AMENDED AND RESTATED FIRST BANK PROMISSORY NOTE
$4,954,707.80 December 15, 1998
FOR VALUE RECEIVED, the undersigned, Incomnet, Inc., a California
corporation whose principal offices are located at 2801 Main Street, Irvine,
California, 92614 and Incomnet Communications Corporation, a Delaware
corporation whose principal offices are located at 2801 Main Street, Irvine,
California, 92614 (Incomnet, Inc. and Incomnet Communications Corporation shall
jointly and severally for purposes of this Amended and Restated First Bank
Promissory Note be referred to as 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 FOUR MILLION NINE HUNDRED
FIFTY FOUR THOUSAND SEVEN HUNDRED SEVEN AND 80/100 DOLLARS ($4,954,707.80) (the
"First Bank Principal Amount") plus all accrued and unpaid interest and fees
thereon on the Maturity Date (defined below).
All capitalized terms not otherwise defined herein shall have the meaning
given such term in the Loan and Security Agreement, dated the date hereof, among
the Borrower, the Lender and Incomnet Communications Corporation (the "Loan
Agreement").
1. PAYMENTS
(a) As set forth above, the First Bank 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 December 31, 2000.
(b) The Borrower shall pay to the Lender interest on the unpaid First Bank
Principal Amount at a per annum rate equal to twelve percent (12%). 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 quarterly in arrears on the last
Business Day of each Fiscal Quarter, with the first such payment of interest
becoming due and payable on March 31, 1999 ("First Payment"). Accrued interest
for the period from December 15, 1998 through December 31, 1998 shall be paid in
arrears along with the First Payment.
(c) 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 First Bank Principal Amount at a per annum rate equal to three
percent (3%) plus the rate of interest otherwise specified herein as applicable
to such loan.
(d) 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 First Bank 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 First Bank Principal Amount outstanding, the Lender shall refund to
the Borrower such excess.
(e) The Borrower may prepay the First Bank 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 principal shall be
accompanied by the payment of all accrued but unpaid interest on the prepaid
First Bank Principal Amount to the date of prepayment. Any prepayment under this
section of less than all of the outstanding First Bank Principal Amount shall be
applied, first, to accrued but unpaid interest on the First Bank Principal
Amount and, second, to the First Bank Principal Amount to be prepaid.
(f) 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. All such payments shall be made in immediately
available funds. If any payment of the First Bank Principal Amount, interest
thereon or other sum to be made hereunder becomes due and payable on a day other
than a Business Day, the due date of such payment shall be extended to the next
succeeding Business Day and interest thereon shall be payable at the applicable
interest rate during such extension.
(g) Notwithstanding any provision in any loan agreement between First Bank
and Borrower to the contrary, the payments under this Amended and Restated First
Bank Promissory Note shall be made in accordance with the terms of the Loan
Agreement.
(h) This Amended and Restated First Bank Promissory Note is the Amended
and Restated First Bank Note referred to in the Loan Agreement. The Lender is
entitled to the benefits and security provided thereby or referred to therein,
as well as all security relating to the Original Note referenced below. All
terms and conditions set forth in the Loan Agreement with respect to the Amended
and Restated Notes are incorporated herein and made a part hereof. The Loan
Agreement and this Amended and Restated First Bank Promissory Note are secured
by certain collateral more specifically described in the Loan Agreement.
(i) This Amended and Restated First Bank Promissory Note amends and
restates that certain promissory note made by Incomnet Communications
Corporation formerly know as National Telephone & Communications Inc. (the
"Original Note") payable to the order of First Bank & Trust on March 27, 1997
and as more fully described in the Loan Agreement. As of the date hereof, the
outstanding principal balance of and all accrued and unpaid interest owing on
said Original Note shall, without any action on the part of any party, be deemed
to be outstanding under this Amended and Restated First Bank Promissory Note.
Acceptance by the Lender of this Amended and Restated First Bank Promissory Note
shall not be deemed or construed as payment or satisfaction of all or any
portion of the indebtedness evidenced by the Original Note amended
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and restated hereby, all of which continues to remain outstanding although the
indebtedness represented thereby is now represented hereby. In addition, by
executing this Amended and Restated First Bank Promissory Note, Borrower
acknowledges that there are no defenses, offsets, lender defaults, or any other
matters giving rise or cause to Borrower not being obligated to make payments
under the Original Note or to Lender under this Amended and Restated First Bank
Promissory Note.
2. EVENTS OF DEFAULT
Upon and after the occurrence of an Event of Default under the Notes or as
described in the Loan Agreement, the Lender shall have all of the rights and
remedies set forth in Section 11.2 of the 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 TO APPLY THE LAWS OF ANY OTHER STATE OR JURISDICTION.
5. NO RIGHT OF SET-OFF
No set-off, counterclaim, reduction or diminution of any obligation, or
any defense of any kind or nature (other than performance by the undersigned of
its obligations hereunder) which the Borrower has or may have against Lender or
any affiliate or assignee thereof shall be available hereunder to the Borrower.
6. WAIVER OF PRESENTMENT; CUMULATION OF REMEDIES
All parties to this Amended and Restated First Bank Promissory Note,
including the Borrower and any sureties, endorsers or guarantors, hereby waive
presentment for payment, demand, protest, notice of dishonor, notice of
acceleration of maturity, and all defenses on the ground of extension of time
for payment hereof, and agree to continue and remain bound for the payment of
principal, interest and all other sums payable hereunder, notwithstanding any
change or changes by way of release, surrender, exchange or substitution of any
security for this Amended and Restated First Bank Promissory Note or by way of
any extension or extensions of time for payment of principal or interest; and
all such parties waive all and every kind of notice of such change or changes
and agree that the same may be made without notice to or consent of any of them.
The rights and remedies of the holder as provided herein shall be cumulative and
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concurrent and may be pursued singularly, successively or together at the sole
discretion of the holder, and may be exercised as often as occasion therefor
shall occur, and the failure to exercise any such right or remedy shall in no
event be construed as a waiver or release of the same.
INCOMNET, INC.
By: /s/ Denis Richard
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Denis Richard
Its: President and Chief Executive Officer
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