Document:

PROMISSORY
NOTE EXCHANGE AGREEMENT

    

    This Promissory Note Exchange Agreement
(this “Agreement”), made
and entered into June 24, 2009, is by and between Compliance Systems
Corporation, a Nevada corporation (“CSC”), and Barry M.
Brookstein, a resident of the State of New York (“Noteholder”).

    

    WHEREAS, Noteholder is the holder of
that certain Promissory Note of Call Compliance, Inc., a New York corporation
and wholly-owned subsidiary of CSC (“CCI”), in the principal amount
of $50,000, dated as of March 3, 2009 and payable to Noteholder (the “Original Note”);

    

    WHEREAS, the Original Note is payable
on demand and the obligations of CCI under the Original Note have been
guaranteed by CSC; and

    

    WHEREAS, a copy of the Original Note
has be attached as Exhibit A to this Agreement;

    

    WHEREAS, Noteholder and CSC desire to
exchange the Original Note for a new 18% Senior Subordinated Secured Promissory
Note of CSC, in the principal amount of $50,000, dated as of the date of its
issuance, payable to Noteholder and secured by a subordinated security interest
in all of the assets of CSC (the “New Note”), all upon the terms
and conditions as set forth in this Agreement; and

    

    WHEREAS, a copy of the form of the New
Note has been attached as Exhibit B to this Agreement.

    

    NOW, THEREFORE, in consideration of the
foregoing and of the mutual premises, covenants, representations and warranties
contained in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which is hereby acknowledged, the parties hereto agree
as follows:

    

    1.           Exchange of the Original Note for the
New Note.  In reliance on the representations and warranties
contained in this Agreement and subject to the terms and conditions of this
Agreement, at the Closing (as such is defined below):

    

    (a)           Noteholder
will assign and deliver to CSC and CSC will acquire from Noteholder all of
Noteholder’s rights, title and interest in, and physical possession of, the
Original Note, and

    

    (b)           CSC
will deliver to Noteholder and Noteholder will acquire from CSC all rights,
title and interest in, and physical possession of, the New Note, free and clear
of all liens and encumbrances whatsoever, except to the extent provided in this
Agreement, the New Note and applicable law.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c)           As
additional consideration for Noteholder assigning and delivering to CSC all of
Noteholder’s rights, title and interest in, and physical possession of, the
Original Note, CSC shall grant to Noteholder:

    (i)           1
million five-year common stock purchase warrants (each, a “Class A Warrant”), each Class
A Warrant entitling its holder to purchase one share (each, a “Class A Warrant Share”) of the
common stock, par value $0.001 per share (the “CSC Common Stock”), of CSC at
a purchase price of $0.05 per share and having the terms, conditions rights and
privileges as set forth in the warrant certificate (the “Class A Warrant Certificate”)
evidencing the Class A Warrants, the form of the Class A Warrant Certificate
being attached as Exhibit C to this Agreement, and

    (ii)           1
million five-year common stock purchase warrants (each, a “Class B Warrant”), each Class
B Warrant entitling its holder to purchase one share (each, a “Class B Warrant Share”) of CSC
Common Stock at a purchase price of $0.05 per share and having the terms,
conditions rights and privileges as set forth in the warrant certificate (the
“Class B Warrant
Certificate”) evidencing the Class B Warrants, the form of the Class B
Warrant Certificate being attached as Exhibit D to this Agreement

    

    2.           The
Closing.

    

    (a)           Place and
Date.  The closing (the “Closing”) of the exchange
transactions contemplated by this Agreement shall take place at the offices of
Moritt Hock Hamroff & Horowitz LLP, located at 400 Garden City Plaza, Garden
City, New York 11530, commencing at 10:00 a.m. on June 24, 2009 (or at such
other place, on such other date and/or at such other time as the parties may
agree in writing) (in either case, the “Closing Date”).

    

    (b)           Documents to be Delivered by
Noteholder.  At the Closing, Noteholder shall deliver to CSC
(i) the Original Note, as previously executed by CCI, as previously executed by
CCI, together with such powers, assignments or other instruments of transfer and
assignment as shall be necessary to transfer, assign, convey and vest in CSC all
of Noteholder’ right, title and interest in and to the Original Note and (ii)
the Security Agreement, in the form attached as Exhibit E to this Agreement (the
“Security Agreement”),
duly executed by Noteholder.

    

    (c)           Documents to be Delivered by
CSC.  At the Closing, CSC shall deliver to of
Noteholder:

    (i)           the
New Note, as fully executed by CSC,

    (ii)         
a check of CCI in the amount equal to all accrued and unpaid interest under the
Original Note for all periods prior to the Closing Date,

    (iii)         the
Security Agreement, duly executed by CSC, together with such further documents,
also duly executed by CSC, as Noteholder may reasonably request in order to
perfect the security interest of Noteholder as contemplated by the Security
Agreement, (iv)the Class A Warrant Certificate, duly executed by CSC,
and

    (v)          the
Class B Warrant Certificate, duly executed by CSC.

    
      
         

      

      
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    (d)           Form of
Documents.  Unless specifically otherwise provided in this
Agreement, all documents to be delivered pursuant to this Section 3 by one party
to the other party to this Agreement shall be in form and substance reasonably
satisfactory to the other party.

    

    3.           Representations, Warranties and
Covenants of Noteholder.  Noteholder represents, warrants,
covenants and agrees to and with CSC as follows:

    

    (a)           Corporate
Status.  Noteholder is an individual residing in the State of
New York;

    

    (b)           Authority of
Agreement.  Noteholder has the legal capacity to execute and
deliver this Agreement and to carry out Noteholder’s obligations under this
Agreement; this Agreement constitutes the valid and legally binding obligations
of Noteholder, enforceable against Noteholder in accordance with its terms,
except as the same may be limited by bankruptcy, insolvency, reorganization or
other laws affecting the enforcement of creditors’ rights generally, now or
hereafter in effect, and subject to the application of equitable principles and
the availability of equitable remedies;

    

    (c)           No
Conflicts.  The execution, delivery and performance of this
Agreement and the other instruments and agreements to be executed, delivered and
performed by Noteholder pursuant to this Agreement and the consummation of the
transactions contemplated by this Agreement by Noteholder do not and will not
with or without the giving of notice or the passage of time or both, violate or
conflict with or result in a breach or termination of any provision of, or
constitute a default under, any order, judgment, decree, statute, regulation,
contract, agreement or any other restriction any kind or description to which
Noteholder may be bound;

    

    (d)           Ownership and Principal
Amount of the Original Note.  Noteholder is the lawful record
and beneficial owner of the Original Note, free and clear of any and all
security interests, liens, encumbrances, claims, pledges, rights, charges,
escrows, options, rights of first refusal, contracts, commitments,
understandings and of any kind; Noteholder has the full right, power and
authority to exchange, sell, transfer and assign the Original Note pursuant to
the terms and conditions of this Agreement, to the effect that CSC, immediately
after the Closing, shall be the lawful record and beneficial owner of the
Original Note, free and clear of any and all security interests, liens,
encumbrances, claims, pledges, rights, charges, escrows, options, rights of
first refusal, contracts, commitments, understandings or obligations of any
kind, except as may arise from acts or omissions of CSC; and the principal
amount outstanding under the Original Note is equal to the principal amount set
forth on the face of the Original Note;

    

    (e)           Investment
Intent.  Noteholder is acquiring the New Note, Class A Warrants
and Class B Warrants and, in connection with the exercise of any Class A
Warrants and/or Class B Warrants, Class A Warrant Shares and Class B Warrant
Shares, if any, for Noteholder’s own account, for investment only and not with a
view to, or for sale in connection with, a distribution thereof or any part
thereof, within the meaning of the Securities Act of 1933, as amended (the
“Securities Act”), and
the rules and regulations promulgated thereunder, or any applicable state
securities or blue-sky laws, and no one other than Noteholder has any interest
in the New Note Class A Warrants, Class B Warrants, Class A Warrant Shares and
Class B Warrant Shares (collectively, the “Securities”) or this
Agreement;

    
      
         

      

      
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    (f)           Offering Exempt from
Registration; CSC’s Reliance.  CSC has advised Noteholder
that:

    (i)           None
of the Securities have been or will be registered under the Securities Act or
under the laws of any state on the basis that the issuance thereof is exempt
from such registration;

    (ii)          CSC’s
reliance on the availability of such exemption is, in part, based upon the
accuracy and truthfulness of Noteholder’s representations contained in this
Agreement;

    (iii)         As
a result of such lack of registration, none of the Securities may be resold or
otherwise transferred or disposed without registration pursuant to or an
exemption therefrom available under the Securities Act and such state securities
laws; and

    (iv)         In
furtherance of the provisions of this paragraph 3(e), each certificate
representing any of the Class A Warrants, Class B Warrants, Class A Warrant
Shares or Class B Warrant Shares, shall bear a restrictive legend substantially
in the following form:

    

    If on a Class A Warrant Certificate or
Class B Warrant Certificate:

    

    “NEITHER
THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE NOR THE SHARES OF COMMON
STOCK OR ANY OTHER SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.  SUCH
WARRANTS HAVE BEEN ACQUIRED, AND ANY SHARES OF COMMON STOCK OR ANY OTHER
SECURITIES ISSUABLE UPON EXERCISE OF SUCH WARRANTS ARE REQUIRED TO BE ACQUIRED,
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY
NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH WARRANTS AND/OR SUCH SHARES OR OTHER
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF SUCH
WARRANTS AND SUCH SHARES OR OTHER SECURITIES TO THE EFFECT THAT REGISTRATION IS
NOT REQUIRED UNDER SUCH ACT AND SUCH STATE SECURITIES LAWS.”

    

    If on a
stock certificate evidencing any Class A Warrant Shares or Class B Warrant
Shares:

    
      
         

      

      
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    “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.  SUCH SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD DISTRIBUTION OR
RESALE, AND MAY NOT BE SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES
LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF SUCH INTEREST TO THE
EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT AND SUCH STATE
SECURITIES LAWS.”

    

    (g)           Sophistication of the
Investor.  Noteholder has evaluated the merits and risks of
acquiring the New Note, Class A Warrants and Class B Warrants (and will evaluate
the merits and risks of purchasing the Class A Warrant Shares and Class B
Warrant Shares by exercising the Class A Warrants and Class B Warrants,
respectively) and has such knowledge and experience in financial and business
matters that the undersigned is capable of evaluating the merits and risks of
such acquisitions (and purchases), is aware of and has considered the financial
risks and hazards of acquiring (and purchasing) the Securities, and is able to
bear the economic risk of acquiring (and purchasing) the Securities, including
the possibility of a complete loss with respect to such purchase;

    

    (h)           Access to
Information.  Noteholder has had access to such information
regarding the business and finances of CSC and the Securities, the receipt and
careful reading of which is hereby acknowledged by Noteholder, and has been
provided the opportunity to:

    (i)           obtain
any additional information which CSC possesses or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy of
information provided to Noteholder; and

    (ii)          discuss
with CSC’s management the business, affairs and financial condition of CSC and
such other matters with respect to CSC as would concern a reasonable person
considering the transactions contemplated by this Agreement and/or concerned
with the operations of CSC;

    

    (i)           No
Guarantees.  That it never has been represented, guaranteed or
warranted to Noteholder by CSC, or any of CSC’s officers, directors, agents,
representatives or employees, or any other person, expressly or by implication,
that:

    (i)           any
gain will be realized by Noteholder from Noteholder’s investment in the
Securities;

    (ii)          that
there will be any approximate or exact length of time that the undersigned will
be required to remain as a holder of the Securities (other than the Note);
or

    (iii)         that
the past performance or experience on the part of CSC, its predecessors, manager
or employees or of any other person, will in any way indicate any future results
of CSC;

    

    (i)           No Other Representations,
Warranties, Covenants or Agreements of the Company.  Except as
set forth in this Agreement, or the documents referred to in this Agreement, CSC
has not made any representation, warranty, covenant or agreement with respect to
the matters contained herein;

    
      
         

      

      
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    (j)           High Degree of Investment
Risk.  Noteholder acknowledges and understands that the
purchase of the Securities involves a high degree of risk and may result in a
loss of the entire amount invested; that CSC has limited working capital and
limited sources of financing available; and that there is no assurance that
CSC’s operations will be profitable in the future;

    

    (k)           Knowledge and
Experience.  Noteholder, individually and/or together with
Noteholder’s professional advisors, has such knowledge and experience in
financial, tax and business matters, including substantial experience in
evaluating and investing in securities (including the securities of new and
speculative companies), so as to enable Noteholder to use the information made
available by CSC in order to evaluate the merits and risks of and investment in
CSC, and to make an informed investment decision with respect thereto;
and

    

    (l)           Independent
Decision.  Noteholder is not relying on CSC or on any
accounting, tax, legal or other opinion in the materials reviewed by Noteholder
with respect to the accounting, financial or tax considerations of Noteholder
relating to investment in CSC; Noteholder has relied solely on the
representations, warranties, covenants and agreements of CSC in this Agreement
and on Noteholder’s own examination and independent investigation in making a
decision to acquire the Securities.

    

    4.           Representations, Warranties and
Covenants of CSC.  CSC represents, warrants, covenants and
agrees to and with Noteholder as follows:

    

    (a)           Corporate
Status.  CSC is a corporation duly organized, validly existing
and in good standing under the laws of the State of Nevada with full corporate
power and authority to carry on its business as now conducted;

    

    (b)           Authority for
Agreements.  CSC has the power and authority to execute and
deliver this Agreement and to carry out CSC’s obligations under this Agreement;
the execution, delivery and performance by CSC of this Agreement and the
consummation of the transactions contemplated by this Agreement have been duly
authorized by all necessary corporate action on the part of CSC and this
Agreement constitutes the valid and legally binding obligation of CSC,
enforceable against CSC in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors’ rights generally, now or hereafter in effect, and
subject to the application of equitable principles and the availability of
equitable remedies;

    

    (c)           No
Conflicts.  The execution, delivery and performance of this
Agreement and the other instruments and agreements, to be executed, delivered
and performed by CSC pursuant to this Agreement and the consummation of the
transactions contemplated by this Agreement and thereby by CSC do not and will
not with or without the giving of notice or the passage of time or both, violate
or conflict with or result in a breach or termination of any provision of, or
constitute a default under, the certificate of incorporation or the by-laws of
CSC or any order, judgment, decree, statute, regulation, contract, agreement or
any other restriction of any kind or description to which CSC is a party or by
which CSC may be bound; and

    
      
         

      

      
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    (d)           New Note Validly
Issued.  The New Note has been duly authorized by CSC and, upon
delivery by CSC to Noteholder in exchange for receipt by CSC from Noteholder of
the Original Note, shall constitute a true and valid obligation of CSC in
accordance with the terms of the New Note;

    

    (e)           Warrants and Warrant
Shares.  The Class A Warrants, Class B Warrants, Class A
Warrant Shares and Class B Warrant Shares have been duly authorized by CSC
and:

    (i)           the
Class A Warrants and Class B Warrants, upon delivery by CSC to Noteholder in
exchange for receipt by CSC from Noteholder of the Original Note, shall
constitute true and valid obligations of CSC in accordance with the terms of the
Class A Warrant Certificate and Class B Warrant Certificate,
respectively,

    (ii)          the
Class A Warrant Shares, upon issuance in accordance with the terms and
conditions of the Class A Warrant Certificate, shall be duly authorized, validly
issued, fully paid for and non-assessable;

    (iii)         the
Class B Warrant Shares, upon issuance in accordance with the terms and
conditions of the Class B Warrant Certificate, shall be duly authorized, validly
issued, fully paid for and non-assessable;

    (iv)         CSC
has duly reserved for issuance upon proper exercise of the Class A Warrants 1
million Class A Warrant Shares; and

    (v)          CSC
has duly reserved for issuance upon proper exercise of the Class B Warrants 1
million Class B Warrant Shares.

    

    5.           Further
Assurances.  At any time and from time to time after the
Closing, each party shall, without further consideration, execute and deliver to
the other such other instruments of transfer and assumption and shall take such
other actions as the other may reasonably request to carry out the exchange
transaction contemplated by this Agreement.

    

    6.           Indemnification;
Survival.

    

    (a)           From
and after the date hereof, Noteholder will indemnify and hold harmless CSC and
CSC’s officers, directors, employees and agents against any and all liability,
damage, deficiency, loss, cost or expense (including reasonable attorneys’ fees
and expenses) that are based upon or that arise out of any misrepresentation or
breach of any warranty or agreement made by Noteholder in this
Agreement.

    

    (b)           From
and after the date hereof, CSC will indemnify and hold harmless Noteholder and
Noteholder’s employees and agents against any and all liability, damage,
deficiency, loss, cost r expense (including reasonable attorneys’ fees and
expenses) that are based upon or that arise out of any misrepresentation or
breach of any warranty or agreement made by CSC in this
Agreement.

    
      
         

      

      
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    (c)           Each
party (the “Indemnified Party”) entitled to indemnification under this Agreement
shall give prompt notice to the party (the “Indemnifying Party”) required to
provide indemnification under this Agreement after such Indemnified Party has
received actual knowledge of any third-party claim as to which indemnity may be
sought, and shall permit the Indemnifying Party (at Indemnifying Party’s
expense) to assume the defense of any claim or any litigation resulting
therefrom; provided, that
counsel for the Indemnifying Party who shall conduct the defense of such claim
or litigation, shall be reasonably satisfactory to the Indemnified Party, and
the Indemnified Party may participate in such defense, but only at such
Indemnified Party’s expense; and provided, further, that the
omission by any Indemnified Party to give prompt notice as provided herein shall
not relieve the Indemnifying Party of its indemnification obligations under this
Agreement, except to the extent that the omission results in a failure of actual
prompt notice to the Indemnifying Party and such Indemnifying Party is damaged
as a result of the failure to give prompt notice.  No Indemnifying
Party, in the defense of the such claim or litigation, shall, except with the
consent of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such Indemnified Party of a release from
all liability with respect to such claim or litigation.  In the event
that the Indemnifying Party does not accept the defense of any matter as above
provided, the Indemnified Party shall have the full right to defend against any
such claim or demand and shall be entitled to settle or agree to pay in full
such claim or demand in the Indemnified Party’s sole and reasonable discretion,
all at the Indemnifying Party’s expense.  In any event, Noteholder and
CSC shall cooperate in the defense of any such action and the records of each
shall be available to the other with respect to such defense.

    

    (d)           Any
notice of a claim by reason of any of the representations, warranties and
agreements contained in this Agreement, shall state specifically the
representation, warranty, covenant or agreement with respect to which the claim
is made and the amount of liability asserted against the other party by reason
of the claim.  The representations, warranties, covenants, agreements
and indemnities contained in this Agreement shall survive the execution and
delivery of this Agreement, any examination on behalf of such parties, the
Closing and the completion of the transactions contemplated herein.

    

    7.           Miscellaneous.

    

    (a)           Payment of
Expenses.  CSC shall bear all reasonable expenses of
Noteholder, including reasonable attorneys’ fees, with respect to this Agreement
and the transactions contemplated by this Agreement.

    
      
         

      

      
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    (b)           Consent to Jurisdiction and
Waivers.  Each of the parties to this Agreement irrevocably
consents that any legal action or proceeding against any of them under, arising
out of or in any manner relating to, this Agreement or any other document
delivered in connection with this Agreement, may be brought in any court of the
State of New York located within Nassau or Suffolk County or in the United
States District Court for the district encompassing Nassau or Suffolk County,
New York.  The parties to this Agreement, by the execution and
delivery of this Agreement, expressly and irrevocably consent and submit to the
personal jurisdiction of any of such courts in any such action or
proceeding.  The parties hereto further irrevocably consent to the
service of any complaint, summons, notice or other process relating to any such
action or proceeding by delivery thereof to it by hand or by any other manner
provided for in paragraph 7(d).  The parties to this Agreement hereby
expressly and irrevocably waive any claim or defense in any such action or
proceeding based on any alleged lack of personal jurisdiction, improper venue or
forum non convenient or any similar basis.  Nothing in this paragraph
7(b) shall affect or impair in any manner or to any extent the right of either
party to commence legal proceedings or otherwise proceed against any other party
hereto in any jurisdiction or to serve process in any manner permitted by
law.

    

    (c)           Amendments and
Waivers.  Except as otherwise provided in this Agreement, the
provisions of this Agreement may not be amended, modified or implemented without
the written consent of each of the parties to this Agreement.  Any of
the parties to this Agreement may, by written notice to the other,

    (i)           waive
any of the conditions to its obligations hereunder or extend the time for the
performance of any of obligations or actions of the other,

    (ii)          waive
any inaccuracies in the representations of the other contained in this Agreement
or in any documents delivered pursuant to this Agreement,

    (iii)         waive
compliance with any of the covenants of the other contained in this Agreement,
and

    (iv)         waive
or modify performance of any of the obligations of the other.

    

    No action
taken pursuant to this Agreement, including any investigation by or on behalf of
any party, shall be deemed to constitute a waiver by the party taking such
action or waiver of compliance with any representation, warranty, condition or
agreement contained in this Agreement.  Waiver of the breach of anyone
or more provisions of this Agreement shall not be deemed or construed to be a
waiver of other breaches or subsequent breaches of the same
provisions.

    

    (d)           Notices.  All
notices, demands, requests, demands and other communications required or
otherwise given under this Agreement shall be in writing and shall be deemed to
have been duly given if delivered by hand, against written receipt therefor,
(ii) forwarded by a third party company or governmental entity providing
delivery services in the ordinary course of business which guarantees delivery
the following business day or (iii) mailed by registered or certified mail,
return receipt requested, postage prepaid; in the case of clauses (ii) or (iii)
of this paragraph 7(d), to the following addresses:

    

    
      
        	
                If
      to CSC, to:

              	 
      	
                Dean
      Garfinkel, President

              
	 
      	 
      	
                Compliance
      Systems Corporation

              
	 
      	 
      	
                90
      Pratt Oval

              
	 
      	 
      	
                Glen
      Cove, New York 11542

              
	 
      	 
      	 
      
	
                with
      a copy to:

              	 
      	
                Dennis
      C. O’Rourke, Esq.

              
	 
      	 
      	
                Moritt
      Hock Hamroff & Horowitz LLP

              
	 
      	 
      	
                400
      Garden City Plaza

              
	 
      	 
      	
                Garden
      City, New York 11530

              

      

    

    
      
         

      

      
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                If
      to Noteholder, to:

              	 
      	
                Barry
      M. Brookstein

              
	
                 
      

              	 
      	
                780
      New York Avenue

              
	 
      	 
      	
                Huntington,
      New York 11743

              
	 
      	 
      	 
      
	
                with
      a copy to:

              	 
      	 
      

      

    

    

    or, in
the case of any of the parties to this Agreement, at such other address as such
party shall have furnished to each of the other parties to this Agreement in
accordance with this paragraph 7(d).  Each such notice, demand,
request or other communication shall be deemed given (x) on the date of such
delivery by hand, (y) on the first business day following the date of such
delivery to the overnight delivery service or facsimile transmission, or (z)
three business days following such mailing.

    

    (e)           Successors and Assigns;
Holders and Third Parties as Beneficiaries.  This Agreement
shall inure to the benefit of and be binding upon the parties to this Agreement
and their respective successors and assigns.

    

    (f)           Counterparts.  This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together shall constitute one and the
same agreement.

    

    (g)           Headings.  The
headings of the articles, sections, paragraphs and their usage in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meanings or interpretations of the terms contained in this
Agreement.

    

    (h)           Governing
Law.  This Agreement and the rights, obligations and
liabilities of the parties to this Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of New York without
regard to the conflicts of laws principles thereof.

    

    (i)           Severability: Specific
Enforcement.  In the event that any one or more of the
provisions contained in this Agreement, or the application of this Agreement in
any circumstances, is held invalid, illegal, or unenforceable for any reason,
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained in this Agreement shall not be
in any way impaired thereby, it being intended that all of the rights and
privileges of the parties to this Agreement shall be enforceable to the fullest
extent permitted by law.  Each of the parties hereto acknowledge that
the other party(ies) hereto would not have an adequate remedy at law for money
damages in the event that any of the covenants or agreements of any other party
in this Agreement were not performed in accordance with its terms and therefore
agrees that the other party(ies) shall be entitled to specific enforcement of
such covenants or agreements and to injunctive and other equitable relief in
addition to any other remedy to which it may be entitled, at law or in
equity.

    
      
         

      

      
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    (j)           Entire Agreement;
Survival.  This Agreement and the agreements referred to in
this Agreement are intended by the parties as a final expression of their
agreements and are intended to be a complete and exclusive statement of the
agreements and understandings of the parties in respect of the subject matter
contained in this Agreement and therein.  There are no restrictions,
promises, representations, warranties or undertakings, with respect to the
subject matter of this Agreement, other than those set forth or referred to in
this Agreement and therein.  This Agreement and the agreements
referred to in this Agreement supersede all prior agreements and understandings
between the parties with respect to such subject matters.

    

    (k)           Binding
Nature.  This Agreement shall be binding upon and inure to the
benefit of the parties hereto.  Neither CSC nor Noteholder may assign
or transfer any rights under this Agreement.

    

    (l)           Use of Certain Terms and
References.  The words “hereof,” “herein” and “hereunder” and
words of similar import when used in this Agreement shall to this Agreement as a
whole and not to any particular provision of this Agreement; the term “or” shall
be deemed to include the term “and/or;” singular or plural tenses shall be
deemed to include the opposite whenever the context so indicates or requires;
and article, section, subsection, paragraph, clause, schedule and exhibit
references are to this Agreement unless otherwise specified.

    

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

    

    
      
        	 
      	
                CSC:

              
	 
      	 
      
	 
      	
                Compliance
      Systems Corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Dean Garfinkel

              
	 
      	 
      	
                Dean
      Garfinkel, President

              
	 
      	 
      
	 
      	
                NOTEHOLDER:

              
	 
      	 
      
	 
      	
                /s/ Barry M. Brookstein

              
	 
      	
                Barry
      M. Brookstein

              

      

    

     

    
      
         

      

      
        11Compliance
Systems Corporation

    

    18%
Senior Subordinated Secured Promissory Note

     

    
      
        	
                Dated:  June
      24, 2009

              	
                Principal
      Amount: $50,000.00

              
	
                Glen
      Cove, New York

              	 
      

      

    

    

    For Value Received, the
undersigned, Compliance
Systems Corporation (together with its
successors and assigns, “Borrower”), a Nevada corporation, hereby promises to
pay to Barry M.
Brookstein, an individual residing
in the State of New York (“Lender”), the principal sum of  $50,000.00,
together with interest as set forth below.  This 18% Senior
Subordinated Secured Promissory Note (this “Note”) is issued (a) pursuant to,
and is the “New Note” referred to, in that certain Promissory Note Exchange
Agreement, dated June 24, 2009 (the “Note Exchange Agreement”), between Borrower
and Lender, and (b) in connection with, and is the “New Note” referred to in,
that certain Security Agreement, dated June 24, 2009 (the “Security Agreement”),
between Borrower and Lender.  This Note is made subject to the terms
and conditions of the Security Agreement as if set forth in full in this
Note.

    

    1.           Interest
Rate.  Until an event of Default shall have occurred, the
principal amount evidenced by this Note shall bear interest at the rate of 18%
per annum, computed on the basis of a 360-day year for the actual number of days
elapsed (the “Applicable Interest Rate”).  Upon the occurrence of an
event of Default, the outstanding principal amount and any accrued but unpaid
interest thereon shall bear interest until paid at the Applicable Interest Rate
plus an
additional 2% per annum (the “Default Interest Rate”).

    

    2.           Payment Date; Payment Method;
Prepayment.

    

    (a)           Payment
Dates.  Payment of all accrued and unpaid interest due under
this Note shall be payable monthly, in arrears, on the first business day (each,
an “Interest Payment Date”) of each calendar month in which any principal amount
evidenced by this Note remains outstanding, commencing with July 1,
2010.  Payment of any outstanding principal amount evidenced by this
Note shall be made on January 1, 2011 (the “Maturity Date”).  Upon
payment in full of the principal evidenced by this Note (and any accrued but
unpaid interest thereon), Lender, by Lender’s acceptance of this Note, agrees to
mark this Note “CANCELLED” and return this Note as so marked to Borrower within
five days after such payment in full is received.  Notwithstanding the
immediately preceding sentence, the failure of Lender to mark this Note
“CANCELLED” and/or return this Note to Borrower upon payment in full of the
principal amount evidenced by this Note (and all accrued interest thereon) shall
not affect the fact that no amounts are due under this Note.  For
purposes of this Note, the term “business day” shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in the State of New York
are authorized or obligated by law or executive order to close.

    

    (b)           Payment
Method.  Payment of the principal evidenced by this Note (and
any accrued but unpaid interest thereon) shall be made by check, subject to
collection, tendered to Lender, via postage-paid, first class mail, at the
address for the giving of notices as set forth in Section 8 of this
Note.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (c)           Voluntary
Prepayment.  Borrower may pay, without penalty or premium, the
principal amount evidenced by this Note (and any accrued but unpaid interest
thereon), in whole or part, at any time up to the Maturity Date.  Any
partial prepayment shall first be applied against any accrued and unpaid
interest due under this Note and then to the principal amount evidenced by this
Note.  In the event of a voluntary prepayment being less than the full
amount outstanding under this Note (including any accrued but unpaid interest),
upon surrender of this Note in connection with said partial prepayment, Borrower
shall deliver to Lender a new note substantially in the form of this Note and
evidencing as principal any amount not so prepaid.  Notwithstanding
the immediately preceding sentence, following any partial prepayment of
principal evidenced by this Note, this Note shall be deemed to evidence a debt
of Borrower only to the extent of the remaining principal amount outstanding
following such partial repayment(s) (plus any accrued and unpaid
interest).

    

    3.           Default;
Acceleration.

    

    (a)           Any
of the following shall constitute an “event of Default” under this
Note:

    (i)          the
failure by Borrower to pay any amounts required to be paid under this Note on or
before the date on which such payment was due and such failure is not cured
within five business days of the giving of notice to Borrower by Lender of such
failure;

    (ii)          the
breach or noncompliance by Borrower of any of its material representations,
warranties or covenants contained in the Security Agreement and such breach or
noncompliance is not cured within five business days of the giving of notice to
Borrower by Lender of such breach or noncompliance;

    (iii)          Borrower
shall:

    (A)          apply
for or consent to the appointment of a receiver or trustee of Borrower’s
assets,

    (B)           make
a general assignment for the benefit of creditors,

    (C)           file
a petition or other request no matter how denominated (“Petition”) seeking
relief under Title 11 of the United States Code or under any other federal or
state bankruptcy, reorganization, insolvency, readjustment of debt, dissolution
or liquidation law or statute (“Bankruptcy Statute”), or

    (D)           file
an answer admitting the material allegations of a Petition filed against it in
any proceeding under any Bankruptcy Statute;

    (iv)          there
shall have entered against Borrower an order for relief under any Bankruptcy
Statute; or

    (v)          a
Petition seeking an order for relief under any Bankruptcy Statute is filed by
any one other than Borrower and without Borrower’s consent or agreement which is
not dismissed or stayed within 60 days after the date of such filing, or such
Petition is not dismissed upon the expiration of any stay thereof.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    (b)           Upon
the occurrence of an event of Default, the unpaid principal amount evidenced by
this Note (and any accrued but unpaid interest thereon) shall be immediately due
and payable.

    

    (c)           Until
the occurrence of an event of Default, the principal amount evidenced by this
Note shall bear interest at the Applicable Interest Rate and upon an event of
Default, any unpaid principal amount under this Note and any accrued but unpaid
interest through the date of effectiveness of such event of Default shall bear
interest until paid at the Default Interest Rate.

    

    4.           Subordination.

    

    (a)           Subordination.  This
Note shall at all times be wholly subordinate and junior in right of payment to
all Senior Indebtedness (as such capitalized term is defined below) to the
extent and in the manner provided in this section 4.

    

    (b)           Definitions.  As
used in this section 4 and section 12, the following capitalized terms shall
have the following meanings:

    (i)          “Indebtedness”
shall mean:

    (A)           all
indebtedness of Borrower for borrowed money or for the deferred purchase price
of property or services (other than current trade liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices),

    (B)           any
other indebtedness of Borrower that is evidenced by a note, bond, debenture or
similar instrument,

    (C)           all
obligations of Borrower under financing leases,

    (D)           all
obligations of Borrower in respect of acceptances issued or
created,

    (E)           all
obligations of Borrower secured by any lien on property, other than Senior
Indebtedness, and

    (F)           all
guarantee obligations of Borrower;

    (ii)          “Senior
Covenant Default” shall mean any event of default as defined under any agreement
pertaining to Senior Indebtedness, other than a Senior Payment
Default;

    (iii)          “Senior
Indebtedness” means all Indebtedness of Borrower currently or in the future
outstanding to:

    (A)           Agile
Opportunity Fund, LLC (“Agile”) under those certain Amended and Restated Secured
Convertible Debentures of Borrower payable to Agile, each in the principal
amount of $300,000.00 and dated May 6, 2008 and September 2, 2008,

    (B)           Nascap
Corp. under that certain Guaranty Agreement, dated September 30, 2006, by
Borrower in favor of Nascap Corp., and

    (C)           Henry
Ponzio (“Ponzio”) under that certain 18% Senior Subordinated Secured Promissory
Note of Borrower, dated June 24, 2009, in the principal amount of 150,000 and
payable to Ponzio;

    (iv)          “Senior
Default” shall mean a Senior Payment Default or a Senior Covenant
Default;

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    (v)          “Senior
Payment Default” shall mean any default in the payment of any Senior
Indebtedness; and

    (vi)          “Subordinated
Indebtedness” shall mean all Indebtedness and other debt of  Borrower
other than Senior Indebtedness, and shall include Borrower’s obligations under
this Note.

     

    (c)           General.  Upon the
maturity of any Senior Indebtedness by lapse of time, acceleration, required
prepayment or otherwise, such Senior Indebtedness shall first be paid in full in
cash or in a manner satisfactory to the payees of such Senior Indebtedness, or
such payment duly provided for in cash or in a manner satisfactory to the payees
of such Senior Indebtedness, before any payment is made on account of the
Subordinated Indebtedness or by Borrower or Affiliates (as defined by Rule 12b-2
of the Securities Exchange Act of 1934, as amended) of Borrower to acquire this
Note.  Notwithstanding any provision in this section 4 to the
contrary,

    (i)           for
so long as no Senior Default has occurred and is continuing, or would occur as a
result of such a payment, Borrower may pay and Lender may receive and retain all
regularly scheduled payments of principal and interest (other than at the
Default Interest Rate) under this Note, and

    (ii)          for
so long as no Senior Default has occurred and is continuing, or would occur as a
result of any such prepayment, Borrower may prepay the principal amount
evidenced by this Note, in accordance with the provisions of paragraph 2(c), and
Lender may receive such prepayments.

    

    (d)           Limitation on
Payment.

    (i)           Upon
receipt by Borrower and Lender of a Blockage Notice (as such capitalized term is
defined below), then, unless and until

    (A)           all
Senior Defaults that gave rise to the Blockage Notice shall have been remedied
or effectively waived or shall have ceased to exist or

    (B)           the
Senior Indebtedness in respect of which such Senior Defaults shall have occurred
shall have been paid in full in cash or in a manner satisfactory to the payees
of such Senior Indebtedness, no direct or indirect payment (in cash, property,
securities or by set-off or otherwise) of or on account of the principal
evidenced by this Note, or accrued and unpaid interest or as a sinking fund for
this Note, or in respect of any redemption, retirement, purchase or other
acquisition of Note, shall be made.

    Notwithstanding
the foregoing, in the case of a Blockage Notice that relates to a Senior
Covenant Default, the foregoing restrictions shall commence upon Borrower’s
receipt of such Blockage Notice and shall expire 270 days
thereafter.  Any principal and interest paid by Lender with respect to
this Note prior to the receipt of the subject Blockage Notice may be kept by
Lender.

    (ii)           For
purposes of this Section 4, a “Blockage Notice” is a notice of the holder of
Senior Indebtedness given to Borrower and Lender that a Senior Default has in
fact occurred and is continuing.

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    Notwithstanding
any provision contained herein to the contrary, once all Senior Defaults which
gave rise to the subject Blockage Notice shall have been remedied or effectively
waived or shall have ceased to exist, or the Senior Indebtedness in respect of
which such Senior Defaults shall have occurred shall have been paid in full in
cash or in a manner satisfactory to the payees of such Senior Indebtedness,
thereafter (unless another Blockage Period shall then be in effect) all amounts
which would have been payable under this Note, but for the existence of the
Blockage Notice delivered with respect to the subject Senior Default, shall be
payable in their entirety.

    

    (e)           Limitation on
Remedies.

    (i)           As
long as any Senior Indebtedness remains outstanding, upon the occurrence of an
event of Default under this Note, Lender shall not, unless the payees of any
Senior Indebtedness shall have caused such Senior Indebtedness to become due
prior to its stated maturity or any event of Default pursuant to subparagraphs
3(a)(iii) through (v) of this Note shall have commenced, declare or join in any
declaration of this Note to be due and payable by reason of such event of
Default or otherwise take any action against Borrower (including, without
limitation, commencing any legal action against Borrower or filing or joining in
the filing of any insolvency petition against Borrower) or exercise or cause to
be exercised any other contractual rights available to Lender prior to the
expiration of 30 days after the written notice of Lender’s ability to accelerate
on account of the occurrence of such event of Default (a “Remedy Notice”) shall
have been given by Lender to Borrower and, to the extent known by Lender, the
payees of the Senior Indebtedness (a “Remedy Standstill Period”).

    (ii)          The
Remedy Standstill Period shall be inapplicable or cease to be effective if the
payees of any Senior Indebtedness shall have caused such Senior Indebtedness to
become due prior to its stated maturity or an event of Default pursuant to
subparagraphs 3(a)(iii) through (v) shall have occurred.

    (iii)          Upon
the expiration or termination of any Remedy Standstill Period, Lender shall be
entitled to exercise any of Lender’s rights with respect to this Note other than
any right to accelerate the maturity date of this Note based upon the occurrence
of any event of Default in respect thereto which has been cured or otherwise
remedied during the Remedy Standstill Period.

    

    (f)           Subordination Upon Certain
Events.  Upon the occurrence of any event of Default with
respect to Borrower under subparagraphs 3(a)(iii) through (v) of this
Note:

    (i)          upon
any payment or distribution of assets of Borrower to creditors of Borrower,
payees of Senior Indebtedness shall be entitled to receive indefeasible payment
in full of all obligations with respect to the Senior Indebtedness before Lender
shall be entitled to receive any payment in respect of the Subordinated
Indebtedness,

    (ii)          until
all Senior Indebtedness is paid in full in cash or in a manner satisfactory to
the payees of such Senior Indebtedness, any distribution to which Lender would
be entitled but for this section 4 shall be made to the payees of Senior
Indebtedness, as their interests may appear, except that Lender may, pursuant to
a plan of reorganization under Chapter 11 of the Bankruptcy Code of 1978, as
amended, or any similar provision of any successor legislation thereto, receive
securities that are subordinate to the Senior Indebtedness to at least the same
extent as this Note if pursuant to such plan the distributions to the payees of
the Senior Indebtedness in the form of cash, securities or other property, by
set-off or otherwise, provide for payment of the full amount of the allowed
claim of the payees of the Senior Indebtedness,

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (iii)           for
purposes of this section 4, a distribution may consist of cash, securities or
other property, by set-off or otherwise, and

    (iv)           notwithstanding
the foregoing provisions of paragraphs 4(c) and (d) and this paragraph 4(f), if payment or delivery by
Borrower of cash, securities or other property to Lender is authorized by an
order or decree giving effect, and stating in such order or decree that effect
is given, to the subordination of this Note to the Senior Indebtedness, and made
by a court of competent jurisdiction in a proceeding under any applicable
bankruptcy or reorganization law, payment or delivery by such Borrower of such
cash, securities or other property shall be made to Lender in accordance with
such order or decree.

    

    (g)           Payments and Distributions
Received.  If Lender shall have received any payment from or
distribution of assets of Borrower in respect of the Subordinated Indebtedness
in contravention of the terms of this section 4 before all Senior Indebtedness
is paid in full in cash or in a manner satisfactory to the payees of such Senior
Indebtedness, then, and in such event, such payment or distribution shall be
received and held in trust for and shall be promptly paid over or delivered to
the payees of Senior Indebtedness to the extent necessary to pay all such Senior
Indebtedness in full in cash or in a manner satisfactory to the payees of such
Senior Indebtedness.

    

    (h)           Proofs of
Claim.  If, while any Senior Indebtedness is outstanding, any
event of Default under subparagraphs 3(a)(iii) through (v) occurs with respect
to Borrower, Lender shall duly and promptly take such action as any payee of
Senior Indebtedness may reasonably request to collect any payment with respect
to this Note for the account of the payees of the Senior Indebtedness and to
file appropriate claims or proofs of claim in respect of this
Note.  Upon the failure of Lender to take any such action, each payee
of Senior Indebtedness is hereby irrevocably authorized and empowered (in its
own name or otherwise), but shall have no obligation, to demand, sue for,
collect and receive every payment or distribution referred to in respect of this
Note and to file claims and proofs of claim and take such other action as it may
deem necessary or advisable for the exercise or enforcement of any of the rights
or interests of Lender with respect to this Note.

    

    (i)           Subrogation.  After
all amounts payable under or in respect of Senior Indebtedness are paid in full
in cash or in a manner satisfactory to the payees of such Senior Indebtedness,
Lender shall be subrogated to the rights of payees of Senior Indebtedness to
receive payments or distributions applicable to Senior Indebtedness to the
extent that distributions otherwise payable to Lender have been applied to the
payment of Senior Indebtedness.  A distribution made under this
section 4 to a payee of Senior Indebtedness which otherwise would have been made
to Lender is not, as between Borrower and Lender, a payment by Borrower on
Senior Indebtedness.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    (j)           Relative Rights.  By
acceptance of this Note, Lender agrees that this section 4 defines the relative
rights of Lender and the payees of Senior Indebtedness.  Nothing in
this section 4 shall:

    (i)           impair,
as between Borrower and Lender, the obligations of Borrower, which are absolute
and unconditional, to pay the principal amount evidenced by this Note (and
accrued and unpaid interest, including default interest) in accordance with its
terms;

    (ii)           affect
the relative rights of Lender and creditors of Borrower other than payees of
Senior Indebtedness or

    (iii)           prevent
Lender from exercising Lender’s available remedies upon an event of Default,
subject to the rights, if any, under this section 4 of payees of Senior
Indebtedness.

    

    (k)           Subordination May Not Be Impaired by
Borrower.  No right of any payee of any Senior Indebtedness to
enforce the subordination of the Indebtedness evidenced by this Note shall be
impaired by any failure to act by Borrower or such payee of Senior Indebtedness
or by the failure of Borrower or such payee to comply with the terms of the
Secured Notes, including this Note.  The provisions of this section 4
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Senior Indebtedness is rescinded or must
otherwise be returned by any payee of Senior Indebtedness as a result of the
insolvency, bankruptcy or reorganization of Borrower or any of its subsidiaries
or otherwise, all as though such payment had not been made.

    

    (l)           Payments.  A payment
with respect to principal of or interest on the Subordinated Indebtedness shall
include, without limitation, payment of principal evidenced by this Note (and
accrued and unpaid interest), any depositing of funds for the defeasance of the
Subordinated Indebtedness, any sinking fund and any payment on account of
mandatory prepayment or optional prepayment provisions.

    

    (m)           Section Not to Prevent Events of
Default.  The failure to make a payment on account of principal
of or interest on or other amounts constituting Subordinated Indebtedness by
reason of any provision of this section 4 shall not be construed as preventing
the occurrence of an event of Default under section 3.

    

    (n)           Subordination Not Impaired; Benefit
of Subordination.  By acceptance of this Note, Lender
acknowledges and consents that, without notice to or assent by Lender, and
without affecting the liabilities and obligations of Borrower and the rights and
benefits of the payees of  Senior Indebtedness set forth in this
section 4:

    (i)           the
obligations and liabilities of Borrower and any other party or parties for or
upon the Senior Indebtedness may, from time to time, be increased, renewed,
refinanced, extended, modified, amended, restated, compromised, supplemented,
terminated, waived or released;

    (ii)           the
payees of Senior Indebtedness, and any representative or representatives acting
on behalf thereof, may exercise or refrain from exercising any right, remedy or
power granted by or in connection with any agreements relating to Senior
Indebtedness; and

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    (iii)           any
balance or balances of funds with any payee of Senior Indebtedness at any time
outstanding for the credit of Borrower may, from time to time, in whole or in
part, be surrendered or released;

    all as
the payees of the Senior Indebtedness, and any representative or representatives
acting on behalf thereof, may deem advisable, and all without impairing,
abridging, diminishing, releasing or affecting the subordination of the
Subordinated Indebtedness to the Senior Indebtedness provided for
herein.

    

    (o)          Modification of Section
4.  The provisions of this section 4 are for the benefit of the
payees of Senior Indebtedness and, so long as any Senior Indebtedness remains
unpaid, may not be modified, rescinded or canceled in whole or in part without
the prior written consent thereto of all payees of Senior
Indebtedness.

    

    (p)          Covenants of
Lender.  By acceptance of this Note, Lender is agreeing and
consenting that, until all of the Senior Indebtedness has been fully
paid:

    (i)           Lender
shall not give any subordination in respect of this Note;

    (ii)           Lender
shall not release, exchange, extend the time of payment of, compromise, set off
or otherwise discharge any part of this Note or modify or amend this Note;
and

    (iii)           for
the benefit of the payees of Senior Indebtedness, upon the occurrence and during
the continuance of a Senior Default, Lender shall take any actions reasonably
requested by any payee of Senior Indebtedness to effectuate the full benefit of
the subordination contained herein.

    

    (q)          Miscellaneous.

    (i)           To
the extent permitted by applicable law, Lender and Borrower hereby
waive:

    (A)           notice
of acceptance of the terms of this Agreement by the payees of the Senior
Indebtedness and

    (B)           all
diligence in the collection or protection of or realization upon the Senior
Indebtedness.

    (ii)           Borrower
and Lender hereby expressly acknowledge that the payees of Senior Indebtedness
may enforce any and all rights derived herein by suit, either in equity or law,
for specific performance of any agreement contained in this section 4 or for
judgment at law and any other relief whatsoever appropriate to such action or
procedure.

    (iii)           Lender
acknowledges and consents that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each payee of Senior
Indebtedness, whether such Senior Indebtedness was created or acquired before or
after the issuance of this Note, and each payee of Senior Indebtedness shall be
deemed conclusively to have relied upon such subordination provisions in
acquiring and continuing to hold such Senior Indebtedness.

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    5.           Enforcement.  All
disputes regarding the enforcement or construction of this Note shall be
resolved in accordance with the Security Agreement and may not be resolved
independently of the enforcement or construction of the Security Agreement which
has been made a part hereof.

    

    6.           Applicable Law; Jurisdiction; Waiver
Of Jury Trial.  THIS NOTE SHALL BE GOVERNED BY AND INTERPRETED
UNDER THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED THEREIN, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF
LAW.  BORROWER HEREBY IRREVOCABLY CONSENTS THAT ANY LEGAL ACTION OR
PROCEEDING AGAINST BORROWER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS
AGREEMENT MAY BE INSTITUTED IN ANY STATE COURT OF GENERAL JURISDICTION LOCATED
IN EITHER THE COUNTIES OF NASSAU OR SUFFOLK OF THE STATE OF NEW YORK, OR THE
UNITED STATES FEDERAL COURT FOR THE EASTERN DISTRICT OF NEW YORK AND BORROWER
HEREBY SUBMITS TO THE JURISDICTION AND VENUE OF SUCH COURTS.  BORROWER
FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS ARISING OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY POSTAGE PREPAID CERTIFIED OR REGISTERED FIRST-CLASS MAIL, RETURN
RECEIPT REQUESTED, TO BORROWER.  THE FOREGOING, HOWEVER, SHALL NOT
LIMIT THE RIGHT OF LENDER TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE ANY LEGAL ACTION OR PROCEEDING OR TO OBTAIN EXECUTION OF
JUDGMENT IN ANY APPROPRIATE JURISDICTION.  IN THE EVENT OF LITIGATION
BETWEEN THE PARTIES OVER ANY MATTER CONNECTED WITH THIS AGREEMENT, THE RIGHT TO
A TRIAL BY JURY IS HEREBY WAIVED BY SUCH PARTIES.

    

    7.           Parties in
Interest.  This Note is non-negotiable and may not be sold,
assigned or otherwise transferred (except under will or laws of succession
applicable to Lender) without the prior written consent of Borrower and Lender
and shall bind both parties hereto and their respective heirs, successors and
permitted assigns.

    

    8.           Notices.  All
requests, demands, notices and other communications required or otherwise given
under this Agreement shall be sufficiently given if (a) delivered by hand,
against written receipt therefor, (b) forwarded by overnight courier requiring
acknowledgment of receipt or (c) mailed by postage prepaid, registered or
certified mail, return receipt requested, addressed, in the case of clauses (b)
or (c) of this section 8 as follows:

    

    
      
        
          	
                               
      If to Borrower, to:

                	
                  Dean
      Garfinkel, President

                
	 
      	
                  Compliance
      Systems Corporation

                
	 
      	
                  90
      Pratt Oval

                
	 
      	
                  Glen
      Cove, New York 11542

                

        

      

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    
      
        
          	
                                             
      with a copy to:

                	
                  Dennis
      C. O’Rourke, Esq.

                
	 
      	
                  Moritt
      Hock Hamroff & Horowitz LLC

                
	 
      	
                  400
      Garden City Plaza

                
	 
      	
                  Garden
      City, New York 11530

                
	 
      	 
      
	
                               
      If to Lender, to:

                	
                  Barry
      M. Brookstein

                
	 
      	
                  780
      New York Avenue

                
	 
      	
                  Huntington,
      New York 11743

                

        

      

    

    

    or, in
the case of any of the parties hereto, at such other address as such party shall
have furnished in writing, in accordance with this section 8, to the other
parties hereto.  Each such request, demand, notice or other
communication shall be deemed given (x) on the date of delivery by hand, (y) on
the first business day following the date of delivery to an overnight courier or
(z) three business days following mailing by registered or certified
mail.

    

    9.           Waiver.

    

    (a)           The
rights and remedies of Lender under this Note shall be cumulative and not
alternative.  No waiver by Lender of any right or remedy under this
Note shall be effective unless in writing signed by Lender.  Neither
the failure nor any delay in exercising any right, power or privilege under this
Note will operate as a waiver of such right, power or privilege and no single or
partial exercise of any such right, power or privilege by Lender will preclude
any other or further exercise of such right, power or privilege or the exercise
of any other right, power or privilege.  To the maximum extent
permitted by applicable law,

    (i)           no
claim or right of the Lender arising out of this Note can be discharged by the
Lender, in whole or in part, by a waiver or renunciation of the claim or right
unless in a writing, signed by the Lender;

    (ii)           no
waiver that may be given by the Lender will be applicable except in the specific
instance for which it is given; and

    (iii)           no
notice to or demand on the Borrower will be deemed to be a waiver of any
obligation of the Borrower or of the right of the Lender to take further action
without notice or demand as provided in this Note.

    

    (b)           Borrower
hereby waives all right to notice of acceptance, default, presentment, and
notice of dishonor.

    

    10.           Severability.  If
any provision in this Note is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Note will remain in full
force and effect.  Any provision of this Note held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.

     

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    11.           Section Headings;
Construction.  The headings of sections and paragraphs in this
Note are provided for convenience only and will not affect its construction or
interpretation.  All references to "section," “paragraph,”
“subparagraph" and “clause” refer to the corresponding section, paragraph,
subparagraph or clause of this Agreement, as the case may be, unless otherwise
specified.  All words used in this Note will be construed to be of
such gender or number as the circumstances require.  Unless otherwise
expressly provided, the words "hereof" and "hereunder" and similar references
refer to this Note in its entirety and not to any specific section or subsection
hereof.

    

    12.           Usury.  Anything in
this Note to the contrary notwithstanding, the obligation of Borrower to make
payments of interest shall be subject to the limitation that payments of
interest shall not be required to be made to the extent that Lender’s receipt of
such payments of interest would not be permissible under the law or laws
applicable to Lender limiting rates of interest which may be charged or
collected by Lender.  Any such amount of interest which is not paid as
a result of the limitation referred to in the preceding sentence shall be
carried forward and paid, if ever, by Borrower to Lender on the earliest date or
dates on which any interest is payable under this Note and on which the receipt
of such payment is permissible under the laws applicable to Lender limiting
rates of interest which may be charged or collected by Lender.

    

    13.           Time is of the
Essence.  Wherever time is specified for the doing or
performance of any act herein, time shall be considered of the
essence.

    

    14.           Security.  The
obligations of Borrower under this Note are secured pursuant to the terms of
that certain Security Agreement, dated June 24, 2009, between Borrower and
Lender.

     

    IN WITNESS WHEREOF, this Note
has been duly executed and delivered as of the date first above
written.

    

    
      
        	
                Compliance
      Systems Corporation

              
	 
      	 
      
	
                By:

              	
                /s/ Dean Garfinkel

              
	 
      	
                Dean
      Garfinkel, President

              

      

    

    

    ATTEST:

    

    
      
        	
                By:

              	
                /s/ Barry M. Brookstein

              
	 
      	
                Barry
      M. Brookstein, Secretary

              

      

    

     

    
      
         

      

      
        11

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