EXHIBIT 10.3 - BRIDGE LOAN NOTE EXECUTED BY INCOMNET, INC. IN FAVOR OF
IRONWOOD TELECOM, LLC, DATED NOVEMBER 4, 1998
BRIDGE LOAN NOTE
$2,275,210.00 November 4, 1998
FOR VALUE RECEIVED, the undersigned, Incomnet, Inc., a California corporation
(the "Borrower"), HEREBY UNCONDITIONALLY PROMISES TO PAY to the order of
Ironwood Telecom, LLC, a Colorado limited liability company (the "Lender"), the
principal sum of TWO MILLION TWO HUNDRED SEVENTY FIVE THOUSAND TWO HUNDRED
TEN DOLLARS ($2,275,210.00) (the "Principal Amount") plus all accrued and
unpaid interest and fees thereon on the Maturity Date (defined below).
1. PAYMENTS
1.1. As set forth above, the Principal Amount
and all accrued and unpaid interest and
fees thereon shall be due and payable on
the Maturity Date. As used herein,
"Maturity Date" means the earlier of (i)
December 15, 1998 and (ii) closing date
of a secured term loan by the Lender to
the Borrower in the principal amount of
$20,000,000.00 (less the principal amount
of the loan to Xx. Xxxx X. Xxxxx made on
the dare hereof and certain other
payments the Lender has agreed to make
for the benefit of the Borrower).
1.2. The Borrower shall pay to the Lender
interest on the unpaid Principal Amount
at a per annum rate equal to 15%.
Interest charges shall be computed on the
basis of a year of 360 days and actual
days elapsed and shall be payable to the
Lender on the Maturity Date.
1.3. If any Event of Default occurs, then,
from the date such Event of Default
occurs and until it is cured, or until
all Obligations are paid and performed in
full, whichever first occurs, the
Borrower shall pay interest on the unpaid
Principal Amount at a per annum rate
equal to 3% plus the rate of interest
otherwise specified herein as applicable
to such loan.
1.4. In no event shall the interest rate and
other charges hereunder exceed the
highest rate permissible under any law
which a court of competent jurisdiction
shall, in a final determination, deem
applicable hereto. If a court determines
that the Lender has received interest and
other charges hereunder in excess of the
highest rate applicable hereto, such
excess shall be deemed to have been
received on account of, and shall
automatically be applied to reduce, the
Principal Amount, in the inverse order of
maturity, and the provisions hereof shall
be deemed amended to provide for the
highest permissible rate. If there is no
Principal Amount outstanding, the Lender
shall refund to the Borrower such excess.
1.5. The Borrower may prepay the Principal
Amount in whole or in part at any time
and from time to time, upon at least two
(2) Business Days' prior written notice
to the Lender. All prepayments of the
principal of the Principal Amount shall
be accompanied by the payment of all
accrued but unpaid interest on the
prepaid principal amount of the Principal
Amount to the date of prepayment. Any
prepayment under this section of less
than all of the
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outstanding Principal Amount shall be
applied, first, to accrued but unpaid
interest on the Principal Amount and,
second, to the Principal Amount to be
prepaid.
1.6. All payments of principal, interest, and
other sums due to the Lender shall be
made at the following address:
Ironwood Telecom LLC
000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxx
or such other address or bank account as may be designated by the Lender in
writing from time to time.
1.7. This Bridge Loan Note is the Bridge Loan
Note referred to in the Bridge Loan and
Security Agreement, dated the date
hereof, between the Borrower and the
Lender (the "Bridge Loan Agreement").
All terms and conditions set forth in the
Bridge Loan Agreement are incorporated
herein and made a part hereof. The
Bridge Loan Agreement is secured by
certain collateral more specifically
described in the Bridge Loan Agreement.
All capitalized terms not otherwise
defined herein shall have the meaning
given such term in the Bridge Loan
Agreement.
2. EVENTS OF DEFAULT
Upon and after the occurrence of an Event of Default, the
Lender shall have all of the rights and remedies set forth in Section 11.2 of
the Bridge loan Agreement.
3. FEES AND COSTS
The Borrower shall pay to the Lender on demand all costs and
expenses that the Lender pays or incurs in connection with the negotiation,
preparation, consummation, administration, enforcement, and termination of this
Agreement, including, without limitation reasonable attorneys' and paralegals'
fees and disbursements of counsel to the Lender.
4. GOVERNING LAW
THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF COLORADO. EXCEPT THAT NO DOCTRINE OF CHOICE OF
LAW SHALL BE USED OT APPLY THE LAWS OF ANY OTHER STATE OR JURISDICTION.
INCOMNET, INC.
By: /s/ Xxxxx Xxxxxxx
Its: PRESIDENT AND CHIEF EXECUTIVE OFFICER
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