Document:

Exhibit
        10.3

       

      THIS
        NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT
        BEEN
        REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
        LAWS. THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE
        MAY
        NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
        AN
        EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY
        APPLICABLE STATES SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
        SATISFACTORY TO CONVERSION SERVICES INTERNATIONAL, INC. THAT SUCH REGISTRATION
        IS NOT REQUIRED.

       

      AMENDED
        AND RESTATED SECURED CONVERTIBLE MINIMUM BORROWING
        NOTE

       

       

      FOR
        VALUE
        RECEIVED, CONVERSION SERVICES INTERNATIONAL, INC. a Delaware corporation
        (the
“Borrower”)
        promises to pay to LAURUS MASTER FUND, LTD., c/o Ogier Fiduciary Services
        (Cayman) Limited, P.O. Box 1234, Queensgate House, South Church Street, George
        Town, Grand Cayman, Cayman Islands, British West Indies, Fax: 345-949-9877
        (the
“Holder”)
        or its
        registered assigns, on order, the sum of Two Million Dollars ($2,000,000),
        of,
        if different, the aggregate principal amount of all “Loans” (as such term is
        defined in the Security Agreement referred to below), together with any accrued
        and unpaid interest hereon, on August 15, 2007 (the “Maturity
        Date”).
        This
        Note amends and restates in its entirety, and is given in substitution for
        and
        not in satisfaction of, that certain Secured Convertible Minimum Borrowing
        Note
        issued in the original principal amount of $2,000,000 by the Company in favor
        of
        the Holder on August 16, 2004.

       

      Capitalized
        terms used herein without definition shall have the meanings ascribed to
        such
        terms in the Security Agreement between Borrower, certain Subsidiaries of
        the
        Borrower and the Holder dated as of August 16, 2004 (as amended, modified
        and
        supplemented from time to time, the “Security
        Agreement”).

       

      The
        following terms shall apply to this Minimum Borrowing Note (the
“Note”):

       

      ARTICLE
        I

      INTEREST

      

      1.1
        Contract
        Rate.
        Subject
        to Sections 4.2, 5.1 and 6.7 hereof, interest payable on this Note shall
        accrue
        at a rate per annum equal to the “prime rate” published in The
        Wall Street Journal
        from
        time to time, plus one percent (1%) (the “Contract
        Rate”).
        The
        Prime Rate shall be increased or decreased as the case may be for each increase
        or decrease in the Prime Rate in an amount equal to such increase or decrease
        in
        the Prime Rate; each change to be effective as of the day of the change in
        such
        rate in accordance with the terms of the Security Agreement. Subject to Section
        1.2, the Contract Rate shall not be less than five percent (5 %). 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1.2
        Contract
        Rate Adjustments and Payments.
        The
        Contract Rate shall be calculated on the last business day of each month
        hereafter until the Maturity Date (each a “Determination Date”) and shall be
        subject to adjustment as set forth herein. If (i) the Borrower shall have
        registered the shares of the Borrower’s common stock underlying each of the
        conversion of each Minimum Borrowing Note then outstanding and that certain
        warrant issued to Holder on a registration statement declared effective by
        the
        Securities and Exchange Commission (the “SEC”), and (ii) the
        market price (the “Market Price”) of the Common Stock as reported by Bloomberg,
        L.P. on the Principal Market (as defined below) for the five (5) trading
        days
        immediately preceding a Determination Date exceeds the then applicable Fixed
        Conversion Price by at least twenty five percent (25%),
        the
        Contract Rate for the succeeding calendar month shall automatically be reduced
        by 200 basis points (200 b.p.) (2.0.%) for each incremental twenty five percent
        (25%) increase in the Market Price of the Common Stock above the then applicable
        Fixed Conversion Price. If (i) the Borrower shall not have registered the
        shares
        of the Borrower’s common stock underlying the conversion of each Minimum
        Borrowing Note then outstanding and that certain warrant issued to Holder
        on a
        registration statement declared effective by the SEC and which remains
        effective, and (ii) the Market Price of the Common Stock as reported by
        Bloomberg, L.P. on the principal market for the five (5) trading days
        immediately preceding a Determination Date exceeds the then applicable Fixed
        Conversion Price by at least twenty five percent (25%), the Contract Rate
        for
        the succeeding calendar month shall automatically be decreased by 100 basis
        points (100 b.p.) (1.0.%) for each incremental twenty five percent (25%)
        increase in the Market Price of the Common Stock above the then applicable
        Fixed
        Conversion Price. Notwithstanding the foregoing (and anything to the contrary
        contained in herein), in no event shall the Contract Rate be less than zero
        percent (0%).  
        Interest
        shall be (i) calculated on the basis of a 360 day year, and (ii) payable
        monthly, in arrears, commencing on October 1, 2004 and on the first business
        day
        of each consecutive calendar month thereafter until the Maturity Date (and
        on
        the Maturity Date), whether by acceleration or otherwise (each, a “Contract
        Rate Payment Date”).
         

       

      ARTICLE
        II

      ADVANCES,
        PAYMENTS UNDER NOTE

       

      2.1.  Mechanics
        of Advances.
        All
        Loans evidenced by this Note shall be made in accordance with the terms and
        provisions of the Security Agreement.

       

      2.2.  Fixed
        Conversion Price.
        For
        purposes hereof, subject to Section 3.5 hereof, the initial “Fixed
        Conversion Price”
        means $
____
        [103% of the average of the closing price of the Common Stock for the ten
        (10)
        trading days immediately prior to the date hereof provided that the Fixed
        Conversion Price shall not exceed 110% of the closing price of the Common
        Stock
        on the trading day immediately preceding the Closing Date]0.62.
        

       

      2.3.   No
        Effective Registration.
        Notwithstanding anything to the contrary herein, the Holder shall not be
        required accept shares of Common Stock as payment following a conversion
        by the
        Holder if there fails to exist an effective current Registration Statement
        (as
        defined in the Registration Rights Agreement) covering the shares of Common
        Stock to be issued, or if an Event of Default hereunder exists and is
        continuing, unless such requirement is otherwise waived in writing by the
        Holder
        in whole or in part at the Holder’s option.

       

      
        
          
          

        

        
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      2.4.   Optional
        Redemption in Cash.
        The
        Borrower will have the option of prepaying this Note (“Optional
        Redemption”)
        by
        paying to the Holder a sum of money equal to one hundred fifteen percent
        (115%)
        of the principal amount of this Note together with accrued but unpaid interest
        thereon and any and all other sums due, accrued or payable to the Holder
        arising
        under this Note, the Security Agreement, or any Ancillary Agreement (as defined
        in the Security Agreement) (the “Redemption
        Amount”)
        on the
        day written notice of redemption (the “Notice
        of Redemption”)
        is
        given to the Holder. The Notice of Redemption shall specify the date for
        such
        Optional Redemption (the “Redemption
        Payment Date”)
        which
        date shall be seven (7) days after the date of the Notice of Redemption (the
        “Redemption
        Period”).
        A
        Notice of Redemption shall not be effective with respect to any portion of
        this
        Note for which the Holder has previously delivered a Notice of Conversion
        (defined below) pursuant to Section 3.1, or for conversions elected to be
        made
        by the Holder pursuant to Section 3.1 during the Redemption Period. The
        Redemption Amount shall be determined as if such Holder’s conversion elections
        had been completed immediately prior to the date of the Notice of Redemption.
        On
        the Redemption Payment Date, the Redemption Amount (plus any additional interest
        and fees accruing on the Notes during the Redemption Period) must be irrevocably
        paid in full in immediately available funds to the Holder. In the event the
        Borrower fails to pay the Redemption Amount on the Redemption Payment Date,
        then
        such Redemption Notice will be null and void.

       

      ARTICLE
        III

      HOLDER’S
        CONVERSION RIGHTS

       

      3.1.  Optional
        Conversion.
        Subject
        to the terms of this Article III, the Holder shall have the right, but not
        the
        obligation, at any time until the Maturity Date, or thereafter during an
        Event
        of Default (as defined in Article V), and, subject to the limitations set
        forth
        in Section 3.2 hereof, to convert all or any portion of the outstanding
        Principal Amount and/or accrued interest and fees due and payable into fully
        paid and nonassessable shares of the Common Stock at the Fixed Conversion
        Price.
        The shares of Common Stock to be issued upon such conversion are herein referred
        to as the “Conversion
        Shares.”

       

      3.2.  Conversion
        Limitation.
        Notwithstanding anything contained herein to the contrary, the Holder shall
        not
        be entitled to convert pursuant to the terms of the Note an amount that would
        (a) be convertible into that number of shares of Common Stock which, when
        added
        to the number of shares of Common Stock otherwise beneficially owned by such
        Holder including those issuable upon exercise of warrants held by such Holder
        would exceed 4.99% of the outstanding shares of Common Stock of the Borrower
        at
        the time of conversion or (b) exceed twenty five percent (25%) of the aggregate
        dollar trading volume of the Common Stock for the twenty two (22) day trading
        period immediately preceding delivery of a Notice of Conversion to the Borrower.
        For the purposes of the immediately preceding sentence, beneficial ownership
        shall be determined in accordance with Section 13(d) of the Exchange Act
        and
        Regulation 13d-3 thereunder. The conversion limitation described in this
        Section
        3.2 shall automatically become null and void without any notice to Borrower
        upon
        the occurrence and during the continuance beyond any applicable grace period
        of
        an Event of Default, or upon 75 days prior notice to the Borrower, except
        that
        at no time shall the beneficial ownership exceed 19.99% of the Common Stock.
        Notwithstanding anything contained herein to the contrary, following the
        listing
        of the Borrower on the NASDAQ SmallCap Market, the Nasdaq National Market
        or the
        American Stock Exchange, the number of shares of Common Stock issuable by
        the
        Borrower and acquirable by the Holder at a price below $[insert market price]
        per share pursuant to the terms of this Note, the Security Agreement, any
        Ancillary Agreement or any other agreement between the Company and the Holder,
        shall not exceed an aggregate of 153,149,330 shares of the Borrower’s Common
        Stock (subject to appropriate adjustment for stock splits, stock dividends,
        or
        other similar recapitalizations affecting the Common Stock) (the “Maximum
        Common Stock Issuance”),
        unless the issuance of shares hereunder in excess of the Maximum Common Stock
        Issuance shall first be approved by the Borrower’s shareholders. If at any point
        in time , following the listing of the Borrower on the NASDAQ SmallCap Market,
        the Nasdaq National Market or the American Stock Exchange, the number of
        shares
        of Common Stock issued pursuant to the terms of this Note, the Security
        Agreement, any Ancillary Agreement or any other agreement between the Company
        and the Holder, together with the number of shares of Common Stock that would
        then be issuable by the Borrower to the Holder in the event of a conversion
        or
        exercise pursuant to the terms of this Note, the Security Agreement, any
        Ancillary Agreement or any other agreement between the Company and the Holder,
        would exceed the Maximum Common Stock Issuance but for this Section 3.2,
        the
        Borrower shall promptly call a shareholders meeting to solicit shareholder
        approval for the issuance of the shares of Common Stock hereunder in excess
        of
        the Maximum Common Stock Issuance.

       

      
        
          
          

        

        
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      3.3.  Mechanics
        of Holder’s Conversion.
        In the
        event that the Holder elects to convert this Note into Common Stock, the
        Holder
        shall give notice of such election by delivering an executed and completed
        notice of conversion (“Notice
        of Conversion”)
        to the
        Borrower and such Notice of Conversion shall provide a breakdown in reasonable
        detail of the Principal Amount, accrued interest and fees that are being
        converted. On each Conversion Date (as hereinafter defined) and in accordance
        with its Notice of Conversion, the Holder shall make the appropriate reduction
        to the Principal Amount, accrued interest and fees as entered in its records
        and
        shall provide written notice thereof to the Borrower within two (2) business
        days after the Conversion Date. Each date on which a Notice of Conversion
        is
        delivered or telecopied to the Borrower in accordance with the provisions
        hereof
        shall be deemed a Conversion Date (the “Conversion
        Date”).
        A
        form of Notice of Conversion to be employed by the Holder is annexed hereto
        as
        Exhibit A. Pursuant to the terms of the Notice of Conversion, the Borrower
        will
        issue instructions to the transfer agent accompanied by an opinion of counsel
        within two (2) business days of the date of the delivery to Borrower of the
        Notice of Conversion and shall cause the transfer agent to transmit the
        certificates representing the Conversion Shares to the Holder by crediting
        the
        account of the Holder’s designated broker with the Depository Trust Corporation
        (“DTC”)
        through its Deposit Withdrawal Agent Commission (“DWAC”)
        system
        within three (3) business days after receipt by the Borrower of the Notice
        of
        Conversion (the “Delivery
        Date”).
        In
        the case of the exercise of the conversion rights set forth herein the
        conversion privilege shall be deemed to have been exercised and the Conversion
        Shares issuable upon such conversion shall be deemed to have been issued
        upon
        the date of receipt by the Borrower of the Notice of Conversion. The Holder
        shall be treated for all purposes as the record holder of such Common Stock,
        unless the Holder provides the Borrower written instructions to the
        contrary.

       

      3.4.  Late
        Payments.
        The
        Borrower understands that a delay in the delivery of the shares of Common
        Stock
        in the form required pursuant to this Article beyond the Delivery Date could
        result in economic loss to the Holder. As compensation to the Holder for
        such
        loss, the Borrower agrees to pay late payments to the Holder for late issuance
        of such shares in the form required pursuant to this Article III upon conversion
        of the Note, in the amount equal to $250 per business day after the Delivery
        Date. The Borrower shall pay any payments incurred under this Section in
        immediately available funds upon demand. 

       

      3.5.  Adjustment
        Provisions.
        The
        Fixed Conversion Price and number and kind of shares or other securities
        to be
        issued upon conversion determined pursuant to Section 2.2 shall be subject
        to
        adjustment from time to time upon the happening of certain events while this
        conversion right remains outstanding, as follows:

       

      
        
          
          

        

        
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      A.  Reclassification,
        etc.
        If the
        Borrower at any time shall, by reclassification or otherwise, change the
        Common
        Stock into the same or a different number of securities of any class or classes,
        this Note, as to the unpaid Principal Amount and accrued interest thereon,
        shall
        thereafter be deemed to evidence the right to purchase an adjusted number
        of
        such securities and kind of securities as would have been issuable as the
        result
        of such change with respect to the Common Stock (i) immediately prior to
        or (ii)
        immediately after such reclassification or other change at the sole election
        of
        the Holder.

       

      B. Stock
        Splits, Combinations and Dividends.
        If the
        shares of Common Stock are subdivided or combined into a greater or smaller
        number of shares of Common Stock, or if a dividend is paid on the Common
        Stock
        or any preferred stock issued by the Borrower in shares of Common Stock,
        the
        Fixed Conversion Price shall be proportionately reduced in case of subdivision
        of shares or stock dividend or proportionately increased in the case of
        combination of shares, in each such case by the ratio which the total number
        of
        shares of Common Stock outstanding immediately after such event bears to
        the
        total number of shares of Common Stock outstanding immediately prior to such
        event.

       

      C. Share
        Issuances.
        Subject
        to the provisions of this Section 3.5, if the Borrower shall at any time
        prior
        to the conversion or repayment in full of the Principal Amount issue any
        shares
        of Common Stock or securities convertible into Common Stock to a person other
        than the Holder (except (i) pursuant to Subsections A or B above; or (ii)
        pursuant to options that may be issued under any employee incentive stock
        option
        and/or any qualified stock option plan adopted by the Borrower) for a
        consideration per share (the “Offer
        Price”)
        less
        than the Fixed Conversion Price in effect at the time of such issuance, then
        the
        Fixed Conversion Price shall be immediately reset to such lower Offer Price
        pursuant to the formula below. For purposes hereof, the issuance of any security
        of the Borrower convertible into or exercisable or exchangeable for Common
        Stock
        shall result in an adjustment to the Fixed Conversion Price upon the issuance
        of
        such securities. 

       

      If
        the
        Borrower issues any additional shares pursuant to this Section 3.5 (C) then,
        and
        thereafter successively upon each such issue, the Fixed Conversion Price
        shall
        be adjusted by multiplying the then applicable Fixed Conversion Price by
        the
        following fraction: 

       

       

      
        
          
          

        

        
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                A
                  +
                  B

              	 
	 	
                (A
                  + B) + [((C - D) x B) / C]

              	 

      

       

      A
        =
        Actual shares outstanding prior to such offering

       

      B
        =
        Actual shares sold in the offering

       

      C
        = Fixed
        Conversion Price

       

      D
        =
        Offering price

       

      D.
        Computation of Consideration.
        For
        purposes of any computation respecting consideration received pursuant to
        Subsection C above, the following shall apply:

       

      (a)
        in
        the case of the issuance of shares of Common Stock for cash, the consideration
        shall be the amount of such cash, provided that in no case shall any deduction
        be made for any commissions, discounts or other expenses incurred by the
        Borrower for any underwriting of the issue or otherwise in connection
        therewith;

       

      (b)
        in
        the case of the issuance of shares of Common Stock for a consideration in
        whole
        or in part other than cash, the consideration other than cash shall be deemed
        to
        be the fair market value thereof as determined in good faith by the Board
        of
        Directors of the Borrower (irrespective of the accounting treatment thereof);
        and 

       

      (c)
        upon
        any such exercise, the aggregate consideration received for such securities
        shall be deemed to be the consideration received by the Borrower for the
        issuance of such securities plus the additional minimum consideration, if
        any,
        to be received by the Borrower upon the conversion or exchange thereof (the
        consideration in each case to be determined in the same manner as provided
        in
        clauses (a) and (b) of this Subsection (D)).

       

      3.6.  Reservation
        of Shares.
        During
        the period the conversion right exists, the Borrower will reserve from its
        authorized and unissued Common Stock a sufficient number of shares to provide
        for the issuance of Common Stock upon the full conversion of this Note. The
        Borrower represents that upon issuance, such shares will be duly and validly
        issued, fully paid and non-assessable. The Borrower agrees that its issuance
        of
        this Note shall constitute full authority to its officers, agents, and transfer
        agents who are charged with the duty of executing and issuing stock certificates
        to execute and issue the necessary certificates for shares of Common Stock
        upon
        the conversion of this Note.

       

      3.7.  Registration
        Rights.
        The
        Holder has been granted registration rights with respect to the shares of
        Common
        Stock issuable upon conversion of this Note as more fully set forth in a
        Registration Rights Agreement dated as of the date hereof between the Borrower
        and the Holder.

       

      
        
          
          

        

        
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      ARTICLE
        IV

      EVENTS
        OF DEFAULT

       

      4.1.  The
        occurrence of any of the events set forth in Section 19 of the Security
        Agreement shall constitute an Event of Default (“Event
        of Default”)
        hereunder. 

       

      DEFAULT
        RELATED PROVISIONS

       

      4.2 Default
        Interest Rate.
        Following the occurrence and during the continuance of an Event of Default,
        interest on this Note shall automatically be increased by two percent (2%)
        per
        month, and all outstanding Obligations, including unpaid interest, shall
        continue to accrue interest from the date of such Event of Default at such
        interest rate applicable to such Obligations until such Event of Default
        is
        cured or waived.

       

      4.3 Conversion
        Privileges.
        The
        conversion privileges set forth in Article III shall remain in full force
        and
        effect immediately from the date hereof and until this Note is paid in
        full.

       

      4.4 Cumulative
        Remedies.
        The
        remedies under this Note shall be cumulative.

       

      ARTICLE
        V

      DEFAULT
        PAYMENTS

       

      5.1.  Default
        Payment.
        If an
        Event of Default occurs and is continuing beyond any applicable grace period,
        the Holder, at its option, may elect, in addition to all rights and remedies
        of
        Holder under the Security Agreement and the Ancillary Agreements and all
        obligations of Borrower under the Security Agreement and the Ancillary
        Agreements, to accelerate all obligations outstanding under the Security
        Agreement and the Ancillary Agreements and, in connection therewith, require
        the
        Borrower to make a Default Payment (“Default
        Payment”).
        The
        Default Payment shall be 130% of the outstanding principal amount of the
        Note,
        plus accrued but unpaid interest, all other fees then remaining unpaid, and
        all
        other amounts payable hereunder. The Default Payment shall be applied first
        to
        any fees due and payable to Holder pursuant to the Notes or the Ancillary
        Agreements, then to accrued and unpaid interest due on the Notes and then
        to
        outstanding principal balance of the Notes. 

       

      5.2.  Default
        Payment Date.
        The
        Default Payment shall be due and payable immediately on the date that the
        Holder
        has exercised its rights pursuant to Section 5.1 (“Default
        Payment Date”).
        

       

      
        
          
          

        

        
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      ARTICLE
        VI

      MISCELLANEOUS

       

      6.1.  Failure
        or Indulgence Not Waiver.
        No
        failure or delay on the part of the Holder hereof in the exercise of any
        power,
        right or privilege hereunder shall operate as a waiver thereof, nor shall
        any
        single or partial exercise of any such power, right or privilege preclude
        other
        or further exercise thereof or of any other right, power or privilege. All
        rights and remedies existing hereunder are cumulative to, and not exclusive
        of,
        any rights or remedies otherwise available.

       

      6.2.  Notices.
        Any
        notice herein required or permitted to be given shall be in writing and provided
        in accordance with the terms of the Security Agreement.

       

      6.3.  
        Amendment Provision.
        The
        term “Note” and all reference thereto, as used throughout this instrument, shall
        mean this instrument as originally executed, or if later amended or
        supplemented, then as so amended or supplemented, and any successor instrument
        as it may be amended or supplemented.

       

      6.4.  Assignability.
        This
        Note shall be binding upon the Borrower and its successors and assigns, and
        shall inure to the benefit of the Holder and its successors and assigns,
        and may
        be assigned by the Holder in accordance with the requirements of the Security
        Agreement.

       

      6.5.  Cost
        of Collection.
        If
        default is made in the payment of this Note, the Borrower shall pay the Holder
        hereof reasonable costs of collection, including reasonable attorneys’
        fees.

       

      6.6.  Governing
        Law.
        This
        Note shall be governed by and construed in accordance with the laws of the
        State
        of New York, without regard to principles of conflicts of laws. Any action
        brought by either party against the other concerning the transactions
        contemplated by this Agreement shall be brought only in the state courts
        of New
        York or in the federal courts located in the state of New York. Both parties
        and
        the individual signing this Note on behalf of the Borrower agree to submit
        to
        the jurisdiction of such courts. The prevailing party shall be entitled to
        recover from the other party its reasonable attorney’s fees and costs. In the
        event that any provision of this Note is invalid or unenforceable under any
        applicable statute or rule of law, then such provision shall be deemed
        inoperative to the extent that it may conflict therewith and shall be deemed
        modified to conform with such statute or rule of law. Any such provision
        which
        may prove invalid or unenforceable under any law shall not affect the validity
        or unenforceability of any other provision of this Note. Nothing contained
        herein shall be deemed or operate to preclude the Holder from bringing suit
        or
        taking other legal action against the Borrower in any other jurisdiction
        to
        collect on the Borrower’s obligations to Holder, to realize on any collateral or
        any other security for such obligations, or to enforce a judgment or other
        court
        order in favor of Holder.

       

      6.7.  Maximum
        Payments.
        Nothing
        contained herein shall be deemed to establish or require the payment of a
        rate
        of interest or other charges in excess of the maximum permitted by applicable
        law. In the event that the rate of interest required to be paid or other
        charges
        hereunder exceed the maximum permitted by such law, any payments in excess
        of
        such maximum shall be credited against amounts owed by the Borrower to the
        Holder and thus refunded to the Borrower.

       

      
        
          
          

        

        
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      6.8.   Security
        Interest and Guarantee.
        The
        Holder has been granted a security interest (i) in certain assets of the
        Borrower and its Subsidiaries as more fully described in (x) the Security
        Agreement and (y) the Master Security Agreement dated as of the date hereof
        and
        (ii) pursuant to the Stock Pledge Agreement dated as of the date hereof.
        The
        obligations of the Borrower under this Note are guaranteed by certain
        Subsidiaries of the Borrower pursuant to the Subsidiary Guaranty dated as
        of the
        date hereof.

       

      6.9.  Construction.
        Each
        party acknowledges that its legal counsel participated in the preparation
        of
        this Note and, therefore, stipulates that the rule of construction that
        ambiguities are to be resolved against the drafting party shall not be applied
        in the interpretation of this Note to favor any party against the
        other.

       

      [Balance
        of page intentionally left blank; signature page follows.]

       

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF,
        the
        Borrower has caused this Amended and Restated Secured Convertible Minimum
        Borrowing Note to be signed in its name effective as of this 30th
        day of
        November 2005.

      
        	 	 	 
	 	CONVERSION
                SERVICES INTERNATIONAL, INC. 
	 
 	 
 	 
 
	 	By:  	/s/ Scott
                Newman 
	 	
                
Name:
                Scott Newman 
	 	
                Title:  
                  President and Chief Executive
                  Officer

              

      

       

       

      
      

      WITNESS:

       

      /s/
        Lawrence F. Metz

      
        

         

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      NOTICE
        OF CONVERSION

       

      (To
        be
        executed by the Holder in order to convert the Note)

       

      The
        undersigned hereby elects to convert $_________ of the principal and $_________
        of the interest due on the Secured Convertible Minimum Borrowing Note issued
        by
        Conversion Services International, Inc. on August 18, 2004, as amended and
        restated on November 30, 2005, into Shares of Common Stock of Conversion
        Services International, Inc. (the “Borrower”) according to the conditions set
        forth in such Note, as of the date written below.

      
        	
                 

                Date
                  of Conversion:

              	 
	
                 

                Conversion
                  Price:

              	 
	
                 

                Shares
                  To Be Delivered:

              	 
	
                 

                Signature:

              	 
	
                 

                Print
                  Name:

              	 
	
                 

                Address:

              	 
	
              	
                 

                 

              
	
                 

                Holder
                  DWAC instructions

              	
                 

                 

              
	 	 

      

       

      

      
        
          
          

        

        
          11Exhibit
        10.4

      

      OMNIBUS
        AMENDMENT

      

      This
        Omnibus Amendment, dated as of November 30, 2005, by and between Conversion
        Services International, Inc., a Delaware corporation (the “Company”), CSI Sub
        Corp. (DE), a Delaware corporation (“CSI Sub”), DeLeeuw Associates, LLC, a
        Delaware limited liability company (“DeLeeuw”), Evoke Software Corporation, a
        Delaware corporation (“Evoke”) and McKnight Associates, Inc., a Delaware
        corporation (“McKnight” and, together with the Company, CSI Sub, DeLeeuw, and
        Evoke, the “Credit Parties” and, each a “Credit Party”) and Laurus Master Fund,
        Ltd., a Cayman Islands company (the “Purchaser”), amends that certain Security
        Agreement, dated as of August 16, 2004 (the “Initial Closing Date”), by and
        between the Credit Parties and Purchaser (as amended, modified or supplemented
        from time to time, the “Security Agreement”); that certain Secured Revolving
        Note, dated August 16, 2004, as amended and restated on July 28, 2005, made
        by
        the Company in favor of Purchaser for the total principal amount of $4,500,000
        (as amended and restated, amended, modified or supplemented from time to
        time,
        the “Revolving Note”); that certain Secured Convertible Minimum Note, dated
        August 16, 2004, made by the Company in favor of Purchaser for the total
        principal amount of $2,000,000 (as amended, modified or supplemented from
        time
        to time, the “MB Note”); that certain Secured Convertible Term Note, dated
        August 16, 2004, as amended and restated on July 28, 2005, made by the Company
        in favor of Purchaser for the total principal amount of $5,000,000 (as amended
        and restated, amended, modified or supplemented from time to time, the “Term
        Note”, and, together with the Security Agreement, the Revolving Note, the MB
        Note, and the other Ancillary Agreements (as defined in the Securities
        Agreement), the “Funding Documents”). Capitalized terms used but not defined
        herein shall have the meanings given them in the Security
        Agreement.

       

      PREAMBLE

      

      WHEREAS,
        pursuant to the Funding Documents, the Purchaser purchased from the Company
        the
        Term Note, the Revolving Note and the MB Note;

       

      WHEREAS,
        the
        Company has requested that the Purchaser increase the Capital Availability
        Amount set forth in the Security Agreement to $7,500,000 pursuant to the
        terms
        and conditions set forth herein, and the Purchaser is willing to so increase
        the
        Capital Availability Amount and, in consideration therefor and in consideration
        of the other agreements set forth herein, the receipt and sufficiency of
        which
        is hereby acknowledged, the Purchaser and the Company have agreed to decrease
        the Fixed Conversion Price of each of the Term Note, the Revolving Note and
        the
        MB Note as set forth herein;

       

      NOW,
        THEREFORE,
        in
        consideration of the covenants, agreements and conditions hereinafter set
        forth,
        and other good and valuable consideration, the receipt and sufficiency of
        which
        are hereby acknowledged, the parties hereto agree as follows:

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      1. Amendments.

      
         

        1.1 The
          Security Agreement.
          The
          Security Agreement is hereby amended to delete the following definitions
          of
“Capital Availability Amount” and “Revolving Note” contained therein, and in
          their stead to insert the following definitions in their proper alphabetical
          order:

      

       

      “Capital
        Availability Amount”
        means
        $7,500,000.

       

      “Revolving
        Note”
        means
        that secured revolving note made by Company in favor of Laurus in the aggregate
        principal amount of Five Million Five Hundred Thousand Dollars
        ($5,500,000).

       

      1.2 Amended
        and Restated Term Note.
        The
        Company shall issue the Purchaser an Amended and Restated Secured Convertible
        Term Note that is attached and incorporated herein as Exhibit
        A
        in
        substitution and not in satisfaction of the Term Note. The Amended and Restated
        Convertible Term Note shall include the following changes: The “Fixed Conversion
        Price” shall be $1.00.

       

      1.3 Amended
        and Restated Revolving Note.
        The
        Company shall issue the Purchaser an Amended and Restated Secured Revolving
        Note
        that is attached and incorporated herein as Exhibit
        B
        in
        substitution and not in satisfaction of the Revolving Note. The Amended and
        Restated Secured Revolving Note shall include the following changes: The
“Fixed
        Conversion Price” shall be $1.00.

       

      1.4 Amended
        and Restated Secured Convertible Minimum Borrowing Note.
        The
        Company shall issue the Purchaser an Amended and Restated Secured Convertible
        Minimum Borrowing Note that is attached and incorporated herein as Exhibit
        C
        in
        substitution and not in satisfaction of the MB Note. The Amended and Restated
        Secured Convertible Minimum Borrowing Note shall include the following changes:
        The “Fixed Conversion Price” shall be $0.62.

       

      2. Miscellaneous.

       

      2.1 The
        amendments set forth above and in the attached exhibits shall be effective
        as of
        the date first above written (the “Amendment
        Effective Date”)
        on the
        date when (i) each of the Credit Parties and the Purchaser shall have executed
        and each of the Credit Parties shall have delivered to Purchaser its respective
        counterpart to this Amendment, (ii) each of the Credit Parties and the Purchaser
        shall have executed and each of the Credit Parties shall have delivered to
        Laurus its respective counterpart to the Reaffirmation Agreement attached
        hereto
        as Exhibit
        D,
        (iii)
        the Company shall have executed, caused to be witnessed and delivered to
        Purchaser its respective counterpart to each of the Amended and Restated
        Secured
        Convertible Term Note attached as Exhibit
        A
        hereto,
        Amended and Restated Secured Revolving Note attached as Exhibit
        B
        hereto
        and Amended and Restated Secured Convertible Minimum Borrowing Note attached
        as
Exhibit
        C
        hereto,
        and (iv) the Purchaser shall have received a management fee of $35,000 arising
        in connection with the increase made to the Capital Availability Amount as
        set
        forth in Section 1.1 above.

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      2.2  Except
        as
        specifically set forth in this Amendment, there are no other amendments,
        modifications or waivers to the Funding Documents, and all of the other forms,
        terms and provisions of the Funding Documents remain in full force and
        effect.

      

      2.3     
        Each
        Credit Party hereby represents and warrants to Purchaser that (i) no Event
        of
        Default exists on the date hereof, (ii) on the date hereof, all representations,
        warranties and covenants made by each Credit Party in connection with the
        Funding Documents are true, correct and complete and (iii) on the date hereof,
        all of the Credit Parties covenant requirements have been met.

      

      2.3  From
        and
        after the Amendment Effective Date, all references in the Funding Documents
        shall be deemed to be references to the Funding Documents, as the case may
        be,
        as modified hereby.

      

      2.4  The
        Company understands that the Company has an affirmative obligation to make
        prompt public disclosure of material agreements and material amendments to
        such
        agreements. It is the Company’s determination that this Amendment is material.
        The Company agrees to file an 8-K within the period prescribed by the SEC.
        

      

      2.4 This
        Amendment shall be binding upon the parties hereto and their respective
        successors and permitted assigns and shall inure to the benefit of and be
        enforceable by each of the parties hereto and their respective successors
        and
        permitted assigns. THIS
        AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED
        BY THE
        LAW OF THE STATE OF NEW YORK.
        This
        Amendment may be executed in any number of counterparts, each of which shall
        be
        an original, but all of which shall constitute one instrument.

       

      [signature
        page follows]

       

      
         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

      

       

      IN
        WITNESS WHEREOF,
        each of
        the parties hereto has executed this Amendment or has caused this Amendment
        to
        be executed on its behalf by a representative duly authorized, all as of
        the
        date first above set forth.

       

      

      
        	
                COMPANY:

              	 	
                PURCHASER:

              
	 	 	 
	
                Conversion
                  Services International, Inc.

              	 	
                Laurus
                  Master Fund, Ltd.

              
	 	 	 
	 	 	 
	
                By:

              	/s/
                Scott Newman 	 	
                By:

              	/s/
                David Grin
	
                Name:

              	
                
                  Scott
                    Newman

                

              	 	
                Name:

              	
                David
                  Grin

              
	
                Title:

              	
                Chief
                  Executive Officer

              	 	
                Title:

              	
                Director

              

      

      

      Agreed
        and Acknowledged: 

      

      CSI
        SUB CORP., INC. 

      
        
           

          
            	By:  	/s/
                    Scott Newman 	 	 
	Name: 	
                    Scott
                      Newman 

                  	 	 
	Title: 	
                    Chief
                      Executive
                      Officer

                  

          

        

      

           

      DELEEUW
        ASSOCIATES, LLC 

       

      
        	By:  	/s/
                Scott Newman 	 	 
	Name: 	
                Scott
                  Newman 

              	 	 
	Title: 	
                Chief
                  Executive Officer 

              	 	 

      

       

      EVOKE
        SOFTWARE CORPORATION

      
         

        
          	By:  	/s/
                  Scott Newman 	 	 
	Name: 	
                  Scott
                    Newman 

                	 	 
	Title: 	
                  
                    Chief
                      Executive
                      Officer 

                  

                

        

         

      MCKNIGHT
        ASSOCIATES, INC. 

      
         

        
          	By:  	/s/
                  Scott Newman 	 	 
	Name: 	
                  Scott
                    Newman 

                	 	 
	Title: 	
                  
                    Chief
                      Executive
                      Officer 

                  

                

        

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      EXHIBIT
        B

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      EXHIBIT
        C

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      EXHIBIT
        D

      

       

      
        
          
          

        

        
          8

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