Exhibit 10.40
PROMISSORY NOTE Appendix D
$_______________ Due: __________________
Highland Park, Illinois, __________, 19__
On _______________, The SoftNet Systems, Inc. ("SSI") for value received,
promises to pay to the order of ________________ ("Lender"), the principal
amount of ____________________________ DOLLARS ($__________) with interest in
arrears thereon from the date hereof until paid at a rate per annum equal to
_____ percent (__%). All interest shall be computed for the actual number of
days elapsed on the basis of a year consisting of 360 days and shall be payable
at maturity. The undersigned shall have the right to repay this Note in full or
in part at any time.
Notwithstanding anything to the contrary herein contained, in the event
that, prior to the scheduled maturity of this Note, (i) SSI shall agree to be
recapitalized by reclassifying its common stock, or consolidate or merge with or
convey all or substantially all of its property and assets to any other
corporation or corporations in exchange for stock or securities of a successor
corporation, or (ii) SSI agrees to sell all or substantially all of its assets,
then, in the case of any transaction specified in clause (i) of this sentence,
all principal and interest hereunder shall become due and payable upon the
consummation of any such transaction and, in the case of a sale of all or
substantially all of its assets, all cash proceeds received by SSI (after
payment of closing costs, taxes, legal fees and like expenses and the
satisfaction of any indebtedness secured by the assets sold) shall be applied,
first, to pay accrued interest and, thereafter, to repay outstanding principal.
SSI shall give Lender not less than five (5) days prior notice of any proposed
transaction of a type described in the preceding sentence.
As additional consideration for the loan made hereunder, SSI agrees to
simultaneously execute and deliver a Warrant to Purchase its Common Stock, $.01
par value, to Lender for the right to purchase _______ common shares of SSI at
$1.75 per share until __________________ (the "Warrant").
If SSI shall fail to pay, when due, any amount payable with respect to any
of the liabilities or to perform any other obligation to Lender, including SSI's
failure to include Xxxxxx's Warrant Shares in any Registration Statement or
permit Lender to sell its Warrant Shares thereunder, except as otherwise
permitted by the terms of the Warrant, such event shall constitute a Default
hereunder. Upon Default, this Note and all other liabilities may
(notwithstanding any provisions thereof), at the option of Lender, and without
demand or notice of any kind, be declared, and thereupon immediately shall
become, due and payable. The undersigned agrees to pay all expenses, including
reasonable attorneys' fees and legal expenses, incurred by Xxxxxx in endeavoring
to collect any of the liabilities.
Additional consideration: If note is not repaid in full on
_____________________, stock holder is entitled to an additional ________
warrants at a price of $____. This note will be due and payable
_________________.
The undersigned hereby expressly waives presentment, demand, notice of
dishonor, protest and, to the fullest extent permitted by applicable law, any
and all other notices, advertisements, hearings or process of law in connection
with the exercise by Lender of any of its rights and remedies upon Default.
The undersigned hereby authorizes, irrevocably, any attorney of any court
of record to appear for the undersigned in such court, in term time or vacation,
at any time after Default hereunder, and confess judgment without process in
favor of Lender for such amount as may appear to be unpaid thereon, together
with reasonable costs of collection, including reasonable attorneys' fees and
legal expenses, and to waive and release all errors which may intervene in any
such proceedings, and consent to immediate execution upon such judgment, hereby
ratifying and confirming all that said attorney may do by virtue hereof.
The loan evidenced hereby has been made, and this Note has been delivered,
at Highland Park, Illinois, and shall be governed by and construed in accordance
with the laws of the State of Illinois, except that the Warrants and underlying
common shares shall be governed in accordance with the laws of the State of New
York. Wherever possible, each provision of the Note shall be interpreted in
such manner as to be effective and valid under applicable law, but if any
provision of this Note shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the remaining provisions
of this Note.
By:
Xxxx X. Xxxxxxxx
President and CEO
