Document:

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

                             SECURED REVOLVING 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 Four Million Dollars  ($4,000,000)  without duplication of any
amounts  owing by  Borrower  to Holder  under the  Minimum  Borrowing  Notes (as
defined in the Security  Agreement  referred to below),  or, 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 the Borrower,
certain  Subsidiaries  party  thereto and the Holder dated as of August 16, 2004
(as  amended,  modified  and  supplemented  from  time to  time,  the  "SECURITY
AGREEMENT").  The  Borrower may repay and  reborrow  amounts  under this Note in
accordance with the borrowing mechanics set forth in the Security Agreement.

The following terms shall apply to this Note:

                                   ARTICLE I
                           CONTRACT RATE & PREPAYMENTS

            1.1.  Interest  Rate.  Subject to Sections  3.2, 4.1 and 5.7 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%).

<PAGE>

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

            1.3 Allocation of Principal to Minimum  Borrowing Note. In the event
that the amount due and payable hereunder should equal or exceed $2,000,000,  to
the extent that the outstanding  balance on Minimum Borrowing Note shall be less
than  $2,000,000  (the  difference of $2,000,000  less the actual balance of the
Minimum Borrowing Note, the "Available Minimum Borrowing"),  such portion of the
balance hereof as shall equal the Available Minimum Borrowing shall be deemed to
be  simultaneously  extinguished  on the Revolving Note and  transferred to, and
evidenced by, a Minimum Borrowing Note.

                                   ARTICLE II
                           HOLDER'S CONVERSION RIGHTS

            2.1. Optional  Conversion.  Subject to the terms of this Article II,
the Holder shall have the right,  but not the obligation,  at any time until the
Maturity  Date,  or during an Event of Default (as defined in Article IV),  and,
subject to the  limitations  set forth in Section 2.2 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  restricted  shares of the

                                       2
<PAGE>

Common Stock at the Fixed Conversion Price (defined below). For purposes hereof,
subject to Section 2.5 hereof, the initial "FIXED CONVERSION PRICE" means $0.14.
The shares of Common Stock to be issued upon such conversion are herein referred
to as the "CONVERSION SHARES."

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

            2.3. 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

                                       3
<PAGE>

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 day 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.

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

            2.5.  Adjustment  Provisions.  The Fixed Conversion Price and number
and kind of shares or other  securities to be issued upon conversion  determined
pursuant  to Section 2.1 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.  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.

                                       4
<PAGE>

                  C. Share Issuances.  Subject to the provisions of this Section
2.5, 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

                  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

                                       5
<PAGE>

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)).

            2.6.  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.

                                  ARTICLE III
                                EVENTS OF DEFAULT

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

                           DEFAULT RELATED PROVISIONS

            3.2 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.

            3.3 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.

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

                                   ARTICLE IV
                                DEFAULT PAYMENTS

            4.1.  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.

                                       6
<PAGE>

            4.2.  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 V
                                  MISCELLANEOUS

            5.1.  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.

            5.2.  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.

            5.3. 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.

            5.4. 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.

            5.5. 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.

            5.6.  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

                                       7
<PAGE>

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.

            5.7. 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.

            5.8. 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.

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

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

                                       8
<PAGE>

      IN WITNESS  WHEREOF,  the  Borrower  has caused this  Secured  Convertible
Revolving 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 & CEO

WITNESS:

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

                                       9
<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  Revolving  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
                             ---------------------------------------------------

                                       10THIS 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  STATE  SECURITIES  LAWS OR AN OPINION OF COUNSEL  REASONABLY
SATISFACTORY TO CONVERSION SERVICES  INTERNATIONAL,  INC. THAT SUCH REGISTRATION
IS NOT REQUIRED.

                          SECURED CONVERTIBLE TERM NOTE

      FOR VALUE RECEIVED,  CONVERSION SERVICES  INTERNATIONAL,  INC., a Delaware
corporation  (the  "BORROWER"),  hereby  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 or
successors in interest,  on order, the sum of Five Million Dollars ($5,000,000),
together with any accrued and unpaid  interest  hereon,  on August 15, 2007 (the
"MATURITY DATE") if not sooner paid. The original  principal amount of this Note
subject to  amortizing  payments  pursuant to Section 1.2 hereof is  hereinafter
referred to as the  "AMORTIZING  PRINCIPAL  AMOUNT" and the  remaining  original
principal amount of this Note is hereinafter  referred to as the "NON-AMORTIZING
PRINCIPAL AMOUNT."

      Capitalized  terms used herein without  definition shall have the meanings
ascribed to such terms in that certain Securities Purchase Agreement dated as of
the date hereof between the Borrower and the Holder (the "PURCHASE AGREEMENT").

      The following terms shall apply to this Note:

                                    ARTICLE I
                             INTEREST & AMORTIZATION

      1.1 (a) Interest Rate.  Subject to Sections  1.1(b),  4.12 and 5.6 hereof,
interest  payable on this Note shall  accrue at a rate per annum (the  "Interest
Rate") equal to the "prime rate"  published in The Wall Street Journal from time
to time,  plus one percent (1%).  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.  Subject to Section  1.1(b)
hereof,  the Interest  Rate shall not be less than five percent  (5%).  Interest
shall be  calculated on the basis of a 360 day year.  Interest  shall accrue but
not be payable  during the period  commencing  on the date  hereof and ending on
September 30, 2004. Interest on the Amortizing Principal Amount shall be payable
monthly, in arrears,  commencing on October 1, 2004 and on the first day of each
consecutive  calendar month  thereafter  (each,  a "REPAYMENT  DATE") and on the

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Maturity Date,  whether by  acceleration or otherwise.  Accrued  interest on the
Non-Amortizing  Principal  Amount shall be payable only on the Maturity Date or,
in the  event of the  redemption  or  conversion  of all or any  portion  of the
Non-Amortizing  Principal Amount,  accrued interest on the amount so redeemed or
converted shall be paid on the date of redemption or conversion, as the case may
be.

      1.1 (b) Interest  Rate  Adjustment.  The Interest Rate shall be subject to
adjustment on the last business day of each month  hereafter  until the Maturity
Date  (each  a  "Determination  Date").  If on any  Determination  Date  (i) the
Borrower shall have registered under the Securities Act of 1933, as amended (the
"SECURITIES  ACT"), the shares of Common Stock underlying each of the conversion
of this Note and the exercise of the Warrant issued on a registration  statement
declared  effective by the Securities and Exchange  Commission (the "SEC"),  and
(ii) the market  price (the  "Market  Price") of the Common Stock as reported by
Bloomberg,  L.P. on the  Principal  Market (as  defined  below) for the five (5)
consecutive  trading days immediately  preceding such Determination Date exceeds
the then  applicable  Fixed  Conversion  Price by at least  twenty five  percent
(25%), the Interest 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 on any  Determination  Date (i) the
Borrower shall not have registered under the Securities Act the shares of Common
Stock  underlying the conversion of this Note and the exercise of the Warrant on
a  registration  statement  declared  effective by the SEC or the Borrower shall
have registered  such shares under the Securities Act but on such  Determination
Date the related  registration  statement is not effective,  and (ii) the Market
Price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market
for  the  five  (5)  consecutive   trading  days   immediately   preceding  such
Determination  Date exceeds the then  applicable  Fixed  Conversion  Price by at
least twenty five percent (25%),  the Interest 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 Interest Rate be less than zero percent (0%).

      1.2  Minimum  Monthly  Principal  Payments.  Amortizing  payments  of  the
original aggregate  principal amount outstanding under this Note (the "PRINCIPAL
AMOUNT")  that  is  released  to the  Borrower  for the  purpose  of  making  an
acquisition approved by the Holder (each, a "PERMITTED ACQUISITION"; the date on
which any such Permitted  Acquisition is consummated,  a "PERMITTED  ACQUISITION
CLOSING DATE") is hereinafter  referred to as the "AMORTIZING  PRINCIPAL AMOUNT"
and the  remaining  outstanding  principal  amount of this  Note is  hereinafter
referred to as the "NON-AMORTIZING PRINCIPAL AMOUNT". Amortizing payments of the
Amortizing  Principal  Amount  shall  begin with  respect to the  portion of the
Amortizing  Principal Amount released pursuant to each Permitted  Acquisition on
the first Repayment Date immediately following any Permitted Acquisition Closing
Date,  and,  in each case,  such  amortizing  payments  shall  continue  on each
succeeding  Repayment Date thereafter until the Amortizing  Principal Amount has
been repaid in full, whether by the payment of cash or by the conversion of such
principal into Common Stock pursuant to the terms hereof. Subject to Section 2.1
and Article 3 below, on each Repayment Date, the Borrower shall make payments to
the Holder in an amount equal to (x) the aggregate  Amortizing  Principal Amount
outstanding at such time for which amortization payments are required to be made

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in accordance with the immediately  preceding sentence divided by (y) the sum of
(I) the number of Repayment  Dates  (including  such Repayment  Date)  remaining
until the  Maturity  Date plus (II) one (such  amount,  the  "MONTHLY  PRINCIPAL
AMOUNT"),  together  with (a) any accrued and unpaid  interest  then due on such
Amortizing  Principal  Amount,  (b)  any  accrued  and  unpaid  interest  on the
Non-Amortizing Principal Amount and (c) any and all other amounts which are then
owing  under this Note that have not been paid (the  Monthly  Principal  Amount,
together with any amounts referred to in the preceding  clauses (a) through (c),
inclusive,  collectively,  the  "MONTHLY  AMOUNT").  Any  Principal  Amount that
remains  outstanding  on the  Maturity  Date  shall  be due and  payable  on the
Maturity  Date,  together with any and all accrued and unpaid  interest and fees
related thereto.

                                   ARTICLE II
                              CONVERSION REPAYMENT

      2.1 (a) Payment of Monthly Amount in Cash or Common Stock.  If the Monthly
Amount  (or a portion  thereof  of such  Monthly  Amount if such  portion of the
Monthly  Amount  would have been  converted  into shares of Common Stock but for
Section 3.2) is required to be paid in cash pursuant to Section 2.1(b), then the
Borrower  shall pay the Holder an amount equal to 100% of the Monthly Amount due
and owing to the Holder on the Repayment Date in cash. If the Monthly Amount (or
a  portion  of such  Monthly  Amount  if not all of the  Monthly  Amount  may be
converted into shares of Common Stock pursuant to Section 3.2) is required to be
paid in shares of Common Stock  pursuant to Section  2.1(b),  the number of such
shares to be issued by the  Borrower  to the Holder on such  Repayment  Date (in
respect of such portion of the Monthly Amount converted into in shares of Common
Stock pursuant to Section  2.1(b)),  shall be the number  determined by dividing
(x) the portion of the Monthly Amount  converted into shares of Common Stock, by
(y) the then applicable Fixed Conversion Price. For purposes hereof, the initial
"FIXED CONVERSION PRICE" means $0.14.

            (b)  Monthly  Amount  Conversion  Guidelines.  Subject  to  Sections
2.1(a), 2.2 and 3.2 hereof, the Holder shall convert into shares of Common Stock
all or a portion of the Monthly  Amount due on each  Repayment  according to the
following guidelines (collectively,  the "CONVERSION CRITERIA"): (i) the average
closing  price of the  Common  Stock  as  reported  by  Bloomberg,  L.P.  on the
Principal Market for the five (5) consecutive trading days immediately preceding
such Notice Date shall be greater than or equal to 110% of the Fixed  Conversion
Price and (ii) the amount of such conversion does not 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  Repayment
Notice.  If the  Conversion  Criteria are not met, the Holder shall convert only
such part of the Monthly Amount that meets the Conversion Criteria.  Any part of
the Monthly  Amount due on a Repayment Date that the Holder has not been able to
convert  into  shares of  Common  Stock due to  failure  to meet the  Conversion
Criteria,  shall be paid by the Borrower in cash on such Repayment Date,  within
three (3) business days of the applicable Repayment Date.

            (c) Application of Conversion Amounts.  Any amounts converted by the
Holder pursuant to Section 2.1(b) shall be deemed to constitute  payments of, or
applied against, (i) first,  outstanding fees, (ii) second,  accrued interest on
the  Amortizing   Principal  Amount,   (iii)  third,  accrued  interest  on  the

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<PAGE>

Non-Amortizing  Principal  Amount  and (iv)  fourth,  the  Amortizing  Principal
Amount.

      2.2 No Effective  Registration.  Notwithstanding  anything to the contrary
herein,  no amount  payable  hereunder may be converted into Common Stock unless
(a) either (i) an effective  current  Registration  Statement (as defined in the
Registration  Rights Agreement) covering the shares of Common Stock to be issued
in  satisfaction  of  such  obligations   exists,  or  (ii)  an  exemption  from
registration  of the  Common  Stock  is  available  pursuant  to Rule 144 of the
Securities Act, and (b) no Event of Default  hereunder exists and is continuing,
unless such Event of Default is cured  within any  applicable  cure period or is
otherwise  waived in writing  by the Holder in whole or in part at the  Holder's
option.

      2.3 Optional Redemption of Amortizing  Principal Amount. The Borrower will
have the  option  of  prepaying  the  outstanding  Amortizing  Principal  Amount
("OPTIONAL AMORTIZING REDEMPTION"), in whole or in part, by paying to the Holder
a sum of money equal to one hundred  fifteen  percent  (115%) of the  Amortizing
Principal  Amount to be  redeemed,  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  Purchase   Agreement  or  any  Related  Agreement  (the
"AMORTIZING  REDEMPTION  AMOUNT") on the day written  notice of redemption  (the
"NOTICE  OF  AMORTIZING  REDEMPTION")  is given to the  Holder.  The  Notice  of
Amortizing  Redemption  shall  specify  the date for  such  Optional  Amortizing
Redemption (the "AMORTIZING  REDEMPTION PAYMENT DATE"),  which date shall be not
less than seven (7)  business  days  after the date of the Notice of  Amortizing
Redemption (the "REDEMPTION  PERIOD").  A Notice of Amortizing  Redemption shall
not be effective with respect to any portion of the Amortizing  Principal Amount
for which the Holder has a pending  election to convert pursuant to Section 3.1,
or for  conversions  initiated  or made by the Holder  pursuant  to Section  3.1
during  the  Redemption  Period.  The  Amortizing  Redemption  Amount  shall  be
determined  as  if  such  Holder's  conversion   elections  had  been  completed
immediately  prior to the date of the Notice of  Amortizing  Redemption.  On the
Amortizing  Redemption  Payment Date, the Amortizing  Redemption Amount shall be
paid in good funds to the  Holder.  In the event the  Borrower  fails to pay the
Amortizing  Redemption Amount on the Amortizing  Redemption  Payment Date as set
forth herein, then such Notice of Amortizing Redemption will be null and void.

      2.4 Optional  Redemption of Non-Amortizing  Principal Amount. The Borrower
will have the option of repaying the outstanding Non-Amortizing Principal Amount
("OPTIONAL  NON-AMORTIZING  REDEMPTION"),  in whole or in part,  by  paying  the
Holder  a sum  of  money  equal  to  one  hundred  ten  percent  (110%)  of  the
Non-Amortizing Principal Amount to be redeemed, together with accrued but unpaid
interest  thereon (the  "NON-AMORTIZING  REDEMPTION  AMOUNT") on the day written
notice of redemption  (the "NOTICE OF  NON-AMORTIZING  REDEMPTION") is giving to
the Holder.  The Notice of Non-Amortizing  Redemption shall specify the date for
such Optional Non-Amortizing Redemption (the "NON-AMORTIZING  REDEMPTION DATE"),
which date shall be not less than seven (7) business  days after the date of the
Notice of Non-Amortizing Redemption (the "NON-AMORTIZING  REDEMPTION PERIOD"). A
Notice of  Non-Amortizing  Redemption shall not be effective with respect to any
portion  of the  Non-Amortizing  Principal  Amount  for which the  Holder  has a
pending  election  to  convert  pursuant  to  Section  3.1,  or for  conversions
initiated   or  made  by  the  Holder   pursuant   to  Section  3.1  during  the
Non-Amortizing  Redemption Period. The Non-Amortizing Redemption Amount shall be

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<PAGE>

determined  as  if  the  Holder's   conversion   elections  had  been  completed
immediately prior to the date of the Notice of Non-Amortizing Redemption. On the
Non-Amortizing  Redemption Date, the  Non-Amortizing  Redemption Amount shall be
paid (i) in good funds to the  Holder,  (ii) by  furnishing  the Holder  written
direction to notify the bank holding the Restricted  Account to release from the
Restricted  Account  and  deliver  to the  Holder  a sum of  money  equal to the
Non-Amortizing  Redemption  Amount,  or (iii) if the  amount on  deposit  in the
Restricted  Account  is less  than  the  Non-Amortizing  Redemption  Amount,  by
furnishing  the  Holder  written  direction  to  notify  the  bank  holding  the
Restricted  Account to release all amounts on deposit in the Restricted  Account
to the Holder and  delivering to the Holder good funds in an amount equal to the
balance of the Non-Amortizing Redemption Amount.

                                   ARTICLE III
                                CONVERSION RIGHTS

      3.1. Holder's Conversion Rights.  Subject to Section 2.2, the Holder shall
have the right,  but not the  obligation,  to convert  all or any portion of the
then aggregate outstanding Principal Amount of this Note, together with interest
and fees due  hereon,  into  shares of Common  Stock,  subject  to the terms and
conditions  set forth in this Article III. The Holder may exercise such right by
delivery to the Borrower of a written  Notice of Conversion  pursuant to Section
3.3.

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

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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.  (a) In the event that the Holder
elects to convert any amounts outstanding under this Note into Common Stock, the
Holder  shall  give  notice of such  election  by  delivering  an  executed  and
completed notice of conversion (a "NOTICE OF CONVERSION") to the Borrower, which
Notice of  Conversion  shall  provide a breakdown  in  reasonable  detail of the
Principal Amount, accrued interest and fees 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".  A form of Notice of  Conversion  to be employed by the Holder is annexed
hereto as Exhibit A.

            (b)  Pursuant to the terms of a Notice of  Conversion,  the Borrower
will issue  instructions  to the  transfer  agent  accompanied  by an opinion of
counsel,  if so  required  by the  Borrower's  transfer  agent,  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 shares of
Common Stock,  unless the Holder provides the Borrower  written  instructions to
the contrary.

      3.4 Conversion Mechanics.

            (a) The  number of shares  of  Common  Stock to be issued  upon each
conversion  of this Note  pursuant to this  Article III shall be  determined  by
dividing  that  portion  of the  Principal  Amount and  interest  and fees to be
converted,  if any, by the then applicable Fixed Conversion  Price. In the event
of any conversions of outstanding  obligations  under this Note in part pursuant
to this Article III, such conversions shall be deemed to constitute  conversions
(i) first, of the Monthly Amount for the current  calendar  month,  (ii) then of
the accrued  interest on the  Non-Amortizing  Principal  Amount,  (iii) then, of

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outstanding  Non-Amortizing  Principal Amount and (iv) after the  Non-Amortizing
Principal  Amount has been paid in full,  of  outstanding  Amortizing  Principal
Amount,  by applying the conversion  amount to Monthly Amounts for the remaining
Repayment Dates in chronological order.

            (b) The  Fixed  Conversion  Price and  number  and kind of shares or
other securities to be issued upon conversion is subject to adjustment from time
to time upon the occurrence of certain events, as follows:

            A. 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 in
      shares  of Common  Stock,  the Fixed  Conversion  Price or the  Conversion
      Price,  as the case may be,  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.

            B. 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.

            C. Share  Issuances.  Subject to the provisions of this Section 3.4,
      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 at the time of
      issuance of such  securities.  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 at the time of issuance of such securities.

            D.  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  immediately  prior
      to such reclassification or other change.

      3.5 Issuance of  Replacement  Note.  Upon any partial  conversion  of this
Note, a replacement  Note  containing  the same date and provisions of this Note
shall,  at the written  request of the Holder,  be issued by the Borrower to the
Holder for the outstanding  Principal  Amount of this Note and accrued  interest

                                    7 of 13
<PAGE>

which  shall not have been  converted  or paid.  Subject  to the  provisions  of
Article IV, the Borrower will pay no costs,  fees or any other  consideration to
the Holder for the production and issuance of a replacement Note.

                                   ARTICLE IV
                                EVENTS OF DEFAULT

      Upon the  occurrence  and  continuance  of an Event of Default  beyond any
applicable grace period,  the Holder may accelerate all obligations  outstanding
under the  Purchase  Agreement  and the Related  Agreements  and, in  connection
therewith,  make all sums of principal,  interest and other fees then  remaining
unpaid  hereon  and all other  amounts  payable  hereunder  immediately  due and
payable.  In the event of such an acceleration,  the amount due and owing to the
Holder  shall be 130% of the  outstanding  principal  amount  of the Note  (plus
accrued and unpaid  interest  and fees,  if any) (the  "DEFAULT  PAYMENT").  The
Default  Payment  shall be applied  first to any fees due and  payable to Holder
pursuant to this Note, the Purchase Agreement or the Related Agreements, then to
accrued and unpaid  interest due on the Note and then to  outstanding  principal
balance of the Note.

      The  occurrence of any of the  following  events set forth in Sections 4.1
through 4.10, inclusive, is an "EVENT OF DEFAULT":

      4.1 Failure to Pay  Principal,  Interest or other Fees. The Borrower fails
to pay when due any  installment of principal,  interest or other fees hereon in
accordance herewith,  or the Borrower fails to pay when due any amount due under
any other promissory note issued by Borrower, and in any such case, such failure
shall  continue for a period of three (3) days following the date upon which any
such payment was due.

      4.2 Breach of Covenant.  The  Borrower  breaches any covenant or any other
term  or  condition  of this  Note or the  Purchase  Agreement  in any  material
respect, or the Borrower or any of its Subsidiaries breaches any covenant or any
other term or  condition of any Related  Agreement in any material  respect and,
any such case, such breach, if subject to cure, continues for a period of thirty
(30) days after the occurrence thereof.

      4.3  Breach of  Representations  and  Warranties.  Any  representation  or
warranty made by the Borrower in this Note or the Purchase Agreement,  or by the
Borrower or any of its Subsidiaries in any Related Agreement, shall, in any such
case,  be false or  misleading  in any  material  respect  on the date that such
representation or warranty was made or deemed made.

      4.4  Receiver or Trustee.  The Borrower or any of its  Subsidiaries  shall
make an assignment for the benefit of creditors,  or apply for or consent to the
appointment  of a receiver  or trustee for it or for a  substantial  part of its
property  or  business;  or  such a  receiver  or  trustee  shall  otherwise  be
appointed.

      4.5 Judgments.  Any money judgment, writ or similar final process shall be
entered or filed against the Borrower or any of its Subsidiaries or any of their

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respective  property or other  assets for more than  $150,000,  and shall remain
unvacated, unbonded or unstayed for a period of thirty (30) days.

      4.6  Bankruptcy.  Bankruptcy,  insolvency,  reorganization  or liquidation
proceedings  or other  proceedings or relief under any bankruptcy law or any law
for the relief of debtors  shall be instituted by or against the Borrower or any
of its Subsidiaries.

      4.7 Stop  Trade.  An SEC stop  trade  order or  Principal  Market  trading
suspension  of the Common Stock shall be in effect for fifteen (15)  consecutive
days or  fifteen  (15) days  during a period of thirty  (30)  consecutive  days,
excluding  in all cases a  suspension  of all  trading  on a  Principal  Market,
provided  that the  Borrower  shall  not have  been  able to cure  such  trading
suspension  within  thirty  (30) days of the  notice  thereof or list the Common
Stock on another  Principal  Market  within sixty (60) days of such notice.  The
"Principal  Market"  for the Common  Stock shall  include the NASD OTC  Bulletin
Board,  NASDAQ SmallCap  Market,  NASDAQ National Market System,  American Stock
Exchange,  or New York Stock Exchange (whichever of the foregoing is at the time
the principal trading exchange or market for the Common Stock, or any securities
exchange  or other  securities  market on which the  Common  Stock is then being
listed or traded.

      4.8 Failure to Deliver  Common  Stock or  Replacement  Note.  The Borrower
shall fail (i) to timely deliver  Common Stock to the Holder  pursuant to and in
the form required by this Note, and Section 9 of the Purchase Agreement, if such
failure  to  timely  deliver  Common  Stock  shall not be cured  within  two (2)
business days or (ii) to deliver a  replacement  Note to Holder within seven (7)
business days  following  the required  date of such  issuance  pursuant to this
Note, the Purchase  Agreement or any Related  Agreement (to the extent  required
under such agreements).

      4.9 Default Under Related  Agreements or Other Agreements.  The occurrence
and continuance of any Event of Default (as defined in the Purchase Agreement or
any Related Agreement) or any event of default (or similar term) under any other
indebtedness.

      4.10  Change in  Control.  (i) Any  "Person" or "group" (as such terms are
defined in  Sections  13(d) and 14(d) of the  Exchange  Act, as in effect on the
date hereof) 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 45% or more on a
fully  diluted  basis of the then  outstanding  voting  equity  interest  of the
Borrower or (ii) the Board of Directors  of the Borrower  shall cease to consist
of a majority of the Board of  Directors  of the Borrower on the date hereof (or
directors  appointed  by  a  majority  of  the  Board  of  Directors  in  effect
immediately prior to such appointment).

                           DEFAULT RELATED PROVISIONS

      4.11  Default  Interest  Rate.  Following  the  occurrence  and during the
continuance of an Event of Default,  the Borrower shall pay additional  interest
on  this  Note in an  amount  equal  to two  percent  (2%)  per  month,  and all
outstanding  obligations  under  this Note,  including  unpaid  interest,  shall
continue  to accrue  such  additional  interest  from the date of such  Event of
Default until the date such Event of Default is cured or waived.

                                    9 of 13
<PAGE>

      4.12 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.

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

                                    ARTICLE V
                                  MISCELLANEOUS

      5.1 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.

      5.2 Notices.  Any notice herein required or permitted to be given shall be
in writing and shall be deemed  effectively given: (a) upon personal delivery to
the party notified, (b) when sent by confirmed telex or facsimile if sent during
normal  business hours of the recipient,  if not, then on the next business day,
(c) five days after having been sent by  registered  or certified  mail,  return
receipt  requested,  postage  prepaid,  or (d)  one  day  after  deposit  with a
nationally  recognized  overnight  courier,  specifying next day delivery,  with
written  verification  of  receipt.  All  communications  shall  be  sent to the
Borrower  at  the  address  provided  in  the  Purchase  Agreement  executed  in
connection  herewith,  and to the Holder at the address provided in the Purchase
Agreement  for such  Holder,  with a copy to John E.  Tucker,  Esq.,  825  Third
Avenue,  14th Floor, New York, New York 10022,  facsimile number (212) 541-4434,
or at such other address as the Borrower or the Holder may designate by ten days
advance written notice to the other parties hereto. A Notice of Conversion shall
be deemed given when made to the Borrower pursuant to the Purchase Agreement.

      5.3 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  issued  pursuant  to Section  3.5
hereof, as it may be amended or supplemented.

      5.4  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 Purchase  Agreement.  This Note shall not be assigned by the
Borrower without the consent of the Holder.

      5.5  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

                                    10 of 13
<PAGE>

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 in favor of the Holder.

      5.6  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.

      5.7  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 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.

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

      5.9 Cost of  Collection.  If default is made in the  payment of this Note,
the  Borrower  shall pay to Holder  reasonable  costs of  collection,  including
reasonable attorney's fees.

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

                                    11 of 13
<PAGE>

      IN WITNESS WHEREOF,  the Borrower has caused this 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
--------------------

                                    12 of 13
<PAGE>

EXHIBIT A

                              NOTICE OF CONVERSION

(To be  executed  by the Holder in order to convert all or part of the Note into
Common Stock

[Name and Address of Holder]

The  Undersigned  hereby  converts  $_________  of the principal due on [specify
applicable  Repayment Date] under the Convertible Term Note issued by Conversion
Services  International,  Inc.  dated  August __,  2004 by delivery of Shares of
Common Stock of Conversion  Services  International,  Inc. on and subject to the
conditions set forth in Article III of such Note.

1.       Date of Conversion
                                   -----------------------
2.       Shares To Be Delivered:
                                   -----------------------

                                     By:_______________________________
                                     Name:_____________________________
                                     Title:____________________________

                                    13 of 13
<PAGE>

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