Exhibit 10.24
AGREEMENT
AGREEMENT made as of the 15th day of July, 2004 by and among Call
Compliance, Inc., a company organized under the laws of New York ("CCI" or the
"Company"), TELMAX Co., Inc., a company organized under the laws of New York
("Payee"), and Compliance Systems Corporation, a company organized under the
laws of Delaware ("CSC").
Reference is hereby made to that certain Promissory Note ("Note") dated
December 1, 2002, pursuant to which CCI is indebted to Payee in the aggregate
principal amount of Two Hundred and Forty-Two Thousand Dollars and FB/LOO
($242,000.00). CCI is a wholly-owned subsidiary of CSC, a guarantor under the
Note.
Pursuant to the Note, during the five-year period which began on June 1,
2003, the Company is obligated to pay to the Payee a monthly amount of Six
Thousand One Hundred Twenty-Eight Dollars and Seventy Cents ($6,128.70) on the
last day of each month ("Monthly Payment"). All Monthly Payments through
December 31, 2003 have been made in accordance with the terms of the Note.
The Payee has advised the Company that on a retro-active basis with
respect to the Monthly Payments, commencing as of January 1, 2004, and for the
one-year period ending December 31, 2004 (the "Payment Period"), certain of its
shareholders (the "Shareholders") wish to receive their share of the
distribution from the Monthly Payment in-kind, in shares of non-voting Class B
Common Stock, $.ooi par value per share ("Common Stock"), of CSC, at a valuation
of $1.50 per share, subject to adjustment as set forth below ("Purchase Price").
In accordance herewith, the Payee hereby agrees to receive as full payment
of each Monthly Payment under the Note (i) a cash payment to Payee in the amount
of One Thousand One Hundred and Twenty-Eight Dollars and 67/100 ($1,128.67) and
(ii) Three Thousand Three Hundred
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AGREEMENT
and Thirty-Three ~ shares of Common Stock of CSC. The shares will be issued by
CSC on or about July 30, 2004WITH respect to the two quarters ended March 31 and
June 30, 2004, respectively, and on or about September 30 and December 31, 2004,
with respect to the quarters then ended, directly to the shareholders of the
Payee, in the amounts set forth beside their respective names set forth on
Schedule "A" attached hereto ("Shareholders"). Notwithstanding the forgoing, if
at any time during or after the Payment Period CSC enters into any transaction
involving the sale of any Common Stock or securities exercisable, convertible or
exchangeable for shares of Class A or Class B Common Stock of CSC, and the
effective purchase and /or conversion, exercise or exchange price is less than
$1.50 per share ("Adjusted Price"),
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AGREEMENT
then the Purchase Price shall be adjusted on a retroactive and prospective
basis, as applicable, to equal the Adjusted Price, and CSC shall promptly issue
to each of the Shareholders the appropriate number of additional shares of
Common Stock.
The Payee hereby represents that each of the Shareholders has agreed to
receive its pro rata share of the Monthly Payment in shares of Common Stock and
that the payments in (i) and (ii) of the immediately preceding paragraph shall
constitute full payment by the Company to Payee of each Monthly Payment and full
compliance by the Company of its obligations under the Note. However, in the
event of an event of default under the Note, the terms of this agreement shall
automatically be null and void and the Company's cash payment obligations under
the Note shall govern in all respects.
IN WITNESS WHEREOF, this Agreement has been signed by the parties hereto
on the date appearing on the first page.
CALL COMPLIANCE, INC.
By: /s/ [Illegible]
--------------------------
COMPLIANCE SYSTEMS CORPORATION
By: /s/ [Illegible]
--------------------------
TELMAX CO., INC.
By: /s/ [Illegible]
--------------------------
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AGREEMENT
SHAREHOLDER NUMBER OF SHARES TO BE ISSUED EACH QUARTER
Alan Ilberman 1,250.00
Judith Felsen 1,250.00
Robert Reiner 1,250.00
Jack Karp 1,250.00
Henry Ponzio 2,500.00
Nellie Hanover 2~00.0O
Trust Total 10.000.0O
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