Document:

PLEDGE AND ESCROW AGREEMENT

      THIS PLEDGE AND ESCROW  AGREEMENT  (the  "Agreement")  is made and entered
into as of March 8, 2006 (the "Effective Date") by and among COMPLIANCE  SYSTEMS
CORPORATION, a corporation organized and existing under the laws of the State of
Nevada  (formerly GSA  Publications,  Inc.) (the "Pledgor"),  MONTGOMERY  EQUITY
PARTNERS,  LTD.,  (the  "Pledgee"),  and DAVID  GONZALEZ,  ESQ., as escrow agent
("Escrow Agent").

                                    RECITALS:

      WHEREAS,  in order to secure the full and prompt payment when due (whether
at the stated  maturity,  by  acceleration or otherwise) of all of the Company's
obligations (the  "Obligations")  to the Pledgee or any successor to the Pledgee
under this Agreement,  the Securities  Purchase  Agreement of even date herewith
between the Pledgor and the Pledgee (the "Securities Purchase  Agreement"),  the
Convertible Debentures (the "Convertible  Debentures") issued or to be issued by
the Pledgor to the Pledgee in connection with the Securities Purchase Agreement,
either now or in the future,  up to a total of One Million Dollars  ($1,000,000)
of principal,  plus any  interest,  costs,  fees,  and other amounts owed to the
Pledgee  thereunder,  the Security  Agreement of even date herewith  between the
Pledgor and the Pledgee  (the  "Security  Agreement"),  and all other  contracts
entered  into  between  the  parties  hereto  (collectively,   the  "Transaction
Documents"),  the Pledgor has agreed to irrevocably pledge to the Pledgee Twenty
Million  (20,000,000)  shares (the  "Pledged  Shares") of the  Pledgor's  common
stock.

      NOW,  THEREFORE,  for  and  in  consideration  of  the  mutual  covenants,
agreements, warranties, and representations herein contained, and for other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged, the parties hereto agree as follows:

                              TERMS AND CONDITIONS

      1. Pledge and Transfer of Pledged Shares.

            1.1. The Pledgor hereby grants to Pledgee a security interest in all
Pledged  Shares as security  for  Pledgor's  obligations  under the  Convertible
Debentures.  Simultaneously with the execution of the Transaction Documents, the
Pledgor shall deliver to the Escrow Agent stock  certificates  representing  the
Pledged  Shares,  together with duly executed stock powers or other  appropriate
transfer documents executed in blank by the Pledgor (the "Transfer  Documents"),
and such stock  certificates and Transfer  Documents shall be held by the Escrow
Agent  until  the full  payment  of all  amounts  due to the  Pledgee  under the
Convertible Debentures and through repayment in accordance with the terms of the
Convertible Debentures, or the termination or expiration of this Agreement.

      2. Rights Relating to Pledged  Shares.  Upon the occurrence of an Event of
Default (as defined  herein),  the Pledgee shall be entitled to vote the Pledged
Shares, to receive dividends and other distributions  thereon,  and to enjoy all
other rights and privileges incident to the ownership of the Pledged Shares.

<PAGE>

      3. Release of Pledged Shares from Pledge.  Upon the payment of all amounts
due to the Pledgee under the  Convertible  Debentures by repayment in accordance
with the terms of the  Convertible  Debentures,  the parties hereto shall notify
the Escrow Agent to such effect in writing.  Upon receipt of such written notice
for payment of the amounts due to the Pledgee under the Convertible  Debentures,
the Escrow  Agent shall  return to the Pledgor the  Transfer  Documents  and the
certificates  representing  the  Pledged  Shares,   (collectively  the  "Pledged
Materials"),  whereupon  any and all rights of Pledgee in the Pledged  Materials
shall be terminated.  Notwithstanding anything to the contrary contained herein,
upon full  payment  of all  amounts  due to the  Pledgee  under the  Convertible
Debentures,  by  repayment  in  accordance  with the  terms  of the  Convertible
Debentures,  this Agreement and Pledgee's security interest and rights in and to
the Pledged Shares shall terminate.

      4.  Event of  Default.  An  "Event  of  Default"  shall be  deemed to have
occurred  under this  Agreement  upon an Event of Default under the  Transaction
Documents.

      5. Remedies.

            5.1. Upon and anytime  after the  occurrence of an Event of Default,
the Pledgee shall have the right acquire the Pledged  Shares in accordance  with
the following  procedure:  (a) the Pledgee shall provide  written notice of such
Event of Default (the "Default  Notice") to the Escrow Agent, with a copy to the
Pledgor; (b) in a Default Notice the Pledgee shall specify the number of Pledged
Shares to be issued to the Plegdee, provided however, that the Pledgee shall not
have the right to acquire  such number of Pledged  Shares  which would cause the
Pledgee, together with its affiliates, to beneficially own in excess of 9.99% of
the  outstanding  capital  of  the  Pledgor  (unless  the  Pledgee  waives  such
limitation by providing 65 days'  advance  written  notice);  and (c) as soon as
practicable  after receipt of a Default  Notice,  the Escrow Agent shall deliver
the  specified  number of  Pledged  Shares  along with the  applicable  Transfer
Documents  to the  Pledgor's  Transfer  Agent  with  instructions  to issue such
Pledged Shares to the Pledgee in accordance with the Irrevocable  Transfer Agent
Instructions of even date herewith,  among the Pledgee,  the Pledgor, the Escrow
Agent, and the Transfer Agent.

            5.2. Upon receipt of the Pledged  Shares issued to the Pledgee,  the
Pledgee  shall  have the right to (i) sell the  Pledged  Shares and to apply the
proceeds of such sales, net of any selling commissions,  to the Obligations owed
to the  Pledgee  by the  Pledgor  under the  Transaction  Documents,  including,
without limitation,  outstanding principal,  interest, legal fees, and any other
amounts owed to the Pledgee,  and exercise all other rights and (ii) any and all
remedies of a secured  party with  respect to such  property as may be available
under the Uniform  Commercial  Code as in effect in the State of New Jersey.  To
the extent that the net  proceeds  received by the Pledgee are  insufficient  to
satisfy the  Obligations  in full, the Pledgee shall be entitled to a deficiency
judgment  against  the  Pledgor  for such  amount.  The  Pledgee  shall have the
absolute  right to sell or dispose of the  Pledged  Shares in any manner it sees
fit and shall have no liability to the Pledgor or any other party for selling or
disposing of such Pledged Shares even if other methods of sales or  dispositions
would or allegedly  would result in greater  proceeds  than the method  actually
used.  The Pledgor  shall remain liable for  shortfalls,  if any, that may exist
after the Pledgee has exhausted all remedies hereunder.

<PAGE>

            5.3.  Each right,  power and remedy of the Pledgee  provided  for in
this  Agreement  or any  other  Transaction  Document  shall be  cumulative  and
concurrent and shall be in addition to every other such right,  power or remedy.
The  exercise or  beginning of the exercise by the Pledgee of any one or more of
the  rights,  powers or remedies  provided  for in this  Agreement  or any other
Transaction  Document  or now or  hereafter  existing  at law or in equity or by
statute or otherwise  shall not preclude the  simultaneous  or later exercise by
the  Pledgee of all such other  rights,  powers or  remedies,  and no failure or
delay on the part of the  Pledgee to exercise  any such  right,  power or remedy
shall operate as a waiver thereof.  No notice to or demand on the Pledgor in any
case shall  entitle  it to any other or  further  notice or demand in similar or
other  circumstances  or constitute a waiver of any of the rights of the Pledgee
to any other further action in any circumstances  without demand or notice.  The
Pledgee  shall have the full power to enforce or to assign or contract is rights
under this Agreement to a third party.

            5.4. Demand  Registration  Rights. In addition to all other remedies
available to the Pledgee,  upon an Event of Default, the Pledgor shall promptly,
but in no event more than thirty (30) days after the date of the Default Notice,
file a  registration  statement  to register  with the  Securities  and Exchange
Commission the Pledged  Shares for the resale by the Pledgee.  The Pledgor shall
cause the  registration  statement  to remain in effect until all of the Pledged
Shares have been sold by the Pledgee.

      6. Concerning the Escrow Agent.

            6.1. The Escrow Agent  undertakes to perform only such duties as are
expressly set forth herein and no implied  duties or  obligations  shall be read
into this Agreement against the Escrow Agent.

            6.2.  The  Escrow  Agent may act in  reliance  upon any  writing  or
instrument  or signature  which it, in good faith,  believes to be genuine,  may
assume the validity and accuracy of any statement or assertion contained in such
a writing or instrument,  and may assume that any person  purporting to give any
writing, notice, advice or instructions in connection with the provisions hereof
has been duly  authorized  to do so. The Escrow Agent shall not be liable in any
manner for the sufficiency or correctness as to form, manner, and execution,  or
validity of any  instrument  deposited in this escrow,  nor as to the  identity,
authority,  or right of any person  executing the same; and its duties hereunder
shall be limited to the safekeeping of such certificates,  monies,  instruments,
or other document received by it as such escrow holder,  and for the disposition
of the same in  accordance  with the written  instruments  accepted by it in the
escrow.

            6.3.  Pledgee and the Pledgor hereby agree,  to defend and indemnify
the Escrow  Agent and hold it  harmless  from any and all  claims,  liabilities,
losses,  actions,  suits,  or  proceedings  at law or in  equity,  or any  other
expenses, fees, or charges of any character or nature which it may incur or with
which it may be  threatened  by reason of its acting as Escrow  Agent under this
Agreement;  and in connection  therewith,  to indemnify the Escrow Agent against
any and all  expenses,  including  attorneys'  fees and costs of  defending  any
action,  suit, or  proceeding or resisting any claim (and any costs  incurred by
the Escrow Agent pursuant to Sections 6.4 or 6.5 hereof). The Escrow Agent shall
be vested with a lien on all property deposited  hereunder,  for indemnification
of attorneys' fees and court costs regarding any suit,  proceeding or otherwise,
or any other expenses, fees, or charges of any character or nature, which may be
incurred by the Escrow Agent by reason of disputes arising between the makers of
this escrow as to the correct  interpretation of this Agreement and instructions
given to the Escrow Agent hereunder, or otherwise,  with the right of the Escrow
Agent, regardless of the instructions aforesaid, to hold said property until and
unless said additional expenses, fees, and charges shall be fully paid. Any fees
and costs charged by the Escrow Agent for serving hereunder shall be paid by the
Pledgor.

<PAGE>

            6.4.  If any of the  parties  shall  be in  disagreement  about  the
interpretation  of this Agreement,  or about the rights and obligations,  or the
propriety of any action  contemplated by the Escrow Agent hereunder,  the Escrow
Agent may, at its sole discretion  deposit the Pledged  Materials with the Clerk
of the United  States  District  Court of New  Jersey,  sitting  in Newark,  New
Jersey,  and, upon notifying all parties concerned of such action, all liability
on the part of the Escrow  Agent  shall fully  cease and  terminate.  The Escrow
Agent  shall be  indemnified  by the  Pledgor,  the  Company and Pledgee for all
costs,  including  reasonable  attorneys'  fees in connection with the aforesaid
proceeding,  and shall be fully  protected  in  suspending  all or a part of its
activities  under this Agreement  until a final decision or other  settlement in
the proceeding is received.

            6.5.  The Escrow  Agent may consult  with  counsel of its own choice
(and the costs of such  counsel  shall be paid by the Pledgor and  Pledgee)  and
shall have full and complete  authorization  and protection for any action taken
or suffered by it hereunder in good faith and in accordance  with the opinion of
such  counsel.  The Escrow Agent shall not be liable for any mistakes of fact or
error of judgment, or for any actions or omissions of any kind, unless caused by
its willful misconduct or gross negligence.

            6.6. The Escrow Agent may resign upon ten (10) days' written  notice
to the parties in this Agreement.  If a successor  Escrow Agent is not appointed
within  this ten (10) day  period,  the  Escrow  Agent may  petition  a court of
competent jurisdiction to name a successor.

            6.7 Conflict Waiver. The Pledgor hereby acknowledges that the Escrow
Agent is general counsel to the Pledgee, a partner in the general partner of the
Pledgee,  and  counsel  to the  Pledgee  in  connection  with  the  transactions
contemplated  and referred  herein.  The Pledgor agrees that in the event of any
dispute  arising in  connection  with this  Agreement or otherwise in connection
with any transaction or agreement  contemplated and referred herein,  the Escrow
Agent shall be permitted  to continue to  represent  the Pledgee and the Pledgor
will not seek to disqualify such counsel and waives any objection  Pledgor might
have with respect to the Escrow  Agent  acting as the Escrow  Agent  pursuant to
this Agreement.

            6.8 Notices. Unless otherwise provided herein, all demands, notices,
consents,  service of process, requests and other communications hereunder shall
be in writing and shall be delivered in person or by overnight  courier service,
or mailed by certified mail, return receipt requested, addressed:

<PAGE>

If to the Pledgor, to:          Compliance Systems Corporation
                                90 Pratt Oval
                                Glen Cove, NY 11542
                                Attention:  Dean Garfinkel
                                Telephone:  (516) 656-5155
                                Facsimile:  (516) 676-2420

With a copy to:                 Kirkpatrick & Lockhart Nicholson Graham, LLP
                                201 South Biscayne Boulevard, Suite 2000
                                Miami, Florida 33131
                                Attention:  Clayton E. Parker, Esq.
                                Telephone:  (305) 539-3306
                                Facsimile:  (305) 328-7095

If to the Pledgee:              Montgomery Equity Partners, Ltd.
                                101 Hudson Street, Suite 3700
                                Jersey City, NJ 07302
                                Attention:  Mark A. Angelo
                                Telephone:  (201) 985-8300
                                Facsimile:  (201) 985-8744

With copy to:                   David Gonzalez, Esq.
                                101 Hudson Street, Suite 3700
                                Jersey City, NJ 07302
                                Telephone:  (201) 985-8300
                                Facsimile:  (201) 985-1964

Any such notice  shall be  effective  (a) when  delivered,  if delivered by hand
delivery or overnight courier service, or (b) five (5) days after deposit in the
United States mail, as applicable.

      7. Binding Effect.  All of the covenants and obligations  contained herein
shall be binding upon and shall inure to the benefit of the respective  parties,
their successors and assigns.

      8. Governing Law; Venue; Service of Process. The validity,  interpretation
and  performance  of this Agreement  shall be determined in accordance  with the
laws of the State of New Jersey applicable to contracts made and to be performed
wholly  within that state  except to the extent that  Federal law  applies.  The
parties hereto agree that any disputes, claims, disagreements, lawsuits, actions
or controversies of any type or nature whatsoever that,  directly or indirectly,
arise from or relate to this Agreement,  including,  without limitation,  claims
relating to the  inducement,  construction,  performance  or termination of this
Agreement,  shall be  brought  in the state  superior  courts  located in Hudson
County, New Jersey or Federal district courts located in Newark, New Jersey, and
the parties  hereto  agree not to challenge  the  selection of that venue in any
such proceeding for any reason,  including,  without limitation,  on the grounds
that such venue is an inconvenient  forum. The parties hereto specifically agree
that  service  of process  may be made,  and such  service  of process  shall be
effective if made, pursuant to Section 8 hereto.

      9.  Enforcement  Costs. If any legal action or other proceeding is brought
for the enforcement of this Agreement, or because of an alleged dispute, breach,
default  or   misrepresentation  in  connection  with  any  provisions  of  this
Agreement,  the  successful or prevailing  party or parties shall be entitled to
recover  reasonable  attorneys'  fees,  court costs and all expenses even if not
taxable as court costs (including,  without limitation, all such fees, costs and
expenses  incident  to  appeals),  incurred  in that  action or  proceeding,  in
addition to any other relief to which such party or parties may be entitled.

<PAGE>

      10.  Remedies  Cumulative.  No remedy herein  conferred  upon any party is
intended to be  exclusive  of any other  remedy,  and each and every such remedy
shall be  cumulative  and  shall be in  addition  to every  other  remedy  given
hereunder  or now or  hereafter  existing  at law,  in equity,  by  statute,  or
otherwise.  No single or partial  exercise  by any party of any right,  power or
remedy hereunder shall preclude any other or further exercise thereof.

      11.  Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of  which  shall be  deemed  an  original,  but all of which
together shall constitute the same instrument.

      12. No Penalties. No provision of this Agreement is to be interpreted as a
penalty upon any party to this Agreement.

      13. JURY TRIAL.  EACH OF THE  PLEDGEE  AND THE PLEDGOR  HEREBY  KNOWINGLY,
VOLUNTARILY AND  INTENTIONALLY  WAIVES THE RIGHT WHICH IT MAY HAVE TO A TRIAL BY
JURY OF ANY CLAIM,  DEMAND,  ACTION OR CAUSE OF ACTION BASED HEREON,  OR ARISING
OUT OF,  UNDER OR IN ANY WAY  CONNECTED  WITH THE DEALINGS  BETWEEN  PLEDGEE AND
PLEDGOR, THIS PLEDGE AND ESCROW AGREEMENT OR ANY DOCUMENT EXECUTED IN CONNECTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,  STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF ANY PARTY  HERETO OR THERETO IN EACH CASE  WHETHER NOW
EXISTING  OR  HEREAFTER  ARISING,  AND  WHETHER  IN  CONTRACT,  TORT,  EQUITY OR
OTHERWISE.

         [SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE INTENTIONALLY BLANK]

<PAGE>

      IN WITNESS WHEREOF,  the parties hereto have duly executed this Pledge and
Escrow Agreement as of the date first above written.

                              MONTGOMERY EQUITY PARTNERS, LTD.

                              By:    Yorkville Advisors, LLC
                              Its:   General Partner

                              By:
                                 ---------------------------
                              Name:  Mark Angelo
                              Title: Portfolio Manager

                              COMPLIANCE SYSTEMS CORPORATION

                              By:
                                 ---------------------------
                              Name:  Dean Garfinkel
                              Title: Chairman

                              ESCROW AGENT

                              By:
                                 ------------------------
                              Name:  David Gonzalez, Esq.INSIDER PLEDGE AND ESCROW AGREEMENT

      THIS INSIDER  PLEDGE AND ESCROW  AGREEMENT (the  "Agreement")  is made and
entered  into as of March 8, 2006  (the  "Effective  Date")  by and  among  DEAN
GARFINKEL (the "Pledgor"),  MONTGOMERY  EQUITY  PARTNERS,  LTD. (the "Pledgee"),
COMPLIANCE SYSTEMS CORPORATION,  a Nevada corporation (the "Company"), and DAVID
GONZALEZ, ESQ., as escrow agent ("Escrow Agent").

                                    RECITALS:

      WHEREAS,  the Company shall issue and sell to the Pledgee,  as provided in
the Securities  Purchase Agreement of even date herewith between the Company and
the  Pledgee  (the  "Securities  Purchase  Agreement"),  and the  Pledgee  shall
purchase  up  to  One  Million  Dollars   ($1,000,000)  of  secured  convertible
debentures  (the  "Convertible  Debentures"),  which shall be  convertible  into
shares of the Company's  common  stock,  par value $0.001 per share (the "Common
Stock") (as converted, the "Conversion Shares"); and

      WHEREAS, to induce the Pledgee to enter into the transaction  contemplated
by the Securities Purchase Agreement,  the Convertible Debentures,  the Investor
Registration  Rights Agreement of even date herewith between the Company and the
Pledgee (the  "Investor  Registration  Rights  Agreement")  and the  Irrevocable
Transfer Agent Instructions among the Company,  the Pledgee, the Transfer Agent,
and the Escrow  Agent (the  "Transfer  Agent  Instructions")  (the  "Transaction
Documents"),  the  Pledgor  has  agreed to  irrevocably  pledge  to the  Pledgee
9,834,170 shares (the "Pledged  Shares") of Common Stock  beneficially  owned by
the Pledgor in accordance with this Agreement.

      NOW,  THEREFORE,  for  and  in  consideration  of  the  mutual  covenants,
agreements, warranties, and representations herein contained, and for other good
and  valuable  consideration,  the  receipt and  sufficiency  of which is hereby
acknowledged, the parties hereto hereby agree as follows:

                              TERMS AND CONDITIONS

1.  Obligations  Secured.  The  obligations  secured  hereby  are  any  and  all
obligations of the Company now existing or hereinafter  incurred to the Pledgee,
whether oral or written and whether arising before,  on or after the date hereof
including,  without limitation,  those obligations of the Company to the Pledgee
under the  Transaction  Documents and any other amounts now or hereafter owed to
the Pledgee by the Company thereunder (collectively, the "Obligations").

2. Pledge and Transfer of Pledged  Shares.  The Pledgor hereby grants to Pledgee
an  irrevocable,  first  priority  security  interest in all  Pledged  Shares as
security for the Company's Obligations. Simultaneously with the execution of the
Transaction  Documents,  the  Pledgor  shall  deliver to the Escrow  Agent stock
certificates  made out in favor of the Pledgor  representing the Pledged Shares,
together with duly executed stock powers or other appropriate transfer documents
with  medallion  bank  guarantees  and  executed  in blank by the  Pledgor  (the
"Transfer Documents"),  and such stock certificates and Transfer Documents shall
be held by the Escrow Agent until the full payment of all Obligations due to the
Pledgee,  including  the  repayment  of all  amounts  owed by the Company to the
Pledgee  under  the  Convertible   Debentures  (whether  outstanding  principal,
interest, legal fees, or any other amounts owed to the Pledgee by the Company).

<PAGE>

3. Rights Relating to Pledged Shares. Upon the occurrence of an Event of Default
(as defined  herein),  the Pledgee shall be entitled to vote the Pledged Shares,
receive dividends and other  distributions  thereon,  and enjoy all other rights
and  privileges  incident  to the  ownership  of the  number of  Pledged  Shares
actually released from escrow in accordance with Section 6.1 hereof.

4.  Release  of  Pledged  Shares  from  Pledge.  Upon  the full  payment  of all
Obligations  due to the Pledgee under the Transaction  Documents,  including the
repayment  of  all  amounts  owed  by  the  Company  to the  Pledgee  under  the
Convertible Debentures (whether outstanding principal, interest, legal fees, and
any other amounts owed to the Pledgee by the Company),  the parties hereto shall
notify the Escrow Agent to such effect in writing. Promptly upon receipt of such
written  notice,  the Escrow  Agent shall  return to the  Pledgor  the  Transfer
Documents and the certificates  representing  the Pledged Shares  (collectively,
the "Pledged Materials"), whereupon any and all rights of Pledgee in the Pledged
Materials shall be terminated.

5. Event of  Default.  An "Event of  Default"  shall be deemed to have  occurred
under this Agreement upon an Event of Default under the Convertible Debentures.

6. Remedies.

            a. Upon and anytime after the occurrence of an Event of Default, the
Pledgee shall have the right acquire the Pledged  Shares in accordance  with the
following procedure:  (a) the Pledgee shall provide written notice of such Event
of  Default  (the  "Default  Notice")  to the Escrow  Agent,  with a copy to the
Pledgor; (b) in a Default Notice the Pledgee shall specify the number of Pledged
Shares to be issued to the Plegdee, provided however, that the Pledgee shall not
have the right to acquire  such number of Pledged  Shares  which would cause the
Pledgee, together with its affiliates, to beneficially own in excess of 9.99% of
the  outstanding  capital  of  the  Pledgor  (unless  the  Pledgee  waives  such
limitation by providing 65 days'  advance  written  notice);  and (c) as soon as
practicable  after receipt of a Default  Notice,  the Escrow Agent shall deliver
the  specified  number of  Pledged  Shares  along with the  applicable  Transfer
Documents  to the  Pledgor's  Transfer  Agent  with  instructions  to issue such
Pledged Shares to the Pledgee in accordance with the Irrevocable  Transfer Agent
Instructions of even date herewith,  among the Pledgee,  the Pledgor, the Escrow
Agent, and the Transfer Agent.

            b. Upon receipt of the Pledged  Shares  issued to the  Pledgee,  the
Pledgee  shall  have the right to (i) sell the  Pledged  Shares and to apply the
proceeds of such sales, net of any selling commissions,  to the Obligations owed
to the  Pledgee  by the  Pledgor  under the  Transaction  Documents,  including,
without limitation,  outstanding principal,  interest, legal fees, and any other
amounts owed to the Pledgee,  and exercise all other rights and (ii) any and all

                                       2
<PAGE>

remedies of a secured  party with  respect to such  property as may be available
under the Uniform  Commercial  Code as in effect in the State of New Jersey.  To
the extent that the net  proceeds  received by the Pledgee are  insufficient  to
satisfy the  Obligations  in full, the Pledgee shall be entitled to a deficiency
judgment  against  the  Pledgor  for such  amount.  The  Pledgee  shall have the
absolute  right to sell or dispose of the  Pledged  Shares in any manner it sees
fit and shall have no liability to the Pledgor or any other party for selling or
disposing of such Pledged Shares even if other methods of sales or  dispositions
would or allegedly  would result in greater  proceeds  than the method  actually
used.  The Pledgor  shall remain liable for  shortfalls,  if any, that may exist
after the Pledgee has exhausted all remedies hereunder.

            c. Each right,  power and remedy of the Pledgee provided for in this
Agreement or any other  Transaction  Document shall be cumulative and concurrent
and shall be in  addition  to every  other  such  right,  power or  remedy.  The
exercise or  beginning  of the exercise by the Pledgee of any one or more of the
rights,  powers  or  remedies  provided  for in  this  Agreement  or  any  other
Transaction  Document  or now or  hereafter  existing  at law or in equity or by
statute or otherwise  shall not preclude the  simultaneous  or later exercise by
the  Pledgee of all such other  rights,  powers or  remedies,  and no failure or
delay on the part of the  Pledgee to exercise  any such  right,  power or remedy
shall operate as a waiver thereof.  No notice to or demand on the Pledgor in any
case shall  entitle  it to any other or  further  notice or demand in similar or
other  circumstances  or constitute a waiver of any of the rights of the Pledgee
to any other further action in any circumstances  without demand or notice.  The
Pledgee  shall have the full power to enforce or to assign or contract is rights
under this Agreement to a third party.

7. Representations, Warranties and Covenants.

            a. The Pledgor represents, warrants and covenants that:

                  (i) Pledgor is, and at the time when  pledged  hereunder  will
be, the legal,  beneficial and record owner of, and has (and will have) good and
valid  title to, all Pledged  Shares  pledged  hereunder,  subject to no pledge,
lien,  mortgage,  hypothecation,  security  interest,  charge,  option  or other
encumbrance whatsoever;

                  (ii)  Pledgor  has full  power,  authority  and legal right to
pledge all the Pledged Shares pledged pursuant to this Agreement; and

                  (iii)  all the  Pledged  Shares  have  been  duly and  validly
issued,  are fully  paid and  non-assessable  and are  subject  to no options to
purchase or similar rights.

            b. The Pledgor  covenants and agrees to take all reasonable steps to
defend the Pledgee's  right,  title and security  interest in and to the Pledged
Shares and the  proceeds  thereof  against the claims and demands of all persons
whomsoever  (other  than the  Pledgee  and the Escrow  Agent);  and the  Pledgor
covenants  and  agrees  that it will have like  title to and right to pledge any
other  property  at any time  hereafter  pledged to the  Pledgee  as  Collateral
hereunder  and will  likewise  take all  reasonable  steps to  defend  the right
thereto and security interest therein of the Pledgee.

            c. The Pledgor  covenants  and agrees to take no action  which would
violate or be inconsistent with any of the terms of any Transaction Document, or
which  would have the effect of  impairing  the  position  or  interests  of the
Pledgee under any Transaction Document.

                                       3
<PAGE>

            d. The  Pledgor  represents,  warrants  and  covenants  that (i) the
Pledgor has been the beneficial  owner of the Pledged Shares for a period of not
less than two (2) years as computed in accordance  with Rule 144(d)  promulgated
under the  Securities  Act of 1933, as amended,  and (ii) this Agreement is made
with  recourse.  Upon an Event of Default,  the Pledgee  shall be deemed to have
acquired the Pledged  Shares on the date they were acquired by the Pledgor.  The
Pledgor is an "affiliate" of the Company, as such term is defined in Rule 144(a)
promulgated under the Securities Act of 1933, as amended.

8. Concerning the Escrow Agent.

            a. The Escrow  Agent  undertakes  to perform only such duties as are
expressly set forth herein and no implied  duties or  obligations  shall be read
into this Agreement against the Escrow Agent.

                  b. The Escrow  Agent may act in  reliance  upon any writing or
instrument  or signature  which it, in good faith,  believes to be genuine,  may
assume the validity and accuracy of any statement or assertion contained in such
a writing or instrument,  and may assume that any person  purporting to give any
writing, notice, advice or instructions in connection with the provisions hereof
has been duly  authorized  to do so. The Escrow Agent shall not be liable in any
manner for the sufficiency or correctness as to form, manner, and execution,  or
validity of any  instrument  deposited in this escrow,  nor as to the  identity,
authority,  or right of any person  executing the same; and its duties hereunder
shall be limited to the safekeeping of such certificates,  monies,  instruments,
or other document received by it as such escrow holder,  and for the disposition
of the same in  accordance  with the written  instruments  accepted by it in the
escrow.

                  c.  Pledgee  and the  Pledgor  hereby  agree,  to  defend  and
indemnify  the  Escrow  Agent  and hold it  harmless  from  any and all  claims,
liabilities,  losses, actions, suits, or proceedings at law or in equity, or any
other  expenses,  fees, or charges of any character or nature which it may incur
or with which it may be threatened by reason of its acting as Escrow Agent under
this  Agreement;  and in  connection  therewith,  to indemnify  the Escrow Agent
against any and all expenses,  including  attorneys' fees and costs of defending
any action,  suit, or proceeding or resisting any claim (and any costs  incurred
by the Escrow Agent  pursuant to Sections  6.4 or 6.5 hereof).  The Escrow Agent
shall  be  vested  with  a  lien  on  all  property  deposited  hereunder,   for
indemnification   of  attorneys'  fees  and  court  costs  regarding  any  suit,
proceeding  or  otherwise,  or any  other  expenses,  fees,  or  charges  of any
character  or nature,  which may be  incurred  by the Escrow  Agent by reason of
disputes   arising  between  the  makers  of  this  escrow  as  to  the  correct
interpretation  of this  Agreement  and  instructions  given to the Escrow Agent
hereunder,  or otherwise,  with the right of the Escrow Agent, regardless of the
instructions  aforesaid,  to hold said property until and unless said additional
expenses,  fees,  and charges shall be fully paid. Any fees and costs charged by
the Escrow Agent for serving hereunder shall be paid by the Pledgor.

                  d. If any of the parties  shall be in  disagreement  about the
interpretation  of this Agreement,  or about the rights and obligations,  or the
propriety of any action  contemplated by the Escrow Agent hereunder,  the Escrow
Agent may, at its sole discretion  deposit the Pledged  Materials with the Clerk

                                       4
<PAGE>

of the United  States  District  Court of New  Jersey,  sitting  in Newark,  New
Jersey,  and, upon notifying all parties concerned of such action, all liability
on the part of the Escrow  Agent  shall fully  cease and  terminate.  The Escrow
Agent  shall be  indemnified  by the  Pledgor,  the  Company and Pledgee for all
costs,  including  reasonable  attorneys'  fees in connection with the aforesaid
proceeding,  and shall be fully  protected  in  suspending  all or a part of its
activities  under this Agreement  until a final decision or other  settlement in
the proceeding is received.

                  e. The Escrow Agent may consult with counsel of its own choice
(and the costs of such  counsel  shall be paid by the Pledgor and  Pledgee)  and
shall have full and complete  authorization  and protection for any action taken
or suffered by it hereunder in good faith and in accordance  with the opinion of
such  counsel.  The Escrow Agent shall not be liable for any mistakes of fact or
error of judgment, or for any actions or omissions of any kind, unless caused by
its willful misconduct or gross negligence.

                  f. The  Escrow  Agent may resign  upon ten (10) days'  written
notice to the  parties in this  Agreement.  If a successor  Escrow  Agent is not
appointed within this ten (10) day period, the Escrow Agent may petition a court
of competent jurisdiction to name a successor.

9. Conflict  Waiver.  The Pledgor hereby  acknowledges  that the Escrow Agent is
general counsel to the Pledgee, a partner in the general partner of the Pledgee,
and counsel to the Pledgee in connection with the transactions  contemplated and
referred herein.  The Pledgor agrees that in the event of any dispute arising in
connection  with this Agreement or otherwise in connection  with any transaction
or  agreement  contemplated  and  referred  herein,  the Escrow  Agent  shall be
permitted to continue to represent  the Pledgee and the Pledgor will not seek to
disqualify such counsel and waives any objection Pledgor might have with respect
to the Escrow Agent acting as the Escrow Agent pursuant to this Agreement.

10. Notices. Unless otherwise provided herein, all demands,  notices,  consents,
service of process,  requests  and other  communications  hereunder  shall be in
writing and shall be  delivered in person or by overnight  courier  service,  or
mailed by certified mail, return receipt requested, addressed:

If to the Company, to:          Compliance Systems Corporation
                                90 Pratt Oval
                                Glen Cove, NY 11542
                                Attention:  Dean Garfinkel
                                Telephone:  (516) 656-5155
                                Facsimile:  (516) 676-2420

With a copy to:                 Kirkpatrick & Lockhart Nicholson Graham, LLP
                                201 South Biscayne Boulevard, Suite 2000
                                Miami, Florida 33131
                                Attention:  Clayton E. Parker, Esq.
                                Telephone:  (305) 539-3306
                                Facsimile:  (305) 328-7095

                                       5
<PAGE>

If to the Pledgee:              Montgomery Equity Partners, Ltd.
                                101 Hudson Street, Suite 3700
                                Jersey City, NJ 07302
                                Attention:  Mark A. Angelo
                                Telephone:  (201) 985-8300
                                Facsimile:  (201) 985-8744

With copy to:                   Montgomery Equity Partners, Ltd.
                                101 Hudson Street, Suite 3700
                                Jersey City, NJ 07302
                                Attention:  David Gonzalez, Esq.
                                Telephone:  (201) 985-8300
                                Facsimile:  (201) 985-1964

If to the Pledgor, to:          Dean Garfinkel
                                c/o Compliance Systems Corporation
                                90 Pratt Oval
                                Glen Cove, NY 11542
                                Telephone:  (516) 656-5155
                                Facsimile:  (516) 676-2420

Any such notice  shall be  effective  (a) when  delivered,  if delivered by hand
delivery or overnight courier service, or (b) five (5) days after deposit in the
United States mail, as applicable.

11. Binding Effect. All of the covenants and obligations  contained herein shall
be binding upon and shall inure to the benefit of the respective parties,  their
successors and assigns.

12. Governing Law; Venue; Service of Process.  The validity,  interpretation and
performance of this Agreement shall be determined in accordance with the laws of
the State of New Jersey  applicable to contracts made and to be performed wholly
within that state  except to the extent that  Federal law  applies.  The parties
hereto agree that any  disputes,  claims,  disagreements,  lawsuits,  actions or
controversies  of any type or nature  whatsoever  that,  directly or indirectly,
arise from or relate to this Agreement,  including,  without limitation,  claims
relating to the  inducement,  construction,  performance  or termination of this
Agreement,  shall be  brought  in the state  superior  courts  located in Hudson
County, New Jersey or Federal district courts located in Newark, New Jersey, and
the parties  hereto  agree not to challenge  the  selection of that venue in any
such proceeding for any reason,  including,  without limitation,  on the grounds
that such venue is an inconvenient  forum. The parties hereto specifically agree
that  service  of process  may be made,  and such  service  of process  shall be
effective if made, pursuant to Section 8 hereto.

13.  Enforcement  Costs. If any legal action or other  proceeding is brought for
the enforcement of this  Agreement,  or because of an alleged  dispute,  breach,
default  or   misrepresentation  in  connection  with  any  provisions  of  this
Agreement,  the  successful or prevailing  party or parties shall be entitled to
recover  reasonable  attorneys'  fees,  court costs and all expenses even if not
taxable as court costs (including,  without limitation, all such fees, costs and
expenses  incident  to  appeals),  incurred  in that  action or  proceeding,  in
addition to any other relief to which such party or parties may be entitled.

                                       6
<PAGE>

14. Remedies  Cumulative.  No remedy herein conferred upon any party is intended
to be  exclusive  of any other  remedy,  and each and every such remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law, in equity, by statute, or otherwise.  No single or
partial  exercise  by any party of any right,  power or remedy  hereunder  shall
preclude any other or further exercise thereof.

15.  Counterparts.  This Agreement may be executed in one or more  counterparts,
each of which  shall be  deemed an  original,  but all of which  together  shall
constitute the same instrument.

16. No  Penalties.  No provision of this  Agreement  is to be  interpreted  as a
penalty upon any party to this Agreement.

17.  JURY  TRIAL.  EACH  OF  THE  PLEDGEE  AND  THE  PLEDGOR  HEREBY  KNOWINGLY,
VOLUNTARILY AND  INTENTIONALLY  WAIVES THE RIGHT WHICH IT MAY HAVE TO A TRIAL BY
JURY OF ANY CLAIM,  DEMAND,  ACTION OR CAUSE OF ACTION BASED HEREON,  OR ARISING
OUT OF,  UNDER OR IN ANY WAY  CONNECTED  WITH THE DEALINGS  BETWEEN  PLEDGEE AND
PLEDGOR, THIS PLEDGE AND ESCROW AGREEMENT OR ANY DOCUMENT EXECUTED IN CONNECTION
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING,  STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF ANY PARTY  HERETO OR THERETO IN EACH CASE  WHETHER NOW
EXISTING  OR  HEREAFTER  ARISING,  AND  WHETHER  IN  CONTRACT,  TORT,  EQUITY OR
OTHERWISE.

       [SIGNATURE PAGE FOLLOWS; REMAINDER OF PAGE INTENTIONALLY BLANK]

                                       7
<PAGE>

      IN WITNESS  WHEREOF,  the parties  hereto have duly  executed this Insider
Pledge and Escrow Agreement as of the date first above written.

                              PLEDGEE:

                              MONTGOMERY EQUITY PARTNERS, LTD.

                              By:
                                 ------------------------------
                                Name: Mark Angelo

                              Title:      Portfolio Manager

                              PLEDGOR:

                              By:
                                 ------------------------------
                              Name: Dean Garfinkel

                              COMPLIANCE SYSTEMS CORPORATION

                              By:

                              Name: Dean Garfinkel

                                 Title: Chairman

                              ESCROW AGENT

                              By:
                                 ------------------------------
                              Name: David Gonzalez, Esq.

      FOR VALUE  RECEIVED,  the Pledgor  hereby  unconditionally  and absolutely
guarantees the Company's  Obligations (as defined above). This Agreement is made
with recourse.

      By:
          ------------------------------
      Name:  Dean Garfinkel

                                       8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00099-of-00352.parquet"}]]