<PAGE>

                                                                   EXHIBIT 10.17

NEITHER THIS NOTE NOR ANY SECURITIES WHICH MAY BE ISSUED UPON CONVERSION HEREOF
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED
OR OTHERWISE QUALIFIED UNDER ANY STATE SECURITIES LAW. NEITHER THIS NOTE NOR ANY
SUCH SECURITIES MAY BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT AND REGISTRATION OR OTHER QUALIFICATION
UNDER ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION OR OTHER QUALIFICATION IS NOT
REQUIRED.

                                 DOVEBID, INC.
                                 -------------

                   CONVERTIBLE SUBORDINATED PROMISSORY NOTE
                   ----------------------------------------

$880,000.00                                                    February 29, 2000

          DoveBid, Inc., a Delaware corporation (the "Company"), with offices at
1241 East Hillsdale Blvd., Foster City, CA 94404, for value received, promises
to pay to the order of William J. Gardner, Jr. ("Payee") at such address as
Payee may designate, Eight Hundred and Eighty Thousand Dollars ($880,000.00),
plus simple interest thereon calculated from the date hereof until paid at the
annual rate of 7.0%, compounded annually.  Principal and accrued interest will
be due and payable in lawful money of the United States in full on February 28,
2002 (the "Maturity Date"), unless this Note shall have been previously
converted pursuant to Section 2 below, in which case all outstanding principal
under this Note and all accrued interest thereon shall be satisfied in full by
virtue of such conversion and the issuance and delivery of fully paid and non-
assessable shares of Conversion Stock to the holder of this Note as set forth in
Section 2 below.  Payments by the Company shall be applied first to any and all
accrued interest through the payment date and second to the principal remaining
due hereunder.

          The following is a statement of the rights of the holder of this Note
and the conditions to which this Note is subject, and to which the holder
hereof, by the acceptance of this Note, agrees:

          1.   Definitions.  As used in this Note, the following terms, unless
               -----------
the context otherwise requires, have the following meanings:

               1.1  "Company" includes any corporation or other entity which
succeeds to or assume the obligations of the Company under this Note.

               1.2  "Conversion Stock" shall mean shares of Common Stock of the
Company.

               1.3  "Conversion Price" shall mean the price per share that is
the exact middle of the price range stated in the Company's final amended
registration statement on Form

                                       1
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S-1, Form SB-1 or a similar successor form pertaining to an Initial Public
Offering that closes on before the Maturity Date. No conversion shall occur and
there is therefore no Conversion Price with respect to an Initial Public
Offering that closes after the Maturity Date.

               1.4  "Noteholder," "holder," or similar terms, when the context
refers to a holder of this Note, shall mean any person who shall at the time be
the registered holder of this Note.

               1.5  "Initial Public Offering" shall mean the closing of a sale
of Common Stock pursuant to a registration statement on Form S-1, Form SB-1 or
SB-2 (or any similar or successor form) under the Securities Act of 1933, as
amended, for an underwritten initial public offering.

               1.6  "Subordination Agreement" shall mean the Subordination
Agreement attached hereto as Annex A and incorporated by reference herein.
                             -------

          2.   Conversion.
               ----------

               2.1  Mandatory Conversion.  Notwithstanding anything regarding
                    --------------------
the subordinated nature of this Note, this Note and all of the outstanding
principal and accrued and unpaid interest on and under this Note shall be
converted into Conversion Stock at the Conversion Price immediately prior to the
first closing of an Initial Public Offering before the Maturity Date.  For
informational purposes, the Company shall provide the Noteholder with written
notice (at the most recent address for the Noteholder provided to the Company by
the Noteholder in writing) (i) within seven (7) days after it files with the
Securities and Exchange Commission any registration statement on Form S-1, Form
SB-1 or Form SB-2 (or any similar or successor form) for an Initial Public
Offering, and (ii) reasonably promptly following the closing of an Initial
Public Offering. Conversion as described in this Section 2.1 shall occur only
upon the closing of an Initial Public Offering, provided that (i) upon the
closing of an Initial Public Offering, the conversion shall be deemed to have
occurred immediately prior to the first closing of such Initial Public Offering,
and (ii) as a condition precedent or condition subsequent to conversion (the
election between which type of condition shall be the Company's sole election in
the Company's sole discretion), the Noteholder must surrender this Note for
conversion at the principal office of the Company. Incident to any conversion,
the Conversion Stock will have those rights and privileges, and be subject to
those restrictions, of the shares of Common Stock as set forth in the Company's
Certificate of Incorporation, and the Noteholder will receive the rights and be
subject to the obligations applicable to the purchasers of Common Stock,
provided that the sale restriction specified in Section 2.5 below shall apply to
the Conversion Stock.  This Note shall not be convertible and shall not be
converted into Conversion Stock if there is not an Initial Public Offering on or
before the Maturity Date.

               2.2  No Fractional Shares.  No fractional shares will be issued
                    --------------------
on conversion of this Note.  If on any conversion of this Note a fraction of a
share results, the Company will pay the cash value of that fractional share,
calculated on the basis of the applicable Conversion Price.

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               2.3  Reservation of Stock.  Prior to any conversion of this Note
                    --------------------
pursuant to Section 2.1 above, the Company will take such corporate action and
obtain such government consents and approvals as may, in the reasonable opinion
of its counsel, be necessary to authorize the issuance of a sufficient number of
shares of Conversion Stock into which this Note is to convert pursuant to
Section 2.1 above.

               2.4  Fully Paid Shares; Certificates.  All shares of Conversion
                    -------------------------------
Stock issued upon the conversion of this Note shall be validly issued, fully
paid and non-assessable.  The certificates representing the shares of Conversion
Stock issued upon conversion hereof shall be delivered to the holder against
surrender of this Note.  The holder, by accepting this Note, undertakes and
agrees to accept such shares of Conversion Stock in full satisfaction of the
outstanding principal and accrued interest thereon in accordance with the terms
of this Note.  Anything to the contrary in this Note notwithstanding, the
Company's obligation to issue shares of Conversion Stock to any holder of this
Note is expressly conditioned upon compliance of such issuance with applicable
federal and state securities laws without registration or other qualification
thereunder.

               2.5  Restriction on Sale.  Upon and following any conversion
                    -------------------
pursuant to this Section 2, no holder of any Conversion Stock shall effect any
sale or distribution of any of the Conversion Stock (which shall include any and
all voting securities received by such holder as or in connection with a stock
dividend, stock split or other recapitalization or similar distribution on or in
respect of the Conversion Stock) or any of the Company's other equity
securities, or of any securities convertible into or exchangeable for such
securities, during the period beginning on the closing of the Initial Public
Offering and ending 180 days after such closing.  The certificate(s)
representing the shares of Conversion Stock issued upon the conversion of this
Note shall be legended to reflect such restriction on sale.

               2.6  No Rights or Liabilities as Shareholder.  This Note does not
                    ---------------------------------------
by itself entitle the Noteholder to any voting rights or other rights as a
shareholder of the Company.  In the absence of conversion of this Note, no
provisions of this Note, and no enumeration herein of the rights or privileges
of the holder shall cause such holder to be a shareholder of the Company for any
purpose by virtue hereof.

               2.7  No Other Conversion.  The conversion described in this
                    -------------------
Section 2 shall constitute the sole methods by which this Note will convert.

          3.   Subordination.  This Note and the indebtedness evidence by this
               -------------
Note are subordinated to the prior payment in full of all or substantially all
other indebtedness of the Company pursuant to the terms of a Subordination
Agreement in the form attached hereto as Annex A and incorporated herein by
                                         -------
reference.

          4.   Usury Savings Clause.  The Company and the Noteholder intend to
               --------------------
comply at all times with applicable usury laws.  If at any time such laws would
render usurious any amounts due under this Note under applicable law, then it is
the Company's and the Noteholder's express intention that the Company not be
required to pay interest on this Note at a rate in excess of the maximum lawful
rate, that the provisions of this Section 5 shall control over all other
provisions of this Note which may be in apparent conflict hereunder, that such
excess

                                       3
<PAGE>

amount shall be immediately credited to the principal balance of this Note (or,
if this Note has been fully paid, refunded by the Noteholder to the Company),
and the provisions hereof shall immediately be reformed and the amounts
thereafter decreased, so as to comply with the then applicable usury law, but so
as to permit the recovery of the fullest amount otherwise due under this Note.

          5.   General Provisions.
               ------------------

               5.1  Notices.  All notices and other communications required or
                    -------
permitted hereunder shall be effective upon receipt (or refusal of receipt) and
shall be in writing and delivered by a nationally-recognized overnight courier
service or by depositing the same in United States mail, addressed to the party
to be notified, postage prepaid and registered or certified with return receipt
requested, by delivering the same in person to such party or to an officer or
agent of such party, as follows:

                    (i)  If mailed or delivered to the Company, to each of the
following, using two separate mailings or deliveries:

                         DoveBid, Inc.
                         1241 East Hillsdale Blvd.
                         Foster City, CA 94404
                         Attn: Cory Ravid, Chief Financial Officer

                         DoveBid, Inc.
                         1241 East Hillsdale Blvd.
                         Foster City, CA 94404
                         Attn: Anthony Capobianco, General Counsel

                    (ii) If mailed or delivered to the Payee, addressed to him
at the following address:

                         16 Dogwood Road
                         Madison, CT 06443

               or to such other address as any party hereto shall specify in
writing to the other parties hereto pursuant to this Section 5.1 from time to
time. Such notice shall be effective only upon actual receipt.

               5.2  Severability; Headings.  In case any provision of this Note
                    ----------------------
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby, unless to do so would deprive the Noteholder or the Company of
a substantial part of its bargain.  All headings used herein are used for
convenience only and shall not be used to construe or interpret this Note.

               5.3  Noteholder Representations and Status.  By accepting this
                    -------------------------------------
Note, the Payee and any other Noteholder each acknowledges, represents and
warrants that the representations and warranties set forth in Section 2.21 of
that certain Membership Interest Purchase Agreement among the Company, Greenwich
Industrial Services LLC, a Connecticut

                                       4
<PAGE>

limited liability company ("GIC"), Payee and each of the other members of GIC
are true and correct as of the date of this Note.

               5.4  Assignment.  Except as provided in the next two sentences,
                    ----------
neither this Note nor any right hereunder may be assigned by the Noteholder
without the prior written consent of the Company, which may be granted or
withheld in the Company's sole discretion. Notwithstanding the immediately prior
sentence, Noteholder may assign the Note and the Subordination Agreement to any
trust, corporation, partnership or other entity in which Noteholder holds all of
the voting power and equity or due to death and in accordance with the laws of
wills, succession and intestacy (provided in each case that such transferee
executes an agreement pursuant to which such transferee agrees to be bound by
the terms of the Note and the Subordination Agreement, such agreement to be in
form and substance reasonably satisfactory to the Company).  Notwithstanding the
first sentence of this Section 5.4, the Company may not assign any of its rights
or obligations hereunder, except that the Company may assign its rights and
obligations hereunder in connection with a merger, consolidation or sale of all
or substantially all of the Company's assets or in connection with a
reincorporation, reorganization or other corporate recapitalization, provided
that the acquiring or surviving corporation or entity agrees to assume all of
the Company's obligations under this Note and that such acquiring or surviving
corporation or entity has a market capitalization or net assets in excess of
$75.0 million at the time of such assignment. This Note will be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.

               5.5  Entire Agreement; Changes.  This Note, and the Agreement and
                    -------------------------
Plan of Merger executed by Payee in connection with the issuance of this Note,
contains the entire agreement between the parties hereto superseding and
replacing any prior agreement or understanding relating to the subject matter
hereof.  Neither this Note nor any term hereof may be changed, waived,
discharged or terminated orally but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought.

                                       5
<PAGE>

               5.6  Law Governing.  This Note shall be construed and enforced in
                    -------------
accordance with, and governed by, the internal laws of the State of California,
excluding that body of law applicable to conflicts of law.

          IN WITNESS WHEREOF, each party has caused this Note to be executed as
of the date set forth above.

                                       THE COMPANY:


                                       DOVEBID, INC.

                                       By: /s/ Anthony Copobianco
                                          ------------------------------------
                                       Its: Vice President and General Counsel
                                           -----------------------------------
Acknowledged and Agreed to:

PAYEE:

/s/ William J Gardner, Jr.
--------------------------------
Name:  William J. Gardner, Jr.


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