Document:

Unassociated Document

    Call
Compliance, Inc.

    18%
Demand Promissory Note

    

    

    
      	
              Dated:
      March 3, 2009

            	
              Principal
      Amount: $50,000

            
	 
      	
              Huntington,
      New York

            

    

    

    For Value Received, the
undersigned, Call Compliance,
Inc. (together with its successors and assigns, the “Maker”), a New York
corporation, hereby promises to pay to the order of Barry Brookstein (the
“Lender”) or registered assignees (Lender or such assignees shall be referred to
herein collectively as the “Holder”), the principal sum of $50,000, together
with interest as set forth below.  The Maker agrees to pay the
principal amount evidenced by this Note plus all unpaid interest due hereunder
not later than seven (7) days after written DEMAND is received by the Maker, at
its address set forth herein, from the Holder.  Repayment of any
amounts that would become due under this Note are guaranteed by Compliance
Systems Corporation, a Nevada corporation, (the “Guarantor”) pursuant to that
certain Corporate Guaranty, dated March 3, 2009 (the “Guaranty”) executed by the
Guarantor for the benefit of the Holder.

    

    THIS
NOTE IS AND SHALL BE CONSTRUED AS A "DEMAND INSTRUMENT" UNDER THE NEW YORK
UNIFORM COMMERCIAL CODE.  HOLDER MAY DEMAND PAYMENT OF THE
INDEBTEDNESS OUTSTANDING UNDER THIS NOTE OR ANY PORTION THEREOF AT ANY
TIME.

    

    1.           Interest Rate.  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”) with the accrual of such interest
commencing as of the date hereof.  Interest on the unpaid principal
evidenced by this Note shall accrue and be payable monthly in arrears on the
1st
Business Day (as defined below) of each month, commencing on April 1, 2009 (or
the first Business Day thereafter).  If any payment of either interest
or principal on this Note becomes due and payable on any day other than a
Business Day, then the maturity thereof shall be extended to the next succeeding
Business Day.  “Business Day” shall mean any day on which banks are
open for business and are neither required nor authorized to close in the State
of New York.

    

    2.           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 Holder, via postage-paid, first class mail, at the
Holder’s address for the giving of notices as set forth in Section 8 of this
Note.  Upon payment in full of the principal evidenced by this Note
(and any accrued but unpaid interest thereon), Holder, by Holder’s acceptance of
this Note, agrees to mark this Note “CANCELLED” and return this Note as so
marked to the Maker within five Business Days after such payment in full is
collected by the Holder.  This Note may be prepaid by the Maker, at
the Maker’s sole discretion, without penalty, in whole or in part and at any
time upon ten days’ prior written notice delivered to Holder, provided that such
prepayment includes any accrued but unpaid interest thereon through the date of
prepayment.

    

    
      
        
        

      

      
        - 1
-

        
          

        

      

      
        
        

      

    

    3.           Default;
Acceleration.

    

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

    

    (i)           the
failure by the Maker to pay any amounts required to be paid under this Note on
or before the date on which such payment was due;

    (ii)          the
breach or noncompliance by the Maker or Guarantor of any terms contained
herein;

    (iii)         the
Maker or Guarantor shall

    (A)          
apply for or consent to the appointment of a receiver or trustee of the Maker’s
or Guarantor’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 the Maker or Guarantor 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 the Maker or Guarantor and without the Maker’s or Guarantor’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.

    

    (b)           Upon
the occurrence of an Event of Default hereunder, Holder shall have the right and
option (but not the obligation) (i) to declare the full amount of the balance
due under the Note due and payable forthwith and to demand and receive the same
from Maker; (ii) to declare interest applicable to all outstanding amounts due
hereunder to be twenty-four (24%) percent; and (iii) to exercise any and all
rights and remedies available under this Note or applicable law, all of which
rights and remedies shall be cumulative.

     

    (c)           The
Maker further agrees that it shall pay, upon written demand received from the
Holder, all expenses of the Holder, including reasonable attorney fees, incurred
in the collection or enforcement of its rights under this Note.  To
the fullest extent permissible, the Maker waives presentment, demand for
payment, protest and notice of nonpayment, and all other demands or notices
otherwise required by law in connection with the delivery, acceptance,
performance, default or enforcement of this Note.  The Maker consents
to any extension or postponement of the time of payment or any other indulgence,
any amendment or modification of any agreement, any substitution, exchange or
release of collateral or to the additional release of any other party or person
primarily or secondarily liable hereunder.  No consent or waiver by
the Holder with respect to any actions or failure to act which, without consent,
would constitute a breach of any provision of this Note, shall be valid and
binding unless in writing and signed by the Holder; and no delay or omission of
the Holder in exercising any right or remedy hereunder shall constitute a waiver
of any such right or remedy.

     

    
      
        
        

      

      
        - 2
-

        
          

        

      

      
        
        

      

    

    4.           Assignment.  This
Note is not assignable by the Maker, and any purported assignment of this Note
shall be null and void and of no effect.  This Note is not assignable
by the Holder except in compliance with applicable federal and state securities
laws.

    

    5.           Waiver and
Amendment.  Any provision of this Note may be amended, waived
or modified upon the written consent of the Maker and the Holder.

    

    6.           Usury. This Note is hereby
expressly limited so that in no event whatsoever, whether by reason of
acceleration of maturity of the loan evidenced hereby or otherwise, shall the
amount paid or agreed to be paid to the Holder hereunder for the loan, use,
forbearance or retention of money exceed that permissible under applicable
law.  If at any time the performance of any provision of this Note or
of any other agreement or instrument entered into in connection with this Note
involves a payment exceeding the limit of the interest that may be validly
charged for the loan, use, forbearance or detention of money under applicable
law, then automatically and retroactively, ipso facto, the obligation to be
performed shall be reduced to such limit, it being the specific intent of the
Maker and the Holder that all payments under this Note are to be credited first
to interest as permitted by law, but not in excess of (a) the agreed rate of
interest set forth herein or therein or (b) that permitted by law, whichever is
the lesser, and the balance toward the reduction of principal.  The
provisions of this Section 8 shall never be superseded or waived and shall
control every other provision of this Note and all other agreements and
instruments between the Maker and the Holder entered into in connection with
this Note.

    

    7.           Governing Law.  This
Note and all rights and obligations hereunder shall be governed by and construed
in accordance with the laws of the State of New York applicable to agreements
made and be performed wholly within such State, without regard to such State’s
conflicts of laws principles.

    

    8.           Notices.  All
requests, demands, notices and other communications required or otherwise given
under this Note 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 as follows:

     

     

    
      
        	
                If
      to the Maker, to:

              	
                Call
      Compliance, Inc.

              
	 
      	
                90
      Pratt Oval

              
	 
      	
                Glen
      Cove, New York 11542

              
	 
      	
                Attn:
      Dean Garfinkel, President

              
	 
      	 
      
	
                with
      a copy to:

              	
                Moritt
      Hock Hamroff & Horowitz LLP

              
	 
      	
                400
      Garden City Plaza, Suite 202

              
	 
      	
                Garden
      City, New York 11530

              
	 
      	
                Attn:
      Dennis C. O’Rourke, Esq.

              
	 
      	 
      
	
                If
      to Holder, to:

              	
                Barry
      Brookstein

              
	 
      	
                780
      New York Avenue

              
	 
      	
                Huntington,
      New York 11743

              

      

    

    
 

    
      
        
        

      

      
        - 3
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    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 (a) on the date of delivery by hand, (b) on
the first business day following the date of delivery to an overnight courier or
(c) three business days following mailing by registered or certified
mail.

    

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

    

    Call
Compliance, Inc.

     

    
      
        	By:  	
                /s/
      Dean Garfinkel

              	 	 	
                 

              	 
	Name:
      	
                Dean
      Garfinkel

              	 	 	
                 

              	 
	Title:	
                President

              	 	 	
                 

              	 

      

    

    
 

    
      
        
        

      

      
        - 4
-Unassociated Document

    

    CORPORATE
GUARANTY

    

    For value
received, and with respect to any loans, advances, leases or financial
accommodations previously, now or hereafter made or granted by Barry Brookstein, an
individual (the "Lender") to or for the account of Call Compliance, Inc., a New
York corporation (the "Debtor"), under that certain Promissory Note, dated of
even date herewith in the principal amount of $50,000, issued to the Lender by
the Debtor (the “Note,”), the undersigned (the "Guarantor") hereby guarantees
the prompt payment to Lender of all sums which may in any manner whatsoever be
presently due and owing and of all sums which shall in the future become in any
manner whatsoever due and owing to Lender from Debtor under the Note whether by
acceleration or otherwise; and under all other present and future agreements,
notes or documents with Lender or sold, transferred or assigned to
Lender.

    

    Guarantor
also agrees to the following:

    

    
      	
               
      

            	
              (a)

            	
              that
      the liability of Guarantor is DIRECT, ABSOLUTE AND UNCONDITIONAL and may
      be enforced without (i) requiring Lender first to resort to any other
      right, remedy or security or (ii) regard to the validity, regularity or
      enforceability of any obligation or purported obligation of Debtor under
      the Note or otherwise;

            

    

    

    
      	
               
      

            	
              (b)

            	
              to
      indemnify Lender and hold Lender harmless from and against all
      obligations, demands and liabilities by whomsoever asserted and against
      all losses in any way suffered or incurred by Lender as a result of or in
      any way arising out of transactions with Debtor, whether under the
      Agreements or otherwise;

            

    

    

    
      	
               
      

            	
              (c)

            	
              that
      this Guaranty shall not be impaired by any modification or extension of
      the Note or any other agreement between Debtor and Lender, nor by any
      modification or release of any of the obligations hereby guaranteed, nor
      by any agreement or arrangement whatsoever with Debtor or anyone
      else;

            

    

    

    
      	
               
      

            	
              (d)

            	
              that
      Guarantor shall be liable to Lender for all attorneys’ fees and costs
      incurred by Lender by reason of this Guaranty or in connection with or
      arising out of or in enforcing any rights granted Lender hereunder or in
      any respect relating to the Note;

            

    

    

    
      	
               
      

            	
              (e)

            	
              that
      Guarantor shall not have any right of subrogation, reimbursement or
      indemnity whatsoever, nor any right of recourse to security for the debts
      and obligations of Debtor to Lender, unless and until all of Debtor’s
      obligations have been paid in full;

            

    

    

    
      	
               
      

            	
              (f)

            	
              that
      if Debtor or Guarantor shall at any time become insolvent or make a
      general assignment or if a petition in bankruptcy or any insolvency or
      reorganization proceedings shall be filed or commenced by or against
      Debtor or Guarantor, any and all obligations of Guarantor shall, at
      Lender’s option, become immediately due and payable without
      notice;

            

    

    

    
      
        
        

      

      
        Page 1 of
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              (g)

            	
              that
      Lender’s books and records showing the account between Lender and Debtor
      shall be admissible in any action or proceeding against Guarantor shall be
      binding upon Guarantor for the purpose of establishing the items therein
      set forth and shall constitute prima facie proof
  thereof;

            

    

    

    
      	
               
      

            	
              (h)

            	
              that
      this Guaranty is, as to Guarantor, a continuing Guaranty which shall
      remain effective until all obligations of Debtor to Lender shall be paid
      in full;

            

    

    

    
      	
               
      

            	
              (i)

            	
              that
      nothing shall discharge or satisfy the liability of Guarantor except the
      full payment and performance of all Debtor’s debts and obligations to
      Lender;

            

    

    

    
      	
               
      

            	
              (j)

            	
              that
      any and all present and future debts and obligations of the Debtor to
      Guarantor are hereby waived and postponed in favor of, and subordinated
      to, the full payment and performance of all present and future debts and
      obligations of Debtor to Lender;

            

    

    

    
      	
               
      

            	
              (k)

            	
              Guarantor,
      as security for its obligations hereunder, hereby assigns to Lender the
      right to collect all debts and obligations of Debtor to
      Guarantor;

            

    

    

    
      	
               
      

            	
              (l)

            	
              that
      all sums at anytime to the credit of Guarantor and any of the property of
      Guarantor at any time in Lender’s possession may be held by Lender as
      security for any and all obligations of Guarantor to Lender and to any of
      Lender’s affiliated entities, no matter how or when arising;
      and

            

    

    

    
      	
               
      

            	
              (m)

            	
              that
      Guarantor shall, under no circumstances whatsoever, assign any of its
      obligations under this Guaranty.

            

    

    

    Guarantor
warrants and represents to, and covenants with, Lender that this Guaranty
contains Guarantor’s entire agreement with respect to Guarantor’s guarantee of
Debtor’s obligations under the Note.  All prior agreements,
commitments, understandings, representations, warranties and negotiations in
connection herewith, if any, are hereby merged into this Guaranty, and no oral
representations shall in any manner whatsoever modify or explain any of the
terms and conditions of this Guaranty.

    

    Guarantor
acknowledges that Guarantor has made an independent investigation of the
financial condition of Debtor and gives this Guaranty based on that
investigation and not upon any representations made by
Lender.  Guarantor agrees that Lender shall have no obligation to
disclose to Guarantor any information acquired by Lender in the course of
Lender’s relationship with Debtor.  Guarantor agrees that any delay by
Lender in exercising any or all of Lender’s rights granted under this Guaranty,
or any other agreement to which Lender is subject with respect to the Note and
any transaction contemplated thereby, shall not operate as a waiver of those
rights.

    

    Guarantor
covenants with Lender that Guarantor has the full legal right, power and
authority to execute this Guaranty; that the execution and delivery of this
Guaranty has been approved by all necessary parties; that none of Guarantor’s
obligations hereunder will result in any breach of any provision of any
agreement or instrument to which Guarantor is a party or by which Guarantor is
bound; and that any certification of Guarantor’s corporate (or other)
resolutions delivered to Lender in connection with this Guaranty shall remain in
full force and effect and Lender may continue to rely upon the same unless
Guarantor shall provide Lender with not less than ten (10) days prior written
notice to the contrary.

    

    
      
        
        

      

      
        Page 2 of
5

        
          

        

      

      
        
        

      

    

    GUARANTOR
WAIVES the following:

    

    
      	
               
      

            	
              (a)

            	
              notice
      of acceptance hereof;

            

    

    

    
      	
               
      

            	
              (b)

            	
              THE
      RIGHT TO A JURY TRIAL IN ANY ACTION
HEREUNDER;

            

    

    

    
      	
               
      

            	
              (c)

            	
              presentment,
      demand and protest of any instrument and notice
  thereof;

            

    

    

    
      	
               
      

            	
              (d)

            	
              notice
      of default;

            

    

    

    
      	
               
      

            	
              (e)

            	
              its
      right to a reasonable disposition of any collateral repossessed from
      Debtor;

            

    

    

    
      	
               
      

            	
              (f)

            	
              the
      benefit of any statute of limitations affecting Guarantor’s liability
      under this Guaranty or the enforcement
hereof;

            

    

    

    
      	
               
      

            	
              (g)

            	
              all
      other notices or formalities to which Guarantor is or might be entitled
      whether by law or otherwise;

            

    

    

    
      	
               
      

            	
              (h)

            	
              all
      rights of set-off;

            

    

    

    
      	
               
      

            	
              (i)

            	
              and
      any right it may have to assert, by way of counterclaim or affirmative
      defense in any action to enforce Lender’s rights hereunder, any claim
      whatsoever against Lender.

            

    

    

    Guarantor’s
obligations under this Guaranty shall include all amounts paid by or on behalf
of Debtor which may be recovered by any person or entity as a preference (as
that term is defined under Title 11 of the United States Code, fraudulent
transfer or conveyance or similar transfer and all of Lender’s costs and
expenses of the defense of any action for such recovery.

    

    Guarantor
shall provide to Lender within five (5) days of written demand therefore, its
current financial statements (and federal income tax returns) satisfactory to
Lender as to form, preparation and content, on a review basis by Guarantor’s
certified public accountant, which financial statement shall be in comparative
form (except for the first year) for such fiscal year and at least two (2) prior
fiscal years.  Each financial statement submitted by Guarantor to
Lender shall be accompanied by a certificate certifying: (i) that such financial
statement was prepared on a cash/receipts and disbursements/income tax basis
which reflects any and all liabilities whether or not paid and which fairly and
accurately presents the Guarantor’s financial condition and results of
operations for the period to which it pertains, and (ii) that no event of
default has occurred under this Agreement during the period to which such
financial statement pertains.

    

    
      
        
        

      

      
        Page 3 of
5

        
          

        

      

      
        
        

      

    

    This
Guaranty, all acts and transactions hereunder and the rights and obligations of
the parties hereto, shall be governed, construed and interpreted according to
the laws of the State of New York.  Guarantor hereby agrees that all
actions or proceedings arising directly or indirectly, in connection with, out
of or related to this Guaranty may be litigated, in Lender’s sole discretion and
election, in courts in New York, and Guarantor hereby subjects itself and
consents to the jurisdiction and venue of the state courts located in the State
of New York, County of Nassau and federal courts of the Eastern District of the
State of New York as the exclusive jurisdiction in any action or proceeding
brought by Guarantor arising out of this Guaranty, and any documents or
agreements executed in connection therewith, and designates such courts as the
non-exclusive jurisdiction and the proper venue for any action brought against
Guarantor.  The provisions of this paragraph are not exclusive insofar
as Lender is concerned and do not prohibit Lender from commencing any necessary
legal action or instituting any appropriate proceeding in any court of competent
jurisdiction or venue.  Service of process may be effectuated upon the
undersigned and any guarantor by Lender serving any and all legal papers
necessary to institute such proceeding by mailing them certified mail, return
receipt requested, to the address identified by the undersigned below and by the
guarantor(s) on the instrument of guaranty and service shall be deemed completed
five (5) days after the same has been posted as aforesaid.

    

    GUARANTOR HEREBY WAIVES ANY RIGHT
GUARANTOR MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY
LITIGATION.  This Guaranty shall be binding upon the successors and
assigns of Guarantor and shall inure to the benefit of Lender’s successors and
assigns.  If more than one person or entity shall execute this
Guaranty, as a Guarantor, the terms and conditions of this Guaranty shall apply
to each of them and the term Guarantor shall apply to each Guarantor executing
this Guaranty.

    

    
      
        
        

      

      
        Page 4 of
5

        
          

        

      

      
        
        

      

    

    

    This Guaranty shall apply in favor of
Lender and each of its affiliates, successors and assigns.

     

    
      
        	 	 	 	COMPLIANCE
      SYSTEMS CORPORATION
	Witness:    	
                 

              	 	 	
                 

              
	(GUARANTOR)	
                 

              	 	BY
      (signature):  	
                /s/
      Dean Garfinkel

              
	 	
                 

              	 	 	
                 

              
	 	 	 	NAME:    	Dean
      Garfinkel
	 	 	 	 	 
	 	 	 	DATE:    	March
      3, 2009
	 	 	 	 	 
	 	 	 	TITLE: 	President
	 	 	 	 	 
	 	 	 	

                ADDRESS:

              	

                90
      Pratt Oval

                
                  Glen
      Cove, New York 11542

                

              
	 	 	 	 	 
	 	 	 	TAX
      PAYER ID NO.	 

      

    

    
 

    
      
        
        

      

      
        Page 5 of
5

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