Document:

REGISTRATION RIGHTS AGREEMENT

      This Registration  Rights Agreement (this "Agreement") is made and entered
into as of August 16, 2004, by and between  Conversion  Services  International,
Inc., a Delaware corporation (the "Company"),  and Laurus Master Fund, Ltd. (the
"Purchaser").

      This Agreement is made pursuant to (i) the Securities  Purchase Agreement,
dated as of the date hereof,  by and between the  Purchaser  and the Company (as
amended,  modified or supplemented  from time to time, the "Securities  Purchase
Agreement"),  and pursuant to the Note referred to therein and (ii) the Security
Agreement,  dated as of the date hereof,  by and between the  Purchaser  and the
Company (as amended,  modified or supplemented  from time to time, the "Security
Agreement"), and pursuant to the Notes and the Warrants referred to therein.

      The Company and the Purchaser hereby agree as follows:

      1.  Definitions.  Capitalized  terms used and not otherwise defined herein
that are defined in the Securities Purchase Agreement or the Security Agreement,
as  applicable,  shall have the  meanings  given  such  terms in the  Securities
Purchase  Agreement or the Security  Agreement,  as applicable.  As used in this
Agreement, the following terms shall have the following meanings:

            "Commission" means the Securities and Exchange Commission.

            "Common Stock" means shares of the Company's common stock, par value
$0.001 per share.

            "Effectiveness   Date"  means  (i)  with   respect  to  the  initial
Registration  Statement required to be filed hereunder, a date no later than one
hundred  twenty five (125) days  following the date hereof and (ii) with respect
to each additional Registration Statement required to be filed hereunder, a date
no later than forty five (45) days following the applicable Filing Date.

            "Effectiveness  Period"  shall have the meaning set forth in Section
2(a).

            "Exchange  Act"  means  the  Securities  Exchange  Act of  1934,  as
amended, and any successor statute.

            "Filing  Date" means,  (i) with respect to the initial  Registration
Statement  required to be filed hereunder,  a date no later than forty five (45)
days following the date hereof,  (ii) with respect to each $3,000,000 tranche of
Loans  evidenced by a Minimum  Borrowing Note funded after the date hereof,  the
date which is thirty (30) days after such funding of such additional  $3,000,000

<PAGE>

of Loans evidenced by a Minimum  Borrowing Note and (iii) with respect to shares
of Common Stock  issuable to the Holder as a result of  adjustments to the Fixed
Conversion  Price made pursuant to any Note or the Warrant or otherwise,  thirty
(30) days after the  occurrence  such event or the date of the adjustment of the
Fixed Conversion Price, as the case may be.

            "Holder" or "Holders"  means the Purchaser or any of its  affiliates
or transferees to the extent any of them hold Registrable Securities.

            "Indemnified  Party"  shall  have the  meaning  set forth in Section
5(c).

            "Indemnifying  Party"  shall have the  meaning  set forth in Section
5(c).

            "Notes"  shall  mean,  collectively,  the  Note (as  defined  in the
Securities Purchase  Agreement),  each Minimum Borrowing Note (as defined in the
Security  Agreement)  and  the  Revolving  Note  (as  defined  in  the  Security
Agreement).

            "Proceeding"  means  an  action,   claim,  suit,   investigation  or
proceeding   (including,   without  limitation,   an  investigation  or  partial
proceeding, such as a deposition), whether commenced or threatened.

            "Prospectus"  means  the  prospectus  included  in the  Registration
Statement  (including,  without  limitation,  a  prospectus  that  includes  any
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  upon  Rule  430A  promulgated  under  the
Securities Act), as amended or supplemented by any prospectus  supplement,  with
respect  to  the  terms  of  the  offering  of any  portion  of the  Registrable
Securities covered by the Registration  Statement,  and all other amendments and
supplements to the  Prospectus,  including  post-effective  amendments,  and all
material  incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

            "Registrable  Securities"  means the shares of Common  Stock  issued
upon the conversion of each Note and issuable upon exercise of the Warrants.

            "Registration  Statement" means each registration statement required
to be filed hereunder,  including the Prospectus,  amendments and supplements to
such  registration  statement or Prospectus,  including pre- and  post-effective
amendments,  all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

            "Rule 144" means Rule 144 promulgated by the Commission  pursuant to
the  Securities  Act,  as such Rule may be  amended  from  time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

            "Rule 415" means Rule 415 promulgated by the Commission  pursuant to
the  Securities  Act,  as such Rule may be  amended  from  time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

<PAGE>

            "Rule 424" means Rule 424 promulgated by the Commission  pursuant to
the  Securities  Act,  as such Rule may be  amended  from  time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

            "Securities  Act" means the Securities Act of 1933, as amended,  and
any successor statute.

            "Securities  Purchase  Agreement"  shall have the  meaning  provided
above.

            "Security Agreement" shall have the meaning provided above.

            "Trading  Market"  means  any of the  NASD  OTCBB,  NASDAQ  SmallCap
Market,  the Nasdaq National Market, the American Stock Exchange or the New York
Stock Exchange.

            "Warrants" means,  collectively,  the Common Stock purchase warrants
issued pursuant to the Securities Purchase Agreement and the Security Agreement.

      2. Registration.

            (a) On or prior to the Filing  Date the  Company  shall  prepare and
      file with the Commission a Registration Statement covering the Registrable
      Securities  for an offering to be made on a continuous  basis  pursuant to
      Rule 415. The Registration  Statement shall be on Form SB-2 (except if the
      Company is not then  eligible  to  register  for  resale  the  Registrable
      Securities  on Form  SB-2,  in which  case such  registration  shall be on
      another appropriate form in accordance herewith).  The Company shall cause
      the  Registration  Statement to become  effective and remain  effective as
      provided herein.  The Company shall use its reasonable  commercial efforts
      to cause the  Registration  Statement to be declared  effective  under the
      Securities  Act as promptly as possible after the filing  thereof,  but in
      any event no later than the Effectiveness  Date. The Company shall use its
      reasonable   commercial   efforts  to  keep  the  Registration   Statement
      continuously  effective  under the  Securities Act until the date which is
      the earlier date of when (i) all Registrable  Securities have been sold or
      (ii)  all  Registrable   Securities  may  be  sold   immediately   without
      registration  under the  Securities  Act and without  volume  restrictions
      pursuant  to Rule  144(k),  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 (the
      "Effectiveness Period").

            (b) If: (i) the  Registration  Statement is not filed on or prior to
      the Filing Date; (ii) the Registration Statement is not declared effective
      by the Commission by the Effectiveness  Date; (iii) after the Registration
      Statement is filed with and  declared  effective  by the  Commission,  the
      Registration Statement ceases to be effective (by suspension or otherwise)

<PAGE>

      as to all Registrable  Securities to which it is required to relate at any
      time prior to the expiration of the  Effectiveness  Period  (without being
      succeeded  immediately by an additional  registration  statement filed and
      declared effective) for a period of time which shall exceed 45 days in the
      aggregate per year or more than 30 consecutive calendar days (defined as a
      period of 365 days  commencing on the date the  Registration  Statement is
      declared effective);  or (iv) the Common Stock is not listed or quoted, or
      is suspended  from trading on any Trading Market for a period of three (3)
      consecutive Trading Days (provided the Company shall not have been able to
      cure such trading  suspension within 30 days of the notice thereof or list
      the Common Stock on another Trading  Market);  (any such failure or breach
      being  referred to as an "Event,"  and for  purposes of clause (i) or (ii)
      the date on which such Event  occurs,  or for purposes of clause (iii) the
      date which such 30 day or 20  consecutive  day period (as the case may be)
      is  exceeded,  or for purposes of clause (iv) the date on which such three
      (3) Trading Day period is exceeded,  being  referred to as "Event  Date"),
      then until the  applicable  Event 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  sum of (x)  the  original  aggregate
      principal  amount  of the  Note (as  defined  in the  Securities  Purchase
      Agreement) plus (y) the original  principal ---- amount of each applicable
      Minimum Borrowing Note (as defined in the Security Agreement).  While such
      Event continues, such liquidated damages shall be paid not less often than
      each thirty (30) days. Any unpaid  liquidated  damages as of the date when
      an Event has been cured by the Company shall be paid within three (3) days
      following the date on which such Event has been cured by the Company.

            (c)  Within  three  business  days of the  Effectiveness  Date,  the
      Company  shall  cause its  counsel to issue a blanket  opinion in the form
      attached  hereto as  Exhibit A, to the  transfer  agent  stating  that the
      shares  are  subject to an  effective  registration  statement  and can be
      reissued free of restrictive legend upon notice of a sale by the Purchaser
      and confirmation by the Purchaser that it has complied with the prospectus
      delivery  requirements,  provided  that the  Company  has not  advised the
      transfer  agent orally or in writing that the opinion has been  withdrawn.
      Copies of the  blanket  opinion  required  by this  Section  2(c) shall be
      delivered to Laurus within the time frame set forth above.

      3. Registration Procedures. If and whenever the Company is required by the
provisions hereof to effect the registration of any Registrable Securities under
the Securities Act, the Company will, as expeditiously as possible:

            (a) prepare and file with the Commission the Registration  Statement
      with  respect  to such  Registrable  Securities,  respond as  promptly  as
      possible to any comments  received from the  Commission,  and use its best
      efforts to cause the Registration Statement to become and remain effective

<PAGE>

      for the Effectiveness Period with respect thereto, and promptly provide to
      the  Purchaser  copies of all  filings and  Commission  letters of comment
      relating thereto;

            (b)  prepare  and  file  with the  Commission  such  amendments  and
      supplements  to the  Registration  Statement  and the  Prospectus  used in
      connection  therewith as may be necessary to comply with the provisions of
      the  Securities  Act with respect to the  disposition  of all  Registrable
      Securities  covered  by  the  Registration  Statement  and  to  keep  such
      Registration Statement effective until the expiration of the Effectiveness
      Period;

            (c)  furnish  to  the  Purchaser   such  number  of  copies  of  the
      Registration Statement and the Prospectus included therein (including each
      preliminary  Prospectus)  as  the  Purchaser  reasonably  may  request  to
      facilitate the public sale or disposition  of the  Registrable  Securities
      covered by the Registration Statement;

            (d) use its commercially  reasonable  efforts to register or qualify
      the  Purchaser's   Registrable  Securities  covered  by  the  Registration
      Statement  under the  securities or "blue sky" laws of such  jurisdictions
      within  the  United  States  as  the  Purchaser  may  reasonably  request,
      provided,  however,  that the  Company  shall not for any such  purpose be
      required  to  qualify   generally  to  transact   business  as  a  foreign
      corporation in any jurisdiction where it is not so qualified or to consent
      to general service of process in any such jurisdiction;

            (e) list the  Registrable  Securities  covered  by the  Registration
      Statement  with any  securities  exchange on which the Common Stock of the
      Company is then listed;

            (f)  immediately  notify the Purchaser at any time when a Prospectus
      relating  thereto is required to be delivered under the Securities Act, of
      the  happening of any event of which the Company has knowledge as a result
      of which the Prospectus contained in such Registration  Statement, as then
      in effect,  includes an untrue  statement  of a material  fact or omits to
      state a material fact  required to be stated  therein or necessary to make
      the statements  therein not misleading in light of the circumstances  then
      existing; and

            (g) make available for inspection by the Purchaser and any attorney,
      accountant  or  other  agent  retained  by  the  Purchaser,  all  publicly
      available,   non-confidential   financial  and  other  records,  pertinent
      corporate documents and properties of the Company, and cause the Company's
      officers,  directors  and  employees  to supply  all  publicly  available,
      non-confidential   information   reasonably  requested  by  the  attorney,
      accountant or agent of the Purchaser.

      4.  Registration   Expenses.   All  expenses  relating  to  the  Company's
compliance  with Sections 2 and 3 hereof,  including,  without  limitation,  all
registration  and filing fees,  printing  expenses,  fees and  disbursements  of
counsel and independent  public  accountants for the Company,  fees and expenses
(including  reasonable  counsel fees) incurred in connection with complying with
state securities or "blue sky" laws, fees of the NASD,  transfer taxes,  fees of

<PAGE>

transfer  agents and  registrars,  fees of, and  disbursements  incurred by, one
counsel for the Holders (to the extent such counsel is required due to Company's
failure to meet any of its  obligations  hereunder),  are  called  "Registration
Expenses".  All  selling  commissions  applicable  to the  sale  of  Registrable
Securities,  including any fees and  disbursements of any special counsel to the
Holders  beyond those included in  Registration  Expenses,  are called  "Selling
Expenses." The Company shall only be responsible for all Registration Expenses.

      5. Indemnification.

            (a) In the event of a  registration  of any  Registrable  Securities
      under the  Securities  Act  pursuant to this  Agreement,  the Company will
      indemnify and hold harmless the Purchaser, and its officers, directors and
      each other person,  if any, who controls the Purchaser  within the meaning
      of the Securities Act, against any losses, claims, damages or liabilities,
      joint or  several,  to which the  Purchaser,  or such  persons  may become
      subject under the  Securities  Act or  otherwise,  insofar as such losses,
      claims,  damages or liabilities (or actions in respect  thereof) arise out
      of or are based upon any untrue  statement or alleged untrue  statement of
      any material fact contained in any Registration Statement under which such
      Registrable  Securities were registered  under the Securities Act pursuant
      to this Agreement,  any preliminary  Prospectus which has been printed and
      distributed (i.e. a "red herring  Prospectus") or final Prospectus related
      thereto,  or any amendment or supplement  thereof,  or arise out of or are
      based upon the  omission or alleged  omission to state  therein a material
      fact  required to be stated  therein or necessary  to make the  statements
      therein not  misleading,  and will reimburse the Purchaser,  and each such
      person for any  reasonable  legal or other  expenses  incurred  by them in
      connection with  investigating or defending any such loss, claim,  damage,
      liability  or action;  provided,  however,  that the  Company  will not be
      liable in any such case if and to the extent  that any such  loss,  claim,
      damage or liability  arises out of or is based upon an untrue statement or
      alleged  untrue  statement  or  omission  or alleged  omission  so made in
      conformity with information  furnished by or on behalf of the Purchaser or
      any such person in writing specifically for use in any such document.

            (b) In the event of a  registration  of the  Registrable  Securities
      under the  Securities Act pursuant to this  Agreement,  the Purchaser will
      indemnify and hold harmless the Company,  and its officers,  directors and
      each other person,  if any, who controls the Company within the meaning of
      the Securities Act,  against all losses,  claims,  damages or liabilities,
      joint or several,  to which the Company or such persons may become subject
      under the  Securities  Act or otherwise,  insofar as such losses,  claims,
      damages or liabilities (or actions in respect thereof) arise out of or are
      based  upon any  untrue  statement  or  alleged  untrue  statement  of any
      material  fact which was  furnished  in writing  by the  Purchaser  to the
      Company  expressly for use in (and such  information  is contained in) the
      Registration  Statement  under  which  such  Registrable  Securities  were
      registered  under the  Securities  Act  pursuant  to this  Agreement,  any

<PAGE>

      preliminary  Prospectus  or final  Prospectus  contained  therein,  or any
      amendment  or  supplement  thereof,  or arise out of or are based upon the
      omission or alleged  omission to state therein a material fact required to
      be  stated  therein  or  necessary  to make  the  statements  therein  not
      misleading,  and will  reimburse  the Company and each such person for any
      reasonable  legal or other  expenses  incurred by them in connection  with
      investigating  or defending  any such loss,  claim,  damage,  liability or
      action,  provided,  however, that the Purchaser will be liable in any such
      case if and only to the  extent  that  any such  loss,  claim,  damage  or
      liability  arises out of or is based upon an untrue  statement  or alleged
      untrue  statement  or omission or alleged  omission so made in  conformity
      with  information  furnished  in writing to the Company by or on behalf of
      the Purchaser  specifically for use in any such document.  Notwithstanding
      the provisions of this  paragraph,  the Purchaser shall not be required to
      indemnify  any person or entity in excess of the  amount of the  aggregate
      net  proceeds   received  by  the  Purchaser  in  respect  of  Registrable
      Securities in connection with any such  registration  under the Securities
      Act.

            (c)   Promptly   after   receipt  by  a  party   entitled  to  claim
      indemnification  hereunder  (an  "Indemnified  Party")  of  notice  of the
      commencement of any action,  such Indemnified  Party shall, if a claim for
      indemnification  in respect  thereof is to be made  against a party hereto
      obligated to indemnify such Indemnified Party (an  "Indemnifying  Party"),
      notify the Indemnifying  Party in writing thereof,  but the omission so to
      notify the  Indemnifying  Party  shall not  relieve it from any  liability
      which it may have to such Indemnified  Party other than under this Section
      5(c) and shall  only  relieve it from any  liability  which it may have to
      such  Indemnified  Party under this  Section 5(c) if and to the extent the
      Indemnifying Party is prejudiced by such omission. In case any such action
      shall be brought  against any  Indemnified  Party and it shall  notify the
      Indemnifying  Party of the commencement  thereof,  the Indemnifying  Party
      shall be entitled to  participate  in and, to the extent it shall wish, to
      assume and undertake the defense thereof with counsel satisfactory to such
      Indemnified  Party, and, after notice from the Indemnifying  Party to such
      Indemnified  Party of its election so to assume and  undertake the defense
      thereof,  the  Indemnifying  Party shall not be liable to such Indemnified
      Party under this Section 5(c) for any legal expenses subsequently incurred
      by such Indemnified  Party in connection with the defense thereof;  if the
      Indemnified  Party  retains its own counsel,  then the  Indemnified  Party
      shall pay all fees, costs and expenses of such counsel, provided, however,
      that, if the  defendants in any such action  include both the  indemnified
      party and the  Indemnifying  Party and the  Indemnified  Party  shall have
      reasonably concluded that there may be reasonable defenses available to it
      which  are  different  from  or  additional  to  those  available  to  the
      Indemnifying Party or if the interests of the Indemnified Party reasonably
      may be deemed to conflict  with the interests of the  Indemnifying  Party,
      the Indemnified  Party shall have the right to select one separate counsel
      and to assume such legal  defenses  and  otherwise to  participate  in the
      defense of such  action,  with the  reasonable  expenses  and fees of such
      separate  counsel and other expenses  related to such  participation to be
      reimbursed by the Indemnifying Party as incurred.

<PAGE>

            (d) In order to provide for just and equitable  contribution  in the
      event of joint  liability  under the  Securities  Act in any case in which
      either (i) the Purchaser,  or any officer,  director or controlling person
      of the  Purchaser,  makes a claim  for  indemnification  pursuant  to this
      Section  5 but it is  judicially  determined  (by  the  entry  of a  final
      judgment or decree by a court of competent jurisdiction and the expiration
      of time to appeal or the  denial of the last  right of  appeal)  that such
      indemnification may not be enforced in such case  notwithstanding the fact
      that this Section 5 provides  for  indemnification  in such case,  or (ii)
      contribution  under the  Securities Act may be required on the part of the
      Purchaser or such officer, director or controlling person of the Purchaser
      in circumstances for which  indemnification is provided under this Section
      5;  then,  and in each such  case,  the  Company  and the  Purchaser  will
      contribute to the aggregate  losses,  claims,  damages or  liabilities  to
      which  they  may be  subject  (after  contribution  from  others)  in such
      proportion  so that the  Purchaser  is  responsible  only for the  portion
      represented  by the  percentage  that  the  public  offering  price of its
      securities  offered  by the  Registration  Statement  bears to the  public
      offering price of all securities  offered by such Registration  Statement,
      provided,  however,  that, in any such case, (A) the Purchaser will not be
      required to contribute  any amount in excess of the public  offering price
      of all  such  securities  offered  by it  pursuant  to  such  Registration
      Statement;   and  (B)  no   person  or   entity   guilty   of   fraudulent
      misrepresentation (within the meaning of Section 10(f) of the Act) will be
      entitled to  contribution  from any person or entity who was not guilty of
      such fraudulent misrepresentation.

      6. Representations and Warranties.

            (a) The  Common  Stock of the  Company  is  registered  pursuant  to
      Section  12(b) or 12(g) of the  Exchange  Act and,  except with respect to
      certain  matters  which the  Company has  disclosed  to the  Purchaser  on
      Schedule 4.21 to the  Securities  Purchase  Agreement and Section 12(u) of
      the Security Agreement, the Company has timely filed all proxy statements,
      reports,  schedules,  forms, statements and other documents required to be
      filed by it under the  Exchange  Act.  The Company  filed:  (i) its Annual
      Report on Form 10-KSB for its fiscal year ended  December 31,  2003,  (ii)
      its  Quarterly  Reports on Form 10-QSB for its fiscal  quarter ended March
      31,  2004,  and (iii) the Form 8-K  filings  which it has made  during the
      fiscal  year  2004 to date  (collectively,  the "SEC  Reports").  Each SEC
      Report was, at the time of its filing, in substantial  compliance with the
      requirements of its respective  form and none of the SEC Reports,  nor the
      financial  statements (and the notes thereto) included in the SEC Reports,
      as of their respective  filing dates,  contained any untrue statement of a
      material  fact or omitted to state a material  fact  required to be stated

<PAGE>

      therein  or  necessary  to make the  statements  therein,  in light of the
      circumstances  under which they were made, not  misleading.  The financial
      statements of the Company included in the SEC Reports comply as to form in
      all material  respects with  applicable  accounting  requirements  and the
      published  rules and  regulations  of the  Commission or other  applicable
      rules and regulations with respect thereto. Such financial statements have
      been prepared in accordance with generally accepted accounting  principles
      ("GAAP") applied on a consistent basis during the periods involved (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 not include  footnotes  or may be  condensed)  and fairly
      present in all material respects the financial  condition,  the results of
      operations  and the cash flows of the Company and its  subsidiaries,  on a
      consolidated basis, as of, and for, the periods presented in each such SEC
      Report.

            (b) The  Common  Stock is listed  for  trading on the NASD OTCBB and
      satisfies all  requirements  for the  continuation  of such  listing.  The
      Company has not received any notice that its Common Stock will be delisted
      from the NASD  OTCBB  (except  for prior  notices  which  have been  fully
      remedied) or that the Common Stock does not meet all  requirements for the
      continuation of such listing.

            (c) Neither the Company,  nor any of its affiliates,  nor any person
      acting on its or their behalf,  has directly or indirectly made any offers
      or sales of any security or solicited any offers to buy any security under
      circumstances that would cause the offering of the Securities  pursuant to
      the  Securities  Purchase  Agreement  and  the  Security  Agremeent  to be
      integrated  with  prior  offerings  by the  Company  for  purposes  of the
      Securities  Act which would  prevent the Company  from  selling the Common
      Stock  pursuant to Rule 506 under the  Securities  Act, or any  applicable
      exchange-related  stockholder approval provisions, nor will the Company or
      any of its affiliates or subsidiaries  take any action or steps that would
      cause  the  offering  of  such  Securities  to be  integrated  with  other
      offerings.

            (d) The Warrants, the Notes and the shares of Common Stock which the
      Purchaser  may  acquire  pursuant  to the  Warrants  and the Notes are all
      restricted  securities  under  the  Securities  Act as of the date of this
      Agreement.  The Company  will not issue any stop  transfer  order or other
      order impeding the sale and delivery of any of the Registrable  Securities
      at such time as such Registrable Securities are registered for public sale
      or an exemption  from  registration  is  available,  except as required by
      federal or state securities laws.

            (e) The Company understands the nature of the Registrable Securities
      issuable  upon the  conversion  of the the Notes and the  exercise  of the
      Warrant and recognizes  that the issuance of such  Registrable  Securities
      may  have  a  potential   dilutive   effect.   The  Company   specifically
      acknowledges  that its obligation to issue the  Registrable  Securities is
      binding upon the Company and  enforceable  regardless of the dilution such
      issuance may have on the ownership  interests of other shareholders of the
      Company.

            (f) Except for agreements  made in the ordinary  course of business,
      there is no agreement  that has not been filed with the  Commission  as an
      exhibit to a  registration  statement or to a form required to be filed by
      the Company under the Exchange  Act, the breach of which could  reasonably

<PAGE>

      be expected to have a material  and adverse  effect on the Company and its
      subsidiaries, or would prohibit or otherwise interfere with the ability of
      the Company to enter into and perform  any of its  obligations  under this
      Agreement in any material respect.

            (g) The Company  will at all times have  authorized  and  reserved a
      sufficient number of shares of Common Stock for the full conversion of the
      Notes and the exercise of the Warrants.

      7. Miscellaneous.

            (a)  Remedies.  In the  event of a  breach  by the  Company  or by a
      Holder, of any of their respective obligations under this Agreement,  each
      Holder or the Company,  as the case may be, in addition to being  entitled
      to exercise all rights granted by law and under this Agreement,  including
      recovery of damages,  will be  entitled  to  specific  performance  of its
      rights under this Agreement.

            (b) No  Piggyback  on  Registrations.  Except  as and to the  extent
      specified  in  Schedule  7(b)  hereto,  neither the Company nor any of its
      security holders (other than the Holders in such capacity pursuant hereto)
      may include securities of the Company in any Registration  Statement other
      than the Registrable Securities,  and the Company shall not after the date
      hereof enter into any agreement  providing any such right for inclusion of
      shares  in the  Registration  Statement  to any of its  security  holders.
      Except as and to the extent specified in Schedule 7(b) hereto, the Company
      has not previously  entered into any agreement  granting any  registration
      rights with respect to any of its  securities  to any Person that have not
      been fully satisfied.

            (c) Compliance. Each Holder covenants and agrees that it will comply
      with  the  prospectus  delivery  requirements  of  the  Securities  Act as
      applicable  to it in  connection  with  sales  of  Registrable  Securities
      pursuant to the Registration Statement.

            (d) Discontinued Disposition.  Each Holder agrees by its acquisition
      of such  Registrable  Securities  that,  upon receipt of a notice from the
      Company of the occurrence of a  Discontinuation  Event (as defined below),
      such Holder will forthwith  discontinue  disposition  of such  Registrable
      Securities under the applicable Registration Statement until such Holder's
      receipt  of the  copies  of the  supplemented  Prospectus  and/or  amended
      Registration Statement or until it is advised in writing (the "Advice") by
      the Company that the use of the applicable Prospectus may be resumed, and,
      in either case,  has received  copies of any  additional  or  supplemental
      filings that are incorporated or deemed to be incorporated by reference in
      such  Prospectus  or  Registration  Statement.  The  Company  may  provide
      appropriate  stop orders to enforce the provisions of this paragraph.  For
      purposes of this Section  7(d), a  "Discontinuation  Event" shall mean (i)
      when the Commission  notifies the Company whether there will be a "review"
      of such  Registration  Statement and whenever the  Commission  comments in

<PAGE>

      writing on such Registration Statement (the Company shall provide true and
      complete copies thereof and all written  responses  thereto to each of the
      Holders); (ii) any request by the Commission or any other Federal or state
      governmental  authority for amendments or supplements to such Registration
      Statement or Prospectus or for additional information;  (iii) the issuance
      by the Commission of any stop order  suspending the  effectiveness of such
      Registration  Statement covering any or all of the Registrable  Securities
      or the initiation of any Proceedings for that purpose; (iv) the receipt by
      the Company of any  notification  with  respect to the  suspension  of the
      qualification  or exemption from  qualification  of any of the Registrable
      Securities for sale in any jurisdiction,  or the initiation or threatening
      of any Proceeding for such purpose; and/or (v) the occurrence of any event
      or passage of time that makes the  financial  statements  included in such
      Registration  Statement  ineligible for inclusion therein or any statement
      made  in  such  Registration  Statement  or  Prospectus  or  any  document
      incorporated or deemed to be incorporated  therein by reference  untrue in
      any material  respect or that requires any revisions to such  Registration
      Statement,  Prospectus  or other  documents  so that,  in the case of such
      Registration  Statement  or  Prospectus,  as the case may be,  it will not
      contain  any  untrue  statement  of a  material  fact or omit to state any
      material  fact  required  to be stated  therein or  necessary  to make the
      statements  therein,  in light of the circumstances  under which they were
      made, not misleading.

            (e)   Piggy-Back   Registrations.   If  at  any  time   during   the
      Effectiveness  Period  there is not an  effective  Registration  Statement
      covering all of the Registrable Securities and the Company shall determine
      to prepare and file with the Commission a registration  statement relating
      to an  offering  for its own  account or the  account of others  under the
      Securities Act of any of its equity securities,  other than on Form S-4 or
      Form S-8 (each as  promulgated  under the  Securities  Act) or their  then
      equivalents   relating  to  equity  securities  to  be  issued  solely  in
      connection  with any  acquisition  of any  entity  or  business  or equity
      securities  issuable in  connection  with stock  option or other  employee
      benefit  plans,  then the Company shall send to each Holder written notice
      of such  determination  and, if within  fifteen days after receipt of such
      notice,  any such Holder  shall so request in writing,  the Company  shall
      include in such registration statement all or any part of such Registrable
      Securities such holder requests to be registered to the extent the Company
      may do so without violating  registration  rights of others which exist as
      of the date of this Agreement,  subject to customary  underwriter cutbacks
      applicable to all holders of registration  rights and subject to obtaining
      any required the consent of any selling  stockholder(s)  to such inclusion
      under such registration statement.

            (f)  Amendments  and  Waivers.  The  provisions  of this  Agreement,
      including the provisions of this sentence, may not be amended, modified or
      supplemented,  and waivers or consents to departures  from the  provisions
      hereof may not be given, unless the same shall be in writing and signed by
      the  Company  and  the  Holders  of  the  then   outstanding   Registrable
      Securities.  Notwithstanding the foregoing,  a waiver or consent to depart
      from  the  provisions  hereof  with  respect  to  a  matter  that  relates

<PAGE>

      exclusively to the rights of certain Holders and that does not directly or
      indirectly  affect the rights of other  Holders may be given by Holders of
      at least a majority of the Registrable  Securities to which such waiver or
      consent relates;  provided,  however, that the provisions of this sentence
      may not be amended,  modified,  or supplemented  except in accordance with
      the provisions of the immediately preceding sentence.

            (g)  Notices.  Any notice or request  hereunder  may be given to the
      Company or the Purchaser at the respective addresses set forth below or as
      may  hereafter be specified in a notice  designated as a change of address
      under this Section 7(g). Any notice or request hereunder shall be given by
      registered or certified  mail,  return receipt  requested,  hand delivery,
      overnight  mail,  Federal  Express or other  national  overnight  next day
      carrier (collectively, "Courier") or telecopy (confirmed by mail). Notices
      and requests  shall be, in the case of those by hand  delivery,  deemed to
      have been given when  delivered to any party to whom it is  addressed,  in
      the case of those by mail or  overnight  mail,  deemed to have been  given
      three (3) business days after the date when  deposited in the mail or with
      the overnight  mail carrier,  in the case of a Courier,  the next business
      day following timely delivery of the package with the Courier, and, in the
      case of a telecopy,  when  confirmed.  The  address  for such  notices and
      communications shall be as follows:

<TABLE>
<CAPTION>
      <S>                                     <C>
      If to the Company:                      Conversion Services International, Inc.
                                              100 Eagle Rock Avenue
                                              East Hanover, New Jersey 07936
                                              Attention:        Chief Financial Officer
                                              Facsimile:        973-581-7113

                                              with a copy to:
                                              Ellenoff Grossman & Schole LLP
                                              370 Lexington Avenue
                                              New York, New York 10017
                                              Attention:        David Selengut, Esq.
                                              Facsimile:        212-370-7889

      If to a Purchaser:                      To the address set forth under such Purchaser
                                              name on the signature pages hereto.

      If to any other Person who is then
      the registered Holder:                  To the address of such Holder as it appears in the
                                              stock transfer books of the Company
</TABLE>

         or such other  address as may be  designated  in writing  hereafter  in
         accordance with this Section 7(g) by such Person.

            (h)  Successors  and  Assigns.  This  Agreement  shall  inure to the
      benefit of and be binding upon the  successors  and  permitted  assigns of
      each of the parties and shall  inure to the  benefit of each  Holder.  The

<PAGE>

      Company  may not assign its rights or  obligations  hereunder  without the
      prior  written  consent of each  Holder.  Each  Holder  may  assign  their
      respective  rights hereunder in the manner and to the Persons as permitted
      under the Securities  Purchase  Agreement,  the Security Agreement and the
      Notes, as applicable.

            (i) Execution and  Counterparts.  This  Agreement may be executed in
      any number of counterparts, each of which when so executed shall be deemed
      to be an original and, all of which taken  together  shall  constitute one
      and the same  Agreement.  In the event that any  signature is delivered by
      facsimile  transmission,  such  signature  shall  create  a valid  binding
      obligation of the party  executing  (or on whose behalf such  signature is
      executed)  the same with the same  force and  effect as if such  facsimile
      signature were the original thereof.

            (j)  Governing  Law.  All  questions  concerning  the  construction,
      validity,  enforcement  and  interpretation  of this  Agreement  shall  be
      governed by and  construed  and enforced in  accordance  with the internal
      laws of the  State  of New  York,  without  regard  to the  principles  of
      conflicts  of  law  thereof.   Each  party  agrees  that  all  Proceedings
      concerning   the   interpretations,   enforcement   and   defense  of  the
      transactions contemplated by this Agreement shall be commenced exclusively
      in the state and federal courts  sitting in the City of New York,  Borough
      of  Manhattan.  Each  party  hereto  hereby  irrevocably  submits  to  the
      exclusive jurisdiction of the state and federal courts sitting in the City
      of New York,  Borough of  Manhattan  for the  adjudication  of any dispute
      hereunder or in connection  herewith or with any transaction  contemplated
      hereby or discussed herein, and hereby irrevocably  waives, and agrees not
      to assert in any Proceeding,  any claim that it is not personally  subject
      to the  jurisdiction of any such court,  that such Proceeding is improper.
      Each party hereto hereby  irrevocably  waives personal  service of process
      and consents to process  being served in any such  Proceeding by mailing a
      copy thereof via registered or certified mail or overnight  delivery (with
      evidence of  delivery)  to such party at the address in effect for notices
      to it under this  Agreement and agrees that such service shall  constitute
      good and  sufficient  service  of  process  and  notice  thereof.  Nothing
      contained  herein  shall be  deemed to limit in any way any right to serve
      process  in  any  manner  permitted  by  law.  Each  party  hereto  hereby
      irrevocably waives, to the fullest extent permitted by applicable law, any
      and all right to trial by jury in any legal  proceeding  arising out of or
      relating to this Agreement or the  transactions  contemplated  hereby.  If
      either party shall commence a Proceeding to enforce any provisions of this
      Agreement,  the Securities Purchase Agreement,  any Related Agreement, the
      Security Agreement or any Ancillary  Agreement,  then the prevailing party
      in  such  Proceeding  shall  be  reimbursed  by the  other  party  for its
      reasonable  attorneys fees and other costs and expenses  incurred with the
      investigation, preparation and prosecution of such Proceeding.

            (k) Cumulative Remedies. The remedies provided herein are cumulative
      and not exclusive of any remedies provided by law.

<PAGE>

            (l) Severability. If any term, provision, covenant or restriction of
      this Agreement is held by a court of competent jurisdiction to be invalid,
      illegal,  void or unenforceable,  the remainder of the terms,  provisions,
      covenants and restrictions set forth herein shall remain in full force and
      effect and shall in no way be affected,  impaired or invalidated,  and the
      parties  hereto shall use their  reasonable  efforts to find and employ an
      alternative  means to achieve the same or substantially the same result as
      that contemplated by such term, provision,  covenant or restriction. It is
      hereby  stipulated  and  declared to be the  intention of the parties that
      they would have executed the remaining  terms,  provisions,  covenants and
      restrictions  without including any of such that may be hereafter declared
      invalid, illegal, void or unenforceable.

            (m) Headings.  The headings in this Agreement are for convenience of
      reference only and shall not limit or otherwise affect the meaning hereof.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                             SIGNATURE PAGE FOLLOWS]

<PAGE>

      IN WITNESS  WHEREOF,  the parties have executed this  Registration  Rights
Agreement as of the date first written above.

CONVERSION SERVICES INTERNATIONAL, INC.  LAURUS MASTER FUND, LTD.

By:      /s/ Scott Newman                By:      /s/ David Grin
         ----------------------------             ---------------------------
Name:    Scott Newman                    Name:    David Grin
         ----------------------------             ---------------------------
Title:   President and CEO               Title:
         ----------------------------             ---------------------------

                                         Address for Notices:

                                         825 Third Avenue - 14th Floor
                                         New York, NY  10022
                                         Attention:  David Grin
                                         Facsimile:  212-541-4434

<PAGE>

                                    EXHIBIT A

                                [Month __, 2004]

[Registrar and Transfer Co.
10 Commerce Drive
Cranford, New Jersey 32377
Attn:  Dan Flynn

Re:      Conversion Services International, Inc. Registration Statement on
         Form SB-2 Ladies and Gentlemen:

      As  counsel  to  Conversion  Services  International,   Inc.,  a  Delaware
corporation (the "Company"), we have been requested to render our opinion to you
in connection  with the resale by the individuals or entitles listed on Schedule
A  attached   hereto  (the   "Selling   Stockholders"),   of  an   aggregate  of
[amount]shares (the "Shares") of the Company's Common Stock.

      A Registration Statement on Form SB-2 under the Securities Act of 1933, as
amended  (the  "Act"),  with  respect to the  resale of the Shares was  declared
effective by the Securities and Exchange  Commission on [date].  Enclosed is the
Prospectus  dated [date].  We  understand  that the Shares are to be offered and
sold in the manner described in the Prospectus.

      Based upon the foregoing,  upon request by the Selling Stockholders at any
time while the registration statement remains effective,  it is our opinion that
the Shares have been  registered  for resale under the Act and new  certificates
evidencing  the Shares  upon their  transfer or  re-registration  by the Selling
Stockholders may be issued without restrictive legend. We will advise you if the
registration statement is not available or effective at any point in the future.

                                Very truly yours,

                                [Company counsel]

<PAGE>

                                   SCHEDULE A

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

                   SECURED CONVERTIBLE MINIMUM BORROWING NOTE

            FOR  VALUE  RECEIVED,  CONVERSION  SERVICES  INTERNATIONAL,  INC.  a
Delaware  corporation  (the  "BORROWER")  promises to pay to LAURUS MASTER FUND,
LTD., c/o Ogier Fiduciary Services (Cayman) Limited,  P.O. Box 1234,  Queensgate
House, South Church Street, George Town, Grand Cayman,  Cayman Islands,  British
West Indies,  Fax:  345-949-9877  (the "HOLDER") or its registered  assigns,  on
order,  the sum of Two  Million  Dollars  ($2,000,000),  of, if  different,  the
aggregate  principal  amount  of all  "Loans"  (as such term is  defined  in the
Security  Agreement  referred  to below),  together  with any accrued and unpaid
interest hereon, on August 15, 2007 (the "MATURITY Date").

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

The  following  terms shall apply to this Minimum  Borrowing  Note (the "Note"):
ARTICLE I INTEREST

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

      1.2 Contract Rate  Adjustments  and  Payments.  The Contract Rate shall be
calculated on the last business day of each month  hereafter  until the Maturity
Date (each a  "Determination  Date") and shall be subject to  adjustment  as set
forth  herein.  If (i) the  Borrower  shall  have  registered  the shares of the
Borrower's  common  stock  underlying  each of the  conversion  of each  Minimum
Borrowing Note then  outstanding  and that certain warrant issued to Holder on a

<PAGE>

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

                                   ARTICLE II
                          ADVANCES, PAYMENTS UNDER NOTE

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

            2.2. Fixed Conversion Price. For purposes hereof, subject to Section
3.5 hereof, the initial "FIXED CONVERSION PRICE" means $ 0.14.

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

            2.4. Optional  Redemption in Cash. The Borrower will have the option
of prepaying this Note ("OPTIONAL  REDEMPTION") by paying to the Holder a sum of
money equal to one hundred  fifteen  percent  (115%) of the principal  amount of
this Note  together  with  accrued but unpaid  interest  thereon and any and all
other sums due,  accrued or payable to the Holder  arising under this Note,  the
Security  Agreement,  or any  Ancillary  Agreement  (as defined in the  Security

                                       2
<PAGE>

Agreement)  (the  "REDEMPTION  AMOUNT") on the day written  notice of redemption
(the "NOTICE OF  REDEMPTION")  is given to the Holder.  The Notice of Redemption
shall specify the date for such Optional  Redemption  (the  "REDEMPTION  PAYMENT
DATE")  which  date  shall be seven  (7) days  after  the date of the  Notice of
Redemption  (the  "REDEMPTION  PERIOD").  A Notice  of  Redemption  shall not be
effective  with  respect  to any  portion  of this Note for which the Holder has
previously  delivered a Notice of Conversion (defined below) pursuant to Section
3.1, or for conversions elected to be made by the Holder pursuant to Section 3.1
during the Redemption  Period.  The Redemption  Amount shall be determined as if
such Holder's conversion  elections had been completed  immediately prior to the
date of the Notice of Redemption. On the Redemption Payment Date, the Redemption
Amount (plus any  additional  interest and fees accruing on the Notes during the
Redemption  Period) must be irrevocably  paid in full in  immediately  available
funds to the  Holder.  In the event  the  Borrower  fails to pay the  Redemption
Amount on the Redemption  Payment Date, then such Redemption Notice will be null
and void.

                                  ARTICLE III
                           HOLDER'S CONVERSION RIGHTS

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

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

                                       3
<PAGE>

ISSUANCE"),  unless the  issuance of shares  hereunder  in excess of the Maximum
Common Stock Issuance shall first be approved by the Borrower's shareholders. If
at any point in time ,  following  the  listing  of the  Borrower  on the NASDAQ
SmallCap Market, the Nasdaq National Market or the American Stock Exchange,  the
number of shares of Common Stock issued  pursuant to the terms of this Note, the
Security  Agreement,  any Ancillary Agreement or any other agreement between the
Company and the Holder,  together with the number of shares of Common Stock that
would  then  be  issuable  by the  Borrower  to the  Holder  in the  event  of a
conversion  or  exercise  pursuant  to the  terms  of this  Note,  the  Security
Agreement,  any Ancillary  Agreement or any other agreement  between the Company
and the Holder,  would  exceed the Maximum  Common  Stock  Issuance but for this
Section 3.2, the Borrower shall promptly call a shareholders  meeting to solicit
shareholder approval for the issuance of the shares of Common Stock hereunder in
excess of the Maximum Common Stock Issuance.

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

            3.4. Late  Payments.  The Borrower  understands  that a delay in the
delivery  of the shares of Common  Stock in the form  required  pursuant to this
Article beyond the Delivery Date could result in economic loss to the Holder. As
compensation  to the  Holder  for such  loss,  the  Borrower  agrees to pay late
payments to the Holder for late  issuance  of such  shares in the form  required

                                       4
<PAGE>

pursuant to this Article III upon conversion of the Note, in the amount equal to
$250 per  business  day after the  Delivery  Date.  The  Borrower  shall pay any
payments incurred under this Section in immediately available funds upon demand.

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

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

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

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

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

           ----------------------------------------
                            A + B
           ----------------------------------------

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

           A = Actual shares outstanding prior to such offering
           B =  Actual shares sold in the offering
           C = Fixed Conversion Price
           D = Offering price

                                       5
<PAGE>

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

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

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

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

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

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

                                   ARTICLE IV
                               EVENTS OF DEFAULT

            4.1. The  occurrence of any of the events set forth in Section 19 of
the Security Agreement shall constitute an Event of Default ("EVENT OF DEFAULT")
hereunder.

                                       6
<PAGE>

                           DEFAULT RELATED PROVISIONS

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

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

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

                                   ARTICLE V
                                DEFAULT PAYMENTS

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

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

                                   ARTICLE VI
                                  MISCELLANEOUS

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

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

                                       7
<PAGE>

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

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

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

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

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

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

            6.9.  Construction.  Each party  acknowledges that its legal counsel
participated in the preparation of this Note and, therefore, stipulates that the
rule of construction  that  ambiguities are to be resolved  against the drafting

                                       8
<PAGE>

party shall not be applied in the interpretation of this Note to favor any party
against the other.

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

                                       9
<PAGE>

      IN WITNESS  WHEREOF,  the  Borrower  has caused this  Secured  Convertible
Minimum Borrowing Note to be signed in its name effective as of this 16th day of
August, 2004.

                                            CONVERSION SERVICES
                                            INTERNATIONAL, INC.

                                            By:/s/ Scott Newman
                                            ------------------------

                                            Name: Scott Newman
                                            Title: President and CEO

WITNESS:

/s/ Lawrence F. Metz
--------------------

                                       10
<PAGE>

                              NOTICE OF CONVERSION

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

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

Date of Conversion:
                            ---------------------------------------------------
Conversion Price:
                            ---------------------------------------------------
Shares To Be Delivered:
                            ---------------------------------------------------
Signature:
                            ---------------------------------------------------
Print Name:
                            ---------------------------------------------------
Address:
                            ---------------------------------------------------
Holder  DWAC instructions
                            ---------------------------------------------------

                                       11

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00071-of-00352.parquet"}]]