UNSECURED DEMAND CONVERTIBLE PROMISSORY NOTE
Principal Amount: $100,000.00 September 27, 1995 Interest Rate: 10% Northvale, New Jersey
FOR VALUE RECEIVED, INRAD, INC., a New Jersey corporation (the "Obligor" or the "Company")
promises to pay, in lawful monies of the United States of America, to the order of Clarex Limited (the "Holder"),
ON DEMAND the principal sum of One Hundred Thousand Dollars ($100,000.00), together with interest, at
any such place as the Holder may designate.
1. Interest. Interest will accrue on the unpaid principal balance from today's date at the rate of ten percent (10%)
per annum and will be due and payable quarter-annually on the 27th day of December, March, June and
September, or on such earlier date as the Holder shall demand payment of the principal amount. Interest on the
Note will be paid in the form of additional Common Stock in whole shares at the conversion price of $1.00.
2. Conversion Right. The Holder of this Note shall have the right, at his option, at any time during the period
commencing on the date hereof, on at least 30 days advance written notice to the Company, to convert all or part
of this Note into shares of Common Stock by applying the principal amount of the Note plus all accrued and
unpaid interest thereon, to the purchase of Common Stock at the conversion price of $1.00.
The conversion price shall be subject to adjustment according to the same terms as provided for in Section 11.5
of the Subordinated Convertible Note dated April 9, 1995, between INRAD, Inc. and Clarex Limited.
3. Subordination to Senior Indebtedness. Anything in this Note or in the Agreement to the contrary
notwithstanding, payment of the principal and interest on this Note is hereby expressly subordinated and subject
in right of payment to the extent and in the manner hereinafter set forth to the prior payment in full of all Senior
Indebtedness. For purposes of this Note, "Senior Indebtedness" shall mean the Company's indebtedness
pursuant to (a) any cre