EXHIBIT 10.1

                                [GRAPHIC OMITTED]

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                               INFONOW CORPORATION

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                                STOCK OPTION PLAN





                             DATED AS OF MAY 9, 2003







       Prepared by Chrisman, Bynum & Johnson, P.C., 1900 Fifteenth Street,
                             Boulder, Colorado 80302


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                               INFONOW CORPORATION

                             1999 STOCK OPTION PLAN
                                Table of Contents


ARTICLE 1
     Purpose                                                                 1

ARTICLE 2
     Incentive Stock Options and Non-Incentive Stock Options                 1

ARTICLE 3
     Administration                                                          1

ARTICLE 4
     Definitions
                                                                             2
          4.1   "Change in Control"                                          3
          4.2   "Common Stock"                                               3
          4.3   "Corporate Transaction"                                      3
          4.4   "Employee"                                                   3
          4.5   "Fair Market Value"                                          3
          4.6   "Secondary Public Offering"                                  4
          4.7   "Non-Employee Director"                                      4
          4.8   "Participant"                                                4
          4.9   "Securities Act"                                             4
          4.10  "Stock Option"                                               4

ARTICLE 5
     Eligibility and Participation                                           4

ARTICLE 6
     Shares of Common Stock Subject to the Plan                              5
          6.1   Maximum Number                                               5
          6.2   Capital Changes                                              5

ARTICLE 7
     Exercise of Stock Options                                               5
          7.1   Time of Exercise                                             5
          7.2   Exchange of Outstanding Stock                                6
          7.3   Use of Promissory Note: Exercise Loans                       6
          7.4   Termination of Employment before Exercise                    6
          7.5   Disposition of Forfeited Stock Options                       7
          7.6   Conditions of Exercise                                       7

ARTICLE 8
     No Contract of Employment                                               8

                                       ii

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ARTICLE 9
     No Rights as a Stockholder                                              8

ARTICLE 10
     Assignability                                                           9

ARTICLE 11
     Corporate Transactions and Changes in Control                           9

ARTICLE 12
     Amendment                                                               10

ARTICLE 13
     Registration of Optioned Shares                                         10

ARTICLE 14
     Withholding Taxes                                                       11
          14.1  Satisfaction of Withholding Obligations                      11
          14.2  Notification of Inquiries and Agreements                     11
          14.3  Use of Outstanding Stock for Withholding Obligations         11

ARTICLE 15
     Brokerage Arrangements                                                  12

ARTICLE 16
     Nonexclusivity of the Plan                                              12

ARTICLE 17
     State Law Provisions                                                    12

ARTICLE 18
     Effective Date                                                          12

                                       iii

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                               INFONOW CORPORATION

                             1999 STOCK OPTION PLAN

                                    ARTICLE 1
                                     Purpose

     The INFONOW CORPORATION CORPORATION 1999 STOCK OPTION PLAN (the "Plan")
provides for the grant of Stock Options to employees, directors and consultants
of INFONOW CORPORATION (the "Company"), and such of its subsidiaries (as defined
in Section 424(f) of the Internal Revenue Code of 1986, as amended (the
"Code")), as the Board of Directors of the Company (the "Board") shall from time
to time designate ("Participating Subsidiaries") in order to advance the
interests of the Company and its Participating Subsidiaries through the
motivation, attraction and retention of key personnel.

                                    ARTICLE 2
             Incentive Stock Options and Non-Incentive Stock Options

     2.1 The Stock Options granted under the Plan may be either:

          2.1.1 Incentive Stock Options ("ISOs") which are intended to be
                "Incentive Stock Options" as that term is defined in Section 422
                of the Code; or

          2.1.2 Nonstatutory Stock Options ("NSOs") which are intended to be
                options that do not qualify as "Incentive Stock Options" under
                Section 422 of the Code.

          2.1.3 All Stock Options shall be ISOs only to the extent specified in
                the Option Agreement. Subject to the other provisions of the
                Plan, a Participant may receive ISOs and NSOs at the same time,
                provided that the ISOs and NSOs are clearly designated as such,
                and the exercise of one does not affect the exercise of the
                other. All Stock Options shall be NSOs unless the Board
                determines otherwise.

     2.2 Except as otherwise expressly provided herein, all of the provisions
and requirements of the Plan relating to Stock Options shall apply to ISOs and
NSOs.

                                    ARTICLE 3
                                 Administration

     3.1 The Plan shall be administered by the Board, or by a committee composed
solely of two or more directors ("Committee") each of whom is a Non-Employee
Director. The Committee or the Board, as the case may be, shall have full
authority to administer the Plan, including authority to interpret and construe
any provision of the Plan and any Stock Options granted thereunder, and to adopt
such rules and regulations for administering the Plan as it may deem necessary
in order to comply with the requirements of the Code or in order that Stock
Options that are intended to be ISOs will be classified as incentive stock
options under the Code, or in order to conform to any regulation or to any



<PAGE>


change in any law or regulation applicable thereto. The Board shall have the
power to reprice and accelerate the vesting of Stock Options. The Board may
reserve to itself any of the authority granted to the Committee as set forth
herein, and it may perform and discharge all of the functions and
responsibilities of the Committee at any time that a duly constituted Committee
is not appointed and serving. All references in this Plan to the "Committee"
shall be deemed to refer to the Board whenever the Board is discharging the
powers and responsibilities of the Committee, and to any special committee
appointed by the Board to administer particular aspects of this Plan.

     3.2 All actions taken and all interpretations and determinations made by
the Committee in good faith (including determinations of Fair Market Value)
shall be final and binding upon all Participants, the Company and all other
interested persons. No member of the Committee shall be personally liable for
any action, determination or interpretation made in good faith with respect to
this Plan, and all members of the Committee shall, in addition to their rights
as directors, be fully protected by the Company with respect to any such action,
determination or interpretation. Rule 16b-3 under the Securities Exchange Act of
1934 (the "Exchange Act") provides that the grant of a stock option to a
director or officer of a company will be exempt from the provisions of Section
16(b) of the Exchange Act if the conditions set forth in that Rule are
satisfied. Unless otherwise specified by the Committee, grants of Stock Options
hereunder to individuals who are officers or directors of the Company shall be
made in a manner that satisfies the conditions of that Rule.

                                    ARTICLE 4
                                   Definitions

     4.1 "Change in Control." Change in Control shall mean any of the following
events occurring after April 23, 1999.

        4.1.1 If any one Person (as defined below), after the date of a
Secondary Public Offering of the Company, in a single transaction or in a series
of transactions shall purchase or otherwise acquire or become the beneficial
owner of securities of the Company representing fifty-one percent (51%) or more
of the combined voting power of the Company's then outstanding voting securities
(including any voting securities issuable upon conversion of convertible
securities of the Company held by such Person);

        4.1.2 If at any annual or special meeting of Company stockholders
following a contested election the Board of Directors of the Company shall cease
to be an Authorized Board. For purposes of this paragraph, a "contested
election" shall mean (i) an election contest subject to Rule 14a-11 under the
Exchange Act or (ii) an election which would have been subject to Rule 14a-11 if
at the time of such election the Company had securities registered pursuant to
Section 12 of the Exchange Act;

                                       2

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        4.1.3 If a change of control of the Company (i) required to be reported
in accordance with Item 6 of Schedule 14A under the Exchange Act, or (ii) which
would be required to be reported in accordance with Item 6 of Schedule 14A if at
the time of such election the Company had securities registered pursuant to
Section 12 of the Exchange Act, has otherwise occurred unless a Constitutional
Majority of an Authorized Board approves the Change of Control and specifically
waives the application of this Section;

        4.1.4 A dissolution or liquidation of the Company;

        4.1.5 A sale of all or substantially all the Company's assets;

        4.1.6 A determination by the Board or the Committee (as applicable), in
its sole discretion, that there has been a change in control of the Company.

              4.1.6.1 For purposes of this Section "Person" shall have the
meaning set forth in Sections 13(d) and 14(d)(2) of the Exchange Act, as in
effect on the date thereof, and shall include, without limitation, any
"Affiliate" or "Associate" of such Person (as those terms are used in Rule 12b-2
under the Exchange Act); provided, however, that the term "Person" shall not
include the Company or any trustee or other fiduciary holding securities under
any employee benefit plan of the Company. For purposes of this Section , (i)
beneficial ownership shall be computed in accordance with Rule 13d-3 under the
Exchange Act; and (ii) "Authorized Board" shall mean a Board of Directors of the
Company of which a number of directors equal to a majority of the authorized
number of directors constituting the entire Board, including vacancies (a
"Constitutional Majority"), were either members of the Board of Directors on the
date of the Company's Initial Public Offering or were nominated or elected a
director by a Constitutional Majority at the date of nomination or election of
an Authorized Board.

     4.2 "Common Stock." A share of Common Stock means a share of authorized
common stock of the Company.

     4.3 "Corporate Transaction." Corporate Transaction shall mean one or more
of the following transactions unless persons who were holders of outstanding
voting capital stock of the Company which was outstanding immediately prior to
such transaction are immediately after such transaction holders of 51% or more
of the outstanding voting capital stock of the surviving or acquiring entity (or
equivalent equity interest if the entity is not a corporation): (i) a merger,
consolidation or acquisition (ii) a share exchange (with or without a
stockholder vote) in which 95% or more of the outstanding capital stock of the
Company is exchanged for capital stock of another corporation; or (iii) the
sale, transfer or other disposition of all or substantially all of the Company's
assets.

     4.4 "Employee." An Employee is an employee of the Company or any
Participating Subsidiary.


     4.5 "Fair Market Value." If the Common Stock is traded publicly, the Fair
Market Value of a share of Common Stock on any date shall be the average of the
representative closing bid and closing asked prices, as quoted by the National
Association of Securities Dealers, Inc. through NASDAQ (its automated system for

                                       3

<PAGE>


reporting quotes), for the date in question, or, if the Common Stock is listed
on the NASDAQ National System or is listed on a national stock exchange, the
officially quoted closing price on NASDAQ or such exchange, as the case may be,
on the date in question. If the Common Stock is not traded publicly, the Fair
Market Value of a share of Common Stock on any date shall be determined in good
faith by the Committee after such consultations with outside legal, accounting
and other experts as the Committee may deem advisable, and the Committee may
maintain a written record of its method of determining such value.

     4.6 "Secondary Public Offering." "Secondary Public Offering" shall mean any
offering of securities to the public by the Company which is registered pursuant
to the Securities Act.

     4.7 "Non-Employee Director." A Non-Employee Director is a person who
satisfies the definition of a "non-employee director" set forth in Rule 16b-3
under the Exchange Act or any successor rule or regulation, as it may be amended
from time to time.

     4.8 "Participant." A Participant is an Employee, director or consultant of
the Company to whom a Stock Option is granted.

     4.9 "Securities Act." Securities Act shall mean the Securities Act of 1933,
as amended.

     4.10 "Stock Option." A Stock Option is the right granted under the Plan to
an Employee, director, or consultant to purchase, at such time or times and at
such price or prices ("Option Price") as are determined by the Committee, the
number of shares of Common Stock determined by the Committee.

                                    ARTICLE 5
                          Eligibility and Participation

Grants of ISOs may be made to Employees of the Company or any Participating
Subsidiary. Grants of NSOs may be made to Employees or directors of, or
consultants to, the Company or any Participating Subsidiary. Any director of the
Company or of a Participating Subsidiary who is also an Employee shall also be
eligible to receive ISOs. The Board or Committee shall from time to time
determine the Participants to whom Stock Options shall be granted, the number of
shares of Common Stock subject to each Stock Option to be granted to each such
Participant, and the Option Price of such Stock Options, all as provided in this
Plan. The Option Price of any ISO shall be not less than the Fair Market Value
of a share of Common Stock on the date on which the Stock Option is granted, and
the Option Price of an NSO shall be not less than eighty-five percent (85%) of
the Fair Market Value on the date the NSO is granted. If an ISO is granted to an
Employee who then owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or any parent or subsidiary
corporation of the Company, the Option Price of such ISO shall be at least 110%
of the Fair Market Value of the Common Stock subject to the ISO at the time such
ISOs are granted, and such ISO shall not be exercisable after five years after
the date on which it was granted. Each Stock Option shall be evidenced by a
written agreement ("Option Agreement") containing such terms and provisions as
the Committee may determine, subject to the provisions of this Plan.

                                       4

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                                    ARTICLE 6
                   Shares of Common Stock Subject to the Plan

     6.1 Maximum Number. The maximum aggregate number of shares of Common Stock
that may be made subject to Stock Options shall be 6,000,000 authorized shares.
To the extent the aggregate Fair Market Value (determined as of the time the ISO
is granted) of the stock with respect to which ISOs are exercisable for the
first time by an individual in a particular calendar year exceeds $100,000, such
excess Stock Options shall be treated as NSOs. If any shares of Common Stock
subject to Stock Options are not purchased or otherwise paid for before such
Stock Options expire, such shares may again be made subject to Stock Options.

     6.2 Capital Changes. In the event any changes are made to the shares of
Common Stock (whether by reason of reorganization, recapitalization, stock
dividend paid in capital stock of the Company, stock split, combination of
shares, exchange of shares, change in corporate structure or otherwise),
appropriate adjustments shall be made in: (i) the number of shares of Common
Stock theretofore made subject to Stock Options, and in the Option Price of said
shares; and (ii) the aggregate number of shares which may be made subject to
Stock Options in the future. If any of the foregoing adjustments shall result in
a fractional share, the fraction shall be disregarded, and the Company shall
have no obligation to make any cash or other payment with respect to such a
fractional share. Without limitation, a distribution to shareholders of the
Company of securities of a subsidiary of the Company does not result in an
adjustment under Section 6.1 or permit the holder to acquire securities of such
subsidiary.

                                    ARTICLE 7
                            Exercise of Stock Options

     7.1 Time of Exercise. Subject to the provisions of the Plan, the Committee,
in its discretion, shall determine the time when a Stock Option, or a portion of
a Stock Option, shall become exercisable, and the time when a Stock Option, or a
portion of a Stock Option, shall expire. Such time or times shall be set forth
in the Option Agreement evidencing such Stock Option. Unless otherwise specified
in an Option Agreement, a Stock Option shall become exercisable (i) with respect
to 7/36 of the shares subject thereto seven months after the date of grant, and
(ii) with respect to 1/36 of the shares subject thereto at the end of each month
thereafter, (so that all Stock Options are fully vested three (3) years after
the date of grant) subject to continued employment with the Company or a
Participating Subsidiary and Section hereof. A Stock Option shall expire, to the
extent not exercised, no later than the tenth anniversary of the date on which
it was granted. The Committee may accelerate the vesting of any Participant's
Stock Option by giving written notice to the Participant. Upon receipt of such
notice, the Participant and the Company shall amend the Option Agreement to
reflect the new vesting schedule. The acceleration of the exercise period of a
Stock Option shall not affect the expiration date of that Stock Option. No
fractional shares shall be issued as a result of the exercise of a Stock Option.
In computing the number of shares to be received as a result of the exercise of
a Stock Option, the Committee will "round down" to the nearest whole share.

                                     5

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     7.2 Exchange of Outstanding Stock. The Committee, in its sole discretion,
may permit a Participant to (i) surrender to the Company whole shares of Common
Stock previously acquired by the Participant and/or (ii) request that the
Company withhold whole shares of Common Stock issuable upon exercise of the
Stock Option, as part or full payment for the exercise of a Stock Option. Such
surrendered or withheld shares shall be valued at their Fair Market Value on the
date of exercise. Shares credited to a Participant shall again be available for
grant under the Plan.

     7.3 Use of Promissory Note; Exercise Loans. The Committee may, in its sole
discretion, impose terms and conditions, including conditions relating to the
manner and timing of payments, on the exercise of Stock Options. Such terms and
conditions may include, but are not limited to, permitting a Participant to
deliver to the Company his promissory note as full or partial payment for the
exercise of a Stock Option. The Committee, in its sole discretion, may authorize
the Company to make a loan to a Participant in connection with the exercise of
Stock Options, or authorize the Company to arrange or guarantee loans to a
Participant by a third party. Any loan by the Company or acceptance of a
promissory note shall be made in accordance with the corporate law of the
Company's state of incorporation.

     7.4 Termination of Employment before Exercise. If the employment of a
Participant who was an employee of the Company or a Participating Subsidiary
when the Stock Option was granted shall terminate for any reason other than the
Participant's death or disability or for cause (as defined below), any Stock
Option granted to the Participant, to the extent then exercisable under the
applicable Option Agreement(s), shall remain exercisable after the termination
of the Participant's employment for a period ending on the last day of the month
next following the month of such termination (but not later than the specified
expiration date). If the Participant's employment is terminated because the
Participant is disabled within the meaning of Section 22(e)(3) of the Code, any
Stock Option granted to the Participant, to the extent then exercisable under
the applicable Option Agreement(s), shall remain exercisable after the
termination of his employment until the last day of the twelfth month (but not
later than the specified expiration date from the date of such termination). If
the Participant dies while employed by the Company or a Participating
Subsidiary, or during the one-month or twelve-month periods referred to above,
his Stock Options may be exercised by the Participant's estate, duly appointed
representative or beneficiary who acquires the Stock Options by will or by the
laws of descent and distribution, to the extent that they were exercisable on
the date of cessation of his employment, but no further installments of the
Participant's Stock Options will become exercisable and each of the
Participant's Stock Options shall terminate on the last day of the twelfth month
from the date of the Participant's death (but not later than the specified
expiration dates). If a Stock Option is not exercised during the applicable
period, it shall be deemed to have been forfeited and of no further force or
effect.

     Notwithstanding the foregoing provisions of this Section, but subject to
the other provisions of this Plan, the Option Agreement may specify longer
periods for exercise of a NSO or ISO after any such an event.

     Upon action of the Committee in its sole discretion, except as provided in
a written employment or consulting agreement of the Company or a Participating
Subsidiary with the Participant, which is referenced in the Option Agreement,
any Stock Option shall terminate immediately, and may not be exercised, (i) if
prior to the date of exercise and/or delivery of certificate(s) representing

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shares received upon the option exercise (but in any event not later than five
(5) days after date of exercise) Participant is terminated for cause as an
Employee of the Company or its Participating Subsidiary, or if not an Employee,
for cause as a director or consultant for the Company or its Participating
Subsidiary; or (ii) if subsequent to a Participant's termination and prior to
the expiration of the term of the Stock Option conditions arise or are
discovered with respect to a Participant that would have constituted cause for
termination. "Cause" shall have the meaning given to it in the Participant's
written employment, consultant or director agreement with the Company or
Participating Subsidiary. If no such written agreement exists, "cause" shall
mean (i) dishonesty which is not the result of an inadvertent or innocent
mistake with respect to the Company or any of its subsidiaries; (ii) willful
misfeasance or nonfeasance of duty intended to injure or having the effect of
injuring in some material fashion the reputation, business or business
relationships of the Company or any of its subsidiaries or any of their
respective officers, directors or employees; (iii) conviction upon a charge of
any crime involving moral turpitude or a crime other than a vehicle offense
which could reflect in some material fashion unfavorably upon the Company or any
of its subsidiaries; or (iv) willful or prolonged absence from work by the
Participant (other than by reason of disability due to physical or mental
illness) or failure, neglect or refusal by the Participant to perform his duties
and responsibilities without the same being corrected upon thirty (30) days
prior written notice. In addition, unless specifically provided otherwise in
reference to this Plan in a written employment, consultant or director agreement
with the Company or Participating Subsidiary, "cause" for purposes of this
Section shall exist (and termination of the Stock Option may occur even if not
so provided in the written employment, consultant or director agreement with the
Company or Participating Subsidiary) if the Participant materially breaches any
provision of an agreement with the Company or any of its subsidiaries with
respect to obligations regarding non-competition, invention, ownership,
confidentiality, non-solicitation of customers, and non-hire of customers and
employees of the Company or a Subsidiary, or if the Participant commits a
material breach of any other obligation to the Company or any of its
subsidiaries under conditions where the existence of this risk of termination of
the Stock Option would not constitute a substantial risk of forfeiture under
Section 83 of the Code if Section 83 of the Code would apply in respect of such
Stock Options in such circumstance and require such Stock Option to be treated
as taxable income to the Participant prior to exercise or transfer of the Stock
Option.

     7.5 Disposition of Forfeited Stock Options. Any shares of Common Stock
subject to Stock Options forfeited by a Participant shall not thereafter be
eligible for purchase by the Participant, but may be made subject to Stock
Options granted to other Participants.

     7.6 Conditions of Exercise. Notice of exercise shall be in the form
attached to the Option Agreement and shall, in the discretion of the Company,
contain a representation, in the form provided by the Company, that the shares
are being purchased for investment only and not for resale or distribution, and
such other representations and agreements as the Company may reasonably require,
and may in addition require as a condition of exercise that the Participant
execute any applicable stockholders agreement. The Company may also require as a
condition of exercise that the Participant will agree, if requested by the
Company in connection with a public offering of the Company's securities, to
adhere to lock-up arrangements between the Company and an underwriter involved
in such public offering.

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                                    ARTICLE 8
                            No Contract of Employment

     Nothing in this Plan shall confer upon the Participant the right to
continue as an employee, consultant or director of the Company or any
Participating Subsidiary, nor shall it interfere in any way with the right of
the Company, or any Participating Subsidiary, to discharge the Participant at
any time for any reason whatsoever, with or without cause. The grant of a Stock
Option does not imply that the Company does not anticipate either a general
reduction in force or the termination of the employment, directorship or
consulting position of a Participant. Nothing in this Article shall affect any
rights or obligations of the Company or any Participant under any written
contract of employment.

     The grant of a Stock Option does not create a fiduciary relationship
between the Participant and the Company or any other person or entitle the
Participant to require the Company or any other person to provide any
information except as required by applicable securities or employee benefits
statutes and rules and regulations issued thereunder.

                                    ARTICLE 9
                           No Rights as a Stockholder

     A Participant shall have no rights as a stockholder with respect to any
shares of Common Stock subject to a Stock Option. Except as provided in Section
6.2, no adjustment shall be made in the number of shares of Common Stock issued
to a Participant, or in any other rights of the Participant upon exercise of a
Stock Option by reason of any dividend, distribution or other right granted to
stockholders for which the record date is prior to the date of exercise of the
Participant's Stock Option. The Committee, the Board and the Company have no
continuing duty to provide a Participant with information concerning the
Company. The Company, its subsidiaries, the Board and the Committee shall have
no liability to the Participant, or the Participant's estate or transferee if:
(i) a Stock Option intended to be an ISO does not at any time qualify as an
incentive stock option under the Code; or (ii) a Stock Option grant or exercise,
or the subsequent sale of securities received on such exercise, does not qualify
as exempt from the application of Section 16(b) of the Exchange Act; in each
case even if the Participant, estate to transferee was informed it would
qualify.

                                       8

<PAGE>


                                   ARTICLE 10
                                  Assignability

     No Stock Option granted under this Plan, nor any other rights acquired by
Participant under this Plan, shall be assignable or transferable by a
Participant, other than by will or the laws of descent and distribution.
Notwithstanding the preceding sentence, the Committee, in its sole discretion,
may permit the assignment or transfer of an NSO and the exercise thereof by a
person other than a Participant, on such terms and conditions as the Committee
in its sole discretion may determine. Any such terms shall be set forth in the
Option Agreement. Any option granted under the Plan shall be null and void and
without effect upon the bankruptcy of the optionee to whom the option is
granted, or upon any attempted assignment or transfer, except as herein
provided, including without limitation any purported assignment, whether
voluntary or by operation of law, pledge, hypothecation or other disposition,
attachment, trustee process or similar process, whether legal or equitable, upon
such option. The terms of any rights under this Plan in the hands of a permitted
transferee or assignee shall be determined as if held by the optionee and shall
be of no greater extent or term than if the transfer or assignment had not taken
place. In the event of a Participant's death, the Stock Option may be exercised
by the personal representative of the Participant's estate or by the successor
or successors in interest determined under the Participant's will or under the
applicable laws of descent and distribution. The terms of any rights under this
Plan in the hands of a transferee or assignee shall be determined as if held by
the Participant and shall be of no greater extent or term than if the transfer
or assignment had not taken place.

                                   ARTICLE 11
                  Corporate Transactions and Changes in Control

     11.1 At least fifteen (15) days prior to the consummation of a Corporate
Transaction, the Company shall give Participants written notice of the proposed
Corporate Transaction. The vesting schedules of all Stock Options may, at the
sole discretion of the Committee, be accelerated so that the Stock Options shall
become exercisable as to those shares which could be purchased under those
vesting schedules 12 months after the date of consummation of the Corporation
Transaction. In addition, at the sole discretion of the Committee, the vesting
schedule of some or all other Stock Options may be accelerated so that all or
any portion of Stock Options outstanding under the Plan immediately prior to the
consummation of the Corporate Transaction shall, for all purposes under this
Plan, become exercisable as of such time. If a Corporate Transaction is to
occur, in lieu of allowing a Participant to exercise the Participant's Stock
Options, the Board may, in its sole discretion, require some or all Participants
to accept a cash payment in consideration for the termination of the
Participant's Stock Options. The termination shall occur immediately prior to
the consummation of the Corporate Transaction and the cash payment shall be
equal to the difference between the price per share of Common Stock in the
Corporate Transaction as determined by the Board and the exercise price of a
Participant's Stock Options. All Stock Options, to the extent not previously
exercised, shall terminate upon the consummation of such Corporate Transaction
and cease to be exercisable unless expressly assumed by the successor
corporation or parent thereof. Provided, however, that if the Corporate
Transaction is to be accounted for as a "pooling-of-interest," then unexercised
stock options shall be exchanged for similar options of the acquiror or
surviving entity or voting common stock of the acquiror or surviving entity

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based on the value of the options, as and to the extent required by APB No. 16,
accounting pronouncements of the Securities and Exchange Commission, and other
authoritative principles and pronouncements concerning pooling-of-interest
accounting. Notwithstanding the foregoing, the vesting of a Participant's Stock
Options shall not be accelerated (if and to the extent requested in writing by
the Participant) upon a Corporate Transaction if the participant is a
"disqualified individual" as that term is defined in Section 280G of the
Internal Revenue Code.

     11.2 The vesting schedules of all Stock Options shall be automatically
accelerated so that the Stock Options shall become exercisable as to all shares
subject to the Stock Options if the Participant's employment is terminated
without cause by the Company within one (1) year following a Change in Control.
"Without cause" means that "cause" did not exist as defined in Section 7.4.

     11.3 The employment, consulting or directorship agreement, or the Option
Agreement of a Participant may contain terms which vary from Sections and upon
approval of the Board and the Committee.

                                   ARTICLE 12
                                    Amendment

     The Board of Directors may from time to time alter, amend, suspend or
discontinue the Plan, including, where applicable, any modifications or
amendments as it shall deem advisable in order that ISOs will be classified as
incentive stock options under the Code, or in order to conform to any regulation
or to any change in any law or regulation applicable thereto; provided, however,
that no such action shall adversely affect the rights and obligations with
respect to Stock Options at any time outstanding under the Plan; and provided
further that no such action shall, without the approval of the stockholders of
the Company, (i) increase the maximum number of shares of Common Stock that may
be made subject to Stock Options (unless necessary to effect the adjustments
required by Section ), (ii) materially modify the requirements as to eligibility
for participation in the Plan, or (iii) materially increase the benefits
accruing to Participants under the Plan.

                                   ARTICLE 13
                         Registration of Optioned Shares

     The Stock Options shall not be exercisable unless the purchase of such
optioned shares is pursuant to an applicable effective registration statement
under the Securities Act and applicable state securities laws or unless, in the
opinion of counsel to the Company, the proposed purchase of such optioned shares
would be exempt from the registration requirements of the Securities Act and
from the registration or qualification requirements of applicable state
securities laws. Any certificates for such shares shall bear such legends as
deemed appropriate by the Committee.

                                       10

<PAGE>


                                   ARTICLE 14
                                Withholding Taxes

     14.1 Satisfaction of Withholding Obligations. The Company or Participating
Subsidiary may take such steps as it may deem necessary or appropriate for the
withholding of any taxes or funds which the Company or the Participating
Subsidiary is required by any law or regulation of any governmental authority,
whether federal, state or local, domestic or foreign, to withhold in connection
with any Stock Options (collectively, "Withholding Obligations"). Such steps may
include, by way of example only and not limitation, (i) requiring a Participant
to remit to the Company in cash an amount sufficient to satisfy such Withholding
Obligations; (ii) allowing the Participant to tender to the Company shares of
Common Stock, the Fair Market Value of which at the tender date the Committee
determines to be sufficient to satisfy such Withholding Obligations; (iii)
withholding shares of Common Stock otherwise issuable upon the exercise of a
Stock Option and which have a Fair Market Value at the exercise date sufficient
to satisfy such Withholding Obligations; (iv) agreement with the Participant to
withhold amounts from Participant's paycheck amounts sufficient to satisfy such
Withholding Obligations; or (iv) any combination of the foregoing.

     14.2 Notification of Inquiries and Agreements. Each Participant shall
notify the Company in writing within 10 days after the date such Participant (i)
first obtains knowledge of any Internal Revenue Service inquiry, audit,
assertion, determination, investigation, or question relating in any manner to
the value of any shares of Common Stock or Stock Options granted or received
hereunder; (ii) includes or agrees (including, without limitation, in any
settlement, closing or other similar agreement) to include in gross income with
respect to any shares of Common Stock or Stock Options received or granted
hereunder (A) any amount in excess of the amount reported on Form 1099 or Form
W-2 to such Participant by the Company, or (B) if no such Form was received, any
amount; (iii) exercises, sells, disposes of, or otherwise transfers (other than
to such Person's successors, heirs, executors or administrators, as the case may
be) a Stock Option acquired pursuant to this Plan; or (iv) sells, disposes of,
or otherwise transfers (other than to such Person's successors, heirs, executors
or administrators, as the case may be) shares of Common Stock acquired pursuant
to the exercise of an Incentive Stock Option within the Disqualified Period.
Upon request, a Participant shall provide to the Company any information or
document relating to any event described in the preceding sentence which the
Company (in its sole discretion) requires in order to calculate and substantiate
any change in the Company's tax liability as a result of such event.
"Disqualified Period" means, in the case of any Incentive Stock Option, the
period beginning on the date such Stock Option is granted and ending on the
later of the date (i) two years after the date such Stock Option is granted, or
(ii) one year after the transfer of any Common Stock to a Participant pursuant
to the exercise of such Stock Option.

     14.3 Use of Outstanding Stock for Withholding Obligations. The Committee
may, in its sole discretion, permit a Participant to satisfy such Participant's
Withholding Obligations with shares of Common Stock which such Participant would
otherwise be entitled to receive upon exercise, provided however, (i) that the
amount of any Withholding Obligations representing federal income tax which may
be satisfied in such a manner shall not exceed the lessor of: (a) the regular
federal income tax withholding rate to which such Participant would be subject
in respect of the taxable income arising from such exercise; and (b) the flat
withholding rate applicable to supplemental wages in effect at such time under

                                       11

<PAGE>


Treasury Regulations Section 31.3402(g)-1(a)(2)(ii) (or any successor provision
of the Code or Treasury Regulations); (ii) provided further, that the Committee
may, in its discretion, permit a Participant to satisfy federal income tax
withholding in excess of the amount described in (i) above by (A) surrendering
to the Company shares of Company capital stock having a Fair Market Value at the
time of surrender equal to such additional withholding and which have been owned
by such Participant for at least 6 months prior to such exercise, or (B)
attesting in writing to such Participant ownership of shares of Common Stock
having a Fair Market Value at the time of attestation equal to such additional
Withholding Obligations and allowing the Company to withhold from the shares
such Participant would otherwise receive an equal number of shares of Common
Stock.

                                   ARTICLE 15
                             Brokerage Arrangements

     The Committee, in its discretion, may enter into arrangements with one or
more banks, brokers or other financial institutions to facilitate the
disposition of shares acquired upon the exercise of Stock Options including,
without limitation, arrangements for the simultaneous exercise of Stock Options
and the sale of shares acquired upon exercise.

                                   ARTICLE 16
                           Nonexclusivity of the Plan

     Neither the adoption of the Plan by the Board nor the submission of the
Plan to stockholders of the Company for approval shall be construed as creating
any limitations on the power or authority of the Board to adopt such other or
additional incentive or other compensation arrangements of whatever nature as
the Board of Directors may deem necessary or desirable or preclude or limit the
continuation of any other plan, practice or arrangement for the payment of
compensation or fringe benefits to employees generally, or to any class or group
of employees, which the Company or any Participating Subsidiary now has lawfully
put into effect, including, without limitation, any retirement, pension, savings
and stock purchase plan, insurance, death and disability benefits and executive
short-term or long-term incentive plans.

                                   ARTICLE 17
                              State Law Provisions

     All grants and exercises of Stock Options, and the sale or other
disposition of securities received on such exercise, shall be subject to
applicable provisions of local, state and foreign laws.

                                   ARTICLE 18
                                 Effective Date

     This Plan was adopted by the Board on April 23, 1999,and became effective
on that date subject to the approval of the Company's stockholders within twelve
(12) months thereafter. However, if such approval is not obtained all provisions
of this Plan, and all grants hereunder, shall nevertheless be effective except
that all ISOs shall be NSOs. No Stock Options shall be granted subsequent to ten
(10) years after the effective date of the Plan. Stock Options outstanding
subsequent to ten years after the effective date of the Plan shall continue to
be governed by the provisions of the Plan.

                                       12

<PAGE>


                      NON-STATUTORY STOCK OPTION AGREEMENT


     This NON-STATUTORY STOCK OPTION AGREEMENT is made ________, 199___, between
INFONOW CORPORATION (hereinafter referred to as the "Company"), and
_______________ (hereinafter referred to as "Optionee").

     WHEREAS, Optionee is an important and valuable contributor to the Company
and the Company deems it to be in its interest and in the interest of its
shareholders to secure the services of Optionee for the Company or such of its
subsidiary companies as may be designated by the Company; and

     WHEREAS, the Company, as an incentive to Optionee to continue to serve the
Company or its subsidiaries and to increase Optionee's proprietary interest in
the Company, desires to enter into this Agreement containing the terms and
conditions hereinafter set forth and to grant Optionee an option to purchase
shares of the Common Stock of the Company.

     NOW, THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
parties agree as follows:

     1. Grant of Option. In consideration of the foregoing, the Company hereby
grants to Optionee the right and option (hereinafter referred to as "the
option") to purchase __________ shares of the Company's Common Stock ("Shares")
pursuant to the following schedule: subject to Section 7.4 of the Company's 1999
Stock Option Plan (the "Plan"), __________. The option shall terminate on the
tenth anniversary of the date hereof and, accordingly, may not be exercised
after that date. The purchase price to be paid for such Shares upon exercise of
the option shall be $______ per share, being not less than the percentage of
Fair Market Value of the Shares on the date of this Agreement required under the
Plan. This option is granted pursuant to, and is subject to the terms and
conditions of the Plan, a copy of which has been furnished to Optionee and
receipt of which Optionee hereby acknowledges.

     2. Method of Exercising Option. The option may be exercised, in whole at
any time or in part from time to time, by giving to the Company notice in
writing to that effect. Within thirty (30) days after the receipt by it of
notice of exercise of the option and upon due satisfaction of all conditions
pertaining to the option as set forth in this Agreement, the Company shall cause
certificates for the number of Shares with respect to which the option is
exercised to be issued in the name of Optionee, or his executors,
administrators, or other legal representatives, heirs, legatees, next of kin, or
distributees, and to be delivered to Optionee or his executors, administrators,
or other legal representatives, heirs, legatees, next of kin, or distributees.
Payment of the purchase price for the shares with respect to which the option is
exercised shall be made to the Company upon the delivery of such stock, together
with revenue stamps or checks in an amount sufficient to pay any stock transfer
taxes required on such delivery. The Company shall give the person or persons
entitled to the same at least five (5) days' notice of the time and place for
delivery and for the payment of such purchase price.

                                       13

<PAGE>


     3. Conditions of Option. The option is subject to the following additional
conditions:

          (a) The option herein granted to Optionee is not transferable by
     Optionee during Optionee's lifetime, but may be transferred by will or the
     laws of descent and distribution.

          (b) The option may be exercised by Optionee pursuant to the terms of
     the Plan, but only to the extent that Optionee had the right to exercise
     such option at the date of termination of the Optionee's service to the
     Company.

     4. Representation as to Investment. Unless the Option and the shares are
registered pursuant to a then effective registration statement pursuant to the
Securities Act of 1933 and applicable state law, the exercise of such option and
the delivery of the Shares subject to it will be contingent upon the Company
being furnished by Optionee, his legal representatives, or other persons
entitled to exercise such option, with a statement in writing, in substantially
the form attached as Exhibit 2 hereto, that at the time of such exercise it is
his or their intention to acquire the Shares being purchased solely for
investment purposes and not with a view to distribution.

     5. Notices. Any notice to be given by Optionee as required by this
Agreement shall be sent to the Company at its principal executive offices and
any notice from the Company to Optionee shall be sent to Optionee at his address
as it appears on the Company's books and records. Either party may change the
address to which notices are to be sent by informing the other party in writing
of the new address.

     6. Restriction Against Assignment. Except as otherwise expressly provided
above, Optionee agrees on behalf of himself and of his executors and
administrators, heirs, legatees, distributees, and any other person or persons
claiming any benefits under him by virtue of this Agreement, that this Agreement
and the rights, interests, and benefits under it shall not be assigned,
transferred, pledged, or hypothecated in any way by Optionee or any executor,
administrator, heir, legatee, distributee, or other person claiming under
Optionee by virtue of this Agreement. Such rights, interest, or benefits shall
not be subject to execution, attachment, or similar process. Any attempted
assignment, transfer, pledge or hypothecation, or other disposition of this
Agreement or of such rights, interests, and benefits contrary to the preceding
provisions, or the levy of any attachment or similar process thereupon, shall be
null and void and without effect.

     7. Further Agreements. The undersigned agrees, in connection with the
issuance of the Shares, and thereafter from time to time as requested by the
Company, to execute any stockholders agreement as provided in the Plan. The
undersigned will, if requested, by the Company in connection with a public
offering of the Company's securities, adhere to lock-up arrangements between the
Company and an underwriter involved in such public offering.

     The Company or Participating Subsidiary may take such steps as it may deem
necessary or appropriate for the withholding of any taxes or funds which the
Company or the Participating Subsidiary is required by any law or regulation of
any governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with any Stock Options (collectively,
"Withholding Obligations"). Such steps may include, by way of example only and

                                       14

<PAGE>


not limitation, (i) requiring a Participant to remit to the Company in cash an
amount sufficient to satisfy such Withholding Obligations; (ii) allowing the
Participant to tender to the Company shares of Common Stock, the Fair Market
Value of which at the tender date the Committee determines to be sufficient to
satisfy such Withholding Obligations; (iii) withholding shares of Common Stock
otherwise issuable upon the exercise of a Stock Option and which have a Fair
Market Value at the exercise date sufficient to satisfy such Withholding
Obligations; or (iv) any combination of the foregoing.

         The Optionee understands that the Company will require the Optionee to
satisfy any applicable Withholding Obligations in connection with this option or
Common Stock received pursuant thereto. The Optionee agrees to notify the
Company in writing within 10 days after the date the Optionee (i) first obtains
knowledge of any Internal Revenue Service inquiry, audit, assertion,
determination, investigation, or question relating in any manner to the value of
this option or any shares of Common Stock received pursuant hereto; (ii)
includes or agrees (including, without limitation, in any settlement, closing or
other similar agreement) to include in gross income with respect to this option
or any shares of Common Stock received pursuant hereto (A) any amount in excess
of the amount reported on Form 1099 or Form W-2 to the Optionee by the Company,
or (B) if no such Form was received, any amount; or (iii) exercises, sells,
disposes of, or otherwise transfers (other than to the Optionee's successors,
heirs, executors or administrators, as the case may be) this option. Upon
request, the Optionee shall provide to the Company any information or document
relating to any event described in the preceding sentence which the Company (in
its sole discretion) requires in order to calculate and substantiate any change
in the Company's tax liability as a result of such event.

         IN WITNESS WHEREOF, the Company and the Optionee have executed this
Non-Statutory Stock Option Agreement as of the day and year first above written.

ATTEST:                                     INFONOW CORPORATION


By:________________________                 By:___________________________
         Secretary                                     President

                                            ______________________________
                                            Optionee

                                       15

<PAGE>


                                                                       EXHIBIT 1

                               NOTICE OF EXERCISE

TO:  INFONOW CORPORATION

1.   The undersigned hereby elects to purchase ___________________ shares of
     Common Stock of INFONOW CORPORATION pursuant to the terms of the attached
     Non-statutory Stock Option Agreement, and tenders herewith payment of the
     purchase price of such shares in full.

2.   Please issue a certificate or certificates representing said shares of
     Common Stock in the name of the undersigned or in such other name as is
     specified below:


                                            (Name)




                                            (Address)




Date:                      _______________________________
                                     Optionee



                                       16
<PAGE>


                                                                       EXHIBIT 2

                       INVESTMENT REPRESENTATION STATEMENT

TO:      INFONOW CORPORATION

With respect to the ____________________ shares of Common Stock ("Shares") of
INFONOW CORPORATION ("Company") which the undersigned ("Purchaser") has
purchased from the Company today, the Purchaser hereby represents and warrants
as follows:

1.   The Purchaser acknowledges that he has received no formal prospectus or
     offering memorandum describing the business and operations of the Company.
     He has, however, by virtue of his relationship with the Company, been given
     access to all information that he believes is material to his decision to
     purchase the Shares. The Purchaser has had the opportunity to ask questions
     of, and receive answers from, representatives of the Company concerning its
     business operations. Any questions raised by the Purchaser have been
     answered to his satisfaction.

2.   The Shares are being acquired by the Purchaser for his account, for
     investment purposes only, and not with a view to the distribution or resale
     thereof.

3.   No representations or promises have been made concerning the marketability
     or value of the Shares. The Purchaser understands that there is currently
     no market for the transfer of the Shares. The Purchaser further
     acknowledges that, because the Shares have not been registered under the
     Securities Act of 1933, and cannot be resold unless they are subsequently
     registered under said Act or an exemption from registration is available,
     the Purchaser must continue to bear the economic risk of his investment in
     the Shares for an indefinite period of time. Specifically, the Purchaser
     agrees that the Shares may not be transferred until the Company has
     received an opinion of counsel reasonably satisfactory to it that the
     proposed transfer will not violate federal or state securities laws unless
     the Company receives this requirement. The Company has not agreed or
     represented to the Purchaser that the Shares will be purchased or redeemed
     from the Purchaser at any time in the future. Further, there have been no
     representations, promises, or agreements that the Shares will be registered
     under the Securities Act of 1933 at any time in the future or otherwise
     qualified for sale under the applicable securities laws. The Purchaser
     further understands that a notation will be made on the appropriate records
     of the Company and on the Stock Certificate representing the Shares so that
     the transfer of Shares will not be effected on those records without
     compliance with the restrictions referred to above.

Date:
                                            Purchaser


                                       17

<PAGE>


                        INCENTIVE STOCK OPTION AGREEMENT


     This INCENTIVE STOCK OPTION AGREEMENT is made ________, 200___, between
INFONOW CORPORATION (hereinafter referred to as the "Company"), and
_______________ (hereinafter referred to as "Optionee").

     WHEREAS, Optionee is an important and valuable employee of the Company and
the Company deems it to be in its interest and in the interest of its
shareholders to secure the services of Optionee for the Company or such of its
subsidiary companies as may be designated by the Company; and

     WHEREAS, the Company, as an incentive to Optionee to continue to remain in
the employment of the Company or its subsidiaries and to increase Optionee's
proprietary interest in the Company, desires to enter into this Agreement
containing the terms and conditions hereinafter set forth and to grant Optionee
an option to purchase shares of the Common Stock of the Company.

     NOW, THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, and for other good and valuable consideration, the
parties agree as follows:

     1. Grant of Option. In consideration of the foregoing, the Company hereby
grants to Optionee the right and option (hereinafter referred to as "the
option") to purchase __________ shares of the Company's Common Stock ("Shares")
pursuant to the following schedule: subject to Section 7.4 of the Company's 1999
Stock Option Plan (the "Plan"), ____________. The option shall terminate on the
[tenth]/[fifth]/[______](1) anniversary of the date hereof and, accordingly, may
not be exercised after that date. The purchase price to be paid for such Shares
upon exercise of the option shall be $______ per share, being not less than
[100%]/[110%] (2) of the fair market value of the Shares on the date of this
Agreement. This option is granted pursuant to, and is subject to the terms and
conditions of the Plan, a copy of which has been furnished to Optionee and
receipt of which Optionee hereby acknowledges.

     2. Method of Exercising Option. The option may be exercised, in whole at
any time or in part from time to time, by giving to the Company notice in
writing to that effect. Within thirty (30) days after the receipt by it of
notice of exercise of the option and upon due satisfaction of all conditions
pertaining to the option as set forth in this Agreement, the Company shall cause
certificates for the number of Shares with respect to which the option is
exercised to be issued in the name of Optionee, or his executors,

------------------------------

(1) Circle "Fifth" (or insert a shorter period) if the Optionee holds stock
possessing more than 10% of the total combined voting power of all classes of
Company stock (not counting options).
Circle "tenth" (or insert a shorter period) if the Optionee holds stock with 10%
or less of the voting power (not counting options)

(2) Circle "110%" if the Optionee holds stock possessing more than 10% of the
total combined voting power of all classes of Company stock (not counting
options).
Circle "100%" if the Optionee holds stock with 10% or less of the voting power
(not counting options).


                                       18
<PAGE>


administrators, or other legal representatives, heirs, legatees, next of kin, or
distributees, and to be delivered to Optionee or his executors, administrators,
or other legal representatives, heirs, legatees, next of kin, or distributees.
Payment of the purchase price for the shares with respect to which the option is
exercised shall be made to the Company upon the delivery of such stock, together
with revenue stamps or checks in an amount sufficient to pay any stock transfer
taxes required on such delivery. The Company shall give the person or persons
entitled to the same at least five (5) days' notice of the time and place for
delivery and for the payment of such purchase price.

     3. Conditions of Option. The option is subject to the following additional
conditions:

          (a) The option herein granted to Optionee shall not be transferable by
     Optionee other than by will or the laws of descent and distribution, and
     shall be exercisable, during his lifetime, only by him.

          (b) The option may be exercised by Optionee pursuant to the terms of
     the Plan, but only to the extent that Optionee had the right to exercise
     such option at the date of termination of the Optionee's employment with
     the Company.

     4. Representation as to Investment. Unless the Option and the shares are
registered pursuant to a then effective registration statement pursuant to the
Securities Act of 1933 and applicable state law, the exercise of such option and
the delivery of the Shares subject to it will be contingent upon the Company
being furnished by Optionee, his legal representatives, or other persons
entitled to exercise such option, with a statement in writing, in substantially
the form attached as Exhibit 2 hereto, that at the time of such exercise it is
his or their intention to acquire the Shares being purchased solely for
investment purposes and not with a view to distribution.

     5. Qualification of Option. The option is intended to qualify as an
incentive stock option within the meaning of the Internal Revenue Code of 1986,
as amended, and shall be so construed, provided, however, that nothing herein
shall be deemed to be or interpreted as a representation, guarantee, or other
undertaking on the part of the Company that such option is or will be determined
to be an incentive stock option within that or any other section of the Internal
Revenue Code.

     6. Notices. Any notice to be given by Optionee as required by this
Agreement shall be sent to the Company at its principal executive offices and
any notice from the Company to Optionee shall be sent to Optionee at his address
as it appears on the Company's books and records. Either party may change the
address to which notices are to be sent by informing the other party in writing
of the new address.

     7. Restriction Against Assignment. Except as otherwise expressly provided
above, Optionee agrees on behalf of himself and of his executors and
administrators, heirs, legatees, distributees, and any other person or persons
claiming any benefits under him by virtue of this Agreement, that this Agreement
and the rights, interests, and benefits under it shall not be assigned,
transferred, pledged, or hypothecated in any way by Optionee or any executor,
administrator, heir, legatee, distributee, or other person claiming under
Optionee by virtue of this Agreement. Such rights, interest, or benefits shall
not be subject to execution, attachment, or similar process. Any attempted


                                       19
<PAGE>


assignment, transfer, pledge or hypothecation, or other disposition of this
Agreement or of such rights, interests, and benefits contrary to the preceding
provisions, or the levy of any attachment or similar process thereupon, shall be
null and void and without effect.

     8. Further Agreements. The undersigned agrees, in connection with the
issuance of the Shares, and thereafter from time to time as requested by the
Company, to execute any stockholders agreement as provided in the Plan. The
undersigned will, if requested, by the Company in connection with a public
offering of the Company's securities, adhere to lock-up arrangements between the
Company and an underwriter involved in such public offering.

     The Company or Participating Subsidiary may take such steps as it may deem
necessary or appropriate for the withholding of any taxes or funds which the
Company or the Participating Subsidiary is required by any law or regulation of
any governmental authority, whether federal, state or local, domestic or
foreign, to withhold in connection with any Stock Options (collectively,
"Withholding Obligations"). Such steps may include, by way of example only and
not limitation, (i) requiring a Participant to remit to the Company in cash an
amount sufficient to satisfy such Withholding Obligations; (ii) allowing the
Participant to tender to the Company shares of Common Stock, the Fair Market
Value of which at the tender date the Committee determines to be sufficient to
satisfy such Withholding Obligations; (iii) withholding shares of Common Stock
otherwise issuable upon the exercise of a Stock Option and which have a Fair
Market Value at the exercise date sufficient to satisfy such Withholding
Obligations; or (iv) any combination of the foregoing.

     The Optionee understands that the Company will require the Optionee to
satisfy any applicable Withholding Obligations in connection with this option or
Common Stock received pursuant thereto. The Optionee agrees to notify the
Company in writing within 10 days after the date the Optionee (i) first obtains
knowledge of any Internal Revenue Service inquiry, audit, assertion,
determination, investigation, or question relating in any manner to the value of
this option or any shares of Common Stock received pursuant hereto; (ii)
includes or agrees (including, without limitation, in any settlement, closing or
other similar agreement) to include in gross income with respect to this option
or any shares of Common Stock received pursuant hereto (A) any amount in excess
of the amount reported on Form 1099 or Form W-2 to the Optionee by the Company,
or (B) if no such Form was received, any amount; (iii) exercises, sells,
disposes of, or otherwise transfers (other than to the Optionee's successors,
heirs, executors or administrators, as the case may be) this option; or (iv)
sells, disposes of, or otherwise transfers Stock acquired pursuant to this
Agreement within the Disqualified Period. "Disqualified Period" means, in the
case of any Option, the period beginning on the date such Option is granted and
ending on the later of the date (a) two years after the date such Option is
granted, or (b) one year after the transfer of any Stock to an Optionee pursuant
to the exercise of such Option. Upon request, the Optionee shall provide to the
Company any information or document relating to any event described in the
preceding sentence which the Company (in its sole discretion) requires in order
to calculate and substantiate any change in the Company's tax liability as a
result of such event.


                                       20
<PAGE>


     IN WITNESS WHEREOF, the Company and the Optionee have executed this
Incentive Stock Option Agreement as of the day and year first above written.

ATTEST:  INFONOW CORPORATION


By:________________________
         Secretary


___________________________
Optionee



                                       21
<PAGE>

                                                                       EXHIBIT 1

                               NOTICE OF EXERCISE

TO:  INFONOW CORPORATION

1.   The undersigned hereby elects to purchase ___________________ shares of
     Common Stock of INFONOW CORPORATION pursuant to the terms of the attached
     Incentive Stock Option Agreement, and tenders herewith payment of the
     purchase price of such shares in full.

2.   Please issue a certificate or certificates representing said shares of
     Common Stock in the name of the undersigned or in such other name as is
     specified below:


                                            (Name)




                                            (Address)




Date:                      _______________________________
                                     Optionee


                                       22

<PAGE>


                                                                       EXHIBIT 2

                       INVESTMENT REPRESENTATION STATEMENT

TO:      INFONOW CORPORATION

With respect to the ____________________ shares of Common Stock ("Shares") of
INFONOW CORPORATION ("Company") which the undersigned ("Purchaser") has
purchased from the Company today, the Purchaser hereby represents and warrants
as follows:

1.   The Purchaser acknowledges that he has received no formal prospectus or
     offering memorandum describing the business and operations of the Company.
     He has, however, by virtue of his relationship with the Company, been given
     access to all information that he believes is material to his decision to
     purchase the Shares. The Purchaser has had the opportunity to ask questions
     of, and receive answers from, representatives of the Company concerning its
     business operations. Any questions raised by the Purchaser have been
     answered to his satisfaction.

2.   The Shares are being acquired by the Purchaser for his account, for
     investment purposes only, and not with a view to the distribution or resale
     thereof.

3.   No representations or promises have been made concerning the marketability
     or value of the Shares. The Purchaser understands that there is currently
     no market for the transfer of the Shares. The Purchaser further
     acknowledges that, because the Shares have not been registered under the
     Securities Act of 1933, and cannot be resold unless they are subsequently
     registered under said Act or an exemption from registration is available,
     the Purchaser must continue to bear the economic risk of his investment in
     the Shares for an indefinite period of time. Specifically, the Purchaser
     agrees that the Shares may not be transferred until the Company has
     received an opinion of counsel reasonably satisfactory to it that the
     proposed transfer will not violate federal or state securities laws unless
     the Company receives this requirement. The Company has not agreed or
     represented to the Purchaser that the Shares will be purchased or redeemed
     from the Purchaser at any time in the future. Further, there have been no
     representations, promises, or agreements that the Shares will be registered
     under the Securities Act of 1933 at any time in the future or otherwise
     qualified for sale under the applicable securities laws. The Purchaser
     further understands that a notation will be made on the appropriate records
     of the Company and on the Stock Certificate representing the Shares so that
     the transfer of Shares will not be effected on those records without
     compliance with the restrictions referred to above.

Date:
                                    Purchaser


                                       23