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FORM OF TAX INDEMNIFICATION AGREEMENT

This is an actual contract by SkyMall.

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Sectors: Specialty Retail
Governing Law: Arizona , View Arizona State Laws
Effective Date: January 01, 1996
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FORM OF TAX INDEMNIFICATION AGREEMENT



THIS AGREEMENT is made and entered into as of this ___ day of _______, 1996, by and among SKYMALL, INC., a Nevada corporation (the "Company"), and Robert M. and Christi M. Worsley, Alan C. and Karen Ashton, Bert A. Getz, Richard and Mary O'Riley, Fairfax Cone O'Riley, Henry M. O'Riley, James K. O'Riley, Rowan T. O'Riley and Gertrude M. O'Riley (the "Stockholders") to become effective as of the Termination Date (as defined below).



RECITALS



For the period commencing on November 16, 1989 through the Termination Date (the "S Corporation Period"), the Company was subject to an election to be taxed as an "S" corporation under Section 1362 of the Internal Revenue Code of 1986, as amended (the "Code"), and under similar provisions of state income tax laws. During the S Corporation Period, the Company did not incur any material income tax liability for federal and state income taxes and the Company's items of income, loss and deductions were passed through to the Stockholders in varying percentages, depending upon the respective periods that they owned the shares of the Common Stock of the Company during the S Corporation Period. The Stockholders included such items on their respective income tax returns. The Company's election to be taxed as an S Corporation for federal and state income tax purposes will terminate in connection with a private placement and sale of shares of the Common Stock of the Company (the "Termination Date"). Accordingly, the parties desire to set forth their agreement with respect to certain income taxes which may be imposed upon one or more of the Stockholders or the Company after the Termination Date as a result of the conduct of the Company's business during the S Corporation Period.



IT IS, THEREFORE, AGREED:



1. Indemnification. In the event any governmental taxing authority, including, without limitation, the Internal Revenue Service, the Arizona Department of Revenue or any other state taxing authority (a "Taxing Authority"), adjusts, for any reason whatsoever, a Stockholder's taxable income or loss, tax credits or recapture of tax credits on account of any of the activities of the Company during the S Corporation Period (an "Adjustment"), the Company shall pay, on demand, to such Stockholder from time to time an amount which equals the sum of (a) the additional federal and state income taxes actually paid by the Stockholder as a result of the Adjustment, as certified by the Stockholder in writing, including the aggregate amount of any interest, penalties or additions to tax paid by the Stockholder as a result of such Adjustment, plus (b) the aggregate amount of all expenses, including reasonable attorneys' fees and accountants' fees, incurred by the Stockholder in connection with or as a result of the Adjustment, including the total amount of any such expenses or fees incurred in connection with the enforcement of this Agreement, plus (c) an amount, computed using the highest generally applicable marginal federal and state income tax rates applicable to
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