EXHIBIT 2
SUBSCRIPTION AGREEMENT
InfoNow Corporation
0000 Xxxxx Xxxxxx Xxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Gentlemen:
1. Pursuant to the Company's private placement of up to 350,000 shares of the
Company's Common Stock ("shares") at $1.125 per share. The Undersigned
hereby tenders this subscription and applies for the purchase of shares as
set forth on the signature page of this Subscription Agreement. Together
with this Subscription Agreement, the Undersigned is delivering to Xxxxx
Xxxxxx, Chief Financial Officer for InfoNow Corporation, a check payable to
"InfoNow Corporation" in the full amount of the purchase price for the
Common Stock which the Undersigned is subscribing for pursuant hereto or
funds by wire transfer as instructed by the Company. The Undersigned
understands that the Company will use the proceeds of the sale of shares as
working capital.
2. Representations and Warranties. In order to induce the Company to accept
this subscription, the Undersigned hereby represents and warrants to, and
covenants with, the Company as follows:
(i) The Undersigned has received and carefully reviewed the documents
listed on Exhibit A hereto ("Documents") available. The Undersigned
has not been furnished with any other materials or literature
relating to the offer and sale of the Shares by the Company;
(ii) The Undersigned has had a reasonable opportunity to review any other
documents filed by the Company with the SEC and the NASDAQ which are
a matter of public record (collectively, the "Public Filings") ask
questions of and receive answers from the Company concerning the
Company and the offering, and all such questions, if any, have been
answered to the full satisfaction of the Undersigned.
(iii) The Undersigned has such knowledge and expertise in financial and
business matters that the Undersigned is capable of evaluating the
merits and risks involved in an investment in the Shares;
(iv) The Undersigned is an "accredited investor," as such term is defined
in Regulation D of the Rules and Regulations promulgated under the
Act. The Undersigned understands that the Company has determined that
the exemption from the registration provisions of the Securities Act
of 1933, as amended (the "Act"), which is based upon non-public
offerings are applicable to the offer and sale of the shares, based,
in part, upon the representations, warranties and agreements made by
the Undersigned herein.
(v) No representations or warranties have been made to the Undersigned
by the Company or any agent, employee or affiliate of the Company
and in entering into this transaction, the Undersigned is not
relying upon any information, other than that contained in the
Documents, the Public Filings and the results of independent
investigation by the Undersigned;
(vi) The Undersigned understands that (A) the Shares have not been
registered under the Act or the securities laws of any state, based
upon an exemption from such registration requirements for non-public
offerings to; (B) the Shares are and will be "restricted
securities", as said term is defined in Rule 144 of the Rules and
Regulations promulgated under the Act; (C) the Shares may not be
sold or otherwise transferred unless they have been first registered
under the Act and all applicable state securities laws, or unless
exemptions from such registration provisions are available with
respect to said resale or transfer; (D) The Company is under no
obligation to register the Shares under the Act or any state
securities laws, or to take any action to make any exemption from
any such registration provisions available; (E) the certificates for
the Shares will bear a legend to the effect that the transfer of the
securities represented thereby is subject to the provisions hereof;
and (F) stop transfer instructions will be placed with the transfer
agent for the Shares;
(vii) The Undersigned is acquiring the Shares solely for the account of
the Undersigned, for investment purposes only, and not with a view
towards the resale or distribution thereof;
(viii) The Undersigned will not sell or otherwise transfer any of the
Shares or any interest therein, unless and until (i) said Shares
shall have first been registered under the Act and all applicable
state securities laws; or (ii) the Undersigned shall have first
delivered to the Company a written opinion of counsel (which counsel
and opinion in form and substance shall be reasonably satisfactory
to the Company), to the effect that the proposed sale or transfer is
exempt from the registration provisions of the Act and all
applicable state securities laws;
(ix) The Undersigned has full power and authority to execute and deliver
this Subscription Agreement and to perform the obligations of the
Undersigned hereunder; and this Subscription Agreement is a legally
binding obligation of the Undersigned in accordance with its terms;
(x) The Undersigned has carefully reviewed the jurisdictional notices
listed below and agrees to abide by any restrictions contained
therein applicable to the Undersigned:
(xi) The Undersigned understands that this subscription is not binding upon
the Company until the Company accepts it, which acceptance is at the
sole discretion of the Company and is to be evidenced by the Company's
execution of this Subscription Agreement where indicated. This
Subscription Agreement shall be null and void if the Company does not
accept it as aforesaid.
(xii) The Undersigned understands that the Company may, at its sole
discretion, reject this subscription and, in the event that the
offering is oversubscribed, reduce this subscription in any amount and
to any extent, whether or not pro rata reductions are made of any
other investor's subscription.
3. The Undersigned agrees to indemnify the Company and hold it harmless from
and against any and all losses, damages, liabilities, costs and expenses
which it may sustain or incur in connection with the breach by the
Undersigned of any representation, warranty or covenant made by the
Undersigned.
4. Neither this Subscription Agreement nor any of the rights of the
Undersigned hereunder may be transferred or assigned by the Undersigned.
5. This Subscription Agreement (i) may only be modified by a written
instrument executed by the Undersigned and the Company; and (ii) sets forth
the entire agreement of the Undersigned and the Company with respect to the
subject matter hereof; (iii) shall be governed by the laws of the State of
Colorado applicable to contracts made and to be wholly performed therein;
and (iv) shall inure to the benefit of, and be binding upon the Company and
the Undersigned and its respective heirs, legal representatives, successors
and assigns.
6. Unless the context otherwise requires, all personal pronouns used in this
Subscription Agreement, whether in the masculine, feminine or neuter
gender, shall include all other genders.
JURISDICTIONAL NOTICES
For Residents of all States:
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THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OR THE SECURITIES LAWS OF ANY STATES AND ARE BEING OFFERED AND SOLD IN
RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF SAID ACT AND
SUCH LAWS. THE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
SAID ACT AND SUCH LAWS PURSUANT TO REGISTRATION OF EXEMPTION THEREFROM.
INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE SECURITIES
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION, ANY STATE SECURITIES COMMISSION OR ANY OTHER REGULATORY
AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE
MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
California Residents:
---------------------
IT IS UNLAWFUL TO CONSUMMATE A SALE OR TRANSFER THIS SECURITY, OR ANY
INTEREST THEREIN, OR TO RECEIVE ANY CONSIDERATION THEREFOR, WITHOUT PRIOR
WRITTEN CONSENT OF THE COMMISSIONER OF CORPORATIONS OF THE STATE OF
CALIFORNIA, EXCEPT AS PERMITTED IN THE COMMISSIONER'S RULES.
Florida Residents:
------------------
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA SECURITIES ACT
IN RELIANCE UPON EXEMPTION PROVISIONS CONTAINED THEREIN. ANY SALE MADE
PURSUANT TO SUCH EXEMPTION PROVISIONS IS VOIDABLE BY THE PURCHASER WITHIN
THREE (3) DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY THE
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER OR AN ESCROW AGENT. A
WITHDRAWAL WITHIN SUCH THREE (3) DAY PERIOD WILL BE WITHOUT ANY FURTHER
LIABILITY TO ANY PERSON. TO ACCOMPLISH THIS WITHDRAWAL, A SUBSCRIBER NEED
ONLY SEND A LETTER OR TELEGRAM TO THE COMPANY AT THE ADDRESS SET FORTH IN
THIS MEMORANDUM, INDICATING HIS INTENTION TO WITHDRAW.
SUCH LETTER OR TELEGRAM SHOULD BE SENT AND POSTMARKED PRIOR TO THE END OF
THE AFOREMENTIONED THIRD BUSINESS DAY. IT IS ADVISABLE TO SEND SUCH LETTER
BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO ENSURE THAT IT IS RECEIVED
AND ALSO TO EVIDENCE THE TIME IT WAS MAILED. IF THE REQUEST IS MADE ORALLY,
IN PERSON OR BY TELEPHONE, TO AN OFFICER OF THE COMPANY, A WRITTEN
CONFIRMATION THAT THE REQUEST HAS BEEN RECEIVED SHOULD BE REQUESTED.
New Jersey Residents:
---------------------
THIS CONFIDENTIAL TERM SHEET HAS NOT BEEN FILED WITH OR REVIEWED BY THE
BUREAU OF SECURITIES OF THE DEPARTMENT OF LAW AND PUBLIC SAFETY OF THE
STATE OF NEW JERSEY PRIOR TO ITS ISSUANCE AND USE. THE ATTORNEY GENERAL OF
NEW JERSEY HAS NOT PASSED ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
New York Residents:
-------------------
THIS CONFIDENTIAL TERM SHEET HAS NOT BEEN FILED WITH OR REVIEWED BY THE
ATTORNEY GENERAL OF THE STATE OF NEW YORK PRIOR TO ITS ISSUANCE AND USE.
THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED ON OR ENDORSED
THE MERITS OF THIS OFFERING. ANY REPRESENTATIONS TO THE CONTRARY ARE
UNLAWFUL.
SIGNATURE PAGE
IN WITNESS WHEREOF, the Undersigned has executed this Subscription
Agreement this 13th day of September, 1996.
Individual Signature:
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx
Print Name of Subscriber
/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx X. Xxxxxxx
Number of Shares Subscribed For: 82,667 Shares
Aggregate Purchase Price US$93,000.00
ISSUANCE OF WARRANTS: In consideration for the subscription of the above shares,
InfoNow will issue a two-year warrant to subscriber to purchase additional
common shares equal to 50% of the number of shares subscribed above at a price
equal to $ 1 .50 per share.
(Please print information below exactly as you wish it to appear in the records
of the Company)
Name and capacity in which Social Security Number of Individual
subscription is made - see or other Taxpayer ID. Number
below for particular
requirements ###-##-####
Address: Address for notices if different:
000 Xxxx Xxxxx Xxxx
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Xxxxxx xxx Xxxxxx Xxxxxx xxx Xxxxxx
Xxxxxxx, XX 00000
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City State Zip Code City State Zip Code
Please indicate form of ownership (if applicable):
----------------------------- ---------------------------------
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TENANTS-IN-COMMON JOINT TENANTS WITH RIGHT OF
(Both Parties must sign SURVIVORSHIP
above) (Both Parties must sign above)
ACCEPTANCE OF SUBSCRIPTION
INFONOW CORPORATION
The foregoing subscription is hereby accepted by InfoNow Corporation, this 13th
day of September, 1996, for 82,667 Shares.
INFONOW CORPORATION
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Chief Financial Officer,
Treasurer and Secretary
