EXHIBIT 3
ASSIGNMENT AND STOCK OPTION AGREEMENT
This Assignment and Stock Option Agreement (the "Agreement") is entered
Into by and among ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇"), and
InfoNow Corporation (the "Company").
Whereas, ▇▇▇▇▇ desires to sell and assign that certain Secured Convertible
Promissory Note (the "Note") dated May 22, 1995 executed by (the "Company") on
behalf of ▇▇▇▇▇; and
Whereas, ▇▇▇▇▇▇▇ desires to purchase and have assigned to him the Note in
consideration for the payment of $300,000 cash.
Now, Therefore, in consideration for the mutual promises made herein and
other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties agree as follows:
1. Sale and Assignment of the Note. Effective on the Closing (as defined
below) ▇▇▇▇▇ hereby sells and assigns all her right, title and interest in the
Note to ▇▇▇▇▇▇▇, in consideration for: payment by ▇▇▇▇▇▇▇ prior to or at the
Closing of $300,000 cash.
2. Closing. The closing of the sale and assignment of the Note (the
"Closing") shall occur at the offices of the Company at 2 p.m. on November 30,
1995, or such other time as the parties may mutually agree. .
3. Company to Honor Assignment. The company agrees to honor the Note
assignment referred to herein and will issue to ▇▇▇▇▇▇▇ a new note (in the same
form as the Note) in the principal amount of $300,000.
4. Representations of ▇▇▇▇▇. ▇▇▇▇▇ represents to ▇▇▇▇▇▇▇ that:
(a) she has created no lien or other encumbrance on the Note; and
(b) her agreement to assign and sell the Note does not conflict with any
preexisting obligation.
5. Representations of ▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ represents to ▇▇▇▇▇ that:
(a) he is a sophisticated investor and has sufficient knowledge and
experience to make investment decisions such as the purchase of the Note;
(b) he is an executive officer of the Company, is knowledgeable about
its business, and has received answers from ▇▇▇▇▇ or the Company to any
questions he may have had regarding the Company's business; and
(c) his agreement to purchase the Note and grant the Option does not
conflict with any preexisting obligation.
6. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado, excluding
conflict of laws principles.
(b) Survival of Representations. The representations contained herein shall
survive the Closing.
(c) Waiver and Amendment. A party may only waive the failure of another
party to perform any of its obligations under this Agreement by a writing signed
by the waiving party. This Agreement may be amended by a writing executed by the
parties.
(d) Counterparts. This Agreement may be executed simultaneously in
identical counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
In Witness Whereof, the parties have caused this Agreement to be executed
as of the date first written above.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ Illegible
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InfoNow Corporation
SECURED CONVERTIBLE PROMISSORY NOTE
$300,000 May 22, ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
FOR VALUE RECEIVED, INFONOW CORPORATION, a Delaware corporation
("Borrower"), hereby promises to pay to the order of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
("Lender"), in lawful money of the United States of America and in immediately
available funds, an aggregate principal amount of $300,000, together with
accrued and unpaid interest thereon, payable on the dates and in the manner set
forth below.
This Note is executed and delivered in connection with that certain
Agreement and Plan of Merger by and among Borrower, infonewco, Inc., Cimarron
International, Inc., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and Lender (the "Merger Agreement") and
that certain Stock Pledge and Security Agreement by and between Borrower and
Lender (the "Security Agreement"), each dated as of even date herewith. This
Note is delivered in satisfaction of the amounts due and owing to Lender
pursuant to Section 1.3(a)(iii) of the Merger Agreement. All terms defined in
the Security Agreement shall have the same definitions when used herein, unless
otherwise defined herein.
1. Principal Repayment. The outstanding principal amount of the Loan shall
be due and payable on the third anniversary date of this Note.
2. Interest Rate. Borrower further promises to pay interest on the
outstanding principal amount hereof from the date hereof until payment in full
of such principal, which interest shall be payable at the prime rate, based on
the prime rate as published in the Wall Street Journal on the May 22, 1995, the
Closing date of the Merger, or the maximum rate permissible by law (which under
the laws of the State of Colorado shall be deemed to be the laws relating to
permissible rates of interest on commercial loans), whichever is less. Interest
shall be payable quarterly on the last day of January, April, July and October
and shall be calculated on the basis of a 360-day year for the actual number of
days elapsed in each quarter.
3. Place of Payment. All amounts payable hereunder shall be payable at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, unless another place of payment shall be
specified in writing by Lender.
4. Application of Payments. Payment on this Note shall be applied first to
accrued interest, and thereafter to the outstanding principal balance hereof.
5. Conversion Option. At its option, by written notice to the Borrower, the
holder of this Note may convert all or part of the outstanding principal amount
on this Note into shares of Borrower's Common Stock at a conversion price of
$1.30 per share (or such lower price as applies to the private placement by the
Company which is a condition to closing the Merger Agreement), not later than
the earlier of: (i) the second anniversary of the date of this Note, and (ii)
ten (10) business days following receipt by Lender of a written notice of
Borrower stating that during the second year in which this Note is outstanding,
the average closing "bid" price of the Common Stock of Borrower has equalled or
exceeded $4.00 for 30 consecutive trading days, as reported on NASD's Electronic
Bulletin Board, Nasdaq Small Cap Market or other exchange. In connection with
any conversion of this Note into Common Stock of Borrower, Borrower shall grant
to the holder of this Note registration rights no less favorable than those
rights granted with respect to the Merger Shares (as defined in the Merger
Agreement).
6. Secured Note. The full amount of this Note is secured by the Collateral
identified and described as security therefore in the Security Agreement
executed by and delivered by Borrower. Borrower shall not, directly or
indirectly, suffer or permit to be created or to remain, and shall promptly
discharge, any lien on or in the Collateral, or in any portion thereof, except
as permitted pursuant to the Security Agreement. In addition, Borrower shall not
suffer any other matter whereby an interest of Lender under the Security
Agreement in the Collateral or in any lien pursuant to the Security Agreement or
any part of the foregoing might be impaired, except as permitted pursuant to
such Security Agreement.
7. Default. Borrower's failure to pay timely any of the principal amount
due under this Note or any accrued interest or other amounts due under this Note
on the date the same becomes due and payable or within five (5) calendar days
thereafter shall constitute a default under this Note. Upon the occurrence of a
default hereunder, all unpaid principal, accrued interest and other amounts
owing hereunder shall, at the option of Lender, be immediately accelerated and
become collectible by Lender pursuant to applicable law.
8. Waiver. Borrower waives presentment and demand for payment, notice of
dishonor, protest and notice of protest of this Note, and shall pay all costs of
collection when incurred, including, without limitation, reasonable attorney's
fees, costs and other expenses. The right to plead any and all statutes of
limitations as a defense to any demands hereunder is hereby waived to the full
extent permitted by law.
9. Governing Law. This Note shall be governed by, and construed and
enforced in accordance with, the Laws of the State of Colorado, excluding
conflict of laws principles that would cause the application of laws of any
other jurisdiction.
10. Successors and Assigns. The provisions of this Note shall inure to the
benefit of and be binding on any successor to Borrower and shall extend to any
holder hereof. IT IS UNDERSTOOD, ACKNOWLEDGED AND AGREED BY BORROWER THAT THIS
NOTE MAY BE ASSIGNED AND SUCH ASSIGNEE, ITS SUCCESSORS OR ASSIGNS SHALL BE
ENTITLED TO ALL OF THE RIGHTS, OF LENDER HEREUNDER. BORROWER HEREBY EXPRESSLY
AGREES THAT ITS OBLIGATION OT PAY THE OUTSTANDING PRINCIPAL AND ACCRUED INTEREST
UNDER THIS NOTE IS ABSOLUTE AND UNCONDITIONAL AND EXPRESSLY WAIVES, AND AGREES
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THAT IT WILL NOT ASSERT OR ALLEGE AGAINST LENDER OR ANY OF ITS SUCCESSORS AND
ASSIGNS IN CONNECTION WITH ANY DEMAND OR SUIT FOR PAYMENT ON THIS NOTE, ANY
DEFENSE, CLAIM OR COUNTER-CLAIM THAT BORROWER WOULD OTHERWISE BE ABLE TO ASSERT
OR ALLEGE AGAINST LENDER RELATING TO THE MAKING OF, OR BORROWER'S OBLIGATIONS
UNDER, THIS NOTE.
INFONOW CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇
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Title: Chairman
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