Item 1.01. Entry Into a Material Definitive Agreement.

On January 4, 2008, Document Security Systems, Inc. (the "Company") entered into a Credit Facility Agreement (the "Fagenson Credit Agreement") with Fagenson and Co., Inc., a related party to Robert B. Fagenson, a member of the Company's Board of Directors. Under the Fagenson Credit Agreement, the Company can borrow up to $3,000,000 from time to time up to and until January 4, 2010 (the "End of the Term"). Any amount borrowed by the Company pursuant to the Fagenson Credit Agreement will have an annual interest rate of 2% above LIBOR and will be secured by the Common Stock of Plastic Printing Professionals, Inc., the Company's wholly owned subsidiary. Interest is payable quarterly in arrears and the principal is payable in full at the End of the Term under the Fagenson Credit Agreement.

On January 4, 2008, the Company also entered into a Credit Facility Agreement (the "White Credit Agreement") with Patrick White, the Company's Chief Executive Officer and Chairman of the Board of Directors. Under the White Credit Agreement, the Company can borrow up to $600,000 from time to time up to and until January 4, 2010 (the "End of the Term"). Any amount borrowed by the Company pursuant to the White Credit Agreement will have an annual interest rate of 2% above LIBOR and will be secured by the accounts receivable of the Company. Interest is payable quarterly in arrears and the principal is payable in full at the End of the Term under the White Credit Agreement.

Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

Item 1.01 above, is hereby incorporated by reference into this Item 2.03

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