Document Security Systems Receives $500,000 Payment from The Ergonomic Group.

Agreement with EGI is Finalized; DSS Anticipates New Revenue Stream in 2007 from Launch of On-Demand Product for EGI's Financial Services and Technology Products and Software Customers

ROCHESTER, N.Y. -- Document Security Systems, Inc. (AMEX: DMC) ("DSS"), a leader in proven, patented protection against counterfeiting and unauthorized copying, scanning and photo imaging, announced that it has received a scheduled $500,000 payment on December 29, 2006, from The Ergonomic Group (EGI) under its previously announced agreement granting EGI an exclusive, limited right to use and market DSS's extensive portfolio of security technologies.

Peter Ettinger, President of Document Security Systems, Inc., stated, "By integrating our security technologies into EGI's internet-based products and services, The Ergonomic Group can now provide its financial services and technology products and software clients highly-advanced protection against counterfeiting and brand fraud. This agreement is a win for both companies as it synchronizes both companies' core strengths in solving security problems in target industries. Importantly, this agreement represents an important new revenue opportunity for DSS in on demand internet-secure solutions, and we expect the partnership to contribute to growth and profitability as we move into 2007 and well into our future."

The two-year agreement with EGI was announced earlier this year and calls for the companies to jointly develop customized security solutions and to market these solutions to EGI's client base in key vertical markets. DSS received two initial, non-refundable license fee payments of $250,000 in August and September of 2006. With the receipt of the $500,000 pre-paid royalty fee, DSS received a total of $1.0 million in cash from EGI in 2006. Furthermore, under the agreement EGI will pay DSS additional royalty fees on all EGI sales for security products that contain DSS's technology. This agreement, combined with the Company's recently completed private placement, provides DSS with sufficient capital for the foreseeable future.

Mr. Ettinger continued, "As a result of our relationship, we have access to The Ergonomic Group's state-of-the-art development lab, its Network Operations Center, and 18 world class engineers, providing DSS major strategic and competitive advantages, as we transfer our leading edge technologies into the world of the internet. Our plan is to capitalize on our relationship with EGI in order to broaden our product offerings and to expand our presence in the insurance, pharmaceutical and other key industries."

EGI, through its strategic partnerships with IBM, Hewlett-Packard, Cisco, Oracle, Sun Microsystems and Symantec, is a technology solutions provider that analyzes and resolves business and Information Technology issues for its clients. The Ergonomics Group solutions encompass proven, best-of-breed technologies covering all areas of networking, storage, compliance, capacity planning, lifecycle management, and security. EGI holds approximately 4.9% of DSS's outstanding shares as stated in its Form 13G filed on January 9, 2006.

About Document Security Systems, Inc.

A rapidly growing security technology company, Document Security Systems is a world leader in the development of optical deterrent technologies that help prevent counterfeiting and brand fraud from the use of the most advanced scanners, copiers and imaging systems in the market. The Company's patented and patent-pending technologies protect valuable documents and printed products from counterfeiters and identity thieves. Document Security Systems' customers, which include international governments, major corporations and world financial institutions, use its covert and overt technologies to protect a number of applications including, but not limited to, currency, vital records, brand protection, ID cards, internet commerce, passports and gift certificates. Document Security Systems' strategy is to become the world's leading producer of cutting-edge security technologies for paper, plastic and electronically generated printed assets. More information about Document Security Systems can be found at its websites: www.documentsecurity.com and www.plasticprintingprofessionals.com.

About The Ergonomic Group

The Ergonomic Group (EGI) is a technology solutions provider that combines customer choice, a service-centric approach, and a regional commitment to help organizations solve their most pressing business and IT challenges. Featuring best-of-breed technologies, a unique "easy to do business with" approach, and experience that spans the desktop to the data center, EGI develops and implements robust IT solutions in six focus areas: networking, storage, security, compliance, capacity planning and lifecycle management. EGI's foundation of market-specific expertise and over 20 years of implementation experience ensure an ideal solution for every client. More information about The Ergonomic Group can be found at its website: www.ergogroup.com.

Safe Harbor Statement

This release contains forward-looking statements regarding expectations for future financial performance, which involve uncertainty and risk. It is possible the Company's future financial performance may differ from expectations due to a variety of factors including, but not limited to, changes in economic and business conditions in the world, increased competitive activity, achieving sales levels to fulfill revenue expectations, consolidation among its competitors and customers, technology advancements, unexpected costs and charges, adequate funding for plans, changes in interest and foreign exchange rates, regulatory and other approvals and failure to implement all plans, for whatever reason. It is not possible to foresee or identify all such factors. Any forward-looking statements in this report are based on current conditions, expected future developments and other factors which the Company believes are appropriate in the circumstances. Prospective investors are cautioned that such statements are not a guarantee of future performance and actual results or developments may differ materially from those projected. The Company makes no commitment to update any forward-looking statement included herein, or disclose any facts, events or circumstances that may affect the accuracy of any forward-looking statement.