Document:

NEITHER
THIS DEBENTURE NOR ANY SHARES OF STOCK ISSUABLE UPON CONVERSION OF THIS
DEBENTURE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATE. NEITHER THIS DEBENTURE NOR
ANY SHARES OF STOCK ISSUABLE UPON CONVERSION OF THIS DEBENTURE MAY BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THIS DEBENTURE OR SHARES OF STOCK ISSUABLE
UPON CONVERSION OF THIS DEBENTURE UNDER SUCH ACT UNLESS SUCH REGISTRATION IS NOT
REQUIRED PURSUANT TO A VALID EXEMPTION THEREFROM UNDER THE ACT.

    

    COMPLIANCE
SYSTEMS CORPORATION

    

    AMENDED
AND RESTATED

    SECURED
CONVERTIBLE DEBENTURE

    

    $300,000.00                                                                                                                          September
2, 2008

    

    FOR VALUE
RECEIVED, the undersigned Compliance Systems
Corporation, a Nevada corporation (referred to herein as “Borrower”
or the “Company”),
promises to pay to the order of Agile Opportunity Fund, LLC,
its successors or assigns (the “Lender”),
the principal sum of Three Hundred Thousand Dollars ($300,000.00) or such lesser
principal amount as is then outstanding on November 6, 2009 (the “Maturity
Date”), and interest thereon at a rate equal to fifteen percent (15%) per
annum (the “Interest
Rate”).  Interest shall be payable on the last day of each
calendar month prior to the Maturity Date with the first interest payment to be
made on September 30, 2008.  Borrower shall pay the principal balance
then outstanding under this Secured Convertible Debenture (this “Debenture”)
plus accrued but unpaid interest in full on the Maturity Date along with payment
of any other amounts due hereunder or under the other Loan Documents (as defined
below).  The Borrower acknowledges that in addition to the interest
due hereunder, Lender shall be entitled to an additional payment, on the
Maturity Date or whenever the principal of this Debenture is paid (including in
connection with any earlier redemption), such that Lender’s annualized rate of
return on such principal payment shall be equal to thirty (30%)
percent.  Notwithstanding any other provision hereof, interest paid or
becoming due hereunder and any other payments hereunder which may constitute
interest shall in no event exceed the maximum rate permitted by applicable
law.

    

    Interest
and any other amounts due hereunder are payable in lawful money of the United
States of America to the Lender at the address set forth in that certain
Securities Purchase Agreement executed by the Borrower and the Lender dated as
of May 6, 2008, as amended from time to time (the “Securities
Purchase Agreement”) and pursuant to which this Debenture is
issued.  The terms and conditions of the Securities Purchase Agreement
and all other documents and instruments delivered in connection therewith
(collectively, the “Loan
Documents”) are incorporated by reference herein and made a part
hereof.  All capitalized terms not otherwise defined herein shall have
the respective meanings as set forth in the Securities Purchase
Agreement.

    
      
         

      

      
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    Section
1.  Conversion.

    

    (a)           At
any time from the original issue date hereof through the date that this
Debenture is paid in full, Lender shall have the right, in its sole discretion,
to convert the principal balance of this Debenture then outstanding plus accrued
but unpaid interest, in whole or in part, into shares (each, a “Conversion
Share”) of Common Stock at a conversion price equal to $0.05 per
Conversion Share, subject to adjustment as provided in Section 2 herein (the
“Conversion
Price”).

    

    (b)           Lender
may convert this Debenture at the then applicable Conversion Price by the
surrender of this Debenture (properly endorsed) to the Company at the principal
office of the Borrower, together with the form of Notice of Conversion attached
hereto as Annex A (a
“Notice of
Conversion”) duly completed, dated and executed, specifying therein the
principal amount of Debenture and/or outstanding interest to be
converted.  The “Conversion Date” shall be the date that such Notice
of Conversion and this Debenture is duly provided to Borrower hereunder (or, at
Lender's option, the next interest payment date with respect to Lender's
conversion of any scheduled interest payment).

    

    (c)           On
the date of receipt by the Company of the duly completed, dated and executed
Notice of Conversion and this Debenture in accordance with Section 1(b) with
respect to a conversion of any portion of this Debenture, the Lender (and any
person(s) receiving Conversion Shares in lieu of the Lender) shall be deemed to
have become the holder of record for all purposes of the Conversion Shares to
which such valid conversion relates.

    

    (d)           As
soon as practicable, but not in excess of five business days, after the valid
conversion of any portion of this Debenture, the Company, at the Company’s
expense (including the payment by Company of any applicable issuance and similar
taxes, will cause to be issued in the name of and delivered to the Lender
(and/or such other person(s) identified in the Notice of Conversion with respect
to such conversion), certificates evidencing the number of duly authorized,
validly issued, fully paid and non-assessable Conversion Shares to which the
Lender (and/or such other person(s) identified in such Notice of Conversion,
shall be entitled to receive upon the conversion), as adjusted to reflect the
effects, if any, of the anti-dilution provisions of Section 2, such certificates
to be in such reasonable denominations as Lender may request when delivering the
Notice of Conversion.

    

    (e)           If
less than the entire principal and accrued interest under this Debenture is
being converted, the Company shall execute and deliver to the Lender a new
Debenture (dated as of the date hereof) evidencing the principal balance of this
Debenture that has not been so converted.

    
      
         

      

      
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    Section 2.  Conversion Price
Adjustment.

    

    (a)  If and whenever the
Company issues or sells any Additional Stock (as defined below) for
consideration per share less than the Conversion Price in effect immediately
prior to such issuance or sale, then immediately upon such issuance or sale the
Conversion Price shall be reduced to a new Conversion Price determined by
dividing (i) amount equal to the sum of (a) the number of shares of Common Stock
(on a fully-diluted basis) outstanding immediately prior to such issuance or
sale, multiplied by the then existing Conversion Price, plus (b) the
consideration, if any, received by the Company in connection with such issuance
or sale, by (ii) the total number of shares of Common Stock (on a fully-diluted
basis) outstanding immediately after such issuance or sale, rounded to the
nearest one ten-thousandth ($0.0001) of a dollar.  As used herein,
“Additional
Stock” means any securities issued (or deemed to have been issued
pursuant to Section 2(b)) by the Company after the original issue date hereof
other than: (i) any rights, warrants or options directly or indirectly to
subscribe for or purchase Common Stock (“Options”)
outstanding as of the original issue date hereof including the Company’s
outstanding convertible preferred stock; (ii) the first 15 million of Common
Stock issued pursuant to an equity incentive plan for employees, officers,
directors and independent contractors of the Company adopted by the Board of
Directors of the Company; provided such Common
Stock is sold at or above the market price for the Common Stock as of the date
of grant of the Option to purchase such Common Stock or date of issuance of such
Common Stock, if no Option is being exercised in connection with such sale;
(iii) shares of Common Stock issuable upon conversion of any Debentures issued
under the Securities Purchase Agreement; and (iv) as a stock dividend or upon
any subdivision of shares of Common Stock, provided that the securities issued
pursuant to such stock dividend or subdivision are limited to additional shares
of Common Stock.

     

    (b) For
purposes of determining the adjusted Conversion Price under Section 2(a) above,
the following shall be applicable:

    

    (i)           Issuance of Rights or
Options. If the Company in any manner grants or sells any Options and the
price per share for which Additional Stock is issuable upon the exercise of such
Options, or upon conversion or exchange of any convertible securities issuable
upon exercise of such Options, is less than the Conversion Price in effect
immediately prior to such grant or sale, then the total maximum number of shares
of Additional Stock issuable upon the exercise of such Options or upon
conversion or exchange of the total maximum amount of such Convertible
Securities issuable upon the exercise of such Options shall be deemed to be
outstanding and to have been issued and sold by the Company at the time of the
granting or sale of such Options for such price per share. For purposes of this
paragraph, the “price per share for which Additional Stock is issuable” shall be
determined by dividing (A) the total amount, if any, received or receivable
by the Company as consideration for the granting or sale of such Options, plus
the minimum aggregate amount of additional consideration payable to the Company
upon exercise of all such Options, plus in the case of such Options which relate
to Convertible Securities, the minimum aggregate amount of additional
consideration, if any, payable to the Company upon the issuance or sale of such
Convertible Securities and the conversion or exchange thereof, by (B) the
total maximum number of shares of Additional Stock issuable upon the exercise of
such Options or upon the conversion or exchange of all such Convertible
Securities issuable upon the exercise of such Options. No further adjustment of
the Conversion Price shall be made when Convertible Securities are actually
issued upon the exercise of such Options or when Additional Stock is actually
issued upon the exercise of such Options or the conversion or exchange of such
Convertible Securities.

    
      
         

      

      
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    (ii)  Issuance of Convertible
Securities. If the Company in any manner issues or sells any convertible
securities and the price per share for which Additional Stock is issuable upon
conversion or exchange thereof is less than the Conversion Price in effect
immediately prior to such issuance or sale, then the maximum number of shares of
Additional Stock issuable upon conversion or exchange of such convertible
securities shall be deemed to be outstanding and to have been issued and sold by
the Company at the time of the issuance or sale of such convertible securities
for such price per share.  For the purposes of this subparagraph, the
“price per share for which Additional Stock is issuable” shall be determined by
dividing (A) the total amount received or receivable by the Company as
consideration for the issue or sale of such convertible securities, plus the
minimum aggregate amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (B) the total maximum
number of shares of Additional Stock issuable upon the conversion or exchange of
all such convertible securities.  No further adjustment of the
Conversion Price shall be made when Additional Stock is actually issued upon the
conversion or exchange of such convertible securities, and if any such issue or
sale of such convertible securities is made upon exercise of any Options for
which adjustments of the Conversion Price had been or are to be made pursuant to
other provisions of this Section 2, no further adjustment of the Conversion
Price shall be made by reason of such issue or sale.

    

    (iii)  Change in Option Price,
Conversion Rate or Shares Issuable. If the purchase price provided for in
any Options, the additional consideration, if any, payable upon the conversion
or exchange of any convertible securities, the rate at which any convertible
securities are convertible into or exchangeable for Additional Stock, and/or the
quantity of Additional Stock issuable upon the conversion, exercise or exchange
of any such Option or convertible security, changes at any time, then the
Conversion Price in effect at the time of such change shall be immediately
adjusted to the Conversion Price which would have been in effect at such time
had such Options or convertible securities still outstanding provided for such
changed purchase price, additional consideration, conversion rate or quantity,
as the case may be, at the time initially granted, issued or sold; provided that
no such change shall at any time cause the Conversion Price hereunder to be
increased.  If the terms of any Option or convertible security which
was outstanding as of the original issue date hereof are changed in the manner
described in the immediately preceding sentence, then such Option or convertible
Security and the Additional Stock deemed issuable upon exercise, conversion or
exchange thereof shall be deemed to have been issued as of the date of such
change.

    

    (iv)  Calculation of Consideration
Received. If any Additional Stock is issued or sold or deemed to have
been issued or sold for cash, the consideration will be deemed to be the amount
of cash paid therefor.  In the case of the issuance of Additional
Stock for a consideration in whole or in part other than cash, the consideration
other than cash will be deemed to be the fair value thereof as determined in
good faith by the Board of Directors of the Company irrespective of any
accounting treatment.

    
      
         

      

      
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    (v)  Record Date. If the
Company takes a record of the holders of any securities for the purpose of
entitling them (A) to receive a dividend or other distribution payable in
Additional Stock, Options or in convertible securities or (B) to subscribe for
or purchase Additional Stock, Options or convertible securities, then such
record date shall be deemed to be the date of the issue or sale of the shares of
Additional Stock deemed to have been issued or sold upon the declaration of such
dividend or upon the making of such other distribution or the date of the
granting of such right of subscription or purchase, as the case may
be.

    

    (c) If
the Borrower, at any time while this Debenture is outstanding, (i) shall pay a
stock dividend or otherwise make a distribution or distributions on shares of
its Common Stock or any other equity or equity equivalent securities payable in
shares of Common Stock, (ii) subdivide outstanding shares of Common Stock into a
larger number of shares, (iii) combine (including by way of reverse stock split)
outstanding shares of Common Stock into a smaller number of shares, or (iv)
issue by reclassification of shares of the Common Stock any shares of capital
stock of the Borrower, then the Conversion Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding before such event and of which
the denominator shall be the number of shares of Common Stock (excluding
treasury shares, if any) outstanding after such event. Any adjustment made
pursuant to this paragraph shall become effective immediately after the record
date for the determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the effective date in
the case of a subdivision, combination or reclassification.

    

    (d)           In
case of any consolidation or merger of the Borrower with or into another
corporation or the conveyance of all or substantially all of the assets of the
Borrower to another corporation, this Debenture shall thereafter be convertible
(to the extent such conversion is permitted hereunder) into the number of shares
of stock or other securities or property to which a holder of the number of
shares of Common Stock of the Borrower deliverable upon conversion of this
Debenture would have been entitled upon such consolidation, merger or
conveyance; and, in any such case, appropriate adjustment shall be made in the
application of the provisions herein set forth with respect to the rights and
interest thereafter of the holders of this Debenture, to the end that the
provisions set forth herein shall be thereafter applicable, as nearly as
reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the conversion of the Debenture.

    

               Section
3.  Redemption.  (a)  The
Borrower at its option shall have the right, upon 15  business days’
advance written notice, to redeem a portion or all amounts outstanding under
this Debenture prior to the Maturity Date.

    

    (b)           Notwithstanding
the foregoing in the event that the Borrower has elected to repay any
outstanding principal amount and accrued interest under this Debenture the
Lender shall still be entitled to effectuate conversions as contemplated
hereunder through the date of redemption.

    
      
         

      

      
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               Section
4.  Transferability.  Neither
this Debenture nor any shares of stock issuable upon conversion of this
Debenture have been registered under the Securities Act of 1933, as amended (the
“Act”),
or under the securities laws of any state. Neither this Debenture nor any shares
of stock issuable upon conversion of this Debenture may be sold, offered for
sale, pledged or hypothecated in the absence of a registration statement in
effect with respect to this Debenture or shares issuable upon conversion of this
Debenture under such Act unless such registration is not required pursuant to a
valid exemption therefrom under the Act.  Provided the foregoing
requirements are satisfied, this Debenture and any of the rights granted
hereunder are freely transferable by the Lender in its sole
discretion.

    

               Section
5.  Reservation of
Stock.  The Borrower covenants that it will at all times
reserve and keep available out of its authorized and unissued shares of Common
Stock solely for the purpose of issuance upon conversion of this Debenture as
herein provided, free from preemptive rights or any other actual contingent
purchase rights of persons other than the Lender, not less than such number of
shares of the Common Stock as shall be issuable upon the conversion of the
outstanding principal of this Debenture and accrued and unpaid interest
thereon.  If at any time, the Company does not have available an
amount of authorized but unissued Common Stock or Common Stock held in treasury
necessary to satisfy any conversion of all amounts outstanding under this
Debenture, the Company shall call and hold a special meeting of its stockholders
within 30 days of the occurrence of any shortfall in authorized shares for the
purpose of approving an increase in the number of shares of authorized Common
Stock to an amount sufficient to enable conversion all amounts outstanding under
this Debenture, subject in all respects to compliance with the requirements of
Section 14 of the Securities Exchange Act of 1934 to which the Borrower is
subject.  The Board of Directors of the Company shall recommend that
stockholders vote in favor of increasing the number of authorized shares of
Common Stock at any such meeting.  Each Member of the Board of
Directors of the Company shall also vote all of such Director’s voting
securities of the Company in favor of such increase in authorized
shares.  The Borrower covenants that all shares of Common Stock that
may be issuable upon conversion of this Debenture shall, upon issue, be duly and
validly authorized, issued and fully paid and nonassessable.  No
consent of any other party and no consent, license, approval or authorization
of, or registration or declaration with, any governmental authority, bureau or
agency is required in connection with the execution, delivery or performance by
the Borrower, or the validity or enforceability of this Debenture other than
such as have been met or obtained. The execution, delivery and performance of
this Debenture and all other agreements and instruments executed and delivered
or to be executed and delivered pursuant hereto or thereto or the securities
issuable upon conversion of this will not violate any provision of any existing
law or regulation or any order or decree of any court, regulatory body or
administrative agency or the certificate of incorporation or by-laws of the
Borrower or any mortgage, indenture, contract or other agreement to which the
Borrower is a party or by which the Borrower or any property or assets of the
Borrower may be bound.

    

               Section
6.  No
Fractional Shares.  Upon a conversion hereunder the Borrower
shall not be required to issue stock certificates representing fractions of
shares of Common Stock, and in lieu of any fractional shares which would
otherwise be issuable, the Borrower shall issue the next highest whole number of
shares of Common Stock, as the case may be.

    
      
         

      

      
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    Section
7.  Event of
Default.

    

    (a)           In
the event that any of the following events shall occur (whatever the reason and
whether it shall be voluntary or involuntary or effected by operation of law or
pursuant to any judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental body):

    (i)           Any
default in the payment of the principal of, interest on or other charges in
respect of this Debenture, as and when the same shall become due and payable
(whether on a Conversion Date or the Maturity Date or by acceleration or
otherwise);

    (ii)           The
Borrower or any subsidiary of Borrower as listed on Schedule 2.7 of the
Securities Purchase Agreement (each, a “Subsidiary”) shall fail to observe or
perform any other material covenant, agreement or warranty contained in, or
otherwise commit any breach or default of any provision of this Debenture or any
Loan Document to which it is a party;

    (iii)           The
Borrower or any Subsidiary, shall commence, or there shall be commenced against
the Borrower or any Subsidiary any applicable bankruptcy or insolvency laws as
now or hereafter in effect or any successor thereto, or the Borrower or any
Subsidiary commences any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or
similar law of any jurisdiction whether now or hereafter in effect relating to
the Borrower or Subsidiary or there is commenced against the Borrower or
Subsidiary any such bankruptcy, insolvency or other proceeding which remains
undismissed for a period of 60 days; or the Borrower or Subsidiary is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Borrower or Subsidiary
suffers any appointment of any custodian, private or court appointed receiver or
the like for it or any substantial part of its property which continues
undischarged or unstayed for a period of 60 days; or the Borrower or Subsidiary
makes a general assignment for the benefit of creditors; or the Borrower or
Subsidiary shall fail to pay or shall state that it is unable to pay or shall be
liable to pay, its debts as they become due or by any act or failure to act
expressly indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate or other action is taken by the Borrower or
Subsidiary for the purpose of effecting any of the foregoing; or

    (iv)           The
Borrower or any Subsidiary shall default (subject to all applicable cure
periods) in any of its secured obligations under any other debenture or any
mortgage, credit agreement or other facility, indenture agreement, factoring
agreement or other instrument under which there may be issued, or by which there
may be secured or evidenced any indebtedness for borrowed money or money due
under any leasing or factoring arrangement of the Borrower, whether such
indebtedness now exists or shall hereafter be created and such default shall
result in such indebtedness becoming or being declared due and payable prior to
the date on which it would otherwise become due and payable,

    then, and in any such
event, a default by Borrower shall be deemed to occur under this
Debenture, which, unless such default is cured (in the case of clause (i) or
(ii) of this paragraph (a) only) by Borrower within five business days from
delivery of notice (an “Event of Default Notice”) to Borrower of such default,
shall be deemed, for the purposes of this Agreement, to be an “Event of
Default.”

    
      
         

      

      
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    (b)           Following
an Event of Default, the Interest Rate shall increase to twenty percent (20%)
per annum (but not exceeding the maximum rate permitted by law) immediately
following such Event of Default. During
the time that any portion of this Debenture is outstanding, if (i) any Event of
Default has occurred and has not been cured by the Borrower or (ii) an event
described in Section 2(d) occurs, the full principal amount of this Debenture,
together with interest and other amounts owing in respect thereof, to the date
of acceleration shall become at the Lender's election, immediately due and
payable.  The Lender need not provide and the Borrower hereby waives
any presentment, demand, protest or other notice of any kind, and the Lender may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law.

    

    Section
8.  Registration
Rights.  The Lender is entitled to certain registration rights
with respect to the Common Stock issuable upon conversion of this Debenture as
set forth in the Securities Purchase Agreement.

    

    Section
9.  Notices.  Any
and all notices, requests, documents or other communications or deliveries
required or permitted to be given or delivered hereunder shall be delivered in
accordance with the notice provisions of the Securities Purchase
Agreement.  Notwithstanding anything to the contrary contained in the
immediately preceding sentence, an Event of Default Notice may be given by
Lender to Borrower via e-mail addressed to: barry@callcompliance.com
and shall be deemed given, if prior to 4:00 p.m. New York City time on a
business day, on the date of transmission or, if delivered after 4:00 p.m. New
York City time on a business day or at any time on a nonbusiness day, on the
immediately following business day.

    

    Section
10.  Governing
Law.  This Debenture and the provisions hereof are to be
construed according to and are governed by the laws of the State of New York,
without regard to principles of conflicts of laws thereof.  Borrower
agrees that the New York State Supreme Court located in the County of Nassau,
State of New York shall have exclusive jurisdiction in connection with any
dispute concerning or arising out of this Debenture, the Loan Documents, or
otherwise relating to the parties relationship.  In any action,
lawsuit or proceeding brought to enforce or interpret the provisions of this
Debenture, the Loan Documents and/or arising out of or relating to any dispute
between the parties, the Lender shall be entitled to recover all of his or its
costs and expenses relating to such issue (including without limitation,
reasonable attorney’s fees and disbursements) in addition to any other relief to
which the Lender may be entitled.

    

    Section 11.  Successors and
Assigns.  Subject to applicable securities laws, this Debenture
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and assigns
of Lender.

     

    Section 12.  Amendment.  This
Debenture may be modified or amended or the provisions hereof waived only with
the written consent of the Lender and the Company.

     

    Section 13.  Severability.  Wherever
possible, each provision of this Debenture shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Debenture shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Debenture.

    
      
         

      

      
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    [Signature
page follows]

    

    
      
        
        

      

      
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    IN
WITNESS WHEREOF, the Borrower has caused this Debenture to be duly executed by a
duly authorized officer as of the date first above indicated.

    

    
      
        
          
            	
                    COMPLIANCE SYSTEMS CORPORATION

                  
	 
      	 
      
	
                    By:

                  	
                    /s/
      Dean Garfinkel

                  
	
                    Name:  Dean Garfinkel

                  
	
                    Title:  President

                  

          

        

      

    

    
      
         

      

      
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    ANNEX
A

    

    NOTICE OF
CONVERSION

    To Be
Executed by the Lender

    in Order
to Convert Debenture

    

               The
undersigned Lender hereby elects to convert $__________ principal and $_____
interest currently outstanding and owed under the Secured Convertible Debenture
issued to Agile Opportunity
Fund, LLC at a Conversion Price of $___ (the “Debenture”)
and to purchase ___________ shares of Common Stock of Compliance Systems Corporation
issuable upon conversion of such Debenture, and requests that certificates for
such securities shall be issued in the name of:

    

    ___________________________________________________________

    (please
print or type name and address)

    

    ___________________________________________________________

    (please
insert social security or other identifying number)

    

    and be
delivered as follows:

    

    ___________________________________________________________

    please
print or type name and address)

    

    ___________________________________________________________

    (please
insert social security or other identifying number)

    

    Lender
Name:_______________________________________________

    

    By:________________________________________________________

          Name:

          Title:

    

    Conversion
Date:___________________________________________

    
      
         

      

      
        11WAIVER
AND STANDSTILL AGREEMENT

    

    This Waiver and Standstill
Agreement, dated as of January 26, 2009 (this “Agreement”), is entered
into among Compliance Systems
Corporation, a Nevada corporation (“CSC”), Call Compliance, Inc., a New
York corporation and wholly-owned subsidiary of CSC (“CCI,” and collectively
with CSC, “Compliance”) and Nascap Corp., a New York
corporation (“Nascap”).

    

    WHEREAS, Nascap is the named
payee and holder of that certain Promissory Note of CCI, dated September 30,
2006, in the principal amount of $150,000 and payable upon demand (the
“Note”);

    

    WHEREAS, pursuant to the terms
of that certain Guaranty Agreement, dated September 30, 2006 (the “Guaranty
Agreement”), between CSC and Nascap, CSC guaranteed specified obligations of CCI
under the Note;

    

    WHEREAS, pursuant to that
certain Security Agreement, dated September 30, 2006, between CCI and Nascap,
CCI granted Nascap a security interest in certain assets of CCI consisting of
all amounts received (the “VeriSign/Comtel Receipts”) by CCI out of goods sold
or leased or for services rendered by CCI to VeriSign Inc. and Comtel Telcom
Assets, LP (the “Secured Assets”);

    

    WHEREAS, by letter addressed
to CCI and dated January 26, 2009, Nascap demanded payment in full of all monies
due under the Note;

    

    WHEREAS, Compliance currently
does not have sufficient available funds to make payment in full of all monies
due under the Note;

    

    WHEREAS, Nascap is willing to
provide Compliance with a specified amount of time, expiring on April 15, 2009
(the “Standstill Termination Date”), in which to pay in full all monies owing
under the Note, provided that CCI segregate and hold separately all
VeriSign/Comtel Receipts received by either CSC or CCI, and to tender to Nascap
the VeriSign/Comtel Receipts on or prior to the Standstill Termination Date
(but, in no event, shall the amount tendered to Nascap exceed the total amount
owing under the Note as of the date of such tender);

    

    WHEREAS, Events of Default
under each of the Note, Guaranty Agreement and Security Agreement include, but
not limited to, (a) either CSC’s or CCI’s failure to pay all amount due under
the Note on the business day on which Nascap has demanded such payment, (b)
CSC’s or CCI’s failure to pay interest accruing under the Note in arrears on the
30th
day of each calendar month and (c) CSC or CCI admitting that such entity is
unable to pay its debts as such debts become due (collectively, the “Waived
Defaults”);

    

    WHEREAS, CSC and/or CCI may be
obligated to admit its inability to pay its debts as such debts become
due;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    WHEREAS, at the request of
Compliance, Nascap
has agreed to (a) waive (i) the timely payment of the amounts due under the Note
up to the Standstill Termination Date, provided that all
amounts due under the Note are tendered to Nascap no later than the Standstill
Termination Date, and (ii) any default by Compliance caused by either CSC’s and
CCI’s admission that it is unable to pay its debts as such debts become due,
whether such default is under the Note, Guaranty Agreement or Security
Agreement, and (b) stand still and not declare, or otherwise assert the
occurrence of, an Event of Default prior to the Standstill Termination Date
under either of the Note, Guaranty Agreement or Security Agreement due to the
occurrence of any of the Waived Defaults.

    

    NOW, THEREFORE, in
consideration of the mutual premises and agreements contained herein, and for
other good and valuable consideration, the adequacy and receipt of which is
hereby acknowledged by each of the parties to this Agreement, the parties agree
as follows:

    

    1.           Segregation of
Funds.  Commencing on the date of this Agreement and continuing
through the date on which Compliance shall have tendered to Nascap all amounts
owing under the Note, Compliance shall segregate and hold separately from all
other amounts held by Compliance all VeriSign/Comtel Receipts received by
Compliance commencing as of the date of this Agreement and shall not utilize or
other transfer any of such VeriSign/Comtel Receipts except for transfers to
Nascap as payments to reduce the amounts owed under the Note.

    

    2.           Waiver.

    

    (a)           Nascap
hereby waives the timely tender of the payment of (i) all accrued interest due
under the Note on the 30th day of
each calendar month and (ii) all amounts due and owing to Nascap by CCI under
the Note, provided, in both of
such cases, that (x) Compliance segregate and hold separately from all other
amounts held by Compliance the VeriSign/Comtel Receipts received by Compliance
during the period commencing on the date of this Agreement and ending on the
date on which Compliance shall have tendered to Nascap all amounts owing under
the Note and (y) no later than the Standstill Termination Date, Compliance
tender to Nascap the aggregate amount of VeriSign/Comtel Receipts received by
Compliance on or after the date of this Agreement, but only to the extent that
such VeriSign/Comtel Receipts equal or are less than the total amount owing
under the Note on the earlier of the (1) Standstill Termination Date or (2) the
date on which Compliance shall have tendered to Nascap all amounts owing under
the Note.  To the extent that the aggregate amount of VeriSign/Comtel
Receipts exceeds the total amount owing under the Note on the earlier of the (1)
Standstill Termination Date or (2) the date on which Compliance shall have
tendered to Nascap all amounts owing under the Note, such excess amount shall
become available for use by Compliance and Compliance shall no longer be
required to segregate or hold separately any VeriSign/Comtel Receipts upon
Compliance tendering payment to Nascap in accordance with clause (y) of the
immediately preceding sentence.

    

    (b)           Nascap
hereby acknowledges and agrees that, for the period commencing on the date of
this Agreement and terminating on the Standstill Termination Date, so long as
Compliance is in compliance with its obligations under paragraph 2(a), the
failure by Compliance to tender in full (i) all accrued interest due under the
Note on the 30th day of
each calendar month and (ii) all amounts owing under the Note shall be waived
and not be deemed an Event of Default under the Note.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    

    (c)           Nascap
hereby further waives any Event of Default under the Note, Guaranty Agreement
and/or Security Agreement caused by the Waived Defaults.

    

    2.           Standstill.  So long
as there is no occurrence of an Event of Default under the Note, Security
Agreement or Guaranty other than (x) the failure of Compliance to tender to
Nascap all accrued interest due under the Note on the 30th day of
each calendar month up to the Standstill Termination Date, (y) the failure of
Compliance to tender to Nascap all amounts owing to Nascap under the Note, and
(z) the Waived Defaults, provided, in each of
such cases Compliance is in compliance with its obligations under section 1,
then, in such an
event, Nascap will not, on or prior to the Standstill Termination Date,
take any action otherwise available to Nascap, whether under the Note, Guaranty
Agreement, Security Agreement, or otherwise, due to the fact that (a) Compliance
has failed to tendered to Nascap (i) all accrued interest due Nascap under the
Note on the 30th day of
each calendar month up to the Standstill Termination Date and/or (ii) all
amounts owing under the Note, (b) there has occurred any of the Waived
Defaults.  In the event that, on or prior to the Standstill
Termination Date, Compliance has fully tendered to Nascap (1) all accrued
interest due Nascap under the Note on the 30th day of
each calendar month and (2) all other amounts owing to Nascap under the Note
through the date of such full tender, then, in such an event, the standstill
provisions of this Section 3 shall become permanent and
irrevocable.

    

    3.           General.

    

    (a)           Each
of the parties agrees to provide such other documents and to take such further
action reasonably requested by the other party as may be necessary in order to
effectuate this Agreement.

    

    (b)           This
Agreement and the rights and obligations of the parties hereunder shall be
interpreted, construed and enforced in accordance with the laws of the State of
New York, without regard to its choice and/or conflict of laws
provisions.  Any legal action resulting from, arising under, out of or
in connection with, directly or indirectly, this Agreement shall be commenced
exclusively in the Supreme Court, State of New York, County of Nassau, or the
U.S. District Court for the Eastern District of New York.  All parties
to this Agreement hereby submit themselves to the jurisdiction of any such
court, and agree that service of process on them in any such action, suit or
proceeding may be affected by the means by which notices are to be given under
this Agreement.

    

    (c)           This
Agreement sets forth the entire agreement and understanding of the parties
hereto in respect of the subject matter contained herein, and supersedes all
prior agreements, promises, understandings, letters of intent, covenants,
arrangements, communications, representations or warranties, whether oral or
written, by any party hereto or by any related or unrelated third
party.  Except to the extent contemplated by this Agreement, the terms
and conditions of the Debentures shall remain in full force and
effect.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    (d)           This
Agreement may not be changed, modified or rescinded orally.  Any
change, modification or rescission need be in writing, signed by the party
against whom enforcement of any change, modification or rescission is
sought.  Any waiver of any of the provisions of this Agreement, or of
any inaccuracy in or non-fulfillment of any of the representations, warranties
or obligations hereunder or contemplated hereby, shall not be effective unless
made in a writing signed by the party against whom the enforcement of any such
waiver is sought.  A waiver given in any case shall only apply with
respect to that particular act or omission, and shall not be effective as to any
further acts or omissions, regardless of whether they are of the same or similar
nature.

    

    (e)           This
Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective administrators,
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other
party.

    

    (f)           The
waiver by any party to this Agreement of a breach of any provision of this
Agreement shall not operate or be construed as a waiver of any subsequent
breach.

    

    (g)           This
Agreement may be executed simultaneously in any number of counterparts, each of
which shall be deemed an original but all of which together shall constitute one
and the same instrument.

    

    (h)           This
section and other headings contained in this Agreement are for purposes of
reference only, and shall not affect the meaning or interpretation of this
Agreement.

    

    (i)           Any
term or provision of this Agreement which is invalid or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Agreement or affecting the validity
or enforceability of any of the terms or provisions of this Agreement in any
other jurisdiction.

    

    (j)           Each
party hereto shall be responsible for their legal and other fees and expenses
relating to the negotiation, execution and delivery of this Agreement and
related agreements, and the consummation of the transaction contemplated by this
Agreement.

    

    IN WITNESS WHEREOF, the
parties hereto have executed this Agreement as of the date first indicated
above.

    

    
      
        
          	
                  Compliance
      Systems Corporation

                
	 
      
	
                  By:

                	
                  /s/
      Barry M. Brookstein

                
	 
      	
                  Barry
      M. Brookstein

                
	 
      	
                  Chief
      Financial Officer

                

        

      

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    

    
      
        
          	
                  Nascap Corp.

                
	 
      	 
      
	
                  By:

                	
                  /s/
      Lorraine Chinnici

                
	 
      	
                  Lorraine
      Chinnici

                
	 
      	
                  President

                

        

      

    

    
      
         

      

      
        5

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