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Document Security Systems to Acquire DPI of Rochester

Press release from the issuing company

Rochester, NY, November 7, 2008 – Document Security Systems, Inc., ("DSS") a leader in patented protection against counterfeiting and unauthorized copying, scanning and photo imaging, today announced that is has entered into a definitive agreement to acquire substantially all of the assets of DPI of Rochester, LLC ("DPI") subject to court approval in DPI's pending Chapter 11 bankruptcy case. DPI is a full service digital and commercial offset printer located in Rochester, NY with approximately $7.6 million in annual sales in 2007.

Robert Fagenson, Chairman of the Board of Document Security Systems, commented, "At our annual shareholders meeting in May, we stated that 2008 was a year in which we hoped to reach five significant goals. We have previously announced significant strides in four of them: the stabilization and growth in our core printing business, a substantial reduction of operating expenses, the segregation of our European litigation from our operations and the digital distribution of our security products via our AuthentiGuard DX appliance. The consummation of our agreement to purchase DPI would represent the accomplishment of the fifth of our goals – a synergistic acquisition in the printing industry. We analyzed many potential acquisitions before determining that DPI was the best fit for DSS. "

Patrick White, CEO of Document Security Systems, said "Joining with DPI will allow us to greatly expand our security print production capabilities. Document Security Systems has had opportunities to produce significant vital security print projects which require our valuable patented technologies as well as the production capacity DPI will provide. In addition, DPI has a strong talented workforce as well as cutting edge digital print equipment which will give us the overall necessary tools to address various world-wide security print opportunities. DPI operates a state-of-the-art commercial print facility and has built an impressive list of clients on its reputation for high quality printing and excellent customer service. We are excited to bring these capabilities to our growing customer group. Our combined operations will reduce costs and create significant operational synergies to both organizations. In addition, this transaction will provide DPI with resources that will allow it to continue to provide its customers with the highest level of service possible."

Document Security Systems may provide debtor-in-possession financing, subject to United States Bankruptcy Court approval, to DPI during its Chapter 11 reorganization process to prevent any disruption of service to DPI's customers. The purchase of assets is expected to be completed in the quarter ended December 31, 2008 and is subject to the United States Bankruptcy Court approval and an opportunity for other parties to overbid for DPI's assets. Document Security Systems' obligations under the agreement are conditioned upon the negotiation of real and personal property leases, the approval of the bankruptcy court and other matters. There can be no assurance that the transaction contemplated by the purchase agreement will be approved by the bankruptcy court or that the conditions to closing will be met.