Unassociated Document


     

    CONVERSION
SERVICES INTERNATIONAL, INC.

    7%
CONVERTIBLE UNSECURED NOTE

    DUE
ON APRIL 30, 2012

     

    
      
        	
                $500,000

              	
                March
      8, 2010

              


      

       

    

    THIS
NOTE IS ISSUED PURSUANT TO AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE
SECURITIES ACT OF 1933 (THE "ACT") AND QUALIFICATION PROVISIONS OF APPLICABLE
STATE SECURITIES LAWS.  NEITHER IT NOR THE SHARES OF COMMON STOCK INTO
WHICH IT CAN BE CONVERTED CAN BE SOLD, HYPOTHECATED OR OTHERWISE TRANSFERRED
UNLESS REGISTERED PURSUANT TO THE ACT AND QUALIFIED UNDER APPLICABLE STATE LAW
OR, IN THE OPINION OF COUNSEL REASONABLY ACCEPTABLE TO MAKER, AN EXEMPTION
THEREFROM IS AVAILABLE.

    


    FOR VALUE
RECEIVED, the undersigned, Conversion Services International, Inc. (“CSI”), a
Delaware corporation with an address at 100 Eagle Rock Avenue, East Hanover, New
Jersey 07936, ("Maker"), promises to pay to Hunter & Co., with an address at
c/o TAG Virgin Islands, Inc., The Tunick Building, 1336 Beltjen Road, Suite 202,
St. Thomas, VI 00802, as agent ("Payee"), on April 30, 2012, or sooner as
otherwise provided herein (the "Maturity Date"), the principal amount of Five
Hundred Thousand ($500,000) Dollars in lawful money of the United States of
America (the "Principal”).  This Note bears interest (the "Interest"),
payable semi-annually on May 1st and
November 1st, or the date on which this Note is converted into Maker's common
stock as provided herein, at the annual rate of seven percent (7%), except as
otherwise provided herein, until the Principal and all accrued Interest thereon
(collectively the “Obligations”) shall be paid in full.  This Note is
convertible into Maker's common stock, par value $0.001 per share (the "Common
Stock"), as set forth below. This Note permanently supercedes that certain 7%
Convertible Unsecured Note, dated as of December 23, 2008 and in the amount of
$1,050,000, of CSI to Hunter & Co.

    


    1.           Interest; Repayment of
Principal.

    


    Interest
on the Note will accrue from the most recent date to which Interest has been
paid or, if no Interest has been paid, from the date of delivery of the
Note.  It will be computed on the basis of a 360-day year of twelve
30-day months.  Maker shall repay to Payee the full Principal, Five
Hundred Thousand ($500,000) Dollars, on the Maturity Date plus accrued but
unpaid Interest.

    


    2.           Method of
Payment.

    


    Maker
will pay Principal and Interest in money of the United States that at the time
of payment is legal tender for the payment of public and private
debts.  All payments shall be sent to Payee at its address first set
forth above or such other address as Payee shall notify Maker.


    
      
         


      

      
        
        

        
          

        

      

      
         


      

    

    


    3.           Conversion.

    


    (a)           Conversion
of Note.  Except as provided in Paragraph (c)(iii) of
this Section 3
below, by or on the Maturity Date, the Obligations will either be: (1) repaid in
full to the Payee, or (2) converted into Common Stock.  Conversion of
this Note into Common Stock shall be solely at the option of the Payee. The
price for conversion (the “Conversion Price”), subject to adjustment as provided
in Section 4
below, shall be equal to $0.03 per share of the Common Stock on the date of
conversion (subject to adjustment for any stock split, stock dividends, stock
combination, recapitalization and like occurrences to occur after the date
hereof).  Maker will not issue a fractional share of Common Stock upon
conversion but will round any fractional share to the nearest share so that if
the fraction is less than 0.5 no share shall be issued and if the fraction is
0.5 or higher Maker shall issue one full share.  Maker shall pay Payee
all accrued but unpaid Interest (the “Outstanding Interest”) as of the
Conversion Date, as defined in Paragraph 3 (b)
below, as provided in Paragraph 3(b)
below.  The date on which the Maker shall deliver the Common Stock and
outstanding Interest is herein referred to as the “Conversion
Date.”  After the Conversion Date, this Note shall be void and Payee
shall have the sole right to receive the Common Stock and outstanding
Interest.

    


    (b)           Taxes
on Shares Issued.  The issue of stock certificates on conversion of
this Note shall be made without charge to Payee for any tax in respect of such
issue.  Maker shall not, however, be required to pay any tax that may
be payable in respect of any transfer involved in the issue and delivery of
Common Stock in any name other than that of Payee, and Maker shall not be
required to issue or deliver any certificates representing such Common Stock
unless and until the person or persons requesting the issue thereof shall have
paid to Maker the amount of such tax or shall have established to the
satisfaction of Maker that such tax has been paid.

    


    (c)           Covenants
of Maker Relating to Conversion.  Maker covenants and agrees that,
except as provided in Subparagraphs (i) and (iv) of this Paragraph 3(c), from
and after the date hereof and until the date of repayment in full of the
Obligations, or full conversion of the Obligations:

    


    (i)           
On the Conversion Date it shall have, free from preemptive rights, out of its
authorized but unissued shares, or out of shares held in its treasury,
sufficient shares to effect the conversion of the Obligations;

    


    (ii)           All
Common Stock that may be issued upon conversion of the Obligations will upon
issue be validly issued, fully paid and non-assessable, free from all taxes,
liens and charges with respect to the issue thereof except as provided in Paragraph 3(c) above,
and will not be subject to the preemptive rights of any stockholder of
Maker;


    
      
        
           

        

         


      

      
        -2-

        
          

        

      

      
         


      

    

    


    (iii)           If
any Common Stock to be provided for the purpose of conversion of the Obligations
require registration with or approval of any governmental authority under any
federal or state law before such shares may be validly issued upon conversion,
Maker will in good faith and as expeditiously as possible attempt to secure such
registration or approval, as the case may be, and Maker's obligation to deliver
shares of the Common Stock upon conversion of the Obligations shall be abated
until such registration or approval is obtained; provided, however, that this
Note and the Obligations shall remain outstanding unless paid in full until
Maker delivers the Common Stock and the outstanding Interest to Payee and in no
event shall this Note be converted until Maker effects such delivery;
and

    


    (iv)If on
the Conversion Date, and thereafter so long as the Common Stock shall be listed
on any securities exchange, market or other quotation system, Maker will, if
permitted by the rules of such exchange, market or other quotation system, list
and keep listed and for sale so long as the Common Stock shall be so listed on
such exchange, market or other quotation system, upon official notice of
issuance, all Common Stock issuable upon conversion of the
Obligations.

    


    4.           Adjustment in Conversion
Price.

    


    (a)           Adjustments
for Change in Capital Stock.  Except as provided in Paragraph 4(n) below,
if Maker shall (i) declare a dividend on all its outstanding Common Stock in
shares of its capital stock, (ii) subdivide all its outstanding Common Stock,
(iii) combine all its outstanding Common Stock into a smaller number of shares,
or (iv) issue any shares of its capital stock by reclassification of its Common
Stock (including any such reclassification in connection with a consolidation or
merger in which Maker is the continuing corporation), then in each such case the
conversion privilege and the Conversion Price in effect immediately prior to
such action shall be adjusted so that if the Note is thereafter converted, Payee
may receive the number and kind of shares that it would have owned immediately
following such action if it had converted the Note immediately prior to such
action.  Such adjustment shall be made successively whenever such an
event shall occur.  The adjustment shall become effective immediately
after the record date in the case of a dividend or distribution and immediately
after the effective date in the case of a subdivision, combination or
reclassification.  If after an adjustment Payee upon conversion of
this Note may receive shares of two or more classes of capital stock of Maker,
Maker's Board of Directors, in good faith, shall determine the allocation of the
adjusted Conversion Price between the classes of capital stock.  After
such allocation, the conversion privilege and Conversion Price of each class of
capital stock shall thereafter be subject to adjustment on terms comparable to
those applicable to Common Stock in this Section
4.

    


     (b)           Other
Offerings.  In case Maker shall issue to all of its existing
stockholders  or otherwise grant rights, options, or warrants
entitling the holders thereof to subscribe for or purchase Common Stock (or
securities convertible into or exchangeable for Common Stock) at a price per
share (or having a conversion price per share, in the case of a security
convertible into or exchangeable for Common Stock) less than the Current Market
Price per share (as defined in Paragraph 4(d) below)
on the record date for the determination of stockholders entitled to receive
such rights on the granting date, as the case may be, (i) to distribute to all
holders of its Common Stock evidences of its indebtedness or assets (excluding
cash dividends or distributions paid from retained earnings) or rights or
warrants to subscribe or purchase Common Stock (excluding those referred to
above), then in each such case the Company shall need to obtain the express
written consent of the Payee prior to such offering.

     

    
      
        
           

        

         


      

      
        -3-

        
          

        

      

      
         


      

    

     

    (c)           Omitted.

    


    (d)           Current
Market Price.  For the purpose of any computation under Paragraphs 4(b)
above, the "Current Market Price" per share of Common Stock on any date
shall be deemed to be the closing price on the date of issuance.  The
"Closing Price" for each day shall mean the last reported sales price regular
way or, in case no such reported sale takes place on such day, the closing bid
price regular way, in either case on the principal national securities exchange
on which the Common Stock is listed or admitted to trading or, if the Common
Stock is not listed or admitted to trading on any national securities exchange,
the highest reported bid price as furnished by the National Association of
Securities Dealers, Inc. through NASDAQ or similar organization if NASDAQ is no
longer reporting such information, or by the Pink Sheets, LLC or similar
organization if the Common Stock is not then quoted on an inter-dealer quotation
system.  If on any such date the Common Stock is not quoted by any
such organization, the fair value of the Common Stock on such date, as
determined in good faith by Maker's Board of Directors, shall be
used.

    


     (e)           Action
to Permit Valid Issuance of Common Stock.  Before taking any action
which would cause an adjustment reducing the Conversion Price below the then par
value, if any, of the shares of Common Stock issuable upon conversion of this
Note, Maker will take all corporate action which may, in the opinion of its
counsel, be necessary in order that Maker may validly and legally issue shares
of such Common Stock at such adjusted Conversion Price.

    


    (f)           Minimum
Adjustment.  No adjustment in the Conversion Price shall be required
if such adjustment is less than 1% of the then Existing Conversion Price; provided, however, that any
adjustments which by reason of this Paragraph 4(f) are not required to
be made shall be carried forward and taken into account in any subsequent
adjustment.  All calculations under this Section 4 shall be
made to the nearest cent or to the nearest one-hundredth of a share, as the case
may be.  Anything to the contrary notwithstanding, Maker shall be
entitled to make such reductions in the Conversion Price, in addition to those
required by this Paragraph 4(f), as it
in its discretion shall determine to be advisable in order that any stock
dividends, subdivision of shares, distribution of rights to purchase stock or
securities, or distribution of securities convertible into or exchangeable for
stock hereafter made by Maker to its stockholders shall not be
taxable.

    


    (g)           Referral
of Adjustment.  In any case in which this Section 4 shall
require that an adjustment in the Conversion Price be made effective as of a
record date for a specified event, if the Note shall have been converted after
such record date Maker may elect to defer until the occurrence of such event
issuing to Payee the shares, if any, issuable upon such conversion event over
and above the shares, if any, issuable upon such conversion on the basis of the
Conversion Price in effect prior to such adjustment; provided, however, that Maker
shall deliver to Payee a due bill or other appropriate instrument evidencing
Payee's right to receive such additional shares upon the occurrence of the event
requiring such adjustment.


    
      
        
           

        

         


      

      
        -4-

        
          

        

      

      
         


      

    

    


    (h)           Number
of Shares.  Upon each adjustment of the Conversion Price as a result
of the calculations made in Paragraphs 4(a)
through (c)
above, this Note shall thereafter evidence the right to purchase, at the
adjusted Conversion Price, that number of shares (calculated to the nearest
one-hundredth) obtained by dividing (i) the product obtained by multiplying the
number of shares issuable upon conversion of this Note prior to adjustment of
the number of shares by the Conversion Price in effect prior to adjustment of
the Conversion Price by (ii) the Conversion Price in effect after such
adjustment of the Conversion Price.

    


    (i)           When
No Adjustment Required.  No adjustment need be made for a transaction
referred to in Paragraphs 4(a)
through (c)
above if Payee is permitted to participate in the transaction on a basis no less
favorable than any other party and at a level which would preserve Payee's
percentage equity participation in the Common Stock upon conversion of the
Note.  No adjustment need be made for sales of Common Stock pursuant
to any Maker plan for reinvestment of dividends or interest, the granting of
options and/or the exercise of options outstanding under any of Maker's stock
option plans, the exercise of any other of Maker's currently outstanding
options, or any currently authorized warrants, whether or not
outstanding.  No adjustment need be made for a change in the par value
of the Common Stock, or from par value to no par value.  If the Note
becomes convertible solely into cash, no adjustment need be made
thereafter.  Interest will not accrue on the cash.

    


    (j)           Notice
of Adjustment.  Whenever the Conversion Price is adjusted, Maker shall
promptly mail to Payee a notice of the adjustment together with a certificate
from Maker's Chief Financial Officer briefly stating (i) the facts requiring the
adjustment, (ii) the adjusted Conversion Price and the manner of computing it,
and the date on which such adjustment becomes effective.  The
certificate shall be evidence that the adjustment is correct, absent manifest
error.

    


    (k)           Voluntary
Reduction.  Maker from time to time may reduce the Conversion Price by
any amount for any period of time if the period is at least twenty (20) days and
if the reduction is irrevocable during the period.  Whenever the
Conversion Price is reduced, Maker shall mail to Payee a notice of the
reduction.  Maker shall mail the notice at least fifteen (15) days
before the date the reduced Conversion Price takes effect.  The notice
shall state the reduced Conversion Price and the period it will be in
effect.  A reduction of the Conversion Price does not change or adjust
the Conversion Price otherwise in effect for purposes of Paragraphs 4(a)
through (c)
above.  Anything to the contrary notwithstanding, this Paragraph 4(k) shall
be void and of no effect if it violates the rules and/or regulations of any
exchange on which the Common Stock is then listed for trading.


    
      
        
           

        

         


      

      
        -5-

        
          

        

      

      
         


      

    

    


    (l)           Prohibition
against Certain Reductions of Exercise Price.  Anything to the
contrary notwithstanding, in no event shall the Conversion Price be reduced
below the par value of the Common Stock.

    


    (m)           Notice
of Certain Transactions.  If (i) Maker takes any action that would
require an adjustment in the Conversion Price pursuant to this Section 4; or (ii)
there is a liquidation or dissolution of Maker, Maker shall mail to Payee a
notice stating the proposed record date for a distribution or effective date of
a reclassification, consolidation, merger, transfer, lease, liquidation or
dissolution.  Maker shall mail the notice at least fifteen (15) days
before such date.  Failure to mail the notice or any defect in it
shall not affect the validity of the transaction.

    


    (n)           Reorganization
of Company.  If Maker and/or the holders of Common Stock are parties
to a merger, consolidation or a transaction in which (i) Maker transfers or
leases substantially all of its assets; (ii) Maker reclassifies or changes its
outstanding Common Stock; or (iii) the Common Stock is exchanged for securities,
cash or other assets; the person who is the transferee or lessee of such assets
or is obligated to deliver such securities, cash or other assets shall assume
the obligations under this Note.  If the issuer of securities
deliverable upon conversion of the Note is an affiliate of the surviving,
transferee or lessee corporation, that issuer shall join in such
assumption.  The assumption agreement shall provide that the Payee may
convert the Obligations into the kind and amount of securities, cash or other
assets which it would have owned immediately after the consolidation, merger,
transfer, lease or exchange if it had converted the Note immediately before the
effective date of the transaction.  The assumption agreement shall
provide for adjustments that shall be as nearly equivalent as may be practical
to the adjustments provided for in this Section
4.  The successor company shall mail to Payee a notice briefly
describing the assumption agreement.  If this Paragraph applies, Paragraph 4(a) above
does not apply.

    


    5.           Covenants.

    


    Maker
covenants and agrees that from and after the date hereof and until the date of
repayment in full of the Obligations it shall comply with the following
conditions:

    


    (i)           Maintenance
of Existence and Conduct of Business.  Maker shall, and shall cause
each of its subsidiaries, if any, to (A) do or cause to be done all things
necessary to preserve and keep in full force and effect its legal existence and
rights and maintain its property; and (B) continue to conduct its business so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times.

    


    (ii)           Books
and Records.  Maker shall, and shall cause each of its subsidiaries,
if any, to keep adequate books and records of account with respect to its
business activities.


    
      
        
           

        

         


      

      
        -6-

        
          

        

      

      
         


      

    

    


    (iii)           Insurance.  Maker
shall, and shall cause each of its subsidiaries, if any, to maintain insurance
policies insuring such risks as are customarily insured against by companies
engaged in businesses and/or with property similar to those operated and/or
owned or leased by Maker or any such subsidiaries, as the case may be, including
but not limited to, insurance policies covering real property acceptable to
Payee on which Payee is named as an additional insured.  All such
policies are to be carried with reputable insurance carriers and shall be in
such amounts as are customarily insured against by companies with similar assets
and properties engaged in a similar business.

    


    (iv)           Compliance
with Law.  Maker shall, and shall cause each of its subsidiaries, if
any, to comply in all material respects with all federal, state, local and other
laws and regulations applicable to it or any such subsidiaries, as the case may
be, which, if breached, would have a material adverse effect on Maker's or any
such subsidiaries', as the case may be, business or financial
condition.

    


    6.           Reorganization of
Maker.

    


    If Maker
is party to a merger, consolidation or a transaction in which it is not the
surviving or continuing entity or transfers or leases all or substantially all
of its assets, the person who is the surviving or continuing entity or is the
transferee or lessee of such assets shall assume the terms of this Note and the
Obligations.

    


    7.           Representations and
Warranties of Maker.

    


    Maker
represents and warrants that  (i) it is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has all
requisite power to carry on its business as now conducted and to own its
properties and assets it now owns; (ii) it is duly qualified or licensed to do
business as a foreign corporation in good standing in the jurisdictions in which
ownership of property or the conduct of its business requires such qualification
except jurisdictions in which the failure to qualify to do business will have no
material adverse effect on its business, prospects, operations, properties,
assets or condition (financial or otherwise); (iii) it has full power and
authority to execute and deliver this Note, and that the execution and delivery
of this Note will not result in the breach of or default under, with or without
the giving of notice and/or the passage of time, any other agreement, financial
instrument, arrangement or indenture to which it is a party or by which it may
be bound, or the violation of any law, statute, rule, decree, judgment or
regulation binding upon it; (iv) it has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the Securities
and Exchange Commission (the “Commission”) pursuant
to the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange
Act of 1934 (the “Exchange Act”) (the
“SEC
Documents”); (v) the SEC Documents have complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the case may
be, and the rules and regulations of the Commission promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at the time they
were filed with the Commission, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading; (vi) as of their respective dates,
Maker’s financial statements included in the SEC Documents complied as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto, such
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States as in effect from time to time,
consistently applied, during the periods involved (except (a) as may be
otherwise indicated in such financial statements or the notes thereto, or (b) in
the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial condition of Maker as of the respective dates
thereof and the results of its operations and cash flows for the respective
periods then ended (subject, in the case of unaudited statements, to normal
year-end audit adjustments); (vii) except as set forth in the SEC Documents,
Maker has not received notification from the Commission, the American Stock
Exchange and/or any federal or state securities bureaus that any investigation
(informal or formal), inquiry or claim is pending, threatened or in process
against Maker and/or relating to any of Maker’s securities; (viii) except as set
forth in the SEC Documents or as disclosed to the purchaser, there is no action,
suit, proceeding, or investigation pending or currently threatened against
Maker, and (ix) it has taken and will take all acts required, including but not
limited to authorizing the signatory hereof on its behalf to execute this Note,
so that upon the execution and delivery of this Note, it shall constitute the
valid and legally binding obligation of Maker enforceable in accordance with the
terms thereof.


    
      
        
           

        

         


      

      
        -7-

        
          

        

      

      
         


      

    

     

    8.           Defaults and
Remedies.

    


    (a)           Events
of Default.  The occurrence or existence of any one or more of the
following events or conditions (regardless of the reasons therefor) shall
constitute an "Event of Default" hereunder:

    


    (i)           Maker
shall fail to make any payment of Principal or Interest when due and payable or
declared due and payable pursuant to the terms hereof;

    


    (ii)           Maker
shall fail at any time to be in material compliance with any of the covenants
set forth in Paragraph
3(d) or
Section 5 of
this Note, or shall fail at any time to be in material compliance with or
neglect to perform, keep or observe any of the provisions of this Note, to be
complied with, performed, kept or observed by Maker and such failure shall
remain uncured for a period of five (5) days after notice thereof has been given
by Payee to Maker;

    


    (iii)           Any
representation or warranty made in this Note by Maker shall be untrue or
incorrect in any material respect as of the date when made or deemed
made;

    


    (iv)           Maker
shall have received a written notice of default related to any material
agreement to which it is a party, and such act of default shall remain uncured
after any applicable cure period;


    
      
        
           

        

         


      

      
        -8-

        
          

        

      

      
         


      

    

    


    (v)           A
case or proceeding shall have been commenced against Maker or any of its
subsidiaries, if any, (each a “Proceeding Company”) in a court having competent
jurisdiction seeking a decree or order in respect of a Proceeding Company (A)
under Title 11 of the United States Code, as now constituted or hereafter
amended, or any other applicable federal, state or foreign bankruptcy or other
similar law; (B) appointing a custodian, receiver, liquidator, assignee, trustee
or sequestrator (or similar official) of a Proceeding Company, or any of its
properties; or (C) ordering the winding-up or liquidation of the affairs of a
Proceeding Company, and such case or proceeding shall remain unstayed or
undismissed for a period of ten (10) consecutive days or such court shall enter
a decree or order granting the relief sought in such case or proceeding;
or

    


    (vi)           A
Proceeding Company shall (A) file a petition seeking relief under Title 11 of
the United States Code, as now constituted or hereafter amended, or any other
applicable federal, state or foreign bankruptcy or other similar law; or (B)
consent to the institution of proceedings thereunder or to the filing of any
such petition or to the appointment of or the taking of possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of such Proceeding Company, or any of its properties.

    


    (b)           Remedies.  Upon
the occurrence of an Event of Default specified in Paragraph 8(a) above,
all Obligations then remaining unpaid hereunder shall immediately become due and
payable in full, plus interest on the unpaid portion of the Obligations at the
highest rate permitted by applicable law, without notice to Maker and without
presentment, demand, protest or notice of protest, all of which are hereby
waived by Maker together with all reasonable costs and expenses of the
collection and enforcement of this Note, including reasonable attorney's fees
and expenses, all of which shall be added to the amount due under this
Note.  The rights, powers, privileges and remedies of Payee pursuant
to the terms hereof are cumulative and not exclusive of any other rights,
powers, privileges and remedies which Payee may have under this Note or any
other instrument or agreement.

    


    9.           Acknowledgment of Payee's
Investment Representations.

    


    By
accepting this Note, Payee acknowledges that, neither this Note nor the Common
Stock have been or will be registered under the Act or qualified under any state
securities laws and that the transferability thereof is restricted by the
registration provisions of the Act as well as such state laws.  Based
upon the representations and agreements being made by it herein, this Note is
being and any Common Stock will be issued to it pursuant to an exemption from
such registration provided by Section 4(2) of the Act, and applicable state
securities law qualification exemptions.  Payee represents that it (i)
is an “Accredited Investor” as that term is defined in Rule 501 (a) of
Regulation D promulgated under the Act, and (ii) is acquiring this Note and will
acquire any Common Stock for its own account, for investment purposes only and
not with a view to resale or other distribution thereof, nor with the intention
of selling, transferring or otherwise disposing of all or any part of these
securities for any particular event or circumstance, except selling,
transferring or disposing of them only upon full compliance with all applicable
provisions of the Act, the Securities Exchange Act of 1934, the Rules and
Regulations promulgated by the Commission thereunder, and any applicable state
securities laws.  In addition, Payee understands and acknowledges that
any routine sales of these securities made in reliance upon Rule 144 promulgated
by the Commission under the Act can be effected only in the amounts set forth in
and pursuant to the other terms and conditions, including applicable holding
periods, of that Rule.  Payee further understands and agrees that no
transfer of this Note shall be valid unless made in compliance with the
restrictions set forth on the front of this Note, effected on Maker's books by
the registered holder hereof, in person or by an attorney duly authorized in
writing, and similarly noted hereon as provided in Paragraph 11(h)
below.


    
      
        
           

        

         


      

      
        -9-

        
          

        

      

      
         


      

    

     

    10.           Limitation of Interest
Payments.

    


    Nothing
contained in this Note or in any other agreement between Maker and Payee
requires Maker to pay or Payee to accept interest in an amount that would
subject Payee to any penalty or forfeiture under applicable law.  In
no event shall the total of all charges payable hereunder, whether of interest
or of such other charges, which may or might be characterized as interest,
exceed the maximum rate permitted to be charged under the laws of the States of
New Jersey, New York, Delaware, North Carolina, the United States Virgin Islands
or any other state or domestic or other jurisdiction in which either Maker or
Payee may be located or may conduct business.  Should Payee receive
any payment that is or would be in excess of that permitted to be charged under
such laws, such payment shall have been and shall be deemed to have been made in
error and shall automatically be applied to reduce the Principal outstanding on
this Note.

    


    11.           Miscellaneous.

    


    (a)           Effect
of Forbearance.  No forbearance, indulgence, delay or failure to
exercise any right or remedy by Payee with respect to this Note shall operate as
a waiver or as an acquiescence in any default.

    


    (b)           Effect
of Single or Partial Exercise of Right.  No single or partial exercise
of any right or remedy by Payee shall preclude any other or further exercise
thereof or any exercise of any other right or remedy by Payee.

    


    (c)           Governing
Law; Waiver of Right to Jury Trial; Venue.  This Note shall be
construed and enforced in accordance with, and the rights of the parties shall
be governed by, the internal laws of the jurisdiction to be determined by Payee
applicable to contracts made and to be performed entirely within such
jurisdiction.  Maker hereby waives all right to trial by jury in any
action, suit or proceeding brought to enforce or defend any rights or remedies
under this Note, and agrees that any lawsuit brought to enforce or interpret the
provisions of this Note shall be instituted in state or federal courts, as
appropriate, in the jurisdiction to be determined by Payee, and Maker further
agrees to submit to the personal jurisdiction of such court and waives any
objection which it may have, based on improper venue, forum non conveniens or
sufficiency of contact with the forum state, to the conduct of any proceeding in
any such court and waives personal service of any and all process upon it, and
consents that all such service of process be made by mail or messenger directed
to it at the address set forth in Paragraph 11(g) below
and that service so made shall be deemed to be completed upon the earlier of
actual receipt or three (3) days after the same shall have been posted to its
address.  Nothing contained in this Paragraph 11(c)
affects the right of Payee to serve legal process in any other manner permitted
by law or affects the right of Payee to bring any action or proceeding against
Maker or its property in the courts of any other jurisdiction.


    
      
        
           

        

         


      

      
        -10-

        
          

        

      

      
         


      

    

    


    (d)           Headings.  The
headings and captions of the various sections herein are for convenience of
reference only and shall in no way modify any of the terms or provisions of this
Note.

    


    (e)           Loss,
Theft, Destruction or Mutilation of Note.  Upon receipt by Maker of
evidence reasonably satisfactory to it of loss, theft, destruction or mutilation
of this Note, Maker shall make and deliver or caused to be made and delivered to
Payee a new Note of like tenor in lieu of this Note.

    


    (f)           Modification
of Note or Waiver of Terms Thereof Relating to Payee.  No modification
or waiver of any of the provisions of this Note shall be effective unless in
writing and signed by Payee and then only to the extent set forth in such
writing, or shall any such modification or waiver be applicable except in the
specific instance for which it is given.  This Note may not be
discharged orally but only in writing duly executed by Payee.

    


    (g)           Notice.  All
offers, acceptances, notices, requests, demands and other communications under
this Note shall be in writing and, except as otherwise provided herein, shall be
deemed to have been given only when delivered in person, via nationally
recognized overnight courier service, via facsimile transmission if receipt
thereof is confirmed by the recipient, or, if mailed, when mailed by certified
or registered mail prepaid, to the parties at their respective addresses first
set forth above, or at such other address as may be given in writing in future
by either party to the other.

    


    (h)           Transfer.  This
Note shall be transferable only on the books of Maker upon delivery thereof duly
endorsed by Payee or by its duly authorized attorney or representative, or
accompanied by proper evidence of succession, assignment, or authority to
transfer.  In all cases of transfer by an attorney, executor,
administrator, guardian, or other legal representative, duly authenticated
evidence of his authority shall be produced.  Upon any registration of
transfer, Maker shall deliver a new Note or Notes to the person entitled
thereto.  Notwithstanding the foregoing, Maker shall have no
obligation to cause Notes to be transferred on its books to any person if, in
the opinion of counsel to Maker, such transfer does not comply with the
provisions of the Act and the rules and regulations thereunder.

    


    (i)           Successors
and Assigns.  This Note shall be binding upon Maker, its successors,
assigns and transferees, and shall inure to the benefit of and be enforceable by
Payee and its successors and assigns.


    
      
        
           

        

         


      

      
        -11-

        
          

        

      

      
         


      

    

    


    (j)           Severability.  If
one or more of the provisions or portions of this Note shall be deemed by any
court or quasi-judicial authority to be invalid, illegal or unenforceable in any
respect, the invalidity, illegality or unenforceability of the remaining
provisions, or portions or provisions contained herein shall not in any way be
affected or impaired thereby.

    


    (k)           Gender.  The
use herein of the masculine pronouns or similar terms shall be deemed to include
the feminine and neuter genders as well and the use of the singular pronouns
shall be deemed to include the plural as well.

    


        IN WITNESS
WHEREOF, Maker has caused this Note to be executed on its behalf by an officer
thereunto duly authorized as of the date set forth above.

     

    
      
        	 	CONVERSION SERVICES
      INTERNATIONAL, INC.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Lori
      Cohen	 
	 	 	Name: Lori
      Cohen	 
	 	 	Title:  
      President and Chief Executive Officer	 
	 	 	 	 


      

    


    
      
        
           

        

         


      

      
        -12-