8-K

UNITED STATES 

SECURITIES AND EXCHANGE COMMISSION  

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 15, 2012

DOCUMENT SECURITY SYSTEMS, INC.

(Exact name of registrant as specified in its charter)

New York	001-32146	16-1229730
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

First Federal Plaza, Suite 1525 28 East Main Street Rochester, NY	14614
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (585) 325-3610

______________________________________________________________

(Former name or former address, if changed since last report.)

  Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors and Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On November 15, 2012, Patrick White (“White”), Chief Executive Officer of Document Security Systems, Inc. (the “Company”), and the Company, executed a letter (the “Employment Termination Letter”) terminating White’s employment agreement with the Company, dated June 12, 2004 and his employment as Chief Executive Officer, effective on December 1, 2012, and further providing that White will resign as a director of the Company, also effective on December 1, 2012.

In conjunction with the Employment Termination Letter, the Company and White entered into an Amended Consulting Agreement (the “White Amended Consulting Agreement”) and a Confidentiality, Non-Competition, Non-Solicitation and Intellectual Property Agreement (the “White Confidentiality and Non-Compete Agreement”), both dated November 15, 2012, and both having an effective date of December 1, 2012.

The White Amended Consulting Agreement replaces the consulting agreement previously entered into between the Company and White, dated October 1, 2012. The term of the White Amended Consulting Agreement will run from December 1, 2012 until March 1, 2015. Pursuant to the White Amended Consulting Agreement, White will provide consulting services to the Company as requested by the Company’s CEO, up to a maximum of 60 hours per month. As consideration for the performance of the consulting services, White shall be paid the sum of $14,166.67 per month for the 15 month period dating from December 1, 2012 through February 28, 2014 and, thereafter, 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, White was granted options to acquire 50,000 shares of the Company’s common stock at an exercise price of $4.26 per share.

The White Confidentiality and Non-Compete Agreement replaces the confidentiality and non-compete agreement previously entered into between the Company and White, dated October 1, 2012. Under the White Confidentiality and Non-Compete Agreement, 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 the Company; (ii) while engaged with the Company, 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 the Company’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 the Company that has purchased or licensed the Company’s intellectual property, products or services, (b) solicit any employee of the Company to become an employee of any other business or business entity, or (c) at any time without the Company’s prior written consent, discuss, publish or otherwise divulge any Confidential Information.

The forgoing descriptions of the terms of the Employment Termination Letter, the White Amended Consulting Agreement, and the White Confidentiality and Non-Compete Agreement, are summaries only, and do not purport to set forth the complete terms of those agreements, and are qualified in their entirety by reference to the full text of such agreements, which are filed as Exhibits 10.1, 10.2 and 10.3 to this report, and which Exhibits are incorporated herein by reference.

On November 15, 2012, the Board of Directors of the Company appointed Robert B. Bzdick (“Bzdick”), the Company's current President and Chief Operating Officer and a director, as Chief Executive Officer of the Company, to replace White, with said appointment to take effect on December 1, 2012. In connection with his appointment as Chief Executive Officer, effective December 1, 2012, Bzdick will no longer hold the title[s] of [President and] [Chief Operating Officer].

Bzdick, age 57, joined the Company on February 17, 2010 as President and Chief Operating Officer after the Company's acquisition of its wholly-owned subsidiary, Premier Packaging Corporation, for which Bzdick was the Chief Executive Officer. Bzdick became a director of the Company in March 2010. Prior to founding Premier Packaging Corporation in 1989, 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). Bzdick has over 29 years of experience in manufacturing and operations management in the printing and packaging industry.

On November 15, 2012, the Company issued a press release announcing the resignation of White as Chief Executive Officer and director of the Company, and the appointment of Bzdick as Chief Executive Officer of the Company. A copy of the press release is attached as Exhibit 99.1 to this report.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits
10.1	Employment Termination Letter between Patrick White and Document Security Systems, Inc., dated November 15, 2012.
10.2	Amended Consulting Agreement between Patrick White and Document Security Systems, Inc., dated November 15, 2012.
10.3	Confidentiality, Non-Competition, Non-Solicitation and Intellectual Property Agreement between Patrick White and Document Security Systems, Inc., dated November 15, 2012.
99.1	Press release issued by Document Security Systems, Inc. on November 15, 2012.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	DOCUMENT SECURITY SYSTEMS, INC.
Dated: November 16, 2012	By:	/s/ Patrick A. White
		Patrick A. White
		Chief Executive Officer

EXHIBIT INDEX

10.1	Employment Termination Letter between Patrick White and Document Security Systems, Inc., dated November 15, 2012.
10.2	Amended Consulting Agreement between Patrick White and Document Security Systems, Inc., dated November 15, 2012.
10.3	Confidentiality, Non-Competition, Non-Solicitation and Intellectual Property Agreement between Patrick White and Document Security Systems, Inc., dated November 15, 2012.
99.1	Press release issued by Document Security Systems, Inc. on November 15, 2012.

EX-10.1

November 15, 2012

Document Security Systems, Inc.

36 West Main Street

Rochester, New York 14614

Attn: Philip Jones, CFO

Re: Termination of Employment Agreement

Dear Phil:

This letter confirms our mutual agreement to terminate my Employment Agreement with Document Security Systems, Inc. (the “Company”), dated June 12, 2004, pursuant to Section 8(f) thereof, effective as of December 1, 2012; provided, however, that termination of my Employment Agreement is expressly conditioned upon the Company’s signing and returning an original copy of the attached Amended Consulting Agreement to me by close of business on November 30, 2012.

Please also accept this letter as my resignation from the Board of Directors of the Company, effective December 1, 2012, subject to the condition precedent set forth above.

Sincerely,
/s/ Patrick White
Patrick White
So Agreed: Document Security Systems, Inc.
By	/s/ Philip Jones
	Philip Jones, CFO

EX-10.2

EXECTUION COPY

AMENDED CONSULTING AGREEMENT

THIS AMENDED CONSULTING AGREEMENT (“Agreement”), dated as of the 15^th day of November, 2012, by and between Document Security Systems, Inc., a New York corporation (the “Company”), and Patrick White, an individual (the “Consultant”). The effective date of this Agreement (the “Effective Date”) shall be December 1, 2012.

WITNESSETH:

WHEREAS, effective as of the Effective Date, the parties have agreed to enter into this Agreement; and

WHEREAS, the Company desires to secure and retain the benefit of the Consultant’s services and experiences and the Consultant desires to be retained by the Company upon the terms and conditions stated herein.

NOW, THEREFORE, 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:

1.          Consulting Term. 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 “Consulting Term”) commencing on the Effective Date and automatically terminating on March 1, 2015 or the earlier termination of this Agreement pursuant to Section 6.

2.          Consulting Services. The Consultant shall report to the Chief Executive Officer of the Company and the Consultant shall render the services described on Exhibit A 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’s offices.

3.          Compensation.

(a)          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 at the rate of $170,000 per annum for the period of December 1, 2012 through February 28, 2014 (15 equal payments of $14,166.67 per month) and a consulting fee at the rate of $140,000 per annum for the period of March 1, 2014 through February 28, 2015 (12 equal payments of $11,666.67 per month) (the “Consulting Fee”). The Consulting Fee shall be paid by the Company to the Consultant on a monthly basis on the fifth (5^th) day after the conclusion of such month. On or before December 7, 2012, the Company shall pay to the Consultant a bonus equal to $40,000 (the “Bonus”) 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 “Options”). 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’s policies and procedures.

(b)          Certain Payments.

(i)          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 (“Payments”) constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”)) and will be subject to excise tax under Section 4999 of the Code (“Section 4999 Excise Tax”), the Company shall pay to the Consultant an additional amount (the “280G Gross-Up Payment”) 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.

(ii)         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 (“Deferred Compensation”) 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 “409A Excise Tax”), the Company shall pay to the Consultant an additional amount (“409A Gross-Up Payment”) 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.

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(iii)        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.

(iv)        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 “parachute payments” (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 (“Accounting Firm”) reasonably acceptable to the Consultant and selected by the accounting firm which was, immediately prior to the Change in Control, Company’s independent auditor (the “Auditor”), 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 “excess parachute payments” 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.

(v)        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’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.

(vi)        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.

4.            Relationship of the Parties. 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’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.

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5.            Consulting Benefits. 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; provided, however, 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.

6.            Termination. 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, “Cause” 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’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.

7.            Restrictive Covenants. 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.

8.            Representations and Warranties of the Parties.

(a) 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.

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(b) 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.

9.            Termination of Employment Agreement. The parties acknowledge the existence of a certain employment agreement, effective as of June 10, 2004, between the Company and the Consultant (“Employment Agreement”) 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.

10.          Notices. 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 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.

11.          Severability. 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.

12.          Waivers. 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.

13.          Voluntary Agreement; Entire Agreement; Amendments. 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.

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14.          Headings. 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.

15.          Governing Law; Jurisdiction. 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 in personam jurisdiction of any such court.

16.          Assignment. 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 ab initio 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.

17.          No Partnership or Agency. 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).

18.          Survival. Sections 7 through 19 shall survive termination of this Agreement for any reason.

19.          Counterparts. 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.

[Signature Page to Follow]

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

Company:
Document Security Systems, Inc.
By:	/s/ Philip Jones
Name: Philip Jones
Title:  Chief Financial Officer
Consultant:
/s/ Patrick White
Patrick White

[White Amended Consulting Agreement]

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Exhibit A

Consulting Services

Services as requested by the CEO of the Company which such services are within the scope of Consultant’s expertise and which shall not exceed 60 hours per month.

EX-10.3

EXECUTION COPY

CONFIDENTIALITY, NON-COMPETITION, NON-SOLICITATION AND INTELLECTUAL

PROPERTY AGREEMENT

This Confidentiality, Non-Competition, Non-Solicitation and Intellectual Property Agreement (the “Agreement”) is dated as of November 15, 2012, and effective as of December 1, 2012, by and between Document Security Systems, Inc., a New York corporation (“DSS”) and Patrick White (“Consultant”). Reference is hereby made to that certain Amended Consulting Agreement, dated as of even date herewith (the “Consulting Agreement”), between DSS and the Consultant. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Consulting Agreement.

NOW, THEREFORE, in consideration of the engagement of Consultant by DSS under the Consulting Agreement and the mutual promises and covenants set forth herein, the parties hereto agree as follows:

1.            Confidential Information.

(a)          For purposes of this Agreement, “Confidential Information” shall include any nonpublic knowledge and information relating to the actual or anticipated business or developments of DSS, including but not limited to technical data, trade secrets, intellectual property, know-how, product plans, customer information, software and source codes, inventions, processes, technology, research, marketing, financial information, or other business information, provided, however, that Confidential Information shall not include information which is or becomes publicly known without violation of any confidentiality obligation.

(b)          Consultant acknowledges that irreparable injury and damage to DSS will result from disclosure of Confidential Information to third parties or its use for any purposes. Consultant agrees, indefinitely:

(i)          to hold the Confidential Information in strictest confidence;

(ii)         not to disclose such Confidential Information to any third party except as specifically authorized, in advance, in writing, by DSS, and to use all precautions necessary to prevent the unauthorized disclosure of Confidential Information, including, without limitation, protection of documents from theft, unauthorized duplication and discovery of contents, and restrictions on access by other persons to the Confidential Information;

(iii)        not to use any of the Confidential Information for any purpose, except as authorized in advance, in writing, by DSS;

(iv)        in the event of disclosure in accordance with Section 1(b)(ii) above, to limit disclosure to persons with a bona fide need to know Confidential Information and to the extent necessary to accomplish the purpose for which DSS has entered into this Agreement, to communicate to all persons to whom such Confidential Information is made available the strictly confidential nature of such Confidential Information and to obtain from all such persons agreement, in writing, to be bound by the restrictions imposed by this Agreement; and

(v)         in the event Consultant is required by law or legal process to disclose any Confidential Information, to provide DSS with ten (10) days prior written notice of such requirement (unless a shorter time period is specified by law or legal process as to the required response time) so that DSS may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement; in the event that such protective order or other remedy is not obtained, or that DSS waives compliance with the provisions of this Agreement, to furnish only that portion of Confidential Information that is legally required and to use Consultant’s best efforts to obtain reliable assurances that confidential treatment will be accorded to that portion of Confidential Information to be disclosed.

2.            Restrictive Covenants.

(a)          Company Goodwill. Consultant acknowledges that DSS is engaged in the business of developing, licensing and selling anti-counterfeiting technologies and products (the “Business”), which is highly competitive. Consultant acknowledges that DSS will invest significant time, money, training and resources in Consultant to develop and maintain the Business and to otherwise create goodwill. Consultant acknowledges that the investments made by DSS directly develop goodwill for new customers of DSS and maintain goodwill for its existing customers. Consultant understands and acknowledges that the Confidential Information Consultant will have access to as a Consultant of DSS is not available to the general public and is not readily ascertainable through public sources, and is DSS’ proprietary trade secret and a unique and valuable asset of DSS. Consultant further acknowledges that but for Consultant’s consultant relationship with DSS, Consultant would not have access to the Confidential Information, and that all uses of Confidential Information inure to the benefit of DSS in furtherance of the development of goodwill for its customers. Consultant further acknowledges that Consultant owes a fiduciary duty to DSS because of Consultant’s status as a Consultant of DSS, and this duty encompasses a duty to act in good faith and to faithfully serve and be mindful of all of DSS’ interests. Consultant also acknowledges that if Consultant left the engagement of DSS, Consultant would be in an advantageous position, because of the Confidential Information provided to Consultant, to obtain the Business of and to serve DSS’ customers and to compete with DSS. Consultant further acknowledges that Consultant’s engagement or employment by a competitor of DSS would necessarily require that Consultant disclose or use Confidential Information provided to Consultant by DSS, and that the use of such Confidential Information to obtain the Business of DSS’ customers and to compete with DSS would be a breach of this Agreement. Therefore, Consultant acknowledges that the value of the Business would be seriously diminished if Consultant was to violate the confidentiality provisions in Section 1 or if Consultant engaged in certain conduct during a certain time period, as set forth in this Section 2 or below in Section 3.

(b)          Non-Competition Covenant. While engaged with DSS (except for the exclusive benefit of DSS), and for a period of one (1) year from and after the date of termination of the Consulting Agreement (the “Non-Compete Restricted Period”), Consultant shall not engage or compete, directly or indirectly, as a principal, on his or its own account, or as a shareholder, officer, director, employee, agent, partner or joint venturer in any corporation or business entity, in any business engaged in the sale, distribution, manufacture or provision of products, technologies or services 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 the DSS or any Subsidiary of DSS has heretofore marketed such products, technologies or services; nor during such period and within the same area to extend credit, lend money, furnish quarters or give advice to any such business or proposed business entity; nor within the same area to ship or cause to be shipped or participate in the shipping of any such products for purposes of resale; provided, however, that nothing contained herein shall be construed as preventing an investment in less than five percent (5%) of the securities of a company traded on a recognized stock exchange or market.

(c)          Non-Solicitation Covenant. While engaged by DSS (except for the exclusive benefit of DSS), and for a period of one (1) year from and after the date of termination of the Consulting Agreement (the “Non-Solicitation Restricted Period”), Consultant shall not, at any time solicit, or attempt to solicit, or accept business from, directly or indirectly, any Customer of DSS (or any subsidiary or division of DSS) that has purchased or licensed DSS’ (or any subsidiary or division of DSS) intellectual property, products or services, nor solicit, or attempt to solicit, any present employee of DSS (or any subdivision or division of DSS) to become an employee of any other business or business entity; nor at any time without DSS’ prior written consent, directly or indirectly discuss, publish or otherwise divulge any Confidential Information, unless such information is or becomes rightfully publicly known; provided, however, that nothing contained herein shall be construed as preventing an investment in less than five percent (5%) of the securities of a company traded on a recognized exchange or market. For purposes of this Section 2(c), a “Customer” shall mean any person, persons, foreign or domestic governmental entity or company that DSS, or any division or subsidiary of DSS, has provided technology, products or services to during the twenty-four (24) month period immediately preceding the date of termination of the Consulting Agreement. A Customer shall also include any person, persons, foreign or domestic governmental entity or company that DSS is in discussions or negotiations with for the provision of such technology, products or services at the time of termination of the Consulting Agreement.

(d)          Consideration. The parties agree that the consideration described in that certain Consulting Agreement executed by and between the parties on even date herewith constitutes full and fair consideration for the restrictive covenants contained in this Agreement.

3.            Intellectual Property Rights.

(a)          Works Made For Hire. Consultant agrees that all works that Consultant produces or has produced either solely or with others, during Consultant’s engagement by DSS (each a “Work”, and collectively, the “Works”), have been or are prepared as part of and in the course of such engagement, and, in each case, constitute a work made for hire as that term is defined in 17 U.S.C. Section 101, and, as such, all right, title and interest in each Work, and all intellectual property therein resulting therefrom, shall be owned by DSS. In the event that all or any part of a Work is for any reason deemed not to be a work made for hire, or in the event that Consultant should, by operation of law, be deemed to retain any rights in a Work, then Consultant hereby irrevocably and unconditionally assigns to DSS all right, title and interest in and to such Work, and all intellectual property therein or resulting therefrom, and related proprietary information and intellectual property. Consultant agrees that DSS, as the owner of all rights to the Works, has the full and complete right to prepare and create derivative works based upon the Works and any derivative works of such Works, and to use, reproduce, publish, print, copy, market, advertise, distribute, transfer, sell, publicly perform and publicly display, and otherwise exploit by all means now known or later developed, such Works and derivative works anywhere in the World. Notwithstanding any language to the contrary herein, nothing herein shall be construed to give DSS any rights to “Works” of Consultant that predate the execution of this agreement and/or that are unrelated to 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.

(b)          Inventions. The Consultant agrees to communicate to DSS promptly and fully in writing, in such form as DSS may deem appropriate, all inventions, processes, techniques, discoveries, source or object code, trade secrets and know-how (whether or not patentable or registrable under copyright or similar statutes) with respect 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 made, discovered, conceived, developed or reduced to practice by Consultant, whether alone or jointly with others, during Consultant’s engagement with DSS, as the case may be, whether or not done during work hours, that (A) relate to past, existing or contemplated business or research activities of DSS; (B) are or have been suggested by, or result from, Consultant’s engagement with DSS; or (C) result or have resulted from the use of time, materials or facilities of DSS (each an “Invention”, and collectively, the “Inventions”). Consultant agrees to make and maintain adequate permanent records of all Inventions, in the form of memoranda, notebook entries, drawings, print-outs or reports relating thereto, and agrees that these records, as well as the Inventions themselves, shall be and remain the exclusive property of DSS. Consultant hereby irrevocably and unconditionally assigns to DSS all rights, title and interest in and to all Inventions and written material, and all intellectual property therein or resulting therefrom, which become the property of DSS pursuant to this Section, and all patents which may be attained on them in the United States and all foreign countries. If Consultant has any right or rights to Inventions, including any moral rights or similar rights existing under the judicial or statutory law of any country or jurisdiction in the World, or any foreign treaty, that cannot be assigned to DSS or waived by Consultant, then Consultant unconditionally grants to DSS during the term of such rights, an exclusive, irrevocable, perpetual, worldwide, full paid and royalty-free license, with rights to sublicense through multiple levels of sublicenses, to use, reproduce, publish, create derivative works of, market, advertise, distribute, sell, publicly perform and publicly display and otherwise exploit by all means now known or later developed, such Inventions. Further, Consultant agrees, upon request of DSS, to take all steps necessary to cause any third party to promptly and fully disclose and assign all patents, copyrights and other intellectual property created by Consultant and such third party during the period of Consultant’s engagement. Notwithstanding any language to the contrary herein, nothing herein shall be construed to give DSS any rights to Inventions of Consultant that predate the execution of this agreement and/or that are unrelated to 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.

(c)          Cooperation. Consultant agrees to cooperate with DSS or DSS’ designee, during the period of Consultant’s engagement with DSS and at all times thereafter, in securing and protecting patent, trademark, copyright or other intellectual property rights in the United States and foreign countries, in any Invention or Work. Consultant specifically agrees to execute any and all documents that DSS deems necessary, and to otherwise assist DSS, or its successors, assigns and designees, to protect its or their interests and to vest in it or them all right, title and interest in all Inventions and Works, including assignments of copyrights and Inventions, and to attain, enforce or defend for DSS’ benefit, patents, copyrights or other legal protections from the Inventions and Works in the United States and all foreign countries. Consultant further agrees to provide such evidence and testimony as may be necessary to secure and enforce DSS’ or its designees’ rights.

(d)          Appointment. Consultant hereby irrevocably designates and appoints DSS, and its duly authorized officers and agents, as Consultant’s agent and attorney-in-fact to act for and on Consultant’s behalf, to execute and file any documents, applications or related findings and to do all other lawfully permitted acts to further the purposes set forth in this Section including, but not limited to, the perfection of assignment and the prosecution and issuance of patents, patent applications, copyright applications and registrations, trademark applications and registrations or other rights in connection with such Inventions and Works thereto with the same legal force and effect as if executed by Consultant.

4.            No Competing Obligations. Consultant hereby represents, warrants and covenants to DSS that Consultant is not, and for the duration of Consultant’s engagement with DSS, will not become, subject to any contractual or other binding commitments or obligations to any third party that are inconsistent with Consultant’s obligations under this Agreement, such that Consultant can perform freely Consultant’s obligations hereunder without violating any document or other third party agreement or arrangement or any applicable law, including, without limitation, any agreements or other obligations or documents relating to non-competition, solicitation, confidentiality, trade secrets, proprietary information, or works for hire.

5.            Remedy for Breach of Covenants. Consultant acknowledges that the financial hardship to DSS as a result of breach of any covenant in this Agreement by Consultant may be difficult or impossible to measure in dollars and that no remedy at law will be adequate to compensate DSS for such violation; therefore, the parties acknowledge and agree that upon a breach or threatened breach of this Agreement by Consultant, DSS will be entitled to injunctive relief, including the issuance of a temporary restraining order or preliminary injunction, in addition to any rights or legal remedies at law. Should a court of competent jurisdiction declare any of the covenants set forth in this Agreement unenforceable due to an unreasonable restriction, duration, geographical area or otherwise, the parties agree that such court will be empowered to, and will, grant DSS injunctive relief to the extent reasonably necessary to protect DSS’ interests. If Consultant violates any covenant contained in this Agreement, and if any action is instituted by DSS to prevent or enjoin such violation, then the period of time during which Consultant’s activities will be restricted as provided in this Agreement will be lengthened by a period of time equal to the period between the date upon which Consultant is found to have first violated the restrictions, and the date on which the decree of the court disposing of the issues upon the merits will become final and not subject to appeal.

6.            Survival. This Agreement and all the covenants contained herein will remain in effect for an indefinite period of time and will not be terminated by any event whatsoever other than a writing signed by all parties to this Agreement which expressly terminates it and the covenants herein.

7.            DSS. For purposes of this Agreement, the term “DSS” shall include DSS, its subsidiaries, affiliates, successors and/or assigns. Any consultant of any subsidiary of DSS shall be deemed a consultant of DSS for purposes of enforcement of the terms and provisions of this Agreement.

8.            Notices. Any notice required to be given with respect to this Agreement will be in writing and delivered to DSS or Consultant’s then current address. Notice shall be deemed to have been duly given: (i) when delivered personally; (ii) one (1) day after being deposited with a nationally recognized overnight courier with instructions for next day delivery; or (iii) five (5) days after deposited in the mail, certified or registered, return receipt requested, and with the proper postage prepaid.

9.            Waiver. Any of the terms or conditions of this Agreement may be waived in writing by the party which is entitled to the benefits hereof. No waiver of any of the provisions of this Agreement will be deemed or will constitute a waiver of such provision at any time in the future or a waiver of any other provisions hereof.

10.          Captions. The captions set forth in this Agreement are for convenience only and will not be considered as part of this Agreement, nor affect in any way the meaning of the terms and provisions hereof.

11.          Successors and Assigns. Notwithstanding the foregoing, Consultant may not assign all or part of his rights and obligations under this Agreement, since they are personal to Consultant and constitute material consideration of DSS. DSS may assign and/or delegate all or part of its rights and obligations under this Agreement without the written consent of Consultant. Upon assignment of this Agreement by DSS, the assignee thereof will receive the benefits and burdens set forth herein.

12.          Counterparts. This Agreement may be executed in multiple counterparts, each of which will for all purposes be deemed to be an original and all of which will constitute one and the same Agreement. A signature delivered by PDF, facsimile or other electronic means will be deemed an original signature to this Agreement.

13.          Governing Law. This Agreement will in all respects be interpreted, construed and governed by and in accordance with the laws of the State of New York, without regard to principles of conflict of laws that would defer to or result in the application of the laws of another jurisdiction.

14.          Legal Fees. If any action or proceeding is initiated to enforce the terms and provisions of this Agreement, the party prevailing in such action will be entitled to collect its reasonable attorneys’ fees and costs from the non-prevailing party.

15.          Exclusive Jurisdiction and Consent to Service of Process. The parties agree that any legal action, suit or proceeding arising out of or relating to this Agreement will be instituted in a federal or state court having jurisdiction over Monroe County, New York, which will be the exclusive jurisdiction and venue of said legal proceedings and each party hereto waives any objection which such party may now or hereafter have to the laying of venue of any such action, suit or proceeding, and irrevocably submits to the jurisdiction of any such court in any such action, suit or proceeding. Any and all service of process and any other notice in any such action, suit or proceeding will be effective against such party when transmitted in accordance with the notice provision herein. Nothing contained herein will be deemed to affect the right of any party hereto to serve process in any manner permitted by law.

16.          Entire Agreement. This Agreement constitutes the sole understanding of the parties with respect to the matters contemplated hereby and supersedes and renders null and void all other prior agreements and understandings between the parties with respect to such matters. To the extent any provisions of any other agreements executed by the parties shall conflict with the subject matter of this Agreement, the provisions of this Agreement shall control.

17.          Amendment. No amendment, modification or alteration of the terms or provisions of this Agreement will be binding unless the same will be in writing and duly executed by the parties.

IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written.

DOCUMENT SECURITY SYSTEMS, INC.
By:	/s/ Philip Jones
Chief Financial Officer
CONSULTANT:
/s/ Patrick White
Patrick White

[White Restrictive Covenant Agreement]

EX-99.1

DSS Appoints Robert B. Bzdick Acting CEO

Bzdick’s Extensive Operational Experience Expected to
Greatly Enhance New Product Rollout and Profitability

Investor Conference Call Rescheduled to Tuesday, November 20, 2012 at 4:30 pm ET

______________________

November 15, Rochester, NY — Document Security Systems, Inc. (NYSE MKT: DSS) announced today that President and Chief Operating Officer Robert B. Bzdick will assume the role of acting CEO of the company, effective December 1, 2012.

Current DSS CEO Patrick White will step down and become a consultant to the company. “I want to acknowledge the many years of dedication and leadership of our retiring CEO, Pat White”, says DSS Board Chairman Robert Fagenson. “With all the changes that DSS is undergoing, both Pat and the board decided this was the logical time for him to step away from day to day management duties and assume an advisory role. We thank him for making a seamless transition and for his support of Bob Bzdick as he assumes the leadership responsibilities of our operating divisions in preparation for our planned merger with the Lexington Technology Group.”

Bzdick joined DSS in 2010 when the company acquired Premier Packaging Corp., where he served as CEO and acted as president and COO since founding the company in 1989. Bzdick would serve as acting CEO until the completion of DSS’s pending merger with Lexington Technology Group, Inc., expected in the first half of 2013.

“I’m excited by this opportunity and anticipate great success in the new direction DSS is taking,” Bzdick says. “I look forward to working with our merger partners at Lexington Technology Group as we combine and leverage our portfolios of intellectual property, and not only developing, but monetizing these assets.”

Relying on nearly three decades’ experience in manufacturing operations management, Bzdick has effectively integrated and strengthened DSS’s four operating divisions over the past two years, and enabled the company to better serve its customer base of Fortune 1000 companies. His considerable operations experience makes him uniquely able to manage the rollout of DSS’s next generation of products.

DSS unveiled a new customizable integrated security solution at the Pack Expo trade show in Chicago on October 28. The product combines DSS’s proprietary anti-counterfeit technologies with its cloud computing platform to track and authenticate products. In the pharmaceutical space, for example, drug packages can be scanned by iPhone throughout the distribution process—from customs officers to pharmacies—to authenticate the origin and history of the product. The smart phones scan variable covert print icons and compare them to a record of valid icons stored in a secure cloud database, ensuring products are not counterfeit, expired or sourced from gray markets.

This technology is integral to DSS’s aggressive attempt to reach profitability in 2013—an effort spearheaded by Bzdick and DSS CFO, Philip Jones. The effort has been greatly enhanced by means of significant investment from Lexington, which enthusiastically supports the management transition at DSS.

“In the time we’ve worked with Bob it became clear that he has a vision for executing the company’s product development strategy and for driving profitability across all divisions,” says Lexington Technology Group Chief Operating Officer Peter Hardigan. “Bob is entrepreneurial, he has worked with a number of large companies, he ran his company successfully and brought his considerable leadership to DSS. “He and Phil Jones are leading the transformation of DSS into a business that has innovative products as well as a dynamic and profitable intellectual property program.”

This transformation is evident in DSS’s third quarter earnings statement, including revenues of $4.2 million, up 15 percent over Q3 2011. Strong growth in the Packaging and Licensing (up 54 percent) and Digital Solutions (up 41 percent) divisions fueled revenues of $11.7 million for the nine-month period ending September 30, 2012—a 27 percent increase from the first nine months of 2011.

Bzdick’s appointment will be discussed during DSS’s investor call on Tuesday, November 20. During the call, DSS will also provide an update on its pending merger with Lexington, which it announced on October 2, 2012.

CONFERENCE CALL

Due to the management change, DSS rescheduled the investor call originally scheduled for today. DSS management will host a teleconference and webcast on Tuesday, November 20, at 4:30 p.m. ET:

Time: 4:30 p.m. ET
Date: Tuesday, November 20, 2012
Investor Dial In (Toll Free):  877-407-9205
Investor Dial In (International):  201-689-8054

Live Webcast URL: http://www.investorcalendar.com/IC/CEPage.asp?ID=170041

A replay of the teleconference will be available until November 29, 2012, which can be accessed by dialing (877)660-6853 within the United States or (201)612-7415 if calling internationally. Please enter account #286 and conference ID #402581 to access the replay. 

______________________

ABOUT DOCUMENT SECURITY SYSTEMS:

Document Security Systems, Inc. (NYSE MKT: DSS) is a leader in anti-counterfeit, authentication, and mass-serialization technologies, providing security solutions to corporations, governments, and financial institutions. DSS security programs are designed to protect against product diversion, counterfeit, theft, and other costly and damaging occurrences. From risk analysis and vulnerability assessment, to systems integration and monitoring, DSS offers the advanced tools and knowledge base needed to protect the world’s most valuable and at-risk brands. More information can be found at their website, www.dsssecure.com

ABOUT LEXINGTON TECHNOLOGY GROUP:

Lexington Technology Group invests both expertise and capital in the development and monetization of pioneering technologies. Lexington’s goal is to catalyze technology development within its investments and to reward those who take on the risks of innovation. The enterprise invests in companies that have developed important innovations but have not been fairly rewarded by the marketplace, where shareholder value depends on the company’s ability to successfully monetize patented technologies. Its efforts contribute to an intellectual property market in which inventors are better able to profit from their inventions. More information is available at www.lex-tg.com.

______________________

Important Additional Information Will Be Filed with the SEC

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of DSS, or Lexington Technology Group or the solicitation of any vote or approval. In connection with the proposed transaction, DSS will file with the SEC a Registration Statement on Form S-4 containing a proxy statement/prospectus. The proxy statement/prospectus will contain important information about DSS, Merger Sub, Lexington Technology Group, the transaction and related matters. DSS will mail or otherwise deliver the proxy statement/prospectus to its stockholders and the stockholders of Lexington Technology Group when it becomes available. Investors and security holders of DSS and Lexington Technology Group are urged to read carefully the proxy statement/prospectus relating to the Merger (including any amendments or supplements thereto) in its entirety when it is available, because it will contain important information about the proposed transaction.

Investors and security holders of DSS will be able to obtain free copies of the proxy statement/prospectus for the proposed Merger (when it is available) and other documents filed with the SEC by DSS through the website maintained by the SEC at www.sec.gov. In addition, investors and security holders of DSS and Lexington Technology Group will be able to obtain free copies of the proxy statement/prospectus for the proposed Merger (when it is available) by contacting Document Security Systems, Inc, Attn.: Philip Jones, Chief Financial Officer, at First Federal Plaza, 28 East Main Street, Suite 1525, Rochester, New York 14614, or by e-mail at ir@dsssecure.com. Investors and security holders of Lexington Technology Group will also be able to obtain free copies of the proxy statement/prospectus for the Merger (when it is available) by contacting Lexington Technology Group Technology Group, Inc., Attn.: Jennifer Buckley, 375 Park Avenue 26th Floor, New York, NY 10152, or by e-mail at jen@lex-tg.com.

DSS and Lexington Technology Group, and their respective directors and certain of their executive officers, may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the agreement between DSS, Merger Sub and Lexington Technology Group. Information regarding DSS’s directors and executive officers is contained in DSS’s Definitive Proxy Statement on Schedule 14A prepared in connection with its 2012 Annual Meeting of Stockholders, which was filed with the SEC on April 18, 2012. Information regarding Lexington Technology Group’s directors and officers and a more complete description of the interests of DSS’s directors and officers in the proposed transaction will be available in the proxy statement/prospectus that will be filed by DSS with the SEC in connection with the proposed transaction.

Cautionary Note Regarding Forward-Looking Statements

Statements in this press release regarding the proposed transaction between DSS and Lexington Technology Group; the expected timetable for completing the transaction; the potential value created by the proposed Merger for DSS’s and Lexington Technology Group’s stockholders; the potential of the combined companies’ technology platform; our respective or combined ability to raise capital to fund our combined operations and business plan; the continued listing of DSS's or the combined company’s securities on the NYSE MKT; market acceptance of DSS products and services; our collective ability to maintain or protect our intellectual property rights through litigation or otherwise; Lexington Technology Group’s limited operating history, competition from other industry competitors with greater market presence and financial resources than those of DSS’s; our ability to license and monetize the patents owned by Lexington Technology Group; potential new legislation or regulation related to enforcing patents; the complexity and costly nature of acquiring patent or other intellectual property assets; the combined company’s management and board of directors; and any other statements about DSS’ or Lexington Technology Group’s management teams’ future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words "believes," "plans," "could," "anticipates," "expects," "estimates," "plans," "should," "target," "will," "would" and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the risk that DSS and Lexington Technology Group may not be able to complete the proposed transaction; the inability to realize the potential value created by the proposed Merger for DSS’s and Lexington Technology Group’s stockholders; our respective or combined inability to raise capital to fund our combined operations and business plan; DSS’s or the combined company’s inability to maintain the listing of our securities on the NYSE MKT; the potential lack of market acceptance of DSS’s products and services; our collective inability to protect our intellectual property rights through litigation or otherwise; competition from other industry competitors with greater market presence and financial resources than those of DSS’s; our inability to license and monetize the patents owned by Lexington Technology Group; and other risks and uncertainties more fully described in DSS’s Annual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012 and June 30, 2012, each as filed with the SEC, as well as the other filings that DSS makes with the SEC. Investors and stockholders are also urged to read the risk factors set forth in the proxy statement/prospectus carefully when they are available.

In addition, the statements in this press release reflect our expectations and beliefs as of the date of this release. We anticipate that subsequent events and developments will cause our expectations and beliefs to change. However, while we may elect to update these forward-looking statements publicly at some point in the future, we specifically disclaim any obligation to do so, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date after the date of this release.

______________________

Investor Relations for Document Security Systems:

Century IR.com 212-776-1030

For further information on Lexington Technology Group please contact:

Jamie Diaferia

Infinite PR

212-687-0935

jdiaferia@infinitepr.com