Exhibit 4.2
THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL IN A FORM REASONABLY
SATISFACTORY TO THE ISSUER THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THIS WARRANT MAY BE PLEDGED IN CONNECTION
WITH A BONA FIDE MARGIN ACCOUNT.
SKYMALL, INC.
WARRANT TO PURCHASE COMMON STOCK
Warrant No.: ________ Number of Shares: ________
Date of Issuance: June 30, 2000
SkyMall, Inc., a Nevada corporation (the "Company"), hereby certifies that, for
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, ____________________________ the registered holder hereof or its
permitted assigns (a "holder"), is entitled, subject to the terms set forth
below, to purchase from the Company upon surrender of this Warrant, at any time
or times on or after the date hereof, but not after 11:59 P.M. Eastern Time on
the Expiration Date (as defined herein) ________________________________________
(______) fully paid nonassessable shares of Common Stock (as defined herein) of
the Company (the "Warrant Shares") at the purchase price per share provided in
Section 2(a) below.
1. DEFINITIONS.
(a) FINDER'S AGREEMENT. This Warrant is one of the Warrants (the
"Warrants") issued pursuant to the Finder's Agreement dated as of December 20,
1999, among the Company and the Schneider Securities (the "Agreement").
(b) DEFINITIONS. The following words and terms as used in this Warrant
shall have the following meanings:
(i) "Business Day" means any day other than Saturday, Sunday or other
day on which commercial banks in the City of New York are authorized or
required by law to remain closed.
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(ii) "Closing Bid Price" means, for any security as of any date, the
last closing bid price for such security on the Principal Market (as
defined below) as reported by Bloomberg Financial Markets ("Bloomberg"),
or, if the Principal Market is not the principal trading market for such
security, the last closing bid price of such security on the principal
securities exchange or trading market where such security is listed or
traded as reported by Bloomberg, or if the foregoing do not apply, the last
closing bid price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or,
if no closing bid price is reported for such security by Bloomberg, the
last closing trade price for such security as reported by Bloomberg, or, if
no last closing trade price is reported for such security by Bloomberg, the
average of the bid prices of any market makers for such security as
reported in the "pink sheets" by the National Quotation Bureau, Inc. If the
Closing Bid Price cannot be calculated for such security on such date on
any of the foregoing bases, the Closing Bid Price of such security on such
date shall be the fair market value as mutually determined by the Company
and the holder of this Warrant. All such determinations to be appropriately
adjusted for any stock dividend, stock split or other similar transaction
during such period.
(iii)"Closing Sale Price" means, for any security as of any date, the
last closing trade price for such security on the Principal Market (as
defined below) as reported by Bloomberg, or, if the Principal Market is not
the principal securities exchange or trading market for such security, the
last closing trade price of such security on the principal securities
exchange or trading market where such security is listed or traded as
reported by Bloomberg, or if the foregoing do not apply, the last closing
trade price of such security in the over-the-counter market on the
electronic bulletin board for such security as reported by Bloomberg, or,
if no last closing trade price is reported for such security by Bloomberg,
the last closing ask price of such security as reported by Bloomberg, or,
if no last closing ask price is reported for such security by Bloomberg,
the average of the lowest ask price and lowest bid price of any market
makers for such security as reported in the "pink sheets" by the National
Quotation Bureau, Inc. If the Closing Sale Price cannot be calculated for
such security on such date on any of the foregoing bases, the Closing Sale
Price of such security on such date shall be the fair market value as
mutually determined by the Company and the holder of this Warrant. If the
Company and the holder of this Warrant are unable to agree upon the fair
market value of the Common Stock, then such dispute shall be resolved by
the term "Market Price" being substituted for the term "Closing Sale
Price." All such determinations to be appropriately adjusted for any stock
dividend, stock split or other similar transaction during such period.
(iv) "Common Stock" means (i) the Company's common stock, par value
$.001 per share, and (ii) any capital stock into which such Common Stock
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shall have been changed or any capital stock resulting from a
reclassification of such Common Stock.
(v) "Expiration Date" means the date five (5) years from the date of
this Warrant or, if such date falls on a Saturday, Sunday or other day on
which banks are required or authorized to be closed in the City of New York
or the State of New York or on which trading does not take place on the
principal exchange or automated quotation system on which the Common Stock
is traded (a "Holiday"), the next date that is not a Holiday.
(vi) "Issuance Date" means, with respect to each Warrant, the date of
issuance of the applicable Warrant.
(vii)"Market Price" means, with respect to any security for any date
of determination, that price which shall be computed as the arithmetic
average of the Closing Bid Prices for such security on each of the five (5)
consecutive trading days immediately preceding such date of determination
(all such determinations to be appropriately adjusted for any stock
dividend, stock split or similar transaction during the pricing period).
(viii) "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
(ix) "Principal Market" means the Nasdaq National Market.
(x) "Securities Act" means the Securities Act of 1933, as amended.
(xi) "Warrant" means this Warrant and all warrants issued in exchange,
transfer or replacement thereof.
(xii) "Warrant Exercise Price" shall be $2.00.
(xiii) OTHER DEFINITIONAL PROVISIONS. Except as otherwise specified
herein, all references herein (A) to the Company shall be deemed to include
the Company's successors and (B) to any applicable law defined or referred
to herein, shall be deemed references to such applicable law as the same
may have been or may be amended or supplemented from time to time. When
used in this Warrant, the words "herein," "hereof," and "hereunder," and
words of similar import, shall refer to this Warrant as a whole and not to
any provision of this Warrant, and the words "Section," "Schedule," and
"Exhibit" shall refer to Sections of, and Schedules and Exhibits to, this
Warrant unless otherwise specified. Whenever the context so requires, the
neuter gender includes the masculine or feminine, and the singular number
includes the plural, and vice versa.
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2. EXERCISE OF WARRANT.
(a) Subject to the terms and conditions hereof, this Warrant may be
exercised by the holder hereof then registered on the books of the Company, in
whole or in part, at any time on any Business Day on or after the opening of
business on the date hereof and prior to 11:59 P.M. Eastern Time on the
Expiration Date by (i) delivery of a written notice, in the form of the
subscription notice attached as EXHIBIT A hereto (the "Exercise Notice"), of
such holder's election to exercise this Warrant, which notice shall specify the
number of Warrant Shares to be purchased; (ii) (A) payment to the Company of an
amount equal to the Warrant Exercise Price multiplied by the number of Warrant
Shares as to which this Warrant is being exercised (the "Aggregate Exercise
Price") in cash, certified or bank funds or wire transfer of immediately
available funds or (B) notifying the Company that this Warrant is being
exercised pursuant to a Cashless Exercise (as defined in Section 2(e)); and
(iii) the surrender of this Warrant (or a Lost Warrant Affidavit in
substantially the form annexed hereto as Exhibit C with respect to this Warrant
in the case of its loss, theft or destruction) to a common carrier for overnight
delivery to the Company; provided, that if such Warrant Shares are to be issued
in any name other than that of the registered holder of this Warrant, such
issuance shall be deemed a transfer and the provisions of Section 8 shall be
applicable. In the event of any exercise of the rights represented by this
Warrant in compliance with this Section 2(a), the Company shall on the second
Business Day following the date of receipt of the Exercise Notice, the Aggregate
Exercise Price (or notice of a Cashless Exercise) and this Warrant (or a Lost
Warrant Affidavit in substantially the form annexed hereto as EXHIBIT C with
respect to this Warrant in the case of its loss, theft or destruction) (the
"Exercise Delivery Documents"), credit such aggregate number of shares of Common
Stock to which the holder (or its designee) shall be entitled to the holder's
(or its designee's) balance account with The Depository Trust Company; provided,
however, if the holder who submitted the Exercise Notice requested physical
delivery of any or all of the Warrant Shares, then the Company shall, on or
before the second Business Day following receipt of the Exercise Delivery
Documents issue and surrender to a common carrier for overnight delivery to the
address specified in the Exercise Notice, a certificate, registered in the name
of the holder (or its designee), for the number of shares of Common Stock to
which the holder (or its designee) shall be entitled. Upon delivery of the
Exercise Notice and Aggregate Exercise Price referred to above or notification
to the Company of a Cashless Exercise referred to in Section 2(e), the holder of
this Warrant (or its designee) shall be deemed for all corporate purposes to
have become the holder of record of the Warrant Shares with respect to which
this Warrant has been exercised, irrespective of the date of delivery of this
Warrant as required by clause (iii) above or the certificates evidencing such
Warrant Shares. In the case of a dispute as to the determination of the Warrant
Exercise Price or the Market Price of a security or the arithmetic calculation
of the Warrant Shares, the Company shall promptly issue to the holder (or its
designee) the number of shares of Common Stock that is not disputed and shall
submit the disputed determinations or arithmetic calculations to the holder via
facsimile within one Business Day of receipt of the holder's Exercise Notice. If
the holder and the Company are unable to agree upon the determination of the
Warrant Exercise Price or the Market Price or arithmetic calculation of the
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Warrant Shares within one day of such disputed determination or arithmetic
calculation being submitted to the holder, then the Company shall immediately
submit via facsimile (i) the disputed determination of the Warrant Exercise
Price or the Market Price to an independent, reputable investment banking firm
of nationally recognized standing, mutually acceptable to both the Company and
the holder or (ii) the disputed arithmetic calculation of the Warrant Shares to
an independent, outside accountant, mutually acceptable to both the Company and
the holder. The Company shall cause the investment banking firm or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the holder of the results no later than forty-eight
(48) hours from the time it receives the disputed determinations or
calculations. Such investment banking firm's or accountant's determination or
calculation, as the case may be, shall be deemed conclusive absent manifest
error.
(b) Unless the rights represented by this Warrant shall have expired or
shall have been fully exercised, the Company shall, as soon as practicable and
in no event later than two (2) Business Days after delivery of the Exercise
Delivery Documents and at its own expense, issue a new Warrant identical in all
respects to this Warrant exercised except it shall represent rights to purchase
the number of Warrant Shares purchasable immediately prior to such exercise
under this Warrant exercised, less the number of Warrant Shares with respect to
which such Warrant is exercised.
(c) No fractional shares of Common Stock are to be issued upon the
exercise of this Warrant, but rather the number of shares of Common Stock issued
upon exercise of this Warrant shall be rounded up to the nearest whole number.
(d) If the Company shall fail for any reason or for no reason to issue to
the holder within two (2) Business Days of receipt of the Exercise Delivery
Documents, a certificate for the number of shares of Common Stock to which the
holder (or its designee) is entitled or to credit the holder's (or designee's)
balance account with The Depository Trust Company for such number of shares of
Common Stock to which the holder (or its designee) is entitled upon the holder's
exercise of this Warrant or a new Warrant for the number of shares of Common
Stock to which such holder is entitled pursuant to Section 2(b) hereof, the
Company shall, in addition to any other remedies under this Warrant or the
Agreement or otherwise available to such holder, including any indemnification
under the Agreement, pay as additional damages in cash to such holder on each
day the issuance of such Common Stock certificate or new Warrant, as the case
may be, is not timely effected, an amount equal to 0.5% of the product of (A)
the sum of the number of shares of Common Stock not issued to the holder (or its
designee) on a timely basis and to which the holder (or its designee) is
entitled and/or, the number of shares represented by the portion of this Warrant
which is not being converted, as the case may be, and (B) the average of the
Closing Sale Price of the Common Stock for the five (5) consecutive trading days
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immediately preceding the last possible date which the Company could have issued
such Common Stock or Warrant, as the case may be, to the holder without
violating this Section 2.
(e) If, despite the Company's obligations under the Agreement, the Warrant
Shares to be issued are not registered and available for resale pursuant to a
registration statement in accordance with the Agreement, then notwithstanding
anything contained herein to the contrary, the holder of this Warrant may, at
its election exercised in its sole discretion, exercise this Warrant in whole or
in part and, in lieu of making the cash payment otherwise contemplated to be
made to the Company upon such exercise in payment of the Aggregate Exercise
Price, elect instead to receive upon such exercise the "Net Number" of shares of
Common Stock determined according to the following formula (a "Cashless
Exercise"):
Net Number = (A X B) - (A X C)
-----------------
B
For purposes of the foregoing formula:
A = the total number of shares with respect to which this Warrant
is then being exercised.
B = the Market Price as of the date of the Exercise Notice.
C = the Warrant Exercise Price then in effect for the applicable
Warrant Shares at the time of such exercise.
3. (a) ADJUSTMENT FOR DIVIDENDS IN OTHER STOCK AND PROPERTY;
RECLASSIFICATIONS. In case at any time or from time to time the holders of the
Common Stock (or any shares of stock or other securities at the time receivable
upon the exercise of this Warrant) shall have received, or, on or after the
record date fixed for the determination of eligible shareholders, shall have
become entitled to receive, without payment therefor,
(1) other or additional stock or other securities or
property (other than cash) by way of dividend,
(2) any cash or other property paid or payable out of any
source other than retained earnings (determined in accordance
with generally accepted accounting principles), or
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(3) other or additional stock or other securities or
property (including cash) by way of stock-split, spin-off,
reclassification, combination of shares or similar corporate
rearrangement,
(other than (x) shares of Common Stock or any other stock or securities into
which such Common Stock shall have been exchanged, or (y) any other stock or
securities convertible into or exchangeable for such Common Stock or such other
stock or securities), then and in each such case a holder, upon the exercise
hereof as provided in Section 2, shall be entitled to receive the amount of
stock and other securities and property (including cash in the cases referred to
in clauses (2) and (3) above) which such holder would hold on the date of such
exercise if on the Issuance Date such holder had been the holder of record of
the number of shares of Common Stock called for on the face of this Warrant, and
had thereafter, during the period from the Issuance Date to and including the
date of such exercise, retained such shares and/or all other or additional stock
and other securities and property (including cash in the cases referred to in
clause (2) and (3) above) receivable by it as aforesaid during such period,
giving effect to all adjustments called for during such period by Sections 3(a)
and 3(b).
(b) ADJUSTMENT FOR REORGANIZATION, CONSOLIDATION AND MERGER. In case of
any reorganization of the Company (or any other corporation the stock or other
securities of which are at the time receivable on the exercise of this Warrant)
or reclassification of its securities after the Issuance Date, or the Company
(or any such other corporation) shall consolidate with or merge into another
corporation or entity or convey or exchange all or substantially all its assets
to another corporation or entity, then and in each such case the holder of this
Warrant, upon the exercise hereof as provided in Section 2 at any time after the
consummation of such reorganization, reclassification, consolidation, merger,
conveyance or exchange, shall be entitled to receive, in lieu of the stock or
other securities and property receivable upon the exercise of this Warrant prior
to such consummation, the stock or other securities or property to which such
holder would have been entitled upon such consummation if such holder had
exercised this Warrant immediately prior thereto, all subject to further
adjustment as provided in Sections 3(a), (b), (c) and (d); in each such case,
the terms of this Warrant shall be applicable to the shares of stock or other
securities or property receivable upon the exercise of this Warrant after such
consummation.
(c) ADJUSTMENT FOR CERTAIN DIVIDENDS AND DISTRIBUTIONS. If the Company at
any time or from time to time makes, or fixes a record date for the
determination of holders of Common Stock (or any shares of stock or other
securities at the time receivable upon the exercise of this Warrant) entitled to
receive, a dividend or other distribution payable in additional shares of (x)
Common Stock or any other stock or securities into which such Common Stock shall
have been exchanged, or (y) any other stock or securities convertible into or
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exchangeable for such Common Stock or such other stock or securities, then and
in each such event
(1) the Warrant Exercise Price then in effect shall be
decreased as of the time of the issuance of such additional shares or, in
the event such record date is fixed, as of the close of business on such
record date, by multiplying the Warrant Exercise Price then in effect by a
fraction (A) the numerator of which is the total number of shares of Common
Stock issued and outstanding immediately prior to the time of such issuance
or the close of business on such record date, and (B) the denominator of
which shall be the total number of shares of Common Stock issued and
outstanding immediately prior to the time of such issuance or the close of
business on such record date as the case may be, plus the number of shares
of Common Stock issuable in payment of such dividend or distribution;
PROVIDED, HOWEVER, that if such record date is fixed and such dividend is
not fully paid or if such distribution is not fully made on the date fixed
therefor, the Warrant Exercise Price shall be recomputed accordingly as of
the close of business on such record date, and thereafter the Warrant
Exercise Price shall be adjusted pursuant to this Section 3(c) as of the
time of actual payment of such dividends or distributions; and
(2) the number of shares of Common Stock theretofore
receivable upon the exercise of this Warrant shall be increased, as of the
time of such issuance or, in the event such record date is fixed, as of the
close of business on such record date, in inverse proportion to the
decrease in the Warrant Exercise Price.
(d) STOCK SPLIT AND REVERSE STOCK SPLIT. If the Company at any time or
from time to time effects a stock split or subdivision of the outstanding Common
Stock, the Warrant Exercise Price then in effect immediately before that stock
split or subdivision shall be proportionately decreased and the number of shares
of Common Stock theretofore receivable upon the exercise of this Warrant shall
be proportionately increased. If the Company at any time or from time to time
effects a reverse stock split or combines the outstanding shares of Common Stock
into a smaller number of shares, the Warrant Exercise Price then in effect
immediately before that reverse stock split or combination shall be
proportionately increased and the number of shares of Common Stock theretofore
receivable upon the exercise of this Warrant shall be proportionately decreased.
Each adjustment under this Section 3(d) shall become effective at the close of
business on the date the stock split, subdivision, reverse stock split or
combination becomes effective.
4. REDEMPTION AT THE COMPANY'S ELECTION. The Company, upon thirty (30)
days' prior written notice to the holder, may elect to redeem all or part of
this Warrant at a price equal to $0.01 per Warrant Share issuable upon the
exercise hereof, if, but only if: (i) the Closing Bid Price shall have exceeded
150% of the Warrant Exercise Price (as equitably adjusted to reflect any merger,
consolidation or reorganization of the Company or any stock split, subdivision,
reverse stock split or combination effected by the Company) on each of the
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twenty (20) consecutive trading days ending not more than one Business Day prior
to the date on which the notice of redemption shall be delivered to the holder,
and (ii) the Common Stock shall be listed and trading on the Nasdaq National
Market, AMEX or the NYSE. Any such redemption shall be effective on the
thirtieth day following the delivery of such notice, PROVIDED, HOWEVER, that the
holder may elect at any time prior to the effective date of redemption to
exercise all or any portion of this Warrant in accordance with the terms hereof;
and PROVIDED FURTHER, that the Company's right to redeem this Warrant shall be
suspended if, after the notice has been delivered, the Warrant Shares may not be
sold pursuant to an effective registration statement for any reason whatsoever
or the Common Stock shall cease to be listed and trading on the Nasdaq National
Market, AMEX or the NYSE. The notice period shall then be extended for a period
of time equal to the number of days during the notice period during which the
registration statement shall not have permitted the sale of such Warrant Shares
or the Common Stock shall not have been so listed and trading, as the case may
be; provided, however, that the notice period shall not begin to run until such
time as the holder receives notice from the Company that the registration
statement permits the sale of the Warrant Shares and/or the Common Stock shall
have been so listed and trading, as the case may be. The redemption price shall
be payable in full, in cash, on the effective date of any redemption pursuant to
this paragraph (4). A redemption notice delivered by the Company pursuant to
this paragraph (4) shall be irrevocable. Notwithstanding the foregoing, the
Company's right to redeem all or part of this Warrant may not be exercised if on
the date on which the Company delivers notice of such exercise the Market Price
shall be less than $12.00 per share (as equitably adjusted to reflect any
merger, consolidation or reorganization of the Company or any stock split,
subdivision, reverse stock split or combination effected by the Company).
5. COVENANTS AS TO COMMON STOCK. The Company hereby covenants and agrees
as follows:
(a) This Warrant is, and any Warrants issued in substitution for or
replacement of this Warrant will upon issuance be, duly authorized and validly
issued.
(b) All Warrant Shares which may be issued upon the exercise of the rights
represented by this Warrant will, upon issuance, be validly issued, fully paid
and nonassessable and free from all taxes, liens and charges with respect to the
issuance thereof.
(c) During the period within which the rights represented by this Warrant
may be exercised, the Company will at all times have authorized and reserved at
least 100% of the number of shares of Common Stock needed to provide for the
exercise of the rights then represented by this Warrant and the par value of
said shares will at all times be less than or equal to the applicable Warrant
Exercise Price.
(d) The Company shall secure the listing of the shares of Common Stock
issuable upon exercise of this Warrant upon each national securities exchange or
automated quotation system, if any, upon which shares of Common Stock are then
listed within the time required by such exchange or quotation system's rules and
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regulations and shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all shares of Common Stock from time to time
issuable upon the exercise of this Warrant; and the Company shall so list on
each national securities exchange or automated quotation system within the time
required by such exchange or quotation system's rules and regulations, as the
case may be, and shall maintain such listing of, any other shares of capital
stock of the Company issuable upon the exercise of this Warrant if and so long
as any shares of the same class shall be listed on such national securities
exchange or automated quotation system.
(e) The Company will not, by amendment of its Certificate of Incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms to be
observed or performed by it hereunder, but will at all times in good faith
assist in the carrying out of all the provisions of this Warrant and in the
taking of all such action as may reasonably be requested by the holder of this
Warrant in order to protect the exercise privilege of the holder of this Warrant
against dilution or other impairment, consistent with the tenor and purpose of
this Warrant. Without limiting the generality of the foregoing, the Company (i)
will not increase the par value of any shares of Common Stock receivable upon
the exercise of this Warrant above the Warrant Exercise Price then in effect,
and (ii) will take all such actions as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
shares of Common Stock upon the exercise of this Warrant.
(f) This Warrant will be binding upon any entity succeeding to the Company
by merger, consolidation or acquisition of all or substantially all of the
Company's assets and any such successive mergers, consolidations or
acquisitions.
6. TAXES. The Company shall pay any and all taxes which may be payable
with respect to the issuance and delivery of Warrant Shares upon exercise of
this Warrant; provided, however, that the Company shall not be required to pay
any tax that may be payable in respect of any transfer involved in the issue or
delivery of Common Stock or other securities or property in a name other than
that of the registered holders of this Warrant to be converted and such holder
shall pay such amount, if any, to cover any applicable transfer or similar tax.
7. WARRANT HOLDER NOT DEEMED A STOCKHOLDER. Except as otherwise
specifically provided herein, no holder of this Warrant, solely by virtue of
such holding, shall be entitled to vote or receive dividends or be deemed the
holder of shares of the Company for any purpose, nor shall anything contained in
this Warrant be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote, give or withhold
consent to any corporate action (whether a reorganization, issue of stock,
reclassification of stock, consolidation, merger, conveyance or otherwise),
receive notice of meetings, receive dividends or subscription rights, or
otherwise, prior to the issuance to the holder of this Warrant of the Warrant
Shares which he or she is then entitled to receive upon the due exercise of this
Warrant. In addition, nothing contained in this Warrant shall be construed as
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imposing any liabilities on such holder to purchase any securities (upon
exercise of this Warrant or otherwise) or as a stockholder of the Company,
whether such liabilities are asserted by the Company or by creditors of the
Company. Notwithstanding this Section 6, the Company will provide the holder of
this Warrant with copies of the same notices and other information given to the
stockholders of the Company generally, contemporaneously with the giving thereof
to the stockholders.
8. REPRESENTATIONS OF HOLDER. The holder of this Warrant, by the
acceptance hereof, represents that it is acquiring this Warrant and the Warrant
Shares for its own account for investment only and not with a view towards, or
for resale in connection with, the public sale or distribution of this Warrant
or the Warrant Shares, except pursuant to sales registered or exempted under the
Securities Act; provided, however, that by making the representations herein,
the holder does not agree to hold this Warrant or any of the Warrant Shares for
any minimum or other specific term and reserves the right to dispose of this
Warrant and the Warrant Shares at any time in accordance with or pursuant to a
registration statement or an exemption under the Securities Act. The holder of
this Warrant further represents, by acceptance hereof, that, as of this date,
such holder is an "accredited investor" as such term is defined in Rule
501(a)(1) of Regulation D promulgated by the Securities and Exchange Commission
under the Securities Act (an "Accredited Investor").
9. OWNERSHIP AND TRANSFER.
(a) The Company shall maintain at its principal executive offices (or such
other office or agency of the Company as it may designate by notice to the
holder hereof), a register for this Warrant, in which the Company shall record
the name and address of the person in whose name this Warrant has been issued,
as well as the name and address of each transferee. The Company may treat the
person in whose name any Warrant is registered on the register as the owner and
holder thereof for all purposes, but in all events recognizing any transfers
made in accordance with the terms of this Warrant.
(b) This Warrant and the rights granted hereunder shall be assignable by
the holder hereof without the consent of the Company.
10. LOST, STOLEN, MUTILATED OR DESTROYED WARRANT. If this Warrant is lost,
stolen, mutilated or destroyed, the Company shall, on receipt of an executed
Lost Warrant Affidavit in substantially the form annexed hereto as EXHIBIT C
(or, in the case of a mutilated Warrant, the Warrant), issue a new Warrant of
like denomination and tenor as this Warrant so lost, stolen, mutilated or
destroyed.
11. NOTICE. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Warrant 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
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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:
If to the Company:
SkyMall, Inc.
1520 East Pima Street
Phoenix, Arizona 85034
Telephone: 602-254-8620
Facsimile: 602-254-6544
Attention: Robert M. Worsley, President and Chief Executive Officer
With copy to:
Squire, Sanders & Dempsey L.L.P.
Two Renaissance Square
40 North Central Avenue, Suite 2700
Phoenix, Arizona 85004
Telephone: 602-528-4000
Facsimile: 602-253-8129
Attention: Gregory R. Hall, Esq.
If to a holder of this Warrant, to it at its main business address as shall be
delivered to the Company by the holder at any time. Each party shall provide
five days' prior written notice to the other party of any change in address or
facsimile number. 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,
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, respectively.
12. DATE. The date of this Warrant is June 30, 2000. This Warrant, in all
events, shall be wholly void and of no effect after the close of business on the
Expiration Date, except that notwithstanding any other provisions hereof, the
provisions of Section 8 shall continue in full force and effect after such date
as to any Warrant Shares or other securities issued upon the exercise of this
Warrant.
13. AMENDMENT AND WAIVER. Except as otherwise provided herein, the
provisions of the Warrants issued pursuant to the Agreement may be amended and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company has obtained the
written consent of the holders of Warrants representing 66.7% of the shares of
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<PAGE>
Common Stock obtainable upon exercise of the Warrants then outstanding; provided
that no such action may increase the Warrant Exercise Price of the Warrants,
decrease the number of shares or class of stock obtainable upon exercise of any
Warrants, or otherwise materially adversely effect the rights of the holder of
this Warrant without the written consent of such holder.
14. DESCRIPTIVE HEADINGS; GOVERNING LAW; JURISDICTION. The descriptive
headings of the several Sections and paragraphs of this Warrant are inserted for
convenience only and do not constitute a part of this Warrant. The corporate
laws of the State of New York shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the
construction, validity, enforcement and interpretation of this Warrant shall be
governed by the internal laws of the State of New York, without giving effect to
any choice of law or conflict of law provision or rule (whether of the State of
New York, or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each of the parties
hereto irrevocably consents and submits to the nonexclusive jurisdiction of the
Supreme Court of the State of New York and the United States District Court for
the Southern District of New York in connection with any proceeding arising out
of or relating to this Warrant, waives any objection to venue in the County of
New York, State of New York, or such District, and agrees that service of any
summons, complaint, notice of other process relating to such proceeding may be
effected in the manner provided by Section 10 hereof.
15. RESTRICTION ON EXERCISE OF WARRANT. Notwithstanding anything in this
Warrant to the contrary, this Warrant may not be exercised until such time as
the shareholders of the Corporation have approved the issuance of the shares of
Common Stock issuable upon exercise of this Warrant in accordance with the
applicable corporate governance rules of the Nasdaq Stock Market relating to the
sale or issuance of common stock, or securities convertible into, or exercisable
for, common stock, equal to 20% or more of the common stock or voting power
outstanding immediately preceding such issuance
[Signature Page Follows]
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SKYMALL, INC.
By: __________________________________
Name: ________________________________
Title: _______________________________
<PAGE>
EXHIBIT A TO WARRANT
SUBSCRIPTION FORM
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS WARRANT
SKYMALL, INC.
The undersigned holder hereby exercises the right to purchase
_________________ of the shares of Common Stock ("Warrant Shares") of SkyMall,
Inc., a Nevada corporation (the "Company"), evidenced by the attached Warrant
(the "Warrant"). Capitalized terms used herein and not otherwise defined shall
have the respective meanings set forth in the Warrant.
1. Form of Warrant Exercise Price. The Holder intends that payment of the
Warrant Exercise Price shall be made as:
____________ a "CASH EXERCISE" with respect to ________________
Warrant Shares; and/or
____________ a "CASHLESS EXERCISE" with respect to _____________
Warrant Shares (to the extent permitted by the terms
of the Warrant).
2. Payment of Warrant Exercise Price. In the event that the holder has
elected a Cash Exercise with respect to some or all of the Warrant Shares to be
issued pursuant hereto, the holder shall pay the sum of $___________________ to
the Company in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares. The Company shall deliver to the holder
__________ Warrant Shares in accordance with the terms of the Warrant.
Date: _______________ __, ______
_________________________________
Name of Registered Holder
By: _____________________________
Name:
Title:
A-1
<PAGE>
EXHIBIT B TO WARRANT
FORM OF WARRANT POWER
FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
________________, Federal Identification No. __________, a warrant to purchase
____________ shares of the capital stock of SkyMall, Inc., a Nevada corporation,
represented by warrant certificate no. _____, standing in the name of the
undersigned on the books of said corporation. The undersigned does hereby
irrevocably constitute and appoint ______________, attorney to transfer the
warrants of said corporation, with full power of substitution in the premises.
Dated: _________________, ____
__________________________________
By: _____________________________
Its: _____________________________
B-1
<PAGE>
EXHIBIT C TO WARRANT
FORM OF AFFIDAVIT OF LOSS
STATE OF )
) ss:
COUNTY OF )
The undersigned (hereinafter "Deponent"), being duly sworn, deposes and
says that:
1. Deponent is an adult whose mailing address is:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
2. Deponent is the recipient of a Warrant (the "Warrant") from SkyMall,
Inc. (the "Company"), dated ___________________________________ for the purchase
of ___________________________________ shares of Common Stock, par value $.001
per share, of the Company, at an exercise price of $_________________________
per share.
3. The Warrant has been lost, stolen, destroyed or misplaced, under the
following circumstances:
4. The Warrant was not endorsed.
5. Deponent has made a diligent search for the Warrant, and has been unable
to find or recover same, and Deponent was the unconditional owner of the Warrant
at the time of loss, and is entitled to the full and exclusive possession
thereof; that neither the Warrant nor the rights of Deponent therein have, in
whole or in part, been assigned, transferred, hypothecated, pledged or otherwise
disposed of, in any manner whatsoever, and that no person, firm or corporation
other than the Deponent has any right, title, claim, equity or interest in, to,
or respecting the Warrant.
6. Deponent makes this Affidavit for the purpose of requesting and inducing
the Company and its agents to issue a new warrant in substitution for the
Warrant.
7. If the Warrant should ever come into the hands, custody or power of the
Deponent or the Deponent's representatives, agents or assigns, the Deponent will
immediately and without consideration surrender the Warrant to the Company, its
representatives, agents or assigns, its transfer agents or subscription agents
for cancellation.
C-1
<PAGE>
8. The Deponent hereby indemnifies and holds harmless the Company from any
claim or demand for payment or reimbursement of any party arising in connection
with the subject matter of this Affidavit.
Signed, sealed and dated: _________________________
_____________________________________________
Deponent
Sworn to and subscribed before me this
____ day of _____________, _________
______________________________________
Notary Public
C-2
