<PAGE>   1
                                                                   EXHIBIT 10.34



THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT") OR ANY OTHER APPLICABLE SECURITIES LAWS AND,
ACCORDINGLY, THIS NOTE MAY NOT BE RESOLD, PLEDGED, OR OTHERWISE TRANSFERRED,
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER, OR IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER, THE SECURITIES ACT AND IN
ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS.


               AMENDED AND RESTATED FLOATING RATE PROMISSORY NOTE

$5,000,000                                                     February 26, 1997


         For value received, INTELECT SYSTEMS CORP., a Delaware corporation
("ISC"), and INTELECT COMMUNICATIONS SYSTEMS LIMITED, a corporation organized
under the laws of Bermuda ("ICSL" and together with ISC called the "Makers,"),
jointly and severally promise and agree to pay on or before March 27, 1998 (the
"Maturity Date") to the order of ST. JAMES CAPITAL CORP., a Delaware
corporation (hereinafter called "Holder"), or its registered transferees and
assigns, at the office of First Bank National Association, Minneapolis,
Minnesota, in coin or currency of the United States of America which at the
time of payment is legal tender for the payment of public and private debts,
the principal sum of FIVE MILLION AND NO/DOLLARS ($5,000,000), or so much as is
advanced pursuant to this Note.

         The Makers further agree to pay interest, in like money, on the unpaid
principal amount owing hereunder from time to time from the date hereof at the
Floating Rate, as hereinafter defined. Such accrued interest shall be due and
payable on the Maturity Date.

         Any holder of this Note is entitled to all of the rights, remedies,
benefits and privileges provided for herein and in the other Transaction
Documents, as hereinafter defined. The Obligations (as herein defined) of the
Makers contained in this Note are secured by the Pledge Agreement.

         Each Maker and any and each co-maker, endorsers, guarantors and
sureties or each other Person liable for payment or collection of this Note
expressly and severally waives grace, demand, presentment for payment, notice
of nonpayment, notice of dishonor, notice of intent to accelerate the maturity,
notice of acceleration of the maturity, notice of default, protest and notice
of protest, bringing of suit, and diligence in taking any action to collect
amounts called for hereunder and in the handling of property at any time
existing as security in connection herewith, and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereon,
regardless of and without any notice, diligence, act or omission as or with
respect to the collection of any amount called for hereunder or in connection
with any Lien at any time had or existing as security for any amount called for
hereunder, and agrees to all renewals, extensions or partial payments hereon
and to any release or substitution of security hereof, in whole or in part,
with or without notice, before or after maturity.

         In the event Default (as hereinafter defined) is made in the payment
of this Note in whatever manner its maturity may be brought about and if this
Note is thereupon placed in the hands of attorneys for collection, or if the
same is collected through probate, bankruptcy or other similar proceedings, the
Makers, jointly and severally, promise to pay all reasonable attorneys' fees
and expenses incurred by the Holder in connection with such default or
collection proceedings.
<PAGE>   2
                                   ARTICLE I

            DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

         1.1       Certain Defined Terms.  As used in this Note, the following
terms shall have the following meanings:

         "Advances" shall have the meaning assigned to that term in Section 2.1
hereof.

         "Bankruptcy Code" shall mean the Bankruptcy Reform Act of 1978 as
codified under 11 U.S.C. Section 101, et seq.

         "Business Day" means any day (other than a day which is a Saturday,
Sunday or legal holiday) in the State of Texas on which banks are open for
business in Houston, Texas.

         "Commitment" means, at the time any determination thereof is to be
made, the commitment of the Holder to extend credit to the Makers by means of
Advances, which subject to Section 5.1, shall be an amount equal to $5,000,000.

         "Debt" means, for any Person, (a) all obligations required by GAAP to
be classified upon a balance sheet as liabilities, (b) liabilities secured by
any Lien existing on property owned or acquired by that Person, (c) obligations
that have been (or under GAAP should be) capitalized for financial reporting
purposes, (d) all accrued obligations of such Person in respect of any
contract, agreement or instrument imposing an obligation upon such Person to
pay over funds; (e) for all trade debt of such Person; (g) all guaranties,
endorsements and other contingent obligations with respect to Debt of others,
and (h) for all deferrals, renewals, extensions and refundings of, and
amendments, modifications and supplements to, any of the indebtedness referred
to in (a) through (e) above.

         "Debtor Relief Laws" shall mean the Bankruptcy Code and all other
applicable dissolution, liquidation, conservatorship, bankruptcy, moratorium,
readjustment of debt, compromise, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws from time to time in effect
affecting the rights of creditors generally.

         "Default" means any event which is, or after notice or passage of time
would be, an Event of Default.

         "Default Rate" means a rate per annum equal to the greater of (a) the
Prime Rate in effect on such day plus five percent (5%) and (b) the Highest
Lawful Rate.

         "DNA"   means DNA Enterprises, Inc., a Texas corporation and a wholly
owned Subsidiary of ISC.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended.

         "Event of Default" has the meaning specified in Section 5.1.

         "Floating Rate" means a rate per annum equal to the lesser of (a) the
Prime Rate in effect on such


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<PAGE>   3
day plus two percent (2%) and (b) the Highest Lawful Rate.

         "GAAP" means generally accepted accounting principles of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and the Financial Accounting Standards Board.

         "Highest Lawful Rate" means, as of a particular date, the maximum
nonusurious interest rate that may under applicable law then be contracted for,
charged or received by the Holder in connection with this Note.

         "Lien" shall mean, with respect to any asset, (a) any mortgage, deed
of trust, production payment, deposit, lien, charge, pledge, security interest,
claim or encumbrance of any kind (whether voluntary or involuntary, affirmative
or negative, and whether imposed or created by operation of law or otherwise)
upon such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or other title retention agreement relating to
such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities but excluding
any right of offset which arises without agreement in the ordinary course of
business.

         "Material Adverse Effect" means (i) a material adverse effect on the
business, Properties, operations or condition (financial or otherwise) or
prospects of ISC and its Subsidiaries taken as a whole, (ii) a material adverse
effect on the business, Properties, operations or condition (financial or
otherwise) or prospects of ICSL and its Subsidiaries taken as a whole, (iii)
material impairment of the ability of any Maker to perform timely any of its
respective Obligations under this Note, (iv) material impairment of the ability
of ISC to perform timely any of its Obligations under any of the Transaction
Documents to which such Maker is a party, or (v) material impairment of the
rights of or benefits available to the Holder under this Note or any of the
other Transaction Documents.

         "Maturity Date" means March 27, 1998, or the earlier termination in
whole of the Commitment pursuant to Section 5.1.

         "Note" means this Floating Rate Promissory Note, as hereafter amended,
modified, substituted or replaced.

         "Obligations"  means all obligations, liabilities and indebtedness of
every nature of the Makers and their respective Subsidiaries from time to time
owing to the Holder under this Note and/or any of the other Transaction
Documents, including, without limitation, (i) the due and punctual payment of
(x) the principal of and interest on the Advances, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, including, to the extent permitted by applicable law, interest that
accrues after the commencement of any proceeding by or against any Maker or any
Subsidiary of a Maker under the Bankruptcy Code and all other applicable Debtor
Relief Laws, (y) all other monetary obligations of the Makers and their
respective Subsidiaries to the Holder under this Note and/or any other
Transaction Document, including any and all fees, costs, expenses and
indemnities, and (ii) the due and punctual performance of all other obligations
of the Makers and their respective Subsidiaries under this Note and/or any
other Transaction Document.  "Obligation" shall mean any part of the
Obligations.

         "Outside Financing" means any transactions where any Maker or any
Subsidiary of any Maker, now or hereafter acquired, sells its equity or debt
securities for cash whether in public or private offerings





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<PAGE>   4
or bond financings, provided, however, that an Outside Financing shall not
include any transactions involving (i) purchase money debt incurred to finance
equipment and inventory in the ordinary course of business, (ii) the sale of
any securities for the sole purpose of financing acquisitions, (iii) the
issuance of shares of common stock of Maker or any Subsidiary of Maker pursuant
to existing stock options to employees, officers and directors or existing
plans covering such persons and (iv) the sale of any securities between ICSL
and any of its Subsidiaries or between Subsidiaries of ICSL.

         "Permitted Liens" means (a) Liens now or hereafter securing the
Obligations; (b) pledges or deposits made to secure payment of workers'
compensation, unemployment insurance, or other forms of governmental insurance
or benefits or to participate in any fund in connection with workers'
compensation, unemployment insurance, pensions, or other social security
programs; (c) good-faith pledges or deposits made to secure performance of
bids, tenders, contracts (other than for the repayment of borrowed money), or
leases, or to secure statutory obligations, surety or appeal bonds, or
indemnity, performance, or other similar bonds in the ordinary course of
business; (d) Liens for taxes and liens imposed by operation of law (including
Liens of mechanics, materialmen, warehousemen, carriers and landlords), if (i)
no amounts are due and payable and no Lien has been filed (or agreed to), or
(ii) the validity or amount secured thereof is being contested in good faith by
lawful proceedings diligently conducted, reserves required by GAAP have been
made, and levy and execution thereon have been (and continue to be) stayed or
payment thereof is covered in full (subject to the customary deductible) by
insurance; (e) liens currently in existence; and (f) liens covering purchase
money debt incurred to finance equipment or inventory in the ordinary course of
business.

         "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.

         "Pledge Agreement" means that certain Pledge Agreement dated of even
date herewith executed by ISC in favor of the Holder pursuant to which ISC
grants to the Holder a Lien on all of the issued and outstanding shares of
capital stock of DNA, as originally executed or as it may from time to time be
supplemented, modified or amended.

         "Prime Rate" means, as of a particular date, the prime rate of
interest per annum most recently announced by First Bank National Association,
automatically fluctuating upward or downward with and at the time specified in
each such announcement without notice to the Makers or any other Person; each
change in the Prime Rate shall be effective on the date such change is
announced.

         "Property" means any asset, whether real, personal or mixed, or
tangible or intangible, or any interest therein.

         "Registration Rights Agreement" means that certain Registration Rights
Agreement dated of even date herewith executed by ICSL in favor of the Holder,
covering registration rights in respect to the shares of ICSL's common stock
that may be acquired on the exercise of the Warrants, as originally executed or
as it may from time to time be supplemented, modified or amended.

         "SEC" means the U.S. Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act.

         "Securities Act" means the Securities Act of 1933, as amended.





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<PAGE>   5
         "Subsidiary" means, with respect to any Person, any entity of which
more than 50% (in number of votes) of the stock (or equivalent interests) is
owned of record or beneficially, directly  or indirectly, by such Person,
provided however, such term shall not include Intelect Europe Limited.

         "Transaction Documents" means this Note, the Pledge Agreement, the
Warrants and the Registration Rights Agreement.

         "Warrants" means (i) that certain Warrant to purchase shares of ICSL's
common stock, par value $.01 per share, issued pursuant to the terms of that
certain Warrant dated as of the date hereof, executed by ICSL in favor of
Holder, as hereafter amended, modified, substituted or replaced and (ii) that
certain Warrant to purchase shares of ICSL's common stock, par value $.01 per
share, issued pursuant to the terms of that certain Warrant dated as of March
27, 1997, executed by ICSL in favor of Holder, as hereafter amended, modified,
substituted or replaced.

         1.2.  Accounting Terms.  All terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time; provided, however, that, for purposes of determining compliance with any
covenant set forth in Article IV, such terms shall be construed in accordance
with GAAP as in effect on the date of this Note, consistently applied.

         1.3.  Interpretation.

         (a)     In this Note, unless a clear contrary intention appears:

                 (i)  the singular number includes the plural number and vice
         versa;

                 (ii)  reference to any gender includes each other gender;

                 (iii)  the words "herein," "hereof" and "hereunder" and other
         words of similar import refer to this Note as a whole and not to any
         particular Article, Section or other subdivision;

                 (iv)  reference to any Person includes such Person's
         successors and assigns but, if applicable, only if such successors and
         assigns are permitted by this Note, and reference to a Person in a
         particular capacity excludes such Person in any other capacity or
         individually, provided that nothing in this subclause (iv) is intended
         to authorize any assignment not otherwise permitted by this Note;

                 (v)  reference to any agreement, document or instrument means
         such agreement, document or instrument as amended, supplemented or
         modified and in effect from time to time in accordance with the terms
         thereof and, if applicable, the terms hereof, and reference to the
         Note includes any Note issued pursuant hereto in extension or renewal
         hereof and in substitution or replacement herefor;

                 (vi)  unless the context indicates otherwise, reference to any
         Article, Section, Schedule or Exhibit means such Article or Section
         hereof or such Schedule or Exhibit hereto;

                 (vii)  the words "including" (and with correlative meaning
         "include") means including, without limiting the generality of any
         description preceding such term;





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<PAGE>   6
                 (viii)  with respect to the determination of any period of
         time, the word "from" means "from and including" and the word "to"
         means "to but excluding;"

                 (ix)  reference to any law means such as amended, modified,
         codified or reenacted, in whole or in part, and in effect from time to
         time; and

         (b)     No provision of this Note shall be interpreted or construed
against any Person solely because that Person or its legal representative
drafted such provision.

                                   ARTICLE II

                            COMMITMENT AND ADVANCES

         2.1     Advances.        Subject to the terms and conditions and
relying on the representations and warranties set forth herein and in the other
Transaction Documents, the Holder agrees to make advances (collectively, the
"Advances") to the Makers, at any time and from time to time on and after the
date of this Note to, but excluding, the Maturity Date up to a principal amount
not to exceed $5,000,000. All Advances shall mature and be due and payable in
full on the Maturity Date.  Once repaid, Advances may not be reborrowed. Each
Advance shall be made in accordance with the procedures set forth in Section
2.2.

         2.2     Borrowing Procedures of Advances. In order to effect an
Advance, the Makers shall submit a Request for Advance in writing or by
telecopy (or telephone notice promptly confirmed in writing or by telecopy) to
the Holder not later than 10:00 a.m., Houston, Texas time, on the borrowing
date specified in the Request for Advance for such proposed Advance.  Such
Request for Advance shall refer to this Note and specify (x) in sufficient
detail, the corporate use of the proceeds of such proposed Advance, (y) the
Business Day upon which the proceeds of such proposed Advance are to be made
available to the Makers, and (z) the principal amount of such proposed Advance.
The obligation of the Holder to make any Advance pursuant to a Request for
Advance is subject to the satisfaction that on the date such Advance is to be
made no Default or Event of Default then exists (both before and after giving
effect to the making of such proposed Advance).

         2.3  Interest on Advances and Payment Dates.

         (a)     Subject to the provisions of Section 2.4, the Advances shall
bear interest at the Floating Rate, computed on the basis of the actual number
of days elapsed over a year of 365 or 366 days, as the case may be.

         (b)     Interest on each Advance shall be payable by the Makers (i) in
respect of each Advance accruing interest at the Floating Rate, on the Maturity
Date, (ii) in respect of each Advance accruing interest at the Default Rate, on
demand, and (iii) in respect of all Advances, on any prepayment (on the amount
prepaid), at maturity (whether by acceleration or otherwise) and, after
maturity, on demand.

         2.4  Interest on Overdue Amounts.  If Makers shall fail to pay the
principal of or interest on any Advance or any other amount when due hereunder,
Makers shall on demand from time to time pay interest, to the extent permitted
by law, on such defaulted amount from the date of such Event of Default up to
(but not including) the date of actual payment (after as well as before
judgment) at a rate per annum equal to the Default Rate, computed on the basis
of the actual number of days elapsed over a year of 365





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<PAGE>   7
or 366 days, as the case may be.


         2.5  Voluntary Prepayment of Advances. Makers shall have the right at
any time and from time to time to prepay the Advances, in whole or in part,
without penalty or premium, upon at least five (5) Business Day's prior written
or telecopy notice or telephone notice promptly confirmed in writing to the
Holder.

         2.6  Mandatory Payment of Advances.

                 (a)      Makers shall repay all outstanding Advances on the 
         Maturity Date; and

                 (b)      Makers shall prepay this Note in full on or before
         the close of business (Houston, Texas time) on the second Business Day
         following the occurrence of an Outside Financing, such prepayment to
         be in an amount equal to the net proceeds received by such Maker or
         any Subsidiary of the Makers from such Outside Financing, but not to
         exceed the then outstanding principal and accrued and unpaid interest
         on this Note. All payments made under this Note shall be applied first
         to accrued interest, and the balance, if any, to principal; provided,
         however, that interest shall accrue on any remaining principal balance
         and shall be payable at the rate provided above.

         2.7     Manner of Payment. Both principal and interest are payable in
immediately available funds in lawful money in the United States of America (in
freely transferable Dollars) to the Holder at the office of First Bank National
Association, Minneapolis, Minnesota.  If the date upon which the payment of
principal and interest is required to be made pursuant to this Note occurs
other than on a Business Day, then such payment of principal and interest shall
be made on the next occurring Business Day following said payment date and
shall include interest through said next occurring Business Day.

         2.8  Use of Proceeds.  (a) The proceeds of all Advances be used to
redeem warrants issued to certain former shareholders of DNA and to fund
certain obligations incurred by the Makers in connection with the acquisition
of DNA; and other proper corporate requirements of the Makers.

         (b)     No portion of the proceeds of any Advance under this Note
shall be used by the Makers, or any one of them, in any manner that might cause
the borrowing or the application of such proceeds to violate Regulation G,
Regulation U, Regulation T, or Regulation X or any other regulation of the
Board or to violate the Exchange Act, in each case as in effect on the date or
dates of such borrowing and such use of proceeds.

                                  ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF MAKERS

         Each of the Makers, as to itself and its Subsidiaries, hereby warrants
and represents to the Holder that:

         3.1     Organization, Standing and Qualification.  (a) ISC is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now





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<PAGE>   8
being conducted.  ISC is licensed and qualified to do business as a foreign
corporation in each jurisdiction in which the character of ISC's properties,
owned or leased, or the nature of its activities makes such qualification or
license necessary, except where failure to be so licensed and qualified would
not result in a Material Adverse Effect.

         (b) ICSL is a corporation duly organized, validly existing and in good
standing under the laws of Bermuda and has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as it is now being conducted.  ICSL is licensed and qualified to do business as
a foreign corporation in each jurisdiction in which the character of the ICSL's
properties, owned or leased, or the nature of its activities makes such
qualification or license necessary, except where failure to be so licensed and
qualified would not result in a Material Adverse Effect.

         3.2     Authority; No Defaults. Each Maker has all requisite corporate
power and authority to enter into this Note and to consummate the transactions
contemplated hereby.  ISC has all requisite corporate power and authority to
enter into the Pledge Agreement and to consummate the transactions contemplated
thereby. ICSL has all requisite corporate power and authority to issue the
Warrants and to enter into the Registration Rights Agreement and to consummate
the transactions contemplated thereby. The execution and delivery of this Note
by the Makers (and with respect to ISC, the Pledge Agreement by ISC; and with
respect to ICSL, the Warrants and the Registration Rights Agreement) the
consummation of the transactions contemplated hereby or thereby have been duly
authorized by all necessary corporate action on the part of such Maker.  This
Note has been duly executed and delivered by each Maker and constitutes the
valid and binding obligation of such Maker, enforceable in accordance with its
terms, except as enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws relating to creditors' rights generally and by general principles of
equity which may limit the right to obtain equitable remedies (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
The execution and delivery of this Note by the Makers do not, and the
consummation of the transactions contemplated hereby will not, conflict with or
result in a breach of or the acceleration of any obligation under, or
constitute a default or event of default (or event which, with notice or lapse
of time or both, would constitute a default) under, any provision of any
charter, bylaw, indenture, mortgage, lien, lease, agreement, contract,
instrument, order, judgment, decree, ordinance or regulation, or any
restriction to which any property of such Maker or any of its Subsidiaries is
subject or by which such Maker or any of its Subsidiaries is bound, which could
reasonably be expected to result in a Material Adverse Effect.

         3.3     Approvals.  There is no legal impediment to the valid offer,
issue, sale, delivery and performance by each of the Makers of this Note.

                                   ARTICLE IV

                                   COVENANTS

         Each of the Makers covenants and agrees with the Holder, so long as
this Note is outstanding or any fee, expense, compensation or any other amount
payable by the Makers shall remain unpaid or outstanding, as follows:

         4.1.    Negative Pledge.  No Maker shall, nor shall ICSL permit any of
its Subsidiaries to, create, incur, assume or suffer to exist, any Lien on any
asset of such Person other than Permitted Liens.  No Maker will enter into or
become subject to, and no Maker will permit any of its Subsidiaries to enter





                                      -8-
<PAGE>   9
into or become subject to, any agreement (other than this Agreement) that
prohibits or otherwise restricts the right of such Maker or its Subsidiaries to
create, incur, assume or suffer to exist any Lien in favor of the Holder on any
of such Maker's or any of its Subsidiaries' assets.

         4.2     Margin Regulation.  No Maker shall use or permit any other
Person to use any portion of the proceeds of this Note in any manner which
might cause the extension of credit or the application of such proceeds to
violate the Securities Act or the Exchange Act or to violate Regulation G,
Regulation U, or Regulation X, or any other regulation of the Federal Reserve
Board.

         4.3     Compliance with Laws.     Each Maker shall use its best
efforts to, and shall cause each of its Subsidiaries to use its best efforts,
to conduct its business and affairs and maintain its Properties in compliance
with all applicable laws, rules, regulations, judgments, orders and decrees.

         4.4  Payment and Performance.  Each Maker will pay all amounts due
under this Note and the other Transaction Documents in accordance with the
terms thereof and will observe, perform and comply with every covenant, term
and condition expressed or implied therein.

         (a)     ICSL will furnish to the Holder within 20 days after the
Holder requests, copies of all information, documents, and other reports (or
copies of such portions of any of the foregoing as the SEC may by rules and
regulations prescribe) which ICSL is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. ICSL will use its best efforts to
timely comply with its reporting and filing obligations under the applicable
federal securities laws.

         (b)     ICSL will promptly furnish upon request, any information which
the Holder may from time to time reasonably request concerning any covenant,
provision or condition of this Note or the other Transaction Documents or any
matter in connection with such Persons' businesses and operations.

         4.5.  Maintenance of Existence, Qualifications and Assets.  Each Maker
shall use its best efforts to, and shall cause each of its Subsidiaries to use
its best efforts, to (i) maintain its corporate existence and good standing and
its authority to transact business in all states where necessary; and (ii)
maintain all licenses, permits and franchises necessary for its business.

         4.6     Costs, Expenses and Taxes.  (a) Each Maker, jointly and
severally, agrees to pay within thirty (30) Business Days after presentation of
an invoice:  all reasonable out-of-pocket costs and expenses of the Holder in
connection with (i) the negotiation, preparation, distribution, execution and
delivery of this Note, the Pledge Agreement, the Warrants, the Registration
Rights Agreement and the other documents and instruments referred to therein,
(ii) the management and monitoring of the Advances, (iii) the Holder's review
and due diligence and (iv) the negotiation, preparation, distribution,
execution and delivery of any amendment, supplement, modification, waiver or
consent relating to this Note or the other Transaction Documents (including,
without limitation, as to each of the foregoing, the reasonable fees and
disbursements of legal counsel).

         (b)     Each Maker, jointly and severally, agrees to pay all
reasonable out-of-pocket costs and expenses of the Holder in connection with
(i) the preservation of its rights under, and enforcement of, this Note and the
other Transaction Documents and the documents and instruments referred to
therein (including, without limitation, all filing fees and the reasonable fees
and disbursements of legal counsel), and (ii) any workout, restructuring or
rescheduling of the Obligations or any proceeding under any Debtor Relief Law
with respect to any Maker or any Subsidiary of a Maker (including, without
limitation, the





                                      -9-
<PAGE>   10
reasonable fees and disbursements of counsel for the Holder).

         (c)     Each Maker, jointly and severally, shall pay, and hold the
Holder harmless from and against, any and all present and future stamp, excise,
and other similar taxes and fees with respect to the foregoing matters and hold
the Holder harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
the Holder) to pay such taxes.

         (d)     Without prejudice to the survival of any other Obligations of
the Makers hereunder or under the other Transaction Documents, the obligations
of Borrower under this Section 4.6(d) shall survive the termination of this
Note and the payment in full of the Obligations for a period of six (6) months.

                                   ARTICLE V

                          EVENTS OF DEFAULT; REMEDIES

         5.1     Events of Default. Each of the following events, acts,
occurrences or conditions constitutes an "Event of Default" under this Note:

                 (a)      the Makers default in the payment of the principal or
         interest on this Note when such principal or interest becomes due and
         payable and such default remains uncured for a period of five days; or

                 (b)      any Maker defaults in the performance of any covenant
         in this Note, the default of which may have a Material Adverse Effect,
         and such default remains uncured for a period of 30 days following
         receipt of written notice of such default from Holder, contained in
         this Note or any of the other Transaction Documents (other than a
         default in the performance of a covenant specifically addressed
         elsewhere in this Section 5.1); or

                 (c)      any representation or warranty made by any Maker in
         this Note or any of the other Transaction Documents or in any
         certificate furnished by such Maker in connection with the
         consummation of the transaction contemplated thereby or hereby, is
         untrue as of the date of making thereof and such untruth may
         constitute a Material Adverse Effect; or

                 (d)      Any Maker, or any of such Maker's Subsidiaries,
         defaults in the payment when due (whether by lapse of time, by
         declaration, by call for redemption or otherwise) of the principal of
         or interest on any Debt of such Person secured by a Lien (other than
         the Debt evidenced by this Note and the obligations incurred by the
         Makers in connection with the acquisition of DNA) having an aggregate
         principal amount in excess of $100,000 and such default remains
         uncured for a period of 30 days; or

                 (e)      a court of competent jurisdiction enters a judgment
         or judgments against any Maker or any Subsidiary of a Maker, or any
         property or assets of such Maker or such Subsidiary of a Maker, for
         the payment of money aggregating in excess of $500,000 in excess of
         applicable insurance coverage and such judgment is not discharged or
         stayed within 30 days; or

                 (f)      a court of competent jurisdiction enters (i) a decree
         or order for relief in respect





                                      -10-
<PAGE>   11
         of any Maker or any Subsidiary of a Maker in an involuntary case or
         proceeding under any applicable federal or state bankruptcy,
         insolvency, reorganization or other similar law or (ii) a decree or
         order adjudging any Maker or any Subsidiary of a Maker a bankrupt or
         insolvent, or approving as properly filed a petition seeking
         reorganization, arrangement, adjustment or composition of or in
         respect of such Maker or such Subsidiary of a Maker under any
         applicable federal or state law, or appointing a custodian, receiver,
         liquidator, assignee, trustee, sequestrator or other similar official
         of any Maker or a Subsidiary of any Maker or of any substantial part
         of the property of such Maker or such Subsidiary of a Maker or
         ordering the winding up or liquidation of the affairs of any Maker or
         a Subsidiary of any Maker and any such decree or order of relief or
         any such other decree or order remains unstayed for a period of 60
         days from its date of entry; or

                 (g)      A Maker or any Subsidiary of a Maker commences a
         voluntary case or proceeding under any applicable federal or state
         bankruptcy, insolvency, reorganization or other similar law or any
         other case or proceeding to be adjudicated a bankrupt or insolvent, or
         a Maker or any Subsidiary of a Maker files a petition, answer or
         consent seeking reorganization or relief under any applicable federal
         or state law, or a Maker or any Subsidiary of a Maker makes an
         assignment for the benefit of creditors, or admits in writing its
         inability to pay its debts generally as they become due; or

                 (h)      (1) any person or group (within the meaning of
         Section 13(d) of the Exchange Act) becomes the beneficial owner of 40%
         or more of the total voting power of ICSL; (2) any Maker, or any of
         such Maker's Subsidiaries, merges or consolidates with or into any
         other Person (unless the Maker or it's Subsidiary is the surviving
         entity), (3) any Maker, or any of such Maker's Subsidiaries, sells all
         or substantially all of its assets (unless the purchaser is a
         Subsidiary of a Maker) or (4) any Maker, or any of such Maker's
         Subsidiaries, dissolves or liquidates.

         5.2     Acceleration of Maturity. Upon the occurrence of any Event of
Default described in Sections 5.1(f), 5.1(g) or 5.1(h) above, then (a) the
Commitment shall automatically terminate and (b) the entire unpaid amount of
all Obligations shall automatically become immediately due and payable, without
presentment for payment, demand, protest, notice of intent to accelerate,
notice of acceleration or further notice of any kind, all of which are hereby
expressly waived by each Maker and each of its Subsidiaries and the obligation
of the Holder to make any Advance hereunder shall thereupon terminate. Upon the
occurrence of any other Event of Default, the Holder may (i) declare the
Commitment to be terminated, whereupon the Commitment and the obligations of
the Holder to make any Advance hereunder shall forthwith terminate, and (ii)
declare the entire unpaid amount of all Obligations to be forthwith due and
payable, whereupon all Obligations shall become and be forthwith due and
payable, without presentment for payment, demand, protest, notice of intent to
accelerate, notice of acceleration or further notice of any kind, all of which
are hereby expressly waived by each Maker and each of its Subsidiaries.

         5.3     Remedies. If any Event of Default shall occur, the Holder may
protect and enforce the Holder's rights and remedies under this Note and any of
the other Transaction Documents by any appropriate proceedings, including
proceedings for specific performance of any covenant or agreement contained in
this Note or any of the other Transaction Documents and the Holder may enforce
the payment of any Obligations due or enforce any other legal or equitable
right.  All rights and remedies and powers conferred upon the Holder under this
Note and any of the other Transaction Documents shall be deemed cumulative and
not exclusive of any other rights, remedies or powers available under this
Note, any of the other Transaction Documents or at law or in equity.





                                      -11-
<PAGE>   12

                                 ARTICLE VI

                                MISCELLANEOUS

         6.1     Consent to Amendments. This Note may be amended, and the
Makers may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if and only if the Makers shall obtain the
written consent to such amendment, action or omission to act from the Holder.

         6.2     Benefits of Note. Nothing in this Note, express or implied,
shall give to any Person, other than the Makers, Holder, and their successors
any benefit or any legal or equitable right, remedy or claim under or in
respect of this Note.

         6.3     Successors and Assigns. Neither Maker nor the Holder may
transfer or assign this Note or their respective rights, titles and interests
in this Note without the prior written consent of the other parties hereto. All
covenants and agreements in this Note contained by or on behalf of the Makers
and the Holder shall bind and inure to the benefit of the respective successors
and assigns of the Makers and the Holder.

         6.4     Restrictions on Transfer. Subject to the provisions of Section
6.3 requiring prior written consent, this Note is transferable in the same
manner and with the same effect as in the case of a negotiable instrument
payable to a specified person. Prior to any transfer as provided herein, the
transferor shall provide written notice to the Makers. The Makers, however, may
treat Holder as the owner hereof for all purposes until this Note shall have
been surrendered for transfer as hereinafter provided. Upon surrender of this
Note duly executed by Holder or his agent or attorney, the Makers shall execute
and deliver a new Note in the name of the assignee or assignees and in the
denominations specified in such instrument of assignment, and this Note shall
promptly be canceled.

         6.5     Notice; Address of Parties. Except as otherwise provided, all
communications to the Makers or Holder provided for herein or with reference to
this Note shall be deemed to have been sufficiently given or served for all
purposes on the third business day after being sent as certified or registered
mail, postage and charges prepaid, to the following addresses: if to ICSL: Reid
House, 31 Church Street, Hamilton, Bermuda HM12 or at any other address
designated by the ICSL in writing to Holder with a copy to Philip P. Sudan,
Jr., Ryan & Sudan, L.L.P., 909 Fannin, 39th Floor, Houston, Texas 77010; if to
ISC: ISC, 1100 Executive Drive, Richardson, Texas  75081, or at any other
address designated by ISC to the Holder in writing with a copy to Philip P.
Sudan, Jr., Ryan & Sudan, L.L.P., 909 Fannin, 39th Floor, Houston, Texas 77010;
if to Holder: St. James Capital Corp., 1980 Post Oak Boulevard, Suite 2030,
Houston, Texas 77056, Attn: John L. Thompson, or at any other address
designated by Holder to the Makers in writing.

         6.6     Separability Clause. In case any provision in this Note shall
be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions in such jurisdiction
shall not in any way be affected or impaired thereby; provided, however, such
construction does not destroy the essence of the bargain provided for
hereunder.

         6.7     Governing Law. This Note shall be governed by, and construed
in accordance with, the internal laws of the State of Texas (without regard to
principles of choice of law) and the laws of the United States and for all
purposes shall be construed in accordance with, and governed by, the laws of
said State and of the United States.  The Makers and the Holder further agree
that the provisions of





                                      -12-
<PAGE>   13
Article 1.04, Subtitle 1, Title 79, of the Revised Civil Statutes of Texas,
1925, as amended, are applicable to the determination of the Highest Lawful
Rate with respect to this Not, the indicated rate ceiling computed from time to
time pursuant to Section (a) of such Article shall apply to this Note;
provided, however, that to the extent permitted by such Article, the Holder may
from time to time by notice from the Holder revise the election of such
interest rate ceiling as such ceiling affects then current or future balances
of the Advances outstanding under this Note.  The provisions of Chapter 15 of
Subtitle 3 of the said Title 79 do not apply to this Note issued hereunder.


         6.8     Interest. Each provision in this Note and the other
Transaction Documents is expressly limited so that in no event whatsoever shall
the amount paid, or otherwise agreed to be paid, to the Holder for the use,
forbearance or detention of the money to be loaned under this Note or any
Transaction Document or otherwise (including any sums paid as required by any
covenant or obligation contained herein or in any other Transaction Document
which is for the use, forbearance or detention of such money), exceed that
amount of money which would cause the effective rate of interest to exceed the
Highest Lawful Rate, and all amounts owed under this Note and each other
Transaction Document shall be held to be subject to reduction to the effect
that such amounts so paid or agreed to be paid which are for the use,
forbearance or detention of money under this Note or such Transaction Document
shall in no event exceed that amount of money which would cause the effective
rate of interest to exceed the Highest Lawful Rate.  Anything in this Note or
any other Transaction Document to the contrary notwithstanding, the Makers
shall never be required to pay unearned interest on this Note or ever be
required to pay interest on this Note at a rate in excess of the Highest Lawful
Rate, and if the effective rate of interest which would otherwise be payable
with respect to this Note would exceed the Highest Lawful Rate, or if the
Holder shall receive any unearned interest or shall receive monies that are
deemed to constitute interest which would increase the effective rate of
interest payable by the Makers with respect to this Note to a rate in excess of
the Highest Lawful Rate, then (i) the amount of interest which would otherwise
be payable by the Makers with respect to this Note shall be reduced to the
amount allowed under applicable law and (ii) any unearned interest paid by the
Makers or any interest paid by the Makers in excess of the Highest Lawful Rate
shall be in the first instance credited on the principal of this Note with the
excess thereof, if any, refunded to the Makers.  It is further agreed that,
without limitation of the foregoing, all calculations of the rate of interest
contracted for, charged or received by the Holder under this Note or the other
Transaction Documents, are made for the purpose of determining whether such
rate exceeds the Highest Lawful Rate applicable to the Holder (such Highest
Lawful Rate being the Holder's "Maximum Permissible Rate"), shall be made, to
the extent permitted by usury laws applicable to the Holder (now or hereafter
enacted), by (a) characterizing any non-principal payment as an expense, fee or
premium rather than as interest and (b) amortizing, prorating and spreading in
equal parts during the period of the full stated term of the Advances evidenced
by the Note all interest at any time contracted for, charged or received by the
Holder in connection therewith.

         6.9     Acknowledgement of Letter of Intent. The parties hereby
acknowledge that they have heretofore entered into that certain Letter of
Intent dated as of February 14, 1997, as may be amended from time to time (the
"Letter of Intent"), which Letter of Intent contemplates that the parties will
enter into a credit facility in favor of the Makers, or certain of them, in an
aggregate principal amount of up to $15,000,000, the proceeds of which will be
used, in part, to refinance the indebtedness evidenced by this Note. The
obligations of the Holder to enter into said credit facility are subject to the
satisfaction, among other things, of the items and requirements set forth in
Section 3 of the Letter of Intent and the execution and delivery by the Makers
of definitive loan documents satisfactory in form and substance to the Holder,
including legal opinions from independent legal counsel to the Makers.
Notwithstanding anything contained in the Letter of Intent, all outstanding
principal together with all accrued and unpaid interest shall be due and
payable in full on the Maturity Date.





                                      -13-
<PAGE>   14
         6.10.  Restatement of Prior Note.  This Note is issued in part in
substitution for, and in exchange, replacement, modification, and restatement
of, but not in extinguishment of $2,500,000 principal indebtedness evidenced by
that certain promissory note of the Makers dated February 26, 1997, in the
original principal sum of $2,500,000 payable to the order of the Lender (the
"Prior Note"), it being acknowledged that the indebtedness evidenced by this
Note in part constitutes a modification and rearrangement of the $2,500,000
outstanding principal indebtedness evidenced by the Prior Note.

         6.11.  FINAL AGREEMENT OF THE PARTIES.  THIS NOTE AND THE OTHER
TRANSACTION DOCUMENTS TO WHICH ANY OF MAKERS OR ANY OF THEIR RESPECTIVE
SUBSIDIARIES IS A PARTY CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION
26.02(A) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

                 THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.





                                      -14-
<PAGE>   15
         IN WITNESS WHEREOF, each Maker has caused this instrument to be duly
executed on the date first above written.

                                    INTELECT COMMUNICATIONS SYSTEMS
                                       LIMITED


                                    By: ________________________________________


                                    Name: ______________________________________


                                    Title: _____________________________________




                             INTELECT SYSTEMS CORP.


                                    By: ________________________________________


                                    Name: ______________________________________


                                    Title: _____________________________________









                                      -15-