Document:

Exhibit 4.4

                          REGISTRATION RIGHTS AGREEMENT

         This  REGISTRATION  RIGHTS  AGREEMENT,  dated as of September  22, 2004
(this  "AGREEMENT"),  is entered  into by and  between  Sands  Brothers  Venture
Capital LLC, Sands Brothers  Venture Capital III LLC and Sands Brothers  Venture
Capital IV LLC  (collectively,  with their respective  permitted  successors and
assigns, the "HOLDERS") and Conversion Services International,  Inc., a Delaware
corporation (the "COMPANY").

         WHEREAS,  as of the date hereof, the Holders have loaned to the Company
an aggregate of  $1,000,000.00  pursuant to three separate  Senior  Subordinated
Convertible  Promissory Notes (as the same may be amended,  extended,  restated,
renewed or modified, the "NOTES") issued by the Company to the Holders;

         WHEREAS,  in  connection  with their loans to the Company,  the Holders
have  received  three  Warrants to purchase  up to an  aggregate  of six million
(6,000,000)  shares (the "WARRANT  STOCK") of common stock,  par value $.001 per
share, of the Company (the "COMMON STOCK");

         WHEREAS,  the  Notes are  convertible  into  shares of Common  Stock in
accordance with the terms of the Notes (such share, the "NOTE STOCK"); and

         WHEREAS,  the  Company  and the  Holders  desire  to  enter  into  this
Agreement to provide for the public  registration  of the Warrant  Stock and the
Note Stock on the terms provided for herein.

         NOW,  THEREFORE,  in  consideration  of the  recitals  and  the  mutual
promises  and  covenants  herein  contained  and for  other  good  and  valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto do hereby agree as follows:

1.  Definitions.  As used  herein,  the  following  capitalized  terms  have the
following meanings. All other capitalized terms are defined elsewhere herein:

         "COMMISSION" means the Securities and Exchange Commission.

         "PERSON"  means a natural  person,  a  partnership,  a  corporation,  a
limited liability  company,  an association,  a joint stock company,  a trust, a
joint venture,  an unincorporated  organization or a governmental  entity or any
department, agency or political subdivision thereof.

         "REGISTRABLE SECURITIES" means: (i) the Warrant Stock and (ii) the Note
Stock;  provided,  however,  that  Registrable  Securities shall not include any
shares of Common  Stock or other  equity  securities  the sale of which has been
registered  pursuant  to the  Securities  Act or that may be sold to the  public
without volume  restrictions  pursuant to Rule 144  promulgated by the SEC under
the Securities Act.

         "SEC" means the Securities and Exchange Commission.

         "SECURITIES ACT" means the Securities Act of 1933, as amended,  and the
rules and regulations promulgated thereunder.

         "SECURITIES EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.

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         2. Demand  Registration  Rights.  Subject to the  limitations set forth
herein,  the Holders may, at any time following the earlier to occur of: (i) the
closing by the  Company of a  convertible  debt or equity  financing  with gross
proceeds  to the  Company  of $5  million  or  greater  and the  setting  of the
conversion  and  exercise  price  of the  Note  and the  Warrant  in  connection
therewith or (ii) September 7, 2005 (such earlier date,  the "EFFECTIVE  Date"),
make a written  request for  registration  under the  Securities  Act (a "DEMAND
REQUEST") of all or part of its or their Registrable Securities on any available
SEC registration  form (a "DEMAND  REGISTRATION").  Notwithstanding  anything in
this Section 2 to the  contrary,  the Holders shall not be entitled to more than
one (1) such Demand Request.  Each request will specify the aggregate  number of
Registrable  Securities to be registered by the Holders and the intended  method
of disposition thereof.

         In the event that the Company either: (x) fails to file (or include the
Registrable  Securities within) an appropriate  registration  statement with the
SEC covering  the  Registrable  Securities  within  forty-five  (45) days of the
Company's  receipt of the Demand Request or (y) fails to have such  registration
statement declared effective by the SEC within 125 days of the Company's receipt
of the Demand Request,  then then until the applicable  registration  failure is
cured,  the Company  shall pay to each Holder an amount in cash,  as  liquidated
damages  and not as a  penalty,  equal to 1.0% for each  thirty  (30) day period
(prorated  for partial  periods) on a daily basis of the the original  aggregate
principal amount of the Note held by such Holder.  The Company shall be required
to pay such liquidated  damages as of the date of the applicable  breach. If the
Company fails to pay any liquidated  damages  pursuant to this Section 2 in full
within  seven (7) days after the date  payable,  the Company  will pay  interest
thereon at a rate of 10% per annum to the Holder,  accruing  daily from the date
such  liquidated  damages  are due until such  amounts,  plus all such  interest
thereon, are paid in full.

         3. Restrictions on Demand Rights.  No demand for registration  pursuant
to Section 2 hereof shall be made prior to the Effective Date. If, and solely in
connection  with an  underwritten  offering by the  Company,  in the  reasonable
discretion  of the  underwriter  for such  offering,  the number of  Registrable
Securities  proposed to be sold in such Demand  Registration  either exceeds the
number that can be effectively  sold in, or would have a material adverse effect
on, such  underwritten  offering,  the Company will include in such registration
only  the  number  of  Registrable  Securities  which,  in the  opinion  of such
underwriter  or  underwriters,  can be sold pro rata among the  Holders  and the
holders  of any other  securities  which are  required  to be  included  in such
registration.

         4.  Piggyback  Registration  Rights.  At any  time  after  the the date
hereof,  whenever  the Company  proposes to register  any Common Stock under the
Securities Act,  either in a primary  distribution by the Company or a secondary
distribution  by any of its  security  holders,  the  Company  will give  prompt
written notice to the Holders of its intention to effect such a registration and
will include in the  registration  all  Registrable  Securities  with respect to
which  the  Company  has  received   written   requests  for  inclusion  in  the
registration  within fifteen (15) days after receipt of the Company's  notice (a
"PIGGYBACK  REGISTRATION").  Except as otherwise  provided  herein,  Registrable
Securities with respect to which such request for registration has been received
will be registered by the Company on the same terms and  conditions as all other
securities of the Company included in the proposed registration.

         5. Restrictions on Piggyback Rights.

                  (a) The  Holders  will not be  entitled  to effect a Piggyback
Registration  with respect to a  registration  statement:  (i) filed pursuant to
Section 2 hereof;  or (ii) on Form S-4 or Form S-8 under the  Securities Act (or
any successor or replacement forms).

                  (b) If either:  (i) the managing  underwriter or underwriters,
in the case of an underwritten Piggyback  Registration,  advise the Company that
in its or their opinion; or (ii) in the case of a Piggyback Registration that is

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not being underwritten,  the Company shall reasonably determine, that the number
of securities  proposed to be sold in such  Piggyback  Registration  exceeds the
number which can be effectively sold in, or would have a material adverse effect
on, such offering,  the Company will include in such  registration the number of
securities  which,  in the opinion of such  underwriter or  underwriters  or the
Company,  as the case may be, can be sold as follows:  (x) first, the securities
the Company proposes to sell and (y) second,  pro rata among the Holders and the
holders of any other securities which are required or eligible to be included in
such registration.

         6.  Registration  Procedures.  With  respect  to  any  registration  of
Registrable Securities, the Company will use its commercially reasonable efforts
to effect the registration in accordance with the intended method of disposition
thereof as quickly as practicable  and, in connection with any such request,  as
expeditiously as practicable will:

                  (a)  prepare  and file with the SEC a  registration  statement
that includes the  Registrable  Securities and use its  commercially  reasonable
efforts to cause such  registration  statement to become and remain effective as
provided herein and use its commercially  reasonable  efforts to comply with the
Securities Act and the rules and  regulations of the SEC in preparing and filing
such registration  statement;  provided,  however,  before filing a registration
statement or any  prospectus or amendments or supplements  thereto,  the Company
will  furnish  to legal  counsel  selected  by the  Holders  copies  of all such
documents  proposed to be filed,  which  documents will be subject to review and
comment by such counsel;

                  (b)  prepare  and  file  with  the  SEC  such  amendments  and
post-effective  amendments to such registration statement as may be necessary to
keep such registration  statement continuously effective until the date when all
Registrable  Securities covered by the Registration  Statement have been sold or
may be sold  without  volume  restrictions  pursuant  to Rule  144(k)  under the
Securities Act as determined by the counsel to the Company pursuant to a written
opinion  letter  to such  effect,  addressed  and  acceptable  to the  Company's
transfer agent and the affected Holders; cause the prospectus to be supplemented
by any  required  prospectus  supplement  and, as so  supplemented,  to be filed
pursuant to Rule 424 under the Securities Act; and comply with the provisions of
the  Securities  Act  applicable  to it with respect to the  disposition  of all
securities  covered by such registration  statement during the applicable period
in  accordance  with the  intended  methods of  disposition  of the  Registrable
Securities  as set forth in the  registration  statement  or  supplement  to the
prospectus;

                  (c)  furnish  to the  Holders,  without  charge,  at least one
signed copy of such  registration  statement  and any  post-effective  amendment
thereto,  and such number of conformed  copies thereof and such number of copies
of the prospectus (including each preliminary  prospectus) and any amendments or
supplements thereto, and any documents incorporated by reference therein, as the
Holders may  reasonably  request in order to facilitate  the  disposition of the
Registrable  Securities  being  registered (it being understood that the Company
consents to the use of the prospectus and any amendment or supplement thereto by
the Holders and the underwriter or underwriters,  if any, in connection with the
offering and sale of the Registrable Securities covered by the prospectus or any
amendment or supplement thereto);

                  (d) (i) notify by  Supplemental  Notice (as defined below) the
Holders  at any  time  when a  prospectus  relating  to  Registrable  Securities
included in a  registration  statement  is required  to be  delivered  under the
Securities  Act in the event that the Company  becomes aware of the happening of
any event as a result  of which the  prospectus  included  in such  registration
statement (as then in effect)  contains any untrue  statement of a material fact
or omits to state a material fact necessary to make the  statements  therein (in
the  case of the  prospectus  or any  preliminary  prospectus,  in  light of the
circumstances  under which they were made) not misleading;  and (ii) as promptly
as  practicable  thereafter,  prepare  and file with the SEC and  furnish to the

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Holders with Registrable  Securities  subject to the registration  statement,  a
supplement or amendment to such  prospectus so that, as thereafter  delivered to
the purchasers of the Registrable  Securities,  such prospectus will not contain
any  untrue  statement  of a  material  fact or omit to  state a  material  fact
necessary to make the statements  therein,  in light of the circumstances  under
which they were made, not misleading;

                  (e) enter into customary agreements (including, if applicable,
an underwriting  agreement in customary form) and take such other actions as are
reasonably  required in order to expedite or facilitate the  disposition of such
Registrable Securities;

                  (f) subject to compliance  with  Regulation FD  promulgated by
the SEC and the terms of any reasonable  confidentiality  agreement which may be
requested  by the Company,  make  reasonably  available  for  inspection  by the
Holders and any attorney, accountant or other agent retained by the Holders, all
pertinent  financial  and  other  records,  pertinent  corporate  documents  and
properties  of the Company as shall be  reasonably  necessary  to enable them to
exercise their due diligence responsibilities, and cause the Company's officers,
directors and employees to supply all  information  reasonably  requested by any
such Inspector in connection with such registration statement;

                  (g) in the event that the sale of  Registrable  Securities  is
pursuant to an underwritten offering, use its commercially reasonable efforts to
obtain a "cold comfort" letter from the Company's independent public accountants
in customary form and covering such matters of the type  customarily  covered by
"cold comfort" letters;

                  (h) use  all  reasonable  efforts  to  obtain  an  opinion  or
opinions from counsel to the Company in customary form;

                  (i)  make  generally  available  to its  security  holders  an
earnings statement  satisfying the provisions of Section 11(a) of the Securities
Act no later than forty-five (45) days after the end of the twelve-month  period
beginning with the first month of the Company's first fiscal quarter  commencing
after the effective date of the  registration  statement,  which statement shall
cover such twelve-month period;

                  (j) use its  commercially  reasonable  efforts to prevent  the
entry  of  any  threatened,  or  obtain  the  withdrawal  of any  issued,  order
suspending  the  effectiveness  of any  registration  statement  at the earliest
practicable time;

                  (k) if requested by the managing  underwriter or  underwriters
or  the  Holders  with  Registrable   Securities  subject  to  the  registration
statement,  promptly  incorporate in a prospectus  supplement or  post-effective
amendment such  information as the managing  underwriter or  underwriters or the
Holders reasonably requests to be included therein;

                  (l)  on or  prior  to  the  date  on  which  any  registration
statement is declared  effective,  use its  commercially  reasonable  efforts to
register or qualify,  and  cooperate  with the  Holders and the  underwriter  or
underwriters,  if any, and their counsel in connection with the  registration or
qualification  of  the  Registrable   Securities  subject  to  the  registration
statement,  under the  securities  or blue sky laws of each  state and any other
jurisdiction  of the  United  States as the  Holders or  underwriter  reasonably
requests in writing,  to use its  commercially  reasonable  efforts to keep each
such registration or qualification effective,  including through new filings, or
amendments  or  renewals,  during  the period  such  registration  statement  is
required  to be  kept  effective  and to do any  and all  other  acts or  things
necessary or advisable to enable the  disposition in all such  jurisdictions  of
the Registrable  Securities  subject to the  registration  statement;  provided,

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however,  that the Company will not be required to: (i) qualify  generally to do
business  in any  jurisdiction  where it would  not  otherwise  be  required  to
qualify; (ii) consent to general service of process in any such jurisdiction; or
(iii) subject itself to general taxation in any such jurisdiction;

                  (m) cooperate with the Holders,  and the managing  underwriter
or  underwriters,  if any, to facilitate the timely  preparation and delivery of
certificates (not bearing any restrictive legends)  representing the Registrable
Securities be sold and enable the certificates to be in such  denominations  and
registered in such names as the managing underwriter or underwriters, if any, or
the Holders,  may request;  and (n) cause all Registrable  Securities to be sold
under the  registration  statement to be listed on each  securities  exchange on
which similar securities issued by the Issuer are listed.

         7. Cooperation by Holders.

                  (a) The Holders  will  furnish to the Company in writing  such
information  and affidavits as the Company may reasonably  request and as may be
required by applicable  law or regulation in connection  with any  registration,
qualification or compliance with respect to the Registrable Securities.

                  (b) The failure of the Holders to furnish any  information  or
documents in accordance with any provision  contained in this Section 7 will not
affect the  obligations of the Company under this Agreement to any other Holders
who furnishes such information and documents unless,  in the reasonable  opinion
of  counsel to the  Company or the  underwriters,  such  failure  impairs or may
impair  the  viability  of the  offering  or the  legality  of the  registration
statement or the underlying offering.

                  (c) The  Holders,  upon receipt of any notice from the Company
of the happening of any event of the kind  described in Section 6(d) hereof (the
"SUPPLEMENTAL   NOTICE"),   will  forthwith   discontinue   disposition  of  the
Registrable  Securities  until  such  party's  receipt  of  the  copies  of  the
supplemented or amended prospectus  contemplated by Section 6(d) hereof or until
it is advised in writing by the Company  that the use of the  prospectus  may be
resumed, and has received copies of any additional or supplemental filings which
are incorporated by reference in the prospectus.  If so directed by the Company,
the Holders will deliver to the Company all copies,  other than  permanent  file
copies  then  in  such  party's  possession,  of the  prospectus  covering  such
Registrable  Securities  current at the time of receipt of such  notice.  In the
event the Company  shall give  Supplemental  Notice,  the time periods for which
such  registration  statement  must be maintained as effective  pursuant to this
Agreement,  including without  limitation the period referred to in Section 6(b)
hereof,  will be  extended  by the number of days  during  the  period  from and
including  the date of the giving of such notice to and  including the date when
each  Holders  shall have  received  the copies of the  supplemented  or amended
prospectus contemplated by Section 6(d) hereof.

                  (d) At the end of any  period  during  which  the  Company  is
obligated to keep any registration  statement  current and effective as provided
by Section  6(b) hereof (and any  extensions  thereof  required by Section  7(c)
hereof),  the Holders will discontinue  sales of upon receipt of notice from the
Company of its intention to remove from registration the Registrable  Securities
subject to the  registration  statement and such parties will notify the Company
of the number of shares of Common Stock  registered which remain unsold promptly
after receipt of such notice from the Company.

                  (e) In connection with any registered  underwritten  offering,
the Holders agree to execute agreements  pursuant to which the Holders agree not
to  offer,  sell or  contract  to sell or  otherwise  dispose  of,  directly  or
indirectly,  or  announce  the  offering  of,  any  securities  of  the  Company
beneficially owned by such party,  other than Registrable  Securities subject to
the registration  statement,  for a reasonable period of time after the offering

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(not to exceed one hundred eighty (180) days),  upon the  reasonable  request of
the  Company  but only to the same  extent and for the same  period as all other
Company  "insiders"  are restricted  and any release from such  restrictions  of
other Company "insiders" shall be provided, on a pro rata basis, to each Holders
of Registrable Securities.

         8. Registration Expenses.

                  (a) All  costs and  expenses  of each  registration  hereunder
(whether Demand Registration or Piggyback Registration),  except for commissions
or discounts,  will be borne by the Company,  including: (i) the reasonable fees
and  expenses of legal  counsel,  accountants  or other  representatives  of the
Company and the Holders (not to exceed $5,000 in the case of the Holders);  (ii)
all  other  costs and  expenses  of the  Company  incident  to the  preparation,
printing and filing under the Securities Act of any registration  statement (and
all amendments and supplements thereto) and furnishing copies thereof and of the
prospectus  included  therein;  and (iii)  costs and  expenses  incurred  by the
Company or the Holders in connection with the  qualification  of the Registrable
Securities under the state securities or blue sky laws of various  jurisdictions
(the "REGISTRATION EXPENSES"). Without limitation, the Company will pay or cause
to be paid all Registration  Expenses in connection with any Demand Registration
or Piggyback  Registration  whether or not the  registration  statement  becomes
effective.

                  (b)   Notwithstanding   the   Holders'   ongoing   rights   to
reimbursement  or payment  under this Section 8 to the  contrary,  to the extent
actually  required by  applicable  law or  regulation,  the Holders will pay its
proportionate  share of the  expenses of the offering  determined  on a pro rata
basis in accordance with the number of shares of Registrable  Securities offered
by each party participating in the registration.

         9. Indemnification.

                  (a) The Company agrees to indemnify, to the fullest extent not
prohibited  by  applicable  law,  each  seller of  Registrable  Securities,  its
officers  and  directors  and each Person who controls  such seller  (within the
meaning of the  Securities  Act or the  Securities  Exchange  Act)  against  all
losses,   claims,   damages,   liabilities  and  expenses  (including,   without
limitation, reasonable attorneys' fees except as limited by Section 9(c)) caused
by any untrue or alleged  untrue  statement of a material fact  contained in any
registration statement,  any final prospectus contained therein or any amendment
thereof or supplement  thereto or any omission or alleged omission of a material
fact required to be stated therein or necessary to make the  statements  therein
not  misleading,  except  insofar as the same are caused by or  contained in any
information furnished in writing to the Company by said seller expressly for use
therein  or by said  seller's  failure  to  deliver  a copy of the  registration
statement or final prospectus or any amendments or supplements thereto after the
Company has  furnished  such seller  with a  sufficient  number of copies of the
same. The reimbursements  required by this Section 9(a) will be made by periodic
payments during the course of the  investigation  or defense,  as and when bills
are received or expenses incurred.

                  (b) In connection with any  registration  statement in which a
seller of Registrable Securities is participating, each such seller will furnish
to the  Company  in writing  such  information  and  affidavits  as the  Company
reasonably  requests for use in connection with any such registration  statement
or prospectus  and, to the fullest extent not prohibited by applicable law, will
indemnify the Company,  its directors and officers and each underwriter (if any)
and each Person who controls the Company or such underwriter (within the meaning
of the  Securities  Act or the  Securities  Exchange  Act)  against  any losses,
claims,  damages,  liabilities  and  expenses  (including,  without  limitation,
reasonable attorneys' fees except as limited by Section 9(c)) resulting from any
untrue  or  alleged  untrue  statement  of a  material  fact  contained  in  the
registration  statement,  final prospectus  contained therein,  or any amendment

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thereof or supplement  thereto or any omission of a material fact required to be
stated therein or necessary to make the statements  therein not misleading,  but
only to the extent that such untrue  statement  or omission is  contained in any
information  or affidavit so furnished in writing by such seller  expressly  for
use  therein;  provided,  however,  that the  obligation  to  indemnify  will be
several,  not joint and several,  among such sellers of Registrable  Securities,
and the  liability  of each such  seller of  Registrable  Securities  will be in
proportion  to, and be limited  to, the net amount  received by such seller from
the sale of Registrable Securities pursuant to such registration statement.

                  (c) Any Person entitled to indemnification hereunder will: (i)
give prompt written notice to the  indemnifying  party of any claim with respect
to which it seeks  indemnification;  and (ii) unless in such indemnified party's
reasonable  judgment  a  conflict  of  interest  between  such  indemnified  and
indemnifying  parties  may  exist  with  respect  to  such  claim,  permit  such
indemnifying  party to assume the defense of such claim with counsel  reasonably
satisfactory  to  the  indemnified  party.  If  such  defense  is  assumed,  the
indemnifying  party will not be subject to any liability for any settlement made
by the indemnified party without the indemnifying party's consent (which consent
will not be unreasonably  withheld).  The indemnified  party will not settle any
claim or liability  without first providing the indemnifying  party a reasonable
opportunity to assume its defense. An indemnifying party who is not entitled to,
or elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties  indemnified  by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any  indemnified  party  a  conflict  of  interest  may  exist  between  such
indemnified party and any other of such indemnified parties with respect to such
claim.

                  (d) The indemnification provided for under this Agreement will
remain in full force and effect  regardless of any  investigation  made by or on
behalf of the indemnified party or any officer,  director or controlling  Person
of such indemnified party and will survive the transfer of securities.

                  (e) If the  indemnification  provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified  party in respect of
any losses,  claims,  damages,  liabilities or expenses referred to herein, then
the  indemnifying  party shall  contribute to the amount paid or payable by such
indemnified party as a result of such losses,  claims,  damages,  liabilities or
expenses in such  proportion as is  appropriate to reflect the relative fault of
the indemnifying  party on the one hand, and the indemnified party on the other,
in  connection  with the  statement or omission  which  resulted in such losses,
claims, damages, liabilities or expenses as well as any other relevant equitable
considerations, including the failure to give the notice required hereunder. The
relative  fault of the  indemnifying  party and the  indemnified  party shall be
determined by reference  to, among other  things,  whether the untrue or alleged
untrue  statement  of a material  fact  relates to  information  supplied by the
indemnifying  party or the indemnified  party and the parties'  relative intent,
knowledge,  access to  information  and  opportunity  to correct or prevent such
statement  or omission.  The Company and the Holders  agree that it would not be
just  and  equitable  if  contributions  pursuant  to  this  Section  9(e)  were
determined by pro rata allocation or by any other method of allocation which did
not take into  account the  equitable  considerations  referred  to herein.  The
amount  paid or  payable  to an  indemnified  party as a result  of the  losses,
claims,  damages,  liabilities or expenses  referred to above shall be deemed to
include  any legal or other  expenses  reasonably  incurred in  connection  with
investigating or defending the same.  Notwithstanding the foregoing, in no event
shall the amount  contributed  by the Holders  exceed the aggregate net offering
proceeds  received  by any  such  Holders  from  the  sale  of  its  Registrable
Securities. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to  contribution  from
any person who is not guilty of such fraudulent misrepresentation.

         10.  Current  Public  Information.  At all times  after the Company has
filed a  registration  statement  with the SEC  pursuant to the  requirement  of

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either the Securities  Act or the Securities  Exchange Act, the Company will use
its commercially  reasonable  efforts to file in a timely manner all reports and
other  documents  required  to be filed by it under the  Securities  Act and the
Securities  Exchange  Act and  the  rules  and  regulations  adopted  by the SEC
thereunder and will use its commercially reasonable efforts to take such further
action as the  Holders may  reasonably  request,  all to the extent  required to
enable such  holders to sell  Registrable  Securities  pursuant to: (i) Rule 144
adopted by the SEC under the  Securities  Act (as such rule may be amended  from
time to  time)  or any  similar  rule or  regulation  hereafter  adopted  by the
Commission;  or  (ii) a  registration  statement  on  Form  S-3  or any  similar
registration form hereafter adopted by the Commission.

         11. Adjustments Affecting Registrable  Securities.  The Company will at
all times in good faith  assist in carrying  out all of the  provisions  of this
Agreement and in the taking of all such action as may be reasonably necessary or
appropriate  in  order to  protect  the  registration  rights  pursuant  to this
Agreement of the Holders of Registrable  Securities against impairment,  whether
by denial, delay or otherwise.

         12.  Remedies.  Any Person  having  rights under any  provision of this
Agreement  will be entitled  to enforce  such  rights  specifically,  to recover
damages caused by reason of any breach of any provision of this Agreement and to
exercise  all  other  rights  granted  by  law.  The  Company  and  the  Holders
acknowledge  and agree that in the event of any breach of this  Agreement by it,
the other  parties  could be  irreparably  harmed and could not be made whole by
monetary damages. Each party accordingly agrees: (a) to waive the defense in any
action for specific performance that a remedy at law would be adequate;  and (b)
that each party  hereto,  in addition  to any other  remedy to which they may be
entitled at law or in equity, will be entitled to compel specific performance of
this Agreement.

         13.  Amendments  and Waivers.  Except as otherwise  expressly  provided
herein,  the  provisions of this  Agreement may be amended or waived at any time
only by the  written  agreement  of the  Company  and the  Holders.  Any waiver,
permit,  consent or  approval of any kind or  character  on the part of any such
Holders of any provision or condition of this  Agreement must be made in writing
and shall be effective only to the extent specifically set forth in writing.

         14.  Successors  and Assigns.  Except as otherwise  expressly  provided
herein,  the provisions of this Agreement shall be binding upon and inure to the
benefit of the  respective  successors  and  permitted  assigns  of the  parties
hereto,  whether so  expressed  or not.  The  Holders  may not assign any of its
rights  hereunder  without the prior written  consent of the Company;  provided,
however,  that,  without  such  written  consent,  the  Holders  may assign this
Agreement or its rights  hereunder to any  affiliate  (within the meaning of the
Securities Act) of the Holders who  hereinafter  becomes a holder of Registrable
Securities. Any such assignee shall consent in writing to be bound by all of the
terms and conditions of this  Agreement.  In connection  with any such permitted
assignment,  the Holders shall provide the Company with prompt written notice of
the name and address of said assignee and identifying the Registrable Securities
with respect to which such registration rights are being assigned.

         15. Final  Agreement.  This Agreement  constitutes the final and entire
agreement  of the  parties  concerning  the  matters  referred  to  herein,  and
supersedes all prior or contemporaneous agreements and understandings.

         16. Severability.  Whenever possible,  each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any  provision  of this  Agreement  is held to be  prohibited  by or
invalid under  applicable  law, such provision  will be ineffective  only to the
extent of such prohibition or invalidity,  without invalidating the remainder of
this Agreement.

                                       8
<PAGE>

         17. Descriptive  Headings.  The descriptive  headings of this Agreement
are inserted for  convenience  of reference only and do not constitute a part of
and shall not be utilized in interpreting this Agreement.

         18. Notices.  Any notice,  request or other  communication  required or
permitted  hereunder  shall be in writing  and shall be deemed to have been duly
given if personally delivered or mailed by registered or certified mail, postage
prepaid,  or by  overnight  courier  (prepaid)  or  if  delivered  by  facsimile
transmission, to the Company at the address or facsimile number set forth in the
Company's SEC filings or to the Holders at the  addresses or  facsimiles  number
set forth in the records of the Company. Any party hereto may by notice so given
change its address for future notice  hereunder.  Notice shall be deemed to have
been given (a) upon  personal  delivery,  if delivered  by hand,  (b) three days
after  the  date of  deposit  in the  mails,  postage  prepaid,  or (c) the next
business day if sent by  facsimile  transmission  (if receipt is  electronically
confirmed) or by a prepaid overnight courier service.

         19. Governing Law. All questions concerning the construction,  validity
and interpretation  of, and the performance of the obligations  imposed by, this
Agreement  shall be governed by and  construed in  accordance  with the internal
substantive  laws of the State of New York,  without  regard  to  principles  of
conflicts of laws.

         20. Waiver of Jury Trial, etc. The Holders and the Company hereby:  (a)
waive  any and all  right  to  trial  by jury  in  litigation  relating  to this
Agreement, (b) submit to the nonexclusive  jurisdiction of the state and federal
courts  located  in the State of New York,  County of New York and (c) waive any
objection the Holders or the Company may have as to the bringing or  maintaining
of such action with any such court.

         21.  Counterparts.  This  Agreement  may be  executed  in any number of
counterparts  and by  facsimile,  each of which when so executed  and  delivered
shall be  deemed  an  original,  and all of which  counterparts  together  shall
constitute one instrument.

         22. Termination of Rights. This Agreement,  and the registration rights
provided by this  Agreement,  shall  terminate  on the earlier of: (a) the fifth
anniversary  of the date hereof,  and (b) at such time as the Holders shall have
the ability to sell the  Registrable  Securities  pursuant to and in  accordance
with the provisions of Rule 144(k) of the Securities  Act.  Notwithstanding  the
foregoing,  the provisions of Sections 8 and 9 of this  Agreement  shall survive
any termination of this Agreement indefinitely.

                  [Remainder of page intentionally left blank]

                                       9
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered on their behalf as of the date first above written.

                              COMPANY:

                              CONVERSION SERVICES INTERNATIONAL, INC.

                                  /s/ Scott Newman
                              By: _______________________________
                                  Name:  Scott Newman
                                  Title: President and Chief Executive Officer

                              HOLDERS:

                              SANDS BROTHERS VENTURE CAPITAL LLC

                              By: SB Venture Capital Management LLC, Manager

                                  /s/ Steven Sands
                              By: _______________________________
                                  Name:  Steven Sands
                                  Title: Manager

                              SANDS BROTHERS VENTURE CAPITAL III LLC

                              By: SB Venture Capital Management III LLC, Manager

                                  /s/ Steven Sands
                              By: _______________________________
                                  Name:  Steven Sands
                                  Title: Manager

                              SANDS BROTHERS VENTURE CAPITAL IV LLC

                              By: SB Venture Capital Management IV LLC, Manager

                                  /s/ Steven Sands
                              By: _______________________________
                                  Name:  Steven Sands
                                  Title: Manager

                [Signature Page to Registration Rights Agreement]Exhibit 10.1

THIS NOTE AND THE  SECURITIES  ISSUABLE UPON  CONVERSION  HEREOF,  HAVE NOT BEEN
REGISTERED  UNDER THE  SECURITIES ACT OF 1933 OR ANY STATE  SECURITIES  LAWS AND
NEITHER  SUCH  SECURITIES  NOR  ANY  INTEREST  THEREIN  MAY  BE  OFFERED,  SOLD,
TRANSFERRED,  PLEDGED OR OTHERWISE  DISPOSED OF EXCEPT  PURSUANT TO AN EFFECTIVE
REGISTRATION  STATEMENT  UNDER  SUCH  ACT OR  SUCH  LAWS  OR AN  EXEMPTION  FROM
REGISTRATION  UNDER SUCH ACT AND SUCH LAWS WHICH,  IN THE OPINION OF COUNSEL FOR
THE HOLDER, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO COUNSEL FOR
THIS COMPANY, IS AVAILABLE.

                     CONVERSION SERVICES INTERNATIONAL, INC.

             SENIOR SUBORDINATED SECURED CONVERTIBLE PROMISSORY NOTE

US$50,000.00                                                  September 22, 2004

         FOR VALUE RECEIVED, Conversion Services International, Inc., a Delaware
corporation (the  "COMPANY"),  promises to pay to SANDS BROTHERS VENTURE CAPITAL
LLC, the registered  holder hereof and its successors and permitted assigns (the
"HOLDER"),  the principal sum of FIFTY THOUSAND AND 00/100 DOLLARS  ($50,000.00)
in accordance  with the terms  hereof,  and to pay interest on the principal sum
outstanding,  at the simple  rate of eight  percent  (8%) per annum.  Accrual of
interest on the outstanding  principal amount payable shall commence on the date
hereof and shall  continue  until payment in full of the  outstanding  principal
amount has been made or duly  provided for. The interest so payable will be paid
to the Holder or the person or entity in whose name this Note is  registered  on
the books and records of the Company.

         The  following  is a statement of the rights of the Holder of this Note
and the terms and  conditions  to which this Note is  subject,  and to which the
Holder, by acceptance of this Note, agrees:

         1. Principal Repayment.  The outstanding  principal amount of this Note
shall be payable by September 22, 2005 (the "MATURITY  DATE"),  unless this Note
has been  converted  or repaid  in  accordance  with the terms set forth  below.
Notwithstanding  the foregoing,  all principal,  accrued  interest and all other
amounts  payable under this Note shall be immediately due an owing upon a Change
of Control of the  Company.  For  purposes  of this Note,  a "CHANGE OF CONTROL"
shall be deemed to have  occurred if any  "Person" or "group" (as such terms are
defined in Sections 13(d) and 14(d) of the  Securities  Exchange Act of 1934, as
in effect on the date hereof (the "EXCHANGE ACT")) is or becomes the "beneficial
owner"  (as  defined in Rules  13(d)-3  and  13(d)-5  under the  Exchange  Act),
directly  or  indirectly,  of 50% or more on a fully  diluted  basis of the then
outstanding voting equity interest of the Company.

         2. Interest.  Interest shall accrue on the unpaid  principal  amount of
this Note from the date hereof until such principal amount is repaid in full, at
a simple annual interest rate equal to eight percent (8%) per annum,  payable in
full at the Maturity  Date, or on the date of the full or partial  conversion of
this Note as  provided  for  herein  if Holder  elects  not to  convert  accrued
interest hereunder at such time. All computations of the interest rate hereunder
shall be made on the basis of a year of 365 days based on the  actual  number of
days  (including  the first day but excluding  the last day) any such  principal
amount is  outstanding.  If an Event of Default (as defined below) occurs and is
continuing  beyond any applicable grace period,  the unpaid balance of principal
and  interest  hereunder  from the date of default  shall begin and  continue to
accrue until the payment in full of all unpaid  principal  and accrued  interest
hereunder at a default rate equal to ten and four tenths percent (10.4%).

<PAGE>

         3.  Prepayment.  The Company  shall have the right,  at its election on
fifteen (15) business days prior written notice, to prepay all but not less than
all of the accrued interest and principal under this Note,  without penalty,  in
cash only.

         4. Seniority; Collateral.

                  (a) Subject in all  instances to the  provisions  of Section 5
hereof and the terms of the  Intercreditor  Agreement  (as defined  below),  the
indebtedness  evidenced by this Note and the payment of the  principal,  accrued
interest and other amounts  hereunder shall be Senior (as defined below) to, and
have priority in right of payment over,  all  indebtedness  of the Company,  now
outstanding or hereinafter  incurred. As used herein, the term "SENIOR" shall be
deemed  to  mean  that,  in the  event  of any  default  in the  payment  of the
obligations  represented by this Note (after giving effect to "cure" provisions,
if  any)  or of any  liquidation,  insolvency,  bankruptcy,  reorganization,  or
similar proceedings  relating to the Company,  all sums payable on this Note and
any other  obligations  hereunder  or under the Security  Documents  (as defined
below) shall first be paid in full, with interest, if any, before any payment is
made upon any other  indebtedness,  now  outstanding  or  hereinafter  incurred,
except for the Senior  Indebtedness,  and,  in any such  event,  any  payment or
distribution  of any  character  which  shall be made in  respect  of any  other
indebtedness of the Company,  other than the Senior Indebtedness,  shall be paid
over to the Holder for application to the payment  hereof,  unless and until the
obligations  under this Note and the  Security  Documents  (which shall mean the
principal and other  obligations  arising out of, premium,  if any, interest on,
and any costs and expenses  payable  under,  this Note) shall have been paid and
satisfied in full.

                  (b)  This  Note is  secured  by a  Security  Agreement,  dated
September 22, 2004 (as amended,  modified or supplemented from time to time, the
"SECURITY  AGREEMENT")  of the  Company  in favor of the  Holder,  covering  the
specified   assets  of  the  Company  therein   described   (collectively,   the
"COLLATERAL"),  which Security  Agreement secures the payment and performance of
all obligations hereunder.  The Security Agreement,  the Uniform Commercial Code
financing statements in connection with the Security Agreement,  and any and all
other  documents  executed and delivered by the Company to the Payee under which
the Payee is granted liens on assets of the Company are collectively referred to
as the "SECURITY DOCUMENTS."

         5.  Subordination.  By acceptance of this Note, the Holder,  for itself
and its  successors  and  permitted  assigns,  acknowledges  and  agrees for the
benefit  of  the  Company  and  Laurus  Master  Fund,  Ltd.,  a  Cayman  Islands
corporation  (the "SENIOR DEBT  HOLDER"),  and their  respective  successors and
assigns,  that,  notwithstanding  any  provision  of this  Note or any  Security
Document to the contrary,  the payment of any  interest,  principal or any other
amounts under this Note and the Security  Documents,  and the performance by the
Company its obligations  thereunder,  is and shall be expressly subordinated and
junior in right of  payment  to the prior  indefeasible  payment  in full of all
Senior  Indebtedness  (as  defined  below),  whether now  existing or  hereafter
arising, and is hereby subordinated as a claim against the Company or any of the
assets of the Company, whether such claim be in the event of any distribution of
the assets of the Company, upon any reorganization or composition or bankruptcy,
insolvency,  receivership  or other  statutory  or  common  law  proceedings  or
arrangements involving the Company or the readjustment of its liabilities or any
assignment  for the  benefit of  creditors  or any  marshaling  of its assets or
liabilities  or any  general  failure  of the  Company  to pay its debts as they
become due.  All rights of the Holder  hereunder  are  expressly  subject to the
rights of the Senior Debt Holder. The subordination provisions set forth in this
Section  5 are  in  addition  to  the  terms  and  provisions  of  that  certain
Intercreditor Agreement, dated as of the date hereof, between the Holder and the
Senior  Debt Holder (the  "INTERCREDITOR  AGREEMENT"),  and each of the terms of
this Note and of each  Security  Document  are subject in all  instances  to the
terms of the Intercreditor Agreement. Notwithstanding the foregoing, the Company
may make  payments of principal and interest to the  Subordinated  Lender unless
prohibited by the terms of the Intercreditor Agreement.

                                       2
<PAGE>

         As used herein, the term "SENIOR  INDEBTEDNESS"  shall mean all amounts
owed by the Company to the Senior Debt Holder under,  and all obligations of the
Company  pursuant to: (i) that certain $2 million  Secured  Convertible  Minimum
Borrowing  Note of the Company,  dated  August 16, 2004,  in favor of the Senior
Debt Holder, (ii) that certain $4 million Secured Revolving Note of the Company,
dated  August 16, 2004,  in favor of the Senior Debt Holder,  (iii) that certain
Master Security  Agreement,  dated August 16, 2004,  among the Company,  CSI Sub
Corp. (DE), DeLeeuw Associates,  LLC, Evoke Software  Corporation and the Senior
Debt Holder,  (iv) that certain $5 million Secured  Convertible Term Note, dated
August 16, 2004, in favor of the Senior Debt Holder; (v) that certain Securities
Purchase  Agreement,  dated August 16, 2004,  between the Company and the Senior
Debt Holder,  (vi) that certain Stock Pledge  Agreement,  dated August 16, 2004,
between the Company and the Senior Debt Holder,  (vii) that certain Registration
Rights Agreement, dated August 16, 2004, between the Company and the Senior Debt
Holder, and (viii) that certain Common Stock Purchase Warrant,  dated August 16,
2004, in favor of the Senior Debt Holder.

         6. Conversion.

                  (a) Generally. All or any portion of the outstanding principal
and/or  accrued  interest  under this Note shall be  convertible  into shares of
common stock,  par value $.001 per share, of the Company (the "COMMON STOCK") at
the election of the Holder at any time following the consummation by the Company
of a convertible  debt or equity  financing with gross proceeds of $5 million or
greater to the Company (a "QUALIFIED  FINANCING").  The conversion  price of the
shares of Common Stock  issuable upon  conversion of this Note (the  "CONVERSION
PRICE")  shall be equal to a price  per  share of  Common  Stock  equal to forty
percent (40%) of the price of the securities  issued by the Company  pursuant to
the Qualified  Financing  (subject to adjustment as provided for in Section 6(b)
below and proportional adjustments for any stock-split,  stock dividends,  stock
combination,  recapitalization  and like  occurrences  to occur  after  the date
hereof).  Notwithstanding the foregoing,  in the event that the Company does not
consummate a Qualified  Financing on or before September 7, 2005, the Conversion
Price  shall be set at $0.14 per  share  from  September  7,  2005  through  and
including the Maturity Date.

                  (b) Certain  Adjustments to Conversion  Price.  If at any time
the  Company  shall  issue or sell any  shares of Common  Stock  (other  than in
connection  with  Permitted  Issuances  (as  defined  below))  in  exchange  for
consideration  in an amount per share of Common  Stock less than the  Conversion
Price,  then the  Conversion  Price shall be adjusted so that it shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to such  event by a  fraction,  the  numerator  of which  shall be the number of
shares of Common Stock  outstanding  on the date of issuance  plus the number of
additional  shares of Common  Stock  which the  aggregate  offering  price would
purchase based upon the Conversion  Price, and the denominator of which shall be
the number of shares of Common Stock  outstanding  on the date of issuance  plus
the number of  additional  shares of Common  Stock  issued or  issuable  in such
offering.  Any potential adjustment in the Conversion Price provided for in this
Section 6(b) shall apply retroactively, if applicable, once the Conversion Price
is actually determined in accordance with Section 6(a) hereof. By way of example
only, in the event the Company sells additional  shares of Common Stock at $0.20
per share on October 15, 2004 and then  consummates  a  Qualified  Financing  on
February 15, 2005 at $0.50 per share  (resulting in a Conversion  Price of $0.30
per share), the Conversion Price shall be subject to adjustment pursuant to this
Section 6(b).

                  As used herein, the term "PERMITTED ISSUANCES" shall mean: (i)
Common Stock issued pursuant to a stock split or subdivision,  (ii) Common Stock
issuable  or  issued to  employees,  consultants  or  directors  of the  Company
directly or pursuant to a stock plan or other compensation  arrangement approved
by the Board of Directors of the Company,  (iii) capital stock, debt instruments
convertible into capital stock or options or warrants to purchase capital stock,
issued to  financial  institutions,  investors  or  lessors in  connection  with
commercial credit arrangements,  equipment  financings or similar  transactions,

                                       3
<PAGE>

provided that the terms of such  transaction or transactions are approved by the
Board of Directors of the Company,  and (iv)  capital  stock,  debt  instruments
convertible  into capital stock or warrants or options to purchase capital stock
issued in connection with bona fide acquisitions,  mergers,  technology licenses
or  purchases,  corporate  partnering  agreements,  joint  ventures  or  similar
transactions,  the terms of which are  approved by the Board of Directors of the
Company.

                  (c) Certain  Notices.  Upon any  adjustment of the  Conversion
Price as  provided  for in Sections  6(a) or (b)  hereof,  in each such case the
Company shall promptly deliver a notice to the Holder,  which notice shall state
the  Conversion  Price  resulting  from  such  adjustment  and the  increase  or
decrease,  if any, in the number of shares Common Stock receivable at such price
upon the  conversion  hereof,  setting forth in reasonable  detail the method of
calculation and the facts upon which such calculation is based.

                  (d) Mechanics of Conversion. Upon conversion of this Note: (i)
all or any  portion  of the  principal  balance  of and all  accrued  but unpaid
interest  under this Note shall be  converted  and this Note shall  become fully
paid and satisfied,  (ii) the Holder shall surrender and deliver this Note, duly
endorsed,  to the Company's office or such other address which the Company shall
designate  against delivery of the certificates  representing the new securities
of the Company,  and (iii) in exchange for the surrendered Note described in the
preceding clause 4(d)(ii), the Company shall provide the Holder with irrevocable
instructions  addressed to the  Company's  transfer and exchange  agent to issue
such number of  restricted  shares of Common  Stock which shall be listed on the
principal stock exchange or automated quotation system on which the Common Stock
is then listed.

                  (e) Elimination of Fractional Interests.  No fractional shares
of Common  Stock shall be issued  upon  conversion  of this Note,  nor shall the
Company be required to pay cash in lieu of  fractional  interests,  it being the
intent of the parties that all fractional interests shall be eliminated and that
all issuances of Common Stock shall be rounded up to the nearest whole share.

                  (f) Listing.  The Company  shall use  commercially  reasonable
efforts to promptly  secure the listing of the shares of Common  Stock  issuable
upon  conversion of the Note and upon the exercise of the Warrant (as defined in
Section 7(b) below) on the OTCBB or the principal  trading market for the Common
Stock (the  "PRINCIPAL  MARKET")  (subject to official  notice of issuance)  and
shall maintain such listing so long as any other shares of Common Stock shall be
so listed. The Company will use commercially  reasonable efforts to maintain the
listing of its Common  Stock on the  Principal  Market,  and will  comply in all
material  respects with the Company's  reporting,  filing and other  obligations
under the bylaws or rules of the National  Association of Securities Dealers and
such exchanges, as applicable.

         7. Representations, Warranties and Other Agreements of the Company. The
Company  understands,  agrees with, and represents and warrants to the Holder as
of the date hereof that:

                  (a)   Organization  and   Qualification.   The  Company  is  a
corporation duly  incorporated,  existing and in good standing under the laws of
the  State  of  Delaware,  and  has the  requisite  corporate  power  to own its
properties and to carry on its business as now being  conducted.  The Company is
duly  qualified as a foreign  corporation to do business and is in good standing
in every  jurisdiction in which the nature of the business conducted by it makes
such  qualification  necessary  and where the failure so to qualify would have a
Material  Adverse  Effect (as defined  below).  The Common  Stock is eligible to
trade and is listed  for  trading  on the  Principal  Market.  The  Company  has
received  no notice,  either  written  or oral,  with  respect to the  continued
eligibility of the Common Stock for such listing, and the Company has maintained
all requirements for the continuation of such listing,  and the Company does not
reasonably  anticipate that the Common Stock will be delisted from the Principal
Market in the foreseeable future. The Company has complied or will timely comply

                                       4
<PAGE>

with all requirements of the National  Association of Securities Dealers and the
Principal Market with respect to the issuance of this Note and the Common Stock.
As used herein,  the term "MATERIAL  ADVERSE EFFECT" means any material  adverse
effect  on  the  business,   operations,   properties  condition  (financial  or
otherwise) or results of operations of the Company and its subsidiaries taken as
a whole.

                  (b) Authorization;  Enforcement. The Company has the requisite
corporate  power and authority to enter into and perform its  obligations  under
this Note,  the warrant  exercisable  into  shares of Common  Stock to be issued
simultaneously  with the Note (the  "WARRANT")  and the Security  Documents,  to
issue and sell this Note and the Warrant  (and the Common  Stock  issuable  upon
conversion of the Notes or exercise of the Warrant) in accordance with the terms
hereof,  and to perform  its  obligations  under this Note,  the Warrant and the
Security  Documents  in  accordance  with  the  requirements  of the  same.  The
execution,  delivery and  performance of this Note, the Warrant and the Security
Documents and the consummation by it of the transactions contemplated hereby and
thereby have been duly  authorized  by the  Company's  Board of Directors and no
further consent or authorization of the Company, its Board of Directors,  or its
stockholders is required. This Note and the Warrant sold to the Holder have been
duly and validly  authorized,  executed and delivered by the Company.  The Note,
the  Warrant  and the  Security  Documents  constitute  the  valid  and  binding
obligations of the Company  enforceable  against the Company in accordance  with
their  respective  terms,  except  as  such  enforceability  may be  limited  by
applicable bankruptcy,  insolvency,  reorganization,  moratorium, liquidation or
similar laws relating to, or affecting, generally, the enforcement of creditors'
rights and remedies or by other equitable principles of general application.

                  (c) Capitalization. The authorized Common Stock of the Company
consists of  1,000,000,000  shares of Common Stock of which  768,510,668  shares
were issued and  outstanding.  There are  20,000,000  shares of preferred  stock
authorized and zero (0) shares of preferred  stock issued and  outstanding.  All
outstanding shares of Common Stock issued on or after January 30, 2004 have been
validly issued and are fully paid and  nonassessable.  No shares of Common Stock
are subject to  preemptive  rights or any other  similar  rights or any liens or
encumbrances.  Except as may be held by the Senior Debt Holder and except as set
forth in: (A) the Company's  publicly  disseminated press releases (the "COMPANY
PRESS  RELEASES")  or  (B)  the  Company's  registration  statements,   reports,
schedules,  forms, statements and other documents filed by it and its affiliates
with  the  Securities  and  Exchange  Commission  (the  "SEC")  pursuant  to the
Securities   Act  of  1933,  as  amended  (the  "1933  ACT")  or  the  reporting
requirements of the Securities Exchange Act of 1934, as amended (the "1934 ACT")
(all of the foregoing  filed prior to the date hereof and all exhibits  included
therein  and  financial   statements   and   schedules   thereto  and  documents
incorporated  by  reference  therein,  the "SEC  DOCUMENTS"):  (i)  there are no
outstanding  options,   warrants,  scrip,  rights  to  subscribe  to,  calls  or
commitments  of any  character  whatsoever  relating to, or securities or rights
convertible  into,  any  shares of  capital  stock of the  Company or any of its
subsidiaries, or arrangements by which the Company or any of its subsidiaries is
or may become bound to issue  additional  shares of capital stock of the Company
or any of its subsidiaries, (ii) there are no outstanding debt securities of the
Company,  and (iii)  there are no  agreements  or  arrangements  under which the
Company or any of its  subsidiaries  is obligated to register the sale of any of
its or their securities under the 1933 Act.

                  (d)  Reservation  of Shares.  The  Company  shall at all times
reserve and keep available out of its  authorized but unissued  shares of Common
Stock, free from all taxes,  liens and charges with respect to the issue thereof
and not be subject to preemptive  rights or other similar rights of stockholders
of the Company,  solely for the purpose of effecting the conversion of this Note
and the  exercise of the  Warrant,  such number of its shares of Common Stock as
shall from time to time be  sufficient  to effect the  conversion  of all of the
outstanding  principal  amount,  and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the conversion
of this Note and the exercise of the Warrant, in addition to such other remedies

                                       5
<PAGE>

as shall be available to Holder,  the Company will take such corporate action as
may, in the  opinion of its  counsel,  be  necessary  to increase  the number of
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purposes,  including without  limitation,  using its best
efforts to obtain the requisite  stockholder  approval necessary to increase the
number of authorized shares of the Company's Common Stock.

                  (e)  Acknowledgment  Regarding  Holder's Purchase of the Note.
The Company  acknowledges  and agrees that the Holder is not acting as financial
advisor to or fiduciary of the Company (or in any similar  capacity with respect
to this Note or the transactions  contemplated  hereby),  that this Note and the
transactions  contemplated  hereby, and the relationship  between the Holder and
the Company, are and will be considered "arms-length"  notwithstanding any other
or prior agreements or nexus between the Holder and the Company,  whether or not
disclosed,   and  that  any  statement  made  by  the  Holder,  or  any  of  its
representatives  or agents,  in connection  with this Note and the  transactions
contemplated  hereby is not advice or a recommendation,  is merely incidental to
the Holder's purchase of the Note and has not been relied upon in any way by the
Company, its officers or directors. The Company further represents to the Holder
that the Company's  decision to issue this Note and consummate the  transactions
contemplated hereby has been based solely upon an independent  evaluation by the
Company, its officers and directors.

                  (f) No Conflicts.  The execution,  delivery and performance of
this Note by the Company and the consummation by the Company of the transactions
contemplated  hereby  will not:  (i)  result  in a  violation  of the  Company's
Certificate  of  Incorporation  or Bylaws or (ii) conflict with, or constitute a
default (or an event  which with notice or lapse of time or both would  become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which
the Company or any of its  subsidiaries  is a party, or result in a violation of
any law, rule,  regulation,  order,  judgment or decree  (including  federal and
state securities laws and  regulations)  applicable to the Company or any of its
subsidiaries  or by which any  property  or asset of the  Company  or any of its
subsidiaries  is  bound  or  affected  (except  for  such  conflicts,  defaults,
terminations,  amendments, accelerations,  cancellations and violations as would
not, individually or in the aggregate,  have a Material Adverse Effect). Neither
the Company nor any of its subsidiaries is in violation of its charter documents
or  other  organizational   documents,  and  neither  the  Company  nor  any  of
its/subsidiaries  is in default (and no event has occurred which, with notice or
lapse of time or both,  would  put the  Company  or any of its  subsidiaries  in
default)  under,  nor has there occurred any event giving others (with notice or
lapse of time or both) any rights of  termination,  amendment,  acceleration  or
cancellation of, any agreement,  indenture or instrument to which the Company or
any of its  subsidiaries is a party,  except for possible  defaults or rights as
would not, in the aggregate or individually, have a Material Adverse Effect. The
business of the Company and its subsidiaries is not being  conducted,  and shall
not be conducted so long as this Note is  outstanding,  in violation of any law,
ordinance  or  regulation  of  any  governmental  entity,  except  for  possible
violations  which  neither  singly  nor in the  aggregate  would have a Material
Adverse Effect. Except for the consent of the Senior Debt Holder or as otherwise
required by law, rule or  regulation,  the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency in order for it to execute,  deliver or perform any
of its obligations under this Note, the Warrant,  the Security  Documents or the
other  documents  and  instruments  contemplated  by  any of  the  foregoing  in
accordance with the terms hereof and thereof, or to perform its obligations with
respect to this Note, the Warrant, the Security Documents or the other documents
and instruments contemplated by any of the foregoing exactly as described herein
or therein.

                  (g) SEC  Documents;  Financial  Statements.  Since January 30,
2004,  the Company has timely filed all SEC  Documents.  As of their  respective
dates, the SEC Documents complied in all material respects with the requirements
of the  1933  Act and the  1934 Act and the  rules  and  regulations  of the SEC

                                       6
<PAGE>

promulgated  thereunder  applicable  to the SEC  Documents,  and none of the SEC
Documents,  at the time they  were  filed  with the SEC,  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.  As of their
respective  dates,  the financial  statements of the Company 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 SEC with
respect thereto. Such financial statements have been prepared in accordance with
generally  accepted  accounting  principles,  consistently  applied,  during the
periods involved  ("GAAP")  (except:  (i) as may be otherwise  indicated in such
financial  statements  or the notes  thereto,  or (ii) 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
position  of  the  Company  as of the  dates  thereof  and  the  results  of its
operations  and cash flows for the periods then ended  (subject,  in the case of
unaudited  statements,  to normal  year-end audit  adjustments).  Except for the
Senior  Indebtedness or as set forth in the financial  statements of the Company
included in the SEC  Documents,  the Company has no  liabilities,  contingent or
otherwise,  other  than:  (i)  liabilities  incurred in the  ordinary  course of
business  subsequent  to  the  date  of  such  financial   statements  and  (ii)
obligations  under contracts and commitments  incurred in the ordinary course of
business  and  not  required  under  GAAP  to be  reflected  in  such  financial
statements,  in each case of clause (i) and (ii) next above which,  individually
or in the  aggregate,  are not material to the  financial  condition,  business,
operations, properties, operating results or prospects of the Company.

                  (h)  Contracts.  The SEC  Documents  contain  a  complete  and
accurate  list of all written and oral  contracts,  agreements,  leases or other
instruments  to which the Company or any  subsidiary  is a party or by which the
Company  or any  subsidiary  is  subject  which  are  required  by the rules and
regulations promulgated by the SEC to be so listed (each a "CONTRACT").  None of
the Company, its subsidiaries or, to the best of the Company's knowledge, any of
the other  parties  thereto,  is in breach or violation of any  Contract,  which
breach or violation  would, or with the lapse of time, the giving of notice,  or
both, have a Material Adverse Effect.

                  (i) Absence of Certain  Changes.  Except as  disclosed  in the
Company Press Releases or the SEC Documents, since June 30, 2004, there has been
no material adverse change and no material adverse  development in the business,
properties,  operation,  financial condition, results of operations or prospects
of the Company. The Company has not taken any steps, and does not currently have
any reasonable  expectation of taking any steps, to seek protection  pursuant to
any  bankruptcy  law nor does the Company has any  knowledge  that its creditors
intend to initiate  involuntary  bankruptcy  proceedings.  The Company shall, at
least until  Holder no longer  holds any of the Notes,  maintain  its  corporate
existence in good  standing and shall pay all taxes when due except for taxes it
reasonably disputes.

                  (j) Absence of Litigation.  Except as disclosed in the Company
Press  Releases  or the SEC  Documents,  there is no action,  suit,  proceeding,
inquiry or  investigation  before or by any court,  public board or body pending
or, to the  knowledge  of the  Company,  threatened  against  or  affecting  the
Company,  wherein  an  unfavorable  decision,  ruling or  finding  would  have a
Material  Adverse  Effect  or which  would  adversely  affect  the  validity  or
enforceability  of, or the  authority  or ability of the  Company to perform its
obligations under, this Note or any of the documents contemplated herein.

                  (k) No  Brokers.  The  Company  has taken no action that would
give rise to any claim by any person for brokerage commissions, finder's fees or
similar payments relating to this Note and the transactions contemplated hereby.
The Company and the Holder both  acknowledge  that no other broker or finder was
involved with respect to the transactions contemplated hereby.

                                       7
<PAGE>

         8. Affirmative Covenants.  At all times while this Note is outstanding,
the Company shall observe the following affirmative covenants:

                  (a) Payment of Principal and  Interest.  The Company will duly
and punctually pay the principal of and interest on this Note in accordance with
the terms of this Note.

                  (b) Corporate Existence, etc. The Company will, and will cause
each of its subsidiaries to:

                           (i) do or cause to be done all  things  necessary  to
preserve   and  keep  in  full  force  and  effect  its   corporate   existence,
organization,  rights  (charter and statutory)  and  franchises  except for such
corporate existence,  organization, rights (charter and statutory) or franchises
the  termination  of which would not  reasonably  be expected to have a Material
Adverse Effect;

                           (ii)   promptly   pay  and   discharge   all   taxes,
assessments  and  governmental  charges  or levies  imposed  upon it or upon its
income or profits or upon any of its property,  real, personal or mixed, or upon
any part thereof,  before the same shall become delinquent;  provided,  however,
that the  Company  shall  not be  required  to pay and  discharge  any such tax,
assessment,  charge,  levy or claim  so long as the  validity  thereof  shall be
contested in good faith by  appropriate  proceedings  and the Company  shall set
aside on its books adequate reserves in accordance with GAAP with respect to any
such tax assessments, charge, levy or claim so contested;

                           (iii)  use its  commercially  reasonable  efforts  to
conduct its  business in a manner  consistent  with past  practices,  and do all
things  necessary  to preserve  its  relationships  with its  material  vendors,
customers,  distributors,  sales  representatives  and  others  having  material
business relationships with the Company or any of its subsidiaries;

                           (iv)  maintain,   preserve,   protect  and  keep  its
business and properties used and useful in the conduct of its business,  in good
repair,  working  order and condition in accordance  with all  applicable  laws,
permits  and  warranties,  and from time to time  make all  needful  and  proper
repairs, renewals,  replacements and improvements thereto as shall be reasonably
required in the conduct of its  business,  and protect and maintain its patents,
copyrights,  trademarks and trade secrets and all registrations and applications
for registration  thereof except where the failure to take such action would not
reasonably be expected to have a Material Adverse Effect;

                           (v) use its commercially reasonable efforts to comply
with all  applicable  statutes,  regulations  and orders of, and all  applicable
restrictions  imposed by, any governmental  agency, in respect of the conduct of
its business and the ownership of its properties  (including  without limitation
applicable  statutes,  regulations  and  orders  relating  to  equal  employment
opportunities or environmental standards or controls),  except such as are being
contested in good faith by appropriate proceedings;

                           (vi)  to the  extent  reasonably  necessary  for  the
operation  of  its  business,  keep  adequately  insured  by  financially  sound
reputable  insurers,  all properties  insured by similar  corporations and carry
such other insurance as is usually carried by similar corporations; and

                           (vii)  at all  times  keep  true and  correct  books,
records and accounts  reflecting all of its business affairs and transactions in
accordance  with GAAP,  and such books and records  shall be open at  reasonable
times and upon reasonable  notice to the reasonable  inspection of the Holder or
its agents,  subject to confidentiality  agreements  reasonably requested by the
Company.

                                       8
<PAGE>

                  (c) Reporting Status. The Company shall file on a timely basis
all reports  required to be filed with the SEC pursuant to the 1934 Act, and the
Company  shall not  terminate  its status as an issuer  required to file reports
under the 1934 Act even if the 1934 Act or the rules and  regulations  hereunder
would permit such termination.

                  (d) Reservation of Shares. The Company shall at all times have
authorized,  and reserved for the purpose of  issuance,  a sufficient  number of
shares of Common Stock issuable upon conversion of this Note and exercise of the
Warrant to provide  for the  issuance of all of such  shares.  Prior to complete
conversion  of this Note and  exercise of the  Warrant,  the  Company  shall not
reduce the number of shares of Common  Stock  reserved  for  issuance  hereunder
without the written  consent of the Holder except for a reduction  proportionate
to a reverse stock split  effected for a business  purpose other than  affecting
the  requirements of this Section,  which reverse stock split affects all shares
of Common Stock equally.

                  (e) Intentional Acts or Omissions. The Company shall knowingly
perform  any act  with  the  specific  intention  that,  if  such  act was or is
performed,  or with specific  intention omit to perform any act which if omitted
to be  performed,  would  prevent or excuse the  performance  of this Note,  the
Warrant or any of the transactions contemplated hereby and thereby.

                  (f) Certain Notices.  The Company shall,  within ten (10) days
of occurrence, furnish to the Holder written notice of:

                           (i) any default in the payment of any amount  payable
under any obligation for borrowed money or guarantees  where the amount involved
exceeds $100,000;

                           (ii)  all  actions,   suits,   claims,   proceedings,
arbitrations, investigations and inquiries that could, if successful, materially
and  adversely  affect  the  Company  or its  subsidiaries  or where the  amount
involved exceeds $100,000; and

                           (iii)  termination  or default  under a contract,  or
aggregate number of contracts within any 150 day period,  pursuant to which more
than an amount equal to the then average  monthly sales  (determined  as a prior
three months rolling average) of the Company or its Subsidiaries are generated.

                  By its acceptance of this Note,  Holder agrees that any public
filing made by the Company with the  Securities  and Exchange  Commission  which
details the events set forth in Section  8(f)(i) and (iii) above shall be deemed
to have satisfied the notice requirements set forth in this Section 8(f).

9. Negative Covenants. At all times while this Note is outstanding,  the Company
shall not  undertake  the  following  without the prior  written  consent of the
Holder,  which  consent  shall  not be  unreasonably  withheld,  conditioned  or
delayed:

                  (a) Bankruptcy, etc. The Company will not, and will not permit
any of its subsidiaries to: (i) liquidate or dissolve, (ii) declare, make, apply
for, consent or acquiesce to or suffer any: (A) bankruptcy, reorganization, debt
arrangement or other case or proceeding  under any bankruptcy or insolvency law,
(B) appointment of a trustee, receiver,  sequestrator or other custodian for the
Company or all or  substantially  all of its property or (C) general  assignment
for the benefit of creditors or (iii) admit in any legal document and in writing
its inability to pay its debts as they become due.

                                       9
<PAGE>

                  (b) Other  Indebtedness.  Except for the Senior  Indebtedness,
the Company shall not incur any  indebtedness  for borrowed  money which is pari
passu with or senior to the indebtedness  evidenced by this Note or the Security
Documents.

                  (c) No  Impairment.  The Company will not, by amendment of its
Certificate  of  Incorporation,  as  amended,  or  through  any  reorganization,
recapitalization,  transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action,  avoid or seek to avoid the
observance  or  performance  of any of the  terms to be  observed  or  performed
hereunder  by the  Company,  but will at all times in good  faith  assist in the
carrying  out of all the  provisions  of this Note and in the taking of all such
action as may be necessary  or  appropriate  in order to protect the  conversion
rights of the Holder against impairment.

                  (d)  Redemptions.  Except  as  contemplated  by the  documents
governing the Senior  Indebtedness,  the Company will not redeem,  repurchase or
otherwise  acquire for  consideration  any outstanding  equity securities of the
Company or its subsidiaries (or securities  convertible into or exchangeable for
equity securities of such entities).

                  (d)  Dividends.  The Company will not, and will not permit any
of its  subsidiaries  to, declare,  pay, set aside or make any cash dividends or
distributions on its outstanding capital stock or any other securities.

                  (e) Tax Matters. The Company will not, and will not permit any
of its  subsidiaries to, make any tax election  inconsistent  with past practice
that would have a Material Adverse Effect.

         10.  Events of Default.  Subject in all  instances  to the terms of the
Intercreditor Agreement, in the event that any of the following (each, an "EVENT
OF DEFAULT") shall occur:

                  (a) Non-Payment of  Obligations.  The Company shall default in
the payment of the principal of or accrued interest on this Note as and when the
same shall become due and payable,  whether by acceleration or otherwise,  which
default shall continue uncured for five (5) business days; or

                  (b)  Cross-Default.  The Company  shall default in the payment
when due of any amount payable under any other  obligation for money borrowed or
guarantee in excess of $100,000; or

                  (c) Non-Performance of Covenants. The Company shall default in
the due  observance  or  performance  of any covenant or agreement  set forth in
Sections 8 or 9 hereof,  which default shall continue  uncured for 30 days after
the Company  receives  written  notice  thereof from the Holder (it being agreed
that such 30-day notice and cure period shall not apply to any default contained
in Sections 8(e) or (f) or Sections 9(a) or (b) hereof); or

                  (d) Breach or Failure of  Representations  and Warranties.  If
any  representation or warranty or agreement made by the Company in this Note or
any  of  the  Security  Documents,   or  in  connection  with  the  transactions
contemplated herein, shall prove to have been false or incorrect in any material
respect when made; or

                  (e) Invalidity of Note or Security Documents. This Note or any
other  Security  Document shall for any reason cease to be, or shall be asserted
by the Company not to be, a legal,  valid and binding obligation of the Company,
enforceable  in  accordance  with its terms,  or the  security  interest or lien
purported  to be created by any of the Security  Documents  shall for any reason
cease to be,  or be  asserted  by the  Company  not to be,  a  valid,  perfected
security  interest in any Collateral  (except to the extent otherwise  permitted
under any of the Security Documents);

                                       10
<PAGE>

                  (f) Judgments.  The rendering of one or more final  judgments,
orders or decrees  against  the  Company  and/or any  subsidiary  of the Company
(including  for seizure,  forfeiture,  garnishment or abatement) in an aggregate
amount  equal to or in excess of  $100,000  which  are not  vacated,  satisfied,
discharged or execution thereof stayed within a period of 30 days from the entry
thereof;

                  (g) Violation of Laws.  The violation by the Company or any of
its  subsidiaries of any law or regulation,  whether with respect to the conduct
of its business or otherwise, which violation: (i) continues uncured for 30 days
after the Company receives written notice thereof from the Holder and (ii) has a
Material Adverse Effect; and

                  (h) Suspension of Operations. If the Company or any Subsidiary
shall suspend its operations and such suspension would reasonably be expected to
have a Material  Adverse  Effect on the Company and its  Subsidiaries,  taken as
whole,  then, and at any time thereafter,  if such or any other Event of Default
shall then be continuing, the Holder may, at its option, declare this Note to be
due and payable without presentment,  demand, protest or notice of any kind, all
of which are hereby expressly waived,  anything contained herein to the contrary
notwithstanding.  The Holder  shall have all of the  rights  and  remedies  of a
secured party under the Uniform  Commercial Code of the State of New York, under
the Uniform  Commercial  Code of any other state in which any  Collateral may be
situated  and,  additionally,  all of the rights and  remedies set forth in this
Note and the other Security Documents and in any instrument or document referred
to herein or therein,  and under any other  applicable law relating to this Note
or the Collateral.

         11. Holder Not Deemed a Stockholder.  No Holder,  as such, of this Note
shall be entitled  (prior to  conversion  or redemption of this Note into Common
Stock,  and only  then to the  extent  of such  conversion)  to vote or  receive
dividends or be deemed the holder of shares of the Company for any purpose,  nor
shall  anything  contained  in this Note be  construed to confer upon the Holder
hereof,  as such, any of the rights at law of a stockholder of the Company prior
to the  issuance to the holder of this Note of the shares of Common  Stock which
the Holder is then  entitled  to  receive  upon the due  conversion  of all or a
portion of this Note.

         12. Mutilated, Destroyed, Lost or Stolen Notes. In case this Note shall
become mutilated or defaced, or be destroyed,  lost or stolen, the Company shall
execute  and  deliver  a new  note of like  principal  amount  in  exchange  and
substitution  for  the  mutilated  or  defaced  Note,  or  in  lieu  of  and  in
substitution for the destroyed,  lost or stolen Note. In the case of a mutilated
or defaced Note,  the Holder shall  surrender  such Note to the Company.  In the
case of any  destroyed,  lost or stolen Note,  the Holder  shall  furnish to the
Company:  (a) evidence to its satisfaction of the destruction,  loss or theft of
such Note and (b) such  security or indemnity as may be  reasonably  required by
the Company to hold the Company harmless.

         13. Waiver of Demand,  Presentment,  etc. The Company hereby  expressly
waives demand and presentment for payment, notice of nonpayment, protest, notice
of protest, notice of dishonor,  notice of acceleration or intent to accelerate,
bringing of suit and  diligence in taking any action to collect  amounts  called
for hereunder and shall be directly and primarily  liable for the payment of all
sums owing and to be owing  hereunder,  regardless  of and  without  any notice,
diligence,  act or omission as or with respect to the  collection  of any amount
called for  hereunder.  The  Company  agrees  that,  in the event of an Event of
Default,  to pay to the Holder,  on demand,  all costs and  expenses  (including
reasonable  legal  fees  of  one  counsel)   incurred  in  connection  with  the
enforcement and collection of this Note.

         14.  Payment.  All payments  with respect to this Note shall be made in
lawful money of the United  States of America at the address of the Holder as of

                                       11
<PAGE>

the date hereof or as designated in writing by the Holder from time to time. The
forwarding by the Company of such funds shall  constitute a payment of principal
and  interest  hereunder  and shall  satisfy and  discharge  the  liability  for
principal and interest on this Note to the extent of the sum represented by such
payment.  Payment shall be credited  first to the accrued  interest then due and
payable and the remainder  applied to principal.  The Holder shall keep a record
of each payment of principal and interest with respect thereto.

         15.  Assignment.  The rights and  obligations  of the  Company  and the
Holder of this Note  shall be binding  upon,  and inure to the  benefit  of, the
successors  and  permitted  assigns of the  parties  hereto.  The Holder may not
assign,  pledge or otherwise  transfer this Note or any interest therein without
the prior written consent of the Company;  provided that the Holder may, without
such  consent,  assign  this  Note  to an  affiliate  of the  Holder,  it  being
understood  that: (i) any such  affiliate  shall agree in writing to be bound by
the terms of this Note and the Intercreditor Agreement as if it were an original
party  thereto and (ii) any such transfer  shall be made in accordance  with all
applicable laws, rules and regulations,  including the federal  securities laws.
Interest and principal are payable only to the registered Holder of this Note on
the books and records of the Company.

         16.  Waiver and  Amendment.  Any  provision  of this  Note,  including,
without limitation,  the due date hereof, and the observance of any term hereof,
may be amended, waived or modified (either generally or in a particular instance
and either  retroactively or prospectively) only with the written consent of the
Company and the Holder.

         17. Notices.  Any notice,  request or other  communication  required or
permitted  hereunder  shall be in writing  and shall be deemed to have been duly
given if personally delivered or mailed by registered or certified mail, postage
prepaid,  or by  overnight  courier  (prepaid)  or  if  delivered  by  facsimile
transmission, to the Company at the address or facsimile number set forth in the
Company's SEC filings or to the Holder at the addresses or facsimiles number set
forth in the  records of the  Company.  Any party  hereto may by notice so given
change its address for future notice  hereunder.  Notice shall be deemed to have
been given (a) upon  personal  delivery,  if delivered  by hand,  (b) three days
after  the  date of  deposit  in the  mails,  postage  prepaid,  or (c) the next
business day if sent by  facsimile  transmission  (if receipt is  electronically
confirmed) or by a prepaid overnight courier service.

         18.  Governing  Law.  This Note shall be governed by and  construed  in
accordance  with the laws of the State of New York,  excluding  that body of law
relating to conflicts of laws.

         19. Severability. If one or more provisions of this Note are held to be
unenforceable  under applicable law, such provisions shall be excluded from this
Note, and the balance of this Note shall be  interpreted  as if such  provisions
were so excluded and shall be enforceable in accordance with its terms.

         20. Headings.  Section headings in this Note are for convenience  only,
and shall not be used in the construction of this Note.

                            [signature page follows]

<PAGE>

         IN WITNESS  WHEREOF,  the Company  has caused this Senior  Subordinated
Secured  Convertible  Promissory  Note to be issued as of the date  first  above
written.

                             CONVERSION SERVICES INTERNATIONAL, INC.

                                    /s/ Scott Newman
                             By:  ________________________________
                                    Name:  Scott Newman
                                    Title: President and Chief Executive Officer

         By its acceptance of this Note, the Holder acknowledges and agrees that
it has made this loan  evidenced by this Note for  investment  purposes only and
not with a view to  distribution  or  resale of this  Note or the  Common  Stock
receivable  upon  conversion  of this Note,  nor with the  intention of selling,
transferring  or  otherwise  disposing  of all  or  any  part  thereof  for  any
particular  price,  or at any  particular  time,  or upon the  happening  of any
particular event or circumstances.

         ACKNOWLEDGED AND AGREED:

                                SANDS BROTHERS VENTURE CAPITAL LLC

                                By: SB Venture Capital Management LLC, Manager

                                          /s/ Steven Sands
                                    By: _______________________________
                                          Name:  Steven Sands
                                          Title: Manager

                                  [End of Note]

                                       13

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