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INFONOW CORPORATION
COMMON STOCK PURCHASE AGREEMENT
March 30, 2000
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INFONOW CORPORATION
COMMON STOCK PURCHASE AGREEMENT
This Common Stock Purchase Agreement (this "Agreement") is made as of the
30th day of March, 2000, between and among InfoNow Corporation (the "Company"),
a corporation organized under the laws of the State of Delaware, with its
principal offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
and the persons listed on the Schedule of Purchasers attached hereto as Exhibit
A (the "Purchasers").
IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Purchasers agree as follows:
SECTION 1
AUTHORIZATION AND SALE OF COMMON STOCK
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1.1 Authorization. Subject to the terms and conditions of this agreement,
the Company has authorized the sale of up to 526,316 shares (the "Shares") of
its Common Stock, par value $0.001 per share ("Common Stock").
1.2 Sale of the Shares. Subject to the terms and conditions of this
Agreement, the Company agrees to issue and sell to each Purchaser and each
Purchaser severally agrees to purchase from the Company the number of Shares set
forth opposite each Purchaser's name on Exhibit A for $9.50 per share.
SECTION 2
CLOSING DATE; DELIVERY
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2.1 Closing Date. The completion of the purchase and sale of the Shares
(the "Closing") shall occur as soon as practicable and as agreed by the parties
hereto, at a place and time (the "Closing Date") to be agreed upon by the
Company and ▇▇▇▇▇▇▇ & Company, Inc. (the "Placement Agent") and of which the
Purchasers will be notified by facsimile transmission or otherwise.
2.2 Delivery. At the Closing, the Company shall deliver to each Purchaser
one or more stock certificates registered in the name of such Purchaser, or in
such nominee name(s) as designated by the Purchaser in writing, representing the
number of Shares set forth opposite such Purchaser's name on Exhibit A attached
hereto. The name(s) in which the stock certificates are to be registered are set
forth in the Stock Certificate Questionnaire attached hereto as part of Exhibit
B. The Company's obligation to complete the purchase and sale of the Shares and
deliver such stock certificate(s) to each Purchaser at the Closing shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (a) receipt by the Company of same-day funds in the full amount of
the purchase price for the Shares being purchased hereunder; (b) receipt by the
Company of a completed version of Exhibit B, Exhibit C and Exhibit D-1 or D-2
(as applicable); attached hereto; and (c) the accuracy of the representations
and warranties made by the Purchasers and the fulfillment of those undertakings
of the Purchasers to be fulfilled prior to the Closing. Each Purchaser's
obligation to accept delivery of such stock certificate(s) and to pay for the
Shares evidenced thereby shall be subject to the accuracy in all material
respects of the representations and warranties made by the Company herein and
the fulfillment in all material respects of those undertakings of the Company to
be fulfilled prior to the Closing.
Simultaneously with the Closing the Company and the Purchasers shall
execute and deliver a Registration Rights Agreement attached hereto as Exhibit
G.
SECTION 3
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
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3.1 Organization and Qualification. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is qualified to do business as a foreign corporation in each
jurisdiction in which qualification is required, except where failure to so
qualify would not have a Material Adverse Effect (as defined herein).
3.2 Corporate Power; Authorization. The Company has all requisite legal and
corporate power and has taken all requisite corporate action to execute and
deliver this Agreement, to sell and issue the Shares and to carry out and
perform all of its obligations under this Agreement. This Agreement constitutes
the legal, valid and binding obligation of the Company, enforceable in
accordance with its terms, except (a) as limited by applicable bankruptcy,
insolvency, reorganization or similar laws relating to or affecting the
enforcement of creditors' rights generally and (b) as limited by equitable
principles generally. The execution and delivery of this Agreement does not, and
the performance of this Agreement and the compliance with the provisions hereof
and the issuance, sale and delivery of the Shares by the Company will not
materially conflict with, or result in a material breach or violation of the
terms, conditions or provisions of, or constitute a material default under, or
result in the creation or imposition of any material lien pursuant to the terms
of, the Certificate of Incorporation or Bylaws of the Company or any statute,
law, rule or regulation or any state or federal order, judgment or decree or any
indenture, mortgage, lease or other material agreement or instrument to which
the Company or any of its proprties is subject.
3.3 Authorized Capital Stock. The authorized capital stock of the Company
consists of (a) 15,000,000 shares of Common Stock, $0.001 par value, of which,
as of March 30, 2000, 7,270,627 shares were outstanding (excluding, as of such
date (i) 3,195,105 shares of Common Stock issuable upon the exercise of
outstanding options under the Company's 1990 Stock Plan and 1999 Stock Plan
(collectively, the "Stock Option Plans"), (ii) 1,004,895 shares of Common Stock
reserved for future option grants under the Stock Option Plans and (iii) 170,861
shares of Common Stock issuable upon the exercise of outstanding warrants) and
(b) 2,000,000 shares of Preferred Stock, $0.001 par value, of which 251,148 have
been designated Series A Convertible Preferred Stock and 816,000 shares have
been designated Series B Convertible Participating Preferred Stock. No shares of
Series A are outstanding and 250,000 shares of Series B Convertible Preferred
Stock are outstanding. The issued and outstanding shares of the Company's Common
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Stock have been duly authorized and validly issued, are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, were not issued in violation of or subject to any preemptive
rights or other rights to subscribe for or purchase securities, and conform in
all material respects to the description thereof contained in the SEC Documents
(as defined herein). Except as disclosed or contemplated by in the SEC
Documents, the Company does not have outstanding any options to purchase, or any
preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into, or any contracts or commitments to
issue or sell, shares of its capital stock or any such options, rights,
convertible securities or obligations. The description of the Company's stock,
stock bonus and other stock plans or arrangements and the options or other
rights granted and exercised thereunder set forth in the SEC Documents
accurately and fairly presents the information required to be shown with respect
to such plans, arrangements, options and rights.
3.4 SEC Documents; Financial Statement. The Company has filed in a timely
manner all documents that the Company was required to file with Securities and
Exchange Commission (the "SEC") under Sections 13, 14(a) and 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), during the
twelve (12) months preceding the date of this Agreement. As of their respective
filing dates, all documents filed by the Company with the SEC (the "SEC
Documents") complied in all material respects with the requirements of the
Exchange Act or the Securities Act, as applicable. None of the SEC Documents as
of their respective dates contained any untrue statement of material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
were made, not misleading. The financial statements of the Company included in
the SEC Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the consolidated financial position of
the Company and any subsidiaries at the dates thereof and the consolidated
results of their operations and consolidated cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal, recurring
adjustments).
3.5 Accountants. ▇▇▇▇ + Associates LLP, who have expressed their opinion
with respect to the consolidated financial statements for the year ended
December 31, 1999, are independent accountants as required by the Securities Act
and the rules and regulations promulgated thereunder (the "Rules and
Regulations").
3.6 No Defaults. Except as disclosed in the SEC Documents, and except as to
defaults, violations and breaches which individually or in the aggregate would
not be material to the Company, the Company is not in violation or default of
any provision of its Certificate of Incorporation or Bylaws, or other
organizational documents, or in breach of or default with respect to any
provision of agreement, judgment, decree, order, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which it is a party
or by which it or any of its properties are bound; and there does not exist any
state of fact which, with notice or lapse of time or both, would constitute an
event of default on the part of the Company as defined in such documents, except
such defaults which individually or in the aggregate would not be material to
the Company.
3
3.7 Contracts. The contracts described in or specifically contemplated by
the SEC Documents are in full force and effect on the date hereof; and neither
the Company nor, to the Company's knowledge, any other party is in breach of or
default under any of such contracts which would have a Material Adverse Effect.
3.8 No Actions. There are no legal or governmental actions, suits or
proceedings pending or, to the Company's knowledge, threatened to which the
Company is or may be a part or of which property owned or leased by the Company
is or may be the subject, or related to environmental or discrimination matters,
which actions, suits or proceedings, individually or in the aggregate, might
prevent or might reasonably be expected to materially and adversely affect the
transactions contemplated by this Agreement or result in a material adverse
affect on the condition (financial or otherwise), properties, business,
prospects or results of operations of the Company (a "Material Adverse Effect");
and no labor disturbance by the employees of the Company exists to or, to the
Company's knowledge, is imminent which might reasonably be expected to have a
Material Adverse Effect. Except as disclosed in the SEC Documents, the Company
is not party to or subject to the provisions of any material injunction,
judgment, decree or order of any court, regulatory body, administrative agency
or other governmental body.
3.9 Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state, or local governmental authority on the part of the Company is
required in connection with the consummation of the transactions contemplated by
this Agreement except for (a) compliance with the securities and Blue Sky laws
in the states in which Shares are offered and/or sold, which compliance will be
effected in accordance with such laws and (b) the filing of the Registration
Statement as contemplated by Section 6 of this Agreement.
3.10 Litigation. There are no actions, suits proceedings or investigations
pending or, to the best of the Company's knowledge, threatened against the
Company or any of its properties before or by any court or arbitrator or any
governmental body, agency or official in which there is a reasonable likelihood
(in the judgment of the Company) of an adverse decision that (a) could have a
Material Adverse Effect on the Company's properties or assets or the business of
the Company as presently conducted or proposed to be conducted or (b) could
impair the ability of the Company to perform in any material respect its
obligations under this Agreement.
3.11 Properties. The Company has good and marketable title to all the
properties and assets reflected as owned by it in its consolidated financial
statements, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except (a) those, if any, reflected in such consolidated financial
statements, or (b) those which are not material in amount and do not adversely
affect the use made and promised to be made of such property by the Company. The
Company holds its leased properties under valid and binding leases, with such
exceptions as are not materially significant in relation to its business. The
Company owns or leases all such properties as are necessary to its operations as
now conducted.
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3.12 No Material Change. Since December 31, 1999 (a) the Company has not
incurred any material liabilities or obligations, indirect or contingent, or
entered into any material verbal or written agreement or other transaction which
is not in the ordinary course of business (b) the Company has not sustained any
material loss or interference with its businesses or properties from fire,
flood, windstorm, accident or other calamity not covered by insurance; (c) the
Company has not paid or declared any dividends or other distributions with
respect to its capital stock and is not in default in the payment of principal
or interest on any outstanding debt obligations; (d) there has not been any
change in the capital stock of the Company other than the sale of the Shares
hereunder and shares or options issued pursuant to the Stock Option Plans, as
approved by the Company's Board of Directors; (e) there has not been any
increase in indebtedness material to the Company (other than in the ordinary
course of business); and (f) there has not been any change that would result in
a Material Adverse Effect.
3.13 Intellectual Property. The Company owns or has obtained valid and
enforceable licenses or options for the inventions, patent applications,
patents, trademarks (both registered and unregistered), tradenames, copyrights
and trade secrets necessary for the conduct of the Company's business as
currently conducted (collectively, the "Intellectual Property"); and to the
Company's knowledge (for each of the following subsections (i) through (v)): (i)
there are no third parties who have any ownership rights to any Intellectual
Property that is owned by, or has been licensed to, the Company for its products
that would preclude the Company from conducting its business as currently
conducted, except for the ownership rights of the owners of the Intellectual
Property licensed or optioned by the Company; (ii) there are currently no sales
of any products that would constitute an infringement by third parties of any
Intellectual Property owned, licensed or optioned by the Company; (iii) there is
no pending or threatened action, suit, proceeding or claim by others challenging
the rights of the Company in or to any Intellectual Property owned, licensed or
optioned by the Company, other than non-material claims; (iv) there is no
pending or threatened action, suit, proceeding or claim by others challenging
the validity or scope of any Intellectual Property owned, licensed or optioned
by the Company, other than non-material claims; and (v) there is no pending or
threatened action, suit, proceeding or claim by others that the Company
infringes or otherwise violates any patent, trademark, copyright, trade secret
or other proprietary right of others, other than non-material claims.
3.14 Compliance. The Company has not been advised, nor does it have reason
to believe, that it is not conducting business in compliance with all applicable
laws, rules and regulations of the jurisdictions in which it is conducting
business, including, without limitation, all applicable local, state and federal
environmental laws regulations; except where failure to be so in compliance
would not have a Material Adverse Effect.
3.15 Taxes. The Company has filed all necessary federal, state and foreign
income and franchise tax returns and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of a tax deficiency which has been or
might be asserted or threatened against it which could have a Material Adverse
Effect.
3.16 Transfer Taxes. On the Closing Date, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection with the
sale and transfer of the Shares to be sold to the Purchasers hereunder will be,
or will have been, fully paid or provided for by the Company and all laws
imposing such taxes will be or will have been fully complied with.
5
3.17 Investment Company. The Company is not an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.
3.18 Distribution of Offering Materials. The Company has not distributed
and will not distribute prior to the Closing Date any offering materials related
to the offering and sale of the Shares.
3.19 Insurance. The Company maintains insurance of the types and in the
amounts that it reasonably believes is adequate for its business, including, but
not limited to, insurance covering all real and personal property owned or
leased by the Company against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against by similarly situated companies, all
of which insurance is in full force and effect.
3.20 Contributions. Since its incorporation the Company has not, directly
or indirectly (a) made any unlawful contribution to any candidate for public
office, or failed to disclose fully any contribution in violation of law, or (b)
made any payment to any federal or state governmental officer or official, or
other person charged with similar public or quasi-public duties, other than
payments required or permitted by the laws of the United States or any
jurisdiction thereof.
3.21 Legal Opinion. Prior to the Closing, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
counsel to the Company, will deliver its legal opinion related to the
transactions referred to herein, substantially in the form attached to herein as
Exhibit F.
3.22 Officers Certificate. At the Closing, the Company will deliver to each
Purchaser a certificate executed by the chief executive officer and the chief
financial officer of the Company, dated the Closing Date, in form and substance
reasonably satisfactory to the Purchasers, certifying that the representations
and warranties of the Company set forth in this Section 3 are true and correct
in all material respects as of the date of this Agreement and as of the Closing
Date, and the Company has complied with all the agreements and satisfied all the
conditions herein on its part to be performed or satisfied on or prior to the
Closing Date.
SECTION 4
REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASERS
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Each Purchaser hereby severally represents and warrants to the Company,
effective as of the Closing Date, as follows:
4.1 Authorization. Purchaser represents and warrants to the Company that:
(a) Purchaser has all requisite legal and corporate or other power and capacity
and has taken all requisite corporate or other action to execute and deliver
this Agreement, to purchase the Shares to be purchased by it and to carry out
and perform all of its obligations under this Agreement; and (b) this Agreement
constitutes the legal, valid and binding obligation of the Purchaser,
enforceable in accordance with its terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, or similar laws relating to or affecting
the enforcement of creditors' rights generally and (ii) as limited by equitable
principles generally.
6
4.2 Investment Experience. Purchaser is an "accredited investor" as defined
in Rule 501(a) under the Securities Act. Purchaser is aware of the Company's
business affairs and financial condition and has had access to and has acquired
sufficient information about the Company to reach an informed and knowledgeable
decision to acquire the Shares. Purchaser has such business and financial
experience as is required to give it the capacity to protect its own interests
in connection with the purchase of the Shares.
4.3 Investment Intent. Purchaser is purchasing the Shares for its own
account as principal, for investment purposes only, and not with a present view
to, or for, resale, distribution or fractionalization thereof, in whole or in
part, within the meaning of the Securities Act. Purchaser understands that its
acquisition of the Shares has not been registered under the Securities Act or
registered or qualified under any state securities law in reliance on specific
exemptions therefrom, which exemptions may depend upon, among other things, the
bona fide nature of Purchaser's investment intent as expressed herein. Purchaser
has completed or caused to be completed the Registration Statement Questionnaire
attached hereto as Exhibit C and the certificate attached hereto as Exhibit D-1
or D-2, as applicable, and the responses provided therein shall be true and
correct as of the Closing Date and will be true and correct as of the effective
date of the Registration Statement. Purchaser has, in connection with its
decision to purchase the number of shares set forth in Exhibit A relied solely
upon it own investigations and the representations and warranties of the Company
contained herein. Purchaser will not, directly or indirectly, offer, sell,
pledge, transfer or otherwise dispose of (or solicit any offers to buy, purchase
or otherwise acquire or take a pledge of) any of the Shares except in compliance
with the Securities Act, and the rules and regulations promulgated thereunder.
4.4 Registration or Exemption Requirements. Purchaser further acknowledges
and understands that the Shares may not be resold or otherwise transferred
except in a transaction registered under the Securities Act or unless an
exemption from such registration is available.
4.5 Restriction on Short Sales. Purchaser represents and warrants to and
covenants with the Company that Purchaser has not engaged and will not engage in
any short sales of the Company's Common Stock prior to the effectiveness of the
Shelf Registration Statement described in the Registration Rights Agreement
attached hereto as Exhibit G, except to the extent that any such short sale is
fully covered by shares of Common Stock of the Company other than the Shares.
4.6 No Legal, Tax or Investment Advice. Purchaser understands that nothing
in this Agreement or any other materials presented to Purchaser in connection
with the purchase and sale of the Shares constitutes legal, tax or investment
advice. Purchaser has consulted such legal, tax and investment advisors as it,
in its sole discretion, has deemed necessary or appropriate in connection with
its purchase of the Shares.
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SECTION 5
SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
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The representations and warranties, covenants and agreements contained herein
shall survive until March 30, 2001.
SECTION 6
REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT
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6.1 Registration. The Company shall comply with the terms and conditions
contained in the Registration Rights Agreement attached hereto as Exhibit G.
6.2 Transfer of Shares After Registration. Each Purchaser agrees that it
will not effect any disposition of the Shares or its right to purchase the
Shares that would constitute a sale within the meaning of the Securities Act,
except as contemplated by the Shelf Registration Statement referred to in
Section 6.1 or in accordance with Rule 144.
6.3 Termination of Conditions and Obligations. The conditions precedent
imposed by Section 4.4 or this Section 6.2 upon the transferability of the
Shares shall cease and terminate upon the passage of twenty-four months from the
Closing Date or at such time as an opinion of counsel satisfactory in form and
substance to the Company shall have been rendered to the effect that such
conditions are not necessary in order to comply with the Securities Act.
SECTION 7
MISCELLANEOUS
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7.1 Broker's Fee. The Purchaser acknowledges that the Company intends to
pay to the ▇▇▇▇▇▇▇ & Co. a fee in respect of the sale of the Shares to the
Purchaser. Each of the parties hereby represents that, there are no other
brokers or finders entitled to compensation in connection with the sale of the
Shares to the Purchaser.
7.2 Notices. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized overnight
express courier postage prepaid, and shall be deemed given when so mailed and
shall be delivered as addressed as follows:
(a) if to the Company, to:
InfoNow Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
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or to such other person at such other place as the Company shall designate to
each Purchaser in writing; and
(b) if to a Purchaser, at its address as set forth at the end of this
Agreement for such purchaser, or at such other address or addresses as may
have been furnished to the Company in writing.
7.3 Changes. This Agreement may not be modified or amended except pursuant
to an instrument in writing signed by the Company and each Purchaser.
7.4 Headings. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
7.5 Severability. In case any provision contained in this Agreement should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
7.6 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and the federal law of the
United States of America.
7.7 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument, and shall become effective
when one or more counterparts have been signed by each party hereto and
delivered to the other parties.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the day and year first
above written.
INFONOW CORPORATION
By
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Chief Executive Officer
NR VENTURES, LTD.
By
Name:
Title:
Address: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
RIT CAPITAL PARTNERS, PLC
By
Name:
Title:
Address: ▇▇ ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Facsimile: 011-44-171-629-3250
Telephone: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇ EMERGING INFORMATION
SCIENCES TRUST
By
Name:
Title:
Address:
Facsimile:
Telephone:
10
EXHIBIT A
SCHEDULE OF PURCHASERS
Aggregate
Purchase
Purchaser Shares Price
--------- ------ -----
NR Ventures, Ltd. 210,527 $2,000,000
RIT Capital Partners, PLC 210,526 $2,000,000
▇▇▇▇▇▇ Emerging Information Sciences Trust S.A 105,263 $1,000,000
---------- ----------
TOTAL 526,316 $5,000,000
========== ==========
SUMMARY INSTRUCTION SHEET FOR PURCHASER
(to be read in conjunction with the entire Common Stock Purchase Agreement)
A. Complete the following items in the Common Stock Purchase Agreement:
1. Signature Page: Provide the information regarding the Purchaser
requested on the signature page. The agreement must be executed by an
individual authorized to bind the Purchaser.
2. Exhibit B - Stock Certificate Questionnaire: Provide the information
requested by the Stock Certificate Questionnaire.
3. Exhibit C - Registration Statement Questionnaire: Provide the
information requested by the Registration Statement Questionnaire.
4. Exhibits D-1 and D-2 - Purchaser Certificate: Provide the information
requested by the Certificate for Individual Purchasers or the
Certificate for Corporate, Partnership, Trust, Foundation and Joint
Purchasers, as applicable.
B. Return the properly completed and signed Common Stock Purchase Agreement
signature pages and Exhibits B, C and D-1 or D-2 (as applicable) to:
--------------------------
--------------------------
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C. Instructions regarding the transfer of funds for the purchase of Shares
will be sent by facsimile to the Purchaser by the Placement Agent at a
later date.
D. Upon the resale of the Shares by the Purchasers after the Registration
Statement covering the Shares is effective, as described in the Purchase
Agreement, the Purchaser:
1. must deliver a current prospectus of the Company to the buyer
(prospectuses must be obtained from the Company at the Purchaser's
request); and
2. must send a letter in the form of Exhibit E to the Company so that the
Shares may be properly transferred.
EXHIBIT B
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 4.3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be Registered in (this is the
name that will appear on your stock certificate(s)). You may use a
nominee name if appropriate:
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2. The relationship between the Purchaser of the Shares and the
Registered Holder listed in response to item 1 above:
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3. The mailing address of the Registered Holder listed in response to
item 1 above:
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4. The Social Security Number or Tax Identification Number of the
Registered Holder listed in response to item 1 above:
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EXHIBIT C
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement, please
provide us with the following information:
1. Pursuant to the "Selling Stockholder" section of the Registration
Statement, please state your or your organization's name exactly as it
should appear in the Registration Statement:
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2. Please provide the number of shares of InfoNow Common Stock that you
or your organization will own immediately after Closing, including
those purchased by you or your organization pursuant to this Agreement
and those shares of Common Stock purchased by you or your organization
through other transactions:
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3. Have you or your organization had any position, office or other
material relationship within the past three years with the Company or
its affiliates?
_____ Yes _____ No
If yes, please indicate the nature of any such relationships below:
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EXHIBIT D-1
CERTIFICATE FOR INDIVIDUAL PURCHASERS
If the investor is an individual Purchaser (or married couple) the
Purchaser must complete, date and sign this Certificate.
CERTIFICATE
I certify that the representations and responses below are true and
accurate:
In order for the Company to offer and sell the Shares in conformance with
state and federal securities laws, the following information must be obtained
regarding your investor status. Please initial each category applicable to you
as an investor in the Company.
____ (1) A natural person whose net worth, either individually or jointly
with such person's spouse exceeds $1,000,000.
____ (2) A natural person who had an income in excess of $200,000, or joint
income with the person's spouse in excess of $300,000, in 1997, 1998 and 1999,
and reasonably expects to have individual income reaching the same level in
2000.
____ (3) An executive officer or director of the Company.
Dated: ___________________
Name(s) of Purchaser
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Signature
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Signature
EXHIBIT D-2
CERTIFICATE FOR CORPORATE, PARTNERSHIP,
TRUST, FOUNDATION AND JOINT PURCHASERS
If the investor is a corporation, partnership, trust, pension plan,
foundation, joint purchasers (other than a married couple) or other entity, an
authorized officer, partner, or trustee must complete, date and sign this
Certificate.
CERTIFICATE
The undersigned certifies that the representations and responses below are
true and accurate.
(a) The investor has been duly formed and is validly existing and has full
power and authority to invest in the Company. The person signing on behalf of
the undersigned has the authority to exercise and deliver the Common Stock
Purchase Agreement on behalf of the Purchaser, and to take other sections with
respect thereto.
(b) Indicate the form of entity of the undersigned:
________ Limited Partnership
________ General Partnership
________ Corporation
________ Revocable Trust (identify each grantor and indicate under what
circumstances the trust is revocable by the grantor: __________________
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____________ (Continue on a separate piece of paper, if necessary.)
________ Other Type of Trust (indicate type of trust and, for trusts
other than pension trust, name the guarantors and beneficiaries:_______
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_________. (Continue on a separate piece of paper, if necessary.)
________ Other form of organization (indicate form of organization
(_______)
(c) Indicate the approximate date the undersigned entity was formed:
________
(d) In order for the Company to offer and sell the Shares in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor sums. Please initial each category applicable
to you as an investor in the Company.
____ 1. A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity;
____ 2. A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934;
____ 3. An insurance company as defined in Section 2(13) of the Securities
Act;
____ 4. As investment company registered under the Investment Company Act
of 1940 or a business development company as defined in Section 2(a)(48) of that
Act;
____ 5. A Small Business Investment Company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958;
____ 6. A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000;
____ 7. An employee benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in Section 3(21) of such act, which is either a bank,
savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;
____ 8. A private business development company as defined in Section
202(a)(23) of the Investment Advisers Act of 1940;
____ 9. An organization described in Section 501(c)(3) of the Internal
Revenue Code, a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Shares, with
total assets in excess of $5,000,000;
____ 10. A trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the Shares, whose purchase is directed by a
sophisticated person who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the merits and risks
of investing in the Company;
____ 11. An entity in which all of the equity owners qualify under any of
the above subparagraphs. If the undersigned belongs to this investor category
only, list the equity owners of the undersigned, and the investor category which
each such equity owner satisfies:
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(Combine on a separate piece of paper, if necessary.)
Dated: __________________ , 19 ____
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Name of investors
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Signature and title of authorized
officer, partner or trustee
EXHIBIT E
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
Attention:
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, [an officer of, or other person duly authorized by]
______________ [fill in official name of individual or institution] hereby
certifies that he/she [said institution] is the Purchaser of the shares
evidenced by the attached certificate, and as such, sold such shares on
_____________ in accordance with [date] Registration Statement number [fill in
the number of or otherwise identify Registration Statement] and the requirement
of delivering a current prospectus by the Company has been complied with in
connection with such sale.
Print or Type:
Name of Purchaser
(Individual or
Institution):
Name of Individual
representing
Purchaser (if an
Institution)
Title of Individual representing
Purchaser (if an Institution):
Signature by:
Individual Purchaser
or Individual representing
Purchaser:
EXHIBIT F
FORM OF LEGAL OPINION
March 30, 2000
To the Purchasers named
in the Common Stock Purchase Agreement
referred to below:
Re: InfoNow Corporation
Common Stock Purchase Agreement dated March 30, 2000
Ladies and Gentlemen:
This firm has acted as special counsel to InfoNow Corporation, a Delaware
corporation (the "Company"), in connection with the Common Stock Purchase
Agreement, dated March 30, 2000 (the "Purchase Agreement"), among the Company
and the Purchasers listed in Exhibit A, attached thereto. This opinion letter is
furnished to you pursuant to the requirements set forth in Section 3.21 of the
Purchase Agreement. Capitalized terms used herein that are defined in the
Purchase Agreement shall have the meanings set forth in the Purchase Agreement,
unless otherwise defined herein.
For purposes of this opinion letter, we have examined copies of the
following documents:
The Purchase Agreement.
The Certificate of Incorporation of the Company, as certified by the
Secretary of the Company on the date hereof as being complete, accurate and in
effect.
The Bylaws of the Company, as certified by the Secretary of the
Company on the date hereof as being complete, accurate and in effect.
Resolutions of the Board of Directors of the Company adopted on March
24, 2000, as certified by the Secretary of the Company on the date hereof as
being complete, accurate and in effect, relating to, among other things,
authorization of the Purchase Agreement and the consummation of the transactions
contemplated thereunder.
A certificate of the Secretary of the Company, dated the date hereof,
as to the incumbency of certain officers of the Company and other factual
matters.
We have not, except as specifically identified above, made any independent
review or investigation of factual matters, including the assets, business or
affairs of the Company. In our examination of the Purchase Agreement and the
aforesaid certificates, records, documents and agreements, we have assumed the
genuineness of all signatures (other than those on behalf of the Company in the
Purchase Agreement), the legal capacity of all natural persons, the accuracy and
completeness of all documents submitted to us, the authenticity of all original
documents and the conformity to authentic original documents of all documents
submitted to us as copies (including telecopies). We also have assumed the
accuracy, completeness and authenticity of the foregoing certifications (of
public officials, governmental agencies and departments and corporate officers)
and statements of fact, on which we are relying, and have made no independent
investigations thereof. In rendering the following opinions with respect to the
Company we have relied as to factual matters, without independent investigation,
upon the representations, warranties and certifications made by the Company in
or pursuant to the Purchase Agreement and upon the Secretary's certificates
identified above. This opinion letter is given, and all statements herein are
made, in the context of the foregoing.
As used in this opinion letter, the phrase "to our knowledge" means the
actual knowledge (that is, the conscious awareness of facts or other
information) of lawyers in the firm who have given substantive legal attention
to representation of the Company in connection with the Purchase Agreement.
For purposes of this opinion letter, we have assumed that (i) the
Purchasers have all requisite power and authority under all applicable laws,
regulations and governing documents to execute, deliver and perform their
respective obligations under the Purchase Agreement, (ii) the Purchasers have
duly authorized, executed and delivered the Purchase Agreement, (iii) the
Purchasers, to the extent they are not individuals, are validly existing and in
good standing in all necessary jurisdictions, (iv) the Purchase Agreement
constitutes valid and binding obligations, enforceable against the Purchasers in
accordance with its terms and (v) there has been no material mutual mistake of
fact or misunderstanding or fraud, duress or undue influence, in connection with
the negotiation, execution or delivery of the Purchase Agreement.
Based upon, subject to and as limited by the foregoing, we are of the
opinion that:
(a) The Company is duly incorporated, validly existing and in good standing
under the laws of the State of Delaware.
(b) The Company has the requisite corporate power and corporate authority
to own or lease its properties and assets and to conduct its business as it is
currently being conducted.
(c) The Company has the corporate power and corporate authority to enter
into the Purchase Agreement and to perform its obligations thereunder.
(d) The Purchase Agreement is valid, binding and enforceable against the
Company in accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
(including, without limitation, the effect of statutory and other law regarding
fraudulent conveyances, fraudulent transfers and preferential transfers) and as
may be limited by the exercise of judicial discretion and the application of
principles of equity including, without limitation, requirements of good faith,
fair dealing, conscionability and materiality (regardless of whether such
agreements are considered in a proceeding in equity or at law).
(e) All corporate proceedings required by law to be taken by the Board of
Directors and stockholders of the Company on or prior to the Closing Date in
connection with the execution and delivery of the Purchase Agreement have been
duly and validly taken.
Assuming delivery of the Shares and payment of the purchase price therefor
in accordance with the Purchase Agreement, the Shares have been duly authorized
and validly issued and are fully paid and non-assessable.
(g) The Company is authorized by its Certificate of Incorporation to issue
17,000,000 shares, each having a par value of $.001 per share, of which
15,000,000 shares are classified as common stock and 2,000,000 shares are
classified as preferred stock. Of the preferred stock, 251,148 shares have been
designated as Series A Preferred Stock and 816,000 shares have been designated
as Series B Convertible Participating Preferred Stock. On the Closing Date, to
our knowledge, and not including any shares to be issued pursuant to the
Purchase Agreement, there were 7,270,627 shares of Common Stock issued and
outstanding and 250,000 shares of Series B Convertible Preferred Stock issued
and outstanding.
(h) The execution, delivery, and performance by the Company of its
agreements in the Purchase Agreement and the issuance and sale by the Company of
the Shares on the date hereof will not (i) violate the Certificate of
Incorporation or Bylaws of the Company, (ii) breach or result in a default under
any agreement or instrument on file with the Securities and Exchange Commission,
or (iii) violate any applicable Colorado, Delaware or federal law or regulation
or, to our knowledge, any order, writ, injunction or decree of any jurisdiction,
court of governmental instrumentality binding upon the Company, except that we
express no opinion as to state securities or blue sky laws or as to compliance
with the antifraud provisions of the federal and state securities laws.
No authorization or consent of any governmental entity is required to
permit the Company to issue and sell the shares issued to the Purchasers on the
date hereof, except such as may be required under state securities or blue sky
laws, as to which we express no opinion.
Subject to the accuracy of the representations of the Purchasers contained
in the Purchase Agreement, the offer and sale of the Shares will be exempt from
the registration requirements of the Securities Act of 1933, as amended.
The Company is not subject to regulation as an "investment company" under
the Investment Company Act of 1940, as amended.
The opinions expressed in Paragraph (d) above shall be understood to mean
that if there is a default in performance of an obligation, (i) if a failure to
pay or other damage can be shown and (ii) if the defaulting party can be brought
into a court that will hear the case and apply the governing law, then, subject
to the availability of defenses, and to the exceptions set forth in Paragraph
(d) above, the court will provide a money damage (or perhaps injunctive or
specific performance) remedy.
We are admitted to practice law in the State of Colorado and we express no
opinion as to the laws of, or the effect or applicability of the laws of, any
jurisdiction other than Colorado, the corporate laws of Delaware and the federal
laws of the United States. To the extent that any law of any jurisdiction other
than the laws of the State of Colorado, the corporate laws of Delaware and the
federal laws of the United States, govern any of the matters as to which we
express an opinion herein, we have assumed, without independent investigation,
that the law of such jurisdiction is the same as that of the State of Colorado,
and we express no opinion as to whether such assumption is reasonable.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion letter. This opinion letter has been
prepared solely for your use in connection with transactions contemplated by the
Purchase Agreement on the date hereof, and should not be quoted in whole or in
part or otherwise be referred to, nor be filed with or furnished to any
governmental agency or other person or entity, without the prior written consent
of this firm.
Very truly yours,
