FIRST AMENDMENT TO PROMISSORY NOTE

                  This   Agreement,   dated  as  of   October   5,  2000   (this
"Amendment"),  is by and  between  Stephen  B.  Gray,  an  individual  currently
residing at 9 Pavilica Road, Stockton, NJ 08559 (the "Maker"), and ION NETWORKS,
INC.,  a  Delaware  corporation  currently  having  an  address  at  1551  South
Washington Avenue, Piscataway, New Jersey 08854 (the "Payee").

                  The  Maker  issued  his  Promissory  Note to the  Payee in the
principal  amount of $750,000 dated June 27, 2000 (the "Existing  Note",  and as
amended  by this  Amendment,  and as the  same  may be  hereafter  supplemented,
modified, amended, restated or replaced from time to time in the manner provided
therein, the "Note").

                  The Maker  and the  Payee  have  entered  into the  Separation
Agreement (as defined  below),  pursuant to which (among other things) the Payee
agreed to  temporarily  forebear on the repayment of the Existing  Note, and the
Maker  agreed  to  secure  his  obligations  under  the  Existing  Note with the
Mortgage.

                  The  parties  have  entered  into this  Amendment  in order to
approve and reflect the foregoing and certain other changes,  all upon the terms
and provisions and subject to the conditions hereinafter set forth.

                                    Agreement
                                    ---------

                  In  consideration  of the foregoing,  the mutual covenants and
agreements set forth below and in the Separation  Agreement,  and other good and
valuable   consideration   (the   receipt  and  adequacy  of  which  are  hereby
acknowledged by the parties), the parties hereto hereby agree as follows:

          Section 1.  Amendment to Existing  Note.  The Existing  Note is hereby
amended as follows, effective as of the date first written above:

          (a) The interest rate on the Existing Note, as hereby  amended,  shall
be  determined  and fixed as of June 27,  2000,  and shall cease to accrue as of
September 29, 2000.

          (b) Section 1 of the Existing Note is hereby  deleted in its entirety,
and the following new section is hereby inserted in its place:

                  "1. Payment of Principal and Interest.  The Principal  Amount,
         together with all accrued and unpaid interest thereon, shall be paid by
         Maker to the  Payee on the  first to occur  of:  (i)  April  30,  2001,
         provided that if the Payee is unable to register the shares  underlying
         certain  options  owned by maker by December 31,  2000,  as required by
         Section 4(b) of the Separation  Agreement (as hereinafter defined) such
         date shall be December 31, 2001, instead of April 30, 2001; or (ii) the
         occurrence  of an Event of Default  (as defined  below);  or (iii) such
         earlier date as may be otherwise  provided  herein (the  earliest  such
         applicable date being referred to herein as the "Maturity Date")."

          (c) The last two sentences of Section 2 ("Prepayment") of the Existing
Note,  beginning with the language "Maker agrees" and ending with  "compensation
committee or CFO", are hereby deleted in their entirety.

          (d) At the  end of  Section  2 of the  Existing  Note,  the  following
Section 2A is hereby inserted without the modification of any other provision:

                  "2A. Security.  This Maker's  obligations under this Note: (i)
         are subject to and  supported by certain  agreements  made by the Maker
         under the Separation and Forebearance  Agreement  between the Maker and
         the Payee dated as of October 5, 2000 (as the same may

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          be supplemented,  modified, amended, restated or replaced from time to
          time in the manner provided therein, the "Separation Agreement"), (ii)
          are assured by the guaranty of Kathleen D. Gray, the Maker's wife (the
          "Guarantor"),  pursuant to her Guaranty Agreement with the Payee dated
          as of  October  5,  2000 (as the same may be  supplemented,  modified,
          amended, restated or replaced from time to time in the manner provided
          therein, the "Guaranty"), and (iii) are secured by the Mortgage on the
          property located at 9 Pavilica Road, Stockton,  New Jersey 08559, from
          the  Maker  and  the  Guarantor,  as  mortgagors,  to  the  Payee,  as
          mortgagees,  dated  as  of  October  5,  2000  (as  the  same  may  be
          supplemented,  modified,  amended,  restated or replaced  from time to
          time in the manner provided therein,  the "Mortgage"),  which Mortgage
          also secures the obligations of the Guarantor under her Guaranty.  The
          Guaranty and Mortgage also support the  Promissory  Note issued by the
          Maker to the Payee,  dated as of the date hereof, in the amount of One
          Hundred and Sixty Three  Thousand  ($163,000)  Dollars (as so amended,
          and as the same may be supplemented,  modified,  amended,  restated or
          replaced  from  time to  time  in the  manner  provided  therein,  the
          "$163,000 Note")".

          (e) Section 3 of the Existing Note is deleted in its entirety, and the
following new section is hereby inserted in its place:

                  "3. Events of Default.  An "Event of Default"  shall be deemed
         to occur hereunder (i) upon the  commencement of any proceedings by the
         Maker or Guarantor,  or with the consent or  non-objection of the Maker
         or  Guarantor,   under  any  law  or  statute  concerning   bankruptcy,
         arrangement  of  debt,  insolvency  or  readjustment  of  debt,  or the
         commencement of any such  proceedings  without the consent of the Maker
         or Guarantor and such  proceedings  shall continue  undischarged  for a
         period of sixty (60)  days;  (ii) the  failure to pay any amount  under
         this Note when due;  (iii) any "Event of Default" under (and as defined
         in) the  $163,000  Note,  (iv) any  breach or  default  by Maker or the
         Guarantor under the Separation Agreement, the Guaranty or the Mortgage,
         or (v) upon the death or disability  of the Maker or  Guarantor.  Payee
         shall also be  entitled  to the  payment of interest at the rate of 12%
         per annum on the outstanding  Principal  Amount from and after the date
         of any event of Default."

          (f) After the last  sentence of Section 4 of the  Existing  Note,  the
following is hereby inserted without the modification of any other provision:

                  " In addition,  the Maker shall pay or reimburse ON DEMAND any
         and all costs and expenses  incurred by the Payee,  whether directly or
         indirectly,  in connection with all waivers,  releases,  satisfactions,
         modifications,  amendments and consents,  all payments made and actions
         taken in the name of or on behalf of the  Maker or the  Guarantor,  and
         the administration,  maintenance,  enforcement and adjudication of this
         Note and the Payee's  rights,  powers,  privileges and other  interests
         under this Note and applicable law, including (without  limitation) the
         disbursements, expenses and fees of counsel to the Payee."

          (g) At the  end of  Section  4 of the  Existing  Note,  the  following
Section 4A is hereby inserted without the modification of any other provision:

                  "4A.  Waiver of  Presentment,  Etc.  Presentment  for payment,
         notice of dishonor,  protest,  notice of protest,  notice of acceptance
         and all similar notices are hereby  expressly  waived by the Maker. Any
         waiver or consent  respecting  any term or provision of this  Agreement
         shall be effective  only in the specific  instance and for the specific
         purpose  for  which  given  and  shall  not be  deemed,  regardless  of
         frequency given, to be a further or continuing  waiver or consent.  The
         failure  or  delay  of the  Payee  at any  time  or  times  to  require
         performance  of, or to exercise its rights with respect to, any term or
         provision of this Agreement in no manner shall affect the Payee's right
         at a later time to enforce any such  provision.  No notice to or demand
         on the Maker or Guarantor  in any case shall  entitle such party to any
         other or  further  notice  or  demand  in the  same,  similar  or other
         circumstances.

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<PAGE>


          The  acceptance  by the Payee of (a) any partial or late payment shall
          not constitute a satisfaction or waiver of the full amount then due or
          the  resulting  Event  of  Default  or  (b)  any  payment  during  the
          continuance  of an Event of Default  shall not  constitute a waiver or
          cure  thereof;  and the Payee may  accept or reject  any such  payment
          without  affecting  any  of the  Payee'  rights,  powers,  privileges,
          remedies and other  interests under this Agreement and applicable law.
          All  representations,  warranties  and  covenants of the Maker and all
          rights, powers, privileges,  remedies and other interests of the Payee
          hereunder  are  cumulative  and  not  alternatives,  and  they  are in
          addition  to and shall  not  limit  (except  as  other-wise  expressly
          provided herein) any other right,  power,  privilege,  remedy or other
          interest of the Payee under this  Agreement,  any related  document or
          applicable law."

          Section 2.  Acknowledgment  of  Outstanding  Loans.  The Maker  hereby
acknowledges,  certifies and agrees that: (a) pursuant to the Existing Note, the
Payee has made  loans to the Maker that are  outstanding  as of the date of this
Amendment  in the  aggregate  principal  amount  of  $750,000.00;  and  (b)  the
obligations  of the Maker to repay those loans (with  interest) to the Payee and
to perform or otherwise  satisfy his other  obligations  under the Existing Note
(i) each remain and shall  continue  in full force and  effect,  both before and
after  giving  effect to this  Amendment,  (ii) are not subject to any  defense,
counterclaim,  setoff, right of recoupment,  abatement, reduction or other claim
or  determination,  and (iii) are and shall continue to be governed by the terms
and  provisions  of the Existing Note as  supplemented,  modified and amended by
this Amendment.

          Section 3.  Counterparts.  This Amendment may be signed in two or more
counterpart copies of the entire document or of signature pages to the document,
each of which may be executed by one or more of the parties  hereto,  but all of
which, when taken together, shall constitute a single agreement binding upon all
of the parties hereto.

          Section 4. Governing Law, Etc. This Amendment shall be governed by and
construed in accordance  with the applicable  terms and provisions of Sections 5
through  10 (as  well as any  applicable  definitions  or  provisions  appearing
elsewhere) of the Existing Note as amended  hereby as if this amendment were the
"Note"  referred  to  in  those  provisions,  which  terms  and  provisions  are
incorporated herein by reference.

          Section 5.  Agreement to Continue as Amended.  The Existing  Note,  as
supplemented,  modified and amended by this Amendment, shall remain and continue
in full force and effect after the date hereof.

          Section 6. Entire  Agreement.  This Amendment,  the Note, the $163,000
Note, the Separation Agreement, the Mortgage and the Guaranty contain the entire
agreement of the parties and  supersede all other  representations,  warranties,
agreements and understandings, oral or otherwise, among the parties with respect
to the matters contained herein and therein.

                  In Witness  Whereof,  the  parties  hereto have  executed  and
delivered this Amendment as of the date first written above.

                                       MAKER:

                                       /s/ Stephen B. Gray
                                       -------------------
                                           Stephen B. Gray



                                       PAYEE:

                                       ION NETWORKS, INC.

                                       By: /s/Stephen M. Deixler
                                          --------------------------------
                                           Name:  Stephen M. Deixler
                                           Title: Chairman


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