Document:

v152835_ex4-20 -- Converted by SECPublisher 2.1.1.8, created by BCL Technologies Inc., for SEC Filing

    Exhibit
4.20v152835_ex4-21 -- Converted by SECPublisher 2.1.1.8, created by BCL Technologies Inc., for SEC Filing

    Exhibit
4.21PROMISSORY
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 Henry A. Ponzio, a
resident of the State of Connecticut (“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 $150,000, dated as of April 27, 2006 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 $150,000, 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.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    (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)           3
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)          3
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.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (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

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    (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;

    

    (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;

    
      
         

      

      
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(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

    

     
(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 3
million Class A Warrant Shares; and

    (v)          CSC
has duly reserved for issuance upon proper exercise of the Class B Warrants 3
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.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     
(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.

    

     
(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.

    
      
         

      

      
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    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.

    

    (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.

    
      
         

      

      
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    (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

                  
	 
      	 	 
      
	
                    If
      to Noteholder, to:

                  	 	
                    Henry
      A. Ponzio

                  
	 
      	 	
                    446
      Main Street – Unit 15

                  
	 
      	 	
                    Old
      Saybrook, Connecticut 06475

                  
	 
      	 	 
      
	
                    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.

    
      
         

      

      
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    (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.

    

    (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.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    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/ Henry A. Ponzio

                    
	 
      	
                      Henry
      A. Ponzio

                    

            

          

        

      

    

     

    
      
         

      

      
        12

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