Document:

Unassociated Document

    LIMITED
      NON-RECOURSE GUARANTY AGREEMENT

     

    This
      LIMITED NON-RECOURSE GUARANTY AGREEMENT is made as of the 6th
      day of
      May, 2008, by Dean Garfinkel, having an address at c/o 90 Pratt Oval, Glen
      Cove,
      NY 11542 (the “Guarantor”), to and with Agile Opportunity Fund, LLC, a New York
      limited liability company (“Lender”).

    

    WITNESSETH:

    

    Lender
      has simultaneously entered into a Securities Purchase Agreement (the
“Agreement”) with Compliance Systems Corporation (“Borrower”), pursuant to which
      Lender has purchased the Initial Debenture identified therein and may purchase
      the Additional Debenture identified therein pursuant to the terms thereof
      (collectively, the “Debentures”).

    

    NOW,
      THEREFORE, in order to induce Lender to enter into the Agreement with Borrower,
      Guarantor agrees as follows:

    

    1. Guarantor
      hereby unconditionally and irrevocably guarantees to Lender the due and punctual
      payment in full of all obligations of Borrower under the Debentures. The
      obligations and liabilities of Borrower under the Debentures are collectively
      referred to as the “Obligations.”

    

    2. This
      Guaranty is irrevocable, continuing, indivisible and unconditional and shall
      remain in full force and effect regardless of, and shall not discharged,
      terminated, impaired or modified in any manner by reason of (a) any amendment,
      modification, extension or renewal of the Debentures; (b) the assertion or
      exercise by Lender, or the failure of Lender to assert or exercise, against
      Borrower any of the rights under or interest in the Debentures or any other
      security instruments ; (c) the existence or continuance, or discontinuance,
      of
      Borrower as a legal entity; (d) the bankruptcy, insolvency, receivership or
      reorganization of Borrower, or the making by Borrower of an assignment for
      the
      benefit of creditors; or (e) the acceptance, alteration, release or substitution
      by Lender of any security for the Obligations, whether provided by Borrower,
      Guarantor or any other person. This Guaranty is and shall be a direct and
      primary obligation of Guarantor, and may be enforced by the Lender without
      prior
      resort to Borrower or the exhaustion of any rights or remedies that Lender
      may
      have against Borrower.

    

    3. Notwithstanding
      anything to the contrary herein, Guarantor’s Obligations under this Limited
      Guaranty Agreement are non-recourse to Guarantor and are limited only to any
      net
      proceeds received by Lender in connection with any exercise by Lender of
      Lender’s rights under the Stock Pledge Agreement executed by Guarantor in favor
      of Lender and attached as Exhibit A hereto.

     

    4. Guarantor
      hereby expressly waives the following: (a) acceptance and notice of acceptance
      of this Guaranty by Lender; (b) notice of extension of time of the payment,
      performance and compliance with, or the renewal or alteration of the terms
      and
      conditions of, any Obligations; (c) notice of any demand for payment, notice
      of
      default or nonpayment as to any Obligations; (d) all other notices to which
      the
      Guarantor might otherwise be entitled in connection with the Guaranty or the
      Obligations; and (e) trial by jury and the right thereto in any action or
      proceeding of any kind or nature, arising on, under or by reason of, or relating
      in any way to, this Guaranty or the Obligations.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    5. Guarantor
      has not and will not set up or claim any counterclaim, set-off or other
      objection of any kind to the suit, action or proceeding at law, in equity,
      or
      otherwise, to any demand or claim that may be instituted or made under and
      by
      virtue of this Guaranty. All remedies of Lender by reason of or under this
      Guaranty are separate and cumulative remedies, and it is agreed that no one
      of
      such remedies shall be deemed in exclusion of any other remedies available
      to
      Lender.

    

    6. Guarantor
      represents and warrants that the Guarantor has full power and authority to
      execute, deliver and perform this Guaranty, and that neither the execution,
      delivery nor performance of this Guaranty will violate any law or regulation,
      or
      any order or decree of any court or governmental authority, or will conflict
      with, or result in the breach of, or constitute a default under, any agreement
      or other instrument to which Guarantor is a party or by which Guarantor may
      be
      bound, or will result in the creation or imposition of any lien, claim or
      encumbrance upon any property of Guarantor.

    

    7. This
      Guaranty may not be changed or terminated orally. No modification or waiver
      of
      any provision of this Guaranty shall be effective unless such modification
      or
      waiver shall be in writing and signed by Lender, and the same shall then be
      effective only for the period and on the conditions and for the specific
      instances and purposes specified in such writing. No course of dealing between
      Guarantor and Lender in exercising any rights or remedies hereunder shall
      operate as a waiver or preclude the exercise of any other rights or remedies
      hereunder.

    

    8. This
      Guaranty shall be construed in accordance with, and governed by, the laws of
      the
      State of New York, without giving effect to such jurisdiction’s principles of
      conflict of laws, except to the extent that the validity or the perfection
      of
      the security interest hereunder, or remedies hereunder, in respect of any
      particular Collateral are governed by the laws of a jurisdiction other than
      the
      State of New York. Each of the parties hereto submits to the personal
      jurisdiction of and each agrees that all proceedings relating hereto shall
      be
      brought in federal or state courts located within Nassau County in the State
      of
      New York.

    

    9. This
      Guaranty shall be binding upon and insure to the benefit of the parties hereto
      and their respective heirs, executors, administrators, legal representatives,
      successors and assigns.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    IN
      WITNESS WHEREOF, Guarantor has executed this Limited Non-Recourse Guaranty
      Agreement as of the 6th day of May, 2008.

    

    

    /s/
      Dean
      Garfinkel                 

    Dean
      Garfinkel

    

    Address:

    90
      Pratt
      Oval

    Glen
      Cove, NY 11542

    

    Telephone
      No.:

    (516)
      674-4545

    

    Tax
      I.D.
      Number:

    _____________________________

    

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

          
          

        

      

    

     

    EXHIBIT
      A

    

    FORM
      OF STOCK PLEDGE AGREEMENT

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    STOCK
      PLEDGE AGREEMENT

    

    This
      Stock Pledge Agreement (this "Pledge
      Agreement")
      is
      made as of May 6, 2008 by and between Agile Opportunity Fund, LLC, a Delaware
      limited liability company (the "Lender"),
      and
      the parties indicated on Schedule I hereto (each, a “Pledgor").

    

    WITNESSETH

    

    WHEREAS,
      Lender has entered into a Securities Purchase Agreement, dated as of the date
      hereof (the “Securities Purchase Agreement”), with Compliance Systems
      Corporation, a Nevada corporation (the “Borrower”),
      pursuant to which Lender purchased the Initial Debenture identified therein
      and
      may purchase the Additional Debenture identified therein; and

    

    WHEREAS,
      each of the Pledgors has executed a Limited Non-Recourse Guaranty Agreement
      and
      has agreed to secure the Pledgor’s obligations therein by a pledge of shares of
      preferred stock of the Company as set forth on Schedule I hereto (the
“Pledgor Shares”); and 

    

    WHEREAS,
      capitalize terms not otherwise defined in this Pledge Agreement shall have
      the
      meanings assigned to such terms in the Securities Purchase
      Agreement.

    

    NOW,
      THEREFORE, in consideration of the foregoing and for other good and valuable
      consideration, the receipt and adequacy of which are hereby acknowledged, the
      parties hereto agree as follows:

    

    1. Pledge.
      As
      collateral security for the full and timely payment of the obligations under
      the
      Debentures issued pursuant to the Securities Purchase Agreement and the Limited
      Non-Recourse Guaranty Agreement of even date herewith executed by Pledgors
      in
      connection therewith (the “Debenture
      Obligations”),
      each
      of the Pledgors hereby delivers, deposits, pledges, transfers and assigns to
      the
      Lender and grants to the Lender a security interest in all of the Pledged Shares
      and all certificates evidencing the Pledged Shares owned by Pledgor and
      identified as such on Schedule I hereto and all other instruments or documents
      evidencing the same now owned by the Pledgor and all dividends, cash,
      instruments and other property from time to time received, receivable or
      otherwise distributed in respect of or in exchange for any or all of such
      Pledged Shares.

    

    The
      Pledgors herewith deliver to the Lender the certificates evidencing the Pledged
      Shares together with appropriate undated security transfer powers duly executed
      in blank. The Pledgors agree that all certificates evidencing the Pledged Shares
      shall be marked with the following legend:

    

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF A STOCK
      PLEDGE AGREEMENT DATED AS OF MAY 6, 2008 BY AND BETWEEN AGILE OPPORTUNITY FUND,
      LLC, A DELAWARE LIMITED LIABILITY COMPANY (THE "LENDER"), AND THE PLEDGORS
      NAMED
      THEREIN, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE
      CORPORATION.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    2. Administration
      of Security.
      The
      following provisions shall govern the administration of the Pledged
      Shares:

    

    2.1. So
      long
      as the Pledgors are not in default in respect of any payment or any other
      Debenture Obligation (an “Event of Default”), the
      Pledgors shall be entitled to act with respect to the Pledged Shares in any
      manner not inconsistent with this Pledge Agreement, the Securities Purchase
      Agreement, the Debentures or any document or instrument delivered or to be
      delivered pursuant to or in connection with any of the foregoing, including,
      without limitation, transferring the Pledged Shares to a nominee for purposes
      of
      voting the Pledged Shares and receiving all cash distributions thereon and
      giving consents, waivers and ratifications in respect thereof.

    

    2.2. If,
      while
      this Pledge Agreement is in effect, any of the Pledgors shall become entitled
      to
      receive or shall receive any debt or equity security certificate (including,
      without limitation, any certificate representing shares of stock received in
      connection with the exercise of any option, any certificate representing a
      stock
      dividend or a distribution in connection with any reclassification, increase
      or
      reduction of capital, or any certificate issued in connection with any
      reorganization), option or right, whether as a dividend or distribution in
      respect of, in substitution of, or in exchange for any Pledged Shares, the
      Pledgors agree to accept the same as the Lender's agent and to hold the same
      in
      trust on behalf of and for the benefit of the Lender and to deliver the same
      forthwith to the Lender in the exact form received, with the endorsement of
      such
      Pledgor when necessary and/or appropriate undated security transfer powers
      duly
      executed in blank, to be held by the Lender, subject to the terms of this Pledge
      Agreement, as additional collateral security for the Debenture Obligations.
      Notwithstanding the foregoing, it is agreed that each of the Pledgors may
      exercise any option or right received as contemplated in the preceding sentence,
      and the Lender will exercise any such option or right upon receipt of written
      instructions to that effect and any required payments or documents from the
      Pledgor, and the securities received upon such exercise of any such option
      or
      right shall thereafter be held by the Pledgor or the Lender as contemplated
      by
      the preceding sentence.

    

    2.3. Each
      of
      the Pledgors shall immediately upon request by the Lender and in confirmation
      of
      the security interests hereby created, execute and deliver to the Lender such
      further instruments, deeds, transfers, assurances and agreements, in form and
      substance as the Lender shall reasonably request, including any financing
      statements and amendments thereto, or any other documents, as required under
      New
      York law and any other applicable law to protect the security interests created
      hereunder.

    

    2.4. Subject
      to any sale by the Lender or other disposition by the Lender of the Pledged
      Shares or other property pursuant to this Pledge Agreement and subject to
      Sections 5 and 6 herein, the Pledged Shares shall be returned to the Pledgors
      upon payment in full of the Debenture Obligations or the conversion in full
      of
      the Initial Debenture and, if issued, the Additional Debenture into Common
      Stock.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3. Remedies
      in Case of an Event of Default.

    

    3.1. In
      case
      an Event of Default shall have occurred and be continuing, the Lender shall
      have
      in each case all of the remedies of a secured party under the Nevada Uniform
      Commercial Code, and, without limiting the foregoing, shall have the right,
      in
      its sole discretion, to sell, resell, assign and deliver all or, from time
      to
      time, any part of the Pledged Shares, or any interest in or option or right
      to
      purchase any part thereof, on any securities exchange on which the Pledged
      Shares may be listed, at any private sale or at public auction, with or without
      demand of performance or other demand, advertisement or notice of the time
      or
      place of sale or adjournment thereof or otherwise (except that the Lender shall
      give ten days' notice to the Pledgors of the time and place of any sale pursuant
      to this Section 3), for cash, on credit or for other property, for immediate
      or
      future delivery, and for such price or prices and on such terms as the Lender
      shall, in its sole discretion, determine, the Pledgors hereby waiving and
      releasing any and all right or equity of redemption whether before or after
      sale
      hereunder. At any such sale the Lender may bid for and purchase the whole or
      any
      part of the Pledged Shares so sold free from any such right or equity of
      redemption. The Lender shall apply the proceeds of any such sale first to the
      payment of all costs and expenses, including reasonable attorneys' fees,
      incurred by the Lender in enforcing its rights under the Debenture or this
      Pledge Agreement, second to the payment of accrued and unpaid interest on the
      Debenture and third to the payment of unpaid principal of the Debenture, and
      the
      Pledgors shall continue to be liable for any deficiency. All sales of Pledged
      Shares shall be in a pro rata basis amongst the Pledged Shares owned by each
      of
      the Pledgors as set forth on Schedule I.

    

    3.2. The
      Pledgors recognize that the Lender may be unable to effect a public sale of
      all
      or a part of the Pledged Shares by reason of certain prohibitions contained
      in
      the Securities Act of 1933, as amended (the "Securities
      Act"), or in the rules and regulations promulgated thereunder or
      in
      applicable state securities laws, but may be compelled to resort to one or
      more
      private sales to a restricted group of purchasers who will be obliged to agree,
      among other things, to acquire the Pledged Shares for their own account, for
      investment and not with a view to the distribution or resale thereof. The
      Pledgors understand that private sales so made may be at prices and on other
      terms less favorable to the seller than if the Pledged Shares were sold at
      public sale, and agrees that the Lender has no obligation to delay the sale
      of
      the Pledged Shares for the period of time necessary to permit the registration
      of the Pledged Shares for public sale under the Securities Act and under
      applicable state securities laws. The Pledgors agree that a private sale or
      sales made under the foregoing circumstances shall be deemed to have been made
      in a commercially reasonable manner.

    

    3.3. If
      any
      consent, approval or authorization of any state, municipal or other governmental
      department, agency or authority should be necessary to effectuate any sale
      or
      disposition by the Lender pursuant to this Section 3 of the Pledged Shares,
      each
      of the Pledgors will execute all such applications and other instruments as
      may
      be reasonably required in connection with securing any such consent, approval
      or
      authorization, and will otherwise use the Pledgor’s best efforts to secure the
      same.

    

    3.4. Neither
      failure nor delay on the part of the Lender to exercise any right, remedy,
      power
      or privilege provided for herein or by statute or at law or in equity shall
      operate as a waiver thereof, nor shall any single or partial exercise of any
      such right, remedy, power or privilege preclude any other or further exercise
      thereof or the exercise of any other right, remedy, power or
      privilege.

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    4. Pledgors'
      Obligations Not Affected.
      The
      obligations of the Pledgors under this Pledge Agreement shall remain in full
      force and effect without regard to, and shall not be impaired or affected by:
      (a) any subordination, amendment or modification of, or addition or supplement
      to, the Securities Purchase Agreement or the Debentures, or any assignment
      or
      transfer of any thereof; (b) any exercise or non-exercise by the Lender of
      any
      right, remedy, power or privilege under or in respect of this Pledge Agreement,
      the Securities Purchase Agreement or the Debentures, or any waiver of any such
      right, remedy, power or privilege; (c) any waiver, consent, extension,
      indulgence or other action or inaction in respect of this Pledge Agreement,
      the
      Securities Purchase Agreement or the Debentures, or any assignment or transfer
      of any thereof; or (d) any bankruptcy, insolvency, reorganization, arrangement,
      readjustment, composition, liquidation or the like, of the Lender, whether
      or
      not the Pledgors shall have notice or knowledge of any of the
      foregoing.

    

    5. Transfer
      by Pledgors.
      Each of
      the Pledgors will not sell, assign, transfer or otherwise dispose of, grant
      any
      option with respect to, or mortgage, pledge or otherwise encumber the Pledged
      Shares or any interest therein. Notwithstanding the foregoing, the Pledgors
      shall have the right to convert into Common Stock such number of Pledged Shares
      identified on Schedule I so as to allow each of the Pledgors to sell up to
      125,000 shares of Common Stock per month through June 30, 2009, provided
      that
      such shares of Common Stock are sold at a price not less than $0.05 per
      share.

    

    6. Attorney-in-Fact.
      The
      Lender is hereby appointed the attorney-in-fact of the Pledgors and the
      Pledgors' transferees for the purpose of carrying out the provisions of this
      Pledge Agreement and taking any action and executing any instrument which the
      Lender reasonably may deem necessary or advisable to accomplish the purposes
      hereof, including without limitation, the execution of the applications and
      other instruments described in Section 3.3 herein, which appointment as
      attorney-in-fact is irrevocable as one coupled with an interest.

    

    7. Termination.
      Upon
      payment in full of the Debenture Obligations or the conversion of all
      outstanding amounts due under the Initial Debenture and, if issued, the
      Additional Debenture into Common Stock in accordance with the terms of the
      Debentures, and upon the Company’s due performance of and compliance with all
      the provisions of the Debentures, this Pledge Agreement shall terminate and
      the
      Pledgors shall be entitled to the return of such of the Pledged Shares as have
      not theretofore been sold, released or otherwise applied pursuant to the
      provisions of this Pledge Agreement.

    

    8. Notices.
      Any
      demand upon or notice to a party hereunder shall be effective when delivered
      by
      hand, against written receipt therefor, two business days following the business
      day on which it is properly deposited in the mails, postage prepaid, certified
      or registered mail, return receipt requested, or one business day following
      deposit with an overnight courier, in each case addressed to such party at
      the
      address shown below or such other address as the party may advise the other
      party in writing:

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    
      	
              If
                to Lender: 

            	
              Agile
                Opportunity Fund, LLC

            
	 	
              1175
                Walt Whitman Road, Suite 100A

            
	 	
              Melville,
                NY 11747

            
	 	 
	
              With
                a copy to:

            	
              Westerman
                Ball Ederer Miller & Sharfstein, LLP

            
	 	
              170
                Old Country Road

            
	 	
              Mineola,
                NY 11501

            
	 	
              Attn:
                Alan C. Ederer, Esq.

            
	 	 
	
              If
                to a Pledgor:

            	
              At
                the Address of such Pledgor as set 

            
	 	
              forth
                below the Pledgor’s name on the

            
	 	
              signature
                page to this Pledge Agreement

            
	 	 
	
              With
                a copy to:

            	
              Moritt
                Hock Hamroff & Horowitz LLP

            
	 	
              400
                Garden City Plaza

            
	 	
              Garden
                City, NY 11530

            
	 	
              Attn:
                Dennis C. O’Rourke, Esq.

            

    

    

    9. Binding
      Effect, Successors and Assigns.
      This
      Pledge Agreement shall be binding upon and inure to the benefit of the parties
      hereto and their respective successors and assigns and, except as provided
      below, nothing herein is intended or shall be construed to give any other person
      any right, remedy or claim under, to or in respect of this Pledge Agreement.
      

    

    10. Miscellaneous.
      The
      Lender and its assigns shall have no obligation in respect of the Pledged
      Shares, except to hold and dispose of the same in accordance with the terms
      of
      this Pledge Agreement. Neither this Pledge Agreement nor any provision hereof
      may be amended, modified, waived, discharged or terminated orally, but only
      by
      an instrument in writing signed by the party against which enforcement of the
      amendment, modification, waiver, discharge or termination is sought. The
      provisions of this Pledge Agreement shall be binding upon the heirs,
      representatives, successors and permitted assigns of the Pledgors. The captions
      in this Pledge Agreement are for convenience of reference only and shall not
      define or limit the provisions hereof. This Pledge Agreement shall be governed
      by and construed and enforced in accordance with the laws of the State of New
      York, without regard to the conflicts of law rules thereof. This Pledge
      Agreement may be executed simultaneously in several counterparts, each of which
      is an original, but all of which together shall constitute one
      instrument.

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto, intending to be legally bound by the terms hereof, have caused
      this Pledge Agreement to be executed as of the date first above
      written.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
              THE
                LENDER:

            	
              AGILE
                OPPORTUNITY FUND, LLC

            
	 	 
	 	
              By:
                Agile Investments, LLC

            
	 	 
	 	 
	 	
              By:______________________________

            
	 	
              David
                Propis

            
	 	
              Managing
                Member

            
	 	 
	 	 
	
              THE
                PLEDGORS:

            	
              _________________________________

            
	 	
              Name:
                Barry Brookstein

            
	 	
              Address:
                90 Pratt Oval

            
	 	
              Glen
                Cove, New York 11542

            
	 	 
	 	
              _________________________________

            
	 	
              Name:
                Dean Garfinkel

            
	 	
              Address:
                90 Pratt Oval

            
	 	
              Glen
                Cove, New York 11542

            
	 	 
	 	 
	 	
              SPIRITS
                MANAGEMENT INC.

            
	 	 
	 	 
	 	
              By:_______________________________

            
	 	
              Name:
                Barry Brookstein

            
	 	
              Address:
                780 New York Avenue - Suite A

            
	 	
              Huntington,
                New York 11743

            

    

    

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

    

     

    SCHEDULE
      I

    

    
      	 	
              Number
                of Shares of 

            	
              Certificate
                Number 

            
	
              Name
                of Preferred Stockholder

            	
              Preferred
                Stock Pledged

            	
              Evidencing
                the Pledged Shares

            
	 	 	 
	
              Barry
                Brookstein

            	
              Series
                A Preferred

            	 
	 	
              Stock
                - 200,000 shares

            	
              AP5
                1006

            
	 	 	 
	
              Spirit
                Management Inc.

            	
              Series
                B Preferred

            	 
	 	
              Stock
                - 750,000 shares

            	
              BPS
                2001

            
	 	 	 
	
              Barry
                Brookstein

            	
              Series
                B Preferred

            	 
	 	
              Stock
                - 500,000 shares

            	
              BPS
                2002

            
	 	 	 
	
              Barry
                Brookstein

            	
              Series
                C Preferred

            	 
	 	
              Stock
                - 65,000 shares

            	
              CPS
                3001

            
	 	 	 
	 	
              Series
                C Preferred 

            	 
	 	
              Stock
                - 341,992 shares

            	
              CPS
                3011

            
	 	 	 
	
              Spirits
                Management Inc.

            	
              Series
                C Preferred

            	 
	 	
              Stock
                - 288,851 shares

            	
              CPS
                3005

            
	 	 	 
	 	
              Series
                C Preferred

            	 
	 	
              Stock
                - 161,750 shares

            	
              CPS
                3010

            
	 	 	 
	
              Dean
                Garfinkel

            	
              Series
                C Preferred

            	 
	 	
              Stock
                - 161,750 shares

            	
              CPS
                3006

            
	 	 	 
	 	
              Series
                C Preferred

            	 
	 	
              Stock
                - 250,000 shares

            	
              CPS
                3007

            
	 	 	 
	 	
              Series
                C Preferred

            	 
	 	
              Stock
                - 55,000 shares

            	
              CPS
                3008

            

    

     

    
      
        
        

      

      
        7Unassociated Document

    LIMITED
      NON-RECOURSE GUARANTY AGREEMENT

    

    This
      LIMITED NON-RECOURSE GUARANTY AGREEMENT is made as of the 6th
      day of
      May, 2008, by Barry Brookstein, having an address at c/o 90 Pratt Oval, Glen
      Cove, NY 11542 (the “Guarantor”), to and with Agile Opportunity Fund, LLC, a New
      York limited liability company (“Lender”).

    

    WITNESSETH:

    

    Lender
      has simultaneously entered into a Securities Purchase Agreement (the
“Agreement”) with Compliance Systems Corporation (“Borrower”), pursuant to which
      Lender has purchased the Initial Debenture identified therein and may purchase
      the Additional Debenture identified therein pursuant to the terms thereof
      (collectively, the “Debentures”).

    

    NOW,
      THEREFORE, in order to induce Lender to enter into the Agreement with Borrower,
      Guarantor agrees as follows:

    

    1. Guarantor
      hereby unconditionally and irrevocably guarantees to Lender the due and punctual
      payment in full of all obligations of Borrower under the Debentures. The
      obligations and liabilities of Borrower under the Debentures are collectively
      referred to as the “Obligations.”

    

    2. This
      Guaranty is irrevocable, continuing, indivisible and unconditional and shall
      remain in full force and effect regardless of, and shall not discharged,
      terminated, impaired or modified in any manner by reason of (a) any amendment,
      modification, extension or renewal of the Debentures; (b) the assertion or
      exercise by Lender, or the failure of Lender to assert or exercise, against
      Borrower any of the rights under or interest in the Debentures or any other
      security instruments ; (c) the existence or continuance, or discontinuance,
      of
      Borrower as a legal entity; (d) the bankruptcy, insolvency, receivership or
      reorganization of Borrower, or the making by Borrower of an assignment for
      the
      benefit of creditors; or (e) the acceptance, alteration, release or substitution
      by Lender of any security for the Obligations, whether provided by Borrower,
      Guarantor or any other person. This Guaranty is and shall be a direct and
      primary obligation of Guarantor, and may be enforced by the Lender without
      prior
      resort to Borrower or the exhaustion of any rights or remedies that Lender
      may
      have against Borrower.

    

    3. Notwithstanding
      anything to the contrary herein, Guarantor’s Obligations under this Limited
      Guaranty Agreement are non-recourse to Guarantor and are limited only to any
      net
      proceeds received by Lender in connection with any exercise by Lender of
      Lender’s rights under the Stock Pledge Agreement executed by Guarantor in favor
      of Lender and attached as Exhibit A hereto.

     

    4. Guarantor
      hereby expressly waives the following: (a) acceptance and notice of acceptance
      of this Guaranty by Lender; (b) notice of extension of time of the payment,
      performance and compliance with, or the renewal or alteration of the terms
      and
      conditions of, any Obligations; (c) notice of any demand for payment, notice
      of
      default or nonpayment as to any Obligations; (d) all other notices to which
      the
      Guarantor might otherwise be entitled in connection with the Guaranty or the
      Obligations; and (e) trial by jury and the right thereto in any action or
      proceeding of any kind or nature, arising on, under or by reason of, or relating
      in any way to, this Guaranty or the Obligations.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    5. Guarantor
      has not and will not set up or claim any counterclaim, set-off or other
      objection of any kind to the suit, action or proceeding at law, in equity,
      or
      otherwise, to any demand or claim that may be instituted or made under and
      by
      virtue of this Guaranty. All remedies of Lender by reason of or under this
      Guaranty are separate and cumulative remedies, and it is agreed that no one
      of
      such remedies shall be deemed in exclusion of any other remedies available
      to
      Lender.

    

    6. Guarantor
      represents and warrants that the Guarantor has full power and authority to
      execute, deliver and perform this Guaranty, and that neither the execution,
      delivery nor performance of this Guaranty will violate any law or regulation,
      or
      any order or decree of any court or governmental authority, or will conflict
      with, or result in the breach of, or constitute a default under, any agreement
      or other instrument to which Guarantor is a party or by which Guarantor may
      be
      bound, or will result in the creation or imposition of any lien, claim or
      encumbrance upon any property of Guarantor.

    

    7. This
      Guaranty may not be changed or terminated orally. No modification or waiver
      of
      any provision of this Guaranty shall be effective unless such modification
      or
      waiver shall be in writing and signed by Lender, and the same shall then be
      effective only for the period and on the conditions and for the specific
      instances and purposes specified in such writing. No course of dealing between
      Guarantor and Lender in exercising any rights or remedies hereunder shall
      operate as a waiver or preclude the exercise of any other rights or remedies
      hereunder.

    

    8. This
      Guaranty shall be construed in accordance with, and governed by, the laws of
      the
      State of New York, without giving effect to such jurisdiction’s principles of
      conflict of laws, except to the extent that the validity or the perfection
      of
      the security interest hereunder, or remedies hereunder, in respect of any
      particular Collateral are governed by the laws of a jurisdiction other than
      the
      State of New York. Each
      of the parties hereto submits to the personal jurisdiction of and each agrees
      that all proceedings relating hereto shall be brought in federal or state courts
      located within Nassau County in the State of New York.

    

    9. This
      Guaranty shall be binding upon and insure to the benefit of the parties hereto
      and their respective heirs, executors, administrators, legal representatives,
      successors and assigns.

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, Guarantor has executed this Limited Non-Recourse Guaranty
      Agreement as of the 6th
      day of
      May, 2008.

    

    

    /s/
      Barry
      Brookstein   

    Barry
      Brookstein

     

    Address:

    90
      Pratt
      Oval

    Glen
      Cove, NY 11542

    

    Telephone
      No.:

    (516)
      674-4545

    

    Tax
      I.D.
      Number:

    _____________________________

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    EXHIBIT
      A

    

    FORM
      OF STOCK PLEDGE AGREEMENT

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    STOCK
      PLEDGE AGREEMENT

    

    This
      Stock Pledge Agreement (this "Pledge
      Agreement")
      is
      made as of May 6, 2008 by and between Agile Opportunity Fund, LLC, a Delaware
      limited liability company (the "Lender"),
      and
      the parties indicated on Schedule I hereto (each, a “Pledgor").

    

    WITNESSETH

    

    WHEREAS,
      Lender has entered into a Securities Purchase Agreement, dated as of the date
      hereof (the “Securities
      Purchase Agreement”),
      with
      Compliance Systems Corporation, a Nevada corporation (the “Borrower”),
      pursuant to which Lender purchased the Initial Debenture identified therein
      and
      may purchase the Additional Debenture identified therein; and

    

    WHEREAS,
      each of the Pledgors has executed a Limited Non-Recourse Guaranty Agreement and
      has agreed to secure the Pledgor’s obligations therein by a pledge of shares of
      preferred stock of the Company as set forth on Schedule I hereto (the
“Pledgor
      Shares”);
      and

    

    WHEREAS,
      capitalize terms not otherwise defined in this Pledge Agreement shall have
      the
      meanings assigned to such terms in the Securities Purchase
      Agreement.

    

    NOW,
      THEREFORE, in consideration of the foregoing and for other good and valuable
      consideration, the receipt and adequacy of which are hereby acknowledged, the
      parties hereto agree as follows:

    

    1. Pledge.
      As
      collateral security for the full and timely payment of the obligations under
      the
      Debentures issued pursuant to the Securities Purchase Agreement and the Limited
      Non-Recourse Guaranty Agreement of even date herewith executed by Pledgors
      in
      connection therewith (the “Debenture
      Obligations”),
      each
      of the Pledgors hereby delivers, deposits, pledges, transfers and assigns to
      the
      Lender and grants to the Lender a security interest in all of the Pledged Shares
      and all certificates evidencing the Pledged Shares owned by Pledgor and
      identified as such on Schedule I hereto and all other instruments or documents
      evidencing the same now owned by the Pledgor and all dividends, cash,
      instruments and other property from time to time received, receivable or
      otherwise distributed in respect of or in exchange for any or all of such
      Pledged Shares.

    

    The
      Pledgors herewith deliver to the Lender the certificates evidencing the Pledged
      Shares together with appropriate undated security transfer powers duly executed
      in blank. The Pledgors agree that all certificates evidencing the Pledged Shares
      shall be marked with the following legend:

    

    THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE PROVISIONS OF A STOCK
      PLEDGE AGREEMENT DATED AS OF MAY 6, 2008 BY AND BETWEEN AGILE OPPORTUNITY FUND,
      LLC, A DELAWARE LIMITED LIABILITY COMPANY (THE "LENDER"), AND THE PLEDGORS
      NAMED
      THEREIN, A COPY OF WHICH IS ON FILE AT THE OFFICES OF THE
      CORPORATION.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    2. Administration
      of Security.
      The
      following provisions shall govern the administration of the Pledged
      Shares:

    

    2.1. So
      long
      as the Pledgors are not in default in respect of any payment or any other
      Debenture Obligation (an “Event
      of Default”),
      the
      Pledgors shall be entitled to act with respect to the Pledged Shares in any
      manner not inconsistent with this Pledge Agreement, the Securities Purchase
      Agreement, the Debentures or any document or instrument delivered or to be
      delivered pursuant to or in connection with any of the foregoing, including,
      without limitation, transferring the Pledged Shares to a nominee for purposes
      of
      voting the Pledged Shares and receiving all cash distributions thereon and
      giving consents, waivers and ratifications in respect thereof.

    

    2.2. If,
      while
      this Pledge Agreement is in effect, any of the Pledgors shall become entitled
      to
      receive or shall receive any debt or equity security certificate (including,
      without limitation, any certificate representing shares of stock received in
      connection with the exercise of any option, any certificate representing a
      stock
      dividend or a distribution in connection with any reclassification, increase
      or
      reduction of capital, or any certificate issued in connection with any
      reorganization), option or right, whether as a dividend or distribution in
      respect of, in substitution of, or in exchange for any Pledged Shares, the
      Pledgors agree to accept the same as the Lender's agent and to hold the same
      in
      trust on behalf of and for the benefit of the Lender and to deliver the same
      forthwith to the Lender in the exact form received, with the endorsement of
      such
      Pledgor when necessary and/or appropriate undated security transfer powers
      duly
      executed in blank, to be held by the Lender, subject to the terms of this Pledge
      Agreement, as additional collateral security for the Debenture Obligations.
      Notwithstanding the foregoing, it is agreed that each of the Pledgors may
      exercise any option or right received as contemplated in the preceding sentence,
      and the Lender will exercise any such option or right upon receipt of written
      instructions to that effect and any required payments or documents from the
      Pledgor, and the securities received upon such exercise of any such option
      or
      right shall thereafter be held by the Pledgor or the Lender as contemplated
      by
      the preceding sentence.

    

    2.3. Each
      of
      the Pledgors shall immediately upon request by the Lender and in confirmation
      of
      the security interests hereby created, execute and deliver to the Lender such
      further instruments, deeds, transfers, assurances and agreements, in form and
      substance as the Lender shall reasonably request, including any financing
      statements and amendments thereto, or any other documents, as required under
      New
      York law and any other applicable law to protect the security interests created
      hereunder.

    

    2.4. Subject
      to any sale by the Lender or other disposition by the Lender of the Pledged
      Shares or other property pursuant to this Pledge Agreement and subject to
      Sections 5 and 6 herein, the Pledged Shares shall be returned to the Pledgors
      upon payment in full of the Debenture Obligations or the conversion in full
      of
      the Initial Debenture and, if issued, the Additional Debenture into Common
      Stock.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    3. Remedies
      in Case of an Event of Default.

    

    3.1. In
      case
      an Event of Default shall have occurred and be continuing, the Lender shall
      have
      in each case all of the remedies of a secured party under the Nevada Uniform
      Commercial Code, and, without limiting the foregoing, shall have the right,
      in
      its sole discretion, to sell, resell, assign and deliver all or, from time
      to
      time, any part of the Pledged Shares, or any interest in or option or right
      to
      purchase any part thereof, on any securities exchange on which the Pledged
      Shares may be listed, at any private sale or at public auction, with or without
      demand of performance or other demand, advertisement or notice of the time
      or
      place of sale or adjournment thereof or otherwise (except that the Lender shall
      give ten days' notice to the Pledgors of the time and place of any sale pursuant
      to this Section 3), for cash, on credit or for other property, for immediate
      or
      future delivery, and for such price or prices and on such terms as the Lender
      shall, in its sole discretion, determine, the Pledgors hereby waiving and
      releasing any and all right or equity of redemption whether before or after
      sale
      hereunder. At any such sale the Lender may bid for and purchase the whole or
      any
      part of the Pledged Shares so sold free from any such right or equity of
      redemption. The Lender shall apply the proceeds of any such sale first
      to the
      payment of all costs and expenses, including reasonable attorneys' fees,
      incurred by the Lender in enforcing its rights under the Debenture or this
      Pledge Agreement, second
      to the
      payment of accrued and unpaid interest on the Debenture and third
      to the
      payment of unpaid principal of the Debenture, and the Pledgors shall continue
      to
      be liable for any deficiency. All sales of Pledged Shares shall be in a pro
      rata
      basis amongst the Pledged Shares owned by each of the Pledgors as set forth
      on
      Schedule I.

    

    3.2. The
      Pledgors recognize that the Lender may be unable to effect a public sale of
      all
      or a part of the Pledged Shares by reason of certain prohibitions contained
      in
      the Securities Act of 1933, as amended (the "Securities
      Act"),
      or in
      the rules and regulations promulgated thereunder or in applicable state
      securities laws, but may be compelled to resort to one or more private sales
      to
      a restricted group of purchasers who will be obliged to agree, among other
      things, to acquire the Pledged Shares for their own account, for investment
      and
      not with a view to the distribution or resale thereof. The Pledgors understand
      that private sales so made may be at prices and on other terms less favorable
      to
      the seller than if the Pledged Shares were sold at public sale, and agrees
      that
      the Lender has no obligation to delay the sale of the Pledged Shares for the
      period of time necessary to permit the registration of the Pledged Shares for
      public sale under the Securities Act and under applicable state securities
      laws.
      The Pledgors agree that a private sale or sales made under the foregoing
      circumstances shall be deemed to have been made in a commercially reasonable
      manner.

    

    3.3. If
      any
      consent, approval or authorization of any state, municipal or other governmental
      department, agency or authority should be necessary to effectuate any sale
      or
      disposition by the Lender pursuant to this Section 3 of the Pledged Shares,
      each
      of the Pledgors will execute all such applications and other instruments as
      may
      be reasonably required in connection with securing any such consent, approval
      or
      authorization, and will otherwise use the Pledgor’s best efforts to secure the
      same.

    

    3.4. Neither
      failure nor delay on the part of the Lender to exercise any right, remedy,
      power
      or privilege provided for herein or by statute or at law or in equity shall
      operate as a waiver thereof, nor shall any single or partial exercise of any
      such right, remedy, power or privilege preclude any other or further exercise
      thereof or the exercise of any other right, remedy, power or
      privilege.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    4. Pledgors'
      Obligations Not Affected.
      The
      obligations of the Pledgors under this Pledge Agreement shall remain in full
      force and effect without regard to, and shall not be impaired or affected by:
      (a) any subordination, amendment or modification of, or addition or supplement
      to, the Securities Purchase Agreement or the Debentures, or any assignment
      or
      transfer of any thereof; (b) any exercise or non-exercise by the Lender of
      any
      right, remedy, power or privilege under or in respect of this Pledge Agreement,
      the Securities Purchase Agreement or the Debentures, or any waiver of any such
      right, remedy, power or privilege; (c) any waiver, consent, extension,
      indulgence or other action or inaction in respect of this Pledge Agreement,
      the
      Securities Purchase Agreement or the Debentures, or any assignment or transfer
      of any thereof; or (d) any bankruptcy, insolvency, reorganization, arrangement,
      readjustment, composition, liquidation or the like, of the Lender, whether
      or
      not the Pledgors shall have notice or knowledge of any of the
      foregoing.

    

    5. Transfer
      by Pledgors.
      Each of
      the Pledgors will not sell, assign, transfer or otherwise dispose of, grant
      any
      option with respect to, or mortgage, pledge or otherwise encumber the Pledged
      Shares or any interest therein. Notwithstanding the foregoing, the Pledgors
      shall have the right to convert into Common Stock such number of Pledged Shares
      identified on Schedule I so as to allow each of the Pledgors to sell up to
      125,000 shares of Common Stock per month through June 30, 2009, provided
      that
      such shares of Common Stock are sold at a price not less than $0.05 per
      share.

    

    6. Attorney-in-Fact.
      The
      Lender is hereby appointed the attorney-in-fact of the Pledgors and the
      Pledgors' transferees for the purpose of carrying out the provisions of this
      Pledge Agreement and taking any action and executing any instrument which the
      Lender reasonably may deem necessary or advisable to accomplish the purposes
      hereof, including without limitation, the execution of the applications and
      other instruments described in Section 3.3 herein, which appointment as
      attorney-in-fact is irrevocable as one coupled with an interest.

    

    7. Termination.
      Upon
      payment in full of the Debenture Obligations or the conversion of all
      outstanding amounts due under the Initial Debenture and, if issued, the
      Additional Debenture into Common Stock in accordance with the terms of the
      Debentures, and upon the Company’s due performance of and compliance with all
      the provisions of the Debentures, this Pledge Agreement shall terminate and
      the
      Pledgors shall be entitled to the return of such of the Pledged Shares as have
      not theretofore been sold, released or otherwise applied pursuant to the
      provisions of this Pledge Agreement.

    

    8. Notices.
      Any
      demand upon or notice to a party hereunder shall be effective when delivered
      by
      hand, against written receipt therefor, two business days following the business
      day on which it is properly deposited in the mails, postage prepaid, certified
      or registered mail, return receipt requested, or one business day following
      deposit with an overnight courier, in each case addressed to such party at
      the
      address shown below or such other address as the party may advise the other
      party in writing:

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    

      
        	
                If
                  to Lender:

              	
                Agile
                  Opportunity Fund, LLC

              
	 	
                1175
                  Walt Whitman Road, Suite 100A

              
	 	
                Melville,
                  NY 11747

              
	 	 
	
                With
                  a copy to:

              	
                Westerman
                  Ball Ederer Miller & Sharfstein, LLP

              
	 	
                170
                  Old Country Road

              
	 	
                Mineola,
                  NY 11501

              
	 	
                Attn:
                  Alan C. Ederer, Esq.

              
	 	 
	
                If
                  to a Pledgor:

              	
                At
                  the Address of such Pledgor as set

              
	 	
                forth
                  below the Pledgor’s name on the

              
	 	
                signature
                  page to this Pledge Agreement

              
	 	 
	
                With
                  a copy to:

              	
                Moritt
                  Hock Hamroff & Horowitz LLP

              
	 	
                400
                  Garden City Plaza

              
	 	
                Garden
                  City, NY 11530

              
	 	
                Attn:
                  Dennis C. O’Rourke, Esq.

              

      

    

     

    9. Binding
      Effect, Successors and Assigns.
      This
      Pledge Agreement shall be binding upon and inure to the benefit of the parties
      hereto and their respective successors and assigns and, except as provided
      below, nothing herein is intended or shall be construed to give any other person
      any right, remedy or claim under, to or in respect of this Pledge Agreement.
      

    

    10. Miscellaneous.
      The
      Lender and its assigns shall have no obligation in respect of the Pledged
      Shares, except to hold and dispose of the same in accordance with the terms
      of
      this Pledge Agreement. Neither this Pledge Agreement nor any provision hereof
      may be amended, modified, waived, discharged or terminated orally, but only
      by
      an instrument in writing signed by the party against which enforcement of the
      amendment, modification, waiver, discharge or termination is sought. The
      provisions of this Pledge Agreement shall be binding upon the heirs,
      representatives, successors and permitted assigns of the Pledgors. The captions
      in this Pledge Agreement are for convenience of reference only and shall not
      define or limit the provisions hereof. This Pledge Agreement shall be governed
      by and construed and enforced in accordance with the laws of the State of New
      York, without regard to the conflicts of law rules thereof. This Pledge
      Agreement may be executed simultaneously in several counterparts, each of which
      is an original, but all of which together shall constitute one
      instrument.

    

    IN
      WITNESS WHEREOF,
      the
      parties hereto, intending to be legally bound by the terms hereof, have caused
      this Pledge Agreement to be executed as of the date first above
      written.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
       

      
        	
                THE
                  LENDER:

              	
                AGILE
                  OPPORTUNITY FUND, LLC

              
	 	 
	 	
                By:
                  Agile Investments, LLC

              
	 	 
	 	 
	 	
                By:______________________________

              
	 	
                David
                  Propis

              
	 	
                Managing
                  Member

              
	 	 
	 	 
	
                THE
                  PLEDGORS:

              	
                _________________________________

              
	 	
                Name:
                  Barry Brookstein

              
	 	
                Address:
                  90 Pratt Oval

              
	 	
                Glen
                  Cove, New York 11542

              
	 	 
	 	
                _________________________________

              
	 	
                Name:
                  Dean Garfinkel

              
	 	
                Address:
                  90 Pratt Oval

              
	 	
                Glen
                  Cove, New York 11542

              
	 	 
	 	 
	 	
                SPIRITS
                  MANAGEMENT INC.

              
	 	 
	 	 
	 	
                By:_______________________________

              
	
              	
                Name:
                  Barry Brookstein

              
	 	
                Address:
                  780 New York Avenue - Suite A

              
	 	
                Huntington,
                  New York 11743

              

      

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      SCHEDULE
        I

       

      
        	 	
                Number
                  of Shares of 

              	
                Certificate
                  Number 

              
	
                Name
                  of Preferred Stockholder

              	
                Preferred
                  Stock Pledged

              	
                Evidencing
                  the Pledged Shares

              
	 	 	 
	
                Barry
                  Brookstein

              	
                Series
                  A Preferred

              	 
	 	
                Stock
                  - 200,000 shares

              	
                AP5
                  1006

              
	 	 	 
	
                Spirit
                  Management Inc.

              	
                Series
                  B Preferred

              	 
	 	
                Stock
                  - 750,000 shares

              	
                BPS
                  2001

              
	 	 	 
	
                Barry
                  Brookstein

              	
                Series
                  B Preferred

              	 
	 	
                Stock
                  - 500,000 shares

              	
                BPS
                  2002

              
	 	 	 
	
                Barry
                  Brookstein

              	
                Series
                  C Preferred

              	 
	 	
                Stock
                  - 65,000 shares

              	
                CPS
                  3001

              
	 	 	 
	 	
                Series
                  C Preferred 

              	 
	 	
                Stock
                  - 341,992 shares

              	
                CPS
                  3011

              
	 	 	 
	
                Spirits
                  Management Inc.

              	
                Series
                  C Preferred

              	 
	 	
                Stock
                  - 288,851 shares

              	
                CPS
                  3005

              
	 	 	 
	 	
                Series
                  C Preferred

              	 
	 	
                Stock
                  - 161,750 shares

              	
                CPS
                  3010

              
	 	 	 
	
                Dean
                  Garfinkel

              	
                Series
                  C Preferred

              	 
	 	
                Stock
                  - 161,750 shares

              	
                CPS
                  3006

              
	 	 	 
	 	
                Series
                  C Preferred

              	 
	 	
                Stock
                  - 250,000 shares

              	
                CPS
                  3007

              
	 	 	 
	 	
                Series
                  C Preferred

              	 
	 	
                Stock
                  - 55,000 shares

              	
                CPS
                  3008

              

      

       

    

    
      
        
        

      

      
        7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00142-of-00352.parquet"}]]