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Stock and Warrant Purchase Agreement - SkyMall Inc.

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                      STOCK AND WARRANT PURCHASE AGREEMENT


          STOCK  AND  WARRANT  PURCHASE  AGREEMENT  ("Agreement")  dated  as  of
November 2, 1999 between  SkyMall,  Inc., a Nevada  corporation (the "Company"),
and each  person or entity who  executes a  counterpart  signature  page to this
Agreement and is listed as an investor on SCHEDULE I attached to this  Agreement
(each individually an "Investor" and collectively the "Investors").

                              W I T N E S S E T H:

          WHEREAS, the Company desires to sell and issue to the Investors listed
on SCHEDULE I, and the  Investors  listed on SCHEDULE I desire to purchase  from
the Company,  up to an aggregate of 1,142,885 shares of Common Stock,  $.001 par
value per share (the "Common Stock"), of the Company on the terms and conditions
set forth herein; and

          WHEREAS,  each  Investor  listed  on  SCHEDULE  I  will  also  receive
five-year  warrants (the  "Warrants"),  in the  identical  form and substance of
EXHIBIT A attached  hereto,  to  purchase  that number of  additional  shares of
Common Stock equal to the product of 50%  multiplied  by the number of shares of
Common Stock  purchased by such Investor at a per share  exercise price equal to
$8.00 per share of Common Stock; and

          WHEREAS,  the Company has granted the  Investors  registration  rights
with respect to the shares of Common Stock purchased hereunder and the shares of
Common Stock  issuable  upon  exercise of the Warrants  (the  "Warrant  Shares")
pursuant to the terms hereof;

          NOW,  THEREFORE,  in consideration  of the foregoing  premises and the
covenants  contained  herein  and other  good and  valuable  consideration,  the
receipt and  sufficiency  of which are hereby  acknowledged,  the parties hereto
agree as follows:

          CERTAIN  DEFINITIONS.  As used in this Agreement,  the following terms
shall have the following respective meanings:

          "Closing" and "Closing Date" shall have the meanings  ascribed to such
terms in Section 1.3 herein.

          "Commission" shall mean the Securities and Exchange  Commission or any
other federal agency at the time administering the Securities Act.

          "Exchange  Act" shall mean the  Securities  Exchange  Act of 1934,  as
amended.

<PAGE>

          "Holder"  and  "Holders"  shall  include  an  Investor  or  Investors,
respectively,  and any transferee of the shares of Common Stock, the Warrants or
the Warrant  Shares or  Registrable  Securities  which have not been sold to the
public to whom the  registration  rights  conferred by this  Agreement have been
transferred in compliance with this Agreement.

          "Registrable  Securities"  shall mean:  (i) the shares of Common Stock
and the Warrant  Shares  issued or  issuable  to each  Holder or the  respective
permitted  transferee or designee;  (ii) any securities issued (or issuable upon
the  conversion  or exercise of any warrant,  right or other  security  which is
issued)  to  each  Holder  as a  result  of any  stock  split,  stock  dividend,
recapitalization  or similar  event or upon the exchange of the shares of Common
Stock,  Warrants,  or Warrant Shares; or (iii) any other security of the Company
issued as a dividend or other distribution with respect to, in exchange of or in
replacement of Registrable Securities.

          The terms "register", "registered" and "registration" shall refer to a
registration  effected  by  preparing  and filing a  registration  statement  in
compliance  with  the  Securities  Act  and  applicable  rules  and  regulations
thereunder,  including without limitation,  Rule 415 under the Securities Act or
any successor rule providing for offering  securities on a continuous or delayed
basis, and the declaration or ordering of the effectiveness of such registration
statement by the Commission.

          "Registration  Expenses" shall mean all expenses to be incurred by the
Company  in  connection  with  each  Holder's  registration  rights  under  this
Agreement,  including,  without  limitation,  all  registration and filing fees,
printing expenses,  fees and disbursements of counsel for the Company,  blue sky
fees and expenses,  reasonable fees and  disbursements  of Orrick,  Herrington &
Sutcliffe LLP or other counsel for Holders (using a single counsel selected by a
majority in the interest of the Holders) for a "due  diligence"  examination  of
the Company and review of the Registration Statement and related documents,  and
the  expense  of  any  special  audits  incident  to or  required  by  any  such
registration  (but  excluding  the  compensation  of  regular  employees  of the
Company, which shall be paid in any event by the Company).

          "Registration  Statement"  shall have the meaning set forth in Section
4.1(a) herein.

          "Regulation D" shall mean Regulation D as promulgated  pursuant to the
Securities Act, and as subsequently amended.

          "Securities"  shall mean the shares of Common Stock,  the Warrants and
the Warrant Shares, collectively.

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

          "Selling  Expenses" shall mean all underwriting  discounts and selling
commissions  applicable to the sale of Registrable  Securities,  if any, and all
fees and disbursements of counsel for Holders not included within  "Registration
Expenses".


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<PAGE>

                                    ARTICLE I

                   PURCHASE AND SALE OF THE STOCK AND WARRANTS

          Section  1.1  PURCHASE  AND  SALE.   Upon  the  following   terms  and
conditions, the Company shall issue and sell to each Investor listed on SCHEDULE
I severally,  and each Investor  listed on SCHEDULE I severally  shall  purchase
from the  Company,  the  number  of shares  of  Common  Stock and the  number of
Warrants indicated next to such Investor's name on SCHEDULE I attached hereto.

          Section  1.2  PURCHASE  PRICE.  The per share  purchase  price for the
shares of Common  Stock  shall be equal to $7.00 per share of Common  Stock (the
"Common Stock  Purchase  Price").  Each Investor  listed on SCHEDULE I will also
receive  Warrants to purchase such number of shares of Common Stock equal to the
product of 50%  multiplied by the number of shares of Common Stock  purchased at
an exercise price equal to $8.00 per share of Common Stock.

          Section 1.3 THE  CLOSING.  (a) The closing of the purchase and sale of
the Common Stock and Warrants (the  "Closing"),  shall take place at the offices
of  Squire,  Sanders  & Dempsey  L.L.P,  at 10:00  a.m.,  local  time  following
acceptance  by the  Company  of  subscriptions  representing  not  less  than an
aggregate of $8,000,200 of shares of Common Stock,  which  acceptance  shall not
occur until the  conditions  set forth in Article V hereof shall be fulfilled or
waived in accordance herewith.  The date on which the Closing occurs is referred
to herein as the "Closing Date."

          (b) On the Closing  Date,  the Company  shall deliver to each Investor
certificates   (with  the  number  of  and  denomination  of  such  certificates
reasonably requested by such Investor)  representing the Warrants and the Common
Stock  purchased  hereunder  by such  Investor  registered  in the  name of such
Investor or its nominee or deposit such  Warrants and Common Stock into accounts
designated by such Investor,  and such Investor shall deliver to the Company the
purchase  price for the  Warrants and Common  Stock  purchased by such  Investor
hereunder  by  wire  transfer  in  immediately  available  funds  to an  account
designated in writing by the Company. In addition,  each party shall deliver all
documents,  instruments  and  writings  required to be  delivered  by such party
pursuant to this Agreement at or prior to the Closing Date.

          (c) Subject to the terms and  conditions  of this  Agreement,  Quintel
Communications,   Inc.  ("Quintel")  has  agreed  to  acquire  an  aggregate  of
$3,000,000  of shares of Common Stock as of the Closing Date at the Common Stock
Purchase Price.


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<PAGE>

                                   ARTICLE II

                         REPRESENTATIONS AND WARRANTIES

          Section 2.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
hereby  makes  the  following  representations  and  warranties  to  each of the
Investors from and as of the date hereof through the Closing Date:

          (a)  ORGANIZATION  AND  QUALIFICATION;  MATERIAL  ADVERSE EFFECT.  The
Company owns 100% of the outstanding  capital stock of each of Durham & Company,
a Utah corporation,  Disk Publishing Inc., a Utah corporation,  and skymall.com,
Inc. a Nevada corporation (collectively,  the "Subsidiaries").  The Company does
not have any other direct or indirect subsidiaries.  Each of the Company and its
Subsidiaries is a corporation duly incorporated and validly existing and in good
standing under the laws of its respective  jurisdiction of incorporation and the
Company and the Subsidiaries each have the requisite  corporate power to own its
properties  and to carry on its  business  as now being  conducted.  Each of the
Company and each  Subsidiary is duly  qualified as a foreign  corporation  to do
business and is in good  standing in every  jurisdiction  in which the nature of
the  business  conducted  or  property  owned  by it  makes  such  qualification
necessary  other than those in which the failure so to qualify  would not have a
Material Adverse Effect.  "Material  Adverse Effect" means any adverse effect on
the business, operations,  properties,  prospects, or financial condition of the
entity  with  respect to which such term is used and which is  material  to such
entity and other entities  controlling or controlled by such entity,  taken as a
whole, and any material adverse effect on the  transactions  contemplated  under
the Agreement or any other agreement or document contemplated hereby.

          (b)  AUTHORIZATION;  ENFORCEMENT.  (i) The Company  has the  requisite
corporate  power and  authority to enter into and perform this  Agreement and to
issue the  Securities in  accordance  with the terms hereof and the terms of the
Warrants,  (ii) the execution and delivery of this  Agreement by the Company and
the consummation by it of the transactions  contemplated  hereby,  including the
issuance of the Common  Stock and the Warrants in  accordance  with the terms of
this  Agreement  and the  Warrant  Shares  in  accordance  with the terms of the
Warrants have been duly  authorized by all necessary  corporate  action,  and no
further  consent or  authorization  of the Company or its Board of  Directors or
stockholders  is  required,  (iii) this  Agreement  has been duly  executed  and
delivered  by the Company,  and (iv) this  Agreement  constitutes  the valid and
binding obligations of the Company enforceable against the Company in accordance
with its terms.

          (c)  CAPITALIZATION.  The  authorized  capital  stock  of the  Company
consists of 50,000,000 shares of Common Stock and 10,000,000 shares of preferred
stock;  without  giving effect to this offering,  there are 9,279,958  shares of
Common  Stock  and  no  shares  of  preferred  stock  issued  and   outstanding,
respectively.  All of the  outstanding  shares  of the  Common  Stock  have been
validly issued and are fully paid and non-assessable.  No shares of Common Stock
or preferred stock are entitled to preemptive  rights;  without giving effect to
this offering,  370,555  shares of Common Stock  (including any shares of Common
Stock issuable upon the exercise of any outstanding options,  warrants or rights


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<PAGE>

or upon the exchange or conversion of any exchangeable or convertible securities
of the Company) are entitled to registration  rights (which  registration rights
do not adversely impact the registration  rights granted to the Investors);  and
without  giving  effect to this  offering,  there are  outstanding  options  for
1,672,149 shares of Common Stock and outstanding  warrants for 104,700 shares of
Common  Stock.  Except for  warrants  issuable to Ryan,  Beck & Co. Inc.  ("Ryan
Beck")  and  warrants  issuable  to  Shoreline  Pacific   Institutional  Finance
("Shoreline")  in  connection  with this offering and except as disclosed in the
prior  sentence and as  contemplated  by this  Agreement or disclosed in the SEC
Documents (as defined below), there are no other scrip, rights to subscribe for,
calls or commitments of any character  whatsoever  relating to, or securities or
rights  exchangeable  or  convertible  into,  any shares of capital stock of the
Company, or contracts, commitments,  understandings or arrangements by which the
Company is or may become bound to issue  additional  shares of capital  stock of
the Company or options, warrants, scrip, rights to subscribe for, or commitments
to purchase or acquire,  any shares,  or securities or rights  convertible  into
shares,  of capital stock of the Company.  The Company  represents  and warrants
that it has no current plan or  intention to sell or otherwise  issue any shares
of Common Stock or  securities  convertible  into or  exercisable  for shares of
Common  Stock other than (i) up to  1,142,885  shares of Common  Stock and up to
571,444 Warrants to purchase shares of Common Stock being sold by the Company to
the  Investors and (ii) up to an aggregate of 140,002  warrants (the  "Placement
Warrants")  to purchase  Common Stock being issued to Ryan Beck and Shoreline in
connection  with this  offering  (collectively  such  number of shares of Common
Stock, Warrants and Placement Warrants are referred to as the "Maximum Shares");

          (d) ISSUANCE OF WARRANT SHARES. The Warrant Shares are duly authorized
and will be, as of the Closing Date, reserved for issuance and, upon exercise in
accordance  with terms of the  Warrants,  such  Warrant  Shares  will be validly
issued,  fully  paid and  non-assessable,  free and clear of any and all  liens,
claims  and  encumbrances,  and the  holders  of such  Warrant  Shares  shall be
entitled to all rights and preferences accorded to a holder of Common Stock. The
outstanding  shares of Common Stock are currently  listed on the Nasdaq National
Market ("Nasdaq").

          (e) NO CONFLICTS.  The  execution,  delivery and  performance  of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby do not and will not (i) result in a violation of the charter
or By-Laws of the Company or any Subsidiary or (ii) conflict with, or constitute
a default (or an event which with notice or lapse of time or both would become a
default)  under,  or  give to  others  any  rights  of  termination,  amendment,
acceleration  or  cancellation  of, any  agreement,  indenture,  patent,  patent
license or  instrument  to which the Company or any  Subsidiary  is a party,  or
result in a  violation  of any  Federal,  state,  local or  foreign  law,  rule,
regulation,  order,  judgment or decree (including  Federal and state securities
laws and  regulations)  applicable to the Company or any  Subsidiary or by which
any  property  or asset of the  Company or any  Subsidiary  is bound or affected
(except for such conflicts, defaults, terminations,  amendments,  accelerations,
cancellations  and  violations as would not,  individually  or in the aggregate,
have  a  Material  Adverse   Effect);   provided  that,  for  purposes  of  such


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<PAGE>

representation as to Federal,  state,  local or foreign law, rule or regulation,
no  representation  is made  herein with  respect to any of the same  applicable
solely to the  Investors and not to the Company or any  Subsidiary.  Neither the
business of the Company nor of any Subsidiary is being conducted in violation of
any  law,  ordinance  or  regulation  of any  governmental  entity,  except  for
violations  which either  singly or in the  aggregate do not and will not have a
Material Adverse Effect. The Company is not required under Federal, state, local
or foreign law, rule or regulation to obtain any consent, authorization or order
of, or to make any filing or registration with, any court or governmental agency
in order for it to execute, deliver or perform any of its obligations under this
Agreement  or the Warrants or issue and sell the Common Stock or the Warrants in
accordance  with the terms hereof or issue the Warrant  Shares upon  exercise of
the  Warrants,  except for the  registration  provisions  provided  for  herein,
provided that,  for purposes of the  representation  made in this sentence,  the
Company  is  assuming   and   relying   upon  the   accuracy  of  the   relevant
representations and agreements of the Investors herein.

          (f) SEC  DOCUMENTS;  FINANCIAL  STATEMENTS.  The  Common  Stock of the
Company is  registered  pursuant to Section  12(g) of the  Exchange  Act and the
Company has timely filed all reports,  schedules,  forms,  statements  and other
documents  required  to be  filed  by it with  the  Commission  pursuant  to the
reporting requirements of the Exchange Act, including material filed pursuant to
Section 13(a) or 15(d), in addition to one or more  registration  statements and
amendments  thereto  heretofore filed by the Company with the Commission (all of
the foregoing including filings incorporated by reference therein being referred
to herein as the "SEC  Documents").  The Company has delivered or made available
to the  Investors  true and  complete  copies of all SEC  Documents  (including,
without   limitation,   proxy   information  and   solicitation   materials  and
registration  statements) filed with the Commission since September 30, 1998. As
of their respective dates, the SEC Documents (as amended by any amendments filed
prior to the date of this  Agreement  or any Closing  Date and  provided to each
Investor) complied or will comply in all material respects with the requirements
of the Exchange Act and the rules and regulations of the Commission  promulgated
thereunder  and  other  Federal,  state and local  laws,  rules and  regulations
applicable to such SEC  Documents,  and none of the SEC  Documents  contained or
will  contain  any untrue  statement  of a  material  fact or omitted to state a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading.  The financial  statements  of the Company  included in the SEC
Documents comply as to form in all material respects with applicable  accounting
requirements  and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto. Such financial statements
have been prepared in accordance with generally accepted  accounting  principles
applied on a consistent  basis during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto or (ii) in
the case of  unaudited  interim  statements,  to the extent they may not include
footnotes or may be condensed or summary  statements)  and fairly present in all
material respects the financial  position of the Company as of the dates thereof
and the  results  of  operations  and cash  flows  for the  periods  then  ended
(subject,  in the  case  of  unaudited  statements,  to  normal  year-end  audit
adjustments).


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<PAGE>

          (g)  PRINCIPAL  EXCHANGE/MARKET.  The  principal  market  on which the
Common Stock is currently traded is Nasdaq.

          (h) NO MATERIAL ADVERSE CHANGE.  Since June 30, 1999, the date through
which the most  recent  quarterly  report of the  Company  on Form 10-Q has been
prepared and filed with the  Commission,  a copy of which is included in the SEC
Documents, no event which had or is likely to have a Material Adverse Effect has
occurred or exists  with  respect to the  Company or any  Subsidiary,  except as
otherwise  disclosed  or  reflected  in press  releases  or other SEC  Documents
prepared through or as of a date subsequent to June 30, 1999 and provided to the
Investors.

          (i) NO UNDISCLOSED LIABILITIES. Neither the Company nor any Subsidiary
has any  liabilities  or obligations  not disclosed in the SEC Documents,  other
than  those  liabilities  incurred  in the  ordinary  course  of its  respective
business since June 30, 1999 or liabilities or  obligations,  individually or in
the aggregate,  which do not or would not have a Material  Adverse Effect on the
Company or the Subsidiaries, taken as a whole.

          (j) NO UNDISCLOSED  EVENTS OR CIRCUMSTANCES.  No event or circumstance
has  occurred or exists with  respect to the Company,  any  Subsidiary  or their
respective business, properties,  prospects,  operations or financial condition,
which,  under applicable law, rule or regulation,  requires public disclosure or
announcement  by the  Company but which has not been so  publicly  announced  or
disclosed.

          (k) NO GENERAL SOLICITATION. None of the Company, the Subsidiaries or,
to the Company's  knowledge,  any of their  respective  affiliates or any person
acting on its or their behalf has engaged in any form of general solicitation or
general  advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Securities.

          (l) NO INTEGRATED OFFERING. None of the Company, the Subsidiaries, or,
to the Company's knowledge,  any of their respective  affiliates,  or any person
acting on its or their behalf has,  directly or  indirectly,  made any offers or
sales of any  security  or  solicited  any  offers  to buy any  security,  under
circumstances that would require registration of any of the Securities.

          (m)  INTELLECTUAL  PROPERTY.  Each of the Company and the Subsidiaries
owns or has licenses to use certain  copyrights  and  trademarks  ("intellectual
property") associated with its respective business.  Each of the Company and the
Subsidiaries  has all  intellectual  property rights which are needed to conduct
its  respective  business  as it is now being  conducted  or as  proposed  to be
conducted  as  disclosed  in the SEC  Documents.  The  Company  has no reason to
believe that the intellectual property rights owned by the Company or any of its
Subsidiaries are invalid or  unenforceable or that the use of such  intellectual
property by the Company or the Subsidiaries infringes upon or conflicts with any
right of any third  party,  and  neither  the  Company  nor any  Subsidiary  has
received  notice  of any such  infringement  or  conflict.  The  Company  has no
knowledge of any infringement of the Company's or any Subsidiary's  intellectual
property by any third party.


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<PAGE>

          (n) NO LITIGATION.  Except as set forth in the SEC Documents delivered
to the  Investors,  no  litigation or claim  (including  those for unpaid taxes)
against the Company or any Subsidiary is pending or, to the Company's knowledge,
threatened, and no other event has occurred, which if determined adversely would
have a Material  Adverse  Effect on the  Company or any  Subsidiary,  taken as a
whole,  or would  materially  adversely  effect  the  transactions  contemplated
hereby.  The legal  proceedings  described in the SEC Documents will not have an
effect on the  transactions  contemplated  hereby,  and will not have a Material
Adverse Effect on the Company or the Subsidiaries, taken as a whole.

          (o) BROKERS.  The Company has taken no action which would give rise to
any claim by any person,  other than Ryan,  Beck and  Shoreline,  for  brokerage
commissions,  finder's fees or similar  payments by the Company relating to this
Agreement  or the  transactions  contemplated  hereby.  The Company has taken no
action  which  would  give  rise  to any  claim  by  any  person  for  brokerage
commissions,  finder's fees or similar payments by any Investor relating to this
Agreement or the transactions contemplated hereby.

          (p)  FORMS  S-3.  The  Company  is  eligible  to  file a  Registration
Statement on Form S-3 under the Act and the rules  promulgated  thereunder,  and
Form S-3 is permitted to be used for the transactions  contemplated hereby under
the Act and the rules promulgated thereunder.

          (q)  YEAR  2000  COMPLIANCE.  Each  system  which  includes  software,
hardware,  databases or embedded  control systems  (microcompressor  controlled,
robotic or other device) (collectively,  a "System"),  that constitutes any part
of, or is used in connection with the use, operation or enjoyment of, any asset,
property or leased premises of the Company or any Subsidiary (i) is designed (or
has been  modified) to be used prior to and after  January 1, 2000,  (ii) to the
Company's  knowledge,  will operate  without  error  arising from the  creation,
recognition,  acceptance,  calculation,  display, storage, retrieval, accessing,
comparison,  sorting,  manipulation,   processing  or  other  use  of  dates  or
date-based,  date-dependent or date-related  data,  including but not limited to
century recognition,  day-of-the-week  recognition,  leap years, date values and
interfaces of date functionalities,  and (iii) to the Company's knowledge,  will
not be  adversely  affected  by the advent of the year  2000,  the advent of the
twenty-first  century or the transition  from the twentieth  century through the
year 2000 and into the  twenty-first  century  (collectively,  items (i) through
(iii) are  referred  to  herein as "Year  2000  Compliant").  No System  that is
material to the business,  finances or operations of the business of the Company
or any  Subsidiary  receives  data from or  communicates  with any  component or
system external to itself  (whether or not such external  component or system is
the Company's, or any Subsidiary's or any third party's) that is not itself Year
2000  Compliant.  All  licenses  for  the  use of any  system-related  software,
hardware,  databases  or  embedded  control  system  permit  the  Company or the
Subsidiaries  to make  all  modifications,  bypasses,  debugging,  work-arounds,
repairs, replacements, conversions or corrections necessary to permit the System
to operate compatibly, in conformance with their respective specifications,  and
to be Year 2000 Compliant.  None of the Company nor any of the  Subsidiaries has
incurred,  and none of the Company nor any of the Subsidiaries has any reason to


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<PAGE>

believe that it may in the future incur, any expenses arising from or related to
the failure of any of its Systems as a result of not being Year 2000 Compliant.

          Section 2.2 REPRESENTATIONS  AND WARRANTIES OF THE INVESTORS.  Each of
the   Investors,   severally  and  not  jointly,   hereby  makes  the  following
representations  and  warranties to the Company as of the date hereof and on the
Closing Date:

          (a)  AUTHORIZATION;  ENFORCEMENT.  (i) Such Investor has the requisite
power and authority,  or the legal  capacity,  as the case may be, to enter into
and perform this  Agreement  and to purchase the  Securities  being sold to such
Investor  hereunder,  (ii) the execution and delivery of this  Agreement by such
Investor and the consummation by it of the transactions contemplated hereby have
been duly  authorized  by all  necessary  corporate or  partnership  action,  as
required,  and (iii) this  Agreement  the valid and binding  obligation  of such
Investor  enforceable  against such Investor in accordance its terms,  except as
such  enforceability  may  be  limited  by  applicable  bankruptcy,  insolvency,
reorganization,   moratorium,  liquidation  or  similar  laws  relating  to,  or
affecting  generally the  enforcement  of  creditors'  rights and remedies or by
other equitable principles of general application.

          (b) NO CONFLICTS.  The  execution,  delivery and  performance  of this
Agreement and the consummation by such Investor of the transactions contemplated
hereby  do not and  will  not  (i)  result  in a  violation  of such  Investor's
organizational  documents,  or (ii) conflict with any agreement,  indenture,  or
instrument to which such Investor is a party,  or (iii) result in a violation of
any law,  rule, or  regulation or any order,  judgment or decree of any court or
governmental  agency applicable to such Investor.  Such Investor is not required
to obtain any consent or authorization  of any governmental  agency in order for
it to perform its obligations under this Agreement.

          (c)  INVESTMENT  REPRESENTATION.   Such  Investor  is  purchasing  the
securities  purchased  hereunder  for its  own  account  and not  with a view to
distribution  in violation of any securities  laws. Such Investor has no present
intention to sell the  securities  purchased  hereunder and such Investor has no
present  arrangement  (whether  or not legally  binding) to sell the  Securities
purchased hereunder to or through any person or entity; provided,  however, that
by the  representations  herein, such Investor does not agree to hold any of the
Securities  for any minimum or other  specific  term and  reserves  the right to
dispose of any of the  Securities  at any time in  accordance  with  Federal and
state securities laws applicable to such disposition.

          (d) ACCREDITED INVESTOR.  Such Investor is an "accredited investor" as
defined in Rule 501  promulgated  under the Act. The Investor has such knowledge
and experience in financial and business  matters in general and  investments in
particular, so that such Investor is able to evaluate the merits and risks of an
investment  in the  securities  purchased  hereunder  and  to  protect  its  own
interests in connection with such investment.  In addition (but without limiting
the effect of the Company's  representations  and warranties  contained herein),
such  Investor  has  received  such  information  as it  considers  necessary or
appropriate for deciding whether to purchase the Securities purchased hereunder.


                                       9
<PAGE>

          (e) RULE  144.  Such  Investor  understands  that  there is no  public
trading market for the Warrants,  that none is expected to develop, and that the
Warrants must be held  indefinitely  unless  exercised or unless such securities
are  registered  under the Act or an exemption from  registration  is available.
Such Investor  understands  that the Common Stock and the Warrant Shares must be
held  indefinitely  unless such  securities are  registered  under the Act or an
exemption from  registration is available.  Such Investor has been advised or is
aware of the provisions of Rule 144 promulgated under the Act.

          (f) BROKERS.  Such  Investor has taken no action which would give rise
to any claim by any person for brokerage  commissions,  finder's fees or similar
payments  by  the  Company  relating  to  this  Agreement  or  the  transactions
contemplated hereby.

          (g) RELIANCE BY THE COMPANY. Such Investor understands that the Common
Stock and  Warrants  are being  offered and sold in reliance on a  transactional
exemption from the  registration  requirements  of Federal and state  securities
laws and  that the  Company  is  relying  upon the  truth  and  accuracy  of the
representations,  warranties, agreements,  acknowledgments and understandings of
such Investor set forth herein in order to determine the  applicability  of such
exemptions and the suitability of such Investor to acquire the Securities.

                                   ARTICLE III

                                    COVENANTS

          Section 3.1 REGISTRATION AND LISTING. Until the later of (i) such time
as no Warrants  are  outstanding  or (ii) the  expiration  of the  Effectiveness
Period (as  hereinafter  defined in Section  4.3),  the  Company  will cause the
Common Stock to continue to be  registered  under  Section 12(g) of the Exchange
Act,  will comply in all respects,  with its  reporting  and filing  obligations
under  the  Exchange  Act,  and will not take any  action  or file any  document
(whether  or not  permitted  by the  Exchange  Act or the rules  thereunder)  to
terminate or suspend such reporting and filing  obligations.  Until the later of
(i) such time as no  Warrants  are  outstanding  or (ii) the  expiration  of the
Effectiveness  Period,  the Company  shall use its best  efforts to continue the
listing or trading of the Common Stock on Nasdaq or a principal  exchange (which
consists  exclusively  of the NYSE or AMEX) and comply in all respects  with the
Company's  reporting,  filing and other obligations under the bylaws or rules of
Nasdaq or such principal exchange, as the case may be.

          Section  3.2  CERTIFICATES  ON  EXERCISE.  Upon  the  exercise  of any
Warrants in accordance  with the terms of the Warrants,  the Company shall issue
and deliver to such  Investor (or the then holder)  within two (2) business days
of the exercise date, (x) a Certificate or  Certificates  for the Warrant Shares
issuable upon such exercise and (y) a new  certificate or  certificates  for the
Warrants of such  Investor  (or holder)  which have not yet been  exercised  but
which are  evidenced in part by the  certificate(s)  submitted to the Company in
connection  with such exercise (with the number of and  denomination of such new
certificate(s) designated by such Investor or holder).


                                       10
<PAGE>

          Section 3.3 REPLACEMENT CERTIFICATES.  The certificate(s) representing
the shares of Common Stock,  Warrant Shares or the Warrants held by any Investor
(or then holder) may be exchanged by such  Investor (or such holder) at any time
and from time to time for certificates with different denominations representing
an equal number of shares of Common Stock,  Warrant  Shares or Warrants,  as the
case may be, as  reasonably  requested  by such  Investor  (or such holder) upon
surrendering  the same.  No service  charge will be made for such  registration,
transfer or exchange.

          Section  3.4  SECURITIES  COMPLIANCE.  The  Company  shall  notify the
Commission  and  Nasdaq,   in  accordance  with  their   requirements,   of  the
transactions  contemplated by this Agreement and the Warrants and shall take all
other  necessary  action and  proceedings  as may be required  and  permitted by
applicable  law, rule and  regulation,  for the legal and valid  issuance of the
Securities.  The Company covenants and agrees that it will not sell or otherwise
issue any shares of Common Stock or securities  convertible  into or exercisable
for shares of Common Stock which would  violate  NASD Rule 4460 (i)(1),  and, in
particular, but not in limitation to the foregoing, the Company will not, during
the six (6) month period  following  the Closing of the sale of shares of Common
Stock and  Warrants  to the  Investors,  sell or  otherwise  issue any shares of
Common Stock or securities  convertible into or exercisable for shares of Common
Stock in excess of the Maximum  Shares  without either (i) approval of such sale
or issuance  by the  stockholders  of the  Company,  or (ii) a written  advisory
opinion of the Nasdaq Stock  Market that such  approval is not  necessary  under
NASD Rule 4460 (i)(1) or any other  applicable  Nasdaq Stock Market or NASD rule
or a written waiver of any such requirement by the Nasdaq Stock Market, or (iii)
a written  opinion of counsel to the Company that such  stockholder  approval is
not required.

          Section  3.5  NOTICES.  The  Company  agrees to provide all holders of
Warrants  with  copies  of  all  notices  and  information,  including,  without
limitation,  notices and proxy statements in connection with any meetings,  that
are provided to the holders of shares of Common  Stock,  contemporaneously  with
the delivery of such notices or information to such Common Stock holders.

          Section 3.6  RESERVATION OF STOCK ISSUABLE UPON EXERCISE.  The Company
shall at all times reserve and keep available out of its authorized but unissued
Common Stock,  solely for the purpose of affecting the exercise of the Warrants,
such number of shares of Common  Stock as shall from time to time be  sufficient
to effect the exercise of all outstanding Warrants.



                                   ARTICLE IV

                                  REGISTRATION

          Section 4.1 REGISTRATION REQUIREMENTS.  The Company shall use its best
efforts to effect the  registration  of the Registrable  Securities  (including,


                                       11
<PAGE>

without  limitation,  the  execution of an  undertaking  to file  post-effective
amendments,  appropriate  qualification under applicable blue sky or other state
securities laws and appropriate  compliance with applicable  regulations  issued
under the  Securities  Act) as would  permit or  facilitate  the public  sale or
distribution of all the Registrable  Securities in the manner  (including manner
of sale)  and in all  states  reasonably  requested  by the  Holders.  Such best
efforts by the Company shall include the following:

          (a) The filing by the  Company no later than  fifteen  (15) days after
the  Closing  of  a  registration  statement  or  registration   statements  (as
necessary) with the Commission  pursuant to Rule 415 under the Securities Act on
Form  S-3  (or  such  other  appropriate  registration  form if the  Company  is
ineligible  to use Form S-3) covering the resale of the  Registrable  Securities
acquired   (or   underlying   the   Securities   so  acquired)  at  the  Closing
("Registration Statement(s)").

          (b)  Thereafter  the Company  shall use its best efforts to cause such
Registration  Statement(s)  to be declared  effective by the  Commission  within
ninety (90) days following the Closing Date. In the event that such Registration
Statement is not declared  effective  within 90 days following the Closing Date,
then the Company shall until the Registration  Statement is declared  effective,
(in  addition to any other  remedies  available to a Holder at law or in equity)
pay in cash to each  Holder an  amount  equal to 2% of the  respective  purchase
price paid by such Holder (the  "Damages")  for each 30 day period  beginning on
the 91st day following the Closing Date at which the Registrable Securities were
acquired (the "Default  Period")  that the  Registration  Statement has not been
declared effective;  provided,  however, that the Default Period shall terminate
and  Damages  shall  cease to  accrue on the date upon  which  such  Registrable
Securities may be sold under Rule 144(k) in the reasonable opinion of counsel to
the  Company  (provided  that the  Company's  transfer  agent  has  accepted  an
instruction from the Company to such effect).  If any applicable  Default Period
is less than 30 days such cash payment shall be on a pro rata basis.  The amount
of such cash payment  shall be  calculated  by the Company on the earlier of (i)
the effective date of such  Registration  Statement or (ii) the last day of each
Default  Period,  and a  certified  or bank check in lawful  money of the United
States  of  America  shall  be  sent  within  three  (3)  business  days of such
calculation to the address of each Holder as listed in the stock transfer ledger
maintained by the Company or its transfer agent.  Notwithstanding the foregoing,
if the  Default  Period  commences  from the  failure of the Company to cause to
become effective the  Registration  Statement solely by reason of the failure of
any Holder to provide such information as (i) the Company may reasonably request
from such  Holder  to be  included  in the  Registration  Statement  or (ii) the
Commission or Nasdaq may request in connection with such Registration  Statement
(which request was provided to the Holder in writing) (the "Late  Holder"),  the
Company  shall  not be  required  to pay  such  Damages  to any of the  Holders;
provided,  that the Company shall file the Registration  Statement excluding the
Late Holder or take such other  action as  necessary  to cause the  Registration
Statement  to be  declared  effective,  within two (2)  business  days after the
initial day of the original  Default Period,  provided that a new Default Period
will  commence  three (3)  business  days after the initial day of the  original


                                       12
<PAGE>

Default  Period if the  Registration  Statement  is not  effective.  The Company
agrees to promptly file an amendment to such  Registration  Statement  including
the Late Holder once the requested information has been provided.

          (c) Prepare and file with the Commission  such  amendments  (including
post-effective  amendments) and supplements to such  Registration  Statement and
the prospectus  used in connection  with such  Registration  Statement as may be
necessary to keep such Registration  Statement effective at all times during the
Effectiveness  Period (as defined  below) and comply with the  provisions of the
Act  with  respect  to  the  disposition  of  all  securities  covered  by  such
Registration Statement and notify the Holders of the filing and effectiveness of
such  Registration  Statement and any amendments or supplements.  In the case of
amendments and supplements to a Registration  Statement which are required to be
filed  pursuant to this  Agreement  by reason of the Company  filing a report on
Form 10-K, Form 10-Q or Form 8-K or any analogous report under the Exchange Act,
the  Company  shall  have   incorporated  such  report  by  reference  into  the
Registration  Statement,  if  applicable,  or  shall  file  such  amendments  or
supplements with the Commission on the same day on which the Exchange Act report
is filed which  created the  requirement  for the Company to amend or supplement
the Registration Statement.

          (d)  Furnish  to each  Holder  such  numbers  of  copies  of a current
prospectus   conforming  with  the  requirements  of  the  Act,  copies  of  the
Registration  Statement,  any amendment or supplement  thereto and any documents
incorporated  by reference  therein and such other  documents as such Holder may
reasonably  require  in order  to  facilitate  the  disposition  of  Registrable
Securities owned by such Holder.

          (e) Use its best  efforts  to  register  and  qualify  the  securities
covered by such Registration Statement under such other securities or "Blue Sky"
laws of such  jurisdictions  as shall be  reasonably  requested  by each Holder;
provided that the Company shall not be required in connection  therewith or as a
condition  thereto to (i) qualify to do business where it would not otherwise be
required  to qualify,  (ii) file a general  consent to service of process in any
such states or jurisdictions,  (iii) make any change in the Company's charter or
By-Laws, or (iv) subject itself to general taxation in any such jurisdiction.

          (f) Notify each Holder  immediately of the happening of any event as a
result of which the prospectus  (including  any  supplement  thereto or thereof)
included in such Registration  Statement,  as then in effect, includes an untrue
statement  of  material  fact or omits to state a material  fact  required to be
stated  therein or necessary to make the  statements  therein not  misleading in
light of the circumstances  then existing,  and use its best efforts to promptly
update and/or correct such prospectus.

          (g) Notify each Holder  immediately  of the issuance by the Commission
or any state  securities  commission or agency of any stop order  suspending the
effectiveness of the Registration Statement or the initiation of any proceedings
for that purpose.  The Company shall use its reasonable  best efforts to prevent
the  issuance of any stop order and, if any stop order is issued,  to obtain the
lifting thereof at the earliest possible time.


                                       13
<PAGE>

          (h) Permit a single firm of counsel, designated as Holders' counsel by
the  Holders  of a  majority  of  the  Registrable  Securities  included  in the
Registration  Statement, to review the Registration Statement and all amendments
and supplements thereto within a reasonable period of time prior to each filing,
and shall  not file any  document  in a form to which  such  counsel  reasonably
objects,  provided  such  counsel  shall  provide  such  counsel's  comments  or
objection within five (5) business days after receipt of any document.

          (i) As of the date the Registration Statement is declared effective by
the Commission, the Company shall have caused the Registrable Securities covered
by such  Registration  Statement  to be listed with all  securities  exchange(s)
and/or markets on which the Common Stock is then listed,  and prepared and filed
any required filings with the National  Association of Securities Dealers,  Inc.
or any exchange or market where the Common Stock is traded.

          (j) The Company shall make  available  for  inspection by the Holders,
representative(s) of all the Holders together, any underwriter  participating in
any  disposition  pursuant  to a  Registration  Statement,  and any  attorney or
accountant  retained  by any  Holder or  underwriter,  all  financial  and other
records customary for purposes of the Holders' due diligence  examination of the
Company and all SEC Documents  filed  subsequent to the Closing Date,  pertinent
corporate  documents  and  properties  of the Company,  and cause the  Company's
officers, directors and employees to supply all information reasonably requested
by any such  representative,  underwriter,  attorney or accountant in connection
with such Registration Statement, provided that such parties agree to enter into
a Confidentiality  Agreement in the form and substance annexed hereto as EXHIBIT
B.

          (k) The term "best efforts" as used in this  Agreement  shall include,
without limitation, that the Company shall submit to the Commission, within five
(5)  business  days  after the  Company  learns  that no review of a  particular
Registration  Statement  will be made by the staff of the Commission or that the
staff has no further comments on the Registration Statement, as the case may be,
a request for acceleration of effectiveness of such Registration  Statement to a
time and date not later than 72 hours after the submission of such request.

          Section  4.2  EXPENSES  OF  REGISTRATION.  All  Registration  Expenses
incurred in connection with any  registration,  qualification or compliance with
registration  pursuant to this Section 4 shall be borne by the Company,  and all
Selling Expenses of a Holder shall be borne by such Holder.

          Section  4.3  REGISTRATION  PERIOD.  In the  case of the  registration
effected by the Company  pursuant  to this  Section 4, the Company  will use its
best efforts to keep such registration  effective (the  "Effectiveness  Period")
until the  earlier to occur of (a) two years from the  Closing  Date,  provided,
however,  that the period of time which such Registration  Statement is required
to be effective  shall be increased by the number of days that the  Registration
Statement's effectiveness was suspended, if any, during the two year period from
the Closing Date, (b) the date on which all the Holders have completed the sales


                                       14
<PAGE>

or  distributions  of the Registrable  Securities  included in the  Registration
Statement or, (c) the date on which such  Registrable  Securities of all Holders
may be  sold  without  restriction  under  Rule  144(k)  promulgated  under  the
Securities Act (or any successor  thereto) in the reasonable  opinion of counsel
to the Company  (provided  that the  Company's  transfer  agent has  accepted an
instruction  from  the  Company  to such  effect  and  will  issue  certificates
representing such Registrable Securities without any legend endorsed thereon).

          Section 4.4 OBLIGATION OF HOLDER. It shall be a condition precedent to
the  obligations  of the Company to complete the  registration  pursuant to this
Agreement with respect to Registrable Securities of the Holder that:

          (a)  the  Holder  by  such  Holder's  acceptance  of  the  Registrable
Securities  agrees to cooperate with the Company as reasonably  requested by the
Company  in  connection  with the  preparation  and  filing of any  Registration
Statement  hereunder,  unless the Holder has  notified the Company in writing of
the Holder's election to exclude all of the Holder's Registrable Securities from
such Registration Statement.

          (b) the Holder shall furnish to the Company such information regarding
the  Holder,  the  Registrable  Securities  held by the Holder and the  intended
method of disposition of the Registrable  Securities held by the Holder as shall
be reasonably required to effect the registration of such Registrable Securities
and the Holder shall execute such documents as are customary in connection  with
such registration as the Company may reasonably request.

          Section 4.5 INDEMNIFICATION.

          (a) COMPANY INDEMNITY. The Company will indemnify each Holder, each of
its officers,  directors and partners,  and each person controlling each Holder,
within  the  meaning  of  Section  15 of the  Securities  Act and the  rules and
regulations  thereunder  with respect to which  registration,  qualification  or
compliance has been effected  pursuant to this Agreement,  and each underwriter,
if any,  and each person who  controls,  within the meaning of Section 15 of the
Securities  Act and the  rules  and  regulations  thereunder,  any  underwriter,
against  all claims,  losses,  damages  and  liabilities  (or actions in respect
thereof)  arising out of or based on any untrue  statement  (or  alleged  untrue
statement) of a material fact contained in any prospectus,  offering circular or
other document (including any related  registration  statement,  notification or
the like) incident to any such  registration,  qualification  or compliance,  or
based on any omission (or alleged  omission)  to state  therein a material  fact
required to be stated  therein or necessary to make the  statements  therein not
misleading,  or any violation by the Company of the  Securities Act or any state
securities law or in either case, any rule or regulation  thereunder  applicable
to the  Company and  relating  to action or inaction  required of the Company in
connection with any such  registration,  qualification  or compliance,  and will
reimburse each Holder,  each of its officers,  directors and partners,  and each
person  controlling  such  Holder,  each such  underwriter  and each  person who
controls any such underwriter,  for any legal and any other expenses  reasonably
incurred in connection with  investigating  and defending any such claim,  loss,
damage, liability or action, provided that the Company will not be liable in any
such case to a Holder to the extent that any such claim, loss, damage, liability


                                       15
<PAGE>

or expense  arises out of or is based on any untrue  statement or omission based
upon  written  information  furnished  to the  Company  by  such  Holder  or the
underwriter (if any) therefor and stated to be specifically for use therein. The
indemnity  agreement contained in this Section 4.5(a) shall not apply to amounts
paid in settlement of any such loss, claim, damage,  liability or action if such
settlement is effected  without the consent of the Company  (which  consent will
not be unreasonably withheld).

          (b) HOLDER INDEMNITY.  Each Holder will, severally and not jointly, if
Registrable  Securities  held by it are included in the  securities  as to which
such registration,  qualification or compliance is being effected, indemnify the
Company, each of its directors,  officers,  partners,  and each underwriter,  if
any, of the Company's  securities covered by such registration  statement,  each
person who  controls  the  Company  or such  underwriter  within the  meaning of
Section 15 of the Securities Act and the rules and regulations thereunder,  each
other Holder (if any), and each of their directors,  officers and partners,  and
each person controlling such other Holder(s) against all claims, losses, damages
and liabilities (or actions in respect  thereof)  arising out of or based on any
untrue  statement (or alleged untrue  statement) of a material fact contained in
any  such  registration  statement,   prospectus,  offering  circular  or  other
document, or any omission (or alleged omission) to state therein a material fact
required to be stated  therein or  necessary to make the  statement  therein not
misleading, in each case only insofar as such untrue statement or alleged untrue
statement or omission relates to such Holder, and will reimburse the Company and
such other Holder(s) and their directors, officers and partners, underwriters or
control  persons  for any legal or any other  expenses  reasonably  incurred  in
connection  with  investigating  and  defending  any such claim,  loss,  damage,
liability or action,  in each case to the extent,  but only to the extent,  that
such untrue  statement  (or alleged  untrue  statement)  or omission (or alleged
omission) is made in such registration statement,  prospectus, offering circular
or other  document in reliance upon and in conformity  with written  information
furnished  to the Company by such Holder and stated to be  specifically  for use
therein,  and  provided  that the maximum  amount for which such Holder shall be
liable under this indemnity  shall not exceed the net proceeds  received by such
Holder from the sale of the  Registrable  Securities.  The  indemnity  agreement
contained in this Section  4.5(b) shall not apply to amounts paid in  settlement
of any such  claims,  losses,  damages  or  liabilities  if such  settlement  is
effected  without  the  consent  of  such  Holder  (which  consent  will  not be
unreasonably withheld).

          (c)  PROCEDURE.  Each party  entitled  to  indemnification  under this
Article (the  "Indemnified  Party")  shall give notice to the party  required to
provide   indemnification   (the  "Indemnifying   Party")  promptly  after  such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought,  and shall  permit the  Indemnifying  Party to assume the defense of any
such claim in any litigation resulting therefrom,  provided that counsel for the
Indemnifying  Party,  who  shall  conduct  the  defense  of  such  claim  or any
litigation  resulting  therefrom,  shall be  approved by the  Indemnified  Party
(whose approval shall not be unreasonably  withheld),  and the Indemnified Party
may participate in such defense at such party's  expense,  and provided  further
that the failure of any  Indemnified  Party to give  notice as  provided  herein
shall not relieve the Indemnifying  Party of its obligations  under this Article


                                       16
<PAGE>

except to the extent that the  Indemnifying  Party is  materially  and adversely
affected  by such  failure to provide  notice.  No  Indemnifying  Party,  in the
defense of any such claim or litigation,  shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which  does not  include  as an  unconditional  term  thereof  the giving by the
claimant or plaintiff to such Indemnified  Party of a release from all liability
in respect to such claim or  litigation.  Each  Indemnified  Party shall furnish
such  information  regarding  itself or the claim in question as an Indemnifying
Party may reasonably  request in writing and as shall be reasonably  required in
connection with the defense of such claim and litigation resulting therefrom.

          4.6  CONTRIBUTION.  If the  indemnification  provided for in Section 4
herein is  unavailable  to the  Indemnified  Parties in  respect of any  losses,
claims,  damages or liabilities  referred to herein (other than by reason of the
exceptions  provided  therein),  then each such  Indemnifying  Party, in lieu of
indemnifying  such  Indemnified  Party,  shall  contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities  as between the Company on the one hand and any Holder on the other,
in such  proportion  as is  appropriate  to reflect  the  relative  fault of the
Company and of such Holder in connection  with the statements or omissions which
resulted in such losses,  claims,  damages or liabilities,  as well as any other
relevant equitable considerations.  The relative fault of the Company on the one
hand and of any Holder on the other shall be  determined  by reference to, among
other things,  whether the untrue or alleged untrue statement of a material fact
or omission or alleged  omission to state a material fact relates to information
supplied by the Company or by such Holder.

In no event shall the obligation of any  Indemnifying  Party to contribute under
this Section 4.6 exceed the amount that such Indemnifying  Party would have been
obligated to pay by way of indemnification if the  indemnification  provided for
under   Section   4.5(a)  or  4.5(b)  hereof  had  been   available   under  the
circumstances.

The  Company and the Holders  agree that it would not be just and  equitable  if
contribution pursuant to this Section 4.6 were determined by PRO RATA allocation
(even if the  Holders or the  underwriters  were  treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable  considerations  referred to in the immediately  preceding paragraphs.
The amount  paid or payable by an  Indemnified  Party as a result of the losses,
claims,  damages  and  liabilities  referred  to in  the  immediately  preceding
paragraphs  shall be deemed to  include,  subject to the  limitations  set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in  connection  with  investigating  or  defending  any such  action  or  claim.
Notwithstanding  the provisions of this section,  no Holder or underwriter shall
be required to contribute any amount in excess of the an amount which equals (i)
in the case of any  Holder,  the net  proceeds  received by such Holder from the
sale  of  Registrable  Securities  or (ii) in the  case of an  underwriter,  the
underwriting discount applicable to the securities purchased by the underwriter.


                                       17
<PAGE>

No person guilty of fraudulent  misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to  contribution  from any person
who was not guilty of such fraudulent misrepresentation.

                                    ARTICLE V

                                   CONDITIONS

          Section 5.1  CONDITIONS  PRECEDENT TO THE OBLIGATION OF THE COMPANY TO
ISSUE AND SELL THE STOCK AND WARRANTS.  The obligation  hereunder of the Company
to issue and sell the Common Stock and  Warrants to the  Investors is subject to
the  satisfaction,  at or before the Closing Date, of each of the conditions set
forth below.  These  conditions  are for the  Company's  sole benefit and may be
waived by the Company at any time in its sole discretion.

          (a) ACCURACY OF THE INVESTORS'  REPRESENTATIONS  AND  WARRANTIES.  The
representations and warranties of each Investor shall be true and correct in all
material  respects as of the date when made and as of the Closing Date as though
made at that time (except for  representations and warranties that speak as of a
particular date).

          (b)  PERFORMANCE BY THE INVESTORS.  Each Investor shall have performed
all agreements and satisfied all conditions  required  hereby to be performed or
satisfied by such Investor at or prior to the Closing Date.

          (c) NO INJUNCTION.  No statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority of competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

          Section 5.2 CONDITIONS PRECEDENT TO THE OBLIGATION OF THE INVESTORS TO
PURCHASE THE STOCK AND THE WARRANTS.  The obligation  hereunder of each Investor
to  acquire  and pay  for the  Common  Stock  and  Warrants  is  subject  to the
satisfaction, at or before the Closing Date, of each of the conditions set forth
below.  These  conditions are for each Investor's sole benefit and may be waived
by each Investor at any time in its sole discretion.

          (a) ACCURACY OF THE  COMPANY'S  REPRESENTATIONS  AND  WARRANTIES.  The
representation  and  warranties  of the Company shall be true and correct in all
material  respects as of the date when made and as of the Closing Date as though
made at that time (except for  representations and warranties that speak as of a
particular date).

          (b)  PERFORMANCE BY THE COMPANY.  The Company shall have performed all
agreements and satisfied all conditions required to be performed or satisfied by
the Company at or prior to the Closing Date.

          (c) NASDAQ.  From the date hereof to the Closing Date,  trading in the
Company's Common Stock shall not have been suspended by the Commission or Nasdaq
and trading in securities  generally as reported by Nasdaq,  shall not have been


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<PAGE>

suspended or limited, and the Common Stock shall not have been delisted from any
exchange or market where they are currently listed.

          (d) NO INJUNCTION.  No statute,  rule,  regulation,  executive  order,
decree,  ruling or injunction shall have been enacted,  entered,  promulgated or
endorsed by any court or governmental  authority or competent jurisdiction which
prohibits  the  consummation  of any of the  transactions  contemplated  by this
Agreement.

          (e) OPINION OF COUNSEL.  At the Closing Date the Investors  shall have
received an opinion of counsel to the Company in substantially the form attached
hereto as EXHIBIT C and such other opinions,  certificates  and documents as the
Investors or their counsel shall reasonably require incident to the Closing.

          (f) MINIMUM  SUBSCRIPTION.  An  aggregate of  $8,000,200  of shares of
Common  Stock  shall  have been  purchased  by the  Investors  pursuant  to this
Agreement.

          (g) SECRETARY'S  CERTIFICATE.  The Company shall have delivered to the
Investors a certificate  in form and substance  reasonably  satisfactory  to the
Investors,  executed by the  Secretary  of the Company on behalf of the Company,
certifying  as to the  satisfaction  of all closing  conditions,  incumbency  of
signing officers, charter, By-Laws, good standing and authorizing resolutions of
the Company.

                                   ARTICLE VI

                                LEGEND AND STOCK

          Each  certificate  representing the Common Stock, the Warrants and the
Warrant   Shares  shall  be  stamped  or  otherwise   imprinted  with  a  legend
substantially in the following form:

          THESE  SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933,  AS AMENDED (THE  "SECURITIES  ACT"),  AND THEY MAY NOT BE OFFERED,  SOLD,
PLEDGED,  HYPOTHECATED,  ASSIGNED  OR  TRANSFERRED  EXCEPT  (I)  PURSUANT  TO  A
REGISTRATION  STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME  EFFECTIVE AND
IS CURRENT  WITH  RESPECT TO THESE  SECURITIES  OR (II)  PURSUANT  TO A SPECIFIC
EXEMPTION FROM  REGISTRATION  UNDER THE  SECURITIES  ACT, BUT ONLY UPON A HOLDER
HEREOF FIRST HAVING  OBTAINED THE WRITTEN  OPINION OF COUNSEL OF THE ISSUER,  OR
OTHER COUNSEL REASONABLY ACCEPTABLE TO THE ISSUER, THAT THE PROPOSED DISPOSITION
IS CONSISTENT  WITH ALL  APPLICABLE  PROVISIONS OF THE SECURITIES ACT AS WELL AS
ANY APPLICABLE "BLUE SKY" OR SIMILAR SECURITIES LAW.


                                       19
<PAGE>

                                   ARTICLE VII

                                   TERMINATION

          Section 7.1  TERMINATION  BY MUTUAL  CONSENT.  This  Agreement  may be
terminated at any time prior to the Closing Date by the mutual  written  consent
of the Company and the Investors.

          Section 7.2 OTHER  TERMINATION.  This  Agreement  may be terminated by
action of the Board of  Directors  of the Company or by any of the  Investors at
any time if the  Closing  Date  shall  not have  been  consummated  by the fifth
business day following the date of this Agreement.

                                  ARTICLE VIII

                                  MISCELLANEOUS

          Section 8.1 STAMP TAXES;  AGENT FEES.  The Company shall pay all stamp
and other taxes and duties levied in connection  with the issuance of the Common
Stock and the  Warrants  pursuant  hereto and the  Warrant  Shares  issued  upon
exercise of the Warrants.

          Section 8.2 SPECIFIC ENFORCEMENT; CONSENT TO JURISDICTION.

          (a)  The  Company  and  the  Investors   acknowledge  and  agree  that
irreparable  damage would occur in the event that any of the  provisions of this
Agreement  were not performed in accordance  with their  specific  terms or were
otherwise breached.  It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in  addition  to any other  remedy to which any of them may be entitled by
law or equity.

          (b) The  Company  and each of the  Investors  (i)  hereby  irrevocably
submits to the exclusive  jurisdiction of the United States District Court,  the
New York State courts and other courts of the United States  sitting in New York
County,  New York for the purposes of any suit, action or proceeding arising out
of or  relating to this  Agreement  and (ii)  hereby  waives,  and agrees not to
assert  in any  such  suit,  action  or  proceeding,  any  claim  that it is not
personally  subject to the jurisdiction of such court,  that the suit, action or
proceeding  is brought in an  inconvenient  forum or that the venue of the suit,
action or proceeding is improper. The Company and each of the Investors consents
to process being served in any such suit, action or proceeding by mailing a copy
thereof  to such party at the  address  in effect  for  notices to it under this
Agreement  and agrees that such service  shall  constitute  good and  sufficient
service of process and notice thereof. Nothing in this paragraph shall affect or
limit any right to serve process in any other manner permitted by law.

          Section 8.3 ENTIRE AGREEMENT;  AMENDMENT. This Agreement together with
the  agreements  and  documents  executed in connection  herewith,  contains the
entire  understanding  of the parties with respect to the matters covered hereby


                                       20
<PAGE>

and,  except as  specifically  set forth  herein,  neither  the  Company nor any
Investor  makes any  representation,  warranty,  covenant  or  undertaking  with
respect to such matters. No provision of this Agreement may be waived or amended
other than by a written  instrument signed by the party against whom enforcement
of any such amendment or waiver is sought.

          Section  8.4  NOTICES.  Any  notices,   consents,   waivers  or  other
communications  required  or  permitted  to be  given  under  the  terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon
receipt,  when delivered  personally;  (ii) upon receipt, when sent by facsimile
(provided   confirmation  of  transmission  is  mechanically  or  electronically
generated  and kept on file by the sending  party);  or (iii) one  business  day
after deposit with a nationally  recognized  overnight delivery service, in each
case  properly  addressed to the party to receive the same.  The  addresses  and
facsimile numbers for such communications shall be:

         to the Company:    SkyMall, Inc.
                            1520 East Pima Street
                            Phoenix, Arizona  85034
                            Telephone:  602-254-8620
                            Facsimile:  602-254-6544
                            Attn:   Robert M. Worsley
                            Chief Executive Officer

         with copies to:    Squire, Sanders & Dempsey L.L.P.
                            Two Renaissance Square
                            40 North Central Avenue, Suite 2700
                            Phoenix, Arizona  85004-4498
                            Telephone:  602-528-4134
                            Facsimile:  602-253-8129
                            Attn:   Gregory R. Hall, Esq.

         to the Investors:  To each Investor and its representative at the
                            addresses set forth on SCHEDULE I of this Agreement.

         with copies to:    Orrick, Herrington & Sutcliffe LLP
                            666 Fifth Avenue
                            New York, New York 10103
                            Telephone:  212-506-5000
                            Facsimile:  212-506-5151
                            Attn:  Rubi Finkelstein, Esq.

Any party  hereto may from time to time change its address for notices by giving
at least 5 days  written  notice of such  changed  address to the other  parties
hereto.  Written  confirmation  of receipt  (A) given by the  recipient  of such
notice,   consent,   waiver  or  other   communication,   (B)   mechanically  or
electronically  generated by the sender's facsimile machine containing the time,


                                       21
<PAGE>

date,  recipient  facsimile  number  and an  image  of the  first  page  of such
transmission  or (C)  provided by a  nationally  recognized  overnight  delivery
service shall be rebuttable  evidence of personal service,  receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above.

          Section 8.5  INDEMNITY.  Each party shall  indemnify  each other party
against any loss,  cost or damages  (including  reasonable  attorney's  fees but
excluding consequential damages) incurred as a result of such parties' breach of
any representation, warranty, covenant or agreement in this Agreement.

          Section  8.6  WAIVERS.  No  waiver by any  party of any  default  with
respect to any provision,  condition or  requirement of this Agreement  shall be
deemed  to be a  continuing  waiver  in the  future  or a  waiver  of any  other
provision,  condition or requirement  hereof, nor shall any delay or omission of
any party to exercise any right  hereunder in any manner  impair the exercise of
any such right accruing to it thereafter.

          Section 8.7 HEADINGS. The headings herein are for convenience only, do
not  constitute  a part of this  Agreement  and  shall not be deemed to limit or
affect any of the provisions hereof.

          Section 8.8  SUCCESSORS  AND  ASSIGNS.  Except as  otherwise  provided
herein,  this  Agreement  shall be binding  upon and inure to the benefit of the
parties and their successors and permitted assigns. The parties hereto may amend
this Agreement  without notice to or the consent of any third party. The Company
may not assign this Agreement or any rights or obligations hereunder without the
prior written  consent of all Investors  (which  consent may be withheld for any
reason in their sole  discretion),  except  that the  Company  may  assign  this
Agreement in connection with a merger,  consolidation,  business  combination or
the sale of all or substantially  all of its assets provided that the Company is
not released from any of its obligations  hereunder,  such successor in interest
or assignee  assumes all obligations of the Company  hereunder,  and appropriate
adjustment of the  provisions  contained in this  Agreement is made, in form and
substance satisfactory to the Investors, to place the Investors in substantially
the same position as they would have been but for such assignment.  Any Investor
may assign  this  Agreement  (in whole or in part) or any rights or  obligations
hereunder  without  the consent of the  Company in  connection  with any sale or
transfer of all or any portion of the Securities held by such Investor, provided
that no Investor may assign this Agreement prior to the Closing Date without the
Company's prior consent except to an affiliate or affiliates of such Investor.

          Section 8.9 NO THIRD PARTY  BENEFICIARIES.  This Agreement is intended
for the benefit of the parties hereto and their respective  permitted successors
and  assigns  and is not for the  benefit  of, nor may any  provision  hereof be
enforced by, any other person.

          Section 8.10 GOVERNING  LAW. This  Agreement  shall be governed by and
construed and enforced in accordance  with the internal laws of the State of New
York without regard to such state's principles of conflict of laws.


                                       22
<PAGE>

          Section 8.11  SURVIVAL.  The  representations  and  warranties and the
agreements and covenants of the Company and each Investor contained herein shall
survive the Closing.

          Section 8.12 EXECUTION.  This Agreement may be executed in two or more
counterparts,  all of which shall be considered one and the same  agreement,  it
being understood that all parties need not sign the same counterpart.

          Section 8.13 PUBLICITY.  The Company agrees that it will not disclose,
and  will not  include  in any  public  announcement,  the name of any  Investor
without  its  consent,  unless and until such  disclosure  is required by law or
applicable regulation, and then only to the extent of such requirement.

          Section 8.14 SEVERABILITY.  The parties acknowledge and agree that the
Investors  are not  agents,  affiliates  or  partners  of each  other,  that all
representations, warranties, covenants and agreements of the Investors hereunder
are several and not joint,  that no Investor  shall have any  responsibility  or
liability for the representations,  warrants,  agreements,  acts or omissions of
any other Investor,  and that any rights granted to "Investors"  hereunder shall
be enforceable by each Investor hereunder.

          Section 8.15 LIKE TREATMENT OF HOLDERS. Neither the Company nor any of
its  affiliates  shall,  directly  or  indirectly,  pay or  cause to be paid any
consideration,  whether by way of interest,  fee,  payment for the redemption or
exchange of Securities, or otherwise, to any holder of Securities,  for or as an
inducement to, or in connection with the solicitation of, any consent, waiver or
amendment of any terms or provisions of the Securities or this Agreement, unless
such  consideration is required to be paid to all holders of Securities bound by
such consent,  waiver or amendment whether or not such holders so consent, waive
or agree to amend and whether or not such holders  tender their  Securities  for
redemption or exchange.  The Company shall not,  directly or indirectly,  redeem
any  Securities  unless such offer of redemption is made pro rata to all holders
of Securities on identical terms.



                                       23
<PAGE>

          IN WITNESS  WHEREOF,  the parties hereto have caused this Agreement to
be duly executed as of the date first above written.

                                     SKYMALL, INC.




                                     By: /s/ Robert M. Worsley
                                         ---------------------------------------
                                         Name:  Robert M. Worsley
                                         Title: President



                                     INVESTOR:




                                     By: /s/
                                         ---------------------------------------
                                         Name:
                                         Title:




Exact Name in Which Securities Should
be registered:  ________________________________

                                       24