition to Closing that the Parent&rsquo;s stockholders approve the Amendments);</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Effectiveness of Registration Statement</U>. The Registration Statement shall have become effective in accordance
with the provisions of the Securities Act, no stop order shall have been issued by the SEC and shall remain in effect with respect
to the Registration Statement and no proceeding seeking such a stop order shall have been initiated by the SEC and remain pending
or shall be threatened by the SEC.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Approval for Listing of Shares</U>. The shares of Parent Common Stock shall have been approved for listing (subject
only to notice of issuance) on the NYSE MKT, effective at the Effective Time.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Injunctions or Restraints; Illegality</U>. No temporary restraining order, preliminary or permanent injunction
or other order (whether temporary, preliminary or permanent) issued by any court of competent jurisdiction, or other legal restraint
or prohibition shall be in effect which prevents the consummation of the Merger on substantially identical terms and conferring
upon Parent substantially all the rights and benefits as contemplated herein, nor shall any proceeding brought by any Governmental
Authority, domestic or foreign, seeking any of the foregoing be pending, and there shall not be any action taken, or any law, regulation
or order enacted, entered, enforced or deemed applicable to the Merger, which makes the consummation of the Merger on substantially
identical terms and conferring upon Parent substantially all the rights and benefits as contemplated herein illegal;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Escrow Agreement</U>. &#9;<FONT STYLE="color: black">The Escrow Agreement shall have been executed and delivered
by Parent, the Escrow Agent and the Company Representative. </FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Additional Conditions to Obligations of Parent</U>. The obligations of Parent to effect the Merger are also subject
to the following conditions, any and all of which may be waived in writing by Parent, in whole or in part, to the extent permitted
by the applicable law:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Representations and Warranties</U>. The representations and warranties of the Company contained in Article II
shall be true, complete and correct in all material respects on and as of the Effective Time, with the same force and effect as
if made on and as of the Effective Time, except for those (i) representations and warranties that are qualified by materiality,
which representations and warranties shall be true, complete and correct in all respects and (ii) representations and warranties
which address matters only as of a particular date;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Agreements and Covenants</U>. The Company shall have performed or complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied with by it on or prior to the Effective Time, except for any
failure to perform or comply with such agreements and covenants which would not, individually or in the aggregate, reasonably be
expected to have a Company Material Adverse Effect;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Third Party Consents</U>. Parent shall have received evidence, in form and substance reasonably satisfactory to
it, that (i) those approvals of Governmental Authorities described on the Company Disclosure Schedule (or not described on the
Company Disclosure Schedule but required to be so described) have been obtained; and (ii) those approvals of other third parties
described in Sections 2.4(c) and 2.4(d) (or not described in Sections 2.4(c) and 2.4(d) of the Company Disclosure Schedule but
required to be so described) have been obtained, except where the failure to have been obtained, either individually or in the
aggregate, has not had and could not reasonably be expected to result in a Company Material Adverse Effect;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Company Balance Sheet</U>. At the Effective Time, the Company and its Subsidiaries (a) will have at least $7,500,000
in cash on hand (which, for purposes of calculating such amount, shall include the amount of Professional Fees (as defined in Section
5.13) paid prior to the Effective Time), (b) shall have no liabilities or obligations required to be accrued under GAAP (except
those set forth on Section 2.7 of the Company Disclosure Schedule), (c) shall have no indebtedness for borrowed money, and (d)
shall be solvent, able to pay each of its indebtedness as it matures and have capital sufficient to carry on each of its businesses;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Company Material Adverse Effect</U>. Since the date of this Agreement there shall not have occurred any Company
Material Adverse Effect;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Dissenters&rsquo; Rights</U>. Holders of no more than 10% of the issued and outstanding Company Capital Stock
shall have demanded and perfected their right to an appraisal of the Company Capital Stock in accordance with the DGCL;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(g)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Officer&rsquo;s Certificate</U>. The Company shall have delivered to Parent and Merger Sub a certificate, signed
by the chief executive officer of the Company, to the effect that each of the conditions specified in clause (a) of Section 6.1
and clauses (a) through (f) and clause (h) of this Section 6.2 are satisfied in all respects;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(h)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Company Intellectual Property</U>. No Company Intellectual Property shall, as of the Effective Date, be held unpatentable,
invalid or unenforceable by a court of competent jurisdiction;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(i)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Voting Agreements</U>. The Voting Agreements shall have been executed and delivered by the stockholders of Company
Common Stock and such Voting Agreements shall be in full force and effect; and</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(j)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Other Deliveries</U>. Parent shall have received such other certificates and instruments (including without limitation
certificates of good standing of the Company and its Subsidiaries in their jurisdiction of organization and the various foreign
jurisdictions in which they are qualified, certified charter documents, certificates as to the incumbency of officers and the adoption
of authorizing resolutions) as it shall reasonably request in connection with the Closing.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Additional Conditions to Obligations of the Company</U>. The obligation of the Company to effect the Merger is
also subject to the following conditions, any and all of which may be waived in writing by the Company, in whole or in part, to
the extent permitted by the applicable law:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Representations and Warranties</U>. The representations and warranties of Parent contained Article III shall be
true, complete and correct in all material respects as of when made and on and as of the Effective Time, except for those (i) representations
and warranties that are qualified by materiality, which representations and warranties shall be true, complete and correct in all
respects; and (ii) representations and warranties which address matters only as of a particular date;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Agreements and Covenants</U>. Parent and Merger Sub shall have performed or complied in all material respects
with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Effective
Time, except for any failure to perform or comply with such agreements and covenants which would not, individually or in the aggregate,
reasonably be expected to have a Parent Material Adverse Effect;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Third Party Consents</U>. The Company shall have received evidence, in form and substance reasonably satisfactory
to it, that (i) those approvals of Governmental Authorities described on the Parent Disclosure Schedule (or not described on the
Parent Schedule but required to be so described) shall have been obtained; (ii) those approvals of other third parties described
in Sections 3.4(c) and 3.4 (d) (or not described in Sections 3.4(c) and 3.4 (d) but required to be so described) have been obtained,
except where the failure to have been so obtained, either individually or in the aggregate, could not reasonably be expected to
result in a Parent Material Adverse Effect and (iii) the persons set forth on Section 6.3(c) of the Parent Disclosure Schedule
shall have delivered consents and/or waivers of their anti-dilution or change of control provisions set forth in certain securities
of Parent held by such persons;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Parent Material Adverse Effect</U>. Since the date of this Agreement, there shall not have occurred any Parent
Material Adverse Effect;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Officer&rsquo;s Certificate</U>. Parent shall have delivered to the Company a certificate, signed by the chief
executive officer of Parent, to the effect that each of the conditions specified in clauses (a) through (d) of this Section 6.3
is satisfied in all respects;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Issuance of Additional and Exchanged Shares</U>. Subject to the fulfillment of the conditions set forth in Sections
5.13 and 5.14, the Parent shall have issued the Additional Shares and the Exchanged Shares;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(g)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Voting Agreements</U>. The Voting Agreements shall have been executed and delivered by the stockholders of Parent&rsquo;s
Common Stock and such Voting Agreements and shall be in full force and effect;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(h)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Solvency</U>. Each of Parent and its Subsidiaries shall be solvent, able to pay each of its indebtedness as it
matures and have capital sufficient to carry on each of its businesses, and not be in default under any material agreement to which
it is a party;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(i)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Resignation of Directors and Officers</U>. The Company shall have received written resignations from all of the
directors and officers of the Parent set forth on Schedule 6.3(i) attached hereto effective as of the Effective Time and the directors
and officers to be designated by Parent and the Company as set forth in Sections 1.6 and 5.12 shall have been appointed as set
forth therein;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(j)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Employment Agreements</U>. The employment agreements of each of Will Rosellini and Peter Hardigan shall be assumed
by Parent, effective as of the Closing, with such changes thereto as are agreed between such person&rsquo;s and the Company;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(k)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Termination and Waiver</U>. The employment arrangements of each of the persons set forth on Schedule 6.3(k) shall
have been terminated and/or amended, in form and substance as set forth in Exhibits F-1 through F-6 respectively; and</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(l)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Other Deliveries</U>. The Company shall have received such other certificates and instruments (including without
limitation, if reasonably available, certificates of good standing of the Parent and its Subsidiaries in their jurisdiction of
organization and the various foreign jurisdictions in which they are qualified, certified charter documents, certificates as to
the incumbency of officers and the adoption of authorizing resolutions) as it shall reasonably request in connection with the Closing.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">ARTICLE
VII<BR>
<BR>
</FONT>TERMINATION, AMENDMENT AND WAIVER</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Termination</U>. This Agreement may be terminated and the Merger and other transactions contemplated hereby may
be abandoned at any time prior to the Effective Time:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>by mutual written consent of the Company, Parent and Merger Sub duly authorized by each of the Boards of Directors
of each;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>by either Parent or the Company if the Merger shall not have been consummated on or before March 15, 2013; <U>provided</U>,
<U>however</U>, that the right to terminate this Agreement under this Section 7.1(b) shall not be available to a Party whose failure
to fulfill any obligation under this Agreement has been the cause of, or resulted in, the failure of the Merger to have been consummated
on or before such date;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>by either Parent or the Company, if there shall have been any law enacted by a Governmental Authority prohibiting
the consummation of the Merger, or any Governmental Authority having competent jurisdiction shall have issued an order or taken
any other action, in each case, which restrains, enjoins or otherwise prohibits the Merger;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>by Parent or the Company if the Parent Special Meeting shall have been held and completed (including any adjournments
or postponements thereof), Parent&rsquo;s stockholders shall have taken a final vote on a proposal to adopt this Agreement and
approve the transactions contemplated hereby, including the Merger, and the Parent Stockholder Approval (but only with respect
to the issuance of the Merger Consideration) shall not have been obtained; <U>provided</U>, <U>however</U>, that a party shall
not be permitted to terminate this Agreement pursuant to this Section 7.1(d) if the failure to obtain the Parent Stockholder Approval
is attributable to a failure on the part of such party seeking to terminate this Agreement to perform any material obligation required
to be performed by such party at or prior to the Effective Time pursuant to this Agreement;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>by Parent or the Company if the Company Special Meeting shall have been held and completed (including any adjournments
or postponements thereof), the Company&rsquo;s stockholders shall have taken a final vote on a proposal to adopt this Agreement
and approve the transactions contemplated hereby, including the Merger, and the Company Stockholder Approval shall not have been
obtained; provided, however, that a party shall not be permitted to terminate this Agreement pursuant to this Section 7.1(e) if
the failure to obtain the Company Stockholder Approval is attributable to a failure on the part of such party seeking to terminate
this Agreement to perform any material obligation required to be performed by such party at or prior to the Effective Time pursuant
to this Agreement;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>by Parent, if (i) the Board of Directors of the Company, or any authorized committee thereof, shall have effected
a Company Board Recommendation Change; (ii) the Board of Directors of the Company, or any authorized committee thereof shall have
failed to present and recommend the approval and adoption of this Agreement and the Merger to the stockholders of the Company,
or withdrawn or modified in a manner adverse to Parent, its recommendation or approval of the Merger and this Agreement; (iii)
Company shall have entered, or caused the Company or its Subsidiaries to enter, into any letter of intent, agreement in principle,
term sheet, merger agreement, acquisition agreement or other similar agreement related to any Company Acquisition Proposal; (iv)
Company shall have breached Section 4.2; or (v) the Board of Directors of Company, or any authorized committee thereof shall have
resolved to do any of the foregoing;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(g)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>by Company, if (i) the Board of Directors of Parent, or any authorized committee thereof, shall have effected a Parent
Board Recommendation Change; (ii) the Board of Directors of Parent, or any authorized committee thereof shall have failed to present
and recommend the approval and adoption of this Agreement and the Merger to the stockholders of Parent, or withdrawn or modified
in a manner adverse to Company, its recommendation or approval of the Merger and this Agreement; (iii) Parent shall have entered,
or caused the Parent or its Subsidiaries to enter, into any letter of intent, agreement in principle, term sheet, merger agreement,
acquisition agreement or other similar agreement related to any Parent Acquisition Proposal; (iv) Parent shall have breached Section
4.3; (v) Parent shall have failed to include the Parent Board Recommendation in the Proxy Statement or (vi) the Board of Directors
of Parent, or any authorized committee thereof shall have resolved to do any of the foregoing;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(h)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>by Parent, if neither Parent nor Merger Sub is then in material breach of its obligations or representations and
warranties under this Agreement, and if (i) the Company breaches its representations and warranties herein such that Section 6.2(a)
would not be satisfied or (ii) there has been a breach on the part of the Company of any of its covenants or agreements contained
in this Agreement such that Section 6.2(b) would not be satisfied, and, in both case (i) and case (ii), such breach cannot be cured
or has not been cured within fifteen (15) days after notice thereof to the Company;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(i)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>by the Company, if it is not then in material breach of its obligations, representations and warranties under this
Agreement, and if (i) either Parent or Merger Sub breaches its representations and warranties herein such that Section 6.3(a) would
not be satisfied; or (ii) there has been a breach on the part of Parent or Merger Sub of any of their respective covenants or agreements
contained in this Agreement such that Section 6.3(b) would not be satisfied, and, in both case (i) and case (ii), such breach cannot
be cured or has not been cured within fifteen (15) days after notice thereof to Parent;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(j)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>(A) by Parent, if at any time prior to obtaining the Parent Stockholder Approval, Parent determines to enter into
a definitive agreement relating to a Parent Acquisition Proposal that the Board of Directors of Parent has determined constitutes
a Parent Superior Proposal; provided that the (i) the Board of Directors of Parent shall have effected a Parent Board Recommendation
Change in accordance with Section 4.3(c) and shall have complied with all provisions of Section 4.3; (ii) Parent is not in breach
in any material respect with the terms of this Agreement; (iii) Parent shall have entered into a definitive agreement relating
to the Parent Acquisition Proposal that the Board of Directors of Parent has determined constitutes a Parent Superior Proposal
and (iv) concurrently with the termination of this Agreement, Parent pays the Termination Fee payable to the Company pursuant to
Section 7.3(c) or (B) by Company, if Company determines to enter into a definitive agreement relating to a Company Acquisition
Proposal that the Board of Directors of Company has determined constitutes a Company Superior Proposal; provided that the (i) the
Board of Directors of Company shall have effected a Company Board Recommendation Change in accordance with Section 4.2(c) and shall
have complied with all provisions of Section 4.2; (ii) Company is not in breach in any material respect with the terms of this
Agreement; (iii) Company shall have entered into a definitive agreement relating to the Company Acquisition Proposal that the Board
of Directors of Company has determined constitutes a Company Superior Proposal and (iv) concurrently with the termination of this
Agreement, Company pays the Company Termination Fee payable to the Parent pursuant to Section 7.3(b); or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(k)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>by the Company, at any time, upon the payment to Parent of the fee set forth in Section 7.3(b).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Effect of Termination</U>. Except as provided in this Section 7.2, in the event of the termination of this Agreement
pursuant to Section 7.1, this Agreement (other than this Section 7.2 and Sections 5.2(b), 5.8, 7.3 and Article VIII, each of which
shall survive such termination) will forthwith become void, and there will be no liability on the part of Parent, Merger Sub or
the Company or any of their respective officers or directors to the other and all rights and obligations of any Party will cease,
except, subject to Section 7.3(g), that nothing herein will relieve any Party from liability for any breach, prior to termination
of this Agreement in accordance with its terms, of any representation, warranty, covenant or agreement contained in this Agreement
or from any obligation to pay, if and as applicable, the Company Termination Fee or the Parent Termination Fee.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Fees and Expenses</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as set forth in this Section 7.3, Parent shall pay the Professional Fees incurred by the Company in connection
with this Agreement and the transactions contemplated hereby, except that, in the event that this Agreement is validly terminated
by either Parent or the Company pursuant to Section 7.1, Parent&rsquo;s share of such Professional Fees shall not exceed $50,000
and, provided, that if the Closing occurs, the Professional Fees incurred by the Company shall not exceed $1,000,000 in the aggregate
(which, for purposes of calculating such $1,000,000 limitation, shall include amounts paid by the Company on or prior to the Effective
Time and amounts assumed by Parent and the Surviving Corporation on and after the Effective Time. Furthermore, Parent shall not
incur fees and expenses in excess of $1,000,000, in the aggregate, for attorney, accountant and other professionals (other than
fees and expenses for any broker, financial advisor, investment banker, or proxy solicitor identified to the Company) regarding
services provided to the Parent in connection with the consummation of the transactions contemplated hereby.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>In the event that either (A) the Company terminates this Agreement pursuant to Section 7.1(j)(B) or 7.1(k) or (B)
the Parent or the Company validly terminates this Agreement pursuant to Section 7.1(e) or Section 7.1(f), then the Company shall
pay to Parent, simultaneously with such termination of this Agreement, a fee in cash equal to $5,000,000 (the &ldquo;<B>Company
Termination Fee</B>&rdquo;), which Company Termination Fee shall be payable by wire transfer of immediately available funds to
an account specified by Parent.<B> </B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>In the event that (i) the Company validly terminates this Agreement pursuant to Section 7.1(g) or (ii) Parent validly
terminates this Agreement pursuant to Section 7.1(j)(A), then, in any such case, Parent shall pay to the Company, simultaneously
with such termination of this Agreement, a fee (the &ldquo;<B>Parent Termination Fee</B>&rdquo;) equal to the sum of (x) $3,000,000
plus (y) 5% of the consideration paid to all security holders of Parent in connection with the Parent Superior Proposal in the
same form as such consideration is paid to such security holders (i.e., 5% of the cash, securities and any other form of consideration
paid in connection with the Parent Superior Proposal), which Parent Termination Fee, to the extent it is cash, shall be payable
by wire transfer of immediately available funds to an account specified by the Company; provided, that, notwithstanding anything
to the contrary set forth herein, a Parent Termination Fee shall only be payable if the termination of this Agreement is in connection
with or solely due to the Parent entering into an agreement for a Parent Superior Proposal.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>In the event that this Agreement is validly terminated by Parent pursuant to Section 7.1(b), Section 7.1(d) or Section
7.1(h), and at or prior to the time of such termination, a Parent Acquisition Proposal has either previously been publicly announced
(or has become publicly known) or has been proposed or communicated to Parent and (ii) within six (6) months following the termination
of this Agreement, (y) Parent enters into a definitive agreement with respect to such previously proposed, communicated, known
or announced Parent Acquisition Proposal or (z) such previously proposed, communicated, known or announced Parent Acquisition Proposal
is otherwise consummated, then, in any such case, Parent shall pay to the Company the Parent Termination Fee, by wire transfer
of immediately available funds to an account or accounts designated in writing by the Company, within two (2) Business Days after
the execution of such agreement or after such transaction is consummated, as applicable (provided that for purposes of the foregoing
clause (z) each reference to &ldquo;20%&rdquo; in the definition of Parent Acquisition Proposal shall be deemed to be a reference
to &ldquo;35%&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>In the event that this Agreement is validly terminated by the Company pursuant to Section 7.1(b) or Section 7.1(i)
and at or prior to the time of such termination, a Company Acquisition Proposal has either previously been publicly announced (or
has become publicly known) or has been proposed or communicated to the Company and (ii) within six (6) months following the termination
of this Agreement, (A) the Company enters into a definitive agreement with respect to such previously proposed, communicated, known
or announced Company Acquisition Proposal or (B) such previously proposed, communicated, known or announced Company Acquisition
Proposal is otherwise consummated, then, in any such case, Company shall pay to the Parent the Company Termination Fee, by wire
transfer of immediately available funds to an account or accounts designated in writing by the Parent, within two (2) Business
Days after the execution of such agreement or after such transaction is consummated, as applicable (provided that for purposes
of the foregoing clause (B) each reference to &ldquo;20%&rdquo; in the definition of Company Acquisition Proposal shall be deemed
to be a reference to &ldquo;35%&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each of the Company and Parent acknowledges and agrees that the agreements contained in this <U>Section 7.3</U> are
an integral part of the transactions contemplated by this Agreement, and that, without these agreements, neither the Company nor
Parent would have entered into this Agreement; accordingly, if the Company or Parent fails promptly to pay the Parent Termination
Fee or the Company Termination Fee when due pursuant to <U>Section 7.3</U>, and, in order to obtain such payment, either Parent
or the Company, as applicable, commences an Action that results in an award against the Company or Parent, as applicable, for such
fee, the Company or Parent, as applicable, shall pay the other Party its costs and expenses (including reasonable attorneys' fees
and expenses) in connection with such Action, together with interest on the amount of the applicable fee from the date such payment
was required to be made until the date of payment at the prime lending rate as published in <I>The Wall Street Journal </I>in effect
on the date such payment was required to be made. Under no circumstances shall any Party be required to pay more than one fee in
respect of termination under this Section 7.3.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(g)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Notwithstanding anything to the contrary in this Agreement, (i) each of Parent and Merger Sub acknowledges and agrees
that if Parent is entitled to receive the Company Termination Fee, the right to receive such payment shall be the sole and exclusive
remedy for the termination of this Agreement and such payment shall be the full and final payment for any such termination pursuant
to Section 7.1 hereof and Parent and Merger Sub shall be deemed to have waived any and all claims and held Company harmless in
exchange for such payment, and (ii) the Company acknowledges and agrees that if the Company is entitled to receive the Parent Termination
Fee, the right to receive such payment shall be the sole and exclusive remedy for the termination of this Agreement and such payment
shall be the full and final payment for any such termination pursuant to Section 7.1 hereof and the Company shall be deemed to
have waived any and all claims and held Parent and Merger Sub harmless in exchange for such payment</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.4<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Amendment</U>. This Agreement may be amended by the Parties by action taken by or on behalf of their respective
Boards of Directors at any time prior to the Effective Time subject to the applicable provisions of the BCL and the DGCL. This
Agreement may not be amended except by an instrument in writing signed by all of the Parties.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.5<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Waiver</U>. At any time prior to the Effective Time, any Party may extend the time for the performance of any
of the obligations or other acts required hereunder, waive any inaccuracies in the representations and warranties contained herein
or in any document delivered pursuant hereto and waive compliance with any of the agreements or conditions contained herein. Any
such extension or waiver shall be valid only if set forth in an instrument signed by the Party to be bound thereby.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">ARTICLE
VIII<BR>
<BR>
</FONT>COMPANY REPRESENTATIVE</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Appointment of Company Representative</U>. Pursuant to the Company Stockholder Approval and the transmittal letter,
the Company Representative is appointed, authorized and empowered to be the representative, agent and attorney-in-fact of each
of the Company Stockholders, with full power of substitution, to make the particular decisions and determinations specified in
this Agreement and the Escrow Agreement, that may be necessary or appropriate to accomplish the intent and implement the provisions
of, this Agreement and the Escrow Agreement, and to facilitate the consummation of the transactions contemplated hereby and thereby.
By executing this Agreement, the Company Representative accepts such appointment, authority and power. Without limiting the generality
of the foregoing, the Company Representative shall have the power to take any of the following actions on behalf of such Company
Stockholders: (a) to give and receive notices, communications and consents under this Agreement and the Escrow Agreement; (b) to
waive applicable provisions of this Agreement and the Escrow Agreement; (c) to assert any claim or institute any action against
or defend, contest or litigate any action related to the Escrow Fund (d) to negotiate, enter into settlements and compromises of,
resolve and comply with orders of courts and awards of arbitrators or other third party intermediaries with respect to any disputes
arising under this Agreement and the Escrow Agreement; (e) to agree to any offsets or other additions or subtractions of amounts
to be paid under this Agreement and the Escrow Agreement; and (f) to make, execute, acknowledge and deliver all such other agreements,
guarantees, orders, receipts, endorsements, notices, requests, instructions, certificates, letters and other writings, and, in
general, to do any and all things and to take any and all action that the Company Representative, in its sole and absolute discretion,
may consider necessary or proper or convenient in connection with or to carry out the activities described in this Section 8.1
and the transactions contemplated hereby. Notwithstanding anything to the contrary set forth herein or in the Escrow Agreement,
the Company Representative shall have no right, by virtue of its capacity as Company Representative, to direct the vote or disposition
of any shares of capital stock owned by a Company Stockholder. The death, incapacity, dissolution, liquidation, insolvency or bankruptcy
of any Company Stockholder shall not terminate such appointment or the authority and agency of the Company Representative.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Authority</U>. The appointment of the Company Representative by each such Company Stockholder is coupled with
an interest and may not be revoked in whole or in part (including, without limitation, upon the death or incapacity of such Company
Stockholder). Such appointment shall be binding upon the heirs, executors, administrators, estates, personal representatives, officers,
directors, securityholders, members, managers, successors and assigns of each such Company Stockholder. All decisions of the Company
Representative shall be final and binding on all of the Company Stockholders and no such Company Stockholders shall have the right
to object, dissent, protest or otherwise contest the same. Parent shall be entitled to rely upon, without independent investigation,
any act, notice, instruction or communication from the Company Representative and any document executed by the Company Representative
on behalf of any such Company Stockholders and shall be fully protected in connection with any action or inaction taken or omitted
to be taken in reliance thereon absent willful misconduct. The Company Representative shall be entitled to rely, and shall be fully
protected in relying, upon any statements furnished to it by any Company Stockholder, Parent, the Company, any third Person or
any other evidence deemed by the Company Representative to be reliable, and the Company Representative shall be entitled to act
on the advice of counsel selected by it. The Company Representative shall be fully justified in failing or refusing to take any
action under this Agreement or the Escrow Agreement unless it shall have received such advice or concurrence of such Company Stockholders
as it deems appropriate or it shall have been expressly jointly and severally indemnified to its satisfaction by the Company Stockholders
appointing it against any and all losses and other liabilities and expenses that the Company Representative may incur by reason
of taking or continuing to take any such action.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Counsel</U>. The Company Representative shall be entitled to retain counsel acceptable to it and to incur such
expenses as the Company Representative deems to be necessary or appropriate in connection with its performance of its obligations
under this Agreement and the Escrow Agreement, and all such fees and expenses (including, without limitation, reasonable attorneys&rsquo;
fees and expenses) incurred by the Company Representative shall be paid by Company Stockholders.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.4<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Limitation on Liability</U>. The Company Representative shall not be responsible for any loss suffered by, or
liability of any kind to, such Company Stockholders arising out of any act done or omitted by the Company Representative in connection
with the acceptance or administration of the Company Representative&rsquo;s duties hereunder, unless such act or omission involves
gross negligence or fraud. The Company Stockholders shall indemnify and hold harmless the Company Representative and its partners,
stockholders, affiliates, directors, officers, fiduciaries, employees and agents of each of the foregoing (each, a &quot;<U>Company
Representative Indemnified Party</U>&quot;) from and against all losses, liabilities, claims or expenses incurred or suffered by
the Company Representative Indemnified Parties as a result of, or arising out of, or relating to any and all actions taken or omitted
to be taken by the Company Representative under this Agreement or the Escrow Agreement or in connection with the incurrence, payment,
discharge or settlement of any of the obligations of such Company Stockholders. None of the Company Representative Indemnified
Parties shall be liable to any Company Stockholders in respect of such arrangements or actions or omissions in connection therewith.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.5<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Resignation</U>. The Company Representative may resign by providing fourteen (14) days prior written notice to
the Company and Parent. Upon the resignation of the Company Representative, a majority-in-interest of the Company Stockholders
(based on the relative voting rights and percentage ownership in the Company immediately prior to the Effective Time) shall appoint
a replacement Company Representative to serve in accordance with the terms of this Agreement; <U>provided</U>, <U>however</U>,
that such appointment shall be subject to such newly-appointed Company Representative notifying Parent in writing of his, her or
its appointment and appropriate contact information for purposes of this Agreement, and Parent shall be entitled to rely upon,
without independent investigation, the identity of such newly-appointed Company Representative as set forth in such written notice.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">ARTICLE
IX<BR>
<BR>
</FONT>GENERAL PROVISIONS</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Notices</U>. All notices or other communications which are required or permitted hereunder shall be in writing
and sufficient if delivered personally or sent by nationally-recognized overnight courier or by registered or certified mail, postage
prepaid, return receipt requested, or by electronic mail, with a copy thereof to be delivered by mail (as aforesaid) within 24
hours of such electronic mail, or by telecopier, with confirmation as provided above addressed as follows:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></FONT>If to Parent or Merger Sub:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">DOCUMENT SECURITY SYSTEMS, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">First Federal Plaza</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">28 East Main Street, Suite 1525</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">Rochester, New York 14614&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Telecopier:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">E-Mail:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Attention:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">With copies to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Troutman Sanders LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">405 Lexington Avenue</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">New York, NY 10174</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Telecopier: 212-704-8346</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">E-Mail: james.kaplan@troutmansanders.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Attention: James Kaplan</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></FONT>If to the Company:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">LEXINGTON TECHNOLOGY GROUP, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">375 Park Avenue, 26<SUP>th</SUP> Floor</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">New York, NY 10152</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Telecopier:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">E-Mail: will@socialnetip.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Attention: Will Rosellini</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">With copies to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">666 Third Avenue</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">New York, NY 10017</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Telecopier: 212-983-3115</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">E-Mail: KKoch@mintz.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Attention: Ken Koch</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">or to such other address
as the party to whom notice is to be given may have furnished to the other party in writing in accordance herewith. All such notices
or communications shall be deemed to be received (i) in the case of personal delivery, on the date of such delivery; (ii) in the
case of nationally-recognized overnight courier, on the next Business Day after the date when sent; (iii) in the case of facsimile
transmission or telecopier or electronic mail, upon confirmed receipt; and (iv) in the case of mailing, on the third Business Day
following the date on which the piece of mail containing such communication was posted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Interpretation</U>. When a reference is made in this Agreement to Sections, subsections, Schedules or Exhibits,
such reference shall be to a Section, subsection, Schedule or Exhibit to this Agreement unless otherwise indicated. The words &ldquo;include,&rdquo;
&ldquo;includes&rdquo; and &ldquo;including&rdquo; when used herein shall be deemed in each case to be followed by the words &ldquo;without
limitation.&rdquo; The word &ldquo;herein&rdquo; and similar references mean, except where a specific Section or Article reference
is expressly indicated, the entire Agreement rather than any specific Section or Article. The table of contents and the headings
contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this
Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Severability</U>. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced
by any rule of law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force
and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse
to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the
Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that transactions contemplated hereby are fulfilled to the extent possible.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.4<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Entire Agreement</U>. This Agreement (including all exhibits and schedules hereto and thereto), any non-disclosure
or other agreement pertaining to the treatment of confidential information by and between the parties hereto (or any of them),
and any other documents and instruments delivered in connection herewith constitute the entire agreement and supersede all prior
agreements and undertakings, both written and oral, among the Parties with respect to the subject matter hereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.5<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Assignment</U>. This Agreement shall not be assigned by operation of law or otherwise, except that Parent and
Merger Sub may assign all or any of their rights hereunder to any Affiliate, provided that no such assignment shall relieve Parent
or Merger Sub, as the case may be, of its obligations hereunder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.6<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Parties in Interest</U>. This Agreement shall be binding upon and inure solely to the benefit of each Party hereto,
and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement; <U>provided</U>, <U>however</U><I>,</I> that the provisions of Article
I and Sections 5.10 and 5.11 are intended for the benefit of each of the individuals specified therein and their successors and
assigns.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.7<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Failure or Indulgence Not Waiver; Remedies Cumulative</U>. No failure or delay on the part of any Party in the
exercise of any right hereunder will impair such right or be construed to be a waiver of, or acquiescence in, any breach of any
representation, warranty or agreement herein, nor will any single or partial exercise of any such right preclude other or further
exercise thereof or of any other right. All rights and remedies existing under this Agreement are cumulative to, and not exclusive
to, and not exclusive of, any rights or remedies otherwise available.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.8<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Governing Law; Enforcement</U>. This Agreement and the rights and duties of the Parties hereunder shall be governed
by, and construed in accordance with, the laws of the State of New York without giving effect to the conflicts of laws principles
thereof, which would result in the applicability of the laws of another jurisdiction, except to the extent required under Delaware
corporate law. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the Parties
shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in the state courts in the State of New York, this being in addition to any other remedy to which
they are entitled at law or in equity. In addition, each of the Parties: (i) consents to submit itself to the personal jurisdiction
of the state courts of the State of New York in the event any dispute arises out of this Agreement or any transaction contemplated
hereby; (ii) agrees that it will not attempt to deny or defeat personal jurisdiction by motion or other request for leave from
any such court; (iii) waives any right to trial by jury with respect to any action related to or arising out of this Agreement
or any transaction contemplated hereby; (iv) consents to service of process by delivery pursuant to Section 9.1 hereof; and (v)
irrevocably and unconditionally waives (and agrees not to plead or claim) any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated hereby in any New York State court or any Federal
Court of the United States of America sitting in New York City, New York.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.9<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Nonsurvival of Representations</U>. None of the representations and warranties in this Agreement shall survive
the Effective Time and no party shall have any liability to any other party with respect thereto. This Section&nbsp;9.9 shall not
limit or affect any covenant or agreement of the parties which by its terms provides for performance after the Effective Time.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.10<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Counterparts</U>. This Agreement may be executed in one or more counterparts, and by the different Parties in
separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute
one and the same agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="text-transform: none">[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.05pt">IN WITNESS WHEREOF,
Parent, Merger Sub, the Company and Company Representative have caused this Agreement to be executed as of the date first written
above by their respective officers thereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.05pt">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%">
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>DOCUMENT SECURITY SYSTEMS, INC.</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 35%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 10%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">/s/ Patrick White&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Name:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Patrick White</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">CEO</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>DSSIP, INC.</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">/s/ Patrick White</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Name:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Patrick White</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">CEO</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>LEXINGTON TECHNOLOGY GROUP, INC.</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">/s/</FONT> <FONT STYLE="font-size: 10pt">Will Rosellini&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Name:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Will Rosellini&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">CEO</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>HUDSON BAY MASTER FUND LTD.,</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>solely for the purposes of Sections 1.16</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>and 6.1(e) and Article VII</B></FONT></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid"><FONT STYLE="font-size: 10pt">/s/ Yoav Roth</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Name:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Yoav Roth</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Authorized Signatory</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.05pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 37.05pt">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;&nbsp;</P>

<P STYLE="margin: 0; text-align: right">EXHIBIT A</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ESCROW AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">THIS ESCROW AGREEMENT,
dated as of _<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2012 (the
&ldquo;<B>Agreement</B>&rdquo;), by and among DOCUMENT SECURITY SYSTEMS, INC. (the &ldquo;<B>Parent</B>&rdquo;), HUDSON BAY MASTER
FUND LTD., as representative (the &ldquo;<B>Stockholders&rsquo; Representative</B>&rdquo;) of the stockholders (the &ldquo;<B>Stockholders</B>&rdquo;)
of LEXINGTON TECHNOLOGY GROUP, INC. (the &ldquo;<B>Company</B>&rdquo;), and American Stock Transfer &amp; Trust Company, LLC, as
escrow agent (the &ldquo;<B>Escrow Agent</B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">WHEREAS, the Parent
and the Company have entered into an Agreement and Plan of Merger by and among Parent, DSSIP, Inc., the Company and Stockholders&rsquo;
Representative, dated as of ___________, 2012 (the &ldquo;<B>Merger Agreement</B>&rdquo;; capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in the Merger Agreement);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt"><FONT STYLE="font-size: 10pt">WHEREAS,
pursuant to Section 1.8 of the Merger Agreement, at the Effective Time, Parent shall deliver 7,100,000 shares of Parent Common
Stock (the &ldquo;<B>Escrow Shares</B>&rdquo;) to the Escrow Agent to be held in escrow; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">WHEREAS, pursuant to the Merger Agreement,
the Stockholders have appointed the Stockholders&rsquo; Representative to represent them for certain purposes in connection with
the provisions of the Merger Agreement and this Agreement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">WHEREAS, the Escrow
Agent has agreed to hold, invest and/or release the Escrow Shares pursuant to the terms of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">NOW, THEREFORE, in
consideration of the premises and the mutual covenants, representations and warranties contained herein and intending to be legally
bound hereby, the parties hereto agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Appointment
of Escrow Agent</U>.&nbsp; The Parent, the Stockholders and the Company hereto hereby constitute and appoint the Escrow Agent to
act in accordance with and subject to the terms of this Agreement, and the Escrow Agent hereby accepts such appointment and agrees
to act in accordance with and subject to such terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Deposit
of Escrow Shares</U>.&nbsp; On the Effective Date, Parent shall deposit with the Escrow Agent the Escrow Shares in the form of
certificates, or, if requested at Closing, in book entry, in the name of the Stockholders, to be held and disbursed subject to
the terms and conditions of this Agreement.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Disbursement
of the Escrow Shares</U>.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Escrow Agent shall hold the Escrow Shares and disburse the Escrow Shares in accordance with the terms of this Agreement until the
earlier of (i) the last date upon which the closing price per share of Parent Common Stock exceeds $5.00 per share (as adjusted
for stock splits, stock dividends and similar events) for 40 Trading Days (as hereinafter defined) within a continuous 90 Trading
Day period following the Closing Date (the &ldquo;<B>Stock Target Date&rdquo;</B>)<B> </B>or (ii) __________, 2013 (the &ldquo;<B>Termination
Date&rdquo;</B>). The number of Escrow Shares beneficially owned by each Stockholder is set forth on Schedule 1 hereto. Such Schedule
shall list each Stockholder and such Stockholders&rsquo; interest in the Escrow Shares. The Escrow Agent shall have no further
duties hereunder after the disbursement or destruction of the Escrow Shares in accordance with this Section&nbsp;3. For purposes
of this Agreement, &ldquo;<B>Trading Day</B>&rdquo; means, as applicable, (x) with respect to all price determinations relating
to the Parent Common Stock, any day on which Parent Common Stock is traded on the Principal Market, provided that &ldquo;Trading
Day&rdquo; shall not include any day on which Parent Common Stock is scheduled to trade on such exchange or market for less than
4.5 hours or any day that Parent Common Stock is suspended from trading during the final hour of trading on such exchange or market
(or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during
the hour ending at 4:00:00 p.m., New York time) or (y) with respect to all determinations other than price determinations relating
to Parent Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.
For purposes of this Agreement, &ldquo;<B>Principal Market</B>&rdquo; means the NYSE MKT, or if NYSE MKT is not the principal trading
market for Parent Common Stock, then the principal securities exchange or securities market on which Parent Common Stock is then
traded, or the over-the-counter market or the electronic bulletin board for such security.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Within
three days following the Stock Target Date or the Termination Date, as the case may be, the Parent and the Stockholders&rsquo;
Representative shall deliver joint written instructions to the Escrow Agent (&ldquo;<B>Joint Written Instructions</B>&rdquo;) providing
for the disbursement of the Escrow Shares to the Stockholders or Parent, as the case may be. If Joint Written Instructions are
not provided, then Sections 3(c) and 3(d) below and the other terms and conditions of this Agreement shall govern the disposition
of the Escrow Shares. The disbursement of Escrow Shares, if any, to the Stockholders shall be made directly from the Escrow Agent
to each Stockholder at the address provided by such Stockholder in the letter of transmittal submitted by such Stockholder pursuant
to the Merger Agreement. The parties hereto agree that in no event shall the Stockholders' Representative be obligated to receive
or disburse any Escrow Shares on behalf of any Stockholder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
Joint Written Instructions have not been delivered to the Escrow Agent in accordance with Section 3(b), then (i) the Stockholders&rsquo;
Representative may demand delivery of the Escrow Shares upon written notice to both the Escrow Agent and the Parent (the &ldquo;<B>Stockholders&rsquo;
Demand</B>&rdquo;) and (ii) the Parent may demand delivery of the Escrow Shares upon written notice to both the Escrow Agent and
the Stockholders&rsquo; Representative (&ldquo;<B>Parents&rsquo; Demand&rdquo;</B>). In the event of a Stockholders&rsquo; Demand,
if the Parent does not object to such disbursement by providing a written notice of its objection (the &ldquo;<B>Parent Objection</B>&rdquo;)
to both the Escrow Agent and the Stockholders&rsquo; Representative within 10 days of the date of the Stockholders&rsquo; Demand,
the Escrow Agent shall disburse the Escrow Shares to the Stockholders within three business days after the expiration of such 10
day period. In the event of Parents&rsquo; Demand, if the Stockholders&rsquo; Representative does not object to such disbursement
by providing a written notice of its objection (the &ldquo;<B>Stockholders&rsquo; Objection</B>&rdquo;) to both the Escrow Agent
and the Parent within 10 days of the date of Parent&rsquo;s Demand, the Escrow Agent shall disburse the Escrow Shares to the Parent
within three business days after the expiration of such 10 day period. A Parent Objection or Stockholders&rsquo; Objection, as
applicable, shall set forth in detail the basis of such objection.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
the Stockholders&rsquo; Representative timely delivers a Stockholders&rsquo; Objection or the Parent timely delivers a Parent Objection,
as the case may be, the Escrow Agent shall not disburse, and shall continue to hold the Escrow Shares or the disputed portion thereof,
as the case may be, pending receipt of either (i) delivery instructions signed by the Parent and the Stockholders&rsquo; Representative,
specifying the agreement of the parties as to the action to be taken by the Escrow Agent (&ldquo;<B>Joint Payment Instructions</B>&rdquo;)
or (ii)&nbsp;a notice from either the Parent or the Stockholders&rsquo; Representative stating that the dispute has been submitted
to a court of competent jurisdiction for judgment and that a judgment with respect to such matters has been rendered or such dispute
has been submitted to a panel of arbitrators with proper jurisdiction and that a final non-appealable award with respect to such
arbitration has been rendered (in each case, a &ldquo;<B>Judgment Notice</B>&rdquo;) which is accompanied by a copy of a final,
nonappealable order of such court or such arbitration panel, as the case may be (each an &ldquo;<B>Order</B>&rdquo;), pursuant
to which such court or panel of arbitrators has determined whether and to what extent the party seeking the Escrow Shares is entitled
to the amount requested. Upon receipt of Joint Payment Instructions or a Judgment Notice accompanied by an Order, as the case may
be, the Escrow Agent shall disburse the Escrow Shares as instructed in the Joint Payment Instructions or Judgment Notice, as applicable,
within three business days after receipt of such Joint Payment Instructions or Judgment Notice accompanied by an Order. A copy
of the Judgment Notice or Order shall be delivered to each party at the same time as it is delivered to the Escrow Agent. The Escrow
Agent may rely on its own reasonable judgment as to whether an order constitutes an Order.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything to the contrary set forth herein, if at any time the Escrow Agent shall receive Joint Written Instructions to release
the Escrow Shares, then within three business days after receipt of such Joint Written Instructions, the Escrow Agent shall release
the Escrow Shares in accordance with such Joint Written Instructions. The parties will cooperate in good faith in executing such
Joint Written Instructions whenever reasonably necessary to ensure distributions of escrowed funds to the party entitled thereto
under the terms of the this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as expressly provided otherwise herein, each Stockholder shall at all times retain and have the full and absolute right to exercise
all rights and indicia of ownership with respect to the Escrow Shares owned by such Stockholder, including, without limitation,
voting and consensual rights and the Stockholders&rsquo; Representative shall have no right, by virtue of its capacity as Stockholders&rsquo;
Representative, to direct the vote or disposition of any of the Escrow Shares; provided, however, that the Stockholders shall have
no right to transfer, pledge or encumber or otherwise dispose of in any manner whatsoever any Escrow Shares, except as otherwise
may be provided herein. For tax purposes the Escrow Shares shall be treated as having been actually issued and transferred to the
Stockholders and the Stockholders shall be considered the owners of the shares from the date of issue. All dividends or distributions
or proceeds in stock or other property issued in respect of the Escrow Shares shall be deposited into the Escrow Account and become
part of the Escrow Shares and shall ultimately be distributed to the person or entity which receives the Escrow Shares. Any such
dividends or distributions or proceeds deposited into the Escrow Shares shall be attributed to each Stockholder in his, her or
its proportionate interest as set forth on <U>Schedule&nbsp;1</U> hereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Concerning
the Escrow Agent</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Good
Faith Reliance</U>.&nbsp; The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise
of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate,
opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document
(not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability
of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the
proper person or persons.&nbsp; The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination
or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties
and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Indemnification</U>.&nbsp;
The Escrow Agent shall be indemnified and held harmless, jointly and severally, by the Parent and the Company (which such indemnification
liability between Parent and Company shall be split equally) from and against any expenses, including counsel fees and disbursements,
or loss suffered by the Escrow Agent in connection with any action, suit or other proceeding involving any claim which in any way,
directly or indirectly, arises out of or relates to this Agreement, the services of the Escrow Agent hereunder, or the Escrow Shares
held by it hereunder, other than expenses or losses arising from the gross negligence or willful misconduct of the Escrow Agent.&nbsp;
Promptly after the receipt by the Escrow Agent of notice of any demand or claim or the commencement of any action, suit or proceeding,
the Escrow Agent shall notify the other parties hereto in writing.&nbsp; In the event of the receipt of such notice, the Escrow
Agent, in its sole discretion, may commence an action in the nature of interpleader in an appropriate court to determine ownership
or disposition of the Escrow Shares or it may deposit the Escrow Shares with the clerk of any appropriate court or it may retain
the Escrow Shares pending receipt of a final, non-appealable order of a court having jurisdiction over all of the parties hereto
directing to whom and under what circumstances the Escrow Shares are to be disbursed and delivered.&nbsp; The provisions of this
Section&nbsp;4.2 shall survive in the event the Escrow Agent resigns or is discharged pursuant to Sections 4.5 or 4.6 below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Compensation</U>.&nbsp;
The Parent shall pay the fees and the expenses of the Escrow Agent for its services hereunder. The provisions of this Section 5.3
shall survive any termination of this Agreement and removal or resignation of the Escrow Agent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Further
Assurances</U>.&nbsp; From time to time, on and after the date hereof, the Parent and the Stockholders&rsquo; Representative shall
deliver, or cause to be delivered, to the Escrow Agent such further documents and instruments and shall do or cause to be done
such further acts as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this
Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Resignation</U>.&nbsp;
The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by its giving the other parties
hereto written notice and such resignation shall become effective as hereinafter provided.&nbsp; Such resignation shall become
effective at such time that the Escrow Agent shall turn over to a successor escrow agent appointed by the Parent, the Escrow Shares
held hereunder.&nbsp; If no new escrow agent is so appointed within the 60 day period following the giving of such notice of resignation,
the Escrow Agent may deposit the Escrow Shares with any court it reasonably deems appropriate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Discharge
of Escrow Agent</U>.&nbsp; The Escrow Agent shall resign and be discharged from its duties as escrow agent hereunder if so requested
in writing at any time by the Parent and the Stockholders&rsquo; Representative, jointly; provided, however, that such resignation
shall become effective only upon acceptance of appointment by a successor escrow agent as provided in Section&nbsp;4.5.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35pt">4.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Liability</U>.&nbsp;
Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross
negligence or its own willful misconduct.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Miscellaneous</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Governing
Law</U>.&nbsp;This Agreement and the rights and obligations of the parties hereunder shall be governed by and construed in accordance
with the laws of New York, without giving effect to the conflict of law principles thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Entire
Agreement</U>.&nbsp; This Agreement contains the entire agreement of the parties hereto with respect to the subject matter hereof
and, except as expressly provided herein, may not be changed or modified except by an instrument in writing signed by the party
to be charged.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Headings</U>.&nbsp;
The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation
thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Binding
Effect</U>.&nbsp; This Agreement shall be binding upon and inure to the benefit of the respective parties hereto and their legal
representatives, successors and assigns.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notices</U>.&nbsp;
Any notice or other communication required or which may be given hereunder shall be in writing and either be delivered personally
or be mailed, certified or registered mail, or by private national courier service, return receipt requested, postage prepaid,
and shall be deemed given when so delivered personally or, if mailed, two days after the date of mailing, as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify">If to Parent, to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">DOCUMENT SECURITY SYSTEMS, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">First Federal Plaza</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">28 East Main Street, Suite 1525</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">Rochester, New York 14614&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Telecopier:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">E-Mail:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Attention:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">With copies to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Troutman Sanders LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">405 Lexington Avenue</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">New York, NY 10174</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Telecopier: 212-704-8346</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">E-Mail: james.kaplan@troutmansanders.com</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">Attention: James Kaplan</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 145pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify">[If to the Stockholders&rsquo;
Representative]:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">[____________________]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify">With a copy to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -4.5pt">Mintz, Levin, Cohn, Ferris, Glovsky
and Popeo, P.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -4.5pt">666 Third Avenue,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -4.5pt">New York, New York 10017</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -4.5pt">Attention: Kenneth Koch, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -4.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify">and if to the Escrow Agent, to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">American Stock Transfer &amp; Trust Company, LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">6201 15<SUP>th</SUP> Avenue</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">Brooklyn, New York 11219</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">Attention: Joe Smith</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify">With a copy (which shall not constitute
notice) to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">American Stock Transfer &amp; Trust Company, LLC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">6201 15<SUP>th</SUP> Avenue</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in">Brooklyn, New York 11219</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify">Attention: General Counsel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -4.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
parties may change the persons and addresses to which the notices or other communications are to be sent by giving written notice
to any such change in the manner provided herein for giving notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">5.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Counterparts</U>.
This Agreement may be executed in several counterparts, each one of which may be delivered by facsimile or .pdf transmission and
each of which shall constitute an original, and together shall constitute but one instrument.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><I>(Remainder of page
intentionally left blank. Signature pages to follow.)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IN
WITNESS WHEREOF, the undersigned have executed this Escrow Agreement as of the date first written above.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">HUDSON BAY MASTER FUND LTD.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 3%">By:</TD>
    <TD STYLE="width: 35%; border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">DOCUMENT SECURITY SYSTEMS, INC.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">AMERICAN STOCK TRANSFER &amp; TRUST COMPANY, LLC, as Escrow Agent</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.5in">&nbsp;&nbsp;</P>



<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">EXHIBIT B</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CERTIFICATE OF MERGER</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OF</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DSSIP, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(a Delaware Corporation)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INTO</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><B>LEXINGTON
TECHNOLOGY GROUP, INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>(a Delaware Corporation)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to Title 8,
Section 251(c) of the General Corporation Law of the State of Delaware (the &ldquo;<U>DGCL</U>&rdquo;), the undersigned corporation
hereby certifies as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">1.</TD><TD STYLE="text-align: justify">The constituent corporations are Lexington Technology Group, Inc., a Delaware corporation (the
&ldquo;<U>Company</U>&rdquo;) and DSSIP, Inc., a Delaware corporation (together with the Company, the &ldquo;<U>Constituent Corporations</U>&rdquo;).</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">2.</TD><TD STYLE="text-align: justify">An Agreement and Plan of Merger, dated as of _______, 2012 (the &ldquo;<U>Merger Agreement</U>&rdquo;)
has been approved, adopted, certified, executed and acknowledged by each of the Constituent Corporations.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">3.</TD><TD STYLE="text-align: justify">The Company shall be the surviving corporation after the merger (the &ldquo;<U>Surviving Corporation</U>&rdquo;)
and the name of the Surviving Corporation shall remain Lexington Technology Group, Inc.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">4.</TD><TD STYLE="text-align: justify">The certificate of incorporation of the Surviving Corporation as now in force and effect, shall
continue to be the certificate of incorporation of said Surviving Corporation until amended and changed in accordance with the
provisions of the DGCL.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">5.</TD><TD STYLE="text-align: justify">A copy of the executed Merger Agreement is on file at the office of the Surviving Corporation,
the address of which is as follows:</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">375 Park Avenue, 26<SUP>th</SUP> Floor</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 108.3pt">New York, NY 10152</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">6.</TD><TD STYLE="text-align: justify">A copy of the Merger Agreement will be furnished by the Surviving Corporation, on request and without
cost, to any stockholder of either Constituent Corporation.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">7.</TD><TD STYLE="text-align: justify">This Certificate of Merger (&ldquo;<U>Certificate</U>&rdquo;) shall be effective at such time as
this Certificate is filed with the Secretary of the State of Delaware in accordance with the provisions of Section 103 and 251(c)
of the DGCL.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: center; text-indent: -0.75in">[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK]</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">IN WITNESS WHEREOF,
the Surviving Corporation has caused this Certificate of Merger to be executed by a duly authorized officer as of ______, 2012.</P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">LEXINGTON TECHNOLOGY GROUP, INC.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 5%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 35%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P
style="MARGIN: 0pt 0px; FONT: 10pt Times New Roman, Times, Serif; TEXT-ALIGN: right">&nbsp;</P>

<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: right"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">EXHIBIT F-1</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">FIRST AMENDMENT TO EMPLOYMENT AGREEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This First Amendment to Employment Agreement
(this &ldquo;Amendment&rdquo;) is effective as of October 1, 2012, by and between Document Security Systems, Inc., a New York Corporation,
with an office at 36 West Main Street, Rochester, New York 14614 (&ldquo;Company&rdquo;) and Patrick White, who resides at 58 Bosworth
Field, Mendon, New York 14506 (&ldquo;Executive&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">RECITALS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">WHEREAS, Company and Executive entered into
that certain employment agreement, effective as of June 10, 2004 (&ldquo;Employment Agreement&rdquo;), which sets forth the terms
and conditions of Executive&rsquo;s employment with the Company; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">WHEREAS, Company and Executive desire to
amend the Employment Agreement so that the Employment Agreement complies with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (the &ldquo;Code&rdquo;), and the regulations promulgated thereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">NOW, THEREFORE, in consideration of the
premises, mutual promises and covenants set forth herein, the Company and Executive agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD><U>Defined Terms</U>. Any capitalized term used herein but not defined herein shall have the meaning ascribed to such term
in the Employment Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD><U>Amendments</U>. The Employment Agreement is hereby amended, as follows:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD>Section 2 of the Employment Agreement is hereby deleted in its entirety and replaced as follows:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&ldquo;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Term</I></B>.
The term of this Agreement shall commence on the Effective Date and shall continue, unless otherwise terminated as provided herein,
until the later of (a) December 31, 2012, or (b) the closing date, termination or expiration, of that certain merger by and among
the Company, DSSIP, Inc., a Delaware corporation, and Lexington Technology Group, Inc., a Delaware corporation (&ldquo;<B><I>Term</I></B>&rdquo;).&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD>Section 9(b)(i) and (ii) are hereby deleted in their entirety and replaced as follows:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&ldquo;(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
this Agreement is terminated pursuant to Section 8(e) or otherwise by Company without &ldquo;Good Cause&rdquo;:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 1in">(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive
shall be paid all unpaid salary, earned bonuses, vacation and other benefits accrued through the date of termination on or before
a date that is 2 months and 15 days following the calendar year in which this Agreement is terminated, and shall receive such other
benefits, such as health insurance continuation coverage under COBRA, as may be required by law;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 1in">(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive
shall receive as severance payment in an amount equal to eighteen (18) months of Executive&rsquo;s annual salary at the rate in
effect as of the date of Executive&rsquo;s termination. Such severance payment shall be made in a lump sum on the earlier of (A)
the date that is six months after the date of the Executive&rsquo;s separation from service, within the meaning of Treasury Regulation
Section 1.409A-1(h), with the Company or (B) the Executive&rsquo;s date of death.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD>Section 10(a) is hereby deleted in its entirety and replaced as follows:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&ldquo;(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of this Agreement, a &ldquo;Change in Control&rdquo; will be deemed to have occurred with respect to the Company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 1in">(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;upon
(x) the acquisition of more than 50% of the ownership of the Company within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(v)
or (y) the acquisition of at least 80% of the gross fair market value of the assets of the Company within the meaning of Treasury
Regulation Section 1.409A-3(i)(5)(vii). A change in control shall not include the acquisition of additional control by a shareholder
of the Company within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(vi)(C); or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 1in">(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
any person or entity, together with all &ldquo;affiliates&rdquo; and &ldquo;associates&rdquo; (as defined in Rule 12b-2 of the
Securities Exchange Act of 1934 (the &ldquo;<B><I>Exchange Act</I></B>&rdquo;)) of such person or entity, shall become the beneficial
owner (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing more than
50% of either (A) the combined voting power of the Company&rsquo;s then-outstanding securities having the right to vote in an election
of the Company&rsquo;s Board of Directors (&ldquo;<B><I>Voting Securities</I></B>&rdquo;) or (B) the then-outstanding shares of
all class of stock of the Company.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">d.</TD><TD>A new Section 14(h) is hereby added to the Employment Agreement as follows:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&ldquo;Notwithstanding anything in this Agreement
to contrary, if any amounts due to the Executive hereunder constitute compensation deferred (&ldquo;<B><I>Deferred Compensation</I></B>&rdquo;)
under a nonqualified deferred compensation plan, for purposes of Section 409A of the Code, and such Deferred Compensation is subject
to interest and excise tax under Section 409A(a)(1)(B) of the Code (such interest and excise tax collectively referred to herein
as &ldquo;<B><I>409A Excise Tax</I></B>&rdquo;), the Company shall pay to Executive an additional amount (&ldquo;<B><I>409A Gross-Up
Payment</I></B>&rdquo;) such that the net amount retained by Executive, after deduction of any Federal, state and local income
and employment taxes, shall equal the sum of the Federal, state and local income and employment taxes imposed upon the 409A Gross-Up
Payment and the 409A Excise Tax. For purposes of determining the amount of the 409A Gross-Up Payment, the Executive shall be deemed
to pay Federal income tax at the highest marginal rate of Federal income taxation in the calendar year in which the 409A Gross-Up
Payment is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of Executive&rsquo;s
residence in the calendar year in which the 409A Gross-Up Payment is to be made, net of the maximum reduction in Federal income
taxes which could be obtained from deduction of such state and local taxes. Should any amount of Deferred Compensation payable
hereunder become includible in Executive&rsquo;s gross income because this Agreement fails to meet the requirements of Section
409A of the Code and the regulations thereunder, a payment may be made to Executive under this Agreement equal to the amount of
Deferred Compensation so includible in accordance with Treasury Regulation Section 1.409-3(j)(4)(vii); provided, however, that
the amount of such payment may not exceed the amount required to be included in Executive&rsquo;s gross income as a result of a
failure of this Agreement to comply with the requirements of Section 409A of the Code and the regulations thereunder.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">e.</TD><TD>A new Section 14(i) is hereby added to the Employment Agreement as follows:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&ldquo;Notwithstanding anything set forth above in
Subsection 9(d) of the Agreement or the new Section 14(h) with respect to payments the Company may make to, or on behalf of, the
Executive, with respect to a 280G Gross-Up Payment and/or a 409A Gross-Up Payment, the maximum amount the Company will pay pursuant
to Subsection 9(d) and new Section 14(h) shall be an aggregate of $50,000.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD>Subject to the modifications set forth in Section 2 of this Amendment, the Employment Agreement remains in effect.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">4.</TD><TD>This Amendment (i) constitutes the entire agreement between the Company and Executive with respect to the subject matter hereof
and supersedes all prior discussions, agreements and understandings relating thereto, and (ii) may not be amended or modified except
by a writing signed by the Company and Executive.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">IN WITNESS WHEREOF, the Company and Executive
have executed this Amendment as of the date first written above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="3">DOCUMENT SECURITY SYSTEMS, INC.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 35%">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD> <TD STYLE="border-bottom: Black 1pt solid">/s/ Philip Jones</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">CFO</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">PATRICK WHITE</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid">/s/ Patrick White</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in">&nbsp;<B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>CONSULTING AGREEMENT</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>THIS CONSULTING AGREEMENT</B>
(&ldquo;<U>Agreement</U>&rdquo;), dated as of the 1<SUP>st</SUP> day of October, 2012, by and between Document Security Systems,
Inc., a New York corporation (the &ldquo;<U>Company</U>&rdquo;), and Patrick White, an individual (the &ldquo;<U>Consultant</U>&rdquo;).
The effective date of this Agreement (the &ldquo;<U>Effective Date</U>&rdquo;) shall be the date of the consummation of the transactions
contemplated under that certain Agreement and Plan of Merger, dated as of October 1, 2012 (the &ldquo;<U>Merger Agreement</U>&rdquo;),
by and among the Company, DSSIP, Inc., a Delaware corporation, and Lexington Technology Group, Inc., a Delaware corporation. If
the transactions contemplated under the Merger Agreement are not consummated and the Merger Agreement is terminated in accordance
with its terms, then this Agreement shall be automatically terminated contemporaneously therewith and be of no force or effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>WITNESSETH</U>:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>WHEREAS, </B>effective
as of the Effective Date, the parties have agreed to enter into this Agreement; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>WHEREAS</B>, the Company
desires to secure and retain the benefit of the Consultant&rsquo;s services and experiences and the Consultant desires to be retained
by the Company upon the terms and conditions stated herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>NOW, THEREFORE</B>,
in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree to as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">1. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Consulting
Term.</U> The Company hereby agrees to retain the Consultant and the Consultant agrees to be retained by the Company on the terms
and conditions set forth below for a term (the &ldquo;<U>Consulting Term</U>&rdquo;) commencing on the Effective Date and automatically
terminating upon the second (2<SUP>nd</SUP>) anniversary after the Effective Date or the earlier termination of this Agreement
pursuant to Section 6.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Consulting
Services</U>. The Consultant shall report to the Chief Executive Officer of the Company and the Consultant shall render the services
described on <U>Exhibit A</U> hereto. The Consultant shall use his commercially reasonable efforts in such endeavors and shall
perform his services with a level of care, skill and diligence that a prudent professional acting in a like capacity and familiar
with such matter would employ. Except as necessary for the performance of services hereunder, the Consultant shall not be required
to report to the Company&rsquo;s offices.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Compensation</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(a) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
consideration for the performance of the duties and services to be performed by the Consultant hereunder, the Company agrees to
pay to the Consultant a consulting fee equal to $170,000 per annum for the period from the Effective Date through the first (1<SUP>st</SUP>)
anniversary after the Effective Date and a consulting fee equal to $140,000 per annum for the period from the first (1<SUP>st</SUP>)
anniversary after the Effective Date through the second (2<SUP>nd</SUP>) anniversary after the Effective Date<B> </B>(the<B> </B>&ldquo;<U>Consulting
Fee</U>&rdquo;). The Consulting Fee shall be paid by the Company to the Consultant on a monthly basis within five (5) business
days after the conclusion of such month. Upon the Effective Date, the Company shall pay to the Consultant a bonus equal to $40,000
(the &ldquo;<U>Bonus</U>&rdquo;) and on September 21, 2012, the Company granted options to the Consultant to acquire 50,000 shares
of the common stock, par value $0.02 per share, of the Company at an exercise price equal to $4.26 per share (the &ldquo;<U>Options</U>&rdquo;).
Such options shall vest in full on the first anniversary after the Effective Date. The Company shall reimburse the Consultant for
all ordinary and necessary reasonable business expenses the Consultant incurs in connection with providing services to the Company
under this Agreement, upon submission by the Consultant of receipts and other documentation in accordance with the Company&rsquo;s
policies and procedures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Certain
Payments</U>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(i) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything in the Agreement to contrary, if any amounts due to the Consultant hereunder or under any other agreement, plan or program
of the Company (&ldquo;<U>Payments</U>&rdquo;) constitute a &ldquo;parachute payment&rdquo; (as defined in Section 280G(b)(2) of
the Internal Revenue Code of 1986, as amended (the &ldquo;<U>Code</U>&rdquo;)) and will be subject to excise tax under Section
4999 of the Code (&ldquo;<U>Section 4999 Excise Tax</U>&rdquo;), the Company shall pay to the Consultant an additional amount (the
&ldquo;<U>280G Gross-Up Payment</U>&rdquo;) such that the net amount retained by the Consultant, after deduction of any 4999 Excise
Tax on Payments and any Federal, state and local income and employment taxes and 4999 Excise Tax upon the 280G Gross-Up Payment,
shall be equal to the Payments to Consultant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(ii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything in this Agreement to contrary, if any amounts due to the Consultant hereunder or under any other agreement, including
that certain Employment Agreement, effective as of June 10, 2004 and as amended, by and between the Company and the Consultant,
plan or program of the Company constitute compensation deferred (&ldquo;<U>Deferred Compensation</U>&rdquo;) under a nonqualified
deferred compensation plan, for purposes of Section 409A of the Code, and such Deferred Compensation is subject to interest and
excise tax under Section 409A(a)(1)(B) of the Code (such interest and excise tax collectively referred to herein as &ldquo;<U>409A
Excise Tax</U>&rdquo;), the Company shall pay to the Consultant an additional amount (&ldquo;<U>409A Gross-Up Payment</U>&rdquo;)
such that the net amount retained by the Consultant, after deduction of any Federal, state and local income and employment taxes,
shall equal the sum of the Federal, state and local income and employment taxes imposed upon the 409A Gross-Up Payment and the
409A Excise Tax.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(iii) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise provided in a written agreement between the Company and the Consultant, any determination required under the immediately
preceding paragraphs shall be made in writing in good faith by the Accounting Firm (as defined below). For purposes of making the
calculations required by this paragraph, the Accounting Firm may make reasonable assumptions and approximations concerning applicable
taxes and may rely on reasonable, good faith interpretations concerning the application of the Code and other applicable legal
authority. The Company and Consultant shall furnish to the Accounting Firm such information and documents as the Accounting Firm
may reasonably request in order to make such a determination. The Company shall bear all costs the Accounting Firm may reasonably
incur in connection with any calculations contemplated by this paragraph.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(iv) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of determining whether any of the Payments will be subject to the 4999 Excise Tax and the amount of such 4999 Excise Tax,
(A) all of the Payments shall be treated as &ldquo;parachute payments&rdquo; (within the meaning of Section 280G(b)(2) of the Code)
unless, in the opinion of an accounting firm or consulting firm with particular expertise regarding 4999 Excise Tax (&ldquo;Accounting
Firm&rdquo;) reasonably acceptable to the Consultant and selected by the accounting firm which was, immediately prior to the Change
in Control, Company&rsquo;s independent auditor (the &ldquo;Auditor&rdquo;), such payments or benefits (in whole or in part) should
not be treated by the courts as subject to the 4999 Excise Tax, (B) all &ldquo;excess parachute payments&rdquo; within the meaning
of Section 280G(b)(1) of the Code shall be treated as subject to the 4999 Excise Tax unless, in the opinion of Accounting Firm,
such excess parachute payments (in whole or in part) should not be treated by the courts as subject to the 4999 Excise Tax, and
(C) the value of any noncash benefits or any deferred payment or benefit shall be determined by the Auditor in accordance with
the principles of Sections 280G(d)(3) and (4) of the Code. The Accounting Firm shall not be a firm providing auditing or accounting
services to any entity involved in the Change of Control. Fees and expenses of Accounting Firm and the Auditor shall be borne solely
by Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(v) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
purposes of determining the amount of the 280G and the 409A Gross-Up Payments, the Consultant shall be deemed to pay Federal income
tax at the highest marginal rate of Federal income taxation in the calendar year in which the 280G and/or the 409A Gross-Up Payment
is to be made and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Consultant&rsquo;s
residence in the calendar year in which the 280G and/or the 409A Gross-Up Payment is to be made, net of the maximum reduction in
Federal income taxes which could be obtained from deduction of such state and local taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(vi) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
anything set forth above in this Subsection 3(b) with respect to payments the Company may make to, or on behalf of, the Consultant,
with respect to a 280G Gross-Up Payment and/or a 409A Gross-Up Payment, the maximum amount the Company will pay pursuant to this
Subsection 3(b) shall be an aggregate of $50,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Relationship
of the Parties</U>. The Consultant and the Company hereby acknowledge and agree that, for all purposes, the Consultant shall be
deemed an independent contractor and not an employee of the Company. The Consultant shall be solely responsible for the payment
of all federal, state and local taxes, withholdings and/or other assessments or deductions required to be paid by any applicable
law or regulation based upon the Consultant&rsquo;s receipt of the Consulting Fee, the Bonus, and the Options and the Consultant
shall indemnify the Company and hold it harmless from and against any claim by any binding authority that the Company is responsible
for any taxes, social security payments, unemployment insurance payments or other similar payments in connection with the Consulting
Fee.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">5. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Consulting
Benefits</U>. During the Consulting Term, the Consultant shall receive no retirement, profit sharing, insurance or similar benefits
which may at any time be payable to employees of the Company pursuant to any plan or policy of the Company relating to such benefits;
<U>provided</U>, <U>however</U>, that the Company shall pay the full COBRA premium for family coverage of behalf of the Consultant
directly to the insurer during the term of this Consulting Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">6. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Termination</U>.
The Company may only terminate this Agreement and its relationship with the Consultant for Cause. The Consultant may terminate
this Agreement and his relationship with the Company at any time by written notice. Upon termination under this Section, the Consultant
and the Company shall be released from any and all further obligations under this Agreement, except that the Company shall be obligated
to provide the Consultant with such portion of the Consulting Fee that accrued through the date of such termination and reimbursement
of any business expenses incurred by the Consultant prior to such date of termination in accordance with Section 3. The Consultant
will not be entitled to any other compensation upon termination of this Agreement. This Agreement shall survive any merger, consolidation,
or other reorganization of the Company and shall be binding upon any successor corporation or entity. For purposes of this Section,
&ldquo;Cause&rdquo; shall mean (i) willful disobedience by the Consultant of a material and lawful instruction of the Board of
Directors of the Company; (ii) conviction of the Consultant of any misdemeanor involving fraud or embezzlement or similar crime
or any felony; (iii) an order is entered by the Securities and Exchange Commission, a state regulatory agency or an exchange on
which the Company&rsquo;s securities are traded finding that the Consultant has violated the securities laws; (iv) breach by the
Consultant of any material term, condition or covenant of this Agreement; or (v) fraud or gross negligence in the performance of
his services to the Company; in the case of breach which is capable of being cured, is not cured within thirty (30) days after
the Company has provided the Consultant with written notice thereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">7. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Restrictive
Covenants</U>. The Consultant shall be bound by the terms and conditions of that certain Confidentiality, Non-Competition, Non-Solicitation
and Intellectual Property Agreement, dated as of even date herewith, between the Company and the Consultant, which is hereby incorporated
by reference herein and made a part hereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">8. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Representations
and Warranties of the Parties</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.95in">(a) &nbsp;In order to induce the Company
to enter into this Agreement, the Consultant hereby represents and warrants to the Company that he has the power and authority
to make and perform this Agreement and that this Agreement, when executed and delivered by the Consultant, will be valid, legal
and binding obligations of the Consultant and enforceable against the Consultant in accordance with its terms.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.95in">(b)&nbsp; In order to induce the Consultant
to enter into this Agreement, the Company hereby represents and warrants to the Consultant that the Company has the power and authority
to make and perform this Agreement and that this Agreement when executed and delivered by the Company, will be valid, legal and
binding obligations of the Company and enforceable against the Company in accordance with its terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">9. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Termination
of Employment Agreement</U>. The parties acknowledge the existence of a certain employment agreement, effective as of June 10,
2004, between the Company and the Consultant (&ldquo;Employment Agreement&rdquo;) with a term extended through the latter of December
31, 2012 or the Effective Date, and agree that on the Effective Date, that the Employment Agreement shall automatically be terminated
and of no force or effect and the Company shall have no obligations or owe any liabilities to the Consultant in connection therewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">10.</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notices</U>. All notices given hereunder shall be in writing and shall
be deemed effectively given five (5) days after being mailed, if sent by registered or certified mail, return receipt requested,
or on the next business day if sent by overnight courier, and in each case addressed to the Consultant at: Mr. Patrick White, 58
Bosworth Field, Mendon, New York 14506<B> </B>with a copy to Phillips Lytle LLP, 3400 HSBC Center, Buffalo, New York 14203, Attention:
James D. Donathen, Esq., or any other address as such party may designate by a notice give in accordance with this Section, and
to the Company at: Document Security Systems, Inc., First Federal Plaza, 28 East Main Street, Suite 1525, Rochester, New York 14614,
with a copy to Troutman Sanders LLP, 405 Lexington Avenue, New York, New York 10174, Attention: James Kaplan, Esq., or to any other
address as such party may designate by a notice give in accordance with this Section, or when actually received by the party for
whom intended, if sent by any other means.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">11. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Severability</U>.
If any provisions of this Agreement are deemed invalid or unenforceable in whole or in part, neither the validity of the remaining
portion of such provision nor the validity of any other provision will in any way be affected. Moreover, if any of the restrictions
or limitations contained in this Agreement is deemed unreasonable or to otherwise exceed the time and/or geographical limitations
permitted by applicable law, such provisions will be reformed to the maximum time and/or geographical limitations permitted by
applicable law.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">12. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Waivers</U>.
No waiver of any provision of this Agreement shall be effective unless the same shall be in writing and signed by each of the parties
hereto, and then such waiver shall be effective only in the specific instance and for the specific purpose for which given.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">13. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Voluntary
Agreement; Entire Agreement; Amendments</U>. By executing this Agreement each of the Consultant and the Company acknowledges that
he or it, as the case may be, has read this Agreement in its entirety, fully understands its terms, and is signing it freely and
voluntarily with full knowledge of its significance. This Agreement constitutes the entire understanding of the parties with respect
to its subject matter and there have not been any oral promises or representations on which either party is relying in signing
this Agreement. In consideration of the transactions contemplated hereby, this Agreement fully supersedes any and all prior agreements
and understandings pertaining to the subject matter hereof. This Agreement may be modified or amended only by a writing signed
by the Company and the Consultant.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">14. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Headings</U>.
The subject headings of the Sections of this Agreement are included for purposes of convenience only, and shall not affect the
construction or interpretation of any of their provisions.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">15. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Governing
Law; Jurisdiction</U>. <FONT STYLE="color: black">This Agreement shall be governed by, construed and enforced in accordance with
the laws of the State of New York, without giving effect to the principles of conflicts of law thereof that would defer to or result
in the application of the laws of another jurisdiction. Each of the Company and the Consultant hereby: (a) agrees that any action,
demand, claim or counterclaim relating to the terms, provisions and conditions of this Agreement, or its breach, shall only be
brought in a State or Federal of competent jurisdiction located in Monroe County, State of New York, and (b) consents to the <I>in
personam</I> jurisdiction of any such court. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">16. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Assignment</U>.
This Agreement is not assignable by the Consultant without the prior written consent of the Company in its sole and absolute discretion.
Any attempted assignment without such consent shall be <U>ab</U> <U>initio</U> null and void and of no force or effect. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">17. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Partnership or Agency</U>. Nothing in this Agreement is intended to or shall operate to create a partnership between the parties
hereto, or to authorize either party to act as agent for the other, and neither party shall have authority to act in the name or
on behalf of or otherwise to bind the other in any way (including but not limited to the making of any representation or warranty,
the assumption of any obligation or liability and the exercise of any right or power).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">19. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Survival</U>.
Sections 7 through 20 shall survive termination of this Agreement for any reason.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">20. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Counterparts</U>.
This Agreement may be executed simultaneously 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.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[Signature Page to Follow]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B>IN WITNESS WHEREOF</B>, the parties have
executed this Agreement as of the date first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 1in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">Company:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Document Security Systems, Inc.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">/s/ Philip Jones</TD>
    <TD STYLE="width: 12%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name</TD>
    <TD>Philip Jones</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD>CFO</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">Consultant:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid">/s/ Patrick White</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Patrick White</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>



<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-weight: normal">EXHIBIT
F-2</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">AMENDMENT NO. 1</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">TO</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">EMPLOYMENT AGREEMENT</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This Amendment No.
1 to Employment Agreement is made and entered into as of October 1, 2012 (this &ldquo;<B>Amendment</B>&rdquo;), between Document
Security Systems, Inc., a New York corporation (&ldquo;<B>Company</B>&rdquo;), and Robert B. Bzdick, an individual (&ldquo;<B>Executive</B>&rdquo;).
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement (as hereinafter defined).
The effective date of this Amendment (the &ldquo;<B>Amendment No. 1 Effective Date</B>&rdquo;) shall be on the date of the consummation
of the transactions contemplated under that certain Agreement and Plan of Merger, dated as of October 1, 2012 (the &ldquo;<B>Merger
Agreement</B>&rdquo;), by and among the Company, DSSIP, Inc., a Delaware corporation, and Lexington Technology Group, Inc., a Delaware
corporation. If the transactions contemplated under the Merger Agreement are not consummated whether or not the Merger Agreement
is terminated in accordance with its terms, then this Amendment shall be automatically terminated contemporaneously therewith and
be of no force or effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>WITNESSETH</U>:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">WHEREAS, Company and
Executive have entered into an Employment Agreement, effective as of February 12, 2010 (the &ldquo;<B>Agreement</B>&rdquo;); and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">WHEREAS, Company and
Executive desire to amend the Agreement in accordance with Section 12(a)(ii) of the Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">NOW, THEREFORE, Company
and Executive agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Recitals</U>.
The foregoing recitals are true and made part of this Amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">2. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Amendments
to the Agreement</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(a)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 1 of the Agreement is hereby amended, effective as of the Amendment No.
1 Effective Date, by deleting it in its entirety and replacing it with the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&ldquo;<B><U>Employment; Duties</U></B>.
Company hereby agrees to employ Executive as President and Chief Executive Officer (&ldquo;<B>CEO</B>&rdquo;) of Premier Packaging
Corporation (&ldquo;<B>PPC</B>&rdquo;) and Executive Vice President in charge of industrial divisions (packaging, print, security
print, plastic and digital) of Company. Executive hereby accepts such employment. Executive shall be a member of the Board of Directors
of Company and PPC. Executive will perform those duties and have such authority and powers as are customarily associated with the
position of Executive Vice President and such other duties and responsibilities as the CEO and/or the Board of Directors of the
Company may reasonably request. The Executive shall report to the CEO of the Company or his designee.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(b)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 2 of the Agreement is hereby amended by deleting it in its entirety and
replacing it with the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&ldquo;<B><U>Term</U></B>. The
Term of this Agreement shall commence on the Effective Date and shall continue through December 31, 2014, unless otherwise terminated
or extended as provided herein (the &ldquo;<B>Term</B>&rdquo;). Following the initial Term, this Agreement shall be renewed automatically
for a succeeding period of five (5) years (the &ldquo;<B>Renewal Period</B>&rdquo;) on the same terms and conditions as set forth
herein unless either party shall, at least ninety (90) days prior to the expiration of the initial Term, provide written notice
to the other party of its intention not to renew this Agreement. The period during which Executive is employed by the Company,
including the initial Term and any Renewal Period, is hereinafter referred to as the &ldquo;<B>Employment Period</B>&rdquo;. If
the Company elects not to renew the initial Term, then the Company will pay to the (i) Executive $300,000 which shall be payable
as follows: $100,000 on the first anniversary of such non-renewal, and $50,000 on each of the second through fifth anniversaries
after such non-renewal and (ii) all additional payments and benefits described in Section 4(b), unless not renewed for Cause (as
defined below).&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(c)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 5 of the Agreement is hereby amended by deleting &ldquo;Two Hundred Forty
Thousand Dollars ($240,000)&rdquo; and substituting in its place &ldquo;Two Hundred Thousand Dollars ($200,000)&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(d)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section 9(a) of the Agreement is hereby amended by deleting &ldquo;for a period
of the longer of (i) one year thereafter, (ii) five years from the Effective Date, or (iii) the period of time that Executive is
receiving any severance payments under Sections 4(b) above&rdquo; and substituting in its place &ldquo;for a period of the longer
of (i) one year thereafter, (ii) five years from the Effective Date, or (iii) the period of time that Executive is receiving any
severance payments under Sections 4(b) above and one year thereafter.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">3. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Bonus;
Options</U>. On the Amendment No. 1 Effective Date, in consideration of the reduction of Executive's base salary, Company shall
make payment of a bonus to Executive in an amount equal to $50,000. As additional consideration for such reduction, on September
21, 2012, Company granted Executive options to acquire 150,000 shares of the common stock, par value $0.02 per share, of the Company
at an exercise price equal to $4.26 per share subject to the terms and conditions of the Company&rsquo;s 2004 Employee Stock Option
Plan. Such options shall vest in full on the Amendment No. 1 Effective Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">4. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>10b5-1
Plan</U>. The Company acknowledges and understands that Executive&rsquo;s willingness to enter into this Amendment is contingent
on the written approval, by the Company&rsquo;s Board of Directors, of a 10b5-1 Plan to be established between Executive and his
designated broker pursuant to which Executive intends to sell up to 300,000 shares of the common stock of the Company (the &ldquo;<B>10b5-1
Plan</B>&rdquo;). The 10b5-1 Plan will be established as of the date of this Amendment and will become effective as of the Amendment
No. 1 Effective Date. The 10b5-1 Plan will be in substantially the same for as the plan attached hereto as <U>Exhibit A</U>, and
will provide for the sale of 3,000 shares per trading day if the stock price is between $5.00 and $5.99; and 4,000 shares per trading
day if the stock price is between $6.00 and $6.99. There is no restriction of sales volume if the share price is $7.00 or greater.
In no event will shares will be sold for less than $5.00 per share. Notwithstanding the foregoing, the terms of such 10b5-1 Plan
and Executive&rsquo;s activities under such 10b5-1 Plan shall in each case be governed by and in accordance with the Insider Trading
Policy of the Company. The Company covenants and agrees that the Company&rsquo;s Board of Directors will disclose in reasonable
detail the intention of Executive to establish the 10b5-1 Plan in any information statements or other disclosure documents required
by all applicable Federal and state securities laws and any rules and regulations promulgated thereunder delivered to the shareholders
of the Company in connection with the approval of the transactions contemplated in the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">5. &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><U>Limited
Amendment</U></FONT>. <FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">This Amendment is limited by its terms
and does not and shall not serve to amend or waive any provision of the </FONT>Agreement<FONT STYLE="font-family: Times New Roman, Times, Serif">
except as expressly provided for in this Amendment and all other terms shall remain in full force and effect. </FONT>All references
in the Agreement to &ldquo;this Agreement&rdquo; or terms such as &ldquo;herein&rdquo;, hereof&rdquo; or similar terms shall mean
the Agreement as amended by this Amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[</B>Signature Pages to Follow<B>]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">IN WITNESS WHEREOF,
the parties have caused this Amendment to be duly executed on the day and year first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 1in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left; font-weight: bold">Company:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">Document Security Systems, Inc.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 5%; text-align: left">By:</TD>
    <TD STYLE="width: 35%; text-align: left; border-bottom: Black 1pt solid">/s/ Philip Jones</TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Name:</TD>
    <TD STYLE="text-align: left">Philip Jones</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Title:</TD>
    <TD STYLE="text-align: left">CFO</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left; font-weight: bold">Executive:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; text-align: left">/s/ Robert B. Bzdick</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Robert B. Bzdick</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[Amendment No. 1 to Employment Agreement]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>



<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-weight: normal">EXHIBIT
F-3</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">AMENDMENT NO. 1</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">TO</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">EMPLOYMENT AGREEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">This Amendment No. 1 to
Employment Agreement is made and entered into as of October 1, 2012 (this &ldquo;<B>Amendment</B>&rdquo;), between Document Security
Systems, Inc., a New York corporation (&ldquo;<B>Company</B>&rdquo;), and David M. Wicker, an individual (&ldquo;<B>Executive</B>&rdquo;).
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement (as hereinafter defined).
The effective date of this Amendment (the &ldquo;<B>Effective Date</B>&rdquo;) shall be on the date of the consummation of the
transactions contemplated under that certain Agreement and Plan of Merger, dated as of October 1, 2012 (the &ldquo;<B>Merger Agreement</B>&rdquo;),
by and among the Company, DSSIP, Inc., a Delaware corporation, and Lexington Technology Group, Inc., a Delaware corporation. If
the transactions contemplated under the Merger Agreement are not consummated whether or not the Merger Agreement is terminated
in accordance with its terms, then this Amendment shall be automatically terminated contemporaneously therewith and be of no force
or effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>WITNESSETH</U>:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">WHEREAS, Company and
Executive have entered into an Employment Agreement, effective as of June 17, 2008 (as amended, the &ldquo;<B>Agreement</B>&rdquo;);
and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">WHEREAS, Company and
Executive desire to amend the Agreement in accordance with Section <B>[</B>12(a)(ii)<B>]</B> of the Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">NOW, THEREFORE, Company
and Executive agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Recitals</U>.
The foregoing recitals are true and made part of this Amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Amendments
to the Agreement</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
2 of the Agreement is hereby amended by deleting &ldquo;for (3) three years from the Effective Date&rdquo; and substituting in
its place &ldquo;through December 31, 2013&rdquo;.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
7(a) of the Agreement is hereby amended by deleting &ldquo;one year thereafter&rdquo; and substituting in its place &ldquo;December
31, 2013&rdquo;.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
9(b)(ii) of the Agreement is hereby amended by inserting at the end of it the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&ldquo;Notwithstanding the foregoing,
in the event that this Agreement is terminated by the Company without Good Cause at any time on or after the first (1<SUP>st</SUP>)
anniversary after the Effective Date of this Amendment, then Executive shall receive as severance payment an amount equal to twelve
(12) months of Executive&rsquo;s annual salary at the rate in effect as of the date of Executive&rsquo;s termination, payable at
Executive&rsquo;s sole discretion in either a lump sum at the time of termination or on normal pay dates in accordance with the
Company&rsquo;s pay policies in effect prior to the termination date. In addition, in the event that this Agreement is terminated
by the Company without Good Cause at any time on or after the first (1<SUP>st</SUP>) anniversary after the Effective Date of this
Amendment, then for the twelve (12) month period immediately after the termination of this Agreement, Company shall continue to
provide and pay the premium for the health insurance provided to Executive (and his family, if applicable) immediately prior to
the termination of this Agreement (collectively, the payments under this clause (ii) are referred to as &ldquo;<B>Severance Payments</B>&rdquo;);&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Bonus;
Options</U>. On the Effective Date of this Amendment, Company shall make payment of a bonus to Executive in an amount equal to
$15,000. In addition, on September 21, 2012, the Company granted Executive options to acquire 20,000 shares of the common stock,
par value $0.02 per share, of the Company at an exercise price equal to $4.26 per share subject to the terms and conditions of
the Company&rsquo;s 2004 Employee Stock Option Plan. Such options shall vest in full on the Effective Date but otherwise terminate
in the event of the termination of the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black">&nbsp;&nbsp;<U>Limited
Amendment</U></FONT>. <FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">This Amendment is limited by its terms
and does not and shall not serve to amend or waive any provision of the </FONT>Agreement<FONT STYLE="font-family: Times New Roman, Times, Serif">
except as expressly provided for in this Amendment and all other terms shall remain in full force and effect. </FONT>All references
in the Agreement to &ldquo;this Agreement&rdquo; or terms such as &ldquo;herein&rdquo;, hereof&rdquo; or similar terms shall mean
the Agreement as amended by this Amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[</B>Signature Pages to Follow<B>]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">IN WITNESS WHEREOF,
the parties have caused this Amendment to be duly executed on the day and year first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left; font-weight: bold">Company:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">Document Security Systems, Inc.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 5%; text-align: left">By:</TD>
    <TD STYLE="width: 35%; border-bottom: windowtext 1pt solid; text-align: left">/s/ Philip Jones</TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Name:</TD>
    <TD STYLE="text-align: left">Philip Jones</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Title:</TD>
    <TD STYLE="text-align: left">CFO</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left; font-weight: bold">Executive:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; text-align: left">/s/ David M. Wicker</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">David M. Wicker</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;<B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[Amendment No. 1 to Employment Agreement]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-weight: normal">EXHIBIT
F-4</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">AMENDMENT NO. 1</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">TO</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">EMPLOYMENT AGREEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">This Amendment No. 1 to
Employment Agreement is made and entered into as of October 1, 2012 (this &ldquo;<B>Amendment</B>&rdquo;), between Document Security
Systems, Inc., a New York corporation (&ldquo;<B>Company</B>&rdquo;), and Michael Caton, an individual (&ldquo;<B>Executive</B>&rdquo;).
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Agreement (as hereinafter defined).
The effective date of this Amendment (the &ldquo;<B>Effective Date</B>&rdquo;) shall be on the date of the consummation of the
transactions contemplated under that certain Agreement and Plan of Merger, dated as of October 1, 2012 (the &ldquo;<B>Merger Agreement</B>&rdquo;),
by and among the Company, DSSIP, Inc., a Delaware corporation, and Lexington Technology Group, Inc., a Delaware corporation. If
the transactions contemplated under the Merger Agreement are not consummated whether or not the Merger Agreement is terminated
in accordance with its terms, then this Amendment shall be automatically terminated contemporaneously therewith and be of no force
or effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>WITNESSETH</U>:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, Company and Executive
have entered into an Employment Agreement, effective as of July 15, 2008 (as amended, the &ldquo;<B>Agreement</B>&rdquo;); and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">WHEREAS, Company and Executive
desire to amend the Agreement in accordance with Section 14(a)(ii) of the Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0.5in">NOW, THEREFORE, Company
and Executive agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Recitals</U>.
The foregoing recitals are true and made part of this Amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Amendments
to the Agreement</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
2 of the Agreement is hereby amended by deleting &ldquo;for (3) three years from the Effective Date&rdquo; and substituting in
its place &ldquo;through December 31, 2013&rdquo;.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
7(a) of the Agreement is hereby amended by deleting &ldquo;one year thereafter&rdquo; and substituting in its place &ldquo;December
31, 2013&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section
9(b)(ii) of the Agreement is hereby amended by inserting at the end of it the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&ldquo;Notwithstanding the foregoing,
in the event that this Agreement is terminated by the Company without Good Cause at any time on or after the first (1<SUP>st</SUP>)
anniversary after the Effective Date of this Amendment, then Executive shall receive as severance payment an amount equal to twelve
(12) months of Executive&rsquo;s annual salary at the rate in effect as of the date of Executive&rsquo;s termination, payable at
Executive&rsquo;s sole discretion in either a lump sum at the time of termination or on normal pay dates in accordance with the
Company&rsquo;s pay policies in effect prior to the termination date. In addition, in the event that this Agreement is terminated
by the Company without Good Cause at any time on or after the first (1<SUP>st</SUP>) anniversary after the Effective Date of this
Amendment, then for the twelve (12) month period immediately after the termination of this Agreement, Company shall continue to
provide and pay the premium for the health insurance provided to Executive (and his family, if applicable) immediately prior to
the termination of this Agreement (collectively, the payments under this clause (ii) are referred to as &ldquo;<B>Severance Payments</B>&rdquo;);&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Bonus;
Options</U>. On the Effective Date of this Amendment, Company shall make payment of a bonus to Executive in an amount equal to
$15,000. In addition, on September 21, 2012, the Company granted Executive options to acquire 20,000 shares of the common stock,
par value $0.02 per share, of the Company at an exercise price equal to $4.26 per share subject to the terms and conditions of
the Company&rsquo;s 2004 Employee Stock Option Plan. Such options shall vest in full on the Effective Date but otherwise terminate
in the event of the termination of the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><U>Limited
Amendment</U></FONT>. <FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">This Amendment is limited by its terms
and does not and shall not serve to amend or waive any provision of the </FONT>Agreement<FONT STYLE="font-family: Times New Roman, Times, Serif">
except as expressly provided for in this Amendment and all other terms shall remain in full force and effect. </FONT>All references
in the Agreement to &ldquo;this Agreement&rdquo; or terms such as &ldquo;herein&rdquo;, hereof&rdquo; or similar terms shall mean
the Agreement as amended by this Amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[</B>Signature Pages to Follow<B>]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">IN WITNESS WHEREOF,
the parties have caused this Amendment to be duly executed on the day and year first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left; font-weight: bold">Company:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">Document Security Systems, Inc.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: left">&nbsp;</TD>
    <TD STYLE="width: 5%; text-align: left">By:</TD>
    <TD STYLE="width: 35%; border-bottom: windowtext 1pt solid; text-align: left">/s/ Philip Jones</TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Name:</TD>
    <TD STYLE="text-align: left">Philip Jones</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD STYLE="text-align: left">Title:</TD>
    <TD STYLE="text-align: left">CFO</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left; font-weight: bold">Executive:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="text-align: left">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; text-align: left">/s/ Michael Caton</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Michael Caton</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[Amendment No. 1 to Employment Agreement]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>



<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">EXHIBIT F-5</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Document Security Systems, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>First Federal Plaza</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>28 East Main Street, Suite 1525</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Rochester, New York 14614</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.75in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; width: 50%">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom; width: 50%">October 1, 2012</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.75in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Mr. Phil Jones</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Chief Financial Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Document Security Systems, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">First Federal Plaza</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">28 East Main Street, Suite 1525</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Rochester, New York 14614</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><B>Re:</B></TD><TD><B><U>Severance Provisions</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dear Phil:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The purpose of this
letter is to set forth the terms of your severance in the event of the termination of your employment with Document Security Systems,
Inc. (the &ldquo;<U>Company</U>&rdquo;). The effective date of this letter (the &ldquo;<U>Effective Date</U>&rdquo;) shall be the
date of the consummation of the transactions contemplated under that certain Agreement and Plan of Merger, dated as of October
1, 2012 (the &ldquo;<U>Merger Agreement</U>&rdquo;), by and among the Company, DSSIP, Inc., a Delaware corporation, and Lexington
Technology Group, Inc., a Delaware corporation. If the transactions contemplated under the Merger Agreement are not consummated
whether or not the Merger Agreement is terminated in accordance with its terms, then this letter shall be automatically terminated
contemporaneously therewith and be of no force or effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Termination
of Employment</U>. At all times, your employment with the Company is &ldquo;at-will&rdquo;, which means that employment with the
Company may be terminated at anytime by either you or the Company with or without Cause or Good Reason (in each case as hereinafter
defined), upon written notice to the other party, subject only to the entitlements and liabilities set forth in paragraphs 2 through
4, below; <U>provided</U>, that the Company shall only terminate your employment by approval of the Board of Directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Accrued
Compensation</U>. Upon termination of your employment for any reason by the Company, including, without limitation on account of
death or Disability (as hereinafter defined), the Company will pay or provide you (or, in the case of your death, your estate):
(i) any unpaid base salary earned through the date of termination payable when otherwise due in accordance with the Company's regular
payroll practices and any accrued but unused vacation in accordance with the Company&rsquo;s policy; (ii) reimbursement for any
unreimbursed expenses incurred through the date of termination for which you submitted<FONT STYLE="font-size: 10pt"> sufficient
documentation </FONT>no later than thirty (30) days after your termination of employment <FONT STYLE="font-size: 10pt">and which
are reasonable and necessary business and entertainment expenses in connection with the performance of your duties and responsibilities
to the Company</FONT>, such reimbursements to be made no later than ninety (90) days after your termination<FONT STYLE="font-size: 10pt">;
</FONT>and (iii) all other payments, benefits or fringe benefits to which you may be entitled under the terms of any applicable
compensation arrangement or benefit, equity or fringe benefit plan or program or grant up to the date of termination (collectively,
&ldquo;<U>Accrued Compensation</U>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Termination
Without Cause or for Good Reason</U>. In the event your employment with the Company is terminated by the Company without Cause,
excluding on account of death or Disability, or by you for Good Reason, and provided you execute a customary general release, which
shall include a customary non-disparagement provision, of claims provided to you by the Company (the &quot;Release&quot;), and
such Release is effective and irrevocable prior to the sixtieth (60<SUP>th</SUP>) day following the date of your termination, you
will be entitled to, and the Company will pay to you:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
severance pay, your then current base salary following the date of your termination, payable in equal biweekly installments in
accordance with the Company's regular payroll practices, as if your employment had continued for an additional twelve (12) months;
provided, however, that any installments that otherwise would have been paid prior to the expiration of the period for revoking
the Release shall be accumulated and paid on the first payroll date immediately following the expiration of such revocation period
and all other installments shall be paid when otherwise due hereunder. Notwithstanding the foregoing, if the sixty (60) day period
for executing and not revoking the Release begins in one calendar year and ends in another calendar year, then any severance installments
that otherwise would have been paid in the first calendar year shall be accumulated and paid in a lump sum on the first payroll
date in the second calendar year after the expiration of the revocation period and all other installments shall be paid when otherwise
due hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;provided
you have elected continued coverage under the Company's group health plans pursuant to the Consolidated Omnibus Budget Reconciliation
Act of 1986, as amended (&quot;COBRA&quot;), for the first twelve (12) months of such COBRA coverage, your portion of the COBRA
premiums shall be no more than the portion of the premiums you would have paid for such coverage under the health plan as an active
employee and the Company will provide a monthly subsidy toward the remaining cost of coverage. If you obtain other employment that
offers substantially similar health benefits or otherwise are no longer eligible for COBRA coverage during that twelve month period,
the Company's obligations under this Subsection (b) shall terminate. To the extent you are eligible for COBRA coverage beyond such
twelve month period, you will be responsible for the full amount of the COBRA premium. To the extent required to avoid adverse
tax consequences or penalties under Section 105(h) of the Code if the health plan is self-insured or any similar provision applicable
to a fully-insured health plan under the Patient Protection and Affordable Care Act, as it may be amended from time to time, the
Company will instead directly pay you during the twelve-month or lesser remaining period a fully taxable monthly payment equal
to the Company's contribution toward the COBRA premiums. The Company will gross-up such payment for tax purposes so that the economic
benefit is the same to you as if such benefit was being provided on a non-taxable basis to you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Any tax gross-up payment shall
be paid to you no later than the end of your taxable year following the year in which the applicable taxes are actually remitted
to the taxing authorities. In the event of a tax audit or litigation addressing the existence or amount of any such liability,
then any additional gross-up payments must be made by the end of your taxable year following the year in which the taxes that are
the subject of the audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no
taxes are remitted, the end of your taxable year following the taxable year in which the audit is completed or there is a final
and nonappealable settlement or other resolution of the litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Notwithstanding the foregoing,
if any payments, reimbursements or benefits under this Subsection (b) are considered deferred compensation subject to Section 409A
of the Internal Revenue Code of 1986, as amended (&quot;Code Section 409A&quot;) and the sixty (60) day period for executing and
not revoking the Release begins in one calendar year and ends in another calendar year, then any such payments, reimbursements
or benefits that otherwise would have been paid or provided in the first calendar year shall be accumulated and paid in a lump
sum on the first payroll date in the second calendar year after the expiration of the revocation period and all other amounts shall
be paid or provided when otherwise due hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Termination
for Cause or Without Good Reason</U>. In the event your employment with the Company is terminated for Cause by the Company or by
you without Good Reason, you will only be entitled to, and the Company will only pay to you the Accrued Compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Definition
of Cause</U>. For purposes of this letter, &ldquo;<U>Cause</U>&rdquo; will mean (i) your willful misconduct or gross negligence
with regard to the Company that is materially adverse to the Company; (ii) your willful and continued failure to attempt to substantially
perform your duties with the Company which failure is not remedied within fifteen (15) days of written notice from the Company
specifying the details thereof; (iii) your commission of a felony or crime involving moral turpitude or the commission of any act
or omission involving dishonesty in the performance of your duties and responsibilities as an employee of the Company, or fraud;
(iv) your misappropriation of funds or assets of the Company for personal use or willful violation of the Company&rsquo;s policies
or standards of business conduct; or (v) your breach of any provision contained in the Restrictive Covenant Agreement (as defined
below).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Definition
of Good Reason</U>. For purposes of this agreement, &ldquo;<U>Good Reason</U>&rdquo; will mean, without your express written consent,
the occurrence of any of the following events which is not remedied within thirty (30) days after the receipt by the Company of
written notice from you specifying the details thereof (the &quot;Cure Period&quot;): (i) any material diminution (except temporarily
during period of Disability) in your duties or responsibilities; (ii) a reduction by the Company in your base salary; (iii) a material
breach by the Company of any provisions of this agreement or any other agreement between you and the Company which such breach
is not remedied by the Company within fifteen (15) days after the receipt by it of written notice of the same; and (iv) your being
required to relocate to a principal place of employment more than fifty (50) miles from your present office location. You must
provide the written notice to the Company of the Good Reason event within sixty (60) days of the initial occurrence of the event.
Your actual termination due to such event must occur no later than thirty (30) days after the end of the Cure Period to be considered
a termination for Good Reason.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Termination
on Death</U>. Your employment shall terminate automatically upon your death and your estate shall only be entitled to receive the
Accrued Compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Termination
Due to Disability</U>. Your employment shall terminate in the event that, due to physical or mental illness or injury, you are
unable to perform the essential functions of your position(s), with or without reasonable accommodation, for a total of three (3)
months in any 12-month period (&ldquo;<U>Disability</U>&rdquo;). If your employment is terminated under this Section, you shall
be entitled only to receive the Accrued Compensation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Duty to Mitigate; No Offset</U>. You will be under no obligation to seek other employment and, except as provided in this letter,
there will be no offset against any amounts owing to you under this letter on account of any remuneration attributable to any subsequent
employment that you may obtain.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">10.&nbsp;&nbsp;&nbsp;<U>Restrictive
Covenants</U>. You shall be bound by the terms and conditions of that certain Confidentiality, Non-Competition, Non-Solicitation
and Intellectual Property Agreement, dated as of even date herewith (the &ldquo;<U>Restrictive Covenant Agreement</U>&rdquo;),
between the Company and you, which is hereby incorporated by reference herein and made a part hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">11.&nbsp;&nbsp;&nbsp;<U>Bonus;
Options</U>. On the Effective Date of this letter, the Company shall make payment of a bonus to you in an amount equal to $25,000.
In addition, on September 21, 2012, the Company granted to you options to acquire 25,000 shares of the common stock, par value
$0.02 per share, of the Company at an exercise price equal to $4.26 per share subject to the terms and conditions of the Company&rsquo;s
2004 Employee Stock Option Plan. Such options shall vest in full on the Effective Date but otherwise terminate in the event of
the termination of the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">12.&nbsp;&nbsp;&nbsp;<U>Code
Section 409A Compliance</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">a.&nbsp;&nbsp;&nbsp;&nbsp;The
intent of the parties is that payments and benefits under this Agreement comply with Code Section 409A or comply with an exemption
from the application of Code Section 409A and, accordingly, all provisions of this Agreement shall be construed in a manner consistent
with the requirements for avoiding taxes or penalties under Code Section 409A.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">b.&nbsp;&nbsp;&nbsp;&nbsp;Neither
you nor the Company shall take any action to accelerate or delay the payment of any monies and/or provision of any benefits in
any matter which would not be in compliance with Code Section 409A.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">c.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the
form or timing of payment of any amounts or benefits upon or following a termination of employment unless such termination is also
a &ldquo;separation from service&rdquo; (within the meaning of Code Section 409A) and, for purposes of any such provision of this
Agreement under which (and to the extent) deferred compensation subject to Code Section 409A is paid, references to a &ldquo;termination&rdquo;
or &ldquo;termination of employment&rdquo; or like references shall mean separation from service. A &ldquo;separation from service&rdquo;
shall not occur under Code Section 409A unless you have completely severed your relationship with the Company or you have permanently
decreased your services to 20% or less of the average level of bona fide services over the immediately preceding 36 month period
(or the full period if you have been providing services for less than 36 months). A leave of absence shall only trigger a termination
of employment that constitutes a separation from service at the time required under Code Section 409A. If you are deemed on the
date of separation from service with the Company to be a &ldquo;specified employee&rdquo;, within the meaning of that term under
Code Section 409A(a)(2)(B) and using the identification methodology selected by the Company from time to time, or if none, the
default methodology, then with regard to any payment or benefit that is required to be delayed in compliance with Code Section
409A(a)(2)(B), such payment or benefit shall not be made or provided prior to the earlier of (i) the expiration of the six-month
period measured from the date of your separation from service or (ii) the date of the your death. In the case of benefits required
to be delayed under Code Section 409A, however, you may pay the cost of benefit coverage, and thereby obtain benefits, during such
six-month delay period and then be reimbursed by the Company thereafter when delayed payments are made pursuant to the next sentence.
On the first day of the seventh month following the date of your separation from service or, if earlier, on the date of your death,
all payments delayed pursuant to this Section (whether they would have otherwise been payable in a single sum or in installments
in the absence of such delay) shall be paid or reimbursed to you in a lump sum, and any remaining payments and benefits due under
this Agreement shall be paid or provided in accordance with the normal payment dates specified for them herein.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">d.&nbsp;&nbsp;&nbsp;&nbsp;With
regard to any provision herein that provides for reimbursement of expenses or in-kind benefits subject to Code Section 409A, except
as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange
for another benefit, and (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable
year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, provided
that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed under any arrangement covered by Code Section
105(b) solely because such expenses are subject to a limit related to the period the arrangement is in effect. All reimbursements
shall be reimbursed in accordance with the Company&rsquo;s reimbursement policies but in no event later than the calendar year
following the calendar year in which the related expense is incurred or such earlier date as set forth herein.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">e.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
under this Agreement, an amount is to be paid in two or more installments, for purposes of Code Section 409A, each installment
shall be treated as a separate payment.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">f.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
any of the provisions of this Agreement, the Company shall not be liable to you or any other person if any payment or benefit which
is to be provided pursuant to this Agreement and which is considered deferred compensation subject to Code Section 409A otherwise
fails to comply with, or be exempt from, the requirements of Code Section 409A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">13.&nbsp;&nbsp;&nbsp;<U>Indemnification</U>.
The Company hereby agrees to indemnify you and hold you harmless to the fullest extent permitted by applicable law against and
in respect to any and all actions, suits, proceedings, claims, demands, judgments, costs, expenses (including reasonable attorney&rsquo;s
fees), losses, and damages resulting from your good faith performance of your duties and obligations with the Company. If any claim,
action, suit, or proceeding is brought against you for which you may seek indemnification under this subsection, you shall promptly
notify the Company in writing thereof, and the Company shall have the right to assume and control the defense thereof, unless an
actual or potential conflict of interest between the Company&rsquo;s interests and your interests exists.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[</B>Signature Pages to Follow<B>]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Please contact me at (585)
325-3610 if you have any questions. If you agree with the terms set forth herein kindly execute in the space provided
below and return the same to me.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 53%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 35%; text-align: justify">Sincerely,</TD>
    <TD STYLE="width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify; border-bottom: Black 1pt solid">/s/ Patrick White</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Patrick White</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Chief Executive Officer</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Agreed and acknowledged:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35%; border-bottom: windowtext 1pt solid; text-align: justify">/s/ Phil Jones</TD>
    <TD STYLE="width: 65%; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">Phil Jones</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[Severance Letter]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">EXHIBIT F-6</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Document Security Systems, Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>First Federal Plaza</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>28 East Main Street, Suite 1525</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Rochester, New York 14614</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 50%; padding-right: 5.4pt; padding-left: 5.4pt; font-size: 10pt; text-align: center; vertical-align: bottom">October 1, 2012</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Jeff D&rsquo;Angelo, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Vice President, General Counsel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Document Security Systems, Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">First Federal Plaza</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">28 East Main Street, Suite 1525</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Rochester, New York 14614</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><B></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.3in; text-align: left"><B>Re:</B></TD><TD STYLE="text-align: justify"><B><U>Severance Provisions</U></B></TD>
</TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.5in"><B>&#9;</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Dear Jeff:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The purpose of this
letter is to set forth the terms of your severance in the event of the termination of your employment with Document Security Systems,
Inc. (the &ldquo;<U>Company</U>&rdquo;). The effective date of this letter (the &ldquo;<U>Effective Date</U>&rdquo;) shall be the
date of the consummation of the transactions contemplated under that certain Agreement and Plan of Merger, dated as of October
1, 2012 (the &ldquo;<U>Merger Agreement</U>&rdquo;), by and among the Company, DSSIP, Inc., a Delaware corporation, and Lexington
Technology Group, Inc., a Delaware corporation. If the transactions contemplated under the Merger Agreement are not consummated
whether or not the Merger Agreement is terminated in accordance with its terms, then this letter shall be automatically terminated
contemporaneously therewith and be of no force or effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify"><U>Termination of Employment</U>. At all times, your employment with the Company is &ldquo;at-will&rdquo;,
which means that employment with the Company may be terminated at anytime by either you or the Company with or without Cause or
Good Reason (in each case as hereinafter defined), upon written notice to the other party, subject only to the entitlements and
liabilities set forth in paragraphs 2 through 4, below; <U>provided</U>, that the Company shall only terminate your employment
by approval of the Board of Directors.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD STYLE="text-align: justify"><U>Accrued Compensation</U>. Upon termination of your employment for any reason by the Company,
including, without limitation on account of death or Disability (as hereinafter defined), the Company will pay or provide you (or,
in the case of your death, your estate): (i) any unpaid base salary earned through the date of termination payable when otherwise
due in accordance with the Company's regular payroll practices and any accrued but unused vacation in accordance with the Company&rsquo;s
policy; (ii) reimbursement for any unreimbursed expenses incurred through the date of termination for which you submitted<FONT STYLE="font-size: 10pt">
sufficient documentation </FONT>no later than thirty (30) days after your termination of employment <FONT STYLE="font-size: 10pt">and
which are reasonable and necessary business and entertainment expenses in connection with the performance of your duties and responsibilities
to the Company</FONT>, such reimbursements to be made no later than ninety (90) days after your termination<FONT STYLE="font-size: 10pt">;
</FONT>and (iii) all other payments, benefits or fringe benefits to which you may be entitled under the terms of any applicable
compensation arrangement or benefit, equity or fringe benefit plan or program or grant up to the date of termination (collectively,
&ldquo;<U>Accrued Compensation</U>&rdquo;).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD STYLE="text-align: justify"><U>Termination Without Cause or for Good Reason</U>. In the event your employment with the Company
is terminated by the Company without Cause, excluding on account of death or Disability, or by you for Good Reason, and provided
you execute a customary general release, which shall include a customary non-disparagement provision, of claims provided to you
by the Company (the &quot;Release&quot;), and such Release is effective and irrevocable prior to the sixtieth (60<SUP>th</SUP>)
day following the date of your termination, you will be entitled to, and the Company will pay to you:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#9;(a)&#9;As severance pay,
your then current base salary following the date of your termination, payable in equal biweekly installments in accordance with
the Company's regular payroll practices, as if your employment had continued for an additional twelve (12) months; provided, however,
that any installments that otherwise would have been paid prior to the expiration of the period for revoking the Release shall
be accumulated and paid on the first payroll date immediately following the expiration of such revocation period and all other
installments shall be paid when otherwise due hereunder. Notwithstanding the foregoing, if the sixty (60) day period for executing
and not revoking the Release begins in one calendar year and ends in another calendar year, then any severance installments that
otherwise would have been paid in the first calendar year shall be accumulated and paid in a lump sum on the first payroll date
in the second calendar year after the expiration of the revocation period and all other installments shall be paid when otherwise
due hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&#9;(b)&#9;provided you have
elected continued coverage under the Company's group health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act
of 1986, as amended (&quot;COBRA&quot;), for the first twelve (12) months of such COBRA coverage, your portion of the COBRA premiums
shall be no more than the portion of the premiums you would have paid for such coverage under the health plan as an active employee
and the Company will provide a monthly subsidy toward the remaining cost of coverage. If you obtain other employment that offers
substantially similar health benefits or otherwise are no longer eligible for COBRA coverage during that twelve month period, the
Company's obligations under this Subsection (b) shall terminate. To the extent you are eligible for COBRA coverage beyond such
twelve month period, you will be responsible for the full amount of the COBRA premium. To the extent required to avoid adverse
tax consequences or penalties under Section 105(h) of the Code if the health plan is self-insured or any similar provision applicable
to a fully-insured health plan under the Patient Protection and Affordable Care Act, as it may be amended from time to time, the
Company will instead directly pay you during the twelve-month or lesser remaining period a fully taxable monthly payment equal
to the Company's contribution toward the COBRA premiums. The Company will gross-up such payment for tax purposes so that the economic
benefit is the same to you as if such benefit was being provided on a non-taxable basis to you.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Any tax gross-up payment shall
be paid to you no later than the end of your taxable year following the year in which the applicable taxes are actually remitted
to the taxing authorities. In the event of a tax audit or litigation addressing the existence or amount of any such liability,
then any additional gross-up payments must be made by the end of your taxable year following the year in which the taxes that are
the subject of the audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no
taxes are remitted, the end of your taxable year following the taxable year in which the audit is completed or there is a final
and nonappealable settlement or other resolution of the litigation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Notwithstanding the foregoing,
if any payments, reimbursements or benefits under this Subsection (b) are considered deferred compensation subject to Section 409A
of the Internal Revenue Code of 1986, as amended (&quot;Code Section 409A&quot;) and the sixty (60) day period for executing and
not revoking the Release begins in one calendar year and ends in another calendar year, then any such payments, reimbursements
or benefits that otherwise would have been paid or provided in the first calendar year shall be accumulated and paid in a lump
sum on the first payroll date in the second calendar year after the expiration of the revocation period and all other amounts shall
be paid or provided when otherwise due hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">4.</TD><TD STYLE="text-align: justify"><U>Termination for Cause or Without Good Reason</U>. In the event your employment with the Company
is terminated for Cause by the Company or by you without Good Reason, you will only be entitled to, and the Company will only pay
to you the Accrued Compensation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">5.</TD><TD STYLE="text-align: justify"><U>Definition of Cause</U>. For purposes of this letter, &ldquo;<U>Cause</U>&rdquo; will mean (i)
your willful misconduct or gross negligence with regard to the Company that is materially adverse to the Company; (ii) your willful
and continued failure to attempt to substantially perform your duties with the Company which failure is not remedied within fifteen
(15) days of written notice from the Company specifying the details thereof; (iii) your commission of a felony or crime involving
moral turpitude or the commission of any act or omission involving dishonesty in the performance of your duties and responsibilities
as an employee of the Company, or fraud; (iv) your misappropriation of funds or assets of the Company for personal use or willful
violation of the Company&rsquo;s policies or standards of business conduct; or (v) your breach of any provision contained in the
Restrictive Covenant Agreement (as defined below).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">6.</TD><TD STYLE="text-align: justify"><U>Definition of Good Reason</U>. For purposes of this agreement, &ldquo;<U>Good Reason</U>&rdquo;
will mean, without your express written consent, the occurrence of any of the following events which is not remedied within thirty
(30) days after the receipt by the Company of written notice from you specifying the details thereof (the &quot;Cure Period&quot;):
(i) any material diminution (except temporarily during period of Disability) in your duties or responsibilities; (ii) a reduction
by the Company in your base salary; (iii) a material breach by the Company of any provisions of this agreement or any other agreement
between you and the Company which such breach is not remedied by the Company within fifteen (15) days after the receipt by it of
written notice of the same; and (iv) your being required to relocate to a principal place of employment more than fifty (50) miles
from your present office location. You must provide the written notice to the Company of the Good Reason event within sixty (60)
days of the initial occurrence of the event. Your actual termination due to such event must occur no later than thirty (30) days
after the end of the Cure Period to be considered a termination for Good Reason.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">7.</TD><TD STYLE="text-align: justify"><U>Termination on Death</U>. Your employment shall terminate automatically upon your death and
your estate shall only be entitled to receive the Accrued Compensation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">8.</TD><TD STYLE="text-align: justify"><U>Termination Due to Disability</U>. Your employment shall terminate in the event that, due to
physical or mental illness or injury, you are unable to perform the essential functions of your position(s), with or without reasonable
accommodation, for a total of three (3) months in any 12-month period (&ldquo;<U>Disability</U>&rdquo;). If your employment is
terminated under this Section, you shall be entitled only to receive the Accrued Compensation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">9.</TD><TD STYLE="text-align: justify"><U>No Duty to Mitigate; No Offset</U>. You will be under no obligation to seek other employment
and, except as provided in this letter, there will be no offset against any amounts owing to you under this letter on account of
any remuneration attributable to any subsequent employment that you may obtain.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">10.</TD><TD STYLE="text-align: justify"><U>Restrictive Covenants</U>. You shall be bound by the terms and conditions of that certain Confidentiality,
Non-Competition, Non-Solicitation and Intellectual Property Agreement, dated as of even date herewith (the &ldquo;<U>Restrictive
Covenant Agreement</U>&rdquo;), between the Company and you, which is hereby incorporated by reference herein and made a part hereof.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">11.</TD><TD STYLE="text-align: justify"><U>Bonus; Options</U>. On the Effective Date of this letter, the Company shall make payment of
a bonus to you in an amount equal to $10,000. In addition, on September 21, 2012, the Company granted to you options to acquire
15,000 shares of the common stock, par value $0.02 per share, of the Company at an exercise price equal to $4.26 per share subject
to the terms and conditions of the Company&rsquo;s 2004 Employee Stock Option Plan. Such options shall vest in full on the Effective
Date but otherwise terminate in the event of the termination of the Merger Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">12.</TD><TD><U>Code Section 409A Compliance</U>.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD STYLE="text-align: justify">The intent of the parties is that payments and benefits under this Agreement comply with Code Section
409A or comply with an exemption from the application of Code Section 409A and, accordingly, all provisions of this Agreement shall
be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD STYLE="text-align: justify">Neither you nor the Company shall take any action to accelerate or delay the payment of any monies
and/or provision of any benefits in any matter which would not be in compliance with Code Section 409A.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD STYLE="text-align: justify">A termination of employment shall not be deemed to have occurred for purposes of any provision
of this Agreement providing for the form or timing of payment of any amounts or benefits upon or following a termination of employment
unless such termination is also a &ldquo;separation from service&rdquo; (within the meaning of Code Section 409A) and, for purposes
of any such provision of this Agreement under which (and to the extent) deferred compensation subject to Code Section 409A is paid,
references to a &ldquo;termination&rdquo; or &ldquo;termination of employment&rdquo; or like references shall mean separation from
service. A &ldquo;separation from service&rdquo; shall not occur under Code Section 409A unless you have completely severed your
relationship with the Company or you have permanently decreased your services to 20% or less of the average level of bona fide
services over the immediately preceding 36 month period (or the full period if you have been providing services for less than 36
months). A leave of absence shall only trigger a termination of employment that constitutes a separation from service at the time
required under Code Section 409A. If you are deemed on the date of separation from service with the Company to be a &ldquo;specified
employee&rdquo;, within the meaning of that term under Code Section 409A(a)(2)(B) and using the identification methodology selected
by the Company from time to time, or if none, the default methodology, then with regard to any payment or benefit that is required
to be delayed in compliance with Code Section 409A(a)(2)(B), such payment or benefit shall not be made or provided prior to the
earlier of (i) the expiration of the six-month period measured from the date of your separation from service or (ii) the date of
the your death. In the case of benefits required to be delayed under Code Section 409A, however, you may pay the cost of benefit
coverage, and thereby obtain benefits, during such six-month delay period and then be reimbursed by the Company thereafter when
delayed payments are made pursuant to the next sentence. On the first day of the seventh month following the date of your separation
from service or, if earlier, on the date of your death, all payments delayed pursuant to this Section (whether they would have
otherwise been payable in a single sum or in installments in the absence of such delay) shall be paid or reimbursed to you in a
lump sum, and any remaining payments and benefits due under this Agreement shall be paid or provided in accordance with the normal
payment dates specified for them herein.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">d.</TD><TD STYLE="text-align: justify">With regard to any provision herein that provides for reimbursement of expenses or in-kind benefits
subject to Code Section 409A, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits is not
subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursement, or in-kind
benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other taxable year, provided that the foregoing clause (ii) shall not be violated with regard to expenses reimbursed
under any arrangement covered by Code Section 105(b) solely because such expenses are subject to a limit related to the period
the arrangement is in effect. All reimbursements shall be reimbursed in accordance with the Company&rsquo;s reimbursement policies
but in no event later than the calendar year following the calendar year in which the related expense is incurred or such earlier
date as set forth herein.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">e.</TD><TD STYLE="text-align: justify">If under this Agreement, an amount is to be paid in two or more installments, for purposes of Code
Section 409A, each installment shall be treated as a separate payment.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">f.</TD><TD STYLE="text-align: justify">Notwithstanding any of the provisions of this Agreement, the Company shall not be liable to you
or any other person if any payment or benefit which is to be provided pursuant to this Agreement and which is considered deferred
compensation subject to Code Section 409A otherwise fails to comply with, or be exempt from, the requirements of Code Section 409A.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">13.</TD><TD STYLE="text-align: justify"><U>Indemnification</U>. The Company hereby agrees to indemnify you and hold you harmless to the
fullest extent permitted by applicable law against and in respect to any and all actions, suits, proceedings, claims, demands,
judgments, costs, expenses (including reasonable attorney&rsquo;s fees), losses, and damages resulting from your good faith performance
of your duties and obligations with the Company. If any claim, action, suit, or proceeding is brought against you for which you
may seek indemnification under this subsection, you shall promptly notify the Company in writing thereof, and the Company shall
have the right to assume and control the defense thereof, unless an actual or potential conflict of interest between the Company&rsquo;s
interests and your interests exists.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[</B>Signature Pages to Follow<B>]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">Please contact me at (585) 325-3610 if you
have any questions. If you agree with the terms set forth herein kindly execute in the space provided below and return the same
to me.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 53%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 35%; text-align: justify">Sincerely,</TD>
    <TD STYLE="width: 12%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify; border-bottom: Black 1pt solid">/s/ Patrick White</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Patrick White</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Chief Executive Officer</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Agreed and acknowledged:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 35%; border-bottom: windowtext 1pt solid; text-align: justify">/s/ Jeff D&rsquo;Angelo</TD>
    <TD STYLE="width: 65%; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">Jeff D&rsquo;Angelo</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[Severance Letter]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">AMENDMENT, WAIVER AND CONSENT</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">This Amendment, Waiver and Consent, dated
as of November 20, 2012, is among Document Security Systems, Inc., a New York corporation (&ldquo;Parent&rdquo;), DSSIP, Inc.,
a Delaware corporation and a wholly-owned subsidiary of Parent (&ldquo;Merger Sub&rdquo;), Lexington Technology Group, Inc., a
Delaware corporation (the &ldquo;Company&rdquo;), and Hudson Bay Master Fund Ltd. (&ldquo;Company Representative&rdquo;) as representatives
of the stockholders of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="text-underline-style: none">1.
<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Reference
to Merger Agreement; Definitions.</U><FONT STYLE="text-underline-style: none"> Reference is made to the Agreement and Plan of Merger
dated as of October 1, 2012, by and among Parent, Merger Sub, the Company and the Company Representative (the &ldquo;Merger Agreement&rdquo;).
Terms defined in the Merger Agreement and not otherwise defined herein are used herein with the meanings so defined.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="text-underline-style: none">2.
<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Acknowledgement
of Various Management Changes and Actions Undertaken by the Company.</U><FONT STYLE="text-underline-style: none"> Parent and Merger
Sub hereby acknowledge and consent to the following actions undertaken by the Company and waive any breach or default under the
Merger Agreement, including, but not limited to, any breach of Sections 4.1 or 5.7 of the Merger Agreement, that may result by
reason thereof: </FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>William Rosellini resigned as Chief Executive Officer of the Company, effective as of November 9, 2012. Will Rosellini will
enter into a consulting agreement with Bascom Research LLC pursuant to which, among other things, Mr. Rosellini will be paid an
hourly fee of $250 per hour and a fee equal to 3% of the total amount of grant money or other investments Mr. Rosellini secures
on behalf of Bascom Research LLC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Jeff Ronaldi will replace William Rosellini as the Company&rsquo;s Chief Executive Officer, pursuant to the terms and conditions
of an employment agreement, in substantially the form attached hereto as <U>Exhibit A</U> (the &ldquo;Ronaldi Agreement&rdquo;).
Pursuant to the Ronaldi Agreement, the Company will grant Jeff Ronaldi (i) 100,000 shares of Company Common Stock, pursuant to
an agreement in substantially the form provided to Parent and (ii) an option to purchase 1,800,000 shares of Company Common Stock
at an exercise price of $1.67 per share, pursuant to an option agreement in substantially the form provided to Parent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The existing Employment Agreement between the Company and Peter Hardigan will be amended pursuant to the terms and conditions
of an Amended Employment Agreement, in substantially the form attached hereto as Exhibit B (the &ldquo;Hardigan Agreement&rdquo;).
Pursuant to the Hardigan Agreement, the Company will grant to Peter Hardigan (i) 100,000 shares of Company Common Stock, pursuant
to an agreement in substantially the form provided to Parent, and (ii) an option to purchase 1,800,000 shares of Company Common
Stock at an exercise price of $1.67 per share, pursuant to an option agreement in substantially the form provided to Parent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="text-underline-style: none">3.
<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Amendment
to Section 1.11 of Merger Agreement</U><FONT STYLE="text-underline-style: none">. Section 1.11 of the Merger Agreement is hereby
deleted in its entirety and replaced with the following: </FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&ldquo;1.11&#9;<U>Company Stock Options</U>.
At the Effective Time, by virtue of the Merger and without any action on the part of the Parties, up to an aggregate of 3,600,000
outstanding options awarded to Jeff Ronaldi and Peter Hardigan will be assumed by the Parent. Immediately after the Effective Time,
each such option will convert into an option to purchase or acquire shares of the Parent Common Stock (i) in a number equal to
the number of shares of Company Common Stock subject to the option immediately prior to the Effective Time multiplied by .556 (the
&ldquo;<B>Option Exchange Ratio</B>&rdquo;) and (ii) with an exercise price per share equal to the exercise price of the applicable
option immediately prior to the Effective Time divided by the Option Exchange Ratio, with the number of shares in (i) and the price
per share in (ii) rounded up or down to the next whole share number or tenth (0.1) of a cent, as the case may be, in a manner such
that, after taking into account such rounding, both (A) the excess of the aggregate fair market value of the shares subject to
the new option over the aggregate exercise price for such shares does not exceed the excess of the aggregate fair market value
of the shares subject to the old option over the aggregate exercise price for such shares immediately prior to the Effective Time,
and (B) the ratio on a per option basis of the exercise price to the fair market value of the shares subject to the option is not
increased. In any event, the assumption and conversion of the options under this Section 1.11 will be done in a manner that complies
with the requirements for exemption from Section 409A of the Code and the applicable guidance thereunder, including the avoidance
of any action that would constitute a modification or extension of the options within the meaning of Treasury Regulation Section
1.409A-1(b)(5)(v).&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="text-underline-style: none">4.
<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Company
Representations and Warranties; Company Disclosure Schedule.</U><FONT STYLE="text-underline-style: none"> All representations and
warranties of the Company set forth in the Merger Agreement and all information set forth on the Company Disclosure Schedule including,
but not limited to, Sections 2.3(a), 2.3(b), 2.3(d), 2.3(e), 2.7, 2.9(a), 2.14(a), 2.14(c) and 2.16 shall be deemed amended and
modified to the extent necessary to reflect the information set forth in paragraphs 2(a), 2(b) and 2(c) of this Amendment, Waiver
and Consent.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="text-underline-style: none">5.
<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Amendment
to Section 5.12 of Merger Agreement.</U><FONT STYLE="text-underline-style: none"> Section 5.12 of the Merger Agreement is hereby
deleted in its entirety and replaced with the following:</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;5.12&#9;<U>Directors
and Officers of Parent</U>. Parent and the Company shall take all necessary action (including, but not limited to, an amendment
to the Parent&rsquo;s bylaws increasing the size of its Board of Directors to nine members) so that following the Effective Time,
the Board of Directors of the Parent shall consist of nine directors, five of whom shall be designated by the Company and four
of whom shall be designated by Parent.&nbsp; The directors designated by Parent shall be: Robert Fagenson, Ira Greenstein, Robert
Bzdick and David Klein, and the five directors designated by the Company shall be Jeff Ronaldi, Peter Hardigan, Warren Hurwitz
and two other persons to be designated by the Company (reasonably acceptable to Parent) on or prior to the filing of the first
amendment to the Proxy Statement.&nbsp; If Parent&rsquo;s stockholders approve the proposal to amend the Certificate of Incorporation
of Parent to provide for a Staggered Board, the members of the class coming up for election in the annual meetings of stockholders
for 2013 (&ldquo;Class I&rdquo;), 2014 (&ldquo;Class II&rdquo;) and 2015 (&ldquo;Class III&rdquo;) shall be David Klein, <FONT STYLE="color: Black">Ira
Greenstein</FONT> and Jeff Ronaldi for Class I, Robert Bzdick, Peter Hardigan, and the Company&rsquo;s fourth designee for Class
II and Warren Hurwitz, the Company&rsquo;s fifth designee, and <FONT STYLE="color: Black">Robert Fagenson</FONT> for Class III.&nbsp;
If Parent&rsquo;s stockholders do not approve the proposal to amend the Certificate of Incorporation of Parent to provide for
a Staggered Board, then the Board of Directors of the Parent following the Effective Time shall initially consist of eight directors,
four of whom shall be persons designated by the Company and the other four shall be the persons designated by Parent above; provided,
that, prior to Closing, Parent and the Company shall jointly identify a ninth person to be nominated for a position on the board
of directors of Parent following the Effective Time. The following persons will serve as executive officers of Parent immediately
following the Effective Time:&nbsp; Jeff Ronaldi (Chief Executive Officer), Peter Hardigan (Chief Investment Officer), Philip
Jones (Chief Financial Officer) and Robert Bzdick (Executive Vice President).&rdquo;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="text-underline-style: none">6.
<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Amendment
to Section 4.1(a)(ii) of the Merger Agreement.</U><FONT STYLE="text-underline-style: none"> Section 4.1(a)(ii) and of the Merger
Agreement is hereby deleted in its entirety and replaced with the following: </FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&ldquo;(ii)&#9;with respect to Parent and
its Subsidiaries only, issue, transfer, pledge or encumber any shares of capital stock of any class, or any options, warrants,
convertible securities or other rights of any kind to acquire any shares of capital stock, or any other ownership interest (except
for the issuance of (A) shares of Parent Common Stock in the Private Placement (as hereinafter defined), (B) Parent Common Stock
issuable pursuant to warrants or promissory notes or (C) options by Parent to certain of its directors, officers, employees, and
consultants which such options are exercisable into no more than 650,000 shares of Parent Common Stock (subject to adjustment in
the event of a reverse stock split);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="text-underline-style: none">7.
<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Amendment
to Section 4.1(a)(x) of the Merger Agreement.</U><FONT STYLE="text-underline-style: none"> Section 4.1(a)(x) of the Merger Agreement
is hereby deleted in its entirety and replaced with the following: </FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&ldquo;(x)&#9;take or permit to be taken
any action to: (A) increase employee compensation or grant any severance or termination compensation, except in accordance with
agreements entered into prior to the date of this Agreement; (B) enter into any collective bargaining agreement; (C) with respect
to Parent and its Subsidiaries only, and other than Patrick White, hire or terminate any employees, independent contractors or
consultants, having a total salary or severance package that is individually in excess of $50,000, or that collectively is in excess
of $50,000; (D) establish, adopt, enter into or amend in any material respect any bonus, profit sharing, thrift, compensation,
stock option, restricted stock, pension, retirement, deferred compensation, employment, termination, severance or other plan, trust,
fund, policy, agreement or arrangement for the benefit of any of its directors, officers or employees, except for (1) the cancellation
of options exercisable for an aggregate of 280,000 shares of Parent Common Stock issued to certain officers and employees of Parent
on September 19, 2012 or September 20, 2012 and (2) the adoption of the Document Security Systems, Inc. 2013 Employee, Director
and Consultant Equity Incentive Plan, or (E) approve any cashless exercise of any issued and outstanding options;&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="text-underline-style: none">8.
<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Reverse
Stock Split</U><FONT STYLE="text-underline-style: none">. The Company hereby acknowledges and consents to the approval by the Board
of Directors of Parent of an amendment to its amended and restated certificate of incorporation to effect a reverse stock split
of Parent's issued and outstanding common stock within the range of one-for-two to one-for-four, which amendment to Parent's amended
and restated certificate of incorporation will be included in the Proxy Statement for approval by the stockholders of Parent. </FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><U>
</U></FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in"><FONT STYLE="text-underline-style: none">9.
<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Miscellaneous</U>.
Except as otherwise set forth herein, the Merger Agreement shall remain in full force and effect without change or modification.
This Amendment, Waiver and Consent may be executed in any number of counterparts, which together shall constitute one instrument,
and shall bind and inure to the benefit of the parties and their respective successors and assigns.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">IN WITNESS WHEREOF, the parties hereto have
executed this Amendment, Waiver and Consent as of the day and year first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 3pt">Document Security Systems, Inc.</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt; width: 50%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt; width: 5%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt; width: 35%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt; width: 10%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">By:</TD>
    <TD STYLE="padding-bottom: 3pt; border-bottom: Black 1pt solid">/s/ Robert B. Bzdick</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">Name:</TD>
    <TD STYLE="padding-bottom: 3pt; border-bottom: Black 1pt solid">Robert B. Bzdick</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">Title:</TD>
    <TD STYLE="padding-bottom: 3pt; border-bottom: Black 1pt solid">President, COO</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 3pt">DSSIP, Inc.</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">By:</TD>
    <TD STYLE="padding-bottom: 3pt; border-bottom: Black 1pt solid">/s/ Philip Jones</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">Name:</TD>
    <TD STYLE="padding-bottom: 3pt; border-bottom: Black 1pt solid">Philip Jones</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">Title:</TD>
    <TD STYLE="padding-bottom: 3pt; border-bottom: Black 1pt solid">CEO</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-bottom: 3pt">Lexington Technology Group, Inc.</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">By:</TD>
    <TD STYLE="padding-bottom: 3pt; border-bottom: Black 1pt solid">/s/ Peter Hardigan</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 3pt">Name:</TD>
    <TD STYLE="padding-bottom: 3pt; border-bottom: Black 1pt solid">Peter Hardigan</TD>
    <TD STYLE="padding-bottom: 3pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">COO</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">COMPANY REPRESENTATIVE</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">Hudson Bay Master Fund, Ltd.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify"></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Yoav Roth</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">Yoav Roth</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Its:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">Authorized Signatory</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


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    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Active 7395572v.4</P></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: right"><B>ANNEX B-1</B></P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: right">EXECUTION
COPY</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: center">VOTING
AND SUPPORT AGREEMENT</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">This
VOTING AND SUPPORT AGREEMENT (this &ldquo;<U>Agreement</U>&rdquo;) is entered into as of
October 1, 2012, by and between Lexington Technology Group, Inc., a Delaware
corporation (&ldquo;<U>LTGI</U>&rdquo;) and <B>[_______________]</B> (&ldquo;<U>Stockholder</U>&rdquo;).
LTGI and Stockholder are each sometimes referred to herein as a &ldquo;<U>Party</U>&rdquo;
and collectively as the &ldquo;<U>Parties</U>&rdquo;.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center"><U>W
I T N E S S E T H:</U></P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">WHEREAS,
as of the date hereof, Stockholder has the sole right to vote the number of
shares of common stock, par value $0.02 per share (the &ldquo;<U>Common Stock</U>&rdquo;),
of Document Security Systems, Inc., a New York corporation (the
&ldquo;<U>Company</U>&rdquo;), set forth opposite Stockholder&rsquo;s name on Schedule I hereto
(such shares of Common Stock, together with any other shares of Common Stock the
voting power over which is acquired by Stockholder during the period from and
including the date hereof through and including the date on which this Agreement
is terminated in accordance with its terms (such period, the &ldquo;<U>Voting
Period</U>&rdquo;), are collectively referred to herein as the &ldquo;<U>Subject
Shares</U>&rdquo;.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">WHEREAS,
the Company, DSSIP, Inc., a Delaware corporation and wholly-owned subsidiary of
the Company (&ldquo;<U>Merger Sub</U>&rdquo;), and LTGI contemporaneously herewith intend to
enter into an Agreement and Plan of Merger, dated as of the date hereof (as the
same may be amended from time to time, the &ldquo;<U>Merger Agreement</U>&rdquo;), pursuant
to which Merger Sub will merge with and into LTGI, with LTGI surviving as a
wholly-owned subsidiary of the Company (the &ldquo;<U>Merger</U>&rdquo;); and</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">WHEREAS,
as a condition to the willingness of LTGI to enter into the Merger Agreement,
and as an inducement and in consideration therefor, Stockholder is executing
this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">NOW,
THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
Parties hereto, intending to be legally bound, hereby agree as follows:</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
I<BR><BR></FONT><U>DEFINITIONS</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 1.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Capitalized Terms.</U> For purposes of this Agreement,
capitalized terms used and not defined herein shall have the respective meanings
ascribed to them in the Merger Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P><!-- Field: Page; Sequence: 432; Options: NewSection; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
II<BR><BR></FONT><U>VOTING AGREEMENT AND IRREVOCABLE PROXY</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 2.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Agreement to Vote the Subject Shares</U>. Stockholder hereby
agrees that, during the Voting Period, at any duly called meeting of the
stockholders of the Company (or any adjournment or postponement thereof), and in
any action by written consent of the stockholders of the Company, Stockholder
shall, if a meeting is held, appear at the meeting, in person or by proxy, or
otherwise cause his or her Subject Shares to be counted as present thereat for
purposes of establishing a quorum, and he or she shall vote or consent (or cause
to be voted or consented), in person or by proxy, all of his or her Subject
Shares (a) in favor of the adoption of the Merger Agreement and approval of the
Merger and the other transactions contemplated by the Merger Agreement, and (b)
against any action, proposal, transaction or agreement that would reasonably be
expected to result in a breach in any respect of any covenant, representation or
warranty or any other obligation or agreement of the Company contained in the
Merger Agreement or of Stockholder contained in this Agreement. For purposes of
clarification, whenever it is referenced in this Agreement that Stockholder vote
in favor of the adoption of the Merger Agreement and approve the Merger or other
similar language, it shall be deemed to include, without limitation, approval of
the Amendments and the Staggered Board, and approval of the issuance of the
Merger Consideration. This Agreement is intended to bind Stockholder only with
respect to the specific matters expressly set forth in clauses (a) and (b)
above, and except as set forth in such clauses, Stockholder shall not be
restricted from voting in favor of, against or abstaining with respect to any
other matter presented to the stockholders of the Company. Stockholder agrees
not to enter into any agreement, commitment or arrangement with any person the
effect of which would be inconsistent with or violative of the provisions and
agreements contained in this Article II.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 2.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Ownership Interest</U>. Nothing contained in this Agreement
shall be deemed to vest in LTGI any direct or indirect ownership or incidence of
ownership of or with respect to the Subject Shares. All rights, ownership and
direct and indirect economic benefits of and relating to the Subject Shares
shall remain vested in and belong to Stockholder.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 2.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Effect of Change of Recommendation; Company Breach</U>. For the
avoidance of doubt, Stockholder agrees that, during the Voting Period, the
obligations of Stockholder specified in Section 2.1 shall not be affected by (a)
any withdrawal or modification by the Board of Directors of the Company of its
recommendation in favor of the Merger and the Merger Agreement or (b) any breach
by the Company or Merger Sub of any of its respective representations,
warranties, agreements or covenants set forth in the Merger Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 2.4<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Obligation as Director, Officer or Fiduciary</U>.
Notwithstanding anything contained in this Agreement to the contrary, (a)
Stockholder makes no agreement or understanding herein in any capacity other
than in its capacity as a record holder and/or beneficial owner of the Subject
Shares, (ii) nothing in this Agreement shall be construed to limit or affect any
action or inaction by Stockholder or any Representatives of Stockholder in their
respective capacity as a director, officer, or other fiduciary of the Company or
Merger Sub, and (iii) Stockholder and the Representatives of Stockholder shall
have no liability to LTGI or any of its Affiliates under this Agreement as a
result of any action or inaction by Stockholder or any such Representatives
acting in their respective capacity as a director, officer, or other fiduciary
of the Company or Merger Sub. The term &ldquo;Representatives&rdquo; shall mean any
director, officer, employee, agent or other representative (collectively,
&ldquo;<U>Representatives</U>&rdquo;) of Stockholder.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
III<BR><BR></FONT><U>COVENANTS</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 3.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Generally</U>.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder agrees that during the Voting Period, except as
contemplated by the terms of this Agreement, it shall not, and shall cause its
Affiliates not to, without LTGI&rsquo;s prior written consent, (i) offer for sale,
sell (including short sales), transfer, tender, pledge, encumber, assign or
otherwise dispose of (including by gift) (collectively, a &ldquo;<U>Transfer</U>&rdquo;), or
enter into any contract, option, derivative, hedging or other agreement or
arrangement or understanding (including any profit-sharing arrangement) with
respect to, or consent to, a Transfer of, any or all of the Subject Shares,
except, in each case, for Permitted Transfers (as hereinafter defined); (ii)
grant any proxies or powers of attorney with respect to any or all of the
Subject Shares; (iii) grant in favor of any person any lien of any nature
whatsoever with respect to any or all of the Subject Shares; or (iv) knowingly
or intentionally take any action that to the knowledge of such Stockholder would
have the effect of preventing, impeding, interfering with or adversely affecting
Stockholder&rsquo;s ability to perform its obligations under this Agreement. The term
&ldquo;Permitted Transfers&rdquo; shall mean the Transfer of Subject Shares (1) to any other
person who shall have executed and delivered to LTGI a voting and support
agreement substantially on the same terms and conditions as this Agreement (2)
to any spouse or lineal descendent (whether natural or adopted), sibling,
parent, other family member, heir, executor, administrator, testamentary
trustee, or (3) to any trust for the benefit of any spouse or lineal descendent
(whether natural or adopted), sibling, parent, or other family member, or any
other transfer for estate planning purposes; <U>provided</U>, that in each case
referred to in clauses (1), (2) or (3), the assignee or transferee thereof
agrees in writing, in form and substance reasonably satisfactory to LTGI, to be
bound by the terms of this Agreement; and (4) pursuant to the requirements of
the Merger Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>In the event of a stock dividend or distribution, or any change in
the Common Stock by reason of any stock dividend or distribution, split-up,
recapitalization, combination, conversion, exchange of shares or the like, the
term &ldquo;Subject Shares&rdquo; shall be deemed to refer to and include the Subject Shares
as well as all such stock dividends and distributions and any securities into
which or for which any or all of the Subject Shares may be changed or exchanged
or which are received in such transaction.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder agrees, while this Agreement is in effect, not to
knowingly or intentionally take or agree or commit to take any action that would
make any representation and warranty of Stockholder contained in this Agreement
inaccurate in any material respect.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 3.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Standstill Obligations of the Stockholder</U>. Stockholder
covenants and agrees with LTGI that, during the Voting Period:</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder shall not, and shall not act in concert with any
person to, make, or in any manner participate in, directly or indirectly, a
&ldquo;solicitation&rdquo; of &ldquo;proxies&rdquo; or consents (as such terms are used in the rules of
the Securities and Exchange Commission) or powers of attorney or similar rights
to vote, or seek to advise or influence any person with respect to the voting
of, any shares of Common Stock in connection with any vote or other action on
any matter, other than to recommend that stockholders of the Company vote in
favor of adoption of the Merger Agreement, the Merger and the other transactions
contemplated by the Merger Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder shall not, and shall not act in concert with any
person to, deposit any of the Subject Shares in a voting trust or subject any of
the Subject Shares to any arrangement or agreement with any person with respect
to the voting of the Subject Shares, except as provided by Article II of this
Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder shall not, and shall not act in concert with any
person to, directly or indirectly, initiate, solicit or knowingly encourage or
facilitate (including, in each case, by way of furnishing information) any
inquiries or the making of any proposal or offer with respect to, or any
indication of interest in, any Parent Acquisition Proposal, engage in any
negotiations or discussions concerning any Parent Acquisition Proposal, or
provide any non-public information or data to any person or any Representatives
thereof (other than the Company, Merger Sub or any of the Affiliates of the
Company or Merger Sub) that has made, or to Stockholder&rsquo;s knowledge, is
considering making a Parent Acquisition Proposal, or make any public statements
with respect to any Parent Acquisition Proposal or any matter that relates to,
supports, or could reasonably be expected to lead to any Parent Acquisition
Proposal.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(d)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder shall cease immediately any and all existing
discussions, conversations, negotiations and other communications with any
person conducted heretofore with respect to any Parent Acquisition Proposal or
any matter which, to the knowledge of Stockholder, relates to, supports, or
would reasonably be expected to lead to any Parent Acquisition Proposal.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
IV<BR><BR></FONT><U>REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">Stockholder
hereby represents and warrants to LTGI as follows:</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 4.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Binding Agreement</U>. Stockholder is: (i) of legal age to
execute this Agreement and is legally competent to do so and (ii) has all
necessary power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. This Agreement, assuming due
authorization, execution and delivery hereof by LTGI, constitutes a legal, valid
and binding obligation of Stockholder, enforceable against Stockholder in
accordance with its terms (except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general applicability relating to or affecting creditor&rsquo;s
rights, and to general equitable principles).</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P><!-- Field: Page; Sequence: 435; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 4.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Ownership of Shares</U>. Schedule I sets forth opposite
Stockholder&rsquo;s name the number of shares of Common Stock over which Stockholder
has the sole right to vote or to direct the voting as of the date hereof. As of
the date hereof, Stockholder is the lawful owner of such shares of Common Stock.
Stockholder does not own or hold any right to acquire any additional shares of
any class of capital stock of the Company or other securities of the Company or
any interest therein or any voting rights with respect to any securities of the
Company other than the Subject Shares. Stockholder has good and valid title to
such shares of Common Stock, free and clear of any and all Liens other than
those created by this Agreement. Stockholder has not employed or engaged any
investment banker, broker or finder that is or will be entitled to any
commission or fee from Stockholder in connection with this Agreement or the
transactions contemplated hereby.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 4.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Conflicts</U>.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>No filing with, or notification to, any Governmental Authority,
and no consent, approval, authorization or permit of any other person is
necessary for the execution of this Agreement by Stockholder and the
consummation by Stockholder of the transactions contemplated hereby.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>None of the execution and delivery of this Agreement by
Stockholder, the consummation by Stockholder of the transactions contemplated
hereby or compliance by Stockholder with any of the provisions hereof shall (i)
result in, or give rise to, a violation or breach of or a default under any of
the terms of any material contract, understanding, agreement or other instrument
or obligation to which Stockholder is a party or by which Stockholder or any of
the Subject Shares or Stockholder&rsquo;s assets may be bound, or (iii) violate any
judgment, decree, or order or law applicable to Stockholder, except for any of
the foregoing as could not reasonably be expected to impair Stockholder&rsquo;s
ability to perform its obligations under this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 4.4<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Company Takeover Proposal</U>. Stockholder represents that it
is not engaged in any discussions or negotiations with any person (other than
LTGIor any Affiliates of LTGI) with respect to any Parent Acquisition Proposal
or any matter that, to Stockholder&rsquo;s knowledge, relates to, supports, or would
reasonably be expected to lead to any Parent Acquisition Proposal.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 4.5<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Reliance by LTGI</U>. Stockholder understands and acknowledges
that LTGI is entering into the Merger Agreement in reliance upon the execution
and delivery of this Agreement by Stockholder.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
V<BR><BR></FONT><U>REPRESENTATIONS AND WARRANTIES OF LTGI</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">LTGI
hereby represents and warrants to Stockholder as follows:</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 5.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Binding Agreement</U>. LTGI is a Delaware corporation duly
organized and validly existing under the laws of the jurisdiction of its
organization. LTGI has all necessary corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by LTGI have been duly authorized by all
necessary corporate action on the part of LTGI. This Agreement, assuming due
authorization, execution and delivery hereof by Stockholder, constitutes a
legal, valid and binding obligation of LTGI enforceable against LTGI in
accordance with its terms (except as such enforceability may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws of general applicability relating to or affecting creditor&rsquo;s
rights, and to general equitable principles).</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P><!-- Field: Page; Sequence: 436; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 5.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Conflicts</U>.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>No filing with, or notification to, any Governmental Authority,
and no consent, approval, authorization or permit of any other person is
necessary for the execution of this Agreement by LTGI and the consummation by
LTGI of the transactions contemplated hereby.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>None of the execution and delivery of this Agreement by LTGI, the
consummation by LTGI of the transactions contemplated hereby or compliance by
LTGI with any of the provisions hereof shall (i) conflict with or result in any
breach of the organizational documents of LTGI, (ii) result in, or give rise to,
a violation or breach of or a default under any of the terms of any material
contract, understanding, agreement or other instrument or obligation to which
LTGI is a party or by which LTGI or any of its assets may be bound, or (iii)
violate any applicable judgment, decree, order or law, except for any of the
foregoing as could not reasonably be expected to impair LTGI&rsquo;s ability to
perform its obligations under this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 5.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Reliance by the Stockholder</U>. LTGI understands and
acknowledges that Stockholder is entering into this Agreement in reliance upon
the execution and delivery of the Merger Agreement by LTGI.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
VI<BR><BR></FONT><U>TERMINATION</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 6.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Termination</U>. This Agreement shall automatically terminate,
and none of LTGI or Stockholder shall have any rights or obligations hereunder
and this Agreement shall become null and void and have no effect upon the
earliest to occur of (a) the mutual written consent of LTGI and Stockholder, (b)
the Effective Time, (c) the date of termination of the Merger Agreement in
accordance with its terms and (d) the delivery of written notice by Stockholder
to LTGI following any amendment to the Merger Agreement to increase the Merger
Consideration unless such amendment to the Merger Agreement has been consented
to by Stockholder in writing prior to such amendment, and after the occurrence
of such applicable event this Agreement shall terminate and be of no further
force or effect. The termination of this Agreement shall not prevent any Party
hereunder from seeking any remedies (at law or in equity) against another Party
hereto or relieve such Party from liability, in each case for such Party&rsquo;s fraud
or willful breach of any terms of this Agreement. Notwithstanding anything to
the contrary herein, the provisions of Article VII shall survive the termination
of this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P><!-- Field: Page; Sequence: 437; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
VII<BR><BR></FONT><U>MISCELLANEOUS</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Publication</U>. Stockholder hereby permits LTGI, the Company
and Merger Sub to publish and disclose in any forms, schedules or other
documents required to be filed with the Securities and Exchange Commission
(including the Proxy Statement and Registration Statement) by LTGI, the Company
or Merger Sub, as applicable, Stockholder&rsquo;s identity and ownership of the
Subject Shares and the nature of its commitments, arrangements and
understandings pursuant to this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Further Assurances</U>. From time to time, at the other Party&rsquo;s
request and without further consideration, each Party shall execute and deliver
such additional documents and take all such further action as may be reasonably
necessary or desirable to consummate the transactions contemplated by this
Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Fees and Expenses</U>. Each of the Parties shall be responsible
for its own fees and expenses (including, without limitation, the fees and
expenses of investment bankers, accountants and counsel) in connection with the
entering into of this Agreement and the consummation of the transactions
contemplated hereby and by the Merger Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.4<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Amendments, Waivers, etc</U>. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified, except upon the
execution and delivery of a written agreement executed by each of the Parties
hereto. The failure of any Party hereto to exercise any right, power or remedy
provided under this Agreement or otherwise available in respect hereof at law or
in equity, or to insist upon compliance by any other Party hereto with its
obligations hereunder, and any custom or practice of the Parties at variance
with the terms hereof shall not constitute a waiver by such Party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.5<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Headings</U>. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.6<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Severability</U>. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.7<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Entire Agreement; Assignment</U>. This Agreement (together with
the Merger Agreement, to the extent referred to herein, and Schedule I)
constitutes the entire agreement among the Parties with respect to the subject
matter hereof and supersedes all prior agreements and undertakings, both written
and oral, among the Parties, or any of them, with respect to the subject matter
hereof. This Agreement shall not be assigned by operation of law or otherwise
without the prior written consent of the other Party.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P><!-- Field: Page; Sequence: 438; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.8<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Parties in Interest</U>. This Agreement shall be binding upon
and inure solely to the benefit of each Party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.9<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Interpretation</U>. When reference is made in this Agreement to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words &ldquo;include&rdquo;, &ldquo;includes&rdquo; or &ldquo;including&rdquo; are
used in this Agreement, they shall be deemed to be followed by the words
&ldquo;without limitation.&rdquo; The words &ldquo;hereof,&rdquo; &ldquo;herein,&rdquo; &ldquo;hereby&rdquo; and &ldquo;hereunder&rdquo; and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
word &ldquo;or&rdquo; shall not be exclusive. Whenever used in this Agreement, any noun or
pronoun shall be deemed to include the plural as well as the singular and to
cover all genders. This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the Party
drafting or causing any instrument to be drafted.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.10<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Governing Law</U>. This Agreement and the rights and duties of
the Parties hereunder shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to the conflicts of laws
principles thereof, which would result in the applicability of the laws of
another jurisdiction, except to the extent required under Delaware corporate
law.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.11<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Specific Performance; Jurisdiction</U>. The Parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in the state
courts in the State of New York, this being in addition to any other remedy to
which they are entitled at law or in equity. In addition, each of the Parties:
(i) consents to submit itself to the personal jurisdiction of the state courts
of the State of New York in the event any dispute arises out of this Agreement
or any transaction contemplated hereby; (ii) agrees that it will not attempt to
deny or defeat personal jurisdiction by motion or other request for leave from
any such court; (iii) waives any right to trial by jury with respect to any
action related to or arising out of this Agreement or any transaction
contemplated hereby; and (iv) irrevocably and unconditionally waives (and agrees
not to plead or claim) any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in any New York State court or any Federal Court of the United States of
America sitting in New York City, New York.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.12<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Counterparts</U>. This Agreement may be executed in
counterparts (including by facsimile), each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P><!-- Field: Page; Sequence: 439; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.13<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Partnership, Agency or Joint Venture</U>. This Agreement is
intended to create a contractual relationship between Stockholder and LTGI and
is not intended to create, and does not create, any agency, partnership, joint
venture or any like relationship between or among the parties hereto. Without
limiting the generality of the foregoing sentence, Stockholder (a) is entering
into this Agreement solely on its own behalf and shall not have any obligation
to perform on behalf of any other holder of Common Stock or any liability
(regardless of the legal theory advanced) for any breach of this Agreement by
any other holder of Common Stock and (b) by entering into this Agreement does
not intend to form a &ldquo;<U>group</U>&rdquo; for purposes of Rule 13d-5(b)(1) of the
Exchange Act or any other similar provision of applicable law. Stockholder is
not affiliated with any other holder of Common Stock entering into a voting
agreement with LTGI in connection with the Merger Agreement and has acted
independently regarding its decision to enter into this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: italic 10pt Times New Roman, Times, Serif; text-align: center">[Execution
page follows.]</P>
<P STYLE="margin: 0pt 0px; font: italic 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</P><!-- Field: Page; Sequence: 440; Value: 1 -->
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    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">IN
WITNESS WHEREOF, LTGI and Stockholder have caused this Agreement to be duly
executed as of the day and year first above written.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">

  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>Lexington Technology Group,
      Inc.</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 35%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Name:&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Title:&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Name:&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR></TABLE>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center">[Signature
Page to Voting and Support Agreement]</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif"></P><!-- Field: Page; Sequence: 441; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: right"><U>SCHEDULE
I</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center"><U>Ownership
of Common Stock</U></P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">

  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; width: 50%">
      <P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; border-bottom: black 0.5pt solid; text-align: center">Stockholder</P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; width: 50%">
      <P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; border-bottom: black 0.5pt solid">Number
      of Shares</P></TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 10pt">&nbsp;</TD></TR></TABLE>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0in">&nbsp;</P>

<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0in">&nbsp;</P>

<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: right"><B>ANNEX B-2</B></P>


<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: center">VOTING
AND SUPPORT AGREEMENT</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">This
VOTING AND SUPPORT AGREEMENT (this &ldquo;<U>Agreement</U>&rdquo;) is entered into as of
October 1, 2012, by and among Document Security Systems, Inc., a New York
corporation (&ldquo;<U>Parent</U>&rdquo;), DSSIP, Inc., a Delaware corporation and wholly
owned subsidiary of Parent (&ldquo;<U>Merger Sub</U>&rdquo;) and ___________
(&ldquo;<U>Stockholder</U>&rdquo;). Parent, Merger Sub and Stockholder are each sometimes
referred to herein as a &ldquo;<U>Party</U>&rdquo; and collectively as the
&ldquo;<U>Parties</U>&rdquo;.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center"><U>W
I T N E S S E T H:</U></P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">WHEREAS,
as of the date hereof, Stockholder has the sole right to vote the number of
shares of capital stock of Lexington Technology Group, Inc., a Delaware
corporation (the &ldquo;<U>Company</U>&rdquo;), set forth opposite Stockholder&rsquo;s name on
Schedule I hereto (such shares of capital stock, together with any other shares
of capital stock the voting power over which is acquired by Stockholder during
the period from and including the date hereof through and including the date on
which this Agreement is terminated in accordance with its terms (such period,
the &ldquo;<U>Voting Period</U>&rdquo;), are collectively referred to herein as the
&ldquo;<U>Subject Shares</U>&rdquo;.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">WHEREAS,
Parent, Merger Sub and the Company contemporaneously herewith intend to enter
into an Agreement and Plan of Merger, dated as of the date hereof (as the same
may be amended from time to time, the &ldquo;<U>Merger Agreement</U>&rdquo;), pursuant to
which Merger Sub will merge with and into the Company, with the Company
surviving as a wholly-owned subsidiary of Parent (the &ldquo;<U>Merger</U>&rdquo;); and</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">WHEREAS,
as a condition to the willingness of Parent and Merger Sub to enter into the
Merger Agreement, and as an inducement and in consideration therefor,
Stockholder is executing this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">NOW,
THEREFORE, in consideration of the foregoing and the mutual premises,
representations, warranties, covenants and agreements contained herein, the
Parties hereto, intending to be legally bound, hereby agree as follows:</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
I<BR><BR></FONT><U>DEFINITIONS</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 1.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Capitalized Terms.</U> For purposes of this Agreement,
capitalized terms used and not defined herein shall have the respective meanings
ascribed to them in the Merger Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
II<BR><BR></FONT><U>VOTING AGREEMENT AND IRREVOCABLE PROXY</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 2.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Agreement to Vote the Subject Shares</U>. Stockholder hereby
agrees that, during the Voting Period, at any duly called meeting of the
stockholders of the Company (or any adjournment or postponement thereof), and in
any action by written consent of the stockholders of the Company, Stockholder
shall, if a meeting is held, appear at the meeting, in person or by proxy, or
otherwise cause his or her Subject Shares to be counted as present thereat for
purposes of establishing a quorum, and he or she shall vote or consent (or cause
to be voted or consented), in person or by proxy, all of his or her Subject
Shares (a) in favor of the adoption of the Merger Agreement and approval of the
Merger and the other transactions contemplated by the Merger Agreement, and (b)
against any action, proposal, transaction or agreement that would reasonably be
expected to result in a breach in any respect of any covenant, representation or
warranty or any other obligation or agreement of the Company contained in the
Merger Agreement or of Stockholder contained in this Agreement. This Agreement
is intended to bind Stockholder only with respect to the specific matters
expressly set forth in clauses (a) and (b) above, and except as set forth in
such clauses, Stockholder shall not be restricted from voting in favor of,
against or abstaining with respect to any other matter presented to the
stockholders of the Company. Stockholder agrees not to enter into any agreement,
commitment or arrangement with any person the effect of which would be
inconsistent with or violative of the provisions and agreements contained in
this Article II.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 2.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Ownership Interest</U>. Nothing contained in this Agreement
shall be deemed to vest in Parent or Merger Sub any direct or indirect ownership
or incidence of ownership of or with respect to the Subject Shares. All rights,
ownership and direct and indirect economic benefits of and relating to the
Subject Shares shall remain vested in and belong to Stockholder.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 2.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Effect of Change of Recommendation; Company Breach</U>. For the
avoidance of doubt, Stockholder agrees that, during the Voting Period, the
obligations of Stockholder specified in Section 2.1 shall not be affected by (a)
any withdrawal or modification by the Board of its recommendation in favor of
the Merger and the Merger Agreement or (b) any breach by the Company of any of
its representations, warranties, agreements or covenants set forth in the Merger
Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 2.4<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Obligation as Director, Officer or Fiduciary</U>.
Notwithstanding anything contained in this Agreement to the contrary, (a)
Stockholder makes no agreement or understanding herein in any capacity other
than in its capacity as a record holder and/or beneficial owner of the Subject
Shares, (ii) nothing in this Agreement shall be construed to limit or affect any
action or inaction by Stockholder or any Representatives of Stockholder in their
respective capacity as a director, officer, or other fiduciary of the Company,
and (iii) Stockholder and the Representatives of Stockholder shall have no
liability to Parent or Merger Sub or any of their respective Affiliates under
this Agreement as a result of any action or inaction by Stockholder or any such
Representatives acting in their respective capacity as a director, officer, or
other fiduciary of the Company. The term &ldquo;Representatives&rdquo; shall mean any
director, officer, employee, agent or other representative (collectively,
&ldquo;<U>Representatives</U>&rdquo;) of Stockholder.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
III<BR><BR></FONT><U>COVENANTS</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 3.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Generally</U>.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder agrees that during the Voting Period, except as
contemplated by the terms of this Agreement, it shall not, and shall cause its
Affiliates not to, without Parent&rsquo;s or Merger Sub&rsquo;s prior written consent, (i)
offer for sale, sell (including short sales), transfer, tender, pledge,
encumber, assign or otherwise dispose of (including by gift) (collectively, a
&ldquo;<U>Transfer</U>&rdquo;), or enter into any contract, option, derivative, hedging or
other agreement or arrangement or understanding (including any profit-sharing
arrangement) with respect to, or consent to, a Transfer of, any or all of the
Subject Shares, except, in each case, for Permitted Transfers (as hereinafter
defined); (ii) grant any proxies or powers of attorney with respect to any or
all of the Subject Shares; (iii) grant in favor of any person any lien of any
nature whatsoever with respect to any or all of the Subject Shares; or (iv)
knowingly or intentionally take any action that to the knowledge of such
Stockholder would have the effect of preventing, impeding, interfering with or
adversely affecting Stockholder&rsquo;s ability to perform its obligations under this
Agreement. The term &ldquo;Permitted Transfers&rdquo; shall mean the Transfer of Subject
Shares (1) to any other person who shall have executed and delivered to Parent
and Merger Sub a voting and support agreement substantially on the same terms
and conditions as this Agreement (2) to any spouse or lineal descendent (whether
natural or adopted), sibling, parent, other family member, heir, executor,
administrator, testamentary trustee, or (3) to any trust for the benefit of any
spouse or lineal descendent (whether natural or adopted), sibling, parent, or
other family member, or any other transfer for estate planning purposes;
<U>provided</U>, that in each case referred to in clauses (1), (2) or (3), the
assignee or transferee thereof agrees in writing, in form and substance
reasonably satisfactory to Parent and Merger Sub, to be bound by the terms of
this Agreement; , and (4) pursuant to the requirements of the Merger
Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>In the event of a stock dividend or distribution, or any change in
the Common Stock by reason of any stock dividend or distribution, split-up,
recapitalization, combination, conversion, exchange of shares or the like, the
term &ldquo;Subject Shares&rdquo; shall be deemed to refer to and include the Subject Shares
as well as all such stock dividends and distributions and any securities into
which or for which any or all of the Subject Shares may be changed or exchanged
or which are received in such transaction.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder agrees, while this Agreement is in effect, not to
knowingly or intentionally take or agree or commit to take any action that would
make any representation and warranty of Stockholder contained in this Agreement
inaccurate in any material respect.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 3.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Standstill Obligations of the Stockholder</U>. Stockholder
covenants and agrees with Parent and Merger Sub that, during the Voting
Period:</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder shall not, and shall not act in concert with any
person to, make, or in any manner participate in, directly or indirectly, a
&ldquo;solicitation&rdquo; of &ldquo;proxies&rdquo; or consents (as such terms are used in the rules of
the Securities and Exchange Commission) or powers of attorney or similar rights
to vote, or seek to advise or influence any person with respect to the voting
of, any shares of Common Stock in connection with any vote or other action on
any matter, other than to recommend that stockholders of the Company vote in
favor of adoption of the Merger Agreement, the Merger and the other transactions
contemplated by the Merger Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder shall not, and shall not act in concert with any
person to, deposit any of the Subject Shares in a voting trust or subject any of
the Subject Shares to any arrangement or agreement with any person with respect
to the voting of the Subject Shares, except as provided by Article II of this
Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder shall not, and shall not act in concert with any
person to, directly or indirectly, initiate, solicit or knowingly encourage or
facilitate (including, in each case, by way of furnishing information) any
inquiries or the making of any proposal or offer with respect to, or any
indication of interest in, any Company Acquisition Proposal, engage in any
negotiations or discussions concerning any Company Acquisition Proposal, or
provide any non-public information or data to any person or any Representatives
thereof (other than Parent, Merger Sub or any of the Affiliates of Parent or
Merger Sub) that has made, or to Stockholder&rsquo;s knowledge, is considering making
a Company Acquisition Proposal, or make any public statements with respect to
any Company Acquisition Proposal or any matter that relates to, supports, or
could reasonably be expected to lead to any Company Acquisition Proposal.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(d)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Stockholder shall cease immediately any and all existing
discussions, conversations, negotiations and other communications with any
person conducted heretofore with respect to any Company Acquisition Proposal or
any matter which, to the knowledge of Stockholder, relates to, supports, or
would reasonably be expected to lead to any Acquisition Proposal.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 3.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Appraisal Rights</U>. Stockholder agrees not to seek appraisal
or assert any rights of dissent from the Merger that it may have under Section
262 of the DGCL (or otherwise) and, to the extent permitted by applicable Law,
Stockholder hereby waives any rights of appraisal or rights to dissent from the
Merger that it may have under Section 262 of the DGCL.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
IV<BR><BR></FONT><U>REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">Stockholder
hereby represents and warrants to Parent and Merger Sub as follows:</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 4.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Binding Agreement</U>. Stockholder is <B>[</B>a
corporation/limited liability company duly organized, validly existing and in
corporate and tax good standing under the laws of the state of its
formation<B>]</B> <B>[</B>of legal age to execute this Agreement and is legally
competent to do so<B>]</B> and (ii) has all necessary <B>[</B>corporate/limited
liability company<B>]</B> power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. This
Agreement, assuming due authorization, execution and delivery hereof by Parent
and Merger Sub, constitutes a legal, valid and binding obligation of
Stockholder, enforceable against Stockholder in accordance with its terms
(except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and other similar laws of
general applicability relating to or affecting creditor&rsquo;s rights, and to general
equitable principles).</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 4.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Ownership of Shares</U>. Schedule I sets forth opposite
Stockholder&rsquo;s name the number of shares of Common Stock over which Stockholder
has the sole right to vote or to direct the voting as of the date hereof. As of
the date hereof, Stockholder is the lawful owner of such shares of Common Stock.
Stockholder does not own or hold any right to acquire any additional shares of
any class of capital stock of the Company or other securities of the Company or
any interest therein or any voting rights with respect to any securities of the
Company other than the Subject Shares. Stockholder has good and valid title to
such shares of Common Stock, free and clear of any and all Liens other than
those created by this Agreement. Stockholder has not employed or engaged any
investment banker, broker or finder that is or will be entitled to any
commission or fee from Stockholder in connection with this Agreement or the
transactions contemplated hereby.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P><!-- Field: Page; Sequence: 446; Value: 1 -->
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 4.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Conflicts</U>.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>No filing with, or notification to, any Governmental Authority,
and no consent, approval, authorization or permit of any other person is
necessary for the execution of this Agreement by Stockholder and the
consummation by Stockholder of the transactions contemplated hereby.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>None of the execution and delivery of this Agreement by
Stockholder, the consummation by Stockholder of the transactions contemplated
hereby or compliance by Stockholder with any of the provisions hereof shall (i)
result in, or give rise to, a violation or breach of or a default under any of
the terms of any material contract, understanding, agreement or other instrument
or obligation to which Stockholder is a party or by which Stockholder or any of
the Subject Shares or Stockholder&rsquo;s assets may be bound, or (iii) violate any
judgment, decree, or order or law applicable to Stockholder, except for any of
the foregoing as could not reasonably be expected to impair Stockholder&rsquo;s
ability to perform its obligations under this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 4.4<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Company Takeover Proposal</U>. Stockholder represents that it
is not engaged in any discussions or negotiations with any person (other than
Parent, Merger Sub or any of the Affiliates of Parent and Merger Sub) with
respect to any Company Acquisition Proposal or any matter that, to Stockholder&rsquo;s
knowledge, relates to, supports, or would reasonably be expected to lead to any
Company Acquisition Proposal.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 4.5<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Reliance by Parent and Merger Sub</U>. Stockholder understands
and acknowledges that Parent and Merger Sub are entering into the Merger
Agreement in reliance upon the execution and delivery of this Agreement by
Stockholder.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
V<BR><BR></FONT><U>REPRESENTATIONS AND WARRANTIES OF PARENT and merger
Sub</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">Parent
and Merger Sub hereby represent and warrant to Stockholder as follows:</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 5.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Binding Agreement</U>. Parent is a New York corporation and
Merger Sub is a Delaware corporation; in each case duly organized and validly
existing under the laws of the jurisdiction of their respective organization.
Each of Parent and Merger Sub has all necessary corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Parent and Merger Sub
have been duly authorized by all necessary corporate action on the part of
Parent and Merger Sub. This Agreement, assuming due authorization, execution and
delivery hereof by Stockholder, constitutes a legal, valid and binding
obligation of each of Parent and Merger Sub enforceable against each of Parent
and Merger Sub in accordance with its terms (except as such enforceability may
be limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws of general applicability relating to or
affecting creditor&rsquo;s rights, and to general equitable principles).</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P><!-- Field: Page; Sequence: 447; Value: 1 -->
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 5.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Conflicts</U>.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>No filing with, or notification to, any Governmental Authority,
and no consent, approval, authorization or permit of any other person is
necessary for the execution of this Agreement by Parent and Merger Sub and the
consummation by Parent and Merger Sub of the transactions contemplated
hereby.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>None of the execution and delivery of this Agreement by Parent and
Merger Sub, the consummation by Parent and Merger Sub of the transactions
contemplated hereby or compliance by Parent and Merger Sub with any of the
provisions hereof shall (i) conflict with or result in any breach of the
organizational documents of any of Parent or Merger Sub, (ii) result in, or give
rise to, a violation or breach of or a default under any of the terms of any
material contract, understanding, agreement or other instrument or obligation to
which Parent or Merger Sub is a party or by which Parent or Merger Sub or any of
their respective assets may be bound, or (iii) violate any applicable judgment,
decree, order or law, except for any of the foregoing as could not reasonably be
expected to impair Parent&rsquo;s, or Merger Sub&rsquo;s ability to perform their respective
obligations under this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 1in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 5.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Reliance by the Stockholder</U>. Each of Parent and Merger Sub
understands and acknowledges that Stockholder is entering into this Agreement in
reliance upon the execution and delivery of the Merger Agreement by Parent and
Merger Sub.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
VI<BR><BR></FONT><U>TERMINATION</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 6.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Termination</U>. This Agreement shall automatically terminate,
and none of Parent, Merger Sub or Stockholder shall have any rights or
obligations hereunder and this Agreement shall become null and void and have no
effect upon the earliest to occur of (a) the mutual written consent of Parent,
Merger Sub and Stockholder, (b) the Effective Time, (c) the date of termination
of the Merger Agreement in accordance with its terms and (d) the delivery of
written notice by Stockholder to Parent following any amendment to the Merger
Agreement to decrease the Merger Consideration unless such amendment to the
Merger Agreement has been consented to by Stockholder in writing prior to such
amendment, and after the occurrence of such applicable event this Agreement
shall terminate and be of no further force or effect. The termination of this
Agreement shall not prevent any Party hereunder from seeking any remedies (at
law or in equity) against another Party hereto or relieve such Party from
liability, in each case for such Party&rsquo;s fraud or willful breach of any terms of
this Agreement. Notwithstanding anything to the contrary herein, the provisions
of Article VII shall survive the termination of this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center"><FONT STYLE="text-transform: none; color: black; font-family: Times New Roman, Times, Serif; text-underline-style: none">ARTICLE
VII<BR><BR></FONT><U>MISCELLANEOUS</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-transform: uppercase; text-indent: 0in; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Publication</U>. Stockholder hereby permits the Company,
Parent, and Merger Sub to publish and disclose in any forms, schedules or other
documents required to be filed with the Securities and Exchange Commission
(including the Proxy Statement and Registration Statement) by the Company,
Parent, or Merger Sub, as applicable, Stockholder&rsquo;s identity and ownership of
the Subject Shares and the nature of its commitments, arrangements and
understandings pursuant to this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Further Assurances</U>. From time to time, at the other Party&rsquo;s
request and without further consideration, each Party shall execute and deliver
such additional documents and take all such further action as may be reasonably
necessary or desirable to consummate the transactions contemplated by this
Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Fees and Expenses</U>. Each of the Parties shall be responsible
for its own fees and expenses (including, without limitation, the fees and
expenses of investment bankers, accountants and counsel) in connection with the
entering into of this Agreement and the consummation of the transactions
contemplated hereby and by the Merger Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.4<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Amendments, Waivers, etc</U>. This Agreement may not be
amended, changed, supplemented, waived or otherwise modified, except upon the
execution and delivery of a written agreement executed by each of the Parties
hereto. The failure of any Party hereto to exercise any right, power or remedy
provided under this Agreement or otherwise available in respect hereof at law or
in equity, or to insist upon compliance by any other Party hereto with its
obligations hereunder, and any custom or practice of the Parties at variance
with the terms hereof shall not constitute a waiver by such Party of its right
to exercise any such or other right, power or remedy or to demand such
compliance.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.5<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Headings</U>. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.6<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Severability</U>. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any Party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the Parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the Parties as closely as possible in an acceptable manner to the end
that the transactions contemplated hereby are fulfilled to the fullest extent
possible.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.7<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Entire Agreement; Assignment</U>. This Agreement (together with
the Merger Agreement, to the extent referred to herein, and Schedule I)
constitutes the entire agreement among the Parties with respect to the subject
matter hereof and supersedes all prior agreements and undertakings, both written
and oral, among the Parties, or any of them, with respect to the subject matter
hereof. This Agreement shall not be assigned by operation of law or otherwise
without the prior written consent of the other Party, except that Parent and
Merger Sub may assign all or any of their respective rights and obligations
hereunder to any direct or indirect wholly-owned subsidiary of Parent or Merger
Sub.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P><!-- Field: Page; Sequence: 449; Value: 1 -->
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.8<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Parties in Interest</U>. This Agreement shall be binding upon
and inure solely to the benefit of each Party hereto, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any rights, benefits or remedies of any nature whatsoever under or by
reason of this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.9<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Interpretation</U>. When reference is made in this Agreement to
a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. Whenever the words &ldquo;include&rdquo;, &ldquo;includes&rdquo; or &ldquo;including&rdquo; are
used in this Agreement, they shall be deemed to be followed by the words
&ldquo;without limitation.&rdquo; The words &ldquo;hereof,&rdquo; &ldquo;herein,&rdquo; &ldquo;hereby&rdquo; and &ldquo;hereunder&rdquo; and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement. The
word &ldquo;or&rdquo; shall not be exclusive. Whenever used in this Agreement, any noun or
pronoun shall be deemed to include the plural as well as the singular and to
cover all genders. This Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the Party
drafting or causing any instrument to be drafted.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.10<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Governing Law</U>. This Agreement and the rights and duties of
the Parties hereunder shall be governed by, and construed in accordance with,
the laws of the State of New York without giving effect to the conflicts of laws
principles thereof, which would result in the applicability of the laws of
another jurisdiction, except to the extent required under Delaware corporate
law.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.11<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Specific Performance; Jurisdiction</U>. The Parties agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions of this Agreement in the state
courts in the State of New York, this being in addition to any other remedy to
which they are entitled at law or in equity. In addition, each of the Parties:
(i) consents to submit itself to the personal jurisdiction of the state courts
of the State of New York in the event any dispute arises out of this Agreement
or any transaction contemplated hereby; (ii) agrees that it will not attempt to
deny or defeat personal jurisdiction by motion or other request for leave from
any such court; (iii) waives any right to trial by jury with respect to any
action related to or arising out of this Agreement or any transaction
contemplated hereby; and (iv) irrevocably and unconditionally waives (and agrees
not to plead or claim) any objection to the laying of venue of any action, suit
or proceeding arising out of this Agreement or the transactions contemplated
hereby in any New York State court or any Federal Court of the United States of
America sitting in New York City, New York.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"></P><!-- Field: Page; Sequence: 450; Value: 1 -->
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    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.12<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Counterparts</U>. This Agreement may be executed in
counterparts (including by facsimile), each of which when executed shall be
deemed to be an original but all of which taken together shall constitute one
and the same agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in"><FONT STYLE="color: black">Section 7.13<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Partnership, Agency or Joint Venture</U>. This Agreement is
intended to create a contractual relationship between Stockholder, on the one
hand, and Parent and Merger Sub, on the other hand, and is not intended to
create, and does not create, any agency, partnership, joint venture or any like
relationship between or among the parties hereto. Without limiting the
generality of the foregoing sentence, Stockholder (a) is entering into this
Agreement solely on its own behalf and shall not have any obligation to perform
on behalf of any other holder of Common Stock or any liability (regardless of
the legal theory advanced) for any breach of this Agreement by any other holder
of Common Stock and (b) by entering into this Agreement does not intend to form
a &ldquo;<U>group</U>&rdquo; for purposes of Rule 13d-5(b)(1) of the Exchange Act or any
other similar provision of applicable law. Stockholder is not affiliated with
any other holder of Common Stock entering into a voting agreement with Parent
and Merger Sub in connection with the Merger Agreement and has acted
independently regarding its decision to enter into this Agreement.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: italic 10pt Times New Roman, Times, Serif; text-align: center">[Execution
page follows.]</P>
<P STYLE="margin: 0pt 0px; font: italic 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</P><!-- Field: Page; Sequence: 451; Value: 1 -->
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<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">IN
WITNESS WHEREOF, Parent, Merger Sub and Stockholder have caused this Agreement
to be duly executed as of the day and year first above written.</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse">

  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>Document Security Systems,
      Inc.</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD STYLE="width: 50%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 3%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 35%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="width: 12%"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
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    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Name:&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Title:&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-size: 10pt"><B>DSSIP, Inc.</B></FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
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    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Name:&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">By:&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Name:&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="vertical-align: top; text-align: left">
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">Title:</FONT></TD>
    <TD><FONT STYLE="font-size: 10pt">&nbsp;</FONT></TD></TR></TABLE>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0.5in">&nbsp;&nbsp;&nbsp;</P>
<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: center">[Signature
Page to Voting and Support Agreement]</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif"></P><!-- Field: Page; Sequence: 452; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: right"><U STYLE="text-decoration: none"></U>&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: right"><U>SCHEDULE
I</U></P>
<P STYLE="margin: 0pt 0px; font: bold 10pt Times New Roman, Times, Serif; text-align: right">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center"><U>Ownership
of Capital Stock</U></P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-align: center">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">

  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; width: 50%">
      <P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; border-bottom: black 0.5pt solid; text-align: center">Stockholder</P></TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; width: 50%">
      <P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; border-bottom: black 0.5pt solid">Number
      of Shares</P></TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-right: 5.75pt; padding-left: 5.75pt; font-size: 10pt">&nbsp;</TD></TR></TABLE>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0in">&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0in">&nbsp;&nbsp;</P>
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0in"></P><!-- Field: Page; Sequence: 453; Value: 1 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="margin: 0pt 0px; font: 10pt Times New Roman, Times, Serif; text-indent: 0in"></P>

<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>ANNEX C</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">(Form of $.02 Warrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; font-size: 10pt">Warrant&nbsp;No.&nbsp;W-___</TD>
    <TD STYLE="width: 50%; font-size: 10pt; text-align: right">Number&nbsp;of&nbsp;Shares:&nbsp;____________</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Date of Issuance: _________ __, 2012 (&ldquo;<U>Issuance
Date</U>&rdquo;)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Common Stock Warrant</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Document Security Systems,
Inc., a New York corporation (the &ldquo;<U>Company</U>&rdquo;), for value received, hereby certifies that ________, or its registered
assigns (the &ldquo;<U>Registered Holder</U>&rdquo;), is entitled, subject to the terms of this Common Stock Warrant (the &ldquo;<U>Warrant</U>&rdquo;)
set forth below, to purchase from the Company, at any time after the date hereof and on or before [___________ __ 2022][TEN YEARS]
(the &ldquo;<U>Expiration Date</U>&rdquo;), up to ________ (_______) shares of common stock of the Company (the &ldquo;<U>Warrant
Stock</U>&rdquo;), par value $0.02 per share (the &ldquo;<U>Common Stock</U>&rdquo;), at a per share exercise price (the &ldquo;<U>Exercise
Price</U>&rdquo;) equal to two cents ($.02) per share (subject to adjustment as set forth in Section 2). This Warrant is one of
the $.02 Warrants (collectively, the &ldquo;<U>Warrants</U>&rdquo;) issued pursuant to that certain Agreement and Plan of Merger
by and among the Company, DSSIP, Inc., Lexington Technology Group, Inc. and the Company Representative (as defined therein), dated
as of  October
1, 2012 (the &ldquo;<U>Merger Agreement</U>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Exercise</U></B>.&nbsp;&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Method
of Exercise</U></B>.&nbsp;&nbsp;This Warrant may be exercised by the Registered Holder, in whole or in part, by delivering the
form appended hereto as <U>Exhibit A</U> duly executed by such Registered Holder (the &ldquo;<U>Exercise Notice</U>&rdquo;), at
the principal office of the Company, or at such other office or agency as the Company may designate in writing prior to the date
of such exercise, accompanied by payment in full of the Exercise Price payable with respect to the number of shares of Warrant
Stock purchased upon such exercise.&nbsp;&nbsp;The Exercise Price must be paid by cash, check or wire transfer in immediately available
funds for the Warrant Stock being purchased by the Registered Holder, except as provided in Section 1(c).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Effective
Time of Exercise</U></B>.&nbsp;&nbsp;Each exercise of this Warrant shall be deemed to have been effected immediately prior to the
close of business on the day on which the Exercise Notice has been delivered to the Company (the &ldquo;<U>Exercise Date</U>&rdquo;)
as provided in this Section 1.&nbsp;&nbsp;At such time, the person or persons in whose name or names any certificates for Warrant
Stock shall be issuable upon such exercise as provided in Section 1(d) below shall be deemed to have become the holder or holders
of record of the Warrant Stock represented by such certificates.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Cashless
Exercise</U></B>.&nbsp;&nbsp;Notwithstanding any provisions herein to the contrary, if at any time between the three (3) month
anniversary of the Issuance Date and the Expiration Date the Registered Holder wishes to exercise this Warrant and there is no
effective Registration Statement under the Securities Act registering the resale of the Warrant Stock by the Registered Holder
at such time, then the Registered Holder may elect to exercise this Warrant or a portion hereof, and to pay for the Warrant Stock
by way of a cashless exercise. If the Registered Holder wishes to effect a cashless exercise, the Registered Holder shall deliver
the Exercise Notice duly executed by such Registered Holder or by such Registered Holder&rsquo;s duly authorized attorney, at the
principal office of the Company, or at such other office or agency as the Company may designate in writing prior to the date of
such exercise, in which event the Company shall issue to the Registered Holder the number of shares of Warrant Stock computed according
to the following equation:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in; color: Red"><FONT STYLE="color: Black"><IMG SRC="texdpg2.jpg"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in; color: Red"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">;
where</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">X = the number of shares
of Warrant Stock to be issued to the Registered Holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">Y = the Warrant Stock
purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant Stock being
exercised.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">A = the Fair Market Value
(defined below) of one share of Common Stock on the Exercise Date.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">B = the Exercise Price
(as adjusted pursuant to the provisions of this Warrant).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">C = the Closing Sale
Price ending on the Trading Day before the Exercise Date if exercised on the Exercise Date before 4:00:00 p.m, New York time, or
if exercised on the Exercise Date after 4:00:00 p.m. New York time, then the Closing Sale Price on the Exercise Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For purposes of this Section 1(c), the
&ldquo;Fair Market Value&rdquo; of one share of Common Stock on the Exercise Date shall have one of the following meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
the Common Stock is traded on (A) a national securities exchange or (B) over- the-counter, the Fair Market Value shall be deemed
to be the average of the VWAP (as hereinafter defined) over a ten (10) Trading Day (as hereinafter defined) period ending on the
Trading Day before the Exercise Date; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
neither (1)(A) nor 1(B) is applicable, the Fair Market Value shall be at the commercially reasonable price per share which the
Company could obtain on the Exercise Date from a willing buyer (not a current employee or director) for shares of Common Stock
sold by the Company, from authorized but unissued shares, as determined jointly by the Company&rsquo;s Board of Directors and the
Registered Holders (as hereinafter defined) representing more than 50% of the aggregate amount of all of the then outstanding Warrants.
&ldquo;<U>Registered Holders</U>&rdquo; means all of the holders of the Warrants issued pursuant to the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">For illustration purposes
only, if this Warrant entitles the Registered Holder the right to purchase 100,000 shares of Warrant Stock and the Registered Holder
were to exercise this Warrant for 50,000 shares of Warrant Stock at a time when the Exercise Price was reduced to $1.00 and the
Fair Market Value and the Closing Sale Price of each share of Common Stock was $2.00 on the Exercise Date, as applicable, the cashless
exercise calculation would be as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">X = <U>50,000 ($2.00-$1.00)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">$2.00</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">X = 25,000</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Therefore, the number
of shares of Warrant Stock to be issued to the Registered Holder after giving effect to the cashless exercise would be 25,000 shares
of Warrant Stock and the Company would issue the Registered Holder a new Warrant to purchase 50,000 shares of Warrant Stock, reflecting
the portion of this Warrant not exercised by the Registered Holder.&nbsp;&nbsp;For purposes of Rule 144 promulgated under the Securities
Act of 1933, as amended (the &ldquo;<U>Securities Act</U>&rdquo;), it is intended, understood and acknowledged that the Warrant
Stock issued in the cashless exercise transaction described pursuant to Section 1(c) shall be deemed to have been acquired by the
Registered Holder, and the holding period for the shares of Warrant Stock shall be deemed to have commenced, on the date of the
Registered Holder&rsquo;s acquisition of the Warrant.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Delivery
to Registered Holder</U></B>.&nbsp;&nbsp;As soon as practicable after the exercise of this Warrant in whole or in part, and in
any event within three (3) Business Days thereafter (the &ldquo;<U>Warrant Stock Delivery Date</U>&rdquo;), the Company will (i)
cause the Company&rsquo;s transfer agent (the &ldquo;<U>Transfer Agent</U>&rdquo;) to deliver the Warrant Stock to the Registered
Holder or its designee by crediting the account of the Registered Holder&rsquo;s or such designee&rsquo;s prime broker with the
Depository Trust Company through its Deposit Withdrawal Agent Commission (&ldquo;<U>DWAC</U>&rdquo;) system, or (ii) if the Transfer
Agent is not participating in DWAC, deliver a certificate or certificates to the Registered Holder or its designee for the number
of shares of Warrant Stock to which such Registered Holder shall be entitled. In the event that the Registered Holder exercises
the Warrant in part only, the Company shall issue a new warrant or warrants (dated the date hereof) of like tenor, calling in the
aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (giving effect to any adjustment therein)
to the number of such shares called for on the face of this Warrant minus the number of such shares purchased by the Registered
Holder upon such exercise as provided in Section 1(a).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Exercise</U></B>.&nbsp;&nbsp;In addition to any other rights available
to the Registered Holder, if the Company fails to transmit to the Registered Holder a certificate or the certificates representing
the Warrant Stock pursuant to an exercise on or before the Warrant Stock Delivery Date, and if after such date the Registered Holder
is required by its broker to purchase (in an open market transaction or otherwise) or the Registered Holder&rsquo;s brokerage firm
otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Registered Holder of the Warrant Stock
which the Registered Holder anticipated receiving upon such exercise (a &ldquo;<U>Buy-In</U>&rdquo;), then the Company shall (A)
pay in cash to the Registered Holder the amount by which (x) the Registered Holder&rsquo;s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number
of shares of Warrant Stock that the Company was required to deliver to the Registered Holder in connection with the exercise at
issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of
the Registered Holder, either reinstate the portion of the Warrant and equivalent number of shares of Warrant Stock for which such
exercise was not honored or deliver to the Registered Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations hereunder.&nbsp;&nbsp;For example, if the Registered Holder
purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares
of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Registered Holder $1,000.&nbsp;&nbsp;The Registered Holder shall provide
the Company written notice indicating the amounts payable to the Registered Holder in respect of the Buy-In and, upon request of
the Company, evidence of the amount of such loss.&nbsp;&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Registered
Holder&rsquo;s Exercise Limitations</U></B>.&nbsp;&nbsp;The Company shall not effect any exercise of this Warrant, and a Registered
Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to the extent (but
only to the extent) that the Registered Holder or any of the Registered Holder&rsquo;s affiliates, would beneficially own in excess
of the Beneficial Ownership Limitation (as defined below).&nbsp;&nbsp;For purposes of this Section 1(f), beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act (as defined herein) and the rules and regulations promulgated
thereunder, it being acknowledged by the Registered Holder that the Company is not representing to the Registered Holder that such
calculation is in compliance with Section 13(d) of the Exchange Act and the Registered Holder is solely responsible for any schedules
required to be filed in accordance therewith.&nbsp;&nbsp;To the extent that the limitation contained in this Section 1(f) applies,
the determination of whether this Warrant is exercisable (in relation to other securities owned by the Registered Holder together
with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Registered Holder,
and the submission of an Exercise Notice shall be deemed to be the Registered Holder&rsquo;s determination of whether this Warrant
is exercisable (in relation to other securities owned by the Registered Holder together with any Affiliates) and of which portion
of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination.&nbsp;&nbsp;Upon the written or oral request of a Registered Holder, the
Company shall within two (2) Business Days confirm orally and in writing to the Registered Holder the number of shares of Common
Stock then outstanding.&nbsp;&nbsp;In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including this Warrant, by the Registered Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported.&nbsp;&nbsp;The &ldquo;Beneficial Ownership
Limitation&rdquo; shall be 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock issuable upon exercise of this Warrant.&nbsp;&nbsp;The Registered Holder, upon not less than 61 days&rsquo;
prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(f), provided
that the Beneficial Ownership Limitation shall in no event exceed 9.99% of the number of shares of Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Registered Holder and the
provisions of this Section 1(f) shall continue to apply.&nbsp;&nbsp;Any such increase or decrease will not be effective until the
61st day after such notice is delivered to the Company.&nbsp;&nbsp;The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 1(f) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.&nbsp;&nbsp;The limitations contained in this paragraph
shall apply to a successor holder of this Warrant.</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Adjustments</U></B>.</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Stock
Splits and Stock Dividends</U></B>.&nbsp;&nbsp;If the outstanding shares of the Company&rsquo;s Common Stock shall be subdivided
into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect
immediately prior to such subdivision or at the record date of such dividend shall, simultaneously with the effectiveness of such
subdivision or immediately after the record date of such dividend, be proportionately reduced and the number of Warrant Stock issuable
upon exercise of the Warrant shall be proportionately increased.&nbsp;&nbsp;If the outstanding shares of Common Stock shall be
combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall, simultaneously
with the effectiveness of such combination, be proportionately increased and the number of shares of Warrant Stock issuable upon
exercise of the Warrant shall be proportionately decreased.&nbsp;&nbsp;Notwithstanding anything to the contrary set forth herein,
the Company will not declare or effect any stock split, subdivision, dividend or combination of its Common Stock while any portion
of this Warrant remains exercisable unless the Company simultaneously effects a reduction on the par value per share of its Common
Stock to permit the exercise in full of any remaining portion of this Warrant after giving effect to the adjustments required under
the provisions of this Section 2(a).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Fundamental
Transaction</U></B>.&nbsp;&nbsp;If, at any time while this Warrant is outstanding, (i) the Company effects any merger or consolidation
of the Company with or into another person, (ii) the Company effects any sale of all or substantially all of its assets in one
or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another person) is completed
pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property
or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property (each, a &ldquo;<U>Fundamental Transaction</U>&rdquo;),
then, upon any subsequent exercise of this Warrant, the Registered Holder shall have the right to receive, for each share of Warrant
Stock that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the
number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the &ldquo;<U>Alternate Consideration</U>&rdquo;) receivable as a result of such merger, consolidation
or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such event.&nbsp;&nbsp;For purposes of any such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share
of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.&nbsp;&nbsp;If
holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction,
then the Registered Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction.&nbsp;&nbsp;To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Registered Holder a new warrant
consistent with the foregoing provisions and evidencing the Registered Holder&rsquo;s right to exercise such warrant into Alternate
Consideration.&nbsp;&nbsp;The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions of this Section 2(b) and insuring that this Warrant
(or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Adjustment
Certificate</U></B>.&nbsp;&nbsp;When any adjustment is required to be made in the Exercise Price pursuant to this Section 2, the
Company shall promptly mail to the Registered Holder a certificate setting forth (i) a brief statement of the facts requiring such
adjustment, (ii) the Exercise Price after such adjustment and (iii) the kind and amount of stock or other securities or property
into which this Warrant shall be exercisable after such adjustment.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Transfers</U></B>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Warrant
Register</U></B>.&nbsp;&nbsp;The Company will maintain a register containing the name and address of the Registered Holder of this
Warrant.&nbsp;&nbsp;Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder
of this Warrant as the absolute owner hereof for all purposes; <U>provided, however</U>, that if this Warrant is properly assigned
in blank, the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.&nbsp;&nbsp;Any Registered Holder may change such Registered Holder&rsquo;s address
as shown on the warrant register by written notice to the Company requesting such change.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Rights
Upon Cash Dividend or Distribution of Assets</U></B>. In addition to any adjustments pursuant to Section 2 above, if the Company
shall declare or make any cash dividend or other distribution of its assets (or rights to acquire its assets) to holders of shares
of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement
or other similar transaction) (a &ldquo;<U>Distribution</U>&rdquo;), at any time after the issuance of this Warrant, then, in each
such case, the Registered Holder shall be entitled to participate in such Distribution to the same extent that the Registered Holder
would have participated therein if the Registered Holder had held the number of shares of Common Stock acquirable upon complete
exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership
Limitation) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the date
as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided,
however, to the extent that the Registered Holder&rsquo;s right to participate in any such Distributions would result in the Registered
Holder exceeding the Beneficial Ownership Limitation, then the Registered Holder shall not be entitled to participate in such Distribution
to such extent (or the beneficial ownership of any such shares of Common Stock as a result of such Distribution to such extent)
and such Distribution to such extent shall be held in abeyance for the benefit of the Registered Holder until such time, if ever,
as its right thereto would not result in the Registered Holder exceeding the Beneficial Ownership Limitation).</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Termination</U></B>.&nbsp;&nbsp;This
Warrant (and the right to purchase securities upon exercise hereof) shall terminate at 5:00 p.m., Eastern time, on the Expiration
Date.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Notices
of Certain Transactions</U></B>.&nbsp;&nbsp;In case:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>the
Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise
of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any
right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, to
subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>of
any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger
of the Company, any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger
in which the Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company, or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>of
the voluntary or involuntary dissolution, liquidation or winding-up of the Company, or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>of
any Fundamental Transaction,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">then, and in each such case, the Company
will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the date
on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character
of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation, winding-up or Fundamental Transaction is to take place, and the time, if any is to
be fixed, as of which the holders of record of Common Stock (or such other stock or securities at the time deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up) are to be determined.&nbsp;&nbsp;Failure
to send such notice shall not act to invalidate any such transaction.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Reservation
of Stock</U></B>.&nbsp;&nbsp;The Company covenants that at all times it will have authorized, reserve and keep available, solely
for the issuance and delivery upon the exercise of this Warrant, such shares of Warrant Stock and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.&nbsp;&nbsp;The Company covenants that all Warrant Stock
that may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).&nbsp;&nbsp;The
Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of executing stock certificates to execute and issue the necessary certificates for the shares of Warrant Stock upon the
exercise of the purchase rights under this Warrant by the Registered Holder.&nbsp;&nbsp;The Company will take all such reasonable
action as may be necessary to assure that such Warrant Stock may be issued as provided herein without violation of any applicable
law or regulation.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Replacement
of Warrants</U></B>.&nbsp;&nbsp;Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety
if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Notices</U></B>.&nbsp;&nbsp;Any
notice required or permitted by this Warrant shall be in writing and shall be deemed duly given upon receipt, when delivered personally
or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the regular mail as certified
or registered mail (airmail if sent internationally) with postage prepaid, addressed (a) if to the Registered Holder, to the address
of the Registered Holder most recently furnished in writing to the Company and (b) if to the Company, to the address set forth
on the signature page of this Warrant or as subsequently modified by written notice to the Registered Holder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>No
Rights as Stockholder</U></B>. Until the exercise of this Warrant, the Registered Holder of this Warrant shall not have or exercise
any rights by virtue hereof as a stockholder of the Company except as otherwise set forth in Section 4.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>No
Fractional Shares</U></B>.&nbsp;&nbsp;No fractional shares of Common Stock will be issued in connection with any exercise hereunder.&nbsp;&nbsp;In
lieu of any fractional shares which would otherwise be issuable, the Company shall round the amount of Warrant Stock issuable to
the nearest whole share.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Amendment
or Waiver</U></B>.&nbsp;&nbsp;Any term of this Warrant may be amended or waived upon written consent of the Company and the Registered
Holder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Headings</U></B>.&nbsp;&nbsp;The
headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision
of this Warrant.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Governing
Law</U></B>.&nbsp;&nbsp;This Warrant and all acts and transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect
to principles of conflicts of law.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Dispute
Resolution</U></B>. In the case of a dispute as to the determination of the fair market value, the Company or the Registered Holder,
as the case may be, shall submit the disputed determinations or arithmetic calculations, as the case may be, via facsimile (i)
within two (2) Business Days after receipt of the applicable notice giving rise to such dispute to the Company or the Registered
Holder, as the case may be, or (ii) if no notice gave rise to such dispute, at any time after the Registered Holder learned of
the circumstances giving rise to such dispute. If the Registered Holder and the Company are unable to agree upon such determination
or calculation, as the case may be, of the fair market value within three (3) Business Days of such disputed determination or arithmetic
calculation being submitted to the Company or the Registered Holder, as the case may be, then the Company shall, within two (2)
Business Days submit via facsimile the disputed determination of the fair market value to an independent, reputable investment
bank selected by the Registered Holder and reasonably acceptable to the Company. The Company shall cause, at its expense, the investment
bank to perform the determinations or calculations, as the case may be, and notify the Company and the Registered Holder of the
results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations, as the case
may be. Such investment bank&rsquo;s determination or calculation, as the case may be, shall be binding upon all parties absent
demonstrable error.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Certain
Definitions</U></B>.&nbsp;&nbsp;For purposes of this Warrant, the following terms shall have the following meanings:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B>&ldquo;<U>Business
Day</U></B>&rdquo; means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are
authorized or required by law to remain closed.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B><U>Bloomberg</U></B>&rdquo;
means Bloomberg, L.P.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B><U>Closing
Sale Price</U></B>&rdquo; means, for any security as of any date, the last closing trade price for such security on the Principal
Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate
the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg,
or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers for such
security as reported by the Principal Market. If the Closing Sale Price cannot be calculated for a security on a particular date
on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Registered Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved in accordance with the procedures in Section&nbsp;15. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such
period.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B><U>Principal
Market</U></B>&rdquo; means the NYSE MKT, or if NYSE MKT is not the principal trading market for the Common Stock, then the principal
securities exchange or securities market on which the Common Stock is then traded, or the over-the-counter market or the electronic
bulletin board for such security.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B><U>Trading
Day</U></B>&rdquo; means, as applicable, (x) with respect to all price determinations relating to the Common Stock, any day on
which the Common Stock is traded on the Principal Market, provided that &ldquo;Trading Day&rdquo; shall not include any day on
which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock
is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate
in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time)
unless such day is otherwise designated as a Trading Day in writing by the Registered Holder or (y) with respect to all determinations
other than price determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto)
is open for trading of securities.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B><U>VWAP</U></B>&rdquo;
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during
the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through
its &ldquo;Volume at Price&rdquo; function or, if the foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01
a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing
ask price of any of the market makers for such security as reported by the Principal Market. If VWAP cannot be calculated for such
security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually
determined by the Company and the Registered Holder.&nbsp;&nbsp;If the Company and the Holder are unable to agree upon the fair
market value of such security, then such dispute shall be resolved in accordance with the procedures in Section&nbsp;15. All such
determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during such period.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>[Signature Page Follows]</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">IN WITNESS WHEREOF,
the parties have executed this Warrant as of the date first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: justify">Document Security Systems, Inc.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%">&nbsp;</TD>
    <TD STYLE="width: 35%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; text-align: justify; text-indent: 0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Exhibit A</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">WARRANT EXERCISE FORM</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The undersigned hereby
irrevocably elects to exercise the within Warrant to the extent of purchasing ______ shares of Common Stock of Document Security
Systems, Inc., a New York corporation, and hereby makes payment of $___________ in payment therefore (if a cashless exercise, insert
&ldquo;cashless&rdquo;), all in accordance with the terms and conditions of the Warrant dated ________, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Name:&nbsp;&nbsp;______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Signature:&nbsp;&nbsp;___________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Signature&nbsp;of&nbsp;joint&nbsp;holder&nbsp;(if&nbsp;applicable):&nbsp;_____________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Date:&nbsp;&nbsp;___________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">INSTRUCTIONS FOR ISSUANCE OF STOCK</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">(if other than to the registered
holder of the within Warrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Name:&nbsp;&nbsp;______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Address:&nbsp;&nbsp;_____________________________________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Social&nbsp;Security&nbsp;or&nbsp;Taxpayer&nbsp;Identification&nbsp;Number&nbsp;of&nbsp;Recipient:&nbsp;&nbsp;_________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Exhibit B</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ASSIGNMENT FORM</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">FOR VALUE RECEIVED, _____________________
hereby sells, assigns and transfers unto _______________________ the right to purchase Common Stock of Document Security Systems,
Inc., a New York corporation, represented by this Warrant to the extent of shares as to which such right is exercisable and does
hereby irrevocably constitute and appoint ______________________, Attorney, to transfer the same on the books of the Company with
full power of substitution in the premises.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Date:&nbsp;__________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Signature:&nbsp;&nbsp;______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Signature&nbsp;of&nbsp;joint&nbsp;holder&nbsp;(if&nbsp;applicable):&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">_____________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>



<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>ANNEX D</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">(Form of New Warrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 46%; font-size: 10pt; text-align: justify">Warrant&nbsp;No.&nbsp;W-___</TD>
    <TD STYLE="width: 54%; font-size: 10pt; text-align: right">Number&nbsp;of&nbsp;Shares:&nbsp;____________</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Date of Issuance: _________ __, 2012 (&ldquo;<U>Issuance
Date</U>&rdquo;)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Common Stock Warrant</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Document Security Systems,
Inc., a New York corporation (the &ldquo;<U>Company</U>&rdquo;), for value received, hereby certifies that ________, or its registered
assigns (the &ldquo;<U>Registered Holder</U>&rdquo;), is entitled, subject to the terms of this Common Stock Warrant (the &ldquo;<U>Warrant</U>&rdquo;)
set forth below, to purchase from the Company, at any time after the date hereof and on or before [___________ __ 2017][FIVE YEARS]
(the &ldquo;<U>Expiration Date</U>&rdquo;), up to ________ (_______) shares of common stock of the Company (the &ldquo;<U>Warrant
Stock</U>&rdquo;), par value $0.02 per share (the &ldquo;<U>Common Stock</U>&rdquo;), at a per share exercise price (the &ldquo;<U>Exercise
Price</U>&rdquo;) equal to Four Dollars and Eighty Cents ($4.80) per share (subject to adjustment as set forth in Section 2). This
Warrant is one of a series of warrants (collectively, the &ldquo;<U>Warrants</U>&rdquo;) issued pursuant to that certain Agreement
and Plan of Merger by and among the Company, DSSIP, Inc., Lexington Technology Group, Inc. and the Company Representative (as defined
therein), dated as of  October
1, 2012 (the &ldquo;<U>Merger Agreement</U>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Exercise</U></B>.&nbsp;&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Method
of Exercise</U></B>.&nbsp;&nbsp;This Warrant may be exercised by the Registered Holder, in whole or in part, by delivering the
form appended hereto as <U>Exhibit A</U> duly executed by such Registered Holder (the &ldquo;<U>Exercise Notice</U>&rdquo;), at
the principal office of the Company, or at such other office or agency as the Company may designate in writing prior to the date
of such exercise, accompanied by payment in full of the Exercise Price payable with respect to the number of shares of Warrant
Stock purchased upon such exercise.&nbsp;&nbsp;The Exercise Price must be paid by cash, check or wire transfer in immediately available
funds for the Warrant Stock being purchased by the Registered Holder, except as provided in Section 1(c).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Effective
Time of Exercise</U></B>.&nbsp;&nbsp;Each exercise of this Warrant shall be deemed to have been effected immediately prior to the
close of business on the day on which the Exercise Notice has been delivered to the Company (the &ldquo;<U>Exercise Date</U>&rdquo;)
as provided in this Section 1.&nbsp;&nbsp;At such time, the person or persons in whose name or names any certificates for Warrant
Stock shall be issuable upon such exercise as provided in Section 1(d) below shall be deemed to have become the holder or holders
of record of the Warrant Stock represented by such certificates.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Cashless
Exercise</U></B>.&nbsp;&nbsp;Notwithstanding any provisions herein to the contrary, if at any time between the three (3) month
anniversary of the Issuance Date and the Expiration Date the Registered Holder wishes to exercise this Warrant and there is no
effective Registration Statement under the Securities Act registering the resale of the Warrant Stock by the Registered Holder
at such time, then the Registered Holder may elect to exercise this Warrant or a portion hereof, and to pay for the Warrant Stock
by way of a cashless exercise. If the Registered Holder wishes to effect a cashless exercise, the Registered Holder shall deliver
the Exercise Notice duly executed by such Registered Holder or by such Registered Holder&rsquo;s duly authorized attorney, at the
principal office of the Company, or at such other office or agency as the Company may designate in writing prior to the date of
such exercise, in which event the Company shall issue to the Registered Holder the number of shares of Warrant Stock computed according
to the following equation:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in"><IMG SRC="texepg2.jpg"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">; where</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">X = the number of shares
of Warrant Stock to be issued to the Registered Holder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">Y = the Warrant Stock
purchasable under this Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant Stock being
exercised.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">A = the Fair Market Value
(defined below) of one share of Common Stock on the Exercise Date.&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">B = the Exercise Price
(as adjusted pursuant to the provisions of this Warrant).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">C = the Closing Sale
Price ending on the Trading Day before the Exercise Date if exercised on the Exercise Date before 4:00:00 p.m, New York time, or
if exercised on the Exercise Date after 4:00:00 p.m. New York time, then the Closing Sale Price on the Exercise Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">For purposes of this Section 1(c), the
&ldquo;Fair Market Value&rdquo; of one share of Common Stock on the Exercise Date shall have one of the following meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
the Common Stock is traded on (A) a national securities exchange or (B) over- the-counter, the Fair Market Value shall be deemed
to be the average of the VWAP (as hereinafter defined) over a ten (10) Trading Day (as hereinafter defined) period ending on the
Trading Day before the Exercise Date; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">(2)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;if
neither (1)(A) nor 1(B) is applicable, the Fair Market Value shall be at the commercially reasonable price per share which the
Company could obtain on the Exercise Date from a willing buyer (not a current employee or director) for shares of Common Stock
sold by the Company, from authorized but unissued shares, as determined jointly by the Company&rsquo;s Board of Directors and the
Registered Holders (as hereinafter defined) representing more than 50% of the aggregate amount of all of the then outstanding Warrants.
&ldquo;<U>Registered Holders</U>&rdquo; means all of the holders of the Warrants issued pursuant to the Merger Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">For illustration purposes
only, if this Warrant entitles the Registered Holder the right to purchase 100,000 shares of Warrant Stock and the Registered Holder
were to exercise this Warrant for 50,000 shares of Warrant Stock at a time when the Exercise Price was reduced to $1.00 and the
Fair Market Value and the Closing Sale Price of each share of Common Stock was $2.00 on the Exercise Date, as applicable, the cashless
exercise calculation would be as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">X = <U>50,000 ($2.00-$1.00)</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">$2.00</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">X = 25,000</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Therefore, the number
of shares of Warrant Stock to be issued to the Registered Holder after giving effect to the cashless exercise would be 25,000 shares
of Warrant Stock and the Company would issue the Registered Holder a new Warrant to purchase 50,000 shares of Warrant Stock, reflecting
the portion of this Warrant not exercised by the Registered Holder.&nbsp;&nbsp;For purposes of Rule 144 promulgated under the Securities
Act of 1933, as amended (the &ldquo;<U>Securities Act</U>&rdquo;), it is intended, understood and acknowledged that the Warrant
Stock issued in the cashless exercise transaction described pursuant to Section 1(c) shall be deemed to have been acquired by the
Registered Holder, and the holding period for the shares of Warrant Stock shall be deemed to have commenced, on the date of the
Registered Holder&rsquo;s acquisition of the Warrant.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Delivery
to Registered Holder</U></B>.&nbsp;&nbsp;As soon as practicable after the exercise of this Warrant in whole or in part, and in
any event within three (3) Business Days thereafter (the &ldquo;<U>Warrant Stock Delivery Date</U>&rdquo;), the Company will (i)
cause the Company&rsquo;s transfer agent (the &ldquo;<U>Transfer Agent</U>&rdquo;) to deliver the Warrant Stock to the Registered
Holder or its designee by crediting the account of the Registered Holder&rsquo;s or such designee&rsquo;s prime broker with the
Depository Trust Company through its Deposit Withdrawal Agent Commission (&ldquo;<U>DWAC</U>&rdquo;) system, or (ii) if the Transfer
Agent is not participating in DWAC, deliver a certificate or certificates to the Registered Holder or its designee for the number
of shares of Warrant Stock to which such Registered Holder shall be entitled. In the event that the Registered Holder exercises
the Warrant in part only, the Company shall issue a new warrant or warrants (dated the date hereof) of like tenor, calling in the
aggregate on the face or faces thereof for the number of shares of Warrant Stock equal (giving effect to any adjustment therein)
to the number of such shares called for on the face of this Warrant minus the number of such shares purchased by the Registered
Holder upon such exercise as provided in Section 1(a).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Exercise</U></B>.&nbsp;&nbsp;In addition to any other rights available
to the Registered Holder, if the Company fails to transmit to the Registered Holder a certificate or the certificates representing
the Warrant Stock pursuant to an exercise on or before the Warrant Stock Delivery Date, and if after such date the Registered Holder
is required by its broker to purchase (in an open market transaction or otherwise) or the Registered Holder&rsquo;s brokerage firm
otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Registered Holder of the Warrant Stock
which the Registered Holder anticipated receiving upon such exercise (a &ldquo;<U>Buy-In</U>&rdquo;), then the Company shall (A)
pay in cash to the Registered Holder the amount by which (x) the Registered Holder&rsquo;s total purchase price (including brokerage
commissions, if any) for the shares of Common Stock so purchased exceeds (y) the amount obtained by multiplying (1) the number
of shares of Warrant Stock that the Company was required to deliver to the Registered Holder in connection with the exercise at
issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of
the Registered Holder, either reinstate the portion of the Warrant and equivalent number of shares of Warrant Stock for which such
exercise was not honored or deliver to the Registered Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations hereunder.&nbsp;&nbsp;For example, if the Registered Holder
purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of shares
of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately
preceding sentence the Company shall be required to pay the Registered Holder $1,000.&nbsp;&nbsp;The Registered Holder shall provide
the Company written notice indicating the amounts payable to the Registered Holder in respect of the Buy-In and, upon request of
the Company, evidence of the amount of such loss.&nbsp;&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Registered
Holder&rsquo;s Exercise Limitations</U></B>.&nbsp;&nbsp;The Company shall not effect any exercise of this Warrant, and a Registered
Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 1 or otherwise, to the extent (but
only to the extent) that the Registered Holder or any of the Registered Holder&rsquo;s affiliates, would beneficially own in excess
of the Beneficial Ownership Limitation (as defined below).&nbsp;&nbsp;For purposes of this Section 1(f), beneficial ownership shall
be calculated in accordance with Section 13(d) of the Exchange Act (as defined herein) and the rules and regulations promulgated
thereunder, it being acknowledged by the Registered Holder that the Company is not representing to the Registered Holder that such
calculation is in compliance with Section 13(d) of the Exchange Act and the Registered Holder is solely responsible for any schedules
required to be filed in accordance therewith.&nbsp;&nbsp;To the extent that the limitation contained in this Section 1(f) applies,
the determination of whether this Warrant is exercisable (in relation to other securities owned by the Registered Holder together
with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Registered Holder,
and the submission of an Exercise Notice shall be deemed to be the Registered Holder&rsquo;s determination of whether this Warrant
is exercisable (in relation to other securities owned by the Registered Holder together with any Affiliates) and of which portion
of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation
to verify or confirm the accuracy of such determination.&nbsp;&nbsp;Upon the written or oral request of a Registered Holder, the
Company shall within two (2) Business Days confirm orally and in writing to the Registered Holder the number of shares of Common
Stock then outstanding.&nbsp;&nbsp;In any case, the number of outstanding shares of Common Stock shall be determined after giving
effect to the conversion or exercise of securities of the Company, including this Warrant, by the Registered Holder or its Affiliates
since the date as of which such number of outstanding shares of Common Stock was reported.&nbsp;&nbsp;The &ldquo;Beneficial Ownership
Limitation&rdquo; shall be 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance
of shares of Common Stock issuable upon exercise of this Warrant.&nbsp;&nbsp;The Registered Holder, upon not less than 61 days&rsquo;
prior notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 1(f), provided
that the Beneficial Ownership Limitation shall in no event exceed 9.99% of the number of shares of Common Stock outstanding immediately
after giving effect to the issuance of shares of Common Stock upon exercise of this Warrant held by the Registered Holder and the
provisions of this Section 1(f) shall continue to apply.&nbsp;&nbsp;Any such increase or decrease will not be effective until the
61st day after such notice is delivered to the Company.&nbsp;&nbsp;The provisions of this paragraph shall be construed and implemented
in a manner otherwise than in strict conformity with the terms of this Section 1(f) to correct this paragraph (or any portion hereof)
which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.&nbsp;&nbsp;The limitations contained in this paragraph
shall apply to a successor holder of this Warrant.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Adjustments</U></B>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Stock
Splits and Stock Dividends</U></B>.&nbsp;&nbsp;If the outstanding shares of the Company&rsquo;s Common Stock shall be subdivided
into a greater number of shares or a dividend in Common Stock shall be paid in respect of Common Stock, the Exercise Price in effect
immediately prior to such subdivision or at the record date of such dividend shall, simultaneously with the effectiveness of such
subdivision or immediately after the record date of such dividend, be proportionately reduced and the number of Warrant Stock issuable
upon exercise of the Warrant shall be proportionately increased.&nbsp;&nbsp;If the outstanding shares of Common Stock shall be
combined into a smaller number of shares, the Exercise Price in effect immediately prior to such combination shall, simultaneously
with the effectiveness of such combination, be proportionately increased and the number of shares of Warrant Stock issuable upon
exercise of the Warrant shall be proportionately decreased.&nbsp;&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Fundamental
Transaction</U></B>.&nbsp;&nbsp;If, at any time while this Warrant is outstanding, (i) the Company effects any merger or consolidation
of the Company with or into another person, (ii) the Company effects any sale of all or substantially all of its assets in one
or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another person) is completed
pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property
or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common
Stock is effectively converted into or exchanged for other securities, cash or property (each, a &ldquo;<U>Fundamental Transaction</U>&rdquo;),
then, upon any subsequent exercise of this Warrant, the Registered Holder shall have the right to receive, for each share of Warrant
Stock that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the
number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation,
and any additional consideration (the &ldquo;<U>Alternate Consideration</U>&rdquo;) receivable as a result of such merger, consolidation
or disposition of assets by a holder of the number of shares of Common Stock for which this Warrant is exercisable immediately
prior to such event.&nbsp;&nbsp;For purposes of any such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share
of Common Stock in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration
in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.&nbsp;&nbsp;If
holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction,
then the Registered Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this
Warrant following such Fundamental Transaction.&nbsp;&nbsp;To the extent necessary to effectuate the foregoing provisions, any
successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Registered Holder a new warrant
consistent with the foregoing provisions and evidencing the Registered Holder&rsquo;s right to exercise such warrant into Alternate
Consideration.&nbsp;&nbsp;The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms
requiring any such successor or surviving entity to comply with the provisions of this Section 2(b) and insuring that this Warrant
(or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Distributions</U></B>.
In addition to any other adjustments pursuant to Section 2 above, if the Company shall declare or make any cash dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a &ldquo;<U>Distribution</U>&rdquo;),
at any time after the issuance of this Warrant, then, in each such case, the then current Exercise Price shall be reduced by the
amount or fair market value (determined jointly by the Company and the Registered Holders) of such Distribution; provided, that
the Exercise Price shall not be reduced to an amount that is less than the par value per share of the Common Stock.&nbsp;&nbsp;If
the amount or fair market value of all such Distributions exceeds the then current Exercise Price, then the Registered Holder shall
receive, upon exercise of this Warrant, an amount payable in cash equal to the amount of such excess.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Adjustment
Certificate</U></B>.&nbsp;&nbsp;When any adjustment is required to be made in the Exercise Price pursuant to this Section 2, the
Company shall promptly mail to the Registered Holder a certificate setting forth (i) a brief statement of the facts requiring such
adjustment, (ii) the Exercise Price after such adjustment and (iii) the kind and amount of stock or other securities or property
into which this Warrant shall be exercisable after such adjustment.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Transfers</U></B>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Warrant
Register</U></B>.&nbsp;&nbsp;The Company will maintain a register containing the name and address of the Registered Holder of this
Warrant.&nbsp;&nbsp;Until any transfer of this Warrant is made in the warrant register, the Company may treat the Registered Holder
of this Warrant as the absolute owner hereof for all purposes; <U>provided, however</U>, that if this Warrant is properly assigned
in blank, the Company may (but shall not be required to) treat the bearer hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.&nbsp;&nbsp;Any Registered Holder may change such Registered Holder&rsquo;s address
as shown on the warrant register by written notice to the Company requesting such change.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>RESERVED</U></B>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Termination</U></B>.&nbsp;&nbsp;This
Warrant (and the right to purchase securities upon exercise hereof) shall terminate at 5:00 p.m., Eastern time, on the Expiration
Date.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Notices
of Certain Transactions</U></B>.&nbsp;&nbsp;In case:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>the
Company shall take a record of the holders of its Common Stock (or other stock or securities at the time deliverable upon the exercise
of this Warrant) for the purpose of entitling or enabling them to receive any dividend or other distribution, or to receive any
right to subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, to
subscribe for or purchase any shares of stock of any class or any other securities, or to receive any other right, or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>of
any capital reorganization of the Company, any reclassification of the capital stock of the Company, any consolidation or merger
of the Company, any consolidation or merger of the Company with or into another corporation (other than a consolidation or merger
in which the Company is the surviving entity), or any transfer of all or substantially all of the assets of the Company, or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>of
the voluntary or involuntary dissolution, liquidation or winding-up of the Company, or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>of
any Fundamental Transaction,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">then, and in each such case, the Company
will mail or cause to be mailed to the Registered Holder of this Warrant a notice specifying, as the case may be, (i) the date
on which a record is to be taken for the purpose of such dividend, distribution or right, and stating the amount and character
of such dividend, distribution or right, or (ii) the effective date on which such reorganization, reclassification, consolidation,
merger, transfer, dissolution, liquidation, winding-up or Fundamental Transaction is to take place, and the time, if any is to
be fixed, as of which the holders of record of Common Stock (or such other stock or securities at the time deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution, liquidation or winding-up) are to be determined.&nbsp;&nbsp;Failure
to send such notice shall not act to invalidate any such transaction.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Reservation
of Stock</U></B>.&nbsp;&nbsp;The Company covenants that at all times it will have authorized, reserve and keep available, solely
for the issuance and delivery upon the exercise of this Warrant, such shares of Warrant Stock and other stock, securities and property,
as from time to time shall be issuable upon the exercise of this Warrant.&nbsp;&nbsp;The Company covenants that all Warrant Stock
that may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights
represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and
charges in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).&nbsp;&nbsp;The
Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of executing stock certificates to execute and issue the necessary certificates for the shares of Warrant Stock upon the
exercise of the purchase rights under this Warrant by the Registered Holder.&nbsp;&nbsp;The Company will take all such reasonable
action as may be necessary to assure that such Warrant Stock may be issued as provided herein without violation of any applicable
law or regulation.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Replacement
of Warrants</U></B>.&nbsp;&nbsp;Upon receipt of evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of this Warrant and (in the case of loss, theft or destruction) upon delivery of an indemnity agreement (with surety
if reasonably required) in an amount reasonably satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new Warrant of like tenor.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Notices</U></B>.&nbsp;&nbsp;Any
notice required or permitted by this Warrant shall be in writing and shall be deemed duly given upon receipt, when delivered personally
or by courier, overnight delivery service or confirmed facsimile, or 48 hours after being deposited in the regular mail as certified
or registered mail (airmail if sent internationally) with postage prepaid, addressed (a) if to the Registered Holder, to the address
of the Registered Holder most recently furnished in writing to the Company and (b) if to the Company, to the address set forth
on the signature page of this Warrant or as subsequently modified by written notice to the Registered Holder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>No
Rights as Stockholder</U></B>. Until the exercise of this Warrant, the Registered Holder of this Warrant shall not have or exercise
any rights by virtue hereof as a stockholder of the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>No
Fractional Shares</U></B>.&nbsp;&nbsp;No fractional shares of Common Stock will be issued in connection with any exercise hereunder.&nbsp;&nbsp;In
lieu of any fractional shares which would otherwise be issuable, the Company shall round the amount of Warrant Stock issuable to
the nearest whole share.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Amendment
or Waiver</U></B>.&nbsp;&nbsp;Any term of this Warrant may be amended or waived upon written consent of the Company and the Registered
Holder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Headings</U></B>.&nbsp;&nbsp;The
headings in this Warrant are for purposes of reference only and shall not limit or otherwise affect the meaning of any provision
of this Warrant.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Governing
Law</U></B>.&nbsp;&nbsp;This Warrant and all acts and transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws of the State of New York, without giving effect
to principles of conflicts of law.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Dispute
Resolution</U></B>. In the case of a dispute as to the determination of the fair market value, the Company or the Registered Holder,
as the case may be, shall submit the disputed determinations or arithmetic calculations, as the case may be, via facsimile (i)
within two (2) Business Days after receipt of the applicable notice giving rise to such dispute to the Company or the Registered
Holder, as the case may be, or (ii) if no notice gave rise to such dispute, at any time after the Registered Holder learned of
the circumstances giving rise to such dispute. If the Registered Holder and the Company are unable to agree upon such determination
or calculation, as the case may be, of the fair market value within three (3) Business Days of such disputed determination or arithmetic
calculation being submitted to the Company or the Registered Holder, as the case may be, then the Company shall, within two (2)
Business Days submit via facsimile the disputed determination of the fair market value to an independent, reputable investment
bank selected by the Registered Holder and reasonably acceptable to the Company. The Company shall cause, at its expense, the investment
bank to perform the determinations or calculations, as the case may be, and notify the Company and the Registered Holder of the
results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations, as the case
may be. Such investment bank&rsquo;s determination or calculation, as the case may be, shall be binding upon all parties absent
demonstrable error.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Certain
Definitions</U></B>.&nbsp;&nbsp;For purposes of this Warrant, the following terms shall have the following meanings:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B>Business
Day</B>&rdquo; means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B><U>Bloomberg</U></B>&rdquo;
means Bloomberg, L.P.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B><U>Closing
Sale Price</U></B>&rdquo; means, for any security as of any date, the last closing trade price for such security on the Principal
Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate
the closing trade price, then the last trade price of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg,
or, if no last trade price is reported for such security by Bloomberg, the average of the ask prices of any market makers for such
security as reported by the Principal Market. If the Closing Sale Price cannot be calculated for a security on a particular date
on any of the foregoing bases, the Closing Sale Price of such security on such date shall be the fair market value as mutually
determined by the Company and the Registered Holder. If the Company and the Holder are unable to agree upon the fair market value
of such security, then such dispute shall be resolved in accordance with the procedures in Section&nbsp;15. All such determinations
shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such
period.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B><U>Principal
Market</U></B>&rdquo; means the NYSE MKT, or if NYSE MKT is not the principal trading market for the Common Stock, then the principal
securities exchange or securities market on which the Common Stock is then traded, or the over-the-counter market or the electronic
bulletin board for such security.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B><U>Trading
Day</U></B>&rdquo; means, as applicable, (x) with respect to all price determinations relating to the Common Stock, any day on
which the Common Stock is traded on the Principal Market, provided that &ldquo;Trading Day&rdquo; shall not include any day on
which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Common Stock
is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate
in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time)
unless such day is otherwise designated as a Trading Day in writing by the Registered Holder or (y) with respect to all determinations
other than price determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto)
is open for trading of securities.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B><U>VWAP</U></B>&rdquo;
means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market during
the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through
its &ldquo;Volume at Price&rdquo; function or, if the foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01
a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average
price is reported for such security by Bloomberg for such hours, the average of the highest closing bid price and the lowest closing
ask price of any of the market makers for such security as reported by the Principal Market. If VWAP cannot be calculated for such
security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually
determined by the Company and the Registered Holder.&nbsp;&nbsp;If the Company and the Holder are unable to agree upon the fair
market value of such security, then such dispute shall be resolved in accordance with the procedures in Section&nbsp;15. All such
determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction
during such period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">IN WITNESS WHEREOF,
the parties have executed this Warrant as of the date first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: justify">Document Security Systems, Inc.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 35%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">By:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>Name:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD>Title:</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; text-align: justify; text-indent: 0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Exhibit A</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">WARRANT EXERCISE FORM</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The undersigned hereby
irrevocably elects to exercise the within Warrant to the extent of purchasing ______ shares of Common Stock of Document Security
Systems, Inc., a New York corporation, and hereby makes payment of $___________ in payment therefore (if a cashless exercise, insert
&ldquo;cashless&rdquo;), all in accordance with the terms and conditions of the Warrant dated ________, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Name:&nbsp;&nbsp;______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Signature:&nbsp;&nbsp;___________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Signature&nbsp;of&nbsp;joint&nbsp;holder&nbsp;(if&nbsp;applicable):&nbsp;_____________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Date:&nbsp;&nbsp;___________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">INSTRUCTIONS FOR ISSUANCE OF STOCK</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">(if other than to the registered
holder of the within Warrant)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Name:&nbsp;&nbsp;______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Address:&nbsp;&nbsp;_____________________________________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Social&nbsp;Security&nbsp;or&nbsp;Taxpayer&nbsp;Identification&nbsp;Number&nbsp;of&nbsp;Recipient:&nbsp;&nbsp;_________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Exhibit B</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ASSIGNMENT FORM</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">FOR VALUE RECEIVED, _____________________
hereby sells, assigns and transfers unto _______________________ the right to purchase Common Stock of Document Security Systems,
Inc., a New York corporation, represented by this Warrant to the extent of shares as to which such right is exercisable and does
hereby irrevocably constitute and appoint ______________________, Attorney, to transfer the same on the books of the Company with
full power of substitution in the premises.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Date:&nbsp;__________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Signature:&nbsp;&nbsp;______________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Signature&nbsp;of&nbsp;joint&nbsp;holder&nbsp;(if&nbsp;applicable):&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">_____________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: Red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: Red"></P>

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<P STYLE="margin: 0"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>ANNEX E</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CERTIFICATE OF AMENDMENT </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OF THE </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CERTIFICATE OF INCORPORATION </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>OF </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC.<BR>
Under Section 805 of the Business Corporation Law</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="color: black">The undersigned,
being the Chief Executive Officer of Document Security Systems, Inc. </FONT>(the &quot;<B>Corporation</B>&quot;), hereby certifies
as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: black">1.</FONT></TD><TD>The name of the Corporation is <FONT STYLE="color: black">Document Security Systems, Inc. The name under which the Corporation
was formed was Thoroughbreds, U.S.A., Inc.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD>The Certificate of Incorporation was originally filed on May 30, 1984 in the name of Thoroughbreds, U.S.A., Inc. A Certificate
of Amendment was filed on June 10, 1985. A Certificate of Amendment was filed on July 8, 1986 changing the name of the Corporation
to New Sky Communications, Inc. A Certificate of Amendment was filed on February 3, 2003 changing the name of the Corporation to
Document Security Systems, Inc. A Certificate of Correction of the Certificate of Amendment was filed on October 20, 2003.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD>[NUMBER OF AUTHORIZED SHARES OF PREFERRED STOCK]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">4.</TD><TD>Section 3 of the Certificate of Incorporation is hereby amended and supplemented to include the following:</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><U>Designation
and Amount</U>. The class of preferred stock hereby classified shall be designated the &ldquo;Series A Convertible Preferred Stock&rdquo;.
The initial number of authorized shares of the Series A Convertible Preferred Stock shall be _________</FONT> (____)<FONT STYLE="color: black">,
which shall not be subject to increase without the consent of the holders of a majority of the then outstanding shares of Series
A Convertible Preferred Stock. Each share of the Series A Convertible Preferred Stock shall have a par value of </FONT>$0.02<FONT STYLE="color: black">.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Dividends</U>. From and after the first date of issuance of any shares of Series A Convertible Preferred Stock (the &ldquo;<B>Initial
Issuance Date</B>&rdquo;), the holders of Series A Convertible Preferred Stock (each, a &ldquo;<B>Holder</B>&rdquo; and collectively,
the &ldquo;<B>Holders</B>&rdquo;) shall be entitled to receive such dividends paid and distributions made to the holders of common
stock, par value $0.02 per share ( the &ldquo;<B>Common Stock</B>&rdquo;), <U>pro</U> <U>rata</U> to the holders of Common Stock
to the same extent as if such Holders had converted the Series A Convertible Preferred Stock into Common Stock (without regard
to any limitations on conversion herein or elsewhere) and had held such shares of Common Stock on the record date for such dividends
and distributions (provided, however, to the extent that a Holder's right to participate in any such dividend or distribution would
result in the Holder exceeding the Maximum Percentage (as defined below), then the Holder shall not be entitled to participate
in such dividend or distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such
dividend or distribution to such extent) and the portion of such dividend or distribution shall be held in abeyance for the benefit
of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage<FONT STYLE="color: black">,
at which time such Holder shall be delivered such dividend or distribution to the extent as if there had been no such limitation</FONT>).
Payments under the preceding sentence shall be made concurrently with the dividend or distribution to the holders of Common Stock.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Liquidation
Preference</U>. Upon any Liquidation Event (as defined below), after provision for payment of all debts and liabilities of the
Corporation, any remaining assets of the Corporation shall be distributed <U>pro</U> <U>rata</U> to the holders of Common Stock
and the holders of Series A Convertible Preferred Stock as if the Series A Convertible Preferred Stock had been converted into
shares of Common Stock pursuant to the provisions of Section 6 hereof immediately prior to such distribution. For purposes of this
Certificate of Amendment, a &quot;<B>Liquidation Event</B>&quot; means the voluntary or involuntary liquidation, dissolution or
winding up of the Corporation or its Subsidiaries (as defined below), the sale of assets of which constitute all or substantially
all of the assets of the business of the Corporation and its Subsidiaries taken as a whole, in a single transaction or series of
transactions.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Fundamental
Transactions</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Certain
definitions</U>. For purposes of this Certificate of Amendment, the following definitions shall apply:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Business
Day</B>&quot; means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Exchange
Act</B>&quot; means the Securities Exchange Act of 1934, as amended.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Eligible
Market</B>&quot; means The New York Stock Exchange, Inc., the NYSE MKT, The NASDAQ Global Select Market, The NASDAQ Global Market
or The NASDAQ Capital Market.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Fundamental
Transaction</B>&quot; means that the Corporation shall (or in the case of clause (F) any &quot;person&quot; or &quot;group&quot;
(as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act)), directly or indirectly, in one or more
related transactions, (A) consolidate or merge with or into (whether or not the Corporation is the surviving corporation) another
entity, or (B) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the
Corporation to another entity, or (C) allow another entity or entities to make a purchase, tender or exchange offer that is accepted
by the holders of more than 50% of the outstanding shares of Voting Stock (not including any shares of Voting Stock held by the
entity or entities making or party to, or associated or affiliated with the entity or entities making or party to, such purchase,
tender or exchange offer), or (D) consummate a stock purchase agreement or other business combination (including, without limitation,
a reorganization, recapitalization, spin-off or scheme of arrangement) with another entity whereby such other entity acquires more
than the 50% of the outstanding shares of Voting Stock (not including any shares of Voting Stock held by the other entity or other
entities making or party to, or associated or affiliated with the other entities making or party to, such stock purchase agreement
or other business combination), or (E) reorganize, recapitalize or reclassify its Common Stock, or (F) become the &quot;beneficial
owner&quot; (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the aggregate ordinary
voting power represented by issued and outstanding Voting Stock.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Parent
Entity</B>&quot; of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock
or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity,
the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Person</B>&quot;
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(vii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Required
Holders</B>&quot; means the holders of record of a majority of the then outstanding shares of Series A Convertible Preferred Stock.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(viii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<B>Stated
Value</B>&rdquo; shall mean $0.02 per share, subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations,
reclassifications, combinations, reverse stock splits or other similar events relating to the Series A Convertible Preferred Stock
after the Initial Issuance Date.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(ix)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Successor
Entity</B>&quot; means the Person, which may be the Corporation, formed by, resulting from or surviving any Fundamental Transaction
or the Person with which such Fundamental Transaction shall have been made, provided that if such Person is not a publicly traded
entity whose common stock or equivalent equity security is quoted or listed for trading on an Eligible Market, Successor Entity
shall mean such Person's Parent Entity.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(x)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Trading
Day</B>&quot; means any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the
principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the shares
of Common Stock are then traded; provided that &quot;Trading Day&quot; shall not include any day on which the shares of Common
Stock are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the shares of Common Stock are
suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate
in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York Time).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(xi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Voting
Stock</B>&quot; means capital stock of the class or classes pursuant to which the holders thereof have the general voting power
to elect or the general power to appoint, at least a majority of the board of directors, managers or trustees thereof (irrespective
of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the
happening of any contingency).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Assumption</U>.
The Corporation shall not enter into or be party to a Fundamental Transaction unless (i) the Successor Entity assumes in writing
all of the obligations of the Corporation under this Certificate of Amendment in accordance with the provisions of this Section
4 pursuant to written agreements in form and substance satisfactory to the Required Holders and approved by the Required Holders
prior to such Fundamental Transaction, including agreements to deliver to each Holder of Series A Convertible Preferred Stock in
exchange for such Series A Convertible Preferred Stock a security of the Successor Entity evidenced by a written instrument substantially
similar in form and substance to this Certificate of Amendment including, without limitation, having a stated value equal to the
Stated Value of the Series A Convertible Preferred Stock held by such Holder and having similar ranking to the Series A Convertible
Preferred Stock, and satisfactory to the Required Holders and (ii) the Successor Entity (including its Parent Entity) is a publicly
traded corporation whose common stock is quoted on or listed for trading on an Eligible Market. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Certificate of Amendment referring to the &quot;Corporation&quot; shall refer instead to the
Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations of the Corporation
under this Certificate of Amendment with the same effect as if such Successor Entity had been named as the Corporation herein.
Upon consummation of the Fundamental Transaction, the Successor Entity shall deliver to the Holder confirmation that there shall
be issued upon conversion of the Series A Convertible Preferred Stock at any time after the consummation of the Fundamental Transaction,
in lieu of the shares of Common Stock (or other securities, cash, assets or other property) issuable upon the conversion of the
Series A Convertible Preferred Stock prior to such Fundamental Transaction (without regard to any limitations on the conversion
of the Series A Convertible Preferred Stock), such shares of publicly traded common stock (or their equivalent) of the Successor
Entity, as adjusted in accordance with the provisions of this Certificate of Amendment, which the Holder would have been entitled
to receive had such Holder converted the Series A Convertible Preferred Stock in full (without regard to any limitations on conversion,
including without limitation, the Maximum Percentage) immediately prior to such Fundamental Transaction (provided, however, to
the extent that a Holder&rsquo;s right to receive any such shares of publicly traded common stock (or their equivalent) of the
Successor Entity would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to receive
such shares to such extent (or to beneficially own any shares of publicly traded common stock (or their equivalent) of the Successor
Entity as a result of such consideration to such extent) and the portion of such shares shall be held in abeyance for the benefit
of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage, at
which time such Holder shall be delivered such shares to the extent as if there had been no such limitation). The provisions of
this Section shall apply similarly and equally to successive Fundamental Transactions and shall be applied without regard to any
limitations on the conversion of the Series A Convertible Preferred Stock.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Voting
Rights</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>General</U>.
The Holders shall not be entitled to vote, except (i) as otherwise required by applicable law and (ii) subject to Section 6(i),
that each issued and outstanding share of Series A Convertible Preferred Stock shall be entitled to the number of votes equal to
the number of shares of Common Stock into which each such share of Series A Convertible Preferred Stock is convertible (as adjusted
from time to time pursuant to Section 4 hereof), at each meeting of stockholders of the Corporation (or pursuant to any action
by written consent) with respect to matters presented to the stockholders of the Corporation for their action or consideration
in connection with (A) a Fundamental Transaction or (B) the issuance by the Corporation, directly or indirectly, in one or more
related transactions or series of related transactions, of shares of Common Stock, Options (as defined below) or Convertible Securities
(as defined below) if, in the aggregate, the number of such shares of Common Stock together with the number of shares of Common
Stock issuable upon the conversion or exercise, as applicable, of such Options and Convertible Securities is more than 20% of the
number of shares of Common Stock issued and outstanding prior to any such issuance (such issuance, the &quot;<B>Twenty Percent
Issuance</B>&quot;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Series
A Convertible Preferred Stock Protective Provisions</U>. In addition to any other rights provided by law, the Corporation shall
not and shall not permit any direct or indirect Subsidiary (as defined below) of the Corporation to, without first obtaining the
affirmative vote or written consent of the holders of a majority of the outstanding shares of Series A Convertible Preferred Stock:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black">increase
the authorized number of shares of Series A Convertible Preferred Stock; or</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;amend,
alter or repeal the preferences, special rights or other powers of the Series A Convertible Preferred Stock so as to affect adversely
the Series A Convertible Preferred Stock.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Conversion</U>.
Subject to Section 6(i), each share of Series A Convertible Preferred Stock may be converted into shares of Common Stock at any
time or times, at the option of any Holder as provided in this Section 6, <U>provided</U>, <U>however</U>, that in connection with
any Liquidation Event, the right of conversion shall terminate at the close of business on the full Business Day next preceding
the date fixed for the payment of any amounts distributable on liquidation to the holders of Series A Convertible Preferred Stock.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Certain
definitions</U>. For purposes of this Certificate of Amendment, the following definitions shall apply:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Bloomberg</B>&quot;
means Bloomberg Financial Markets.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Conversion
Amount</B>&quot; means the Stated Value.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Conversion
Price</B>&quot; means $0.02, subject to adjustment as provided herein.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Subsidiary</B>&quot;
means, with respect to the Corporation, any entity in which the Corporation, directly or indirectly, owns any of the capital stock
or holds an equity or similar interest.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Conversion</U>.
The number of shares of Common Stock issuable upon conversion of each share of Series A Convertible Preferred Stock pursuant to
this Section 6 shall be determined by multiplying each such share of Series A Convertible Preferred Stock by the fraction set forth
below (the &quot;<B>Conversion Rate</B>&quot;):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Conversion Amount<BR>
</U><FONT STYLE="text-underline-style: none">Conversion Price</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">No fractional shares of Common
Stock are to be issued upon the conversion of any Series A Convertible Preferred Stock, but rather the number of shares of Common
Stock to be issued shall be rounded up to the nearest whole number.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The applicable Conversion Rate
and Conversion Price from time to time in effect is subject to adjustment as hereinafter provided.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Mechanics
of Conversion</U>. The conversion of Series A Convertible Preferred Stock shall be conducted in the following manner:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Holder's
Delivery Requirements</U>. To convert Series A Convertible Preferred Stock into shares of Common Stock on any date (a &quot;<B>Conversion
Date</B>&quot;), the Holder shall (A) transmit by facsimile (or otherwise deliver), for receipt on or prior to 11:59 p.m., New
York City time, on such date, a copy of a properly completed notice of conversion executed by the registered Holder of the Series
A Convertible Preferred Stock subject to such conversion in the form attached hereto as <U>Exhibit I</U> (the &quot;<B>Conversion
Notice</B>&quot;) to the Corporation and if the Corporation has appointed a registered transfer agent, the Corporation&rsquo;s
registered transfer agent (the &quot;<B>Transfer Agent</B>&quot;) (if the Corporation does not have a registered transfer agent,
references hereto to the &quot;Transfer Agent&quot; shall be deemed to be references to the Corporation) and (B) if required by
Section 6(c)(iv), surrender to a common carrier for delivery to the Corporation as soon as practicable following such date the
original certificates representing the Series A Convertible Preferred Stock being converted (or compliance with the procedures
set forth in Section 9) (the &quot;<B>Preferred Stock Certificates</B>&quot;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Corporation's
Response</U>. Upon receipt by the Corporation of a copy of a Conversion Notice, the Corporation shall (A) as soon as practicable,
but in any event within two (2) Trading Days, send, via facsimile, a confirmation of receipt of such Conversion Notice to such
Holder and the Transfer Agent, if applicable, which confirmation shall constitute an instruction to the Transfer Agent to process
such Conversion Notice in accordance with the terms herein and (B) on or before the third (3<SUP>rd</SUP>) Trading Day following
the date of receipt by the Corporation of such Conversion Notice (the &quot;<B>Share Delivery Date</B>&quot;), (1) provided the
Transfer Agent is participating in the DTC Fast Automated Securities Transfer Program, credit such aggregate number of shares of
Common Stock to which the Holder shall be entitled to the Holder's or its designee's balance account with DTC through its Deposit/Withdrawal
At Custodian system, or (2) if the Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue
and deliver to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder shall be entitled. If the number of shares of Series A Convertible
Preferred Stock represented by the Preferred Stock Certificate(s) submitted for conversion, as may be required pursuant to Section
6(c)(iv), is greater than the number of shares of Series A Convertible Preferred Stock being converted, then the Corporation shall,
as soon as practicable and in no event later than five (5) Business Days after receipt of the Preferred Stock Certificate(s) (the
&quot;<B>Preferred Stock Delivery Date</B>&quot;) and at its own expense, issue and deliver to the Holder a new Preferred Stock
Certificate representing the number of shares of Series A Convertible Preferred Stock not converted.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Corporation's
Failure to Timely Convert</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: 1in">(A)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Cash
Damages</U>. If within three (3) Trading Days after the Corporation's receipt of the facsimile copy of a Conversion Notice the
Corporation shall fail to credit a Holder's balance account with DTC or issue and deliver a certificate to such Holder for the
number of shares of Common Stock to which such Holder is entitled upon such Holder's conversion of Series A Convertible Preferred
Stock (a &quot;<B>Conversion Failure</B>&quot;), and if on or after such Trading Day the Holder purchases (in an open market transaction
or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of the shares of Common Stock issuable
upon such conversion that the Holder anticipated receiving from the Corporation (a &quot;<B>Buy-In</B>&quot;), then the Corporation
shall, within three (3) Trading Days after the Holder's request and in the Holder's discretion, either (i) pay cash to the Holder
in an amount equal to the Holder's total purchase price (including brokerage commissions and out-of-pocket expenses, if any) for
the shares of Common Stock so purchased (the &quot;<B>Buy-In Price</B>&quot;), at which point the Corporation's obligation to deliver
such certificate (and to issue such Common Stock) shall terminate, or (ii) promptly honor its obligation to deliver to the Holder
a certificate or certificates representing such Common Stock and pay cash to the Holder in an amount equal to the excess (if any)
of the Buy-In Price over the product of (A) such number of shares of Common Stock, times (B) the Closing Sale Price on the Conversion
Date. Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including,
without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation's failure to timely
deliver certificates representing shares of Common Stock upon conversion of the Series A Convertible Preferred Stock as required
pursuant to the terms hereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: 1in">(B)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Void
Conversion Notice; Adjustment of Conversion Price</U>. If for any reason a Holder has not received all of the shares of Common
Stock to which such Holder is entitled prior to the tenth (10<SUP>th</SUP>) Trading Day after the Share Delivery Date with respect
to a conversion of Series A Convertible Preferred Stock, then the Holder, upon written notice to the Corporation, with a copy to
the Transfer Agent, may void its Conversion Notice with respect to, and retain or have returned, as the case may be, any shares
of Series A Convertible Preferred Stock that have not been converted pursuant to such Holder's Conversion Notice; provided that
the voiding of a Holder's Conversion Notice shall not effect the Corporation's obligations to make any payments which have accrued
prior to the date of such notice pursuant to Section 6(c)(iii)(A) or otherwise.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 103.5pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 103.5pt">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Book-Entry</U>.
Notwithstanding anything to the contrary set forth herein, upon conversion of Series A Convertible Preferred Stock in accordance
with the terms hereof, the Holder thereof shall not be required to physically surrender the Preferred Stock Certificate unless
(A) the full or remaining number of shares of Series A Convertible Preferred Stock represented by the Preferred Stock Certificate
are being converted, in which case the Holder shall deliver such Preferred Stock Certificate to the Corporation promptly following
such conversion, or (B) a Holder has provided the Corporation with prior written notice (which notice may be included in a Conversion
Notice) requesting reissuance of Series A Convertible Preferred Stock upon physical surrender of any Series A Convertible Preferred
Stock. The Holder and the Corporation shall maintain records showing the number of shares of Series A Convertible Preferred Stock
so converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder and the Corporation,
so as not to require physical surrender of the certificate representing the Series A Convertible Preferred Stock upon each such
conversion. In the event of any dispute or discrepancy, such records of the Corporation establishing the number of shares of Series
A Convertible Preferred Stock to which the record holder is entitled shall be controlling and determinative in the absence of manifest
error. Notwithstanding the foregoing, if Series A Convertible Preferred Stock represented by a certificate are converted as aforesaid,
a Holder may not transfer the certificate representing the Series A Convertible Preferred Stock unless such Holder first physically
surrenders the certificate representing the Series A Convertible Preferred Stock to the Corporation, whereupon the Corporation
will forthwith issue and deliver upon the order of such Holder a new certificate of like tenor, registered as such Holder may request,
representing in the aggregate the remaining number of shares of Series A Convertible Preferred Stock represented by such certificate.
<FONT STYLE="text-transform: uppercase">A</FONT> Holder and any assignee, by acceptance of a certificate, acknowledge and agree
that, by reason of the provisions of this paragraph, following conversion of any Series A Convertible Preferred Stock, the number
of shares of Series A Convertible Preferred Stock represented by such certificate may be less than the number of shares of Series
A Convertible Preferred Stock stated on the face thereof. Each certificate for Series A Convertible Preferred Stock shall bear
the following legend:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 103.5pt">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: 0in">ANY TRANSFEREE
OF THIS CERTIFICATE SHOULD CAREFULLY REVIEW THE TERMS OF THE CORPORATION'S CERTIFICATE OF <FONT STYLE="text-transform: uppercase">Amendment</FONT>
RELATING TO THE SERIES A CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE, INCLUDING SECTION 6(c)(iv) THEREOF. THE NUMBER
OF SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE MAY BE LESS THAN THE NUMBER OF SHARES OF SERIES
A CONVERTIBLE PREFERRED STOCK STATED ON THE FACE HEREOF PURSUANT TO SECTION 6(c)(iv) OF THE CERTIFICATE OF AMENDMENT RELATING TO
THE SERIES A CONVERTIBLE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE.</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Reservation
of Shares</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Corporation shall have such number of its duly authorized and unissued shares of Common Stock for each Series A Convertible Preferred
Stock equal to 130% of the number of shares of Common Stock necessary to effect the conversion at the Conversion Rate with respect
to each such Series A Convertible Preferred Stock as of the Initial Issuance Date. The Corporation shall at all times when the
Series A Convertible Preferred Stock shall be outstanding reserve and keep available out of its authorized but unissued stock,
for the purposes of effecting the conversion of the Series A Convertible Preferred Stock, such number of its duly authorized and
unissued shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding Series A Convertible
Preferred Stock (the &quot;<B>Required Reserve Amount</B>&quot;). The initial number of shares of Common Stock reserved for conversions
of the Series A Convertible Preferred Stock and each increase in the number of shares so reserved shall be allocated pro rata among
the Holders based on the number of shares of Series A Convertible Preferred Stock held by each Holder at the time of issuance of
the Series A Convertible Preferred Stock or increase in the number of reserved shares, as the case may be (the &quot;<B>Authorized
Share Allocation</B>&quot;). In the event a Holder shall sell or otherwise transfer any of such Holder's Series A Convertible Preferred
Stock, each transferee shall be allocated a pro rata portion of the number of reserved shares of Common Stock reserved for such
transferor. Any shares of Common Stock reserved and allocated to any Person which ceases to hold any Series A Convertible Preferred
Stock (other than pursuant to a transfer of Series A Convertible Preferred Stock in accordance with the immediately preceding sentence)
shall be allocated to the remaining Holders of Series A Convertible Preferred Stock, pro rata based on the number of shares of
Series A Convertible Preferred Stock then held by such Holders. Before taking any action that would cause an adjustment reducing
the Conversion Price below the then par value of the shares of Common Stock issuable upon conversion of the Series A Convertible
Preferred Stock, the Corporation will take any corporate action that may, in the opinion of its counsel, be necessary in order
that the Corporation may validly and legally issue fully-paid and nonassessable shares of such Common Stock at such adjusted conversion
price.</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
at any time while any of the Series A Convertible Preferred Stock remain outstanding the Corporation does not have a sufficient
number of duly authorized and unreserved shares of Common Stock to satisfy its obligation to reserve for issuance upon conversion
of the Series A Convertible Preferred Stock at least a number of shares of Common Stock equal to the Required Reserve Amount (an
&quot;<B>Authorized Share Failure</B>&quot;), then the Corporation shall immediately take all action necessary to increase the
Corporation's authorized shares of Common Stock to an amount sufficient to allow the Corporation to reserve the Required Reserve
Amount for the Series A Convertible Preferred Stock then outstanding. Without limiting the generality of the foregoing sentence,
as soon as practicable after the date of the occurrence of an Authorized Share Failure, but in no event later than sixty (60) days
after the occurrence of such Authorized Share Failure, the Corporation shall hold a meeting of its stockholders for the approval
of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Corporation shall provide
each stockholder with a proxy statement and shall use its best efforts to solicit its stockholders' approval of such increase in
authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Dispute
Resolution</U>. In the case of a dispute as to the arithmetic calculation of the Conversion Rate, the <FONT STYLE="color: black">Corporation</FONT>
shall issue to the Holder the number of shares of Common Stock that is not disputed and shall transmit an explanation of the disputed
determinations or arithmetic calculations to the Holder via facsimile within one (1) Business Day of receipt of such Holder's Conversion
Notice or other date of determination. If such Holder and the <FONT STYLE="color: black">Corporation</FONT> are unable to agree
upon the determination of the arithmetic calculation of the Conversion Rate within two (2) Business Days of such disputed determination
or arithmetic calculation being transmitted to the Holder, then the <FONT STYLE="color: black">Corporation</FONT> shall within
one (1) Business Day submit via facsimile the disputed arithmetic calculation of the Conversion Rate to any &quot;big four&quot;
international accounting firm. The <FONT STYLE="color: black">Corporation</FONT> shall cause, at the <FONT STYLE="color: black">Corporation</FONT>'s
expense (unless the accounting firm determines in favor of the Corporation, in which case the Holder shall be responsible for such
expense), the accountant to perform the determinations or calculations and notify the <FONT STYLE="color: black">Corporation</FONT>
and the Holders of the results no later than five (5) Business Days from the time it receives the disputed determinations or calculations.
Such accountant's determination or calculation, as the case may be, shall be binding upon all parties absent error.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Record
Holder</U>. The Person or Persons entitled to receive the shares of Common Stock issuable upon a conversion of Series A Convertible
Preferred Stock shall be treated for all purposes as the record holder or holders of such shares of Common Stock on the Conversion
Date.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Effect
of Conversion</U>. All shares of Series A Convertible Preferred Stock which shall have been surrendered for conversion as herein
provided shall no longer be deemed to be outstanding and all rights with respect to such shares, including the rights, if any,
to receive notices and to vote, shall forthwith cease and terminate except only the right of the holder thereof to receive shares
of Common Stock in exchange therefor and payment of any accrued but unpaid dividends thereon (whether or not declared). Subject
to Section 6(c)(iii)(B), any shares of Series A Convertible Preferred Stock so converted shall be retired and canceled and shall
not be reissued, and the Corporation may from time to time take such appropriate action as may be necessary to reduce the authorized
Series A Convertible Preferred Stock accordingly.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><U>Transfer
Taxes</U>. The issuance of certificates for shares of the Common Stock on conversion of this Series A Convertible Preferred Stock
shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of
the issue or delivery of such certificates, provided that the Corporation shall not be required to pay any tax that may be payable
in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that
of the Holder of such shares of Series A Convertible Preferred Stock so converted and the Corporation shall not be required to
issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the
Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="color: black">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Maximum
Percentage</U>. Notwithstanding anything to the contrary set forth herein, the Corporation shall not effect any conversion of </FONT>Series
A Convertible Preferred Stock<FONT STYLE="color: black">, and no Holder shall have the right to convert any </FONT>Series A Convertible
Preferred Stock<FONT STYLE="color: black">, to the extent that after giving effect to such conversion, the beneficial owner of
such shares (together with such Person's affiliates) would have acquired, through conversion of </FONT>Series A Convertible Preferred
Stock <FONT STYLE="color: black">or otherwise, beneficial ownership of a number of shares of Common Stock that exceeds 9.99% (the
&quot;<B>Maximum Percentage</B>&quot;) of the number of shares of Common Stock outstanding immediately after giving effect to such
conversion. </FONT>The Corporation shall not give effect to any voting rights of the Series A Convertible Preferred Stock, and
any Holder shall not have the right to exercise voting rights with respect to any Series A Convertible Preferred Stock pursuant
hereto, to the extent that giving effect to such voting rights would result in such Holder (together with its affiliates) being
deemed to beneficially own in excess of the Maximum Percentage of the number of shares of Common Stock outstanding immediately
after giving effect to such exercise, assuming such exercise as being equivalent to conversion. <FONT STYLE="color: black"> For
purposes of the foregoing, the number of shares of Common Stock beneficially owned by a Person and its affiliates shall include
the number of shares of Common Stock issuable upon conversion of the </FONT>Series A Convertible Preferred Stock <FONT STYLE="color: black">with
respect to which the determination of such sentence is being made, but shall exclude the number of shares of Common Stock which
would be issuable upon (A) conversion of the remaining, nonconverted shares of </FONT>Series A Convertible Preferred Stock <FONT STYLE="color: black">beneficially
owned by such Person or any of its affiliates and (B) exercise or conversion of the unexercised or unconverted portion of any other
securities of the Corporation (including, without limitation, any notes or warrants) subject to a limitation on conversion or exercise
analogous to the limitation contained in this Section 6(i) beneficially owned by such Person or any of its affiliates. Except as
set forth in the preceding sentence, for purposes of this Section 6(i), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act. For purposes of this Section 6(i), in determining the number of outstanding shares of Common
Stock, a Holder may rely on the number of outstanding shares of Common Stock as reflected in (1) the Corporation's most recent
Form 10-K, Form 10-Q, or Form 8-K, as the case may be, (2) a more recent public announcement by the Corporation, or (3) any other
notice by the Corporation or the Transfer Agent setting forth the number of shares of Common Stock outstanding. For any reason
at any time, upon the written request of any Holder, the Corporation shall within one (1) Business Day following the receipt of
such notice, confirm orally and in writing to any such Holder the number of shares of Common Stock then outstanding. In any case,
the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities
of the Corporation, including the </FONT>Series A Convertible Preferred Stock<FONT STYLE="color: black">, by such Holder and its
affiliates since the date as of which such number of outstanding shares of Common Stock was reported. By written notice to the
Corporation, the Holder may from time to time increase or decrease the Maximum Percentage to any other percentage not in excess
of 9.99% specified in such notice; provided, that (i) any such increase will not be effective until the sixty-first (61st) day
after such notice is delivered to the Corporation, and (ii) any such increase or decrease will apply only to the Holder providing
such written notice and not to any other Holder. In the event that the Corporation cannot pay any portion of any dividend, distribution,
grant or issuance hereunder to a Holder solely by reason of this Section 6(i) (such shares, the &quot;<B>Limited Shares</B>&quot;),
notwithstanding anything to the contrary contained herein, the Corporation shall not be required to pay cash in lieu of the payment
that otherwise would have been made in such Limited Shares, but shall hold any such Limited Shares in abeyance for such Holder
until such time, if ever, that the delivery of such Limited Shares shall not cause the Holder to exceed the Maximum Percentage,
at which time such Holder shall be delivered such Limited Shares to the extent as if there had been no such limitation. The provisions
of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section
6(i) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended beneficial ownership
limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Anti-Dilution
Provisions</U>. The Conversion Price shall be subject to adjustment from time to time in accordance with this Section 7.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Certain
Definitions</U>. For purposes of this Certificate of Designations, the following definitions shall apply:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Convertible
Securities</B>&quot; means any stock or securities (other than Options) directly or indirectly convertible into or exchangeable
or exercisable for Common Stock.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Options</B>&quot;
means any rights, warrants or options to subscribe for or purchase Common Stock or Convertible Securities.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Principal
Market</B>&quot; means the Eligible Market that is the principal securities exchange market for the Common Stock.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)<U>Adjustment
of Conversion Price upon Subdivision or Combination of Common Stock</U>. If the Corporation at any time after the Initial Issuance
Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) its outstanding shares of Common Stock into
a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced.
If the Corporation at any time after the Initial Issuance Date combines (by combination, reverse stock split or otherwise) its
outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination
will be proportionately increased.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Voluntary
Adjustment By Corporation</U>. The Corporation may at any time reduce the then current Conversion Price to any amount and for any
period of time deemed appropriate and approved by the Board of Directors in accordance with New York law.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notices</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Immediately
upon any adjustment of the Conversion Rate and Conversion Price pursuant to Section 7 hereof, the Corporation will give written
notice thereof sent by mail, first class, postage prepaid to each Holder at its address appearing on the stock register, setting
forth in reasonable detail, and certifying, the calculation of such adjustment. In the case of a dispute as to the determination
of such adjustment, then such dispute shall be resolved in accordance with the procedures set forth in Section 6(e).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as otherwise required by law, the Corporation will give written notice to each Holder at least ten (10) Business Days prior to
the date on which the Corporation closes its books or takes a record (I) with respect to any dividend or distribution upon the
Common Stock, (II) with respect to any pro rata subscription offer to holders of Common Stock or (III) for determining rights to
vote with respect to any Twenty Percent Issuance, any Fundamental Transaction or any Liquidation Event.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Corporation will also give written notice to each Holder at least ten (10) Business Days prior to the date on which any Twenty
Percent Issuance, any Fundamental Transaction or any Liquidation Event will take place.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Status
of Converted Stock</U>. In the event any shares of Series A Convertible Preferred Stock shall be converted pursuant to Section
6 hereof, the shares so converted shall be canceled and shall not be issuable by the Corporation.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Suspension
from Trading</U>. If on any day after the Initial Issuance Date, the sale of any of the shares of Common Stock issued or issuable
upon the conversion of any shares of Series A Convertible Preferred Stock (the &quot;<B>Conversion Shares</B>&quot;) (without giving
effect to the Maximum Percentage) issuable hereunder cannot be made (i) because of the suspension of trading by the Principal Market,
or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange
or securities market on which the shares of Common Stock are then traded (other than due to an event that causes the suspension
of trading on such Principal Market or principal securities exchange or securities market of all securities generally) (a &quot;<B>Maintenance
Failure</B>&quot;), then, as partial relief for the damages to any Holder by reason of any such delay in or reduction of its ability
to sell the Conversion Shares (which remedy shall not be exclusive of any other remedies available at law or in equity, including,
without limitation, specific performance), the Corporation shall pay to each Holder, for each full consecutive fifteen (15) Trading
Day period during which there is a Maintenance Failure, an amount in cash equal to one quarter of one percent (0.25%) of the product
of (I) the total number of Conversion Shares issuable hereunder (without giving effect to the Maximum Percentage) and (II) the
highest Closing Sale Price of the Common Stock during the period beginning on the Trading Date immediately prior to the first date
of the Maintenance Failure and ending on the date such Maintenance Failure is cured or (ii) because of a failure to maintain the
listing of the Common Stock on one or more Eligible Markets (a &quot;<B>Delisting Maintenance Failure</B>&quot;), then, as partial
relief for the damages to any Holder by reason of any such delay in or reduction of its ability to sell the Conversion Shares (which
remedy shall not be exclusive of any other remedies available at law or in equity, including, without limitation, specific performance),
the Corporation shall pay to each Holder, for each full consecutive fifteen (15) Trading Day period during which there is a Delisting
Maintenance Failure, an amount in cash equal to one quarter of one percent (0.25%) of the Conversion Amount then held by such Holder.
The payments to which a Holder shall be entitled pursuant to this Section 9 are referred to herein as &quot;<B>Suspension Payments</B>&quot;.
Suspension Payments shall be paid on the third Business Day after each full fifteen (15) day period during which there is a Maintenance
Failure or a Delisting Maintenance Failure, as applicable</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Lost
or Stolen Certificates</U>. Upon receipt by the Corporation of evidence reasonably satisfactory to the Corporation of the loss,
theft, destruction or mutilation of any Series A Convertible Preferred Stock Certificates representing the Series A Convertible
Preferred Stock, and, in the case of loss, theft or destruction, of an indemnification undertaking (with surety, if reasonably
requested by the Corporation) by the holder thereof to the Corporation in customary form and, in the case of mutilation, upon surrender
and cancellation of the Series A Convertible Preferred Stock Certificate(s), the Corporation shall execute and deliver new preferred
stock certificate(s) of like tenor and date; <U>provided</U>, <U>however</U>, the Corporation shall not be obligated to re-issue
preferred stock certificates if the holder contemporaneously requests the Corporation to convert such Series A Convertible Preferred
Stock into Common Stock.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Remedies,
Characterizations, Other Obligations, Breaches and Injunctive Relief</U>. The remedies provided in this Certificate of Amendment
shall be cumulative and in addition to all other remedies available under this Certificate of Amendment, at law or in equity (including
a decree of specific performance and/or other injunctive relief). No remedy contained herein shall be deemed a waiver of compliance
with the provisions giving rise to such remedy. Nothing herein shall limit a holder of Series A Convertible Preferred Stock's right
to pursue actual damages for any failure by the Corporation to comply with the terms of this Certificate of Amendment. The Corporation
covenants to each holder of Series A Convertible Preferred Stock that there shall be no characterization concerning this instrument
other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, conversion and the
like (and the computation thereof) shall be the amounts to be received by the holder of Series A Convertible Preferred Stock thereof
and shall not, except as expressly provided herein, be subject to any other obligation of the Corporation (or the performance thereof).
The Corporation acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the holders of Series
A Convertible Preferred Stock and that the remedy at law for any such breach may be inadequate. The Corporation therefore agrees
that, in the event of any such breach or threatened breach, the holders of Series A Convertible Preferred Stock shall be entitled,
in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic
loss and without any bond or other security being required.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Notice</U>.
Whenever notice or other communication is required to be given under this Certificate of Amendment, unless otherwise provided herein,
such notice shall be given in accordance with contact information provided by each Holder to the Corporation and set forth in the
register for the Series A Convertible Preferred Stock maintained by the Corporation as set forth in Section 15.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Failure
or Indulgence Not Waiver</U>. No failure or delay on the part of any holder of Series A Convertible Preferred Stock in the exercise
of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any other right, power or privilege.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Transfer
of Series A Convertible Preferred Stock</U>. A Holder may assign some or all of the Series A Convertible Preferred Stock and the
accompanying rights hereunder held by such Holder without the consent of the Corporation; <U>provided</U> that such assignment
is in compliance with applicable securities laws.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Series
A Convertible Preferred Stock Register</U>. The Corporation shall maintain at its principal executive offices (or such other office
or agency of the Corporation as it may designate by notice to the Holders), a register for the Series A Convertible Preferred Stock,
in which the Corporation shall record the name and address of the persons in whose name the Series A Convertible Preferred Stock
have been issued, as well as the name and address of each transferee. The Corporation may treat the person in whose name any Series
A Convertible Preferred Stock is registered on the register as the owner and holder thereof for all purposes, notwithstanding any
notice to the contrary, but in all events recognizing any properly made transfers.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Stockholder
Matters</U>. Any stockholder action, approval or consent required, desired or otherwise sought by the Corporation pursuant to the
BCL, this Certificate of Amendment or otherwise with respect to the issuance of the Series A Convertible Preferred Stock or the
Common Stock issuable upon conversion thereof may be effected by written consent of the Corporation's stockholders or at a duly
called meeting of the Corporation's stockholders, all in accordance with the applicable rules and regulations of the BCL and the
applicable provisions hereof. This provision is intended to comply with the applicable sections of the BCL permitting stockholder
action, approval and consent affected by written consent in lieu of a meeting.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>General
Provisions</U>. In addition to the above provisions with respect to Series A Convertible Preferred Stock, such Series A Convertible
Preferred Stock shall be subject to and be entitled to the benefit of the provisions set forth in the Certificate of Incorporation
of the Corporation with respect to preferred stock of the Corporation generally.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">18.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Disclosure</U>.
Upon receipt or delivery by the Corporation of any notice in accordance with the terms of this Certificate of Amendment, unless
the Corporation has in good faith determined that the matters relating to such notice do not constitute material, nonpublic information
relating to the Corporation or any of its Subsidiaries, the Corporation shall within one (1) Business Day after any such receipt
or delivery publicly disclose such material, nonpublic information on a Current Report on Form 8-K or otherwise. In the event that
the Corporation believes that a notice contains material, nonpublic information relating to the Corporation or its Subsidiaries,
the Corporation so shall indicate to the Holders contemporaneously with delivery of such notice, and in the absence of any such
indication, the Holders shall be allowed to presume that all matters relating to such notice do not constitute material, nonpublic
information relating to the Corporation or its Subsidiaries.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">5.</TD><TD STYLE="text-align: justify">This Certificate of Amendment to the [Certificate of
Incorporation] was authorized by the Board of Directors and shareholders of the Corporation.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">IN WITNESS WHEREOF, the
undersigned has signed this <FONT STYLE="color: black">Certificate of Amendment</FONT> on the [__] day of [____] 2012, and affirms
the statements contained therein as true under the penalties of perjury.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: justify">DOCUMENT SECURITY SYSTEMS, INC.</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 3%">By:</TD>
    <TD STYLE="width: 35%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 12%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Name:</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Its: Chief Executive Officer</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>EXHIBIT I</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">Reference is made to
the Certificate of Amendment of [the Certificate of Incorporation] of <FONT STYLE="color: black">Document Security Systems, Inc.</FONT>
(the &quot;<B>Certificate of Amendment</B>&quot;). In accordance with and pursuant to the Certificate of Amendment, the undersigned
hereby elects to convert the number of shares of Series A Convertible Preferred Stock, par value $0.02 per share (the &quot;<B>Series
A Convertible Preferred Stock</B>&quot;), of <FONT STYLE="color: black">Document Security Systems, Inc.</FONT>, a New York corporation
(the &quot;<B>Corporation</B>&quot;), indicated below into shares of Common Stock, par value $0.02 per share (the &quot;<B>Common
Stock</B>&quot;), of the Corporation, as of the date specified below. The undersigned represents and warrants that such conversion
is not prohibited by Section 6(i) of the Certificate of Amendment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 94%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-indent: 0in; text-align: justify">Date&nbsp;of&nbsp;Conversion:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-indent: 0in; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 94%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-indent: 0in; text-align: justify">Number&nbsp;of&nbsp;shares&nbsp;of&nbsp;Series&nbsp;A&nbsp;Convertible&nbsp;Preferred&nbsp;Stock&nbsp;to&nbsp;be&nbsp;converted:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-indent: 0in; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 94%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-indent: 0in; text-align: justify">Stock&nbsp;certificate&nbsp;no(s).&nbsp;of&nbsp;Series&nbsp;A&nbsp;Convertible&nbsp;Preferred&nbsp;Stock&nbsp;to&nbsp;be&nbsp;converted:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-indent: 0in; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 94%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-indent: 0in; text-align: justify">Tax&nbsp;ID&nbsp;Number&nbsp;(If&nbsp;applicable):&nbsp;</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-indent: 0in; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-align: justify">Please&nbsp;confirm&nbsp;the&nbsp;following&nbsp;information:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 94%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-indent: 0in; text-align: justify">Conversion&nbsp;Price:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-indent: 0in; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 94%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-indent: 0in; text-align: justify">Number&nbsp;of&nbsp;shares&nbsp;of&nbsp;Common&nbsp;Stock&nbsp;to&nbsp;be&nbsp;issued:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-indent: 0in; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">Please issue the Common
Stock into which the Series A Convertible Preferred Stock are being converted in the following name and to the following address:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-align: justify">Issue&nbsp;to:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-align: justify">Address:&nbsp;</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-align: justify">Telephone&nbsp;Number:&nbsp;</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-align: justify">Facsimile&nbsp;Number:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 60%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-align: justify">Authorization:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%; text-align: justify">By:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 40%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%; text-align: justify">Title:</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Dated:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 94%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-align: justify">Account&nbsp;Number&nbsp;(if&nbsp;electronic&nbsp;book&nbsp;entry&nbsp;transfer):</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 94%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 5%; text-align: justify">Transaction&nbsp;Code&nbsp;Number&nbsp;(if&nbsp;electronic&nbsp;book&nbsp;entry&nbsp;transfer):</TD>
    <TD STYLE="width: 95%; border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ACKNOWLEDGMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The Corporation hereby acknowledges this Conversion Notice and
hereby directs [______] to issue the above indicated number of shares of Common Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD COLSPAN="3" STYLE="font-weight: bold; text-align: justify">DOCUMENT SECURITY SYSTEMS, INC.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 5%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 35%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 10%; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">By:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Name:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Title:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3in; text-align: justify">&nbsp;</P>



<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>ANNEX H</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DOCUMENT SECURITY SYSTEMS, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>2013 EMPLOYEE, DIRECTOR AND CONSULTANT
EQUITY INCENTIVE PLAN</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">1.</FONT></TD><TD STYLE="text-align: justify"><U>DEFINITIONS.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless otherwise specified
or unless the context otherwise requires, the following terms, as used in this Document Security Systems, Inc. 2013 Employee, Director
and Consultant Equity Incentive Plan, have the following meanings:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Administrator</U> means the
Board of Directors, unless it has delegated power to act on its behalf to the Committee, in which case the Administrator means
the Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Affiliate</U> means a corporation
which, for purposes of Section 424 of the Code, is a parent or subsidiary of the Company, direct or indirect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Agreement</U> means an agreement
between the Company and a Participant delivered pursuant to the Plan and pertaining to a Stock Right, in such form as the Administrator
shall approve.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Board of Directors</U> means
the Board of Directors of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Cause</U> means, with respect
to a Participant (a) dishonesty with respect to the Company or any Affiliate, (b) insubordination, substantial malfeasance or non-feasance
of duty, (c) unauthorized disclosure of confidential information, (d)&nbsp;breach by a Participant of any provision of any employment,
consulting, advisory, nondisclosure, non-competition or similar agreement between the Participant and the Company or any Affiliate,
and (e) conduct substantially prejudicial to the business of the Company or any Affiliate; provided, however, that any provision
in an agreement between a Participant and the Company or an Affiliate, which contains a conflicting definition of Cause for termination
and which is in effect at the time of such termination, shall supersede this definition with respect to that Participant. The determination
of the Administrator as to the existence of Cause will be conclusive on the Participant and the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Code</U> means the United States
Internal Revenue Code of 1986, as amended<FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"> </FONT>including
any successor statute, regulation and guidance thereto.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Committee</U> means the committee
of the Board of Directors to which the Board of Directors has delegated power to act under or pursuant to the provisions of the
Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Common Stock</U> means shares
of the Company&rsquo;s common stock, $0.02 par value per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Company</U> means Document Security
Systems, Inc., a New York corporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Consultant</U> means any natural
person who is an advisor or consultant that provides bona fide services to the Company or its Affiliates, provided that such services
are not in connection with the offer or sale of securities in a capital raising transaction, and do not directly or indirectly
promote or maintain a market for the Company&rsquo;s or its Affiliates&rsquo; securities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Disability</U> or <U>Disabled</U>
means permanent and total disability as defined in Section 22(e)(3) of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Employee</U> means any employee
of the Company or of an Affiliate (including, without limitation, an employee who is also serving as an officer or director of
the Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or more Stock Rights under the
Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Exchange Act</U> means the Securities
Exchange Act of 1934, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Fair Market Value</U> of a Share
of Common Stock means:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(1)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>If the Common Stock is listed on a national securities exchange or traded in the over-the-counter market and sales
prices are regularly reported for the Common Stock, the closing or, if not applicable, the last price of the Common Stock on the
composite tape or other comparable reporting system for the trading day on the applicable date and if such applicable date is not
a trading day, the last market trading day prior to such date;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(2)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>If the Common Stock is not traded on a national securities exchange but is traded on the over-the-counter market,
if sales prices are not regularly reported for the Common Stock for the trading day referred to in clause&nbsp;(1), and if bid
and asked prices for the Common Stock are regularly reported, the mean between the bid and the asked price for the Common Stock
at the close of trading in the over-the-counter market for the trading day on which Common Stock was traded on the applicable date
and if such applicable date is not a trading day, the last market trading day prior to such date; and</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(3)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>If the Common Stock is neither listed on a national securities exchange nor traded in the over-the-counter market,
such value as the Administrator, in good faith, shall determine.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>ISO</U> means an option intended
to qualify as an incentive stock option under Section&nbsp;422 of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Non-Qualified Option</U> means
an option which is not intended to qualify as an ISO.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Option</U> means an ISO or Non-Qualified
Option granted under the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Participant</U> means an Employee,
director or Consultant of the Company or an Affiliate to whom one or more Stock Rights are granted under the Plan.<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>
</SUP></FONT>As used herein, &ldquo;Participant&rdquo; shall include &ldquo;Participant&rsquo;s Survivors&rdquo; where the context
requires.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Plan</U> means this Document
Security Systems, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Securities Act</U> means the
Securities Act of 1933, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Shares</U> means shares of the
Common Stock as to which Stock Rights have been or may be granted under the Plan or any shares of capital stock into which the
Shares are changed or for which they are exchanged within the provisions of Paragraph&nbsp;3 of the Plan. The Shares issued under
the Plan may be authorized and unissued shares or shares held by the Company in its treasury, or both.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Stock-Based Award</U> means
a grant by the Company under the Plan of an equity award or an equity based award which is not an Option or a Stock Grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Stock Grant</U> means a grant
by the Company of Shares under the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Stock Right</U> means a right
to Shares or the value of Shares of the Company granted pursuant to the Plan -- an ISO, a Non-Qualified Option, a Stock Grant or
a Stock-Based Award.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><U>Survivor</U> means a deceased
Participant&rsquo;s legal representatives and/or any person or persons who acquired the Participant&rsquo;s rights to a Stock Right
by will or by the laws of descent and distribution.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">2.</FONT></TD><TD STYLE="text-align: justify"><U>PURPOSES OF THE PLAN.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Plan is intended
to encourage ownership of Shares by Employees and directors of and certain Consultants to the Company and its Affiliates in order
to attract and retain such people, to induce them to work for the benefit of the Company or of an Affiliate and to provide additional
incentive for them to promote the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs, Non-Qualified
Options, Stock Grants and Stock-Based Awards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">3.</FONT></TD><TD STYLE="text-align: justify"><U>SHARES SUBJECT TO THE PLAN.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The number of Shares which may be issued from time to time pursuant to this Plan shall be <B>[Number of Shares]</B>,
or the equivalent of such number of Shares after the Administrator, in its sole discretion, has interpreted the effect of any stock
split, stock dividend, combination, recapitalization or similar transaction in accordance with Paragraph 24 of the Plan.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
If an Option ceases to be &ldquo;outstanding&rdquo;, in whole or in part (other than by exercise), or if the Company shall reacquire
(at not more than its original issuance price) any Shares issued pursuant to a Stock Grant or Stock-Based Award, or if any Stock
Right expires or is forfeited, cancelled, or otherwise terminated or results in any Shares not being issued, the unissued or reacquired
Shares which were subject to such Stock Right shall again be available for issuance from time to time pursuant to this Plan. Notwithstanding
the foregoing, if a Stock Right is exercised, in whole or in part, by tender of Shares or if the Company&rsquo;s or an Affiliate&rsquo;s
tax withholding obligation is satisfied by withholding Shares, the number of Shares deemed to have been issued under the Plan for
purposes of the limitation set forth in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right
or portion thereof, and not the net number of Shares actually issued. However, in the case of ISOs, the foregoing provisions shall
be subject to any limitations under the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">4.</FONT></TD><TD STYLE="text-align: justify"><U>ADMINISTRATION OF THE PLAN.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Administrator of
the Plan will be the Board of Directors, except to the extent the Board of Directors delegates its authority to the Committee,
in which case the Committee shall be the Administrator. Subject to the provisions of the Plan, the Administrator is authorized
to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Interpret the provisions of the Plan and all Stock Rights and to make all rules and determinations which it deems
necessary or advisable for the administration of the Plan;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Determine which Employees, directors and Consultants shall be granted Stock Rights;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Determine the number of Shares for which a Stock Right or Stock Rights shall be granted, provided, however, that
in no event shall Stock Rights with respect to more than [___] Shares be granted to any Participant in any fiscal year;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(d)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Specify the terms and conditions upon which a Stock Right or Stock Rights may be granted;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(e)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Amend any term or condition of any outstanding Stock Right, including, without limitation, to accelerate the vesting
schedule or extend the expiration date, provided that (i) such term or condition as amended is permitted by the Plan; (ii) any
such amendment shall not impair the rights of a Participant under any Stock Right previously granted without such Participant&rsquo;s
consent or in the event of death of the Participant the Participant&rsquo;s Survivors; and (iii) any such amendment shall be made
only after the Administrator determines whether such amendment would cause any adverse tax consequences to the Participant, including,
but not limited to, the annual vesting limitation contained in Section 422(d) of the Code and described in Paragraph 6(b)(iv) below
with respect to ISOs and pursuant to Section 409A of the Code; and</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(f)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Adopt any appendices applicable to residents of any specified jurisdiction as it deems necessary or appropriate in
order to comply with or take advantage of any tax or other laws applicable to the Company, any Affiliate or to Participants or
to otherwise facilitate the administration of the Plan, which appendices may include additional restrictions or conditions applicable
to Stock Rights or Shares issuable pursuant to a Stock Right;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">provided, however, that all such interpretations,
rules, determinations, terms and conditions shall be made and prescribed in the context of not causing any adverse tax consequences
under Section 409A of the Code and preserving the tax status under Section 422 of the Code of those Options which are designated
as ISOs. Subject to the foregoing, the interpretation and construction by the Administrator of any provisions of the Plan or of
any Stock Right granted under it shall be final, unless otherwise determined by the Board of Directors, if the Administrator is
the Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any action under the Plan that
would otherwise be the responsibility of the Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">To the extent permitted
under applicable law, the Board of Directors or the Committee may allocate all or any portion of its responsibilities and powers
to any one or more of its members and may delegate all or any portion of its responsibilities and powers to any other person selected
by it. The Board of Directors or the Committee may revoke any such allocation or delegation at any time. Notwithstanding the foregoing,
only the Board of Directors or the Committee shall be authorized to grant a Stock Right to any director of the Company or to any
&ldquo;officer&rdquo; of the Company as defined by Rule 16a-1 under the Exchange Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">5.</FONT></TD><TD STYLE="text-align: justify"><U>ELIGIBILITY FOR PARTICIPATION.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Administrator will,
in its sole discretion, name the Participants in the Plan; provided, however, that each Participant must be an Employee, director
or Consultant of the Company or of an Affiliate at the time a Stock Right is granted. Notwithstanding the foregoing, the Administrator
may authorize the grant of a Stock Right to a person not then an Employee, director or Consultant of the Company or of an Affiliate;
provided, however, that the actual grant of such Stock Right shall be conditioned upon such person becoming eligible to become
a Participant at or prior to the time of the execution of the Agreement evidencing such Stock Right. ISOs may be granted only to
Employees who are deemed to be residents of the United States for tax purposes. Non-Qualified Options, Stock Grants and Stock-Based
Awards may be granted to any Employee, director or Consultant of the Company or an Affiliate. The granting of any Stock Right to
any individual shall neither entitle that individual to, nor disqualify him or her from, participation in any other grant of Stock
Rights or any grant under any other benefit plan established by the Company or any Affiliate for Employees, directors or Consultants.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">6.</FONT></TD><TD STYLE="text-align: justify"><U>TERMS AND CONDITIONS OF OPTIONS.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Option shall be
set forth in writing in an Option Agreement, duly executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Administrator may provide that Options be granted subject to such terms and conditions, consistent
with the terms and conditions specifically required under this Plan, as the Administrator may deem appropriate including, without
limitation, subsequent approval by the shareholders of the Company of this Plan or any amendments thereto. The Option Agreements
shall be subject to at least the following terms and conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Non-Qualified Options</U>: Each Option intended to be a Non-Qualified Option shall be subject to the terms and
conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the following
minimum standards for any such Non-Qualified Option:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(i)</FONT></TD><TD STYLE="text-align: justify"><U>Exercise Price</U>: Each Option Agreement shall state the exercise price (per share) of the
Shares covered by each Option, which exercise price shall be determined by the Administrator and shall be at least equal to the
Fair Market Value per share of Common Stock on the date of grant of the Option provided, that if the exercise price is less than
Fair Market Value, the terms of such Option must comply with the requirements of Section 409A of the Code unless granted to a Consultant
to whom Section 409A of the Code does not apply.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(ii)</FONT></TD><TD STYLE="text-align: justify"><U>Number of Shares</U>: Each Option Agreement shall state the number of Shares to which it pertains.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(iii)</FONT></TD><TD STYLE="text-align: justify"><U>Option Periods</U>: Each Option Agreement shall state the date or dates on which it first is
exercisable and the date after which it may no longer be exercised, and may provide that the Option rights accrue or become exercisable
in installments over a period of months or years, or upon the occurrence of certain conditions or the attainment of stated goals
or events.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(iv)</FONT></TD><TD STYLE="text-align: justify"><U>Option Conditions</U>: Exercise of any Option may be conditioned upon the Participant&rsquo;s
execution of a Share purchase agreement in form satisfactory to the Administrator providing for certain protections for the Company
and its other shareholders, including requirements that:</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: black">A.</FONT></TD><TD STYLE="text-align: justify">The Participant&rsquo;s or the Participant&rsquo;s Survivors&rsquo; right to sell or transfer the
Shares may be restricted; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: black">B.</FONT></TD><TD STYLE="text-align: justify">The Participant or the Participant&rsquo;s Survivors may be required to execute letters of investment
intent and must also acknowledge that the Shares will bear legends noting any applicable restrictions.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(v)</FONT></TD><TD STYLE="text-align: justify"><U>Term of Option</U>: Each Option shall terminate not more than ten years from the date of the
grant or at such earlier time as the Option Agreement may provide.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>ISOs</U>: Each Option intended to be an ISO shall be issued only to an Employee who is deemed to be a resident
of the United States for tax purposes, and shall be subject to the following terms and conditions, with such additional restrictions
or changes as the Administrator determines are appropriate but not in conflict with Section 422 of the Code and relevant regulations
and rulings of the Internal Revenue Service:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(i)</FONT></TD><TD STYLE="text-align: justify"><U>Minimum standards</U>: The ISO shall meet the minimum standards required of Non-Qualified Options,
as described in Paragraph 6(a) above, except clause (i) and (v) thereunder.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(ii)</FONT></TD><TD STYLE="text-align: justify"><U>Exercise Price</U>: Immediately before the ISO is granted, if the Participant owns, directly
or by reason of the applicable attribution rules in Section&nbsp;424(d) of the Code:</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: black">A.</FONT></TD><TD STYLE="text-align: justify">10% <U>or less</U> of the total combined voting power of all classes of stock of the Company or
an Affiliate, the exercise price per share of the Shares covered by each ISO shall not be less than 100% of the Fair Market Value
per share of the Common Stock on the date of grant of the Option; or</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: black">B.</FONT></TD><TD STYLE="text-align: justify">More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate,
the exercise price per share of the Shares covered by each ISO shall not be less than 110% of the Fair Market Value per share of
the Common Stock on the date of grant of the Option.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(iii)</FONT></TD><TD STYLE="text-align: justify"><U>Term of Option</U>: For Participants who own:</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: black">A.</FONT></TD><TD STYLE="text-align: justify">10% <U>or less</U> of the total combined voting power of all classes of stock of the Company or
an Affiliate, each ISO shall terminate not more than ten years from the date of the grant or at such earlier time as the Option
Agreement may provide; or</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: black">B.</FONT></TD><TD STYLE="text-align: justify">More than 10% of the total combined voting power of all classes of stock of the Company or an Affiliate,
each ISO shall terminate not more than five years from the date of the grant or at such earlier time as the Option Agreement may
provide.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(iv)</FONT></TD><TD STYLE="text-align: justify"><U>Limitation on Yearly Exercise</U>: The Option Agreements shall restrict the amount of ISOs which
may become exercisable in any calendar year (under this or any other ISO plan of the Company or an Affiliate) so that the aggregate
Fair Market Value (determined on the date each ISO is granted) of the stock with respect to which ISOs are exercisable for the
first time by the Participant in any calendar year does not exceed $100,000.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">7.</FONT></TD><TD STYLE="text-align: justify"><U>TERMS AND CONDITIONS OF STOCK GRANTS.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Stock Grant to
a Participant shall state the principal terms in an Agreement duly executed by the Company and, to the extent required by law or
requested by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain
terms and conditions which the Administrator determines to be appropriate and in the best interest of the Company, subject to the
following minimum standards:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each Agreement shall state the purchase price per share, if any, of the Shares covered by each Stock Grant, which
purchase price shall be determined by the Administrator but shall not be less than the minimum consideration required by the Delaware
General Corporation Law, if any, on the date of the grant of the Stock Grant;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each Agreement shall state the number of Shares to which the Stock Grant pertains; and</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Each Agreement shall include the terms of any right of the Company to restrict or reacquire the Shares subject to
the Stock Grant, including the time and events upon which such rights shall accrue and the purchase price therefor, if any.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">8.</FONT></TD><TD STYLE="text-align: justify"><U>TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Administrator shall
have the right to grant other Stock-Based Awards based upon the Common Stock having such terms and conditions as the Administrator
may determine, including, without limitation, the grant of Shares based upon certain conditions, the grant of securities convertible
into Shares and the grant of stock appreciation rights, phantom stock awards or stock units. The principal terms of each Stock-Based
Award shall be set forth in an Agreement, duly executed by the Company and, to the extent required by law or requested by the Company,
by the Participant. The Agreement shall be in a form approved by the Administrator and shall contain terms and conditions which
the Administrator determines to be appropriate and in the best interest of the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company intends
that the Plan and any Stock-Based Awards granted hereunder be exempt from the application of Section 409A of the Code or meet the
requirements of paragraphs (2), (3) and (4) of subsection (a) of Section 409A of the Code, to the extent applicable, and be operated
in accordance with Section 409A so that any compensation deferred under any Stock-Based Award (and applicable investment earnings)
shall not be included in income under Section 409A of the Code. Any ambiguities in the Plan shall be construed to affect the intent
as described in this Paragraph 8.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">9.</FONT></TD><TD STYLE="text-align: justify"><U>EXERCISE OF OPTIONS AND ISSUE OF SHARES.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">An Option (or any part
or installment thereof) shall be exercised by giving written notice to the Company or its designee (in a form acceptable to the
Administrator, which may include electronic notice), together with provision for payment of the aggregate exercise price in accordance
with this Paragraph for the Shares as to which the Option is being exercised, and upon compliance with any other condition(s) set
forth in the Option Agreement. Such notice shall be signed by the person exercising the Option (which signature may be provided
electronically in a form acceptable to the Administrator), shall state the number of Shares with respect to which the Option is
being exercised and shall contain any representation required by the Plan or the Option Agreement. Payment of the exercise price
for the Shares as to which such Option is being exercised shall be made (a)&nbsp;in United States dollars in cash or by check,
or (b)&nbsp;at the discretion of the Administrator, through delivery of shares of Common Stock held for at least six months (if
required to avoid negative accounting treatment) having a Fair Market Value equal as of the date of the exercise to the aggregate
cash exercise price for the number of Shares as to which the Option is being exercised, or (c)&nbsp;at the discretion of the Administrator,
by having the Company retain from the Shares otherwise issuable upon exercise of the Option, a number of Shares having a Fair Market
Value equal as of the date of exercise to the aggregate exercise price for the number of Shares as to which the Option is being
exercised, or (d)&nbsp;at the discretion of the Administrator, in accordance with a cashless exercise program established with
a securities brokerage firm, and approved by the Administrator, or (e)&nbsp;at the discretion of the Administrator, by any combination
of (a), (b), (c), and (d) above or (f) at the discretion of the Administrator, by payment of such other lawful consideration as
the Administrator may determine. Notwithstanding the foregoing, the Administrator shall accept only such payment on exercise of
an ISO as is permitted by Section 422 of the Code.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company shall then
reasonably promptly deliver the Shares as to which such Option was exercised to the Participant (or to the Participant&rsquo;s
Survivors, as the case may be). In determining what constitutes &ldquo;reasonably promptly,&rdquo; it is expressly understood that
the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or &ldquo;blue sky&rdquo; laws) which requires the Company to take any action with respect
to the Shares prior to their issuance. The Shares shall, upon delivery, be fully paid, non-assessable Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">10.</FONT></TD><TD STYLE="text-align: justify"><U>PAYMENT IN CONNECTION WITH THE ISSUANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND ISSUE OF
SHARES.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Any Stock Grant or
Stock-Based Award requiring payment of a purchase price for the Shares as to which such Stock Grant or Stock-Based Award is being
granted shall be made (a) in United States dollars in cash or by check, or (b) at the discretion of the Administrator, through
delivery of shares of Common Stock held for at least six months (if required to avoid negative accounting treatment) and having
a Fair Market Value equal as of the date of payment to the purchase price of the Stock Grant or Stock-Based Award, or (c) at the
discretion of the Administrator, by any combination of (a) and (b) above; or (d) at the discretion of the Administrator, by payment
of such other lawful consideration as the Administrator may determine.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company shall when
required by the applicable Agreement, reasonably promptly deliver the Shares as to which such Stock Grant or Stock-Based Award
was made to the Participant (or to the Participant&rsquo;s Survivors, as the case may be), subject to any escrow provision set
forth in the applicable Agreement. In determining what constitutes &ldquo;reasonably promptly,&rdquo; it is expressly understood
that the issuance and delivery of the Shares may be delayed by the Company in order to comply with any law or regulation (including,
without limitation, state securities or &ldquo;blue sky&rdquo; laws) which requires the Company to take any action with respect
to the Shares prior to their issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">11.</FONT></TD><TD STYLE="text-align: justify"><U>RIGHTS AS A SHAREHOLDER.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No Participant to whom
a Stock Right has been granted shall have rights as a shareholder with respect to any Shares covered by such Stock Right except
after due exercise of an Option or issuance of Shares as set forth in any Agreement, tender of the aggregate exercise or purchase
price, if any, for the Shares being purchased and registration of the Shares in the Company&rsquo;s share register in the name
of the Participant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">12.</FONT></TD><TD STYLE="text-align: justify"><U>ASSIGNABILITY AND TRANSFERABILITY OF STOCK RIGHTS.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">By its terms, a Stock
Right granted to a Participant shall not be transferable by the Participant other than (i) by will or by the laws of descent and
distribution, or (ii) as approved by the Administrator in its discretion and set forth in the applicable Agreement provided that
no Stock Right may be transferred by a Participant for value. Notwithstanding the foregoing, an ISO transferred except in compliance
with clause (i) above shall no longer qualify as an ISO. The designation of a beneficiary of a Stock Right by a Participant, with
the prior approval of the Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer prohibited
by this Paragraph. Except as provided above during the Participant&rsquo;s lifetime a Stock Right shall only be exercisable by
or issued to such Participant (or his or her legal representative) and shall not be assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise) and shall not be subject to execution, attachment or similar process. Any attempted
transfer, assignment, pledge, hypothecation or other disposition of any Stock Right or of any rights granted thereunder contrary
to the provisions of this Plan, or the levy of any attachment or similar process upon a Stock Right, shall be null and void.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">13.</FONT></TD><TD STYLE="text-align: justify"><U>EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise
provided in a Participant&rsquo;s Option Agreement, in the event of a termination of service (whether as an Employee, director
or Consultant) with the Company or an Affiliate before the Participant has exercised an Option, the following rules apply:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate (for any reason
other than termination for Cause, Disability, or death for which events there are special rules in Paragraphs 14, 15, and 16, respectively),
may exercise any Option granted to him or her to the extent that the Option is exercisable on the date of such termination of service,
but only within such term as the Administrator has designated in a Participant&rsquo;s Option Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as provided in Subparagraph (c) below, or Paragraph 15 or 16, in no event may an Option intended to be an
ISO, be exercised later than three months after the Participant&rsquo;s termination of employment.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The provisions of this Paragraph, and not the provisions of Paragraph 15 or 16, shall apply to a Participant who
subsequently becomes Disabled or dies after the termination of employment, director status or consultancy; provided, however, in
the case of a Participant&rsquo;s Disability or death within three months after the termination of employment, director status
or consultancy, the Participant or the Participant&rsquo;s Survivors may exercise the Option within one year after the date of
the Participant&rsquo;s termination of service, but in no event after the date of expiration of the term of the Option.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(d)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Notwithstanding anything herein to the contrary, if subsequent to a Participant&rsquo;s termination of employment,
termination of director status or termination of consultancy, but prior to the exercise of an Option, the Administrator determines
that, either prior or subsequent to the Participant&rsquo;s termination, the Participant engaged in conduct which would constitute
Cause, then such Participant shall forthwith cease to have any right to exercise any Option.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(e)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>A Participant to whom an Option has been granted under the Plan who is absent from the Company or an Affiliate because
of temporary disability (any disability other than a Disability as defined in Paragraph 1 hereof), or who is on leave of absence
for any purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence alone, to have terminated
such Participant&rsquo;s employment, director status or consultancy with the Company or with an Affiliate, except as the Administrator
may otherwise expressly provide; provided, however, that, for ISOs, any leave of absence granted by the Administrator of greater
than ninety days, unless pursuant to a contract or statute that guarantees the right to reemployment, shall cause such ISO to become
a Non-Qualified Option on the 181<SUP>st</SUP> day following such leave of absence.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(f)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Except as required by law or as set forth in a Participant&rsquo;s Option Agreement, Options granted under the Plan
shall not be affected by any change of a Participant&rsquo;s status within or among the Company and any Affiliates, so long as
the Participant continues to be an Employee, director or Consultant of the Company or any Affiliate.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">14.</FONT></TD><TD STYLE="text-align: justify"><U>EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR CAUSE.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise
provided in a Participant&rsquo;s Option Agreement, the following rules apply if the Participant&rsquo;s service (whether as an
Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause prior to the time that all his or her
outstanding Options have been exercised:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>All outstanding and unexercised Options as of the time the Participant is notified his or her service is terminated
for Cause will immediately be forfeited.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Cause is not limited to events which have occurred prior to a Participant&rsquo;s termination of service, nor is
it necessary that the Administrator&rsquo;s finding of Cause occur prior to termination. If the Administrator determines, subsequent
to a Participant&rsquo;s termination of service but prior to the exercise of an Option, that either prior or subsequent to the
Participant&rsquo;s termination the Participant engaged in conduct which would constitute Cause, then the right to exercise any
Option is forfeited.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">15.</FONT></TD><TD STYLE="text-align: justify"><U>EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise
provided in a Participant&rsquo;s Option Agreement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>A Participant who ceases to be an Employee, director or Consultant of the Company or of an Affiliate by reason of
Disability may exercise any Option granted to such Participant:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <!-- Field: /Page -->
<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(i)</FONT></TD><TD STYLE="text-align: justify">To the extent that the Option has become exercisable but has not been exercised on the date of
the Participant&rsquo;s termination of service due to Disability; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(ii)</FONT></TD><TD STYLE="text-align: justify">In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion
through the date of the Participant&rsquo;s termination of service due to Disability of any additional vesting rights that would
have accrued on the next vesting date had the Participant not become Disabled. The proration shall be based upon the number of
days accrued in the current vesting period prior to the date of the Participant&rsquo;s termination of service due to Disability.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>A Disabled Participant may exercise the Option only within the period ending one year after the date of the Participant&rsquo;s
termination of service due to Disability, notwithstanding that the Participant might have been able to exercise the Option as to
some or all of the Shares on a later date if the Participant had not been terminated due to Disability and had continued to be
an Employee, director or Consultant or, if earlier, within the originally prescribed term of the Option.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The Administrator shall make the determination both of whether Disability has occurred and the date of its occurrence
(unless a procedure for such determination is set forth in another agreement between the Company and such Participant, in which
case such procedure shall be used for such determination). If requested, the Participant shall be examined by a physician selected
or approved by the Administrator, the cost of which examination shall be paid for by the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">16.</FONT></TD><TD STYLE="text-align: justify"><U>EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise
provided in a Participant&rsquo;s Option Agreement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>In the event of the death of a Participant while the Participant is an Employee, director or Consultant of the Company
or of an Affiliate, such Option may be exercised by the Participant&rsquo;s Survivors:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(i)</FONT></TD><TD STYLE="text-align: justify">To the extent that the Option has become exercisable but has not been exercised on the date of
death; and</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black">(ii)</FONT></TD><TD STYLE="text-align: justify">In the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion
through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant
not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant&rsquo;s
date of death.</TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>If the Participant&rsquo;s Survivors wish to exercise the Option, they must take all necessary steps to exercise
the Option within one year after the date of death of such Participant, notwithstanding that the decedent might have been able
to exercise the Option as to some or all of the Shares on a later date if he or she had not died and had continued to be an Employee,
director or Consultant or, if earlier, within the originally prescribed term of the Option.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">17.</FONT></TD><TD STYLE="text-align: justify"><U>EFFECT OF TERMINATION OF SERVICE ON STOCK GRANTS AND STOCK-BASED AWARDS.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event of a termination
of service (whether as an Employee, director or Consultant) with the Company or an Affiliate for any reason before the Participant
has accepted a Stock Grant or a Stock-Based Award and paid the purchase price, if required, such grant shall terminate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For purposes of this
Paragraph 17 and Paragraph 18 below, a Participant to whom a Stock Grant has been issued under the Plan who is absent from work
with the Company or with an Affiliate because of temporary disability (any disability other than a Disability as defined in Paragraph
1 hereof), or who is on leave of absence for any purpose, shall not, during the period of any such absence, be deemed, by virtue
of such absence alone, to have terminated such Participant&rsquo;s employment, director status or consultancy with the Company
or with an Affiliate, except as the Administrator may otherwise expressly provide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, for purposes
of this Paragraph 17 and Paragraph 18 below, any change of employment or other service within or among the Company and any Affiliates
shall not be treated as a termination of employment, director status or consultancy so long as the Participant continues to be
an Employee, director or Consultant of the Company or any Affiliate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">18.</FONT></TD><TD STYLE="text-align: justify"><U>EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER THAN FOR CAUSE OR DEATH OR DISABILITY.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise
provided in a Participant&rsquo;s Stock Grant Agreement, in the event of a termination of service (whether as an Employee, director
or Consultant), other than termination for Cause, Disability, or death for which events there are special rules in Paragraphs 19,
20, and 21, respectively, before all forfeiture provisions or Company rights of repurchase shall have lapsed, then the Company
shall have the right to cancel or repurchase that number of Shares subject to a Stock Grant as to which the Company&rsquo;s forfeiture
or repurchase rights have not lapsed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">19.</FONT></TD><TD STYLE="text-align: justify"><U>EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR CAUSE.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise
provided in a Participant&rsquo;s Stock Grant Agreement, the following rules apply if the Participant&rsquo;s service (whether
as an Employee, director or Consultant) with the Company or an Affiliate is terminated for Cause:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>All Shares subject to any Stock Grant whether or not then subject to forfeiture or repurchase shall be immediately
subject to repurchase by the Company at par value.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Cause is not limited to events which have occurred prior to a Participant&rsquo;s termination of service, nor is
it necessary that the Administrator&rsquo;s finding of Cause occur prior to termination. If the Administrator determines, subsequent
to a Participant&rsquo;s termination of service, that either prior or subsequent to the Participant&rsquo;s termination the Participant
engaged in conduct which would constitute Cause, then all Shares subject to any Stock Grant that remained subject to forfeiture
provisions or as to which the Company had a repurchase right on the date of termination shall be immediately forfeited to the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">20.</FONT></TD><TD STYLE="text-align: justify"><U>EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR DISABILITY.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise
provided in a Participant&rsquo;s Stock Grant Agreement, the following rules apply if a Participant ceases to be an Employee, director
or Consultant of the Company or of an Affiliate by reason of Disability: to the extent the forfeiture provisions or the Company&rsquo;s
rights of repurchase have not lapsed on the date of Disability, they shall be exercisable; provided, however, that in the event
such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse to the extent of a
pro rata portion of the Shares subject to such Stock Grant through the date of Disability as would have lapsed had the Participant
not become Disabled. The proration shall be based upon the number of days accrued prior to the date of Disability.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Administrator shall
make the determination both as to whether Disability has occurred and the date of its occurrence (unless a procedure for such determination
is set forth in another agreement between the Company and such Participant, in which case such procedure shall be used for such
determination). If requested, the Participant shall be examined by a physician selected or approved by the Administrator, the cost
of which examination shall be paid for by the Company.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">21.</FONT></TD><TD STYLE="text-align: justify"><U>EFFECT ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR CONSULTANT.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as otherwise
provided in a Participant&rsquo;s Stock Grant Agreement, the following rules apply in the event of the death of a Participant while
the Participant is an Employee, director or Consultant of the Company or of an Affiliate: to the extent the forfeiture provisions
or the Company&rsquo;s rights of repurchase have not lapsed on the date of death, they shall be exercisable; provided, however,
that in the event such forfeiture provisions or rights of repurchase lapse periodically, such provisions or rights shall lapse
to the extent of a pro rata portion of the Shares subject to such Stock Grant through the date of death as would have lapsed had
the Participant not died. The proration shall be based upon the number of days accrued prior to the Participant&rsquo;s date of
death.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">22.</FONT></TD><TD STYLE="text-align: justify"><U>PURCHASE FOR INVESTMENT.</U></TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Unless the offering
and sale of the Shares shall have been effectively registered under the Securities Act, the Company shall be under no obligation
to issue Shares under the Plan unless and until the following conditions have been fulfilled:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The person who receives a Stock Right shall warrant to the Company, prior to the receipt of Shares, that such person
is acquiring such Shares for his or her own account, for investment, and not with a view to, or for sale in connection with, the
distribution of any such Shares, in which event the person acquiring such Shares shall be bound by the provisions of the following
legend (or a legend in substantially similar form) which shall be endorsed upon the certificate evidencing the Shares issued pursuant
to such exercise or such grant:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify">&ldquo;The shares represented
by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act
of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration
under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws.&rdquo;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>At the discretion of the Administrator, the Company shall have received an opinion of its counsel that the Shares
may be issued in compliance with the Securities Act without registration thereunder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">23.</FONT></TD><TD STYLE="text-align: justify"><U>DISSOLUTION OR LIQUIDATION OF THE COMPANY.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon the dissolution
or liquidation of the Company, all Options granted under this Plan which as of such date shall not have been exercised and all
Stock Grants and Stock-Based Awards which have not been accepted, to the extent required under the applicable Agreement, will terminate
and become null and void; provided, however, that if the rights of a Participant or a Participant&rsquo;s Survivors have not otherwise
terminated and expired, the Participant or the Participant&rsquo;s Survivors will have the right immediately prior to such dissolution
or liquidation to exercise or accept any Stock Right to the extent that the Stock Right is exercisable or subject to acceptance
as of the date immediately prior to such dissolution or liquidation. Upon the dissolution or liquidation of the Company, any outstanding
Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or specifically provided in the
applicable Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">24.</FONT></TD><TD STYLE="text-align: justify"><U>ADJUSTMENTS.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Upon the occurrence
of any of the following events, a Participant&rsquo;s rights with respect to any Stock Right granted to him or her hereunder shall
be adjusted as hereinafter provided, unless otherwise specifically provided in a Participant&rsquo;s Agreement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Stock Dividends and Stock Splits</U>. If (i)&nbsp;the shares of Common Stock shall be subdivided or combined into
a greater or smaller number of shares or if the Company shall issue any shares of Common Stock as a stock dividend on its outstanding
Common Stock, or (ii)&nbsp;additional shares or new or different shares or other securities of the Company or other non-cash assets
are distributed with respect to such shares of Common Stock, each Stock Right and the number of shares of Common Stock deliverable
thereunder shall be appropriately increased or decreased proportionately, and appropriate adjustments shall be made including,
in the exercise or purchase price per share, to reflect such events. The number of Shares subject to the limitations in Paragraph
3(a) and 4(c) shall also be proportionately adjusted upon the occurrence of such events.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Corporate Transactions</U>. If the Company is to be consolidated with or acquired by another entity in a merger,
consolidation, or sale of all or substantially all of the Company&rsquo;s assets other than a transaction to merely change the
state of incorporation (a &ldquo;Corporate Transaction&rdquo;), the Administrator or the board of directors of any entity assuming
the obligations of the Company hereunder (the &ldquo;Successor Board&rdquo;), shall, as to outstanding Options, either (i) make
appropriate provision for the continuation of such Options by substituting on an equitable basis for the Shares then subject to
such Options either the consideration payable with respect to the outstanding shares of Common Stock in connection with the Corporate
Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the Participants, provide that such
Options must be exercised (either (A) to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options
being made partially or fully exercisable for purposes of this Subparagraph), within a specified number of days of the date of
such notice, at the end of which period such Options which have not been exercised shall terminate [whether or not vested]; or
(iii) terminate such Options in exchange for payment of an amount equal to the consideration payable upon consummation of such
Corporate Transaction to a holder of the number of shares of Common Stock into which such Option would have been exercisable (either
(A) to the extent then exercisable or, (B) at the discretion of the Administrator, any such Options being made partially or fully
exercisable for purposes of this Subparagraph) <U>less the aggregate</U> exercise price thereof. For purposes of determining the
payments to be made pursuant to Subclause (iii) above, in the case of a Corporate Transaction the consideration for which, in whole
or in part, is other than cash, the consideration other than cash shall be valued at the fair value thereof as determined in good
faith by the Board of Directors.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">With respect to outstanding
Stock Grants, the Administrator or the Successor Board, shall make appropriate provision for the continuation of such Stock Grants
on the same terms and conditions by substituting on an equitable basis for the Shares then subject to such Stock Grants either
the consideration payable with respect to the outstanding Shares of Common Stock in connection with the Corporate Transaction or
securities of any successor or acquiring entity. In lieu of the foregoing, in connection with any Corporate Transaction, the Administrator
may provide that, upon consummation of the Corporate Transaction, each outstanding Stock Grant shall be terminated in exchange
for payment of an amount equal to the consideration payable upon consummation of such Corporate Transaction to a holder of the
number of shares of Common Stock comprising such Stock Grant (to the extent such Stock Grant is no longer subject to any forfeiture
or repurchase rights then in effect or, at the discretion of the Administrator, all forfeiture and repurchase rights being waived
upon such Corporate Transaction).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In taking any of the
actions permitted under this Paragraph 24(b), the Administrator shall not be obligated by the Plan to treat all Stock Rights, all
Stock Rights held by a Participant, or all Stock Rights of the same type, identically.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Recapitalization or Reorganization</U>. In the event of a recapitalization or reorganization of the Company other
than a Corporate Transaction pursuant to which securities of the Company or of another corporation are issued with respect to the
outstanding shares of Common Stock, a Participant upon exercising an Option or accepting a Stock Grant after the recapitalization
or reorganization shall be entitled to receive for the price paid upon such exercise or acceptance if any, the number of replacement
securities which would have been received if such Option had been exercised or Stock Grant accepted prior to such recapitalization
or reorganization.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(d)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Adjustments to Stock-Based Awards</U>. Upon the happening of any of the events described in Subparagraphs (a),
(b) or (c) above, any outstanding Stock-Based Award shall be appropriately adjusted to reflect the events described in such Subparagraphs.
The Administrator or the Successor Board shall determine the specific adjustments to be made under this Paragraph 24, including,
but not limited to the effect of any, Corporate Transaction and, subject to Paragraph 4, its determination shall be conclusive.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">(e)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Modification of Options</U>. Notwithstanding the foregoing, any adjustments made pursuant to Subparagraph (a),
(b) or (c) above with respect to Options shall be made only after the Administrator determines whether such adjustments would (i)
constitute a &ldquo;modification&rdquo; of any ISOs (as that term is defined in Section&nbsp;424(h) of the Code) or (ii) cause
any adverse tax consequences for the holders of Options, including, but not limited to, pursuant to Section 409A of the Code. If
the Administrator determines that such adjustments made with respect to Options would constitute a modification or other adverse
tax consequence, it may refrain from making such adjustments, unless the holder of an Option specifically agrees in writing that
such adjustment be made and such writing indicates that the holder has full knowledge of the consequences of such &ldquo;modification&rdquo;
on his or her income tax treatment with respect to the Option. This paragraph shall not apply to the acceleration of the vesting
of any ISO that would cause any portion of the ISO to violate the annual vesting limitation contained in Section 422(d) of the
Code, as described in Paragraph 6(b)(iv).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">25.</FONT></TD><TD STYLE="text-align: justify"><U>ISSUANCES OF SECURITIES.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares subject
to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends paid in cash or in property (including
without limitation, securities) of the Company prior to any issuance of Shares pursuant to a Stock Right.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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    <!-- Field: /Page -->
<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">26.</FONT></TD><TD STYLE="text-align: justify"><U>FRACTIONAL SHARES.</U></TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">No fractional shares
shall be issued under the Plan and the person exercising a Stock Right shall receive from the Company cash in lieu of such fractional
shares equal to the Fair Market Value thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">27.</FONT></TD><TD STYLE="text-align: justify"><U>CONVERSION OF ISO<FONT STYLE="text-transform: none">s</FONT> INTO NON-QUALIFIED OPTIONS; TERMINATION
OF ISO<FONT STYLE="text-transform: none">s</FONT>.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Administrator,
at the written request of any Participant, may in its discretion take such actions as may be necessary to convert such Participant&rsquo;s
ISOs (or any portions thereof) that have not been exercised on the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the Participant is an Employee of the Company or an Affiliate at the time
of such conversion. At the time of such conversion, the Administrator (with the consent of the Participant) may impose such conditions
on the exercise of the resulting Non-Qualified Options as the Administrator in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give any Participant the right to have
such Participant&rsquo;s ISOs converted into Non-Qualified Options, and no such conversion shall occur until and unless the Administrator
takes appropriate action. The Administrator, with the consent of the Participant, may also terminate any portion of any ISO that
has not been exercised at the time of such conversion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">28.</FONT></TD><TD STYLE="text-align: justify"><U>WITHHOLDING.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In the event that any
federal, state, or local income taxes, employment taxes, Federal Insurance Contributions Act (&ldquo;F.I.C.A.&rdquo;) withholdings
or other amounts are required by applicable law or governmental regulation to be withheld from the Participant&rsquo;s salary,
wages or other remuneration in connection with the issuance of a Stock Right or Shares under the Plan or for any other reason required
by law, the Company may withhold from the Participant&rsquo;s compensation, if any, or may require that the Participant advance
in cash to the Company, or to any Affiliate of the Company which employs or employed the Participant, the statutory minimum amount
of such withholdings unless a different withholding arrangement, including the use of shares of the Company&rsquo;s Common Stock
or a promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof, the fair market value of
the shares withheld for purposes of payroll withholding shall be determined in the manner set forth under the definition of Fair
Market Value provided in Paragraph 1 above, as of the most recent practicable date prior to the date of exercise. If the Fair Market
Value of the shares withheld is less than the amount of payroll withholdings required, the Participant may be required to advance
the difference in cash to the Company or the Affiliate employer. The Administrator in its discretion may condition the exercise
of an Option for less than the then Fair Market Value on the Participant&rsquo;s payment of such additional withholding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">29.</FONT></TD><TD STYLE="text-align: justify"><U>NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Each Employee who receives
an ISO must agree to notify the Company in writing immediately after the Employee makes a Disqualifying Disposition of any Shares
acquired pursuant to the exercise of an ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and includes
any disposition (including any sale or gift) of such Shares before the later of (a) two years after the date the Employee was granted
the ISO, or (b) one year after the date the Employee acquired Shares by exercising the ISO, except as otherwise provided in Section
424(c) of the Code. If the Employee has died before such Shares are sold, these holding period requirements do not apply and no
Disqualifying Disposition can occur thereafter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">30.</FONT></TD><TD STYLE="text-align: justify"><U>TERMINATION OF THE PLAN.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Plan will terminate
on <B>[Insert Date]</B>,<FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP> </SUP></FONT>the date which is ten years
from the <U>earlier</U> of the date of its adoption by the Board of Directors and the date of its approval by the shareholders
of the Company. The Plan may be terminated at an earlier date by vote of the shareholders or the Board of Directors of the Company;
provided, however, that any such earlier termination shall not affect any Agreements executed prior to the effective date of such
termination. Termination of the Plan shall not affect any Stock Rights theretofore granted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">31.</FONT></TD><TD STYLE="text-align: justify"><U>AMENDMENT OF THE PLAN AND AGREEMENTS.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Plan may be amended
by the shareholders of the Company. The Plan may also be amended by the Administrator, including, without limitation, to the extent
necessary to qualify any or all outstanding Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for
favorable federal income tax treatment as may be afforded incentive stock options under Section 422 of the Code (including deferral
of taxation upon exercise), and to the extent necessary to qualify the Shares issuable under the Plan for listing on any national
securities exchange or quotation in any national automated quotation system of securities dealers. In addition, if NYSE Amex amends
its corporate governance rules so that such rules no longer require stockholder approval of &ldquo;material amendments&rdquo; of
equity compensation plans, then, from and after the effective date of such an amendment to such rules, no amendment of the Plan
which (i)&nbsp;materially increases the number of shares to be issued under the Plan (other than to reflect a reorganization, stock
split, merger, spin-off or similar transaction); (ii) materially increases the benefits to Participants, including any material
change to: (a) permit a repricing (or decrease in exercise price) of outstanding Options, (b) reduce the price at which Shares
or Options may be offered, or (c) extend the duration of the Plan; (iii) materially expands the class of Participants eligible
to participate in the Plan; or (iv) expands the types of awards provided under the Plan shall become effective unless stockholder
approval is obtained. Any amendment approved by the Administrator which the Administrator determines is of a scope that requires
shareholder approval shall be subject to obtaining such shareholder approval. Any modification or amendment of the Plan shall not,
without the consent of a Participant, adversely affect his or her rights under a Stock Right previously granted to him or her.
With the consent of the Participant affected, the Administrator may amend outstanding Agreements in a manner which may be adverse
to the Participant but which is not inconsistent with the Plan. In the discretion of the Administrator, outstanding Agreements
may be amended by the Administrator in a manner which is not adverse to the Participant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">32.</FONT></TD><TD STYLE="text-align: justify"><U>EMPLOYMENT OR OTHER RELATIONSHIP.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Nothing in this Plan
or any Agreement shall be deemed to prevent the Company or an Affiliate from terminating the employment, consultancy or director
status of a Participant, nor to prevent a Participant from terminating his or her own employment, consultancy or director status
or to give any Participant a right to be retained in employment or other service by the Company or any Affiliate for any period
of time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; text-transform: uppercase; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="text-transform: none; text-underline-style: none; color: black">33.</FONT></TD><TD STYLE="text-align: justify"><U>GOVERNING LAW.</U></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">This Plan shall be
construed and enforced in accordance with the law of the State of ________.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

<P STYLE="margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PART II </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INFORMATION NOT REQUIRED IN THE PROSPECTUS
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; font-size: 10pt; font-weight: bold">Item 20.</TD>
    <TD STYLE="width: 90%; font-size: 10pt; font-weight: bold">Indemnification of Directors and Officers.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The New York Business
Corporation Law contains provisions permitting and, in some situations, requiring New York corporations to provide indemnification
to their officers and directors for losses and litigation expense incurred in connection with their service to the corporation.
DSS&rsquo;s Bylaws contain provisions requiring indemnification of DSS&rsquo;s directors and officers and other persons acting
in its corporate capacities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">In addition, DSS may
enter into agreements with its directors providing contractually for indemnification consistent with its certificate of incorporation
and bylaws, as amended. Currently, DSS has no such agreements. The New York Business Corporation Law also authorizes DSS to purchase
insurance for its directors and officers insuring them against risks as to which DSS may be unable lawfully to indemnify them.
DSS has obtained limited insurance coverage for its officers and directors as well as insurance coverage to reimburse DSS for potential
costs of its corporate indemnification of officers and directors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">DSS maintains policies
of insurance under which its directors and officers are insured, within the limits and subject to the limitations of the policies,
against certain expenses in connection with the defense of, and certain liabilities which might be imposed as a result of, actions,
suits or proceedings to which they are parties by reason of being or having been such directors or officers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to DSS&rsquo;s directors, officers and control persons pursuant
to the foregoing provisions or otherwise, DSS has been advised that, in the opinion of the SEC, such indemnification is against
public policy, and is, therefore, unenforceable.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; font-size: 10pt; font-weight: bold">Item 21.</TD>
    <TD STYLE="width: 90%; font-size: 10pt; font-weight: bold">Exhibits and Financial Statement Schedules</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>(a) Exhibits </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; font-weight: bold">Exhibit&nbsp;No.</TD>
    <TD STYLE="width: 2%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 87%; border-bottom: windowtext 1pt solid; font-weight: bold">Description</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>2.1*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Agreement and Plan of Merger by and among Document Security Systems, Inc., DSSIP, Inc. and
    Lexington Technology Group, Inc. and Hudson Bay Master Fund Ltd., dated as of October 1, 2012 and Amendment, Waiver and
    Consent, by and among Document Security Systems, Inc., DSSIP, Inc. and Lexington Technology Group, Inc., dated as of November
    20, 2012 (attached as Annex A)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>3.1</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Certificate of Incorporation of Document Security Systems, Inc., as amended (incorporated by reference to exhibit 3.1 to Form 10-K dated March 31, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>3.2</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Second Amended and Restated Bylaws of Document Security Systems, Inc. (incorporated by reference to exhibit 3.1 to Form 8-K dated January 18, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>3.3*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Certificate of Amendment to Amended and Restated Certificate of Incorporation to Authorize Preferred Stock (attached as Annex E)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>3.4**</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Certificate of Amendment to Amended and Restated Certificate of Incorporation to Effect a Reverse Stock Split (attached as Annex F)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>3.5**</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Certificate of Amendment to Amended and Restated Certificate of Incorporation to Implement a Staggered Board of Directors (attached as Annex G)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>4.1*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of $.02 Warrant (attached as Annex C)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>4.2*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Warrant (attached as Annex D)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>5.1**</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Opinion of Troutman Sanders LLP as to the validity of the securities being registered</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>8.1**</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Opinion of Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., as to certain federal income tax matters</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.1*&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Voting and Support Agreements (attached as Annex B-1 and Annex B-2)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.2*&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Document Security Systems, Inc. 2013 Employee, Director and Consultant Equity Incentive Plan (attached as Annex H)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.3&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended and Restated 2004 Employee Stock Option Plan (incorporated by reference to Appendix A to the definitive proxy statement filed with the SEC on December 8, 2005)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.4&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended and Restated 2004 Non-Executive Director Stock Option Plan (incorporated by reference to Appendix B to the definitive proxy statement filed with the SEC on December 8, 2005)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.5</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Warrant to purchase common stock of Document Security Systems, Inc., dated January 28, 2010&nbsp;(incorporated by reference to exhibit 4.1 to Form 8-K dated February 17, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.6</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Stock Purchase Agreement dated as of February 12, 2010 by and among Robert B. Bzdick, Joan T. Bzdick&nbsp;and Document Security Systems, Inc. (incorporated by reference to exhibit 10.2 to Form 8-K dated February 17, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.7&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Employment Agreement dated February 12, 2010 between Document Security Systems, Inc. and Robert B.&nbsp;Bzdick (incorporated by reference to exhibit 10.3 to Form 8-K dated February 17, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.8</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Acquisition Term Loan Note dated February 12, 2010 between Premier Packaging Corporation and RBS Citizens, N.A. (incorporated by reference to exhibit 10.4 to Form 8-K dated February 17, 2010)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 11%">10.9</TD>
    <TD STYLE="width: 2%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 87%; text-align: justify">Revolving Line Note dated February 12, 2010 between Premier Packaging Corporation and RBS Citizens,&nbsp;N.A. (incorporated by reference to exhibit 10.5 to Form 8-K dated February 17, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.10</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Credit Facility Agreement dated February 12, 2010 between Premier Packaging Corporation and RBS Citizens, N.A. (incorporated by reference to exhibit 10.6 to Form 8-K dated February 17, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.11</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Security Agreement dated February 12, 2010 between RBS Citizens, N.A., Document Security Systems, Inc., Plastic Printing Professionals, Inc. and Secuprint Inc. (incorporated by reference to exhibit 10.7 to Form 8-K dated February 17, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.12</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Guaranty and Indemnity Agreement dated February 12, 2010 between RBS Citizens, N.A., Document Security Systems, Inc., Plastic Printing Professionals, Inc. and Secuprint Inc. (incorporated by reference to&nbsp;exhibit 10.8 to form 8-K dated February 17, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.13</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Subscription Agreement dated January 28, 2010 between Document Security Systems, Inc. and&nbsp;Subscribers (incorporated by reference to exhibit 10.9 to Form 8-K dated February 17, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.14</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Subscription Agreement (incorporated by reference to exhibit 10.1 to Form 8-K/A dated July 21, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.15</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Interest Rate Swap Transaction Agreement between Premier Packaging Corporation and RBS Citizens, N.A. (incorporated by reference to exhibit 10.38 to Form 10-K dated March 31, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.16</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Common Stock Purchase Warrant (incorporated by reference to exhibit 10.2 to Form 8-K dated July 21, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.17</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Standby Term Loan Note dated October 8, 2010 between Premier Packaging Corporation and RBS Citizens, N.A. (incorporated by reference to exhibit 10.1 to Form 8-K dated October 12, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.18</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended and Restated Credit Facility Agreement dated October 8, 2010 between Premier Packaging Corporation and RBS Citizens, N.A. (incorporated by reference to exhibit 10.2 to Form 8-K dated October 12, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.19</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended and Restated Security Agreement dated October 8, 2010 between RBS Citizens, N.A., Document Security Systems, Inc., Plastic Printing Professionals, Inc. and Secuprint Inc. (incorporated by reference to&nbsp;exhibit 10.3 to Form 8-K dated October 12, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.20</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended and Restated Guaranty and Indemnity Agreement dated October 8, 2010 between RBS Citizens,&nbsp;N.A., Document Security Systems, Inc., Plastic Printing Professionals, Inc. and Secuprint Inc. (incorporated by reference to exhibit 10.4 to Form 8-K dated October 12, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.21</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Agreement between Document Security Systems, Inc. and Fletcher International, Ltd. dated December 31,&nbsp;2010 (incorporated by reference to exhibit 99.1 to Form 8-K dated December 31, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.22</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Warrant Certificate No. 1 dated December 31, 2010 (incorporated by reference to exhibit 99.2 to Form 8-K&nbsp;dated December 31, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.23</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Warrant Certificate No. 2 dated December 31, 2010 (incorporated by reference to exhibit 99.3 to Form 8-K&nbsp;dated December 31, 2010)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.24</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended and Restated Agreement between Document Security Systems, Inc. and Fletcher International, Ltd. dated February 18, 2011 (incorporated by reference to exhibit 10.1 to Form 8-K dated February 24, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.25</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Warrant Certificate No. 3 dated February 18, 2011 (incorporated by reference to exhibit 4.1 to Form 8-K dated February 24, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.26</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Warrant Certificate No. 4 dated February 18, 2011 (incorporated by reference to exhibit 4.2 to Form 8-K dated February 24, 2011)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 11%">10.27</TD>
    <TD STYLE="width: 2%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 87%; text-align: justify">Amendment between Document Security Systems, Inc. and Fletcher International, Ltd. dated March 14, 2011 (incorporated by reference to exhibit 10.1 of Form 8-K dated March 17, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.28</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Warrant Certificate No. 5 dated March 14, 2011 (incorporated by reference to exhibit 4.1 to Form 8-K dated March 17, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.29</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Warrant Certificate No. 6 dated March 14, 2011 (incorporated by reference to exhibit 4.2 to Form 8-K dated March 17, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.30</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Stock Purchase Agreement between Document Security Systems, Inc., Extradev, Inc., Michael Roy and Timothy Trueblood, dated May 12, 2011 (incorporated by reference to exhibit 10.1 to Form 8-K dated May&nbsp;16, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.31&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Employment Agreement between Michael Roy and Document Security Systems, Inc., dated May 12, 2011&nbsp;(incorporated by reference to exhibit 10.2 to Form 8-K dated May 16, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.32&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Employment Agreement between Timothy Trueblood and Document Security Systems, Inc., dated May 12,&nbsp;2011 (incorporated by reference to exhibit 10.3 to Form 8-K dated May 16, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.33</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Commercial Term Note between Document Security Systems, Inc., Plastic Printing Professionals, Inc. and&nbsp;Neil Neuman, dated June 29, 2011 (incorporated by reference to exhibit 10.1 to Form 8-K dated June 30, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.34</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Second Amended and Restated Credit Facility Agreement between Premier Packaging Corporation and RBS Citizens, N.A., dated July 26, 2011 (incorporated by reference to exhibit 10.1 to Form 8-K dated July 29, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.35</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended and Restated Acquisition Term Loan Note between Premier Packaging Corporation and RBS Citizens, N.A., dated July 26, 2011 (incorporated by reference to exhibit 10.2 to Form 8-K dated July 29, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.36</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended and Restated Revolving Line Note between Premier Packaging Corporation and RBS Citizens, N.A., dated July 26, 2011 (incorporated by reference to exhibit 10.3 to Form 8-K dated July 29, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.37</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Credit Facility Agreement between Premier Packaging Corporation and RBS Citizens, N.A., dated February 24, 2011 (incorporated by reference to exhibit 10.4 to Form 8-K dated July 29, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.38</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Consulting Agreement between Document Security Systems, Inc. and Alan Harrison, dated August 22, 2011 (incorporated by reference to exhibit 10.1 to Form 8-K dated August 23, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.39</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Purchase and Sale Agreement dated August 30, 2011 between Bzdick Properties, LLC and Premier&nbsp;Packaging Corporation (incorporated by reference to exhibit 10.1 to Form 8-K dated September 2, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.40</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended and Restated Promissory Note dated August 30, 2011 from Premier Packaging Corporation to RBS Citizens, N.A (incorporated by reference to exhibit 10.2 to Form 8-K dated September 2, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.41</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Promissory Note dated August 30, 2011 from Premier Packaging Corporation to RBS Citizens, N.A.&nbsp;(incorporated by reference to exhibit 10.3 to Form 8-K dated September 2, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.42</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Promissory Note dated August 30, 2011 from Document Security Systems, Inc. to Bzdick Properties, LLC&nbsp;(incorporated by reference to exhibit 10.4 to Form 8-K dated September 2, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.43</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Assignment of Mortgage dated July 26, 2011 between M&amp;T Real Estate Trust (Successor by merger to M&amp;T Real Estate, Inc.) and RBS Citizens, N.A. (incorporated by reference to exhibit 10.5 to Form 8-K dated September 2, 2011)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 11%">10.44</TD>
    <TD STYLE="width: 2%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 87%; text-align: justify">Mortgage and Security Agreement dated August 30, 2011 between Premier Packaging Corporation and RBS Citizens, N.A. (incorporated by reference to exhibit 10.6 to Form 8-K dated September 2, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.45</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Consolidation, Modification and Extension Agreement dated August 30, 2011 between Premier Packaging Corporation and RBS Citizens, N.A. (incorporated by reference to exhibit 10.7 to Form 8-K dated&nbsp;September 2, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.46</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Guaranty Agreement dated August 30, 2011 from Document Security Systems, Inc., Plastic Printing Professionals, Inc. and Secuprint Inc. to RBS Citizens, N.A. (incorporated by reference to exhibit 10.8 to Form 8-K dated September 2, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.47</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Indemnity Agreement dated August 30, 2011 from Document Security Systems, Inc., Plastic Printing Professionals, Inc. and Secuprint Inc. to RBS Citizens, N.A. (incorporated by reference to exhibit 10.9 to Form 8-K dated September 2, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.48</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Restated Mortgage Note dated February 1, 2007 from Bzdick Properties, LLC to M&amp;T Real Estate Trust&nbsp;(incorporated by reference to exhibit 10.10 to Form 8-K dated September 2, 2011)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.49</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Convertible Promissory Note between Document Security Systems, Inc. and Mayer Laufer, dated&nbsp;December 30, 2011 (incorporated by reference to exhibit 10.1 to Form 8-K dated January 4, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.50</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Warrant (incorporated by reference to exhibit 4.1 to Form 8-K dated February 13, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.51</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Placement Agent Warrant dated February 13, 2011 (incorporated by reference to exhibit 4.2 to Form 8-K dated February 13, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.52</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Subscription Agreement (incorporated by reference to exhibit 10.1 to Form 8-K dated February 13,&nbsp;2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.53</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Registration Rights Agreement (incorporated by reference to exhibit 10.2 to Form 8-K dated February 13, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.54</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Placement Agent Agreement between Document Security Systems, Inc. and Palladium Capital Advisors, LLC dated February 13, 2012 (incorporated by reference to exhibit 10.3 to Form 8-K dated February 13, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.55</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Warrant issued to ipCapital Group, Inc., dated February 20, 2012 (incorporated by reference to exhibit 4.1 to Form 8-K dated February 21, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.56</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Warrant issued to ipCapital Group, Inc., dated February 20, 2012 (incorporated by reference to exhibit 4.2 to Form 8-K dated February 21, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.57</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Warrant issued to Century Media Group, dated February 20, 2012 (incorporated by reference to exhibit 4.3 to Form 8-K dated February 21, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.58</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Engagement Letter between Document Security Systems, Inc. and ipCapital Group, Inc., dated February 20, 2012 (incorporated by reference to exhibit 10.1 to Form 8-K dated February 21, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.59</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Consulting Agreement between Document Security Systems, Inc. and ipCapital Group, Inc., dated February 20, 2012 (incorporated by reference to exhibit 10.2 to Form 8-K dated February 21, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.60</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Consulting Agreement between Document Security Systems, Inc. and Century Media Group, dated February 20, 2012 (incorporated by reference to exhibit 10.3 to Form 8-K dated February 21, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.61</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Purchase, Amendment and Escrow Agreement between Barry Honig, Neil Neuman, Document Security Systems, Inc. and Grushko &amp; Mittman, P.C., dated February 29, 2012 (incorporated by reference to exhibit 10.1 to Form 8-K dated March 2, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.62</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Warrant Assignment, dated February 29, 2012, from Palladium Capital Advisors, LLC to Moishe Hartstein (incorporated by reference to exhibit 4.5 to Form S-3 dated March 26, 2012)</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 11%">10.63</TD>
    <TD STYLE="width: 2%; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 87%; text-align: justify">Form of Subscription Agreement, dated October 1, 2012 (incorporated by reference to exhibit 10.3 to Form 8-K dated October 4, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.64&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended Consulting Agreement between Patrick White and Document Security Systems, Inc., dated November 15, 2012 (incorporated by reference to exhibit 10.2 to Form 8-K dated November 16, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.65&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Confidentiality, Non-Competition, Non-Solicitation and Intellectual Property Agreement between Patrick White and Document Security Systems, Inc., dated November 15, 2012 (incorporated by reference to exhibit 10.3 to Form 8-K dated November 16, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.66&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Confidentiality, Non-Competition, Non-Solicitation and Intellectual Property Agreement, dated as of October 1, 2012, between Document Security Systems, Inc. and Patrick White (incorporated by reference to exhibit 10.6 to Form 8-K dated October 4, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.67&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Letter Agreement, dated October 1, 2012, between Document Security Systems, Inc. and Philip Jones (attached as Exhibit F-5 to the Merger Agreement)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.68&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Confidentiality, Non-Competition, Non-Solicitation and Intellectual Property Agreement, dated as of October 1, 2012, between Document Security Systems, Inc. and Philip Jones (incorporated by reference to exhibit 10.8 to Form 8-K dated October 4, 2012)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.69&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amendment No. 1 to Employment Agreement, dated as of October 1, 2012, between Document Security Systems, Inc. and Robert B. Bzdick (attached as Exhibit F-2 to the Merger Agreement)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>10.70*&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Amended Employment Agreement, dated November 20, 2012, by and between Lexington Technology Group, Inc. and Peter Hardigan</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>10.71*&dagger;</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Employment Agreement, dated November 20, 2012, by and between Lexington Technology Group, Inc. and Jeffrey Ronaldi</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>23.1*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Consent of Freed Maxick CPAs, P.C.</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>23.2*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Consent of Marcum LLP</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>23.3**</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Consent of Troutman Sanders LLP (included in Exhibit 5.1)</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>24.1*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Power of Attorney (see signature page)</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>99.1**</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Form of Proxy Card for Document Security Systems, Inc. Special Meeting</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>99.2*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Consent of Peter Hardigan</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>99.3*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Consent of Jeffrey Ronaldi</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>99.4*</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Consent of<FONT STYLE="color: black"> Warren Hurwitz</FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>101.INS</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">XBRL INSTANCE DOCUMENT</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>101.SCH</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">XBRL TAXONOMY EXTENSION SCHEMA</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>101.CAL</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">XBRL TAXONOMY EXTENSION CALCULATION LINKBASE</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>101.DEF</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">XBRL TAXONOMY EXTENSION DEFINITION LINKBASE</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD>101.LAB</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">XBRL TAXONOMY EXTENSION LABEL LINKBASE</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD>101.PRE</TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">* Filed herewith</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">** To be filed by amendment</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&dagger; Management contract or compensatory plan or arrangement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; font-weight: bold; text-align: justify">Item 22.</TD>
    <TD STYLE="width: 90%; font-weight: bold; text-align: justify">Undertakings</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A. (a) The undersigned registrant hereby
undertakes:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(1) To file, during any period in which
offers or sales are being made, a post-effective amendment to this registration statement:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(i) to include any prospectus required
by Section 10(a)(3) of the Securities Act of 1933, as amended;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(ii) to reflect in the prospectus any facts
or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof)
which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering
price set forth in the Calculation of Registration Fee table in the effective registration statement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(iii) to include any material information
with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such
information in the registration statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(2) That, for the purpose of determining
any liability under the Securities Act of 1933, as amended, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the
initial <I>bona fide</I> offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(3) To remove from registration by means
of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(g) (1) The undersigned registrant hereby
undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which
is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration
form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other
items of the applicable form.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(2) The registrant undertakes that every
prospectus: (i) that is filed pursuant to paragraph (1) immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act of 1933, as amended, and is used in connection with an offering of securities subject to
Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective,
and that, for purposes of determining any liability under the Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial <I>bona fide</I> offering thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">(h) Insofar as indemnification for liabilities
arising under the Securities Act of 1933, as amended, may be permitted to directors, officers and controlling persons of the registrant
pursuant to the provisions described in Item 20 above, or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant
of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">B. The undersigned registrant hereby undertakes
to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4 of this form, within
one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed subsequent to the effective date of the registration statement through
the date of responding to the request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">C. The undersigned registrant hereby undertakes
to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in the registration statement when it became effective.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Pursuant to the requirements
of the Securities Act of 1933, as amended, the registrant has duly caused this Registration Statement on Form S-4 to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of Rochester, State of New York, on the 23<SUP>rd</SUP>
day of November, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="3" STYLE="font-weight: bold">Document Security Systems, Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 4%">By:&nbsp;&nbsp;</TD>
    <TD STYLE="width: 48%; border-bottom: windowtext 1pt solid">/s/&nbsp;&nbsp;Philip Jones</TD>
    <TD STYLE="width: 48%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Name: Philip Jones</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Title:&nbsp;  Chief  Financial Officer</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES AND POWER OF ATTORNEY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">We, the undersigned
officers and directors of Document Security Systems, Inc., hereby severally constitute and appoint Robert B. Bzdick and Philip
Jones and each or any one of them, his/her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution,
for him/her and in his/her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full
power and authority to do and perform each and every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he/she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his/her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement on Form S-4 has been signed below by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: bottom; width: 30%; text-align: center">Signature</TD>
    <TD STYLE="vertical-align: top; width: 2%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 43%; text-align: center">Title</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; width: 24%; text-align: center">Date</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid">/s/ Patrick A. White</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center"> Chief  Executive Officer and<BR>
Director</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">November 23, 2012</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Patrick A. White</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">(principal executive officer)</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid">/s/ Philip Jones</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">Chief Financial Officer</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">November 23, 2012</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Philip Jones</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">(principal financial and accounting officer)</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">/s/ Robert B. Bzdick</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">President, Chief Operating Officer and<BR>
Director</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">November 23, 2012</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Robert B. Bzdick</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid">/s/ Robert B. Fagenson</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">Chairman of the Board of Directors</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">November 23, 2012</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Robert B. Fagenson</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: Black 1pt solid">/s/ David Wicker </TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">Director</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">November 23, 2012</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">David Wicker </TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;/s/ Roger O&rsquo;Brien &nbsp;&nbsp;</P></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;Director</P></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; text-align: center">November 23, 2012</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">Roger O&rsquo;Brien &nbsp;&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid; width: 30%">/s/ Ira A. Greenstein</TD>
    <TD STYLE="vertical-align: top; width: 2%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; width: 43%">Director</TD>
    <TD STYLE="vertical-align: top; width: 1%">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center; width: 24%">November 23, 2012</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom"><FONT STYLE="font-size: 10pt">I</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">ra A. Greenstein</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid">/s/ John Cronin</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">Director</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">November 23, 2012</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">John Cronin</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom; border-bottom: windowtext 1pt solid">/s/ David Klein</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">Director</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">November 23, 2012</TD></TR>
<TR>
    <TD STYLE="vertical-align: bottom">David Klein</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top; text-align: center">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TYPE>EX-10.70
<SEQUENCE>2
<FILENAME>v327631_ex10-70.htm
<DESCRIPTION>EXHIBIT 10.70
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><U>Exhibit 10.70</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>AMENDED EMPLOYMENT AGREEMENT</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">THIS AMENDED EMPLOYMENT
AGREEMENT (the &ldquo;Agreement&rdquo;), made this 20th day of November 2012 (the &ldquo;Effective Date&rdquo;), is entered into
by and between Lexington Technology Group, Inc. f/k/a/ SNIP Inc. (the &ldquo;Company&rdquo;) and Peter Hardigan (the &ldquo;Executive&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">WITNESSETH:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">WHEREAS, you and the
Company executed an employment agreement, dated August 7, 2012 (the &ldquo;Prior Employment Agreement&rdquo;), in which you became
the Company&rsquo;s Chief Operating Officer;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">WHEREAS, the parties
now wish to amend and restate the terms and conditions of the Prior Employment Agreement as set forth in this Agreement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">WHEREAS, you desire to
provide services on the terms and conditions set forth herein; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">NOW, THEREFORE, in consideration
of the foregoing and of the mutual covenants and obligations hereinafter set forth, the parties hereto, intending to be legally
bound, hereby agree as follows:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Effectiveness
of Agreement and Nature of Employment</U>. The term of this Agreement shall commence on August 1, 2012 (the
&ldquo;Commencement Date&rdquo;) and shall continue until July 31, 2013, subject to Section 4 and other terms of this
Agreement (the &ldquo;Term&rdquo;). The Term shall be automatically renewed for additional one-year periods unless either
Executive or the Company notify the other in writing that the Agreement Term shall not be renewed at least ninety (90) days
prior to the conclusion of the Term. Any renewal Term after the initial Term shall be considered part of the Term of
employment.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Title; Capacity</U>. The Company will employ Executive, and Executive agrees to work for the Company, as its Chief
Operating Officer to perform the duties and responsibilities inherent in such position and such other duties and responsibilities
consistent with such position as the Company&rsquo;s Chief Executive Officer (the &ldquo;CEO&rdquo;) shall from time to time assign
to him. Executive shall report directly to the CEO and shall be subject to the supervision of, and shall have such authority as
is delegated to him by, the CEO, which authority shall be sufficient to perform his duties hereunder. Executive shall devote his
best efforts in the performance of the foregoing, provided that he may accept board memberships or participate in charitable and
similar organizations which are not in conflict with his primary obligations to the Company, further provided that such activities
shall be approved by the CEO, which approval shall not be unreasonably withheld. Executive shall perform the services pursuant
to this Agreement from the New York City area, and Executive may be required to travel from time to time in connection with his
position.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Compensation, Equity and Benefits</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Salary</U>. The Company shall pay Executive an annual base salary of $250,000, less applicable payroll withholdings,
which shall be payable in accordance with the Company&rsquo;s customary payroll practices. Such base salary shall not be reduced
during Executive&rsquo;s employment unless a proportionate reduction is generally applied to all senior executives. The Company&rsquo;s
Board of Directors (the &ldquo;Board&rdquo;, and if the Merger (as defined below) is consummated, &ldquo;Board&rdquo; shall mean
the Board of Directors of Document Security Systems, Inc. for all purposes in this Agreement) shall review the Executive's salary
and performance not less often than annually and shall consider the Executive for appropriate base salary increases, if any, as
are applied to other Company executives.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Signing Bonus</U>. Pursuant to the Prior Employment Agreement, Executive acknowledges that the Company paid Executive
a signing bonus in the amount of $150,000, less applicable payroll withholdings, in which the Company paid Executive (a) $100,000
within three&nbsp;(3) business days of the Commencement Date; and (b) the balance of $50,000 on or before September 4, 2012.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Equity</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Common Stock Award</U>. On the Effective Date, the Company shall grant Executive 100,000 shares of common stock
of the Company (the &ldquo;Stock Grant&rdquo;), pursuant and subject to the terms of a Stock Award Agreement between the Executive
and the Company. The Stock Grant shall vest immediately following the grant date.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></FONT><U>Option
Award</U>. On the Effective Date or as soon thereafter as administratively practical, the Company shall grant the Executive a
non-statutory option to purchase up to 1,800,000 shares of the Company&rsquo;s common stock (the
&ldquo;Option&rdquo;), pursuant and subject to the terms of a Stock Option Agreement. The exercise price for each share of
the Company&rsquo;s common stock subject to the Option shall be equal to $1.67, which price is in excess of the fair market
value of one share of the Company&rsquo;s common stock on the grant date, as determined by the Board of Directors in
accordance with Treasury Regulation &sect;1.409A-1(b)(5)(iv).<SUP> </SUP> One half of the Option shall vest in 12 equal
quarterly tranches, with the first tranche having vested as of November 15, 2012, and the remaining tranches vesting on each
of February 15, May 15, August 15, and November 15 thereafter through August 15, 2015. Vesting of the remaining one half of
the Option shall not commence unless and until the merger of DSSIP, Inc. into Lexington Technology Group, Inc. (the
&ldquo;Merger&rdquo;) is completed pursuant to the terms of the Agreement and Plan of Merger among Document Security Systems,
Inc., DSSIP, Inc., Lexington Technology Group, Inc., and Hudson Bay Master Fund Ltd., as representative of the Company
Stockholders solely for the purposes of Sections 1.16 and 6.1(e) and Article VIII of the Agreement and Plan of Merger, dated
as of September 28, 2012, (the &ldquo;Merger Agreement&rdquo;). Following the completion of the Merger, the remaining one
half of the Options shall vest in 12 equal tranches, with a tranche to vest on the last day of each calendar quarter
commencing on the last day of the calendar quarter in which the Merger is completed. Subject to Section 5.2, Executive must
be employed on each vesting date in order for the Option to vest on such date.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Nothing in this Agreement shall prohibit the Company from awarding additional Option Grants or other equity awards
to the Executive in addition to the equity awards set forth in the Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.4<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Discretionary Bonus</U>. During the Term of this Agreement, and in the Company&rsquo;s sole discretion, the Executive
shall be eligible to receive an annual bonus (subject to applicable withholdings) at the end of each calendar year based on the
Executive and the Company successfully achieving targeted annual performance objectives established by the Board (the &ldquo;Annual
Bonus&rdquo;). The Board, in its sole discretion, shall determine the extent to which the Executive has achieved the performance
objectives upon which the Annual Bonus is based, and the amount of Annual Bonus to be paid to the Executive, if any. The Annual
Bonus is not earned until it is approved in writing by the Board. To receive such Annual Bonus, the Executive must still be employed
with the Company as of December 31 of the year for which the Annual Bonus is payable and not be in breach of this Agreement. The
Annual Bonus shall be payable prior to March 15 of the following calendar year. The Executive shall receive a pro-rata portion
of the Annual Bonus that relates to calendar year 2012 based on the actual Commencement Date. Notwithstanding anything in this
Section 3.4 to the contrary, in the event that the Merger is consummated, the determination as to whether the Company has achieved
the performance objectives will be based on the performance of Document Security Systems, Inc.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.5<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Fringe Benefits</U>. Executive shall be entitled to participate in all benefit programs that the Company establishes
and makes available to its executive employees, including health care and option plans. Executive shall be entitled to receive
three (3) weeks of paid vacation per year. The Executive shall not be entitled to carry over any accrued, unused vacation days
from year to year. Executive understands that, except when prohibited by applicable law, the Company&rsquo;s benefit plans and
fringe benefits may be amended by the Company from time to time in its sole discretion.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.6<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Expenses</U>. The Company shall reimburse Executive for reasonable travel, entertainment, mileage, and other business
expenses incurred by Executive in the performance of his duties hereunder in accordance with the Company's general policies, as
amended from time to time. If a business expense reimbursement is not exempt from Section 409A of the Internal Revenue Code of
1986, as amended (the &ldquo;Code&rdquo;), any reimbursement in one calendar year shall not affect the amount that may be reimbursed
in any other calendar year, and a reimbursement (or right thereto) may not be exchanged or liquidated for another benefit or payment.
Any business expense reimbursements subject to Section 409A of the Code shall be made no later than the end of the calendar year
following the calendar year in which such business expense is incurred by Executive.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Termination of Agreement Term</U>. The Term shall terminate upon the occurrence of any of the following:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Termination for Cause</U>. At the election of the Company, for Cause upon written notice by the Company to Executive.
For the purposes of this Section 4.1, &ldquo;Cause&rdquo; for termination shall be deemed to exist upon the occurrence of any of
the following:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>a good faith finding by the Board or a committee thereof that Executive has engaged in dishonesty, gross negligence
or misconduct which, if curable, has not been cured by Executive within thirty (30) days after he shall have received written notice
from the Company stating with reasonable specificity the nature of such conduct;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>a good faith finding by the Board that Executive has engaged in conduct that materially injures the Company, whether
such harm is economic or non-economic, such as injury to the Company&rsquo;s business or reputation;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Executive&rsquo;s conviction or plea of nolo contendere to any felony or crime involving moral turpitude, fraud or
embezzlement; or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(d)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>a good faith finding by the Board that Executive has committed a material breach of this Agreement, which, if curable,
has not been cured by Executive within thirty (30) days after he shall have received written notice from the Company stating with
reasonable specificity the nature of such breach.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Termination by the Company without Cause</U>. At the election of the Company, without Cause, at any time within
the first ninety (90) days of the Commencement Date, and upon thirty (30) days&rsquo; prior written notice by the Company to Executive
on and after the ninety-first day following the Commencement Date.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Death or Disability</U>. As of the last day of the month following the death or determination of Disability of
Executive. As used in this Agreement, &ldquo;Disability&rdquo; shall mean Executive (i) is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death
or can be expected to last for a continuous period of not less than 12 months; or (ii) solely to the extent necessary to satisfy
Section 409A of the Code, Executive has a &quot;disability&quot; or is &quot;disabled&quot; within the meaning of Section 409A
of the Code.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.4<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Voluntary Termination by Executive</U>. At the election of Executive, upon not less than thirty (30) days&rsquo;
prior written notice by him to the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4.5<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Expiration of the Agreement Term</U>. Executive&rsquo;s employment will end at the conclusion of the Term, provided
proper notice has been given pursuant to Section 1 of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Effect of Termination</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>In the event that Executive&rsquo;s employment is terminated (a) for Cause pursuant to Section 4.1, (b) without Cause
for any reason within the ninety (90) days following the Commencement Date pursuant to Section 4.2, (c) because of the Executive&rsquo;s
Death or Disability pursuant to Section 4.3, (d) at the election of Executive pursuant to Section 4.4, or (e)&nbsp;upon expiration
of the Term pursuant to Section 4.5, the Company shall have no further obligation under this Agreement other than to (x) pay to
Executive the compensation earned prior to the last day of his actual employment by the Company and (y) to reimburse Executive
for expenses incurred prior to termination in accordance with Section 3.6.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>In the event that Executive&rsquo;s employment is terminated pursuant to Section 4.2, provided such termination occurs
on or after the ninety-first day following the Commencement Date and except as provided for below: (a), the Company shall pay Executive
separation pay in an amount equal to six (6) months of Executive&rsquo;s Base Salary then in effect commencing on the eighth day
after the Release (as defined herein) is effective and irrevocable and continuing on a payroll basis and for a period of six months
thereafter; (b) the Options will continue to vest during the six (6) month period following the termination of employment (c) if
Executive exercises his right under the Consolidated Omnibus Budget Reconciliation Act of 1986 (&ldquo;COBRA&rdquo;) to continue
participation in the Company&rsquo;s health insurance plan, the Company shall pay its normal share of the costs for such coverage
for then-remaining Term; and (d) the Company shall reimburse Executive for expenses incurred prior to termination in accordance
with Section 3.6. If the Company elects the Extended Restrictive Covenant Period (as that term is defined in Section 6.3 below),
then the separation pay and vesting periods described in Section 5.2(a) and (b) above shall extend from six (6) months to twelve
(12) months. No payments shall be made to Executive under this Section 5.2 unless Executive first signs a release of claims in
a form reasonably satisfactory to the Company (the &ldquo;Release&rdquo;), and the Release is effective and irrevocable prior to
the date that is the sixtieth (60th) day following the termination date, and Executive observes his post-employment obligations
as set forth in Section 6 below. The Company shall have no further obligations under this Section except as specified herein. If
the payment of any COBRA or health insurance premiums would otherwise violate the nondiscrimination rules or cause the reimbursement
of claims to be taxable under the Patient Protection and Affordable Care Act of 2010, together with the Health Care and Education
Reconciliation Act of 2010 (collectively, the &ldquo;Act&rdquo;) or Section 105(h) of the U.S. Tax Code (the &ldquo;Code&rdquo;),
the Company paid premiums shall be treated as taxable payments and be subject to imputed income tax treatment to the extent necessary
to eliminate any discriminatory treatment or taxation under the Act or Section 105(h) of the Code.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">
</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Section 409A Compliance</U>. The severance benefits provided for in Section 5.2 are intended to constitute an
&ldquo;involuntary separation pay plan&rdquo; with respect to termination without Cause pursuant to Treas. Reg. &sect;1.409A-1(b)(9)(iii)
or a short-term deferral under Treas. Reg. &sect;1.409A-1(b)(4) and thus not &ldquo;nonqualified deferred compensation&rdquo; subject
to Section 409A of the Code. If such severance benefit is deemed to provide benefits that constitute &ldquo;nonqualified deferred
compensation&rdquo; with respect to a termination without Cause, then the following interpretations apply to this Agreement: (i)
Any termination of Executive&rsquo;s employment triggering payment of the severance benefit must constitute a &ldquo;separation
from service&rdquo; under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. &sect;1.409A-1(h) before distribution of such benefits
can commence. To the extent that the termination of Executive&rsquo;s employment does not constitute a separation from service
under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. &sect;1.409A-1(h) (as the result of further services that are reasonably
anticipated to be provided by Executive to the Company at the time his employment terminates hereunder), any payment hereunder
that constitutes non-qualified deferred compensation subject to Section 409A of the Code shall be delayed until after the date
of a subsequent event constituting a separation from service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. &sect;1.409A-1(h).
For purposes of clarification, this section shall not cause any forfeiture of benefits on Executive&rsquo;s part, but shall only
act as a delay until such time as a &ldquo;separation from service&rdquo; occurs; (ii) If Executive is a &ldquo;specified employee&rdquo;
(as that term is used in Section 409A of the Code and regulations and other guidance issued thereunder) on the date his separation
from service becomes effective, any benefits payable hereunder that constitute non-qualified deferred compensation under Section
409A of the Code shall be delayed until the earlier of (A) the business day following the six-month anniversary of the date his
separation from service becomes effective, and (B) the date of his death, but only to the extent necessary to avoid such penalties
under Section 409A of the Code. On the earlier of (A) the business day following the six-month anniversary of the date his separation
from service becomes effective, and (B) his death, the Company shall pay Executive in a lump sum the aggregate value of the non-qualified
deferred compensation that the Company otherwise would have paid him prior to that date pursuant to this Agreement. It is intended
that the severance benefit and each separate payment and installment thereof shall be treated as a separate &ldquo;payment&rdquo;
for purposes of Section 409A of the Code. Neither the Company nor Executive shall have the right to accelerate or defer the delivery
of any such payments or benefits except to the extent specifically permitted or required by Section 409A of the Code. If the sixty
(60) day period in which the Executive must Execute the Release begins in one taxable year of the Executive and ends in the later
taxable year, any taxable benefits paid to the Executive under Section 5.2 will be made in the later taxable year.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Nondisclosure and Noncompetition.</U></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Proprietary Information.</U></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Executive agrees that all information and know-how, whether or not in writing, of a private, secret or confidential
nature concerning the Company&rsquo;s business or financial affairs (collectively, &ldquo;Proprietary Information&rdquo;) is and
shall be the exclusive property of the Company. By way of illustration, but not limitation, Proprietary Information may include
inventions, products, processes, methods, techniques, formulas, designs, drawings, slogans, tests, logos, ideas, practices, projects,
developments, plans, research data, financial data, personnel data, computer programs, and customer and supplier data, or other
materials or information relating to the Company&rsquo;s business and activities and the manner in which the Company does business.
Executive will not disclose any Proprietary Information to others outside the Company except in the performance of his duties or
use the same for any unauthorized purposes without written approval by an officer of the Company, either during or after his employment,
unless and until such Proprietary Information has become public knowledge or generally known within the industry without fault
by Executive, or unless otherwise required by law.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Executive agrees that all files, letters, memoranda, reports, records, data, sketches, drawings, laboratory notebooks,
program listings, or other written, photographic, electronic or other material containing Proprietary Information, whether created
by Executive or others, which shall come into his custody or possession, shall be and are the exclusive property of the Company
to be used by Executive only in the performance of his duties for the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>Executive agrees that his obligation not to disclose or use information, know-how and records of the types set forth
in paragraphs (a) and (b) above, also extends to such types of information, know-how, records and tangible property of subsidiaries
and joint ventures of the Company, customers of the Company or suppliers to the Company or other third parties who may have disclosed
or entrusted the same to the Company or to Executive in the course of the Company&rsquo;s business.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Noncompetition and Nonsolicitation</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(a)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>During Executive&rsquo;s employment and for a period of twelve (12) months after the termination of Executive&rsquo;s
employment with the Company, Executive will not directly or indirectly, absent the Company&rsquo;s prior written approval, render
services of a business, professional or commercial nature to any other person or entity that competes with the Company in the same
geographical area where the Company does business at the time this covenant is in effect (or where the Company has made, as of
the effective date of termination, active plans to do business), whether such services are for compensation or otherwise, whether
alone or in conjunction with others, as an employee, as a partner, or as a shareholder (other than as the holder of not more than
1% of the combined voting power of the outstanding stock of a public company), officer or director of any corporation or other
business entity, or as a trustee, fiduciary or in any other similar representative capacity.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(b)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>During Executive&rsquo;s employment and for a period of twelve (12) months after the termination of Executive&rsquo;s
employment with the Company, Executive will not, directly or indirectly, recruit, solicit or induce, or attempt to recruit, solicit
or induce any employee or employees of the Company to terminate their employment with, or otherwise cease their relationship with,
the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(c)<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>During Executive&rsquo;s employment and for a period of twelve (12) months after the termination of Executive&rsquo;s
employment with the Company, Executive will not, directly or indirectly, solicit, divert or take away, or attempt to solicit, divert
or take away, the business or patronage of any of the clients, customers or accounts of the Company or the prospective clients,
customers or accounts of the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>


<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.3<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>If the Executive&rsquo;s employment is terminated pursuant to Section 4.2, then the post-employment periods set forth
in Section 6.2 above shall be six (6) months rather than twelve (12) months, unless the Company, no later than thirty (30) days
after the date of Executive&rsquo;s termination, elects by written notice to Executive to extend the post-employment obligation
period under this Section 6.3 from six (6) months to twelve (12) months (the &ldquo;Extended Restrictive Covenant Period&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.4<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>If any restriction set forth in this Section 6 is found by any court of competent jurisdiction to be unenforceable
because it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it
shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may
be enforceable.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.5<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT>The restrictions contained in this Section 6 are necessary for the protection of the business and goodwill of the
Company and are considered by Executive to be reasonable for such purpose. Executive agrees that any breach of this Section 6 will
cause the Company substantial and irrevocable damage and therefore, in the event of any such breach, in addition to such other
remedies which may be available, the Company shall have the right to seek injunctive relief.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6.6<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Other Agreements</U>. Executive represents that his performance of all the terms of this Agreement as an employee
of the Company does not and will not breach any (i)&nbsp;agreement to keep in confidence proprietary information, knowledge or
data acquired by him in confidence or in trust prior to his employment with the Company or (ii) agreement to refrain from competing,
directly or indirectly, with the business of any previous employer or any other party. Executive represents that all information
Executive provided to the Company regarding Executive&rsquo;s education, work background, experience and lack of post-employment
restrictions are all true and accurate and the Company is entitled to rely on such representations.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">7.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Notices</U>. All notices required or permitted under this Agreement shall be in writing and shall be deemed effective
upon (a) the date of receipt, if sent by personal delivery (including delivery by reputable overnight courier), or (b) the date
of receipt or refusal, if deposited in the United States Post Office, by registered or certified mail, postage prepaid and return
receipt requested, or (c) by facsimile transmission at the address of record of Executive or the Company, or at such other place
as may from time to time be designated by either party in writing.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">8.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Entire Agreement</U>. This Agreement, and those documents referenced herein, constitute the entire agreement between
the parties and supersedes all prior agreements and understandings, whether written or oral relating to the subject matter of this
Agreement, including, expressly the Prior Employment Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">9.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Amendment</U>. This Agreement may be amended or modified only by a written instrument executed by both the Company
and Executive.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">10.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Governing Law</U>. This Agreement shall be construed, interpreted and enforced in accordance with the laws of
the State of Delaware, applied without giving effect to any conflicts-of-law principles. Any action or proceeding relating to this
Agreement or Executive&rsquo;s employment shall be venued exclusively in the state or federal courts located in New York City,
New York.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">11.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Assumption by Successors</U>. Any successor of the Company shall succeed to all of the Company&rsquo;s duties,
obligations, rights and benefits hereunder. The obligations of Executive are personal and shall not be assigned by him.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Miscellaneous</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.1<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>No Waiver</U>. No delay or omission by a party in exercising any right under this Agreement shall operate as a
waiver of that or any other right. A waiver or consent given by a party on any one occasion shall be effective only in that instance
and shall not be construed as a bar or waiver of any right on any other occasion.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><FONT STYLE="font-family: Times New Roman, Times, Serif">12.2<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Severability</U>. In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable,
the validity, legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">13.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Survival</U>. Upon the termination of the Term and any termination of this Agreement, the obligations of the parties
under Sections 5 and 6 shall survive and continue in effect in accordance with their terms.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">14.<FONT STYLE="font-size: 10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT></FONT><U>Jury Waiver</U>. Executive and the Company each waive any right to a jury trial in any action arising out of or
relating to a breach or alleged breach of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="width: 50%; padding-right: 0; padding-left: 0; text-decoration: underline">/s/ Peter Hardigan</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">Peter Hardigan</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">Date: _____________________________________</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 3.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">LEXINGTON TECHNOLOGY GROUP, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">F/K/A SNIP INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">By: _____________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Its:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Date: _____________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: left; margin-bottom: 0pt"></P>

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<DOCUMENT>
<TYPE>EX-10.71
<SEQUENCE>3
<FILENAME>v327631_ex10-71.htm
<DESCRIPTION>EXHIBIT 10.71
<TEXT>
<HTML>
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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><U>Exhibit 10.71</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>EMPLOYMENT AGREEMENT</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">THIS EMPLOYMENT AGREEMENT
(the &ldquo;Agreement&rdquo;), made this 20th day of November 2012 (the &ldquo;Effective Date&rdquo;), is entered into by and between
Lexington Technology Group, Inc. (the &ldquo;Company&rdquo;) and Jeff Ronaldi (the &ldquo;Executive&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">1.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Term of Employment</U>. The Company agrees to employ Executive, and Executive agrees to work for the Company, upon the
terms set forth in this Agreement, for the period commencing on November 9, 2012 (the &ldquo;Commencement Date&rdquo;) and ending
on the three-year anniversary of the Commencement Date, unless sooner terminated in accordance with the provisions of Section 4
or extended as hereinafter provided (such period, as it may be extended or terminated, is the Agreement &ldquo;Term&rdquo;). Beginning
on the third anniversary of the Commencement Date, and on each anniversary of the Commencement Date thereafter, the Term shall
extend for an additional one year period from the then current expiration date of the Term unless at least 90 days prior to the
anniversary date either Executive or the Company provides written notice to the other party electing not to extend the Term.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">2.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Title; Capacity</U>. The Company will employ Executive, and Executive agrees to work for the Company, as its Chief Executive
Officer to perform the duties and responsibilities inherent in such position and such other duties and responsibilities consistent
with such position (including travel, as required) as the Company&rsquo;s Board of Directors (the &ldquo;Board&rdquo;, and if the
Merger (as defined below) is consummated, &ldquo;Board&rdquo; shall mean the Board of Directors of Document Security Systems, Inc.
for all purposes in this Agreement) shall from time to time assign to him. Executive shall report directly to the Board and shall
be subject to the supervision of, and shall have such authority as is delegated to him by, the Board, which authority shall be
sufficient to perform his duties hereunder. Executive shall be a full time employee and shall devote his full business time and
best efforts in the performance of the foregoing, provided (i) that he may accept board memberships or participate in charitable
and similar organizations which are not in conflict with his primary obligations to the Company, further provided that such activities
shall be approved by the Board, which approval shall not be unreasonably withheld; and (ii) he may perform related services as
described in Section 6.4 below.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">3.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Compensation, Equity and Benefits</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">3.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Salary</U>. The Company shall pay Executive an annual base salary of $350,000, less applicable payroll withholdings,
which shall be payable in accordance with the Company&rsquo;s customary payroll practices (the &ldquo;Base Salary&rdquo;). Such
Base Salary shall not be reduced during Executive&rsquo;s employment unless a proportionate reduction is generally applied to all
senior executives. The Board shall review the Executive&rsquo;s salary and performance not less often than annually and shall consider
the Executive for appropriate base salary increases, if any, as are applied to other Company executives.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">3.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Discretionary Bonus</U>. During the Term of this Agreement, and in the Company&rsquo;s sole discretion, the Executive
shall be eligible to receive an annual bonus (subject to applicable withholdings) at the end of each calendar year based on the
Executive and the Company successfully achieving targeted annual performance objectives established by the Board (the &ldquo;Annual
Bonus&rdquo;). The Board, in its sole discretion, shall determine the extent to which the Executive has achieved the performance
objectives upon which the Annual Bonus is based, and the amount of Annual Bonus to be paid to the Executive, if any. The Annual
Bonus is not earned until it is approved in writing by the Board. To receive such Annual Bonus, the Executive must still be employed
with the Company as of December 31 of the year for which the Annual Bonus is payable and not be in breach of this Agreement. The
Annual Bonus shall be payable prior to March 15 of the following calendar year. The Executive shall receive a pro-rata portion
of the Annual Bonus that relates to calendar year 2012 based on the actual Commencement Date. Notwithstanding anything in this
Section 3.4 to the contrary, in the event that the Merger is consummated, the determination as to whether the Company has achieved
the performance objectives will be based on the performance of Document Security Systems, Inc.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">3.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Equity</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Common Stock Award</U>. On the Effective Date, the Company shall grant Executive 100,000 shares of common stock of the
Company (the &ldquo;Stock Grant&rdquo;), pursuant and subject to the terms of a Restricted Stock Agreement between the Executive
and the Company. The Stock Grant shall initially be unvested, and shall vest on the ninetieth day following the grant date.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Option Award</U>. On the Effective Date or as soon thereafter as administratively practical, the Company shall grant
the Executive a non-statutory option to purchase up to 1,800,000 shares of the Company&rsquo;s common stock (the &ldquo;Option&rdquo;),
pursuant and subject to the terms of a Stock Option Agreement. The exercise price for each share of the Company&rsquo;s common
stock subject to the Option shall be $1.67, which price is in excess of the fair market value of one share of the Company&rsquo;s
common stock on the grant date, as determined by the Board of Directors in accordance with Treasury Regulation &sect;1.409A-1(b)(5)(iv).<SUP>
</SUP> One half of the Option shall vest in 12 equal quarterly tranches, beginning February 15, 2013 and on each May 15, August
15, November 15 and February 15 thereafter through November 15, 2015. Vesting of the remaining one half of the Option shall not
commence unless and until the merger of DSSIP, Inc. into Lexington Technology Group, Inc. (the &ldquo;Merger&rdquo;) is completed
pursuant to the terms of the Agreement and Plan of Merger among Document Security Systems, Inc., DSSIP, Inc., Lexington Technology
Group, Inc., and Hudson Bay Master Fund Ltd., as representative of the Company Stockholders solely for the purposes of Sections
1.16 and 6.1(e) and Article VIII of the Agreement and Plan of Merger, dated as of September 28, 2012, (the &ldquo;Merger Agreement&rdquo;).
Following the completion of the Merger, the remaining one half of the Options shall vest in 12 equal tranches, with a tranche to
vest on the last day of each calendar quarter commencing on the last day of the calendar quarter in which the Merger is completed.
Subject to Section 5.2, Executive must be employed on each vesting date in order for the Option to vest on such date.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Nothing in this Agreement shall prohibit the Company from awarding additional Option Grants or other equity awards to the
Executive in addition to the equity awards set forth in the Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">3.4<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Fringe Benefits</U>. Executive shall be entitled to participate in all benefit programs that the Company establishes
and makes available to its executive employees, including health care and option plans. Executive shall be entitled to receive
three (3) weeks of paid vacation per year. The Executive shall not be entitled to carry over any accrued, unused vacation days
from year to year. Executive understands that, except when prohibited by applicable law, the Company&rsquo;s benefit plans and
fringe benefits may be amended by the Company from time to time in its sole discretion.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">3.5<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Expenses</U>. The Company shall reimburse Executive for reasonable travel, entertainment, mileage, and other business
expenses incurred by Executive in the performance of his duties hereunder in accordance with the Company's general policies, as
amended from time to time. If a business expense reimbursement is not exempt from Section 409A of the Internal Revenue Code of
1986, as amended (the &ldquo;Code&rdquo;), any reimbursement in one calendar year shall not affect the amount that may be reimbursed
in any other calendar year, and a reimbursement (or right thereto) may not be exchanged or liquidated for another benefit or payment.
Any business expense reimbursements subject to Section 409A of the Code shall be made no later than the end of the calendar year
following the calendar year in which such business expense is incurred by Executive.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">4.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Termination of Agreement Term</U>. The Term shall terminate upon the occurrence of any of the following:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">4.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Termination for Cause</U>. At the election of the Company, for Cause upon written notice by the Company to Executive.
For the purposes of this Section 4.1, &ldquo;Cause&rdquo; for termination shall be deemed to exist upon the occurrence of any of
the following:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>a good faith finding by the Board or a committee thereof that Executive has engaged in dishonesty, gross negligence or misconduct
which, if curable, has not been cured by Executive within thirty (30) days after he shall have received written notice from the
Company stating with reasonable specificity the nature of such conduct;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>a good faith finding by the Board that Executive has engaged in conduct that materially injures the Company, which, if curable,
has not been cured by Executive within thirty (30) days after he shall have received written notice from the Company stating with
reasonable specificity the nature of such conduct;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Executive&rsquo;s conviction or plea of nolo contendere to any felony or crime involving moral turpitude, fraud or embezzlement;
or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(d)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>a good faith finding by the Board that Executive has committed a material breach of this Agreement, which, if curable, has
not been cured by Executive within thirty (30) days after he shall have received written notice from the Company stating with reasonable
specificity the nature of such breach.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">4.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Termination by the Company without Cause</U>. At the election of the Company without Cause, upon not less than thirty
(30) days&rsquo; prior written notice by Company to the Executive.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">4.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Death or Disability</U>. As of the last day of the month following the death or determination of disability of Executive.
As used in this Agreement, &ldquo;disability&rdquo; shall mean Executive (i) is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected
to last for a continuous period of not less than 12 months; or (ii) solely to the extent necessary to satisfy Section 409A of the
Code, Executive has a &quot;disability&quot; or is &quot;disabled&quot; within the meaning of Section 409A of the Code.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">4.4<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Voluntary Termination by Executive</U>. At the election of Executive, upon not less than thirty (30) days&rsquo; prior
written notice by Executive to the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">4.5<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Expiration of the Agreement Term</U>. The Executive&rsquo;s employment will end at the conclusion of the Term, provided
proper notice has been given pursuant to Section 1 of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">5.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Effect of Termination</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">5.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>In the event that Executive&rsquo;s employment is terminated (a) for Cause pursuant to Section 4.1; (b) without Cause pursuant
to Section 4.2, provided such termination occurs on or before the ninetieth day following the Commencement Date; (c) because of
the Executive&rsquo;s Death or Disability pursuant to Section 4.3; (d) at the election of Executive pursuant to Section 4.4; or
(e)&nbsp;upon expiration of the Term pursuant to Section 4.5, the Company shall have no further obligation under this Agreement
other than to (x) pay to Executive the compensation earned prior to the last day of his actual employment by the Company; and (y)
to reimburse Executive for expenses incurred prior to termination in accordance with Section 3.5.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">5.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>In the event that Executive&rsquo;s employment is terminated pursuant to Section 4.2, provided such termination occurs on
or after the ninety-first day following the Commencement Date and except as provided for below: (a), the Company shall pay Executive
separation pay in an amount equal to six (6) months of Executive&rsquo;s Base Salary then in effect commencing on the eighth day
after the Release (as defined herein) is effective and irrevocable and continuing on a payroll basis and for a period of six months
thereafter; (b) the Options will continue to vest during the six (6) month period following the termination of employment (c) if
Executive exercises his right under the Consolidated Omnibus Budget Reconciliation Act of 1986 (&ldquo;COBRA&rdquo;) to continue
participation in the Company&rsquo;s health insurance plan, the Company shall pay its normal share of the costs for such coverage
for six (6) months; and (d)&nbsp;the Company shall reimburse Executive for expenses incurred prior to termination in accordance
with Section 3.5. If the Company elects the Extended Restrictive Covenant Period (as that term is defined in Section 6.3 below),
then the separation pay and vesting periods described in Sections 5.2(a), (b), and (c) above shall extend from six (6) months to
twelve (12) months. No payments shall be made to Executive under this Section 5.2 unless Executive first signs a release of claims
in a form reasonably satisfactory to the Company (the &ldquo;Release&rdquo;), and the Release is effective and irrevocable prior
to the date that is the sixtieth (60th) day following the termination date, and Executive observes his post-employment obligations
as set forth in Section 6 below. The Company shall have no further obligations under this Section except as specified herein. If
the payment of any COBRA or health insurance premiums would otherwise violate the nondiscrimination rules or cause the reimbursement
of claims to be taxable under the Patient Protection and Affordable Care Act of 2010, together with the Health Care and Education
Reconciliation Act of 2010 (collectively, the &ldquo;Act&rdquo;) or Section 105(h) of the U.S. Tax Code (the &ldquo;Code&rdquo;),
the Company paid premiums shall be treated as taxable payments and be subject to imputed income tax treatment to the extent necessary
to eliminate any discriminatory treatment or taxation under the Act or Section 105(h) of the Code.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">5.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Section 409A Compliance</U>. The severance benefits provided for in Section 5.2 are intended to constitute an &ldquo;involuntary
separation pay plan&rdquo; with respect to termination without Cause pursuant to Treas. Reg. &sect;1.409A-1(b)(9)(iii) or a short-term
deferral under Treas. Reg. &sect;1.409A-1(b)(4) and thus not &ldquo;nonqualified deferred compensation&rdquo; subject to Section
409A of the Code. If such severance benefit is deemed to provide benefits that constitute &ldquo;nonqualified deferred compensation&rdquo;
with respect to a termination without Cause, then the following interpretations apply to this Agreement: (i) Any termination of
Executive&rsquo;s employment triggering payment of the severance benefit must constitute a &ldquo;separation from service&rdquo;
under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. &sect;1.409A-1(h) before distribution of such benefits can commence.
To the extent that the termination of Executive&rsquo;s employment does not constitute a separation from service under Section
409A(a)(2)(A)(i) of the Code and Treas. Reg. &sect;1.409A-1(h) (as the result of further services that are reasonably anticipated
to be provided by Executive to the Company at the time his employment terminates hereunder), any payment hereunder that constitutes
non-qualified deferred compensation subject to Section 409A of the Code shall be delayed until after the date of a subsequent event
constituting a separation from service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. &sect;1.409A-1(h). For purposes
of clarification, this section shall not cause any forfeiture of benefits on Executive&rsquo;s part, but shall only act as a delay
until such time as a &ldquo;separation from service&rdquo; occurs; (ii) If Executive is a &ldquo;specified employee&rdquo; (as
that term is used in Section 409A of the Code and regulations and other guidance issued thereunder) on the date his separation
from service becomes effective, any benefits payable hereunder that constitute non-qualified deferred compensation under Section
409A of the Code shall be delayed until the earlier of (A) the business day following the six-month anniversary of the date his
separation from service becomes effective, and (B) the date of his death, but only to the extent necessary to avoid such penalties
under Section 409A of the Code. On the earlier of (A) the business day following the six-month anniversary of the date his separation
from service becomes effective, and (B) his death, the Company shall pay Executive in a lump sum the aggregate value of the non-qualified
deferred compensation that the Company otherwise would have paid him prior to that date pursuant to this Agreement. It is intended
that the severance benefit and each separate payment and installment thereof shall be treated as a separate &ldquo;payment&rdquo;
for purposes of Section 409A of the Code. Neither the Company nor Executive shall have the right to accelerate or defer the delivery
of any such payments or benefits except to the extent specifically permitted or required by Section 409A of the Code. If the sixty
(60) day period in which the Executive must Execute the Release begins in one taxable year of the Executive and ends in the later
taxable year, any taxable benefits paid to the Executive under Section 5.2 will be made in the later taxable year.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">6.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Nondisclosure and Noncompetition</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">6.1<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Proprietary Information</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Executive agrees that all information and know-how, whether or not in writing, of a private, secret or confidential nature
concerning the Company&rsquo;s business or financial affairs (collectively, &ldquo;Proprietary Information&rdquo;) is and shall
be the exclusive property of the Company. By way of illustration, but not limitation, Proprietary Information may include inventions,
products, processes, methods, techniques, formulas, designs, drawings, slogans, tests, logos, ideas, practices, projects, developments,
plans, research data, financial data, personnel data, computer programs, and customer and supplier data, or other materials or
information relating to the Company&rsquo;s business and activities and the manner in which the Company does business. Executive
will not disclose any Proprietary Information to others outside the Company except in the performance of his duties or use the
same for any unauthorized purposes without written approval by an officer of the Company, either during or after his employment,
unless and until such Proprietary Information has become public knowledge or generally known within the industry without fault
by Executive, or unless otherwise required by law.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Executive agrees that all files, letters, memoranda, reports, records, data, sketches, drawings, laboratory notebooks, program
listings, or other written, photographic, electronic or other material containing Proprietary Information, whether created by Executive
or others, which shall come into his custody or possession, shall be and are the exclusive property of the Company to be used by
Executive only in the performance of his duties for the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>Executive agrees that his obligation not to disclose or use information, know-how and records of the types set forth in
paragraphs (a) and (b) above, also extends to such types of information, know-how, records and tangible property of subsidiaries
and joint ventures of the Company, customers of the Company or suppliers to the Company or other third parties who may have disclosed
or entrusted the same to the Company or to Executive in the course of the Company&rsquo;s business.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">6.2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Noncompetition and Nonsolicitation</U>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(a)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>During Executive&rsquo;s employment and for a period of twelve (12) months after the termination of Executive&rsquo;s employment
with the Company, Executive will not directly or indirectly, absent the Company&rsquo;s prior written approval, render services
of a business, professional or commercial nature to any other person or entity that competes with the Company in the same geographical
area where the Company does business at the time this covenant is in effect (or where the Company has made, as of the effective
date of termination, active plans to do business), whether such services are for compensation or otherwise, whether alone or in
conjunction with others, as an employee, as a partner, or as a shareholder (other than as the holder of not more than 1% of the
combined voting power of the outstanding stock of a public company), officer or director of any corporation or other business entity,
or as a trustee, fiduciary or in any other similar representative capacity.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(b)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>During Executive&rsquo;s employment and for a period of twelve (12) months after the termination of Executive&rsquo;s employment
with the Company, Executive will not, directly or indirectly, recruit, solicit or induce, or attempt to recruit, solicit or induce
any employee or employees of the Company to terminate their employment with, or otherwise cease their relationship with, the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">(c)<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>During Executive&rsquo;s employment and for a period of twelve (12) months after the termination of Executive&rsquo;s employment
with the Company, Executive will not, directly or indirectly, solicit, divert or take away, or attempt to solicit, divert or take
away, the business or patronage of any of the clients, customers or accounts of the Company or the prospective clients, customers
or accounts of the Company.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">6.3<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>If the Executive&rsquo;s employment is terminated pursuant to Section 4.2, then the post-employment periods set forth in
Section 6.2 above shall be six (6) months rather than twelve (12) months, unless the Company, no later than thirty (30) days after
the date of Executive&rsquo;s termination, elects by written notice to Executive to extend the post-employment obligation period
under this Section 6.3 from six (6) months to twelve (12) months (the &ldquo;Extended Restrictive Covenant Period&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">6.4<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The Company acknowledges that Executive manages, and will continue to manage, several portfolios. Accordingly, the restrictions
set forth in Sections 6.2 and 6.3 above shall not apply with respect to any services Executive provides regarding any portfolio
identified in the Confidential Exhibit A of the Memorandum of Understanding the Company and Executive entered into separately
on November 13th, 2012.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">6.5<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>If any restriction set forth in this Section 6 is found by any court of competent jurisdiction to be unenforceable because
it extends for too long a period of time or over too great a range of activities or in too broad a geographic area, it shall be
interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">6.6<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>The restrictions contained in this Section 6 are necessary for the protection of the business and goodwill of the Company
and are considered by Executive to be reasonable for such purpose. Executive agrees that any breach of this Section 6 will cause
the Company substantial and irrevocable damage and therefore, in the event of any such breach, in addition to such other remedies
which may be available, the Company shall have the right to seek specific performance and injunctive relief.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">6.7<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Other Agreements</U>. Executive represents that his performance of all the terms of this Agreement as an employee of
the Company does not and will not breach any (i)&nbsp;agreement to keep in confidence proprietary information, knowledge or data
acquired by him in confidence or in trust prior to his employment with the Company or (ii) agreement to refrain from competing,
directly or indirectly, with the business of any previous employer or any other party. Executive represents that all information
Executive provided to the Company regarding Executive&rsquo;s education, work background, experience and lack of post-employment
restrictions are all true and accurate and the Company is entitled to rely on such representations.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">7.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Notices</U>. All notices required or permitted under this Agreement shall be in writing and shall be deemed effective
upon (a) the date of receipt, if sent by personal delivery (including delivery by reputable overnight courier), or (b) the date
of receipt or refusal, if deposited in the United States Post Office, by registered or certified mail, postage prepaid and return
receipt requested, or (c) by facsimile transmission at the address of record of Executive or the Company, or at such other place
as may from time to time be designated by either party in writing.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">8.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Entire Agreement</U>. This Agreement, and those documents referenced herein, constitute the entire agreement between
the parties and supersedes all prior agreements and understandings, whether written or oral relating to the subject matter of this
Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">9.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Amendment</U>. This Agreement may be amended or modified only by a written instrument executed by both the Company and
Executive.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">10.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Governing Law</U>. This Agreement shall be construed, interpreted and enforced in accordance with the laws of the State
of Delaware, applied without giving effect to any conflicts-of-law principles. Any action or proceeding relating to this Agreement
or Executive&rsquo;s employment shall be venued exclusively in the state or federal courts located in New York City, New York.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">11.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Assumption by Successors</U>. Any successor of the Company shall succeed to all of the Company&rsquo;s duties, obligations,
rights and benefits hereunder. The obligations of Executive are personal and shall not be assigned by him.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">12.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>No Waiver</U>. No delay or omission by a party in exercising any right under this Agreement shall operate as a waiver
of that or any other right. A waiver or consent given by a party on any one occasion shall be effective only in that instance and
shall not be construed as a bar or waiver of any right on any other occasion.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">13.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Severability</U>. In case any provision of this Agreement shall be invalid, illegal or otherwise unenforceable, the validity,
legality and enforceability of the remaining provisions shall in no way be affected or impaired thereby.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">14.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Survival</U>. Upon the termination of the Term and any termination of this Agreement, the obligations of the parties
under Sections 5 and 6 shall survive and continue in effect in accordance with their terms.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">15.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT><U>Jury Waiver</U>. Executive and the Company each waive any right to a jury trial in any action arising out of or relating
to a breach or alleged breach of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><I>(Signature Page Follows)</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="width: 50%; padding-right: 0; padding-left: 0; text-decoration: underline">/s/ Jeff Ronaldi</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">Jeff Ronaldi</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0">Date: _____________________________________</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">LEXINGTON TECHNOLOGY GROUP, INC.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">By:_____________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Its:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Date: _____________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>4
<FILENAME>v327631_ex23-1.htm
<DESCRIPTION>EXHIBIT 23.1
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5in; text-align: justify"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5in; text-align: right"><B>Exhibit 23.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: black">We consent to
the use in this Registration Statement (No. 333-___) on Form S-4 of </FONT>Document Security Systems, Inc. <FONT STYLE="color: black">of
our report dated March 19, 2012, relating to our audits of the consolidated financial statements of Document Security Systems,
Inc. as of December 31, 2011 and 2010, appearing in the Prospectus, which is part of this Registration Statement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We also consent to the reference to our
firm under the captions &quot;Experts&quot;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ FREED MAXICK CPAS, P.C.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Formerly known as Freed Maxick &amp; Battaglia, CPAs, PC)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Buffalo, New York</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">November 23, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>5
<FILENAME>v327631_ex23-2.htm
<DESCRIPTION>EXHIBIT 23.2
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5in; text-align: justify"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 5in; text-align: right"><B>Exhibit 23.2</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="text-transform: uppercase"><U>Independent
Registered Public Accounting Firm&rsquo;s Consent</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We consent to the inclusion in this Registration
Statement of Document Security Systems, Inc. on Form S-4 of our report dated September 11, 2012, which includes an explanatory
paragraph as to Lexington Technology Group, Inc. and Subsidiary&rsquo;s ability to continue as a going concern, with respect to
our audit of the consolidated financial statements of Lexington Technology Group, Inc. and Subsidiary as of June 30, 2012 and for
the period ended from May 10, 2012 (inception) through June 30, 2012 which report appears in the Prospectus, which is part of this
Registration Statement. We also consent to the reference to our Firm under the heading &ldquo;Experts&rdquo; in such Prospectus.<B><SUP>
</SUP></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">/s/ Marcum <FONT STYLE="font-size: 10pt">LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Marcum <FONT STYLE="font-size: 10pt">LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">New York,<B> </B>NY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">November 23, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: left; width: 50%">&nbsp;</TD><TD STYLE="text-align: right; width: 50%"></TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>6
<FILENAME>v327631_ex99-2.htm
<DESCRIPTION>EXHIBIT 99.2
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: right"><B><U>Exhibit 99.2</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: center"><B><U>CONSENT OF Peter Hardigan</U>
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">In accordance with Rule 438 promulgated
under the Securities Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement on Form
S-4 filed by Document Security Systems, Inc. (&ldquo;DSS&rdquo;) with the Securities and Exchange Commission on November 23, 2012,
and all supplements and amendments thereto (the &ldquo;Registration Statement&rdquo;), as a director of DSS&rsquo;s board of directors
effective upon the completion of the merger as described in the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%; border-bottom: windowtext 1pt solid">/s/ Peter Hardigan</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Name: Peter Hardigan</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Date: November 23, 2012</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

</BODY>
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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>7
<FILENAME>v327631_ex99-3.htm
<DESCRIPTION>EXHIBIT 99.3
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: right"><B><U>Exhibit 99.3</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: center"><B><U>CONSENT OF Jeffrey Ronaldi</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">In accordance with Rule 438 promulgated
under the Securities Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement on Form
S-4 filed by Document Security Systems, Inc. (&ldquo;DSS&rdquo;) with the Securities and Exchange Commission on November 23, 2012,
and all supplements and amendments thereto (the &ldquo;Registration Statement&rdquo;), as a director of DSS&rsquo;s board of directors
effective upon the completion of the merger as described in the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%; border-bottom: windowtext 1pt solid">/s/ Jeffrey Ronaldi</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Name: Jeffrey Ronaldi</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Date: November 23, 2012</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>8
<FILENAME>v327631_ex99-4.htm
<DESCRIPTION>EXHIBIT 99.4
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: right"><B><U>Exhibit 99.4</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: center"><FONT STYLE="font-size: 10pt"><B><U>CONSENT
OF </U></B></FONT><B><U><FONT STYLE="color: black">Warren Hurwitz</FONT></U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 24.5pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">In accordance with Rule 438 promulgated
under the Securities Act of 1933, as amended, the undersigned hereby consents to being named in the Registration Statement on Form
S-4 filed by Document Security Systems, Inc. (&ldquo;DSS&rdquo;) with the Securities and Exchange Commission on November 23, 2012,
and all supplements and amendments thereto (the &ldquo;Registration Statement&rdquo;), as a director of DSS&rsquo;s board of directors
effective upon the completion of the merger as described in the Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;</TD>
    <TD STYLE="width: 50%; border-bottom: windowtext 1pt solid">/s/ Warren Hurwitz</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Name: Warren Hurwitz</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom">Date: November 23, 2012</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>



<P STYLE="margin: 0"></P>

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<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>9
<FILENAME>texdpg2.jpg
<DESCRIPTION>GRAPHIC
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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
