Document:

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                                   EXHIBIT 4.3

THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER
ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR
OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW OR (2) THE
COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, THAT SUCH
NOTE OR COMMON STOCK MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.

                               INTERSYSTEMS, INC.
            Series A 11% Convertible Senior Subordinated Secured Note

Due March 31, 2006

$750,000                                                                NO. CS-1

April 25, 2001

     InterSystems, Inc., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to Coast Capital Partners, LLC. or its
registered assigns (the "Payee" or "Holder"), the principal amount of SEVEN
HUNDRED FIFTY THOUSAND AND 00/100 ($750,000) and accrued interest thereon in
accordance with the terms and provisions hereof.

     This Note was issued by the Company in a private placement pursuant to a
Note Purchase Agreement, dated as of April 25, 2001 (together with the exhibits
and schedules attached thereto, the "Note Purchase Agreement"). The series of
notes referred to as Series A 11% Convertible Senior Subordinated Secured Notes,
defined as the " Series A 11% Convertible Notes" in the Note Purchase Agreement,
are referred to hereafter as the "Notes".

     1. PAYMENT OF PRINCIPAL AND INTEREST; METHOD OF PAYMENT; SECURITY.

         1.1 METHOD OF PAYMENT. Payment of the principal of and accrued interest
on this Note shall be made in such coin or currency of the United States of
America as at the time of payment shall be legal tender for the payment of
public and private debts. The Company will pay or cause to

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be paid all sums becoming due hereon for principal, interest, redemptions and
Change of Control events by check sent to the Holder's address as it appears in
the Company's records at the close of business on the related Record Date (as
defined below), without any requirement for the presentation of this Note or
making any notation thereon except that the Holder hereof agrees that payment of
the final amount due shall be made only upon surrender of this Note to the
Company for cancellation at the Company's offices (or an agency maintained by
the Company for such purposes) in Spring Lake, New Jersey (the "Office of the
Company"). For purposes of this Note, the term "Record Date" shall mean, with
respect to regularly scheduled payments of interest the June 15 and December 15,
respectively, immediately preceding the next interest payment date, and with
respect to all other payments, the record date set by the Company at least five
business days prior to the proposed payment date and of which the Company shall
give the Holder notice at least 15 days' prior to such Record Date. Prior to any
sale or other disposition of this instrument, the Holder hereof agrees to
endorse hereon the amount of principal paid hereon and the last date to which
interest has been paid hereon and to notify the Company of the name and address
of the transferee.

         1.2 PAYMENT OF PRINCIPAL. The entire outstanding principal balance of
this Note shall be due and payable on March 31, 2006 (the "Maturity Date"). This
Note cannot be prepaid or otherwise redeemed.

         1.3 PAYMENT OF INTEREST. Interest (computed on the basis of a 360-day
year of twelve 30-day months) on the unpaid portion of the principal amount from
time to time outstanding hereunder shall be paid by the Company to the Payee at
the rate of eleven percent (11%) per annum (the "Stated Interest Rate") in cash.
Said interest to be paid (i) semi-annually on each June 30 and December 31 of
each year, commencing June 30, 2001, (ii) within 30 days of the date of
conversion, through the conversion date, with respect to the portion of the Note
converted, in connection with any redemption on the redemption date with respect
to that portion of the Note being redeemed, (iii) in connection with any Change
of Control Payment (as hereinafter defined) on the date of such payment and (iv)
on the Maturity Date, or, if any such day is not a business day, on the next
succeeding business day.

         1.4 SECURITY INTEREST. As security for the full and timely payment and
performance of all of the obligations of the Company contained herein and any
other obligations or liabilities of the Company to the Holder, the Company
hereby grants a continuing security interest in and lien upon, and mortgages,
pledges and assigns to the Holder for security purposes, the "Collateral." The
term "Collateral" shall mean all of the Company's now owned or hereafter
acquired personal property, including, without limitation, all assets, accounts,
accounts receivable, contract receivables, goodwill, contract rights, general
intangibles, inventory, equipment, fixtures, goods, investments, documents,
instruments, returned merchandise, chattel paper, cash, deposit accounts,
completion bonds, policies of insurance and all products, replacements or
substitutions for, and proceeds of, and accessions and additions to any and all
of the foregoing property and interests in property, and all payments under any
indemnity, warranty or guarantee payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, and the books and
records relating to any of the foregoing Collateral. The Company hereby
authorizes Holder to sign and file financing statements at any time with respect
to the Collateral without the signature of the Company. The Company will,
however,

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at any time on request of the Holder, sign financing statements, trust receipts,
security agreements or other agreements with respect to the Collateral. Upon the
Company's failure to do so, Holder is authorized as the agent of the Company to
sign such instrument, and Company hereby irrevocably designates Holder, its
agents, representatives and designees as agent and attorney-in-fact for the
Company for such purpose. Such appointment is coupled with an interest and is
therefore irrevocable. The Company agrees to pay all filing fees and to
reimburse Holder for all costs and expenses of any kind incurred in any way in
connection with the Collateral. Upon the occurrence and continuance of an "Event
of Default" (as defined in Section 3), Holder shall have, in addition to all
other rights and remedies, the remedies of a secured party under the New Jersey
Uniform Commercial Code. The provisions contained herein shall constitute a
"security agreement" for all purposes of said code. As additional security for
the full and timely payment and performance of the obligations of the Company to
the Holder arising under this Note or otherwise, the Company shall cause each of
its subsidiaries to guarantee such obligations and to grant a continuing
security interest in and lien upon, and mortgage, pledge and assign to the
Holder, for security purposes, all of such subsidiary's personal property, and
shall cause each such subsidiary to execute such documents, instruments and
agreements as the Holder shall request in order to effectuate such guaranty and
grant of security interests.

     2. SUBORDINATION PROVISIONS.

         2.1 PRINCIPAL AND INTEREST. The Company, for itself, its successors and
assigns, covenants and agrees, and the Payee and each successive Holder by
acceptance of this Note, likewise covenants and agrees that payment of the
principal of and interest on this Note is subordinated in right of payment to
the payment of all existing and future "Senior Debt". The term "Senior Debt"
shall mean the principal of and premium, if any, and accrued interest on all
Indebtedness of the Company to any bank or other financial institution whether
such indebtedness is heretofore or hereafter created, incurred or entered into
(or acquired by assignment) and any deferrals, renewals, modifications or
extensions of any such indebtedness, unless under the express provisions of the
instrument creating or evidencing any such indebtedness, or pursuant to which
the same is outstanding, such indebtedness is not superior in right of payment
to this Note. Notwithstanding the foregoing or anything else to the contrary
contained herein, this Note shall rank pari passu with the Company's Series A
13% Convertible Senior Subordinated Secured Notes. "Indebtedness" for all
purposes herein means and includes without duplication, as of any date as of
which the amount thereof is to be determined (whether or not secured by lien,
pledge or deposit), all direct obligations to repay money borrowed (including,
without limitation, amounts borrowed under revolving credit facilities, either
now existing or hereafter created (including any increase in existing
facilities), all notes payable and drafts accepted representing extensions of
credit, and all obligations evidenced by bonds, debentures, notes or other
similar instruments) and all interest accrued and unpaid thereon.

         2.2 DEFAULT. No payments on account of principal of and premium, if
any, and interest on this Note or any other amount payable by the Company to the
Holder on or with respect to this Note (collectively, the "Note Payments") shall
be made if at the time thereof there is a default in the payment of all or any
portion of the obligations under any Senior Debt.

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         2.3 LIQUIDATION, DISSOLUTION, ETC. In the event of any insolvency or
bankruptcy proceeding, and any receivership, total liquidation, reorganization
or other similar proceedings in connection therewith, relative to the Company,
or to its property, or in the event of any proceedings for voluntary
liquidation, dissolution or other winding up of the Company, whether or not
involving insolvency or bankruptcy, then the holders of Senior Debt shall be
entitled to receive payment in full of all principal and premium, if any, and
interest on all such Senior Debt before the Holder shall be entitled to receive
any Note Payment and before the Company may acquire this Note for any cash,
property, assets or securities, and to that end (but subject to the power of a
court of competent jurisdiction to make other equitable provisions reflecting
the rights conferred by these provisions upon such Senior Debt and the holders
thereof with respect to this Note and the Holder hereof by a lawful plan or
reorganization under applicable bankruptcy law) the holders of Senior Debt
(until payment in full of all principal, and premium, if any, and interest on
all such Senior Debt, including interest thereon accruing before or in respect
of periods subsequent to the commencement of any such proceedings) shall be
entitled to receive for application in payment thereof any payment or
distribution of any kind or character, whether in cash or property, or by
set-off or otherwise, which may be payable or deliverable in any such
proceedings in respect of this Note (including any such payment or distribution
which may be payable or deliverable by reason of the provisions of any
indebtedness of the Company which is subordinate and junior in right to this
Note), except securities issued in such proceedings which are subordinate and
junior in right of payment to the payment of Senior Debt.

         2.4 SUBROGATION. Subject to the payment in full of Senior Debt, to the
extent of payments made on or with respect to Senior Debt from any assets out of
the distributive share of the Notes, the Holder shall be subrogated to the
rights of the holders of such Senior Debt to receive payment or distributions of
assets of the Company applicable to such Senior Debt until this Note shall be
paid in full, and no payment or distributions to the holders of such Senior Debt
by or on behalf of the Company from the proceeds that would otherwise be payable
to the Holder shall, as between the Company and the Holder, be deemed to be a
payment by the Company to or on account of this Note.

         2.5 AMENDMENT. These provisions with respect to subordination cannot be
amended, modified or waived without the prior written consent of the holder or
holders of all Senior Debt at the time outstanding; and the subordination
effected hereby shall not be affected by any amendment or modification of, or
addition or supplement to, any such Senior Debt or any instrument or agreement
relating thereto, without the prior written consent of the holder or holders of
all such Senior Debt at the time outstanding. No present or future holder of
Senior Debt shall be prejudiced in his right to enforce subordination of this
Note by any act or failure to act on the part of the Company.

         2.6 BENEFIT OF SENIOR DEBT. The foregoing provisions of this Article 2
shall be for the benefit of the holders of Senior Debt and may be enforced
directly by such holders against the Holder. Upon any payment or distribution of
assets of the Company referred to above, the Holder shall be entitled to rely
upon a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, delivered to the
Holder for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of Senior Debt and

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other indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertaining
thereto or hereto.

     2.7 OBLIGATION TO PAY PRINCIPAL AND INTEREST ABSOLUTE. The foregoing
provisions as to subordination are solely for the purpose of defining the
relative rights of the holders of such Senior Debt, on the one hand, and the
holder of this Note on the other hand. Nothing contained herein is intended to
or shall impair as between the Company, its creditors, other than the holders of
Senior Debt, and the Holder, the obligation of the Company, which shall be
absolute and unconditional, to pay the Holder the Note Payments or affect the
relative rights of the Holder and the creditors of the Company, other than
holders of Senior Debt, nor shall anything herein prevent the Holder hereof from
exercising all remedies otherwise permitted by applicable law upon default
hereunder, subject to the rights of holders of Senior Debt, if any, in respect
of cash, properties or securities of the Company received upon the exercise of
any such remedy. The Holder, by acceptance hereof, acknowledges and agrees that
the subordination provisions of this Section 2 are, and/or are intended to be,
an inducement and a consideration to each holder of any Senior Debt, whether
such Senior Debt was created or acquired before or after the issuance of this
Note, to acquire and continue to hold, or to continue to hold, such Senior Debt
and each holder of Senior Debt shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Debt.

     3. EVENTS OF DEFAULT.

     It shall be an "Event of Default" with respect to this Note upon the
occurrence and continuation uncured of any of the following events:

         3.1 THIS NOTE. (a) failure to pay principal of or premium, if any, on
this Note when due and payable, whether at maturity, upon redemption, upon a
Change of Control Offer (as hereinafter defined) or otherwise, whether or not
such payment is prohibited by the subordination provisions of this Note; or

         (b) failure to pay any interest on this Note when due, which failure
continues for 15 days, whether or not such payment is prohibited by the
subordination provisions of this Note; or

         (c) any failure to perform the covenants contained in Section 3 or 4 of
the Note Purchase Agreement or Section 5.3(o) of this Note; or

         (d) any failure to perform the other covenants of the Company in the
Note Purchase Agreement or in this Note, which failure continues for 60 days
after written notice has been given to the Company of such failure; or

         (e) failure to pay when due principal of and/or acceleration of any
indebtedness for money borrowed by the Company or any of its Subsidiaries (as
hereinafter defined) in excess of $1,000,000, individually or in the aggregate,
if such indebtedness is not discharged, or such acceleration is not annulled,
within 30 days after written notice thereof; or

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         (f) the entry of a decree or order by a court having jurisdiction
adjudging the Company or any Significant Subsidiary as bankrupt or insolvent, or
approving a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or any Significant Subsidiary, under
federal bankruptcy law, as now or hereafter constituted, or any other applicable
federal or state bankruptcy, insolvency or other similar law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary or of any substantial part of the
Company or such Subsidiary's assets, and the continuance of any such decree or
order unstayed and in effect for a period of 90 days; or the commencement by the
Company or any Significant Subsidiary of a voluntary case under federal
bankruptcy law, as now or hereafter constituted, or any other applicable federal
or state bankruptcy, insolvency or other similar law, or the consent by the
Company or such Subsidiary to the institution of bankruptcy or insolvency
proceedings against it, or the filing by the Company or such Subsidiary of a
petition or answer or consent seeking reorganization or relief under federal
bankruptcy law or any other applicable federal or state bankruptcy, insolvency,
or other similar law, or the consent by the Company or such Subsidiary to the
filing of such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Company or such
Subsidiary or of any substantial part of the Company's or such Subsidiary's
property, or the making by the Company or such Subsidiary of an assignment for
the benefit of creditors, or the admission by it in writing of its inability to
pay its debts generally as they become due. For purposes of this Note, the term
"Significant Subsidiary" shall mean each Subsidiary which, as of the then most
recent December 31, accounted for more than 10% of the Company's consolidated
assets, or more than 10% of the Company's consolidated revenue during the 12
months then ended; and the term "Subsidiary" shall mean any current or future
direct or indirect subsidiary of the Company.

         3.2 NOTICE. If an Event of Default occurs and is continuing, the Holder
by notice to the Company may declare the unpaid principal of and premium if any,
and interest hereunder to be due and payable; provided, however, that if an
Event of Default under clause (f) above shall occur, all unpaid principal of and
premium, if any, and interest on the Notes will automatically become due and
payable without any declaration or other act on the part of the Holder.

     4. REMEDIES UPON DEFAULT.

         4.1 ACCELERATION. If an Event of Default occurs and is continuing under
this Note, the Holder by written notice to the Company may declare the unpaid
principal of and premium, if any, and interest thereunder to be due and payable;
provided, however, that if an Event of Default under clause (f) above shall
occur, all unpaid principal of and premium, if any, and interest on this Note
will automatically become due and payable without any declaration or other act
on the part of the Holder.

         4.2 PROCEEDINGS AND ACTIONS. Subject to the terms and provisions of
Section 2, during the continuation of any one or more Events of Default, the
Holder may institute such actions or proceedings in law or equity as it shall
deem expedient for the protection of its rights, and may prosecute and enforce
its claims, against all assets of the Company and shall be entitled to receive
therefrom payment on such claims up to an amount not exceeding the principal
amount of this Note

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then outstanding plus accrued and unpaid interest to the date of payment plus
reasonable expenses of collection, including, without limitation, attorney's
fees and expenses.

     5. CONVERSION.

         5.1 CONVERSION RIGHT. At any time and from time to time commencing with
the date hereof until the Maturity Date, the outstanding principal amount of
debt of this Note, or any portion of such principal amount, is convertible at
the Holder's option into the Company's shares of common stock, $.01 par value
per share (the "Common Stock"), upon surrender of this Note, at the Office of
the Company, accompanied by a written notice of conversion in the form annexed
hereto duly executed by the registered holder or its duly authorized attorney.
The outstanding principal amount of indebtedness of this Note is convertible, in
whole or in part, at the option of the Holder from time to time at any time on
or after the date hereof into shares of Common Stock at a price of $.50 per
share of Common Stock (as adjusted pursuant to the express provisions hereof,
the "Conversion Price"). No fractional shares or scrip representing fractional
shares will be issued upon any conversion, but the Holder will receive an amount
of cash equal to the equivalent fraction of the current market price of the
share of Common Stock on the business day prior to the conversion, in respect of
any fraction of a share which would otherwise be issuable upon the surrender of
this Note for conversion. If the Holder converts this Note prior to March 31,
2002, the Holder will also receive an amount of cash equal to 75% of the
interest which would have accrued with respect to the portion of this Note so
converted had it not been converted, from the date of conversion through March
31, 2002. All such shares of Common Stock and cash (including accrued interest)
shall be delivered or paid within 30 days of the date of conversion. If this
Note is converted at any time only in part, then the portion not so converted
shall continue to be subject to, and the Holder shall continue to have all of
the rights, set forth in this Note with respect to the portion not so converted
(such rights shall include, without limitation, the right to convert all or a
portion of the remaining principal amount into shares of Common Stock or to
continue to hold said Note until payment on the Maturity Date).

         5.2 REGISTRATION OF TRANSFER. Subject to the terms of this Note, at any
time after the date hereof, upon surrender of this Note for conversion, the
Company shall issue and deliver with all reasonable dispatch to or upon the
written order of the Holder and in such name or names as such Holder may
designate, a certificate or certificates for the number of full shares of Common
Stock due to such Holder upon the conversion of this Note (the "Shares"). Such
certificate or certificates shall be deemed to have been issued and any person
so designated to be named therein shall be deemed to have become the Holder of
record of such Shares as of the date of the surrender of this Note; provided,
however, that if, at the date of surrender the transfer books of the Common
Stock shall be closed, the certificates for the Shares shall be issuable as of
the date on which such books shall be opened and until such date the Company
shall be under no duty to deliver any certificate for such Shares; provided,
further, however, that such transfer books, unless otherwise required by law or
by applicable rule of any national securities exchange, shall not be closed at
any one time for a period longer than 20 days.

         5.3 SCHEDULED ADJUSTMENTS AND ADJUSTMENTS FOR DIVIDENDS,
RECLASSIFICATIONS, STOCK ISSUANCES, ETC. Subject to the provisions of this
Section 5.3, the Conversion Price in effect,

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and accordingly, the number of shares of Common Stock into which this Note may
be converted, shall be subject to adjustment from time to time as follows:

         (a) In case the Company shall declare a dividend or make any other
distribution upon any stock of the Company payable in Common Stock, then the
Conversion Price shall be proportionately decreased as of the close of business
on the date of record of said dividend.

         (b) If the Company shall at any time subdivide its outstanding Common
Stock by recapitalization, reclassification or split-up thereof, the Conversion
Price immediately prior to such subdivision shall be proportionately decreased;
and if the Company shall at any time combine the outstanding Common Stock by
recapitalization, reclassification or combination thereof, the Conversion Price
immediately prior to such combination shall be proportionately increased. Any
such adjustment to the Conversion Price shall become effective at the close of
business on the record date for such subdivision or combination.

         (c) In case the Company after the date hereof shall distribute to all
of the holders of outstanding shares of Common Stock any securities or other
assets (other than a cash distribution made as a dividend payable out of
earnings and other than dividends and distributions with respect to which
adjustments are made pursuant to Sections 5.3(a), (b) or (e)), the Board of
Directors shall be required to make such equitable adjustment in the Conversion
Price, as in effect immediately prior to the record date for such distribution,
as may be necessary to preserve for the Holder the rights substantially
proportionate to those enjoyed hereunder by the Holder immediately prior to the
happening of such distribution. Any such adjustment to the Conversion Price
shall become effective at the close of business on the record date for such
distribution.

         (d) [INTENTIONALLY LEFT BLANK]

         (e) If any capital reorganization or reclassification or change of the
capital stock of the Company, or consolidation, merger or combination of the
Company with another entity, or the sale of all or substantially all of its
assets to another entity, shall be effected in such a way that holders of Common
Stock shall be entitled to receive stock, securities, cash, property or assets
with respect to or in exchange for Common Stock, then, as a condition of such
reorganization, reclassification, consolidation, merger, combination or sale,
the Company or such successor or purchasing entity, as the case may be, shall
make such appropriate provision so that the Holder shall have the right
thereafter and until the Maturity Date to convert the outstanding principal
amount of this Note for the kind and amount of stock, securities, cash, property
or assets receivable upon such reorganization, reclassification, consolidation,
merger, combination or sale by a holder of the number of shares of Common Stock
into which this Note might have been converted immediately prior to such
reorganization, reclassification, consolidation, merger, combination or sale,
subject to further adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Section 5.3.

         (f) In case the Company after the date hereof shall issue or sell
shares of Common Stock or Convertible Securities excluding shares or Convertible
Securities issued in any of the

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transactions described in subsections 5.3(a)-(e) above; for a consideration per
share less than the current Conversion Price, the Conversion Price shall be
adjusted immediately thereafter so that it shall equal the price determined by
multiplying the Conversion Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the sum of the number of shares of
Common Stock outstanding immediately prior to the issuance of such additional
shares and the number of shares of Common Stock which the aggregate
consideration received (determined as provided in subsection 5.3(h) below) for
the issuance of such additional shares or Convertible Securities would purchase
at such Conversion Price, and the denominator of which shall be the number of
shares of Common Stock outstanding immediately after the issuance of such
additional shares. Such adjustment shall be made successively whenever such an
issuance is made.

         (g) For purposes of the adjustments provided for in subsections 5.3(c)
and (f) above if at any time, (i) the Company shall issue or distribute any
Convertible Securities, the Company shall be deemed to have issued or
distributed at the same time as the issuance of such Convertible Securities the
maximum number of shares of Common Stock issuable upon conversion or exercise of
the total amount of Convertible Securities; or (ii) the conversion or exercise
price of any Convertible Security is adjusted as a result of the future market
value of the Common Stock (which adjustments are other than as a result of
anti-dilution adjustments resulting from the issuance or distribution of
securities or other assets) then the Company shall be deemed to have issued at
the same time as such adjustment new Convertible Securities having such adjusted
conversion or exercise price and the Convertible Securities subject to such
adjustment shall be deemed expired.

         (h) For purposes of any computation respecting consideration received
pursuant to subsections 5.3 (f), 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 Company 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 Company
          (irrespective of the accounting treatment thereof), whose
          determination shall be conclusive;

               (C) in the case of the issuance of Convertible Securities, the
          aggregate consideration received therefor (before deduction of any
          expenses, commissions or other compensation incurred or paid in
          connection therewith) shall be deemed to be the consideration received
          by the Company for the issuance of such securities plus the additional
          minimum consideration, if any, to be received by the Company upon the
          conversion or exchange thereof (the consideration in each case to be
          determined in the same manner as provided in clauses (A) and (B) of
          this subsection 5.3(h)); and

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               (D) if such consideration consists of the cancellation of debt
          issued by the Company, the consideration shall be deemed to be the
          amount of the outstanding principal amount of such debt as of the date
          of cancellation plus accrued but unpaid interest, through the date of
          cancellation.

         (i) On the expiration, cancellation or redemption of any Convertible
Securities, the Conversion Price then in effect hereunder shall forthwith be
readjusted to such Conversion Price as would have been obtained (i) had the
adjustments made upon the issuance or sale of such expired, canceled or redeemed
Convertible Securities been made upon the basis of the issuance of only the
number of shares of Common Stock theretofore actually delivered upon the
exercise or conversion of such Convertible Securities (and the total
consideration received therefor) and (ii) had all subsequent adjustments been
made only on the basis of the Conversion Price as readjusted under this
subsection (h) for all transactions (which would have affected such adjusted
Conversion Price) made after the issuance or sale of such Convertible
Securities.

         (j) Anything in this Section 5.3 to the contrary notwithstanding, no
adjustment in the Conversion Price shall be required unless such adjustment
would require an increase or decrease of at least 1% in such Conversion Price,
as last adjusted; provided, however, that any adjustments which by reason of
this subsection (j) are not required to be made shall be carried forward and
taken into account in making subsequent adjustments. All calculations under this
Section shall be made to the nearest cent or to the nearest tenth of a share, as
the case may be.

         (k) Upon any adjustment of any Conversion Price, then and in each such
case the Company shall promptly deliver a notice to the Holder, which notice
shall state the Conversion Price resulting from such an adjustment and the
increase or decrease, if any, in the number of shares purchasable at such price
upon the conversion hereof, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.

         (l) In addition to the adjustments provided for elsewhere in this
Section 5.3, if the Company shall at any time combine its outstanding shares of
Common Stock by recapitalization, reclassification or combination thereof, then,
in addition to the adjustments provided for in Section 5.3(b) , on the 90th day
following the effective date of the adjustment pursuant to said Section 5.3(b),
the Conversion Price shall be adjusted to equal the lower of (a) the then
existing Conversion Price, or (b) 110% of the then current market price; and on
the 180th day following the effective date of the adjustment pursuant to said
Section 5.3(b), the Conversion Price shall be again adjusted to equal the lower
of (a) the then current Conversion Price, or (b) 110% of the then current market
price. For purposes of this Note, the term "then current market price" shall
mean as of the date of measurement, the average of the daily per share closing
prices of the Common Stock for the 20 consecutive trading days immediately
preceding such date. The closing price for each day shall be the last price
regular way or, in case no such reported sale takes place on such day, the
average of the last reported bid and asked prices regular way, in either case on
the principal national securities exchange on which the Common Stock is admitted
to trading or listed, or if not listed or admitted to trading on such an
exchange, the average of the closing bid and asked prices as reported by NASDAQ,
or other similar

                                       10

<PAGE>   11

organization if NASDAQ is no longer reporting such information, or if not so
available, the fair market price as determined by the Board of Directors.

         (m) Notwithstanding anything herein to the contrary, no adjustment
shall be made pursuant to this Section 5.3 for any of the following: (i) the
issuance or sale by the Company of shares of Common Stock or Convertible
Securities (A) pursuant to any compensation or incentive plan (including,
without limitation, individual employment agreements) now or hereafter adopted
or entered into for officers, Directors, employees or consultants of the
Company, which plan has been approved by the Compensation Committee or Stock
Option Committee of the Board of Directors (or by a majority vote of the
directors) and, if required by law, the requisite vote of the stockholders of
the Company (unless the exercise or conversion price of the instrument issued
pursuant to such plan is subsequently changed other than solely by the operation
of the anti-dilution provisions thereof, or by the Compensation Committee, the
Stock Option Committee, or the majority vote of the directors and, if required
by law, the stockholders of the Company as provided by this clause (A)); and (B)
upon the conversion or exercise of Convertible Securities outstanding, granted
or subscribed for, on or prior to the date hereof, unless the conversion or
exercise price thereof is changed after the date of issuance of the Notes (other
than solely by operation of the anti-dilution provisions thereof).

         (n) Upon any adjustment of the Conversion Price pursuant to any
provisions contained in this Section 5.3, the number of Shares issuable upon
conversion of this Note shall be changed accordingly.

         (o) The Company shall at all times maintain a reserve and a listing on
the American Stock Exchange (the "AMEX") (and/or any other national securities
exchange or market or trading or quotation facility on which the Common Stock is
then listed) of the total number of shares of Common Stock that are issuable
upon conversion of this Note, as such number may be adjusted from time to time
in accordance with the provisions contained herein. Such listing shall be for
the purpose of issuing shares upon the conversion of this Note. If on any date
(a "Conversion Date") that the Holder of this Note elects to convert this Note,
either in full or in part, the Company is prohibited from issuing all the Shares
to which the Holder would otherwise be entitled pursuant to the provisions
hereof as a result of the failure of said Shares to be so reserved or listed,
and said reserve or listing of said Shares cannot be effectuated without
stockholder approval, then the Company shall issue to the Holder so requesting a
conversion a number of shares of Common Stock equal to the maximum amount that
are issuable, and with respect to the remainder of the Note that the Holder
elected to convert but that will result in the issuance of Shares exceeding the
maximum so reserved or listed, the Holder shall be entitled to be paid by the
Company, immediately following the Conversion Date, an amount equal to the
product of (i) the average closing sales price of the Company's Common Stock
over the five trading days immediately preceding the Conversion Date (as
reported by the AMEX or the principal national securities exchange on which the
Common Stock is then traded, or if not so traded on such an exchange, then as
reported by the NASDAQ, or other similar organization if NASDAQ is no longer
reporting such information) (on any trading day that the Common Stock does not
trade, the closing sales price for that day shall be deemed equal to the average
of the last reported bid and asked price for the Common Stock), and (ii) the
number of Shares that the Company was prevented from issuing to the Holder. Any
amount required to be paid hereunder, shall accrue

                                       11

<PAGE>   12

interest at a rate of 15% per annum, commencing 10 days after the Conversion
Date with respect to which such payment is due.

     5.4 NOTICE OF CERTAIN EVENTS. In case at any time:

         (a) The Company shall pay any dividend payable in stock upon the Common
Stock or make any distribution (other than regular cash dividends) to the
holders of the Common Stock;

         (b) The Company shall offer for subscription pro-rata to the holders of
the Common Stock any additional shares of stock of any class or other rights;

         (c) There shall be any capital reorganization or reclassification of
the capital stock of the Company, or consolidation or merger of the Company
with, or sale of all or substantially all of its assets to, another corporation;
or

         (d) There shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Company;

then, in any one or more of such cases, the Company shall give written notice to
the Holder of the date on which (i) the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights; or
(ii) such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up shall take place, as the case may be.
Such notice shall also specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights or shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, as the case
may be. Such notice shall be given at least ten days prior to the record date or
the date on which the Company's transfer books are closed in respect thereof.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any of the matters set forth in this paragraph.

     6. REPURCHASE AT THE OPTION OF HOLDERS UPON CHANGE OF CONTROL.

         If a Change of Control occurs, the Company shall offer to repurchase
this Note pursuant to an offer (the "Change of Control Offer") at a purchase
price equal to 105% of the principal amount of this Note, plus accrued but
unpaid interest, if any, to the date of repurchase.

         A "Change of Control" means the occurrence of any of the following
events after the date of the issuance of this Note: (i) any person or group
(within the meaning of Section 13(d) or Section 14(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") becomes the direct or indirect
beneficial owner of shares of capital stock of the Company representing greater
than 50% of the combined voting power of all outstanding shares of capital stock
of the Company entitled to vote in the election of directors under ordinary
circumstances, except pursuant to transactions contemplated by the Note Purchase
Agreement; or (ii) at any time Continuing Directors

                                       12

<PAGE>   13

(as defined hereinafter) cease to constitute a majority of the Board of
Directors of the Company then in office. "Continuing Director" means, at any
date, a member of the Company's Board of Directors (i) who was a member of the
Board on the date of the issuance of the Note or (ii) who was nominated or
elected by the majority of directors who were Continuing Directors at the time
of such nomination or election or whose election to the Company's Board of
Directors was recommended or endorsed by the majority of directors who were
Continuing Directors at the time of such election. (Under this definition, if
the present Board of Directors of the Company were to approve a new director or
directors and then resign, no Change of Control would occur even though the
present Board of Directors would thereafter cease to be in office).

         Within 30 days after any Change of Control, unless the Company has
previously given a notice of optional redemption by the Company of all of the
Notes, the Company shall give a notice of the Change of Control Offer to the
Holder at such Holder's last address as it appears in the Company's books
stating: (i) that a Change of Control has occurred and that the Company is
offering to repurchase this Note; (ii) a brief description of such Change of
Control; (iii) the repurchase price (the "Change of Control Payment"); (iv) the
expiration date of the Change of Control Offer, which shall be no earlier than
30 days nor later than 60 days from the date such notice is given; (v) the date
such purchase shall be effected (the "Change of Control Payment Date"), which
shall be no later than 30 days after the expiration date of the Change of
Control Offer; (vi) that if this Note is not accepted for payment pursuant to
the Change of Control Offer, this Note shall continue to accrue interest; (vii)
that unless the Company defaults in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date; (viii)
the Conversion Price; (ix) the name and address of the paying agent and
conversion agent; (x) that this Note must be surrendered to the paying agent to
collect the Change of Control Payment; and (xi) any other information required
by applicable law and any other procedures that the Holder must follow in order
to have this Note repurchased.

         In the event the Company is required to make a Change of Control Offer,
the Company will comply with any applicable securities laws and regulations,
including, to the extent applicable, Section 14(e) of, and Rule 14e-1 and any
other tender offer rules under, the Exchange Act, which may then be applicable
to a Change of Control Offer.

     7. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933.

         The Holder is entitled to the registration rights set forth in the Note
Purchase Agreement executed and delivered by the Holder or its
predecessor-in-interest in this Note. The Holder, each transferee hereof and any
Holder and transferee of any shares of Common Stock into which this Note is
convertible (the "Underlying Shares"), by its acceptance thereof, agrees that
(i) no public distribution of this Note or Underlying Shares will be made in
violation of the Act, and (ii) during such period as the delivery of a
prospectus with respect to the Note or Underlying Shares may be required by the
Act, no public distribution of the Note or Underlying Shares will be made in a
manner or on terms different from those set forth in, or without delivery of, a
prospectus then meeting the requirements of Section 10 of the Act and in
compliance with applicable state securities laws. The Holder of this Note and
each transferee hereof further agrees that if any distribution of the Note or

                                       13

<PAGE>   14

any Underlying Shares is proposed to be made by them otherwise than by delivery
of a prospectus meeting the requirements of Section 10 of the Act, such action
shall be taken only after submission to the Company of an opinion of counsel,
reasonably satisfactory in form and substance to the Company's counsel, to the
effect that the proposed distribution will not be in violation of the Act or of
applicable state law. Furthermore, it shall be a condition to the transfer of
this Note that any transferee hereof deliver to the Company its written
agreement to accept and be bound by all of the terms and conditions contained in
this Note.

         This Note, the Underlying Shares or any other security issued or
issuable upon conversion of this Note may not be sold or otherwise disposed of
except as follows:

         (a) To a person who, in the opinion of counsel for the Holder
reasonably acceptable to the Company, is a person to whom this Note or
Underlying Shares may legally be transferred without registration and without
the delivery of a current prospectus under the Act with respect thereto and then
only against receipt of an agreement of such person to comply with the
provisions of this Section with respect to any resale or other disposition of
such securities which agreement shall be satisfactory in form and substance to
the Company and its counsel; provided that the foregoing shall not apply to any
such Note, shares or other security as to which such Holder shall have received
an opinion letter from counsel acceptable to the Company as to the exemption
thereof from registration under the Act pursuant to Rule 144(k) under the Act;
or

         (b) To any person upon delivery of a prospectus then meeting the
requirements of the Act relating to such securities and the offering thereof for
such sale or disposition.

         Unless the Company directs its transfer agent otherwise, each
certificate for Underlying Shares or other securities issued upon conversion of
this Note shall bear a legend relating to the non-registered status of such
securities under the Act.

     8. MISCELLANEOUS.

         8.1 NOTICES. All communications provided hereunder shall be in writing
and, if to the Company, delivered or mailed by registered or certified mail
addressed to InterSystems, Inc., 1011 Highway 71, Spring Lake, New Jersey,
Attention: President, or, if to the Holder, at the address shown for the Holder
in the registration books maintained by the Company.

         8.2 LOST, STOLEN OR MUTILATED NOTES. In case this Note shall be
mutilated, lost, stolen or destroyed, the Company may, in its discretion, issue
and deliver in exchange and substitution for and upon cancellation of the
mutilated Note, or in lieu of and in substitution for the Note, lost, stolen or
destroyed, a new Note of like tenor and representing an equivalent right or
interest, but only upon receipt of evidence satisfactory to the Company of such
loss, theft or destruction and an indemnity, if requested, also satisfactory to
it.

         8.3 STAMP TAX The Company will pay any documentary stamp taxes
attributable to the initial issuance of the Common Stock; provided, however,
that the Company shall not be

                                       14

<PAGE>   15

required to pay any tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for the Common Stock in
a name other than that of the Holder in respect of which this Note is issued,
and in such case the Company shall not be required to issue or deliver any
certificate for the Common Stock until the person requesting the same has paid
to the Company the amount of such tax or has established to the Company's
satisfaction that such tax has been paid or that no such tax is required to be
paid.

         8.4 SHARES VALIDLY ISSUED. The Company agrees that all shares of Common
Stock issuable upon conversion of this Note shall be, at the time of delivery of
certificates for such shares, validly issued and outstanding, fully paid and
non-assessable and that the issuance of such shares will not give rise to
preemptive rights in favor of existing stockholders.

         8.5 GOVERNING LAW. This Note shall be construed in accordance with and
governed by the laws of the State of New York, without giving effect to such
state's conflict of laws principles.

         8.6 NO RECOURSE. No recourse whatsoever, either directly or through the
Company or any trustee, receiver or assignee, shall be had in any event or in
any manner against any past, present or future stockholder, director or officer
of the Company for the payment of the redemption price, principal of or interest
on this Note (or for any other Note Payments) or for any claim based thereon or
otherwise in respect this Note; this Note being a corporate obligation only.

         8.7 REGISTRATION OF TRANSFER. The Company shall maintain books for the
transfer and registration of Notes. The Company may treat the person in whose
name this Note is registered as the owner and Holder of the Note for the purpose
of receiving principal of and premium, if any, and interest on this Note and for
all other purposes whatsoever, and the Company shall not be affected by any
notice to the contrary. Upon the transfer of any Note in accordance with the
provisions of Section 7 hereof, the Company shall issue and register the Note in
the names of the new holders. The Notes shall be signed manually by the
Chairman, Chief Executive Officer, President or any Vice President and the
Secretary or Assistant Secretary of the Company. Subject to the terms of
Sections 5 and 7 and Section 8.3, upon surrender of this Note, the Company shall
issue and deliver with all reasonable dispatch to or upon the written order of
the Holder, and in such name or names as such Holder may designate, a
certificate or certificates for the number of Shares due to such Holder upon the
conversion of this Note. Such certificate or certificates shall be deemed to
have been issued and any person so designated to be named therein shall be
deemed to have become the Holder of record of such Shares as of the date of the
surrender of this Note pursuant to said sections; provided, however, that if, at
the date of surrender the transfer books of the Common Stock shall be closed,
the certificates for the Shares shall be issuable as of the date on which such
books shall be opened and until such date the Company shall be under no duty to
deliver any certificate for such Shares; provided, further, however, that such
transfer books, unless otherwise required by law or by applicable rule of any
national securities exchange, shall not be closed at any one time for a period
longer than 20 days.

                                       15

<PAGE>   16

     IN WITNESS WHEREOF, InterSystems, Inc. has caused this Note to be signed in
its corporate name by a duly authorized officer in accordance herewith and to be
dated the day and year first above written.

                                           INTERSYSTEMS, INC.

                                            By:_____________________________
                                               Name:
                                               Title:

Attest:

______________________________

                                       16

<PAGE>   17

ASSIGNMENT

     For value received I hereby assign
to _________________________________________ $ ___________________________

principal amount of the 11% Convertible Subordinated Note due March 31, 2006
evidenced hereby and hereby irrevocably appoint_______________ attorney to
transfer the Note on the books of the within named corporation with full power
of substitution in the premises.

Dated:

In the presence of:

____________________________

____________________________

                                       17

<PAGE>   18

CONVERSION NOTICE

TO:  INTERSYSTEMS, INC.

The undersigned holder of this Note hereby irrevocably exercises the option to
convert $ _______ principal amount of such Note (which may be less than the
stated principal amount thereof) into shares of common stock of InterSystems,
Inc. ("Common Stock") (as such term is defined in such Note) in accordance with
the terms of such Note, and directs that the shares of Common Stock issuable and
deliverable upon such conversion, together with a check (if applicable) in
payment for any fractional shares as provided in such Note, be issued and
delivered to the undersigned unless a different name has been indicated below.
If shares of Common Stock are to be issued in the name of a person other than
the undersigned holder of such Note, the undersigned will pay all transfer taxes
payable with respect thereto.

______________________________
Name and Address of Holder

______________________________
Signature of Holder

Principal amount converted $_____________________________

If shares are to be issued otherwise than to the Holder:

______________________________
Name of Transferee

______________________________
Name and SS# of Transferee

                                       18<PAGE>   1
                                   EXHIBIT 4.4

THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), NOR UNDER
ANY STATE SECURITIES LAW AND MAY NOT BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR
OTHERWISE TRANSFERRED UNTIL (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE ACT AND ANY APPLICABLE STATE SECURITIES LAW OR (2) THE
COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, THAT SUCH
NOTE OR COMMON STOCK MAY BE PLEDGED, SOLD, ASSIGNED, HYPOTHECATED OR TRANSFERRED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR APPLICABLE STATE
SECURITIES LAWS.

                               INTERSYSTEMS, INC.

            Series A 13% Convertible Senior Subordinated Secured Note

Due March 31, 2006

$250,000                                                    NO. CS-1

April 25, 2001

         InterSystems, Inc., a Delaware corporation (the "Company"), for value
received, hereby promises to pay to Coast Capital Partners, LLC. or its
registered assigns (the "Payee" or "Holder"), the principal amount of TWO
HUNDRED FIFTY THOUSAND AND 00/100 ($250,000) and accrued interest thereon in
accordance with the terms and provisions hereof.

         This Note was issued by the Company in a private placement pursuant to
a Note Purchase Agreement, dated as of April 25, 2001 (together with the
exhibits and schedules attached thereto, the "Note Purchase Agreement"). The
series of notes referred to as Series A 13% Convertible Senior Subordinated
Secured Notes, defined as the " Series A 13% Convertible Notes" in the Note
Purchase Agreement, are referred to hereafter as the "Notes".

         1. PAYMENT OF PRINCIPAL AND INTEREST; METHOD OF PAYMENT; SECURITY.

                  1.1 METHOD OF PAYMENT. Payment of the principal of and accrued
interest on this Note shall be made in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts. The Company will pay or cause to be paid
all sums becoming due hereon for principal, interest, redemptions and Change of
Control events by check sent to the Holder's address as it appears in the
Company's records at the close of
<PAGE>   2
business on the related Record Date (as defined below), without any requirement
for the presentation of this Note or making any notation thereon except that the
Holder hereof agrees that payment of the final amount due shall be made only
upon surrender of this Note to the Company for cancellation at the Company's
offices (or an agency maintained by the Company for such purposes) in Spring
Lake, New Jersey (the "Office of the Company"). For purposes of this Note, the
term "Record Date" shall mean, with respect to regularly scheduled payments of
interest the June 15 and December 15, respectively, immediately preceding the
next interest payment date, and with respect to all other payments, the record
date set by the Company at least five business days prior to the proposed
payment date and of which the Company shall give the Holder notice at least 15
days' prior to such Record Date. Prior to any sale or other disposition of this
instrument, the Holder hereof agrees to endorse hereon the amount of principal
paid hereon and the last date to which interest has been paid hereon and to
notify the Company of the name and address of the transferee.

                  1.2 PAYMENT OF PRINCIPAL. The entire outstanding principal
balance of this Note shall be due and payable on March 31, 2006 (the "Maturity
Date"). This Note cannot be prepaid or otherwise redeemed.

                  1.3 PAYMENT OF INTEREST. Interest (computed on the basis of a
360-day year of twelve 30-day months) on the unpaid portion of the principal
amount from time to time outstanding hereunder shall be paid by the Company to
the Payee at the rate of thirteen percent (13%) per annum (the "Stated Interest
Rate") in cash. Said interest to be paid (i) semi-annually on each June 30 and
December 31 of each year, commencing June 30, 2001, (ii) within 30 days of the
date of conversion, through the conversion date, with respect to the portion of
the Note converted, in connection with any redemption on the redemption date
with respect to that portion of the Note being redeemed, (iii) in connection
with any Change of Control Payment (as hereinafter defined) on the date of such
payment and (iv) on the Maturity Date, or, if any such day is not a business
day, on the next succeeding business day.

                  1.4 SECURITY INTEREST. As security for the full and timely
payment and performance of all of the obligations of the Company contained
herein and any other obligations or liabilities of the Company to the Holder,
the Company hereby grants a continuing security interest in and lien upon, and
mortgages, pledges and assigns to the Holder for security purposes, the
"Collateral." The term "Collateral" shall mean all of the Company's now owned or
hereafter acquired personal property, including, without limitation, all assets,
accounts, accounts receivable, contract receivables, goodwill, contract rights,
general intangibles, inventory, equipment, fixtures, goods, investments,
documents, instruments, returned merchandise, chattel paper, cash, deposit
accounts, completion bonds, policies of insurance and all products, replacements
or substitutions for, and proceeds of, and accessions and additions to any and
all of the foregoing property and interests in property, and all payments under
any indemnity, warranty or guarantee payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, and the books and
records relating to any of the foregoing Collateral. The Company hereby
authorizes Holder to sign and file financing statements at any time with respect
to the Collateral without the signature of the Company. The Company will,
however, at any time on request of the Holder, sign financing statements, trust
receipts, security agreements or other agreements with respect to the
Collateral. Upon the Company's failure to do so, Holder is

                                        2
<PAGE>   3
authorized as the agent of the Company to sign such instrument, and Company
hereby irrevocably designates Holder, its agents, representatives and designees
as agent and attorney-in-fact for the Company for such purpose. Such appointment
is coupled with an interest and is therefore irrevocable. The Company agrees to
pay all filing fees and to reimburse Holder for all costs and expenses of any
kind incurred in any way in connection with the Collateral. Upon the occurrence
and continuance of an "Event of Default" (as defined in Section 3), Holder shall
have, in addition to all other rights and remedies, the remedies of a secured
party under the New Jersey Uniform Commercial Code. The provisions contained
herein shall constitute a "security agreement" for all purposes of said code. As
additional security for the full and timely payment and performance of the
obligations of the Company to the Holder arising under this Note or otherwise,
the Company shall cause each of its subsidiaries to guarantee such obligations
and to grant a continuing security interest in and lien upon, and mortgage,
pledge and assign to the Holder, for security purposes, all of such subsidiary's
personal property, and shall cause each such subsidiary to execute such
documents, instruments and agreements as the Holder shall request in order
effectuate such guaranty and grant of security interests.

         2. SUBORDINATION PROVISIONS.

                  2.1 PRINCIPAL AND INTEREST. The Company, for itself, its
successors and assigns, covenants and agrees, and the Payee and each successive
Holder by acceptance of this Note, likewise covenants and agrees that payment of
the principal of and interest on this Note is subordinated in right of payment
to the payment of all existing and future "Senior Debt". The term "Senior Debt"
shall mean the principal of and premium, if any, and accrued interest on all
Indebtedness of the Company to any bank or other financial institution whether
such indebtedness is heretofore or hereafter created, incurred or entered into
(or acquired by assignment) and any deferrals, renewals, modifications or
extensions of any such indebtedness, unless under the express provisions of the
instrument creating or evidencing any such indebtedness, or pursuant to which
the same is outstanding, such indebtedness is not superior in right of payment
to this Note. Notwithstanding the foregoing or anything else to the contrary
contained herein, this Note shall rank pari passu with the Company's Series A
11% Convertible Senior Subordinated Secured Notes. "Indebtedness" for all
purposes herein means and includes without duplication, as of any date as of
which the amount thereof is to be determined (whether or not secured by lien,
pledge or deposit), all direct obligations to repay money borrowed (including,
without limitation, amounts borrowed under revolving credit facilities, either
now existing or hereafter created (including any increase in existing
facilities), all notes payable and drafts accepted representing extensions of
credit, and all obligations evidenced by bonds, debentures, notes or other
similar instruments) and all interest accrued and unpaid thereon.

                  2.2 DEFAULT. No payments on account of principal of and
premium, if any, and interest on this Note or any other amount payable by the
Company to the Holder on or with respect to this Note (collectively, the "Note
Payments") shall be made if at the time thereof there is a default in the
payment of all or any portion of the obligations under any Senior Debt.

                  2.3 LIQUIDATION, DISSOLUTION, ETC. In the event of any
insolvency or bankruptcy proceeding, and any receivership, total liquidation,
reorganization or other similar proceedings in

                                        3
<PAGE>   4
connection therewith, relative to the Company, or to its property, or in the
event of any proceedings for voluntary liquidation, dissolution or other winding
up of the Company, whether or not involving insolvency or bankruptcy, then the
holders of Senior Debt shall be entitled to receive payment in full of all
principal and premium, if any, and interest on all such Senior Debt before the
Holder shall be entitled to receive any Note Payment and before the Company may
acquire this Note for any cash, property, assets or securities, and to that end
(but subject to the power of a court of competent jurisdiction to make other
equitable provisions reflecting the rights conferred by these provisions upon
such Senior Debt and the holders thereof with respect to this Note and the
Holder hereof by a lawful plan or reorganization under applicable bankruptcy
law) the holders of Senior Debt (until payment in full of all principal, and
premium, if any, and interest on all such Senior Debt, including interest
thereon accruing before or in respect of periods subsequent to the commencement
of any such proceedings) shall be entitled to receive for application in payment
thereof any payment or distribution of any kind or character, whether in cash or
property, or by set-off or otherwise, which may be payable or deliverable in any
such proceedings in respect of this Note (including any such payment or
distribution which may be payable or deliverable by reason of the provisions of
any indebtedness of the Company which is subordinate and junior in right to this
Note), except securities issued in such proceedings which are subordinate and
junior in right of payment to the payment of Senior Debt.

                  2.4 SUBROGATION. Subject to the payment in full of Senior
Debt, to the extent of payments made on or with respect to Senior Debt from any
assets out of the distributive share of the Notes, the Holder shall be
subrogated to the rights of the holders of such Senior Debt to receive payment
or distributions of assets of the Company applicable to such Senior Debt until
this Note shall be paid in full, and no payment or distributions to the holders
of such Senior Debt by or on behalf of the Company from the proceeds that would
otherwise be payable to the Holder shall, as between the Company and the Holder,
be deemed to be a payment by the Company to or on account of this Note.

                  2.5 AMENDMENT. These provisions with respect to subordination
cannot be amended, modified or waived without the prior written consent of the
holder or holders of all Senior Debt at the time outstanding; and the
subordination effected hereby shall not be affected by any amendment or
modification of, or addition or supplement to, any such Senior Debt or any
instrument or agreement relating thereto, without the prior written consent of
the holder or holders of all such Senior Debt at the time outstanding. No
present or future holder of Senior Debt shall be prejudiced in his right to
enforce subordination of this Note by any act or failure to act on the part of
the Company.

                  2.6 BENEFIT OF SENIOR DEBT. The foregoing provisions of this
Article 2 shall be for the benefit of the holders of Senior Debt and may be
enforced directly by such holders against the Holder. Upon any payment or
distribution of assets of the Company referred to above, the Holder shall be
entitled to rely upon a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
delivered to the Holder for the purpose of ascertaining the persons entitled to
participate in such distribution, the holders of Senior Debt and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertaining thereto or
hereto.

                                        4
<PAGE>   5
                  2.7 OBLIGATION TO PAY PRINCIPAL AND INTEREST ABSOLUTE. The
foregoing provisions as to subordination are solely for the purpose of defining
the relative rights of the holders of such Senior Debt, on the one hand, and the
holder of this Note on the other hand. Nothing contained herein is intended to
or shall impair as between the Company, its creditors, other than the holders of
Senior Debt, and the Holder, the obligation of the Company, which shall be
absolute and unconditional, to pay the Holder the Note Payments or affect the
relative rights of the Holder and the creditors of the Company, other than
holders of Senior Debt, nor shall anything herein prevent the Holder hereof from
exercising all remedies otherwise permitted by applicable law upon default
hereunder, subject to the rights of holders of Senior Debt, if any, in respect
of cash, properties or securities of the Company received upon the exercise of
any such remedy. The Holder, by acceptance hereof, acknowledges and agrees that
the subordination provisions of this Section 2 are, and/or are intended to be,
an inducement and a consideration to each holder of any Senior Debt, whether
such Senior Debt was created or acquired before or after the issuance of this
Note, to acquire and continue to hold, or to continue to hold, such Senior Debt
and each holder of Senior Debt shall be deemed conclusively to have relied on
such subordination provisions in acquiring and continuing to hold, or in
continuing to hold, such Senior Debt.

         3. EVENTS OF DEFAULT.

                  It shall be an "Event of Default" with respect to this Note
upon the occurrence and continuation uncured of any of the following events:

         3.1 THIS NOTE. (a) failure to pay principal of or premium, if any, on
this Note when due and payable, whether at maturity, upon redemption, upon a
Change of Control Offer (as hereinafter defined) or otherwise, whether or not
such payment is prohibited by the subordination provisions of this Note; or

                  (b) failure to pay any interest on this Note when due, which
failure continues for 15 days, whether or not such payment is prohibited by the
subordination provisions of this Note; or

                  (c) any failure to perform the covenants contained in Section
3 or 4 of the Note Purchase Agreement or Section 5.3(o) of this Note; or

                  (d) any failure to perform the other covenants of the Company
in the Note Purchase Agreement or in this Note, which failure continues for 60
days after written notice has been given to the Company of such failure; or

                  (e) failure to pay when due principal of and/or acceleration
of any indebtedness for money borrowed by the Company or any of its Subsidiaries
(as hereinafter defined) in excess of $1,000,000, individually or in the
aggregate, if such indebtedness is not discharged, or such acceleration is not
annulled, within 30 days after written notice thereof; or

                                        5
<PAGE>   6
                  (f) the entry of a decree or order by a court having
jurisdiction adjudging the Company or any Significant Subsidiary as bankrupt or
insolvent, or approving a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Significant
Subsidiary, under federal bankruptcy law, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or appointing a receiver, liquidator, assignee, trustee, sequestrator or
other similar official of the Company or any Significant Subsidiary or of any
substantial part of the Company or such Subsidiary's assets, and the continuance
of any such decree or order unstayed and in effect for a period of 90 days; or
the commencement by the Company or any Significant Subsidiary of a voluntary
case under federal bankruptcy law, as now or hereafter constituted, or any other
applicable federal or state bankruptcy, insolvency or other similar law, or the
consent by the Company or such Subsidiary to the institution of bankruptcy or
insolvency proceedings against it, or the filing by the Company or such
Subsidiary of a petition or answer or consent seeking reorganization or relief
under federal bankruptcy law or any other applicable federal or state
bankruptcy, insolvency, or other similar law, or the consent by the Company or
such Subsidiary to the filing of such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator or similar official of the
Company or such Subsidiary or of any substantial part of the Company's or such
Subsidiary's property, or the making by the Company or such Subsidiary of an
assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due. For purposes of
this Note, the term "Significant Subsidiary" shall mean each Subsidiary which,
as of the then most recent December 31, accounted for more than 10% of the
Company's consolidated assets, or more than 10% of the Company's consolidated
revenue during the 12 months then ended; and the term "Subsidiary" shall mean
any current or future direct or indirect subsidiary of the Company.

                  3.2 NOTICE. If an Event of Default occurs and is continuing,
the Holder by notice to the Company may declare the unpaid principal of and
premium if any, and interest hereunder to be due and payable; provided, however,
that if an Event of Default under clause (f) above shall occur, all unpaid
principal of and premium, if any, and interest on the Notes will automatically
become due and payable without any declaration or other act on the part of the
Holder.

         4. REMEDIES UPON DEFAULT.

                  4.1 ACCELERATION. If an Event of Default occurs and is
continuing under this Note, the Holder by written notice to the Company may
declare the unpaid principal of and premium, if any, and interest thereunder to
be due and payable; provided, however, that if an Event of Default under clause
(f) above shall occur, all unpaid principal of and premium, if any, and interest
on this Note will automatically become due and payable without any declaration
or other act on the part of the Holder.

                  4.2 PROCEEDINGS AND ACTIONS. Subject to the terms and
provisions of Section 2, during the continuation of any one or more Events of
Default, the Holder may institute such actions or proceedings in law or equity
as it shall deem expedient for the protection of its rights, and may prosecute
and enforce its claims, against all assets of the Company and shall be entitled
to receive therefrom payment on such claims up to an amount not exceeding the
principal amount of this Note

                                        6
<PAGE>   7
then outstanding plus accrued and unpaid interest to the date of payment plus
reasonable expenses of collection, including, without limitation, attorney's
fees and expenses.

         5. CONVERSION.

                  5.1 CONVERSION RIGHT. At any time and from time to time
commencing with the date hereof until the Maturity Date, the outstanding
principal amount of debt of this Note, or any portion of such principal amount,
is convertible at the Holder's option into the Company's shares of common stock,
$.01 par value per share (the "Common Stock"), upon surrender of this Note, at
the Office of the Company, accompanied by a written notice of conversion in the
form annexed hereto duly executed by the registered holder or its duly
authorized attorney. The outstanding principal amount of indebtedness of this
Note is convertible, in whole or in part, at the option of the Holder from time
to time at any time on or after the date hereof into shares of Common Stock at a
price of $.90 per share of Common Stock (as adjusted pursuant to the express
provisions hereof, the "Conversion Price"). No fractional shares or scrip
representing fractional shares will be issued upon any conversion, but the
Holder will receive an amount of cash equal to the equivalent fraction of the
current market price of the share of Common Stock on the business day prior to
the conversion, in respect of any fraction of a share which would otherwise be
issuable upon the surrender of this Note for conversion. If the Holder converts
this Note prior to March 31, 2002, the Holder will also receive an amount of
cash equal to 75% of the interest which would have accrued with respect to the
portion of this Note so converted had it not been converted, from the date of
conversion through March 31, 2002; provided, however, that at the Holder's
option, the Holder shall be entitled to receive, in lieu of the payment of such
interest in cash, such number of shares of Common Stock as equals the quotient
of (x) such interest that would otherwise be payable in cash, divided by (y) the
then Conversion Price. All such shares of Common Stock and cash (including
accrued interest) shall be delivered or paid within 30 days of the date of
conversion. If this Note is converted at any time only in part, then the portion
not so converted shall continue to be subject to, and the Holder shall continue
to have all of the rights, set forth in this Note with respect to the portion
not so converted (such rights shall include, without limitation, the right to
convert all or a portion of the remaining principal amount into shares of Common
Stock or to continue to hold said Note until payment on the Maturity Date).

                  5.2 REGISTRATION OF TRANSFER. Subject to the terms of this
Note, at any time after the date hereof, upon surrender of this Note for
conversion, the Company shall issue and deliver with all reasonable dispatch to
or upon the written order of the Holder and in such name or names as such Holder
may designate, a certificate or certificates for the number of full shares of
Common Stock due to such Holder upon the conversion of this Note (the "Shares").
Such certificate or certificates shall be deemed to have been issued and any
person so designated to be named therein shall be deemed to have become the
Holder of record of such Shares as of the date of the surrender of this Note;
provided, however, that if, at the date of surrender the transfer books of the
Common Stock shall be closed, the certificates for the Shares shall be issuable
as of the date on which such books shall be opened and until such date the
Company shall be under no duty to deliver any certificate for such Shares;
provided, further, however, that such transfer books, unless otherwise required
by law or by

                                        7
<PAGE>   8
applicable rule of any national securities exchange, shall not be closed at any
one time for a period longer than 20 days.

                  5.3 SCHEDULED ADJUSTMENTS AND ADJUSTMENTS FOR DIVIDENDS,
RECLASSIFICATIONS, STOCK ISSUANCES, ETC. Subject to the provisions of this
Section 5.3, the Conversion Price in effect, and accordingly, the number of
shares of Common Stock into which this Note may be converted, shall be subject
to adjustment from time to time as follows:

                  (a) In case the Company shall declare a dividend or make any
other distribution upon any stock of the Company payable in Common Stock, then
the Conversion Price shall be proportionately decreased as of the close of
business on the date of record of said dividend.

                  (b) If the Company shall at any time subdivide its outstanding
Common Stock by recapitalization, reclassification or split-up thereof, the
Conversion Price immediately prior to such subdivision shall be proportionately
decreased; and if the Company shall at any time combine the outstanding Common
Stock by recapitalization, reclassification or combination thereof, the
Conversion Price immediately prior to such combination shall be proportionately
increased. Any such adjustment to the Conversion Price shall become effective at
the close of business on the record date for such subdivision or combination.

                  (c) In case the Company after the date hereof shall distribute
to all of the holders of outstanding shares of Common Stock any securities or
other assets (other than a cash distribution made as a dividend payable out of
earnings and other than dividends and distributions with respect to which
adjustments are made pursuant to Sections 5.3(a), (b) or (e)), the Board of
Directors shall be required to make such equitable adjustment in the Conversion
Price, as in effect immediately prior to the record date for such distribution,
as may be necessary to preserve for the Holder the rights substantially
proportionate to those enjoyed hereunder by the Holder immediately prior to the
happening of such distribution. Any such adjustment to the Conversion Price
shall become effective at the close of business on the record date for such
distribution.

                  (d) [INTENTIONALLY LEFT BLANK]

                  (e) If any capital reorganization or reclassification or
change of the capital stock of the Company, or consolidation, merger or
combination of the Company with another entity, or the sale of all or
substantially all of its assets to another entity, shall be effected in such a
way that holders of Common Stock shall be entitled to receive stock, securities,
cash, property or assets with respect to or in exchange for Common Stock, then,
as a condition of such reorganization, reclassification, consolidation, merger,
combination or sale, the Company or such successor or purchasing entity, as the
case may be, shall make such appropriate provision so that the Holder shall have
the right thereafter and until the Maturity Date to convert the outstanding
principal amount of this Note for the kind and amount of stock, securities,
cash, property or assets receivable upon such reorganization, reclassification,
consolidation, merger, combination or sale by a holder of the number of shares
of Common Stock into which this Note might have been converted immediately prior
to such reorganization, reclassification, consolidation, merger, combination or
sale, subject to further

                                        8
<PAGE>   9
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 5.3.

                  (f) In case the Company after the date hereof shall issue or
sell shares of Common Stock or Convertible Securities excluding shares or
Convertible Securities issued in any of the transactions described in
subsections 5.3(a)-(e) above; for a consideration per share less than the
current Conversion Price, the Conversion Price shall be adjusted immediately
thereafter so that it shall equal the price determined by multiplying the
Conversion Price in effect immediately prior thereto by a fraction, the
numerator of which shall be the sum of the number of shares of Common Stock
outstanding immediately prior to the issuance of such additional shares and the
number of shares of Common Stock which the aggregate consideration received
(determined as provided in subsection 5.3(h) below) for the issuance of such
additional shares or Convertible Securities would purchase at such Conversion
Price, and the denominator of which shall be the number of shares of Common
Stock outstanding immediately after the issuance of such additional shares. Such
adjustment shall be made successively whenever such an issuance is made.

                  (g) For purposes of the adjustments provided for in
subsections 5.3(c) and (f) above if at any time, (i) the Company shall issue or
distribute any Convertible Securities, the Company shall be deemed to have
issued or distributed at the same time as the issuance of such Convertible
Securities the maximum number of shares of Common Stock issuable upon conversion
or exercise of the total amount of Convertible Securities; or (ii) the
conversion or exercise price of any Convertible Security is adjusted as a result
of the future market value of the Common Stock (which adjustments are other than
as a result of anti-dilution adjustments resulting from the issuance or
distribution of securities or other assets) then the Company shall be deemed to
have issued at the same time as such adjustment new Convertible Securities
having such adjusted conversion or exercise price and the Convertible Securities
subject to such adjustment shall be deemed expired.

                  (h) For purposes of any computation respecting consideration
received pursuant to subsections 5.3 (f), 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
                  Company 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 Company (irrespective of the
                  accounting treatment thereof), whose determination shall be
                  conclusive;

                           (C) in the case of the issuance of Convertible
                  Securities, the aggregate consideration received therefor
                  (before deduction of any expenses, commissions or other
                  compensation incurred or paid in connection therewith) shall
                  be deemed to be

                                        9
<PAGE>   10
                  the consideration received by the Company for the issuance of
                  such securities plus the additional minimum consideration, if
                  any, to be received by the Company upon the conversion or
                  exchange thereof (the consideration in each case to be
                  determined in the same manner as provided in clauses (A) and
                  (B) of this subsection 5.3(h)); and

                           (D) if such consideration consists of the
                  cancellation of debt issued by the Company, the consideration
                  shall be deemed to be the amount of the outstanding principal
                  amount of such debt as of the date of cancellation plus
                  accrued but unpaid interest, through the date of cancellation.

                  (i) On the expiration, cancellation or redemption of any
Convertible Securities, the Conversion Price then in effect hereunder shall
forthwith be readjusted to such Conversion Price as would have been obtained (i)
had the adjustments made upon the issuance or sale of such expired, canceled or
redeemed Convertible Securities been made upon the basis of the issuance of only
the number of shares of Common Stock theretofore actually delivered upon the
exercise or conversion of such Convertible Securities (and the total
consideration received therefor) and (ii) had all subsequent adjustments been
made only on the basis of the Conversion Price as readjusted under this
subsection (h) for all transactions (which would have affected such adjusted
Conversion Price) made after the issuance or sale of such Convertible
Securities.

                  (j) Anything in this Section 5.3 to the contrary
notwithstanding, no adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in such
Conversion Price, as last adjusted; provided, however, that any adjustments
which by reason of this subsection (j) are not required to be made shall be
carried forward and taken into account in making subsequent adjustments. All
calculations under this Section shall be made to the nearest cent or to the
nearest tenth of a share, as the case may be.

                  (k) Upon any adjustment of any Conversion Price, then and in
each such case the Company shall promptly deliver a notice to the Holder, which
notice shall state the Conversion Price resulting from such an adjustment and
the increase or decrease, if any, in the number of shares purchasable at such
price upon the conversion hereof, setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is based.

                  (l) In addition to the adjustments provided for elsewhere in
this Section 5.3, if the Company shall at any time combine its outstanding
shares of Common Stock by recapitalization, reclassification or combination
thereof, then, in addition to the adjustments provided for in Section 5.3(b), on
the 90th day following the effective date of the adjustment pursuant to said
Section 5.3(b), the Conversion Price shall be adjusted to equal the lower of (a)
the then existing Conversion Price, or (b) 110% of the then current market
price; and on the 180th day following the effective date of the adjustment
pursuant to said Section 5.3(b), the Conversion Price shall be again adjusted to
equal the lower of (a) the then current Conversion Price, or (b) 110% of the
then current market price. For purposes of this Note, the term "then current
market price" shall mean as of the date of measurement, the average of the daily
per share closing prices of the Common Stock for the 20 consecutive trading days
immediately preceding such date. The closing price for each day shall be the
last price regular

                                       10
<PAGE>   11
way or, in case no such reported sale takes place on such day, the average of
the last reported bid and asked prices regular way, in either case on the
principal national securities exchange on which the Common Stock is admitted to
trading or listed, or if not listed or admitted to trading on such an exchange,
the average of the closing bid and asked prices as reported by NASDAQ, or other
similar organization if NASDAQ is no longer reporting such information, or if
not so available, the fair market price as determined by the Board of Directors.

                  (m) Notwithstanding anything herein to the contrary, no
adjustment shall be made pursuant to this Section 5.3 for any of the following:
(i) the issuance or sale by the Company of shares of Common Stock or Convertible
Securities (A) pursuant to any compensation or incentive plan (including,
without limitation, individual employment agreements) now or hereafter adopted
or entered into for officers, Directors, employees or consultants of the
Company, which plan has been approved by the Compensation Committee or Stock
Option Committee of the Board of Directors (or by a majority vote of the
directors) and, if required by law, the requisite vote of the stockholders of
the Company (unless the exercise or conversion price of the instrument issued
pursuant to such plan is subsequently changed other than solely by the operation
of the anti-dilution provisions thereof, or by the Compensation Committee, the
Stock Option Committee, or the majority vote of the directors and, if required
by law, the stockholders of the Company as provided by this clause (A)); and (B)
upon the conversion or exercise of Convertible Securities outstanding, granted
or subscribed for, on or prior to the date hereof (including, without
limitation, the Series A 11% Convertible Notes), unless the conversion or
exercise price thereof is changed after the date of issuance of the Notes (other
than solely by operation of the anti-dilution provisions thereof).

                  (n) Upon any adjustment of the Conversion Price pursuant to
any provisions contained in this Section 5.3, the number of Shares issuable upon
conversion of this Note shall be changed accordingly.

                  (o) The Company shall at all times maintain a reserve and a
listing on the American Stock Exchange (the "AMEX") (and/or any other national
securities exchange or market or trading or quotation facility on which the
Common Stock is then listed) of the total number of shares of Common Stock that
are issuable upon conversion of this Note, as such number may be adjusted from
time to time in accordance with the provisions contained herein. Such listing
shall be for the purpose of issuing shares upon the conversion of this Note. If
on any date (a "Conversion Date") that the Holder of this Note elects to convert
this Note, either in full or in part, the Company is prohibited from issuing all
the Shares to which the Holder would otherwise be entitled pursuant to the
provisions hereof as a result of the failure of said Shares to be so reserved or
listed, and said reserve or listing of said Shares cannot be effectuated without
stockholder approval, then the Company shall issue to the Holder so requesting a
conversion a number of shares of Common Stock equal to the maximum amount that
are issuable, and with respect to the remainder of the Note that the Holder
elected to convert but that will result in the issuance of Shares exceeding the
maximum so reserved or listed, the Holder shall be entitled to be paid by the
Company, immediately following the Conversion Date, an amount equal to the
product of (i) the average closing sales price of the Company's Common Stock
over the five trading days preceding the Conversion Date (as reported by the
AMEX or the principal national securities exchange on which the Common Stock is
then traded, or if not so traded

                                       11
<PAGE>   12
on such an exchange, then as reported by the NASDAQ, or other similar
organization if NASDAQ is no longer reporting such information) (on any trading
day that the Common Stock does not trade, the closing sales price for that day
shall be deemed equal to the average of the last reported bid and asked price
for the Common Stock), and (ii) the number of Shares that the Company was
prevented from issuing to the Holder. Any amount required to be paid hereunder,
shall accrue interest at a rate of 15% per annum, commencing 10 days after the
Conversion Date with respect to which such payment is due.

                  5.4 NOTICE OF CERTAIN EVENTS. In case at any time:

                  (a) The Company shall pay any dividend payable in stock upon
the Common Stock or make any distribution (other than regular cash dividends) to
the holders of the Common Stock;

                  (b) The Company shall offer for subscription pro-rata to the
holders of the Common Stock any additional shares of stock of any class or other
rights;

                  (c) There shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation or merger
of the Company with, or sale of all or substantially all of its assets to,
another corporation; or

                  (d) There shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company;

then, in any one or more of such cases, the Company shall give written notice to
the Holder of the date on which (i) the books of the Company shall close or a
record shall be taken for such dividend, distribution or subscription rights; or
(ii) such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up shall take place, as the case may be.
Such notice shall also specify the date as of which the holders of Common Stock
of record shall participate in such dividend, distribution or subscription
rights or shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding-up, as the case
may be. Such notice shall be given at least ten days prior to the record date or
the date on which the Company's transfer books are closed in respect thereof.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of any of the matters set forth in this paragraph.

         6. REPURCHASE AT THE OPTION OF HOLDERS UPON CHANGE OF

CONTROL.

                  If a Change of Control occurs, the Company shall offer to
repurchase this Note pursuant to an offer (the "Change of Control Offer") at a
purchase price equal to 105% of the principal amount of this Note, plus accrued
but unpaid interest, if any, to the date of repurchase.

                  A "Change of Control" means the occurrence of any of the
following events after the date of the issuance of this Note: (i) any person or
group (within the meaning of Section 13(d) or

                                       12
<PAGE>   13
Section 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") becomes the direct or indirect beneficial owner of shares of capital stock
of the Company representing greater than 50% of the combined voting power of all
outstanding shares of capital stock of the Company entitled to vote in the
election of directors under ordinary circumstances, except pursuant to
transactions contemplated by the Note Purchase Agreement; or (ii) at any time
Continuing Directors (as defined hereinafter) cease to constitute a majority of
the Board of Directors of the Company then in office. "Continuing Director"
means, at any date, a member of the Company's Board of Directors (i) who was a
member of the Board on the date of the issuance of the Note or (ii) who was
nominated or elected by the majority of directors who were Continuing Directors
at the time of such nomination or election or whose election to the Company's
Board of Directors was recommended or endorsed by the majority of directors who
were Continuing Directors at the time of such election. (Under this definition,
if the present Board of Directors of the Company were to approve a new director
or directors and then resign, no Change of Control would occur even though the
present Board of Directors would thereafter cease to be in office).

                  Within 30 days after any Change of Control, unless the Company
has previously given a notice of optional redemption by the Company of all of
the Notes, the Company shall give a notice of the Change of Control Offer to the
Holder at such Holder's last address as it appears in the Company's books
stating: (i) that a Change of Control has occurred and that the Company is
offering to repurchase this Note; (ii) a brief description of such Change of
Control; (iii) the repurchase price (the "Change of Control Payment"); (iv) the
expiration date of the Change of Control Offer, which shall be no earlier than
30 days nor later than 60 days from the date such notice is given; (v) the date
such purchase shall be effected (the "Change of Control Payment Date"), which
shall be no later than 30 days after the expiration date of the Change of
Control Offer; (vi) that if this Note is not accepted for payment pursuant to
the Change of Control Offer, this Note shall continue to accrue interest; (vii)
that unless the Company defaults in the payment of the Change of Control
Payment, all Notes accepted for payment pursuant to the Change of Control Offer
shall cease to accrue interest after the Change of Control Payment Date; (viii)
the Conversion Price; (ix) the name and address of the paying agent and
conversion agent; (x) that this Note must be surrendered to the paying agent to
collect the Change of Control Payment; and (xi) any other information required
by applicable law and any other procedures that the Holder must follow in order
to have this Note repurchased.

                  In the event the Company is required to make a Change of
Control Offer, the Company will comply with any applicable securities laws and
regulations, including, to the extent applicable, Section 14(e) of, and Rule
14e-1 and any other tender offer rules under, the Exchange Act, which may then
be applicable to a Change of Control Offer.

         7. TRANSFER TO COMPLY WITH THE SECURITIES ACT OF 1933.

                  The Holder is entitled to the registration rights set forth in
the Note Purchase Agreement executed and delivered by the Holder or its
predecessor-in-interest in this Note. The Holder, each transferee hereof and any
Holder and transferee of any shares of Common Stock into which this Note is
convertible (the "Underlying Shares"), by its acceptance thereof, agrees that
(i) no public distribution of this Note or Underlying Shares will be made in
violation of the Act, and (ii)

                                       13
<PAGE>   14
during such period as the delivery of a prospectus with respect to the Note or
Underlying Shares may be required by the Act, no public distribution of the Note
or Underlying Shares will be made in a manner or on terms different from those
set forth in, or without delivery of, a prospectus then meeting the requirements
of Section 10 of the Act and in compliance with applicable state securities
laws. The Holder of this Note and each transferee hereof further agrees that if
any distribution of the Note or any Underlying Shares is proposed to be made by
them otherwise than by delivery of a prospectus meeting the requirements of
Section 10 of the Act, such action shall be taken only after submission to the
Company of an opinion of counsel, reasonably satisfactory in form and substance
to the Company's counsel, to the effect that the proposed distribution will not
be in violation of the Act or of applicable state law. Furthermore, it shall be
a condition to the transfer of this Note that any transferee hereof deliver to
the Company its written agreement to accept and be bound by all of the terms and
conditions contained in this Note.

                  This Note, the Underlying Shares or any other security issued
or issuable upon conversion of this Note may not be sold or otherwise disposed
of except as follows:

                  (a) To a person who, in the opinion of counsel for the Holder
reasonably acceptable to the Company, is a person to whom this Note or
Underlying Shares may legally be transferred without registration and without
the delivery of a current prospectus under the Act with respect thereto and then
only against receipt of an agreement of such person to comply with the
provisions of this Section with respect to any resale or other disposition of
such securities which agreement shall be satisfactory in form and substance to
the Company and its counsel; provided that the foregoing shall not apply to any
such Note, shares or other security as to which such Holder shall have received
an opinion letter from counsel acceptable to the Company as to the exemption
thereof from registration under the Act pursuant to Rule 144(k) under the Act;
or

                  (b) To any person upon delivery of a prospectus then meeting
the requirements of the Act relating to such securities and the offering thereof
for such sale or disposition.

                  Unless the Company directs its transfer agent otherwise, each
certificate for Underlying Shares or other securities issued upon conversion of
this Note shall bear a legend relating to the non-registered status of such
securities under the Act.

         8. MISCELLANEOUS.

                  8.1 NOTICES. All communications provided hereunder shall be in
writing and, if to the Company, delivered or mailed by registered or certified
mail addressed to InterSystems, Inc., 1011 Highway 71, Spring Lake, New Jersey,
Attention: President, or, if to the Holder, at the address shown for the Holder
in the registration books maintained by the Company.

                  8.2 LOST, STOLEN OR MUTILATED NOTES. In case this Note shall
be mutilated, lost, stolen or destroyed, the Company may, in its discretion,
issue and deliver in exchange and substitution for and upon cancellation of the
mutilated Note, or in lieu of and in substitution for the Note, lost, stolen or
destroyed, a new Note of like tenor and representing an equivalent right or
interest, but only

                                       14
<PAGE>   15
upon receipt of evidence satisfactory to the Company of such loss, theft or
destruction and an indemnity, if requested, also satisfactory to it.

                  8.3 STAMP TAX The Company will pay any documentary stamp taxes
attributable to the initial issuance of the Common Stock; provided, however,
that the Company shall not be required to pay any tax or taxes which may be
payable in respect of any transfer involved in the issuance or delivery of any
certificates for the Common Stock in a name other than that of the Holder in
respect of which this Note is issued, and in such case the Company shall not be
required to issue or deliver any certificate for the Common Stock until the
person requesting the same has paid to the Company the amount of such tax or has
established to the Company's satisfaction that such tax has been paid or that no
such tax is required to be paid.

                  8.4 SHARES VALIDLY ISSUED. The Company agrees that all shares
of Common Stock issuable upon conversion of this Note shall be, at the time of
delivery of certificates for such shares, validly issued and outstanding, fully
paid and non-assessable and that the issuance of such shares will not give rise
to preemptive rights in favor of existing stockholders.

                  8.5 GOVERNING LAW. This Note shall be construed in accordance
with and governed by the laws of the State of New York, without giving effect to
such state's conflict of laws principles.

                  8.6 NO RECOURSE. No recourse whatsoever, either directly or
through the Company or any trustee, receiver or assignee, shall be had in any
event or in any manner against any past, present or future stockholder, director
or officer of the Company for the payment of the redemption price, principal of
or interest on this Note (or for any other Note Payments) or for any claim based
thereon or otherwise in respect this Note; this Note being a corporate
obligation only.

                  8.7 REGISTRATION OF TRANSFER. The Company shall maintain books
for the transfer and registration of Notes. The Company may treat the person in
whose name this Note is registered as the owner and Holder of the Note for the
purpose of receiving principal of and premium, if any, and interest on this Note
and for all other purposes whatsoever, and the Company shall not be affected by
any notice to the contrary. Upon the transfer of any Note in accordance with the
provisions of Section 7 hereof, the Company shall issue and register the Note in
the names of the new holders. The Notes shall be signed manually by the
Chairman, Chief Executive Officer, President or any Vice President and the
Secretary or Assistant Secretary of the Company. Subject to the terms of
Sections 5 and 7 and Section 8.3, upon surrender of this Note, the Company shall
issue and deliver with all reasonable dispatch to or upon the written order of
the Holder, and in such name or names as such Holder may designate, a
certificate or certificates for the number of Shares due to such Holder upon the
conversion of this Note. Such certificate or certificates shall be deemed to
have been issued and any person so designated to be named therein shall be
deemed to have become the Holder of record of such Shares as of the date of the
surrender of this Note pursuant to said sections; provided, however, that if, at
the date of surrender the transfer books of the Common Stock shall be closed,
the certificates for the Shares shall be issuable as of the date on which such
books shall be opened and until such date the Company shall be under no duty to
deliver any certificate for such Shares; provided, further, however, that such
transfer books, unless otherwise required by law or by

                                       15
<PAGE>   16
applicable rule of any national securities exchange, shall not be closed at any
one time for a period longer than 20 days.

         IN WITNESS WHEREOF, InterSystems, Inc. has caused this Note to be
signed in its corporate name by a duly authorized officer in accordance herewith
and to be dated the day and year first above written.

                                        INTERSYSTEMS, INC.

                                        By:_____________________________
                                           Name:
                                           Title:

Attest:

_____________________________

                                       16
<PAGE>   17
ASSIGNMENT

         For value received I hereby assign

to __________________________ $_______________

principal amount of the 13% Convertible Subordinated Note due March 31, 2006
evidenced hereby and hereby irrevocably appoint            attorney to transfer
the Note on the books of the within named corporation with full power of
substitution in the premises.

Dated:

In the presence of:

_____________________________

_____________________________

                                       17
<PAGE>   18
CONVERSION NOTICE

TO: INTERSYSTEMS, INC.

The undersigned holder of this Note hereby irrevocably exercises the option to
convert $______ principal amount of such Note (which may be less than the stated
principal amount thereof) into shares of common stock of InterSystems, Inc.
("Common Stock") (as such term is defined in such Note) in accordance with the
terms of such Note, and directs that the shares of Common Stock issuable and
deliverable upon such conversion, together with a check (if applicable) in
payment for any fractional shares as provided in such Note, be issued and
delivered to the undersigned unless a different name has been indicated below.
If shares of Common Stock are to be issued in the name of a person other than
the undersigned holder of such Note, the undersigned will pay all transfer taxes
payable with respect thereto.

_____________________________
Name and Address of Holder

_____________________________
Signature of Holder

Principal amount converted $____________________________

If shares are to be issued otherwise than to the Holder:

_____________________________
Name of Transferee

_____________________________
Name and SS# of Transferee

                                       18

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