EXHIBIT 10.42
Secured Full Recourse Promissory Note
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Xxxxxx City. California
$549,780.00 March 7, 2000
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Reference is made to that certain Notice of Exercise of Stock. Option (the
"Purchase Agreement") of even date herewith, by and between the undersigned (the
"Purchaser") and DoveBid, Inc., a Delaware corporation (the "Company"), issued
to Purchaser under the Company's 1999 Stock Option Plan. This Secured Full
Recourse Promissory Note (the "Note") is being tendered by Purchaser to the
Company as part of the meal purchase price of the Shares (as defined below)
pursuant to the Purchase Agreement.
1. Obligation. In exchange for the issuance to the Purchaser
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pursuant to the Purchase Agreement of 220,000 shares of the Company's Common
Stock (the "Shares"). receipt of which is hereby acknowledged, Purchaser hereby
promises to pay to the order of the Company on or before the fifth anniversary
of the date act forth above at the Company's principal place of business located
ax 0000 X. Xxxxxxxxx Xxxx., Xxxxxx Xxxx, Xxxxxxxxxx 00000, or at such other
place as the Company may direct, the principal sum of five hundred and forty-
nine thousand seven hundred eight dollars ($549,780.00) together with interest
compounded monthly on the unpaid principal at the rate of 6.60%, which rate is
not less than the minimum rate established pursuant to Section 1274(d) of the
Internal Revenue Code of 1986, as amended, on the earliest date on which there
was a binding contract in writing for the purchase of the Shares; provided,
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however that the rate at which interest will accrue on unpaid principal under
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this Note will not exceed the highest rate permitted by applicable law. All
payments hereunder shall be made in lawful tender of the United States.
2. Security. Performance of Purchaser's obligations under this Note
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is secured by a security interest in the Shares granted to the Company by
Purchaser under a Stock Pledge Agreement dated of even date herewith between the
Company and Purchaser (the "Pledge Agreement")
3. Events of Default. Purchaser will be deemed to be in default
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under this Note upon the occurrence of any of the following events (each an
"Event of Default"): (i) upon Purchaser's failure to make any payment when due
under this Note; (iii) the failure of any representation or warranty in the
Pledge Agreement to have been true, the failure of Purchaser to perform any
obligation under the Pledge, or upon any other breach by the Purchaser of the
Pledge Agreement, (iv) any voluntary or involuntary transfer of any of the
Shares or any interest therein except to transfer to the Company) without the
Company's consent; (v) upon the filing regarding the Purchaser of any voluntary
or involuntary petition for relief under the United States Bankruptcy Code or
the initiation of any proceeding under federal law or law of any other
jurisdiction for the general relief of debtors; or (vi) upon the execution by
Purchaser of an assignment for the benefit of creditors or the appointment of a
receiver, custodian, trustee or similar party to take possession of Purchaser's
assets or property.
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4. Acceleration: Remedies On Default. Upon the occurrence of any
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Event of Default, at the option of the Company, all principal and other amounts
owed under this Note shall become immediately due and payable without notice or
demand on the part of the Company, and the Company will have, in addition to
it's rights and remedies under this Note, the Pledge Agreement, full recourse
against any real, personal, tangible or intangible assets of Purchaser and may
pursue any legal or equitable remedies that are available to it.
5. Rule 144 Holding Period. PURCHASER UNDERSTANDS THAT THE HOLDING
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PERIOD SPECIFIED UNDER RULE 144(d) OF THE SECURITIES AND EXCHANGE COMMISSION
WILL NOT BEGIN TO RUN WITH RESPECT TO SHARES PURCHASED WITH THIS NOTE UNTIL
EITHER (i) THE EXERCISE PRICE OF SUCH SHARES IS PAID IN FULL IN CASH OR. BY
OTHER PROPERTY ACCEPTED BY THE COMPANY OR (ii) THIS NOTE IS SECURED BY
COLLATERAL, OTHER THAN THE SHARES THAT HAVE NOT BEEN FULLY PAID FOR IN CASH,
HAVING A FAIR MARKET VALUE AT LEAST EQUAL TO The AMOUNT OF PURCHASER'S THEN
OUTSTANDING OBLIGATION UNDER THIS NOTE (INCLUDING ACCRUED INTEREST).
6. Prepayment. Prepayment of principal and/or other amount owed
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under this Note may be made at any time without penalty. Unless otherwise agreed
in writing by the Company, each payment will be applied to the extent of
available funds from such payment in the following order; (i) first to the
accrued and unpaid costs and expenses under the Note or the Pledge Agreement;
(ii) then to the accrued but unpaid interest and (iii) lastly to the outstanding
principal.
7. Governing Law; Waiver. The validity, construction and performance
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of this Note will be governed by the internal laws of the State of California,
excluding that body of law pertaining to conflicts of law. Purchaser hereby
waives presentment, notice of non-payment, notice of dishonor, protest, demand
and diligence.
8. Attorneys' Fees. If suit is brought for collection of this Note,
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Purchaser agrees to pay all reasonable expenses, including attorneys' fees,
incurred by the holder in connection herewith whether or not such suit is
prosecuted to judgment.
IN WITNESS WHEREOF, Purchaser has executed this Note as of the date
and year first above written.
/s/ Xxxxxxx Xxxx
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Xxxxxxx Xxxx Purchaser's Signature
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