Unassociated Document


    SUBORDINATION
      AGREEMENT

    


    THIS
      SUBORDINATION AGREEMENT
      (this
“AGREEMENT”)
      is
      dated as of September 30, 2006, by and between MONTGOMERY EQUITY PARTNERS,
      LTD.,
      a Cayman Island exempted Company (“Montgomery”)
      and
      NASCAP
      CORP.,
      a New
      York corporation (the “Nascap”)
      (collectively,
      referred to hereinafter as the “Parties”).
      

    


    RECITALS:

     

    WHEREAS,
      contemporaneously to the execution of this Agreement, Call Compliance, Inc.,
      a
      New York corporation (“Call
      Compliance”),
      is
      granting a Promissory Note (the “Nascap
      Note”)
      in the
      amount of One Hundred Fifty Thousand Dollars ($150,000.00) to Nascap;
      and

     

    WHEREAS,
      in
      connection with the Nascap Note, Call Compliance and Nascap are entering into
      (i) a Security Agreement, dated September 30, 2006 (the “Nascap
      Security Agreement”),
      pursuant to which Call Compliance will grant to Nascap a security interest
      in
      the Secured Obligations, as defined in the Nascap Security Agreement;
      and

     

    WHEREAS,
      in
      connection with the Nascap Note, Compliance Systems Corporation (“Compliance
      Systems”),
      a
      Nevada corporation which owns 100% of the issued and outstanding shares of
      Call
      Compliance, entered into a Guaranty Agreement, dated September 30, 2006, (the
      “Nascap
      Guaranty Agreement”),
      made
      by Compliance Systems in favor of Nascap, pursuant to which Compliance Systems
      unconditionally and irrevocably guarantees to Nascap the payment and performance
      of Call Company under the Nascap Note and the Nascap Security Agreement;
      and

     

    WHEREAS,
      in
      connection with the Nascap Note, Montgomery, Call Compliance and Compliance
      Systems entered into a Consent, dated September 30, 2006, whereby Montgomery
      consented to Call Compliance to enter into the Nascap Note and the Nascap
      Security Agreement, and consented to Compliance Systems to enter into the Nascap
      Guaranty Agreement; and 

     

    WHEREAS,
      Montgomery
      has a first priority security interest in various assets of Call Compliance,
      including the Secured Obligations.

     

    NOW,
      THEREFORE,
      for and
      in consideration of the mutual and reciprocal covenants and agreements
      hereinafter contained and other good and valuable consideration, the receipt
      and
      sufficiency of which is hereby acknowledged, the Parties hereto, intending
      to be
      legally bound, hereby agree as follows:

     

    1.
      Recitals.
      The
      recitals set forth above are true and are hereby incorporated by this
      reference.

     

    2.
      Subordination.
      Montgomery hereby subordinates its first priority security interest solely
      with
      respect to the Secured Obligations to Nascap, as defined in the Nascap Security
      Agreement. 

     

    3.
      Counterparts.
      This
      Agreement may be executed in one or more counterparts, and by the Parties hereto
      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
      instrument.

     

    4.
      Governing
      Law.
      This
      Agreement shall be governed by the laws of the State of New Jersey, excluding
      its choice of law principles. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF,
      the
      Parties hereto, through their duly authorized representatives, have executed
      this instrument as of the day and year first written above.

     

    
      	 	 	 
	 	
              MONTGOMERY
                EQUITY PARTNERS, LTD.,

              a
                Cayman Island exempted Company

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
                

              

              Printed Name: 

            
	 	
              
                

              

              
                Title:

              

            
	 	
              
                

              

              Date: 

            
	 	
              
                

              

            
	 	 


    

     

    
      	 	 	 
	 	
              
                NASCAP
                  CORP.,

                a
                  New York corporation

              

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
                

              

              Printed Name: 

            
	 	
              
                

              

              
                Title:

              

            
	 	
              
                

              

              Date: 

            
	 	
              
                

              

            
	 	 


    

     

     

    
      
        
        

      

      
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