SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report (Date of earliest event reported) : December 11, 1997
InfoNow Corporation
(Exact Name of Registrant as specified in its charter)
Delaware 0-19813 04-3083360
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification no.)
1875 Lawrence, Suite 1100 Denver, CO 80202
(address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 303-293-0212
Item 2. Acquisition or Disposition of Assets
On December 11, 1997, InfoNow Corporation (the "Company") sold
substantially all of the assets and liabilities of its wholly-owned subsidiary,
Cimarron International, Inc. ("Cimarron") to Cimarron Dog and Pony
Company, Inc. ("Purchaser") which is owned Donald E. Cohen, a Director and
shareholder of the Company.
After the conclusion of the sale, the Company will no longer provide
business presentation services that were offered by the Company's Cimarron
subsidiary and will focus exclusively on providing its FindNow (R) location
referral teleservices. The operations of Cimarron accounted for
approximately 50% of total revenues for the nine months ended September 30,
1997 and did not produce significant operating income or losses.
The Company received a cash payment of $85,000 in consideration for the sale
of Cimarron and executed an earnout agreement which provides that the
Purchaser shall pay 25% of quarterly gross profits in excess of $116,500
for a three year period after the sale. As part of the transaction,
the Company will also continue to provide certain administrative services
through a cost sharing agreement at a monthly fee of $12,000 which the
Company believes represents a fair value for the services if rendered to an
unrelated party. The cost sharing agreement expires on March 31, 1998 and
can be extended by mutual agreement of both parties. In addition, Mr. Cohen
and the Company have agreed to terminate the employment agreement between
them. Mr. Cohen shall remain as a director of the Company.
Item 7. Financial Statements and Exhibits
(b) Proforma financial information
It is impracticable at this time to provide the required proforma information
related to the disposition of the assets and liabilities of Cimarron. In
accordance with Item 7(b) of Form 8-K, such financial statements will be
filed by amendment to this Form 8-K no later than sixty days after the
filing of this report.
(c) Exhibits
See Index to Exhibits.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated : December 16, 1997
INFONOW CORPORATION
(Registrant)
/s/ Kevin D. Andrew
Kevin D. Andrew
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
Exhibit
Number Description of Exhibit
*2.1 [Cimarron Sale Agreement]
3.1 Certificate of Incorporation of the Company, as Amended(A)
3.3 Bylaws of the Company, as Amended. (B)
4.1 Form of Common Stock Certificate for the Registrant's Common
Stock. $.001 par value per share. (B)
4.4 Form of Class C Warrant. (C)
(A) Incorporated by reference from the Company's Annual Report
on Form 10K for the year ended December 31, 1996
(B) Incorporated by reference from Registration Statement
No. 33-43035 on Form S-1 dated February 14, 1992
(C) Incorporated by reference from Post-Effective Amendment No. 2
to Registration Statement N.33-43-35 on Form S-1 dated July 13,
1993
*Filed with this report.
ASSET PURCHASE AGREEMENT
THIS AGREEMENT, made this effective 1st day of December, 1997, between
Cimarron International, Inc. (hereinafter "Seller"), and Cimarron Dog &
Pony Company, Inc. (hereinafter "Purchaser");
WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
purchase from Seller certain of Seller's assets used by Seller in its
business known as Cimarron International, Inc. located at 1875 Lawrence
Street, Suite 1100, Denver, CO 80202;
NOW, THEREFORE, IN CONSIDERATION of the mutual promises and agreements
contained herein, the receipt and sufficiency of which is hereby
acknowledged, it is agreed by the parties hereto as follows:
1. Conveyance of Assets.
Seller shall sell, assign, transfer and deliver to Purchaser, and
Purchaser shall purchase and accept at Closing, certain assets and
properties of Seller, or in which Seller has any right, title, or
interest of every kind and description, wherever located
(hereinafter "Assets"), including:
1.1 Tangible Personal Property.
(a) certain furniture, fixtures, equipment, machinery, tools, devices,
vehicles, and other tangible personal property (hereinafter "Furniture,
Fixtures and Equipment") owned by Seller and used in its operation of
Seller, which property shall be more fully described on the Furniture,
Fixtures and Equipment list, attached hereto as Exhibit A;
1.2 Intangible Personal Property.
(a) equipment lease rights (hereinafter "Equipment Lease"), covering
business equipment, machinery, systems and other items of personal
property, which Equipment Lease is attached hereto as Exhibit B-1, and which
Equipment Lease shall be assigned to, and assumed by, Purchaser pursuant to an
Equipment Lease Assignment, attached hereto as Exhibit B-2;
(b) the customer list of company (hereinafter "Customer List"), which
Customer List shall be assigned and delivered to Purchaser at Closing;
(c) all software rights (hereinafter "Software Rights") to which Seller
has rights to a list of which Software Rights are listed and attached hereto
as Exhibit C;
(d) all unbilled revenues (hereinafter "Unbilled Revenues"), which
Unbilled Revenues, are listed and attached hereto as Exhibit D;
(e) accounts receivable of Seller (hereinafter "Accounts Receivable"), as
referenced in paragraph 3.4, hereof;
(f) business tradename of Seller of Cimarron International, Inc., and
the business telephone number (303) 293-0199, wherein Seller shall transfer
and assign any and all rights thereto and consent to use thereof at Closing.
1.3 Excluded Assets. All cash, cash accounts, checking accounts, and
clearing accounts of Seller are excluded from this transaction.
1.4 Bill of Sale. All Assets referenced herein shall be conveyed and
transferred by means of a Bill of Sale, wherein Seller shall warrant
that it has good and marketable title to said Assets and that said Assets will
be free and clear of all liens and encumbrances. Said Bill of Sale shall
be in a form attached hereto as Exhibit E.
1.5 Assumption of Liabilities. Purchaser shall assume all of Seller's
Liabilities, as such Liabilities are referenced on the Balance Sheet,
attached hereto as Exhibit F.
2. Purchase Price and Terms. The Purchase Price shall be the sum of
$185,000, subject to the adjustments contained in paragraph 3, hereof,
and shall be payable as follows:
2.1 Earnest Money. $-0- in Earnest Money received herewith in the form
of a personal check payable to N/A. Said amount shall be applied to the
Purchase Price at Closing.
2.2 Funds Due at Closing. $85,000 in Funds due at Closing, adjusted by
amounts referenced herein, payable in cash or cashier's check at Closing.
2.3 Earnout Agreement. $100,000 in an Earnout Agreement, executed by
Purchaser and personally guaranteed by Donald E. Cohen (hereinafter
"Cohen"), in favor of the Seller. The Earnout Agreement shall provide
for payments to be made quarterly, in amounts of twenty-five percent (25%)
of gross profits in excess of $116,500 per quarter. Said Earnout Agrement
shall be in a form attached hereto as Exhibit G.
3. Allocations, Prorations and Price Adjustments.
3.1 Purchase Price Allocation. The Purchase Price shall be allocated
to the various assets of Seller as follows:
Furniture, Fixtures and Equipment $ 57,750
Accounts Receivable $ 58,545
Customer List/Customer Contracts $ 48,000
Software $ 5,500
Business Tradename and Goodwill $ 15,205
Total $185,000
3.2 Prorations. The following items shall be prorated at Closing: all
applicable taxes, utilities, insurance, leases or other contract rights,
rents, dues, subscriptions, license fees and advertising.
3.3 Accounts Receivable and Accounts Payable.
(a) All Accounts Receivable accruing to the date of Closing shall be
transferred to the Purchaser. The Accounts Receivable schedule,
attached hereto as Exhibit H, in the amount of $58,545, is the current
list of Accounts Receivable of Seller together with an accurate aging of these
Accounts.
(b) All Accounts Payable accruing to the date of Closing shall be
transferred to and shall be assumed and paid by Purchaser as said
Accounts come due. The Accounts Payable, described in Exhibit I, attached
hereto, in the amount of $13,533, is the current list of these Accounts
Payable of Seller.
(c) Any and all Accounts Receivable and Accounts Payable generated
after Closing shall be the sole property and obligation, respectively, of
Purchaser.
3.5 Prepayments by Customers and Deposits on Hand. Any amounts
received by Seller prior to Closing from customers as prepayments for any
undelivered and unused goods or services as of the date of Closing or held on
deposit by Seller for the benefit of Seller's customers, whether by agreement
or contract, oral or written, shall be either transferred or credited to
Purchaser by Seller at Closing. Purchaser shall assume the full
responsibility and pay all expenses of completing all services to be
performed or products to be supplied by Seller, pertaining to such
prepayments and deposits. Purchaser shall be entitled to all income
therefrom when received.
4. Representations and Warranties of Seller. Seller represents,
warrants and agrees that:
4.1 Corporate Standing. Seller is a corporation duly organized,
existing, and in good standing under the laws of the State of Colorado, and is
authorized and entitled to carry on its business in Colorado. Its sole
shareholder is InfoNow Corporation.
4.2 Authority. Seller has the full power and authority to enter into
this Agreement and to conclude the transaction described herein, and no other
contract or agreement to which it is a party prevents it from concluding
the transaction described herein.
4.3 Corporate Resolution. Seller shall, at Closing, deliver to Purchaser,
a duly executed copy of its corporate resolution authorizing the transaction
described herein, which said resolution shall form a part of this Agreement.
4.4 Financial Statements. Seller warrants that the Financial
Statements, including balance sheets, income statements, tax returns of
Seller, by reference incorporated herein have been previously delivered to
Purchaser and are a fair and accurate presentation of the results of the
operations of Seller for the period beginning May 23, 1995 and ending as of
October 31, 1997. The financial condition of Seller as disclosed by the
Financial Statements will be materially unchanged as of Closing. Seller
makes no warranty concerning the future performance or profitability of
Seller.
4.5 Outstanding Liabilities. Purchaser shall assume all liabilities on
Exhibit F,and pay them as they become due. Seller warrants that any and
all outstanding liabilities, obligations, judgments and/or liens of it,
other than the Liabilities referenced on Exhibit F, shall be paid in full on
or before Closing, or Seller shall pay such liabilities or obligations as
and when they become due and that Purchaser shall receive possession and
control of the Assets, subject to existing and disclosed debts, free and clear
of any liens or encumbrances.
4.6 Condition of Assets.
(a) Since the date of the Financial Statements, there has been no
substantial loss of value in any of the Assets or properties of Seller,
ordinary wear and tear excepted, and said Assets were not subsequently
transferred or conveyed except in the ordinary course of business.
(b) All Assets included in this sale are being purchased on an "as is"
basis WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE. However, at Closing, all such Assets, other than disclosed as
not working, shall be in good working condition,and Seller shall repair or
replace any Assets not in working condition.
4.7 Regulatory Compliance. Seller hereby warrants that to the best of
its knowledge, the Assets are in full compliance with all federal, state and
local building, fire, safety, health and environmental requirements; and
that if any expenses are necessary to bring the Assets into compliance
with any such governmental requirements, those expenses shall be the sole
responsibility of, and be paid by Seller.
4.8 Licenses, Permits and Certificates. Seller hereby warrants that to
the best of its knowledge any and all licenses, permits and certificates
necessary for it to continue its operation as in the past shall be
current and valid as of Closing and can be renewed at no expense to Purchaser
other than the normal renewal fees. Seller, to the best of its knowledge,
hereby warrants that said licenses, certificates or permits have never been
suspended or revoked and that there are no proceedings, in progress or
threatened, to suspend or revoke said licenses, certificates or permits.
4.9 Contractual Obligations. Seller is not a party to any employment
agreement, labor union agreement, agreement for the future purchase of
materials, supplies or equipment, sales agreement, pension, profit-
sharing, or retirement plan or agreement, distributorship or sale agency
agreement, or lease agreement that relates to any period beyond Closing,
whether written or oral, unless otherwise disclosed herein.
4.10 Litigation. To the best of Seller's knowledge, there is no
litigation or proceeding, threatened or pending, against or relating to
Seller, its properties, business, or assets; nor does Seller know or have
reasonable grounds to know of any basis of any such action or governmental
investigation relative to Seller, its properties, business or Assets,
unless otherwise disclosed herein.
4.11 Corporate Restrictions. From the date hereof through Closing,
subject to the provisions of paragraph 1.3, hereof, Seller shall not issue any
stocks, bonds, or other corporate securities of Seller; incur any
obligations or liability except current liabilities in the ordinary
course of business; declare or make any payment or distribution to
stockholders; purchase or redeem any shares of capital stock; mortgage or
pledge any of its assets, tangible or intangible; sell or transfer any
assets or cancel any debts or claims except in the ordinary course of
business; sell, assign or license any patents, trademarks, or tradenames;
suffer any extraordinary losses or waive any rights except in the ordinary
course of business; or enter into any other transaction except in the
ordinary course of business.
4.12 Full Disclosure. This Agreement (including the Exhibits hereto)
does not contain any untrue statement or omission of a material fact upon
which the parties hereto are relying. There has been an absence of changes
since the date of the Financial Statements that will materially and adversely
affect any of the other representations and warranties herein, subject to
the provisions of paragraph 1.3, hereof. There is no fact known to
Seller or Corporation which is not disclosed in this Agreement which materially
adversely affects the accuracy of the representations and warranties
contained in this Agreement or Corporation's financial condition,
results of operations, business, or prospects. All representations and
warranties contained herein will be true and correct at Closing.
4.13 Cohen's Representations and Warranties. To the knowledge of
Donald E. Cohen, all representations of Seller set forth in paragraphs 4.1
through 4.12, hereof, are true and correct.
5. Purchaser's Representations and Warranties. Purchaser represents,
warrants and agrees that:
5.1 Corporate Standing. Purchaser is a corporation duly organized,
existing, and in good standing under the laws of the State of Colorado,
and is authorized and entitled to carry on its business in Colorado. Its
sole shareholder is Donald E. Cohen.
5.2 Authority. Purchaser has the full power and authority to enter
into this Agreement and to conclude the transaction described herein, and no
other contract or agreement to which it is a party prevents it from
concluding the transaction described herein.
5.3 Corporate Resolution. Purchaser shall, at Closing, deliver to
Seller a duly executed copy of its corporate resolution authorizing the
transaction described herein, which said resolution shall form a part of this
Agreement.
5.4 Books and Records Availability. If the originals of any records or
books of account of Seller are transferred by Seller to Purchaser at
Closing, Purchaser shall cause these books and records relating to
periods prior to Closing be kept by Purchaser and made available to
Seller, and its authorized representative, during regular business hours
for a period of not less than three (3) years after Closing. No such books
and records will be destroyed without at least thirty (30) days' prior
written notice to Seller describing the items to be destroyed, during which
period Seller, at its expense, may elect to make copies of such items.
6. Additional Documents\Obligations.
6.1 Cost Sharing Agreement. At Closing, the parties shall enter into a
Cost Sharing Agreement, covering the issues of providing administrative
expenses and use of the Seller's premises. Said Agreement shall be in a
form attached hereto as Exhibit J.
6.2 Employment Termination Agreement. At Closing, Seller and Cohen
shall enter into a Termination Agreement, terminating Cohen's Employment
Agreement dated May 22, 1995. Said Agreement shall be in a form attached
hereto as Exhibit K.
7. Operations Prior to Closing.
7.1 Operation of Seller Prior to Closing. Seller hereby agrees, from
the date of execution of this Agreement to Closing, to carry on business
activities and operations of Seller diligently in substantially the same
manner as has been customary in the past.
7.2 Condition of Assets. Until possession is given to Purchaser,
Seller agrees to operate and maintain the Assets in good working order and
condition.
7.3 Loss/Damage. In the event there is any loss or damage to the
Assets at any time prior to Closing, the risk of loss shall be upon the
Seller. From Closing and thereafter, all risk of loss or damage shall be
upon the Purchaser.
7.4 Confidentiality. Purchaser agrees that Purchaser will, and will
cause its officers, directors and employees and other representatives to,
hold in strict confidence any information obtained in connection with this
Agreement or the transactions contemplated by the Agreement unless and until
that information is or becomes publicly available, except insofar as this
information may be required by law or regulation to be included in a
public report or otherwise disclosed.
8. Obligations at Closing
8.1 Execution and Delivery of Documents. At Closing, Seller and
Purchaser shall execute and deliver all such instruments and take all such
other action as either party may reasonably request from time to time, in
order to effect the transaction provided for herein. The parties shall
cooperate with each other in connection with any steps to be taken as a
part of their respective obligations under this Agreement. This obligation
shall extend to any matters arising after Closing.
8.2 Funds. Purchaser shall deliver to Seller all Funds due referenced
in paragraph 2, hereof.
8.3 Books and Records. Seller shall have the right to retain its
minute books, stock books and other corporate records having exclusively
to do with corporate organization and operation. Originals, or copies at
Seller's discretion and expense, of all other records and books of account of
every kind and nature regarding Seller shall be delivered to Purchaser and
become the property of Purchaser at Closing.
8.4 Cost and Expenses Each party hereto shall bear its own costs and
expenses incurred in connection with the negotiation, preparation, and
performance under this Agreement, and all matters incident thereto,
excepting as otherwise set forth herein.
8.5 Sales and Use Tax. Purchaser hereby acknowledges and agrees to pay
for any and all sales and use taxes payable to local or state jurisdictions
that may arise as a result of the sale of the Assets described herein.
9. Survival of Representations and Warranties; Indemnification.
9.1 Post-Closing Survival. All the representations, warranties and
covenants made as of Closing, as provided herein, shall survive Closing.
9.2 Indemnification by Seller. Seller agrees to indemnify Purchaser,
its directors, officers, shareholders and affiliates against any loss, cost,
expense, damage or liability (including, without limitation, interest at
the rate of 12% per annum on money expended from the date expended and
attorney fees and other expenses incurred in defending against litigation,
either threatened or pending) incurred or sustained by any one or more of
them with respect to or arising out of (a) any breach of or incorrectness
of any representation or warranty made by Seller in or pursuant to this
Agreement or failure by Seller to perform or comply with any covenant or
agreement made by it in or pursuant to this Agreement, or (b) any liability
of or claim against Purchaser relating to any state of facts, event or
omission existing or occurring prior to Closing.
9.3 Indemnification by Purchaser. Purchaser agrees to indemnify
Seller, its directors, officers, shareholders and affiliates against any loss,
cost, expense, damage or liability (including, without limitation, interest at
the rate of 12% per annum on money expended from the date expended and
attorney fees and other expenses incurred in defending against litigation,
either threatened or pending) incurred or sustained by any one or more of them
with respect to or arising out of (a) any breach of or incorrectness of any
representation or warranty made by Purchaser in or pursuant to this Agreement
or failure by Purchaser to perform or comply with any covenant or
agreement made by it in or pursuant to this Agreement, or (b) any
liability of or claim against Seller relating to any state of facts, event or
omission existing or occurring after Closing.
10. General Provisions.
10.1 Entire Agreement. No warranties, representations, promises or
agreements have been made between the parties other than as expressly
herein set forth. This Agreement supersedes any and all agreements between
the parties hereto and constitutes the entire agreement and understanding of
the parties and cannot be modified except in writing executed by all of the
parties hereto.
10.2 Binding Effect. Upon execution, this Agreement shall be
absolutely binding and fully enforceable and shall inure to the benefit of the
parties hereto, their successors, assigns, and personal representatives and
heirs.
10.3 Notices. All notices as may be required by this Agreement shall
be sent to the respective parties at the addresses set forth below. The
place of notice may be modified by appropriate registered or certified mailing
to the parties.
To Seller at: 1875 Lawrence Street, Suite 1100
Denver, CO 80202
With copy to: Peter M. Nemkov, Esq.
950 S. Cherry Street, Suite 1502
Denver, CO 80222
To Purchaser at: 1875 Lawrence Street, Suite 1100
Denver, CO 80202
With copy to: Theresa M. Mehringer
555 17th Street, Suite 3405
Denver, CO 80202
10.4 Time of Possession. Purchaser shall be deemed to be in possession
on the day of Closing.
10.5 Severability. In the event that any of the provisions, or
portions thereof, of this Agreement are held to be unenforceable or invalid by
any court, or tribunal, of competent jurisdiction, the validity of the
remaining provisions, or portions thereof, shall not be affected thereby and
effect shall be given to the intent manifested by the provisions, or portions
thereof, held to be enforceable or valid.
10.6 Construction. Throughout this Agreement, the singular shall
include the plural, and the plural shall include the singular, and masculine
shall include the feminine, wherever the context so requires.
10.7 Right to Counsel. Purchaser and Seller hereby acknowledge that
they have every right to consult a licensed attorney, and have done so to the
extent of their desires.
10.8 Review and Revision. The parties acknowledge and confirm that each of
their respective attorneys have participated jointly in the review and
revision of this Agreement and that it has not been written solely by
counsel for one party. The parties hereto therefore stipulate and agree
that the rule of construction to the effect that any ambiguities are to
be or may be resolved against the drafting party shall not be employed in
the interpretation of this Agreement to favor any party against another.
10.9 Choice of Law and Jurisdiction. This Agreement shall be governed
by and construed under the laws of the State of Colorado, and, the parties
hereto irrevocably consent to the jurisdiction of the District Court,
County of Denver, State of Colorado.
11. Dates.
11.1 Acceptance Date. Purchaser's offer herewith shall be open for
Seller's written acceptance effective December 11, 1997.
11.2 Closing Date. The Closing date shall be effective December 11, 1997.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
upon the date set forth hereinabove.
SELLER:
Cimarron International, Inc.
By:
/s/Kevin D. Andrew, President
PURCHASER:
Cimarron Dog & Pony Company, Inc.
By:
/s/Donald E. Cohen, President
As to paragraphs 2.3 and 4.13
/s/Donald E. Cohen, Individually
EXHIBIT LIST
Document Exhibit
Furniture, Fixtures and Equipment A
Equipment Lease B-1
Assignment of Equipment Lease B
Software Rights C
Unbilled Revenues D
Bill of Sale E
Balance Sheet Liabilities F
Earnout Agreement G
Accounts Receivable H
Accounts Payable I
Cost Sharing Agreement J
Termination Agreement K
EXHIBIT A
FURNITURE, FIXTURES AND EQUIPMENT
[To be provided by Seller]
EXHIBIT B
EQUIPMENT LEASE ASSIGNMENT
THIS ASSIGNMENT, dated this 1st day of December, 1997,
between Cimmaron International, Inc. (hereinafter
"Assignor"), and Cimarron Dog & Pony Company, Inc. (hereinafter "Assignee");
WHEREAS, Assignor, by means of a Lease Agreement (hereinafter
"Lease Agreement") dated January 22, 1997, a copy of which is
attached hereto as Exhibit B-1, with Lanier Worldwide, Inc.
(hereinafter "Lessor"), leased certain equipment referenced
therein (hereinafter "Equipment");
WHEREAS, Assignor hereto desires to assign said Lease
Agreement to Assignee and Assignee desires to accept and become bound
by said Lease Agreement;
WHEREAS, the parties acknowledge that written consent of Lessor
may be required to effect this Assignment;
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Assignment. Assignor hereby assigns any and all of
Assignor's rights in and to the Equipment and to the Lease
Agreement to Assignee.
2. Acceptance. Assignee accepts this Assignment and hereby
agrees to be governed and bound by the terms and conditions
set forth in said Lease Agreement.
3. No Default. Assignor hereby warrants that the Lease
Agreement subject hereto is binding, valid and not in
default, and that all payments due thereunder are current.
4. Lessor Consent. The parties hereto agree that if the
consent of the Lessor is necessary to fully complete this
Assignment, said parties will fully cooperate and take all
necessary and proper steps to obtain such consent.
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment on the date set forth hereinabove.
ASSIGNOR:
Cimmaron International, Inc.
By:
/s/Kevin D. Andrew, President
ASSIGNEE:
Cimarron Dog & Pony Company, Inc.
By:
/s/Donald E. Cohen, President
EXHIBIT C
SOFTWARE RIGHTS
All commercially packaged software currently utliized in
the business operations of Seller
EXHIBIT D
UNBILLED REVENUES
[To be provided by Seller]
EXHIBIT E
BILL OF SALE
This BILL OF SALE made December 1, 1997, by and between
Cimarron International, Inc. (hereinafter "Seller"), and Cimarron Dog
& Pony Company, Inc. (hereinafter "Purchaser");
Transfer of Assets. That for and in consideration of the sum
of One Hundred Ninety Thousand Seven Hundred Twenty Seven Dollars
($190,727.00), paid by Purchaser to Seller, the receipt of which is
hereby acknowledged, Seller does hereby bargain, sell, assign,
transfer, and deliver unto Purchaser, the following in connection
with the sale of the assets (hereinafter "Assets") of the
business known as Cimarron International, Inc.:
the furniture, fixtures, and equipment, a list of which is
attached hereto as Exhibit A; all unbilled revenues, a list of which
is attached hereto as Exhibit B; all accounts receivable, a list of which
is attached hereto as Exhibit C, all accounts payable, a list of which is
attached hereto as Exhibit D, which Purchaser assumes and agrees to pay; and
business tradename and business telephone number.
Seller's Warranties. Seller further warrants and represents
that Seller is the lawful owner of all Assets covered by this Bill
of Sale and that they are free and clear of any outstanding liens,
encumbrances, claims, debts, or liabilities due and owing by
Seller which could result in a lien or encumbrance upon the
aforesaid property; that Seller has the right to sell said
Assets to the Purchaser free from claims of all creditors or other
persons whatsoever and agrees to hold Purchaser harmless from
any such claims and the costs incurred in defending such claims;
and that Seller will execute such further assurances of free and
clear title to the said property hereby conveyed as may be requisite.
Survival of Asset Purchase Agreement. All covenants,
agreements, warranties and representations contained in the Asset
Purchase Agreement, dated December 1, 1997, between Seller and
Purchaser for the sale of said business, and amendments and addenda
thereto, shall not be deemed to be merged in this Bill of Sale, but
shall continue in full force and effect unless otherwise herein
provided.
IN WITNESS WHEREOF, Seller has caused this Bill of Sale to be
executed upon the date set forth hereinabove.
SELLER:
CIMARRON INTERNATIONAL, INC.
By:
/s/ Kevin D. Andrew, President
Purchaser hereby acknowledges receipt of all of the Assets
described in the Bill of Sale.
PURCHASER:
Cimarron Dog & Pony Company, Inc.
By:
/s/Donald E. Cohen, President
STATE OF COLORADO)
CITY AND) ss.
COUNTY OF DENVER )
The foregoing instrument was acknowledged before me on
December 1, 1997, by Kevin D. Andrew, President, Cimarron
International, Inc., Seller, and Donald E. Cohen, President, Cimarron Dog &
Pony Company, Inc., Purchaser.
Notary Public
/s/ Barbara B. Stevens
My Commission Expires:
EXHIBIT F
BALANCE SHEET LIABILITIES
[To be provided by Seller]
EXHIBIT G
EARNOUT AGREEMENT
THIS AGREEMENT, made this 1st day of December, 1997, by and
between Cimarron International, Inc., (hereinafter "Seller")
and Cimarron Dog & Pony Company, Inc. (hereinafter "Purchaser");
WHEREAS, Seller has this date sold to Purchaser a business
known as Cimarron International, Inc. located at 1875 Lawrence
Street, Suite 1100, Denver, CO 80202 (hereinafter "Business");
WHEREAS, pursuant to the Asset Purchase Agreement, dated
December 1, 1997, Purchaser is to execute this Earnout Agreement in
favor of Seller as partial consideration regarding the sale of the
Business;
NOW THEREFORE, in consideration of the mutual promises and
covenants contained herein, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Earnout. Purchaser shall pay to Seller in connection
with the sale of the Business, and as partial payment of the
Purchase Price, an Earnout Amount pursuant to the terms of paragraph
2, hereof.
2. Earnout Amount.
2.1 Amount. The Earnout Amount payable from Purchaser to
Seller is $100,000.00 The Earnout Amount shall be payable at the
rate of twenty-five (25%) percent of gross profit of the Business in
excess of $116,500 per quarter.
2.2 Calculation. The Earnout Amount shall be calculated on
a quarterly basis and shall be payable within ten (10) days
after the end of the period. "Gross Profit" shall be defined as
"gross revenues" less "cost of sales" as such terms are used in
Seller's Financial Statements, referenced in paragraph 4.4 of the
Asset Purchase Agreement, of even date herewith.
2.3 Operating Statements. Purchaser shall provide Seller
with an accounting within ten (10) days after the end of each quarter,
setting forth Purchaser's gross profit calculations. Seller shall
have the right upon reasonable notice to inspect the books and
records of Business to verify any such accounting.
3. Term. The term of this Agreement shall be for a period of
commencing upon execution hereof, and shall extend to the earlier
of:
(a) full payment of the Earnout Amount, or
(b) March 31, 2001.
Any amounts accruing during the term hereof shall be payable
as provided in paragraph 2, hereof.
4. Additional Provisions.
4.1 Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the parties hereto, their heirs,
executors, administrators, successors and assigns.
4.2 Notices. All notices to be given to the parties hereto
shall be properly given if sent by first class mail addressed
to the parties at their respective addresses as follows:
Seller: Purchaser:
1875 Lawrence Street 1875 Lawrence Street
Suite 1100 Suite 1100
Denver, CO 80202 Denver, CO 80202
With copy to: With copy to:
Peter M. Nemkov, Esq. Theresa M. Mehringer
950 S. Cherry Street, Suite 1502 555 17th Street, Suite 3405
Denver, CO 80222 Denver, CO 80202
or to such other addresses as the parties shall have notified
the others in like manner to be the proper business address.
4.3 Severability of Provisions. If any of the provisions of
this Agreement shall be or become invalid or illegal under
any provision of applicable law, the remainder of the Agreement
shall not be affected thereby.
4.4 Entire Agreement. This Agreement contains the entire
understanding of the parties with regard to the subject
matter hereof and no representations have been made or relied upon
beyond the terms hereof. This Agreement may not be amended or
modified except by a writing signed by each of the parties.
4.5 Applicable Law. This Agreement is made and entered
into, and shall be governed by and construed in accordance with the
laws of the State of Colorado and each party hereto consents that
the courts of the State of Colorado have exclusive jurisdiction
over mattes accruing under or related to this Agreement.
IN WITNESS WHEREOF, the parties have hereunto signed this
Agreement on the above-written date.
SELLER:
Cimmaron International, Inc.
By:
/s/ Kevin D. Andrew, President
PURCHASER:
Cimarron Dog & Pony Company, Inc.
By:
/s/ Donald E. Cohen, President
/s/ Donald E. Cohen, Individually
EXHIBIT H
ACCOUNTS RECEIVABLE
[To be provided by Seller]
EXHIBIT I
ACCOUNTS PAYABLE
[To be provided by Seller]
EXHIBIT J
COST-SHARING AGREEMENT
THIS AGREEMENT is made and executed this 1st day of December,
1997, by and between InfoNow Corporation ("InfoNow"), and
Cimarron Dog & Pony Company, Inc. ("Cimarron").
FOR GOOD AND VALUABLE CONSIDERATION, the receipt and
sufficient of which is hereby acknowledged the parties hereto
agree as follows:
1. Possession and Usage. InfoNow hereby grants usage to
Cimarron, and Cimarron assumes and accepts said grant from
InfoNow, exclusive right for usage of the Premises described
as approximately 3500 sq. ft., of the space located at 1875
Lawrence Street, Suite 1100, Denver, CO 80202 ("Premises"), on the
terms, covenants and conditions set forth herein.
2. Office Services Provided. InfoNow shall also provide the
following office and services to Cimarron:
five (5) parking spaces, use of Herman Miller office furniture,
use of telephone equipment/system, receptionist services,
use of conference room, storage room, and kitchen area,
use of copy machine, use of file server,
computer network system, and reasonable and necessary bookkeeping services.
3. Monthly Fee.
3.1 On the last day of each month of the Term hereof,
Cimarron shall pay to InfoNow, without deduction or offset, prior
notice or demand, at 1875 Lawrence Street, Suite 1000, Denver, CO
80202, a Monthly Fee in the amount of $12,000.
3.2 Any installment of the Monthly Fee or of any other sums
payable hereunder which is not paid within ten (10) days
after the same becomes due and payable shall be assessed a five percent
(5%) late fee.
4. Security Deposit. The Security Deposit due from Cimarron
to InfoNow as security for the faithful performance by Cimarron
of all the terms, covenants and conditions of this Agreement
shall be in the amount of $100.00, and shall be due upon execution
hereof.
5. Use of Premises; Notice.
5.1 The Premises may be used and occupied only as office
space, and for no other purpose or purposes. Use of the Premises
shall be subject to all of the provisions of the Business Lease,
dated May, 1993, and the Sub-Lease, dated October 1, 1996.
5.2 In the event that InfoNow receives notice that it is in
breach of any of the provisions of the Business Lease or the
Sub-Lease, referenced herein, InfoNow shall promptly provide a
copy of said notice to Cimarron.
6. Indemnification. Each party hereto, respectively, shall
indemnify and hold harmless the other party against and from
any and all claims arising from the indemnifying party's use of
the Premises or the conduct of its business or from any activity,
work or thing done, permitted or suffered by the indemnifying
party in or about the Premises; and the indemnifying party shall
further indemnify and hold harmless the other party against and from
any and all claims arising from any breach or default in the
performance of any obligation on the indemnifying party's
part to be performed under the terms of this Agreement; the indemnifying
party or arising from any act, neglect, fault or omission of
indemnifying party or of its agents, employees, invitees or
customers and from and against all costs, attorneys' fees,
expenses and liabilities incurred in or about any such claim
or any action or proceeding brought thereon, and in a case any
action or proceeding be brought against the indemnified party by
reason of any such claim.
7. Term. The term of this Agreement shall commence upon
execution hereof and shall extend at a minimum through March
31, 1998. Thereafter, this Agreement shall extend automatically
on month-to-month basis; however, either party can unilaterally
terminate this Agreement upon sixty (60) days notice to the
other.
8. Breach by Cimarron. Cimarron shall be in breach of this
Agreement if any time during the term hereof:
8.1 Cimarron fails to make payment of any installment of the
Monthly Fee, and such failure is not cured within three (3)
days after InfoNow's written notice to Cimarron of such failure of
payment;
8.2 Cimarron fails to observe or perform any of its other
covenants, agreements or obligations hereunder, and such
failure is not cured within ten (10) days after InfoNow's written
notice to Cimarron of such failure; or
8.3 Cimarron has abandoned the Premises.
9. Remedies of Sub-Lessor. If Cimarron breaches this
Agreement, InfoNow may:
9.1 Terminate Cimarron's right to possession wherein this
Agreement shall automatically terminate; and/or
9.2 InfoNow may recover from Cimarron damages in the amount
of the unpaid Monthly Fees accrued through the time of
termination.
10. Miscellaneous Provisions.
10.1 All notices, statements, demands, requests, consents,
approvals, authorizations, offers, agreements, appointments,
or designations under this Agreement by either party to the
other shall be in writing and shall be considered sufficiently
given and served upon the other party if sent delivered personally, or
if by certified mail, return receipt requested, postage prepaid, to
the address of the Premises.
10.2 This Agreement contains all of the agreements and
conditions made between the parties hereto and may not be modified
orally or in any other manner than by an agreement in writing signed by
all parties to this Agreement. Any agreements, warranties or
representations not expressly contained herein shall not in
any way bind either of the parties hereto, and each party
expressly waives all claims for damages by reason of any statement,
representation, warranty, promise or agreement, if any, not
contained in this Agreement.
10.3 The terms and provisions of this Agreement shall be
binding upon and inure to the benefit of the heirs, executors,
administrators, successors and assigns of each of the parties
hereto, respectively.
10.4 This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado, and
jurisdiction in any suit shall be in the County where the
Premises is located.
IN WITNESS WHEREOF, this Agreement as of the day and year
first above written.
INFONOW CORPORATION: CIMARRON DOG & PONY COMPANY, INC.
By: By:
/s/ Kevin D. Andrew, Vice-President /s/ Donald E. Cohen, President
EXHIBIT K
TERMINATION AND RELEASE AGREEMENT
THIS AGREEMENT, made this 1st day of December, 1997, by and
between InfoNow Corporation (hereinafter "Company") and
Donald E. Cohen (hereinafter "Executive");
IN CONSIDERATION of the mutual promises and covenants
contained herein, the receipt and sufficiency of which is hereby
acknowledged, it is agreed as follows:
1. Termination. The Employment Agreement, dated May 22, 1995, between
the parties herto is discharged and terminated, effective upon date hereof.
2. Release. The parties hereto, for themselves and their officers,
directors, shareholders, related entities, heirs, executors and
administrators, and assigns, respectively, release and discharge each
other and their officers, directors, shareholders, related entities,
heirs, executors and administrators, and assigns, respectively, of and
from all and all manner of, action and actions, causes and causes of
action, suits, debts, dues, sums of money, accounts, reckoning, bonds,
bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgments, extents,
executions, claims and demands whatsoever, in law or in equity,
which each releasing party has or may have, against the other
party for, upon or by reason of, any matter, cause or thing
whatsoever, regarding all rights and obligations contained in
the Employment Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on
date above written.
INFONOW CORPORATION
By:
/s/ Kevin D. Andrew /s/Donald E. Cohen
Vice President
EXHIBIT K
TERMINATION AGREEMENT
[To be provided by Seller]
