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Exhibit 10.3

ASPEON, INC.
SECURED CONVERTIBLE PROMISSORY NOTE

        THIS NOTE AND THE SECURITIES REPRESENTED BY THIS SECURED CONVERTIBLE
PROMISSORY NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THESE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT ONLY AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.

$                           September     , 2002

        For value received, Aspeon, Inc., a Delaware corporation (the
"Company"), hereby promises to pay to                         ("Holder"), the
principal sum of                         ($            ) with simple interest
thereon from the date of this Secured Convertible Promissory Note (the "Note")
until paid at the rate of ten percent (10%) per annum, calculated on a monthly
basis. The principal hereof shall be due and payable on the one year anniversary
of the issuance of this Note, unless, at the option of the Holder and pursuant
to the terms of Section 1 hereof, earlier converted into capital stock of the
Company. The interest due under this note shall be due on the last day of each
month after the date hereof. This Note is one in a series of notes issued to
lenders of the Company ("Holders"), with an aggregate principal amount of up to
$500,000 (collectively, the "Notes"), the rights of which are set forth herein
and in a security agreement dated as of the date hereof (the "Security
Agreement").

THE OBLIGATIONS DUE UNDER THIS NOTE ARE SECURED BY THE SECURITY AGREEMENT
EXECUTED BY THE COMPANY IN FAVOR OF HOLDER AS COLLATERAL AGENT FOR THE BENEFIT
OF THE PURCHASERS. ADDITIONAL RIGHTS OF HOLDER ARE SET FORTH IN THE SECURITY
AGREEMENT.

        1.    Conversion Prior to the Repayment Date.    

        (a)  The Company and the Holder agree that all or a portion of the
outstanding principal hereof (the "Debt") shall, at the election of the Holder
(the "Conversion Election"), be convertible into shares of Common Stock of the
Company at a purchase price (the "Conversion Price") equal to $0.08 per share,
as adjusted for stock splits, combinations and the like. If the Company at any
time while this Note remains outstanding shall split or subdivide its
outstanding shares of Common Stock into a greater number of shares, pay a
dividend on its outstanding shares of Common Stock payable in shares of Common
Stock, or combine the outstanding shares of Common Stock of the Company into a
smaller number of shares, the Conversion Price shall be proportionately
decreased in the case of a split, subdivision or dividend or proportionately
increased in the case of a combination. The number of Shares into which this
Note may be converted shall be determined by dividing the Debt or a portion of
the Debt, as the case may be, by the Conversion Price. If the Holder makes the
Conversion Election, the Holder agrees to surrender this Note for conversion at
the principal office of the Company at the time of such closing, and the Company
and the Holder agree to execute all appropriate documentation necessary to
effect such conversion, including, in the event of a Conversion Election for a
portion of the Debt, issuance of a new promissory note in the form of this Note
for the remaining portion of the Debt. Upon the Conversion Election, the Holder
shall receive from the Company all accrued interest due under this Note.

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        (b)  If upon any conversion of this Note a fraction of a share would
result, the Company will pay in lieu thereof in cash the amount of principal
represented by such fractional share.

        2.    Issuance of Stock on Conversion.    

        (a)  As soon as practicable after conversion of this Note pursuant to
Section 1 hereof, the Company at its expense will cause to be issued in the name
of and delivered to the Holder, a certificate or certificates for the number of
shares of Common Stock to which the Holder shall be entitled on such conversion
(bearing such legends as may be required by applicable state and federal
securities laws in the opinion of legal counsel for the Company). Such
conversion shall be deemed to have been made upon the applicable event of
conversion described in Section 1 above, regardless of whether the Note has been
surrendered on such date. Notwithstanding the foregoing, the Holder agrees to
promptly surrender the Note prior to or upon such conversion.

        (b)  The Company covenants to authorize (and if necessary create),
maintain and reserve, a sufficient number of shares of the applicable securities
for conversion of this Note pursuant to Section 1 hereof.

        3.    Transfer Procedure.    

        This Note is not transferable without the written consent of the
Company, which may not be unreasonably withheld. Upon surrender and cancellation
of this Note upon any such transfer, the Company shall issue a new note for the
same aggregate principal amount and interest to the transferee. The Company and
any transfer agent may deem and treat the person in whose name this Note is
registered upon the books of the Company as the absolute owner of this Note
(whether or not this Note is overdue and notwithstanding any notation of
ownership or other writing hereon) for all other purposes, and neither the
Company nor any transfer agent shall be affected by any notice to the contrary.
All payments to the registered owner shall be valid and effectual to satisfy and
discharge the liability on this Note to the extent of the sum so paid.

        4.    Holder Representations and Warranties.    

        Holder understands that this Note and the securities that may be
purchased thereby have not been, and will not be, registered under the
Securities Act of 1933, as amended (the "Act"), by reason of a specific
exemption from the registration provisions of such Act, the availability of
which depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of Holder's representations as expressed herein and in
the Transaction Documents (as defined in the Security Agreement).

        5.    Notice.    

        All notices and other communications required or permitted hereunder
shall be in writing and shall be either mailed by United States first-class
mail, postage prepaid, or delivered personally by hand or nationally recognized
courier or sent via facsimile, addressed to the address of each respective party
set forth on the signature pages hereto, or at such other address as each party
shall have furnished to the other party in writing. All such notices and other
written communications shall be effective (i) if mailed, three (3) business days
after mailing, (ii) if delivered, upon delivery, (iii) if sent by nationally
recognized overnight delivery courier, one (1) business day after deposit with
such courier and (iv) if sent by facsimile, upon confirmation of receipt
printed/obtained from the transmitting machine.

        6.    Amendment and Waivers.    

        This Note may be amended at any time and from time to time with the
written consent of the Company and the Holder. Any written amendment, waiver, or
consent by the Holder shall be conclusive and binding upon Holder and any future
holder of this Note and of any note issued in exchange or substitution therefor,
irrespective of whether or not any notation of such amendment,

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waiver, or consent is made upon this Note or such exchanged or substituted note.
No delay on the part of the Holder in exercising any right hereunder shall
operate as a waiver of such right or any other right.

        7.    Event of Default.    

        The occurrence of the following shall constitute an "Event of Default"
under this Note: (a) the Company shall fail to pay when due any principal or
interest on the due date hereunder and such payment shall not have been made
within ten (10) business days of such due date; (b) the Company admits in
writing an inability to pay debts generally as they become due; (c) the Company
makes a general assignment for the benefit of creditors; (d) the Company applies
for or consents to the appointment of a receiver of the whole or any substantial
part of the Company's assets; (e) the Company files a voluntary petition in
bankruptcy or a petition or an answer seeking reorganization or a arrangement
with creditors or to take advantage of any insolvency law; (f) an order,
judgment, or decree is entered, without the application, approval, or consent of
the Company, by any court of competent jurisdiction adjudging the Company to be
a bankrupt or approving a petition appointing a receiver, trustee, or liquidator
of the whole or any substantial part of the assets of the Company, and such
order, judgment, or decree is not vacated or set aside or stayed within sixty
(60) days from the date of its entry; or (g) in the event of a material breach
of the Transaction Documents (as defined in the Security Agreement) by the
Company which remains uncured after the period allowed to cure the breach.

        8.    Rights of Holder upon Event of Default.    

        Upon the occurrence or existence of any Event of Default described in
Section 7(a) and at any time thereafter during the continuance of such Event of
Default, Holder may, with the consent of the Holders holding a majority of the
aggregate principal amount of the then outstanding Notes, by written notice to
the Company, declare all outstanding obligations payable by the Company
hereunder to be immediately due and payable without presentment, demand, protest
or any other notice of any kind, all of which are hereby expressly waived,
anything contained herein or in the other Transaction Documents to the contrary
notwithstanding. Upon the occurrence or existence of any Event of Default
described in Sections 7(b), 7(c), 7(d), 7(e) or 7(f), immediately and without
notice, all outstanding obligations payable by the Company hereunder shall
automatically become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, anything contained herein or in the other Transaction Documents to the
contrary notwithstanding. In addition to the foregoing remedies, upon the
occurrence or existence of any Event of Default, Holder may exercise any other
right power or remedy granted to it by the Transaction Documents or otherwise
permitted to it by law, either by suit in equity or by action at law, or both.

        9.    Governing Law and Venue.    

        This Note is delivered in and shall be construed in accordance with the
laws of the State of California without regard to any rules that would apply the
law of another jurisdiction. Venue shall lie exclusively in Orange County,
California.

        10.    Attorneys' Fees and Costs.    

        In the event that any dispute among the parties to this Note should
result in litigation, the prevailing party in such dispute shall be entitled to
recover from the losing party all fees, costs and expenses of enforcing any
right of such prevailing party under or with respect to this Note, including
without limitation, such reasonable fees and expenses of attorneys, which shall
include, without limitation, all fees, costs and expenses of appeals, as well as
costs of collection.

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        IN WITNESS WHEREOF, the undersigned has executed this Secured
Convertible Promissory Note as of the date first referenced above.

ASPEON, INC.   HOLDER
 
 
 
 
  By: /s/  DONALD W. RUTHERFORD      

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  By: /s/  KENNETH KADLEC      

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Name: Donald W. Rutherford   By: /s/  RICHARD STACK      

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      By: /s/  HORACE HERTZ      

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      Name: Kenneth Kadlec, Richard Stack, Horace Hertz

SIGNATURE PAGE TO SECURED CONVERTIBLE PROMISSORY NOTE

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ASPEON, INC. SECURED CONVERTIBLE PROMISSORY NOTE