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 Mr. John P. Casey 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 1 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 555 Zang Street, Suite 300 Lakewood, Colorado 80228 Attention: John P. Hill 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/ Denis Richard Its: PRESIDENT AND CHIEF EXECUTIVE OFFICER 2