**INDEMNIFICATION AGREEMENT**

 

 

ThisINDEMNIFICATION AGREEMENT (this "Agreement") is made and entered intothis ____ day of _______  (the "Effective Date") by and between PC Mall,Inc., a Delaware corporation (the "Company"), and                            (the "Indemnitee").

 

WHEREAS, theCompany believes it is essential to retain and attract qualified directors andofficers;

 

WHEREAS, theIndemnitee is a director and/or officer of the Company;

 

WHEREAS,both the Company and the Indemnitee recognize the increased risk of litigationand other claims being asserted against directors and officers of publiccompanies; 

 

WHEREAS, theCompany's Amended and Restated Bylaws (the "Bylaws") require the Companyto indemnify and advance expenses to its directors and officers to the extentpermitted by the DGCL (as hereinafter defined);

 

WHEREAS, theIndemnitee has been serving and intends to continue serving as a director and/orofficer of the Company in part in reliance on the Bylaws; 

 

WHEREAS, inrecognition of the Indemnitee's need for (i) substantial protection againstpersonal liability****based on the Indemnitee's reliance on the Bylaws,(ii) specific contractual assurance that the protection promised by the Bylawswill be available to the Indemnitee, regardless of, among other things, anyamendment to or revocation of the Bylaws or any change in the composition of theCompany's Board of Directors (the "Board") or acquisition transactionrelating to the Company, and (iii) an inducement to continue to provideeffective services to the Company as a director and/or officer thereof, theCompany wishes to provide for the indemnification of the Indemnitee and toadvance expenses to the Indemnitee to the fullest extent permitted by law and asset forth in this Agreement, and, to the extent insurance is maintained by theCompany, to provide for the continued coverage of the Indemnitee under theCompany's directors' and officers' liability insurance policies; 

 

NOW,THEREFORE, in consideration of the premises contained herein and of theIndemnitee continuing to serve the Company directly or, at its request, withanother enterprise, and intending to be legally bound hereby, the parties heretoagree as follows:

 

1.         **Certain Definitions**.

 

           (a)        A "Change in Control" shall be deemed to have occurred if: 

 

(i)         any "person," as such term is used inSections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, andthe rules and regulations thereunder (the "Exchange Act"), other than(a) a trustee or other fiduciary holding securities under an employee benefitplan of the Company; (b) a corporation owned, directly or indirectly, by thestockholders of the Company in substantially the same proportions as theirownership of stock of the Company; or (c) any current beneficial stockholder orgroup, as defined by Rule 13d-5 of the Exchange Act, including the heirs,assigns and successors thereof, of beneficial ownership, within the meaning ofRule 13d-3 of the Exchange Act, of securities possessing more than 50% of thetotal combined voting power of the Company's outstanding securities; hereafterbecomes the "beneficial owner," as defined in Rule 13d-3 of the Exchange Act,directly or indirectly, of securities of the Company representing 20% or more ofthe total combined voting power represented by the Company's then outstandingVoting Securities;

 

(ii)       during any period of two consecutive years, individuals who at the beginning ofsuch period constitute the Board and any new director whose election by theBoard or nomination for election by the Company's stockholders was approved by avote of at least two-thirds of the directors then in office who either weredirectors at the beginning of the period or whose election or nomination forelection was previously so approved, cease for any reason to constitute amajority thereof; or

 

(iii)      the stockholders of the Company approve a merger or consolidation of the Companywith any other corporation, other than a merger or consolidation which wouldresult in the Voting Securities of the Company outstanding immediately priorthereto continuing to represent (either by remaining outstanding or by beingconverted into Voting Securities of the surviving entity) at least 80% of thetotal voting power represented by the Voting Securities of the Company or suchsurviving entity outstanding immediately after such merger or consolidation, orthe stockholders of the Company approve a plan of complete liquidation of theCompany or an agreement for the sale or disposition by the Company, in onetransaction or a series of transactions, of all or substantially all of theCompany's assets.

 

           (b)           "DGCL" shall mean the General Corporation Law of the Stateof Delaware, as the same exists or may hereafter be amended or interpreted;provided, however, that in the case of any such amendment or interpretation,only to the extent that such amendment or interpretation permits the Company toprovide broader indemnification rights than were permitted prior thereto.

 

           (c)           "Expense" shall mean attorneys' fees and all other costs,expenses and obligations paid or incurred in connection with investigating,defending, being a witness in or participating in (including on appeal), orpreparing for any of the foregoing, any Proceeding relating to any IndemnifiableEvent.

 

           (d)           "Indemnifiable Event" shall mean any event or occurrencethat takes place either prior to or after the execution of this Agreement,related to the fact that the Indemnitee is or was a director or officer of theCompany, or is or was serving at the request of the Company as a director,officer, employee, or agent of another corporation or of a partnership, jointventure, trust or other enterprise, including service with respect to employeebenefit plans, or by reason of anything done or not done by the Indemnitee inany such capacity.

 

           (e)           "Potential Change in Control" shall be deemed to occur if (i)the Company enters into an agreement or arrangement, the consummation of whichwould result in the occurrence of a Change in Control; (ii) any person(including the Company) publicly announces an intention to take or to considertaking actions which, if consummated, would constitute a Change in Control;(iii) any person (other than a trustee or other fiduciary holding securitiesunder an employee benefit plan of the Company acting in such capacity or acorporation owned, directly or indirectly, by the stockholders of the Company insubstantially the same proportions as their ownership of stock of the Company)who is or becomes the beneficial owner, directly or indirectly, of securities ofthe Company representing 10% or more of the combined voting power of theCompany's then outstanding Voting Securities, increases his or her beneficialownership of such securities by 5% or more over the percentage so owned by suchperson on the date hereof; or (iv) the Board adopts a resolution to the effectthat, for purposes of this Agreement, a Potential Change in Control hasoccurred.

 

(f)            "Proceeding" shall mean any threatened, pending orcompleted action, suit, investigation or proceeding, and any appeal thereof,whether civil, criminal, administrative or investigative and/or any inquiry orinvestigation, whether conducted by the Company or any other party, that theIndemnitee in good faith believes might lead to the institution of any suchaction.

 

           (g)           "Reviewing Party" shall mean any appropriate person or bodyconsisting of a member or members of the Company's Board or any other person orbody appointed by the Board (including the special independent counsel referredto in Section 6) who is not a party to the particular Proceeding with respect towhich the Indemnitee is seeking indemnification.

 

           (h)           "Voting Securities" shall mean any securities of theCompany which vote generally in the election of directors.

 

2.            **Indemnification. **In the event the Indemnitee was or is aparty to or is involved (as a party, witness, or otherwise) in any Proceeding byreason of (or arising in part out of) an Indemnifiable Event, whether the basisof the Proceeding is the Indemnitee's alleged action in an official capacity asa director or officer or in any other capacity while serving as a director orofficer, the Company shall indemnify the Indemnitee to the fullest extentpermitted by the DGCL against any and all Expenses, liability, and loss(including judgments, fines, ERISA excise taxes or penalties, and amounts paidor to be paid in settlement, and any interest, assessments, or other chargesimposed thereon, and any federal, state, local, or foreign taxes imposed on anydirector or officer as a result of the actual or deemed receipt of any paymentsunder this Agreement) (collectively, "Liabilities") reasonably incurredor suffered by such person in connection with such Proceeding.  The Companyshall provide indemnification pursuant to this Section 2 as soon as practicable,but in no event later than 30 days after it receives written demand from theIndemnitee.  Notwithstanding anything in this Agreement to the contrary andexcept as provided in Section 5 below, the Indemnitee shall not be entitled toindemnification pursuant to this Agreement (i) in connection with any Proceedinginitiated by the Indemnitee against the Company or any director or officer ofthe Company unless the Company has joined in or consented to the initiation ofsuch Proceeding or (ii) on account of any suit in which judgment is renderedagainst the Indemnitee pursuant to Section 16(b) of the Exchange Act for anaccounting of profits made from the purchase or sale by the Indemnitee ofsecurities of the Company.

 

3.            **Advancement of Expenses. **The Company shall advanceExpenses to the Indemnitee within 30 business days of such request (an "ExpenseAdvance"); provided, however, that if required by applicable corporate lawssuch Expenses shall be advanced only upon delivery to the Company of anundertaking by or on behalf of the Indemnitee to repay such amount if it isultimately determined that the Indemnitee is not entitled to be indemnified bythe Company; and provided further, that the Company shall make such advancesonly to the extent permitted by law.   Expenses incurred by the Indemnitee whilenot acting in his/her capacity as a director or officer, including service withrespect to employee benefit plans, may be advanced upon such terms andconditions as the Board, in its sole discretion, deems appropriate.

 

4.            **Review Procedure for Indemnification. **Notwithstanding theforegoing, (i) the obligations of the Company under Sections 2 and 3 above shallbe subject to the condition that the Reviewing Party shall not have determined(in a written opinion, in any case in which the special independent counselreferred to in Section 6 hereof is involved) that the Indemnitee would not bepermitted to be indemnified under applicable law, and (ii) the obligation of theCompany to make an Expense Advance pursuant to Section 3 above shall be subjectto the condition that, if, when and to the extent that the Reviewing Partydetermines that the Indemnitee would not be permitted to be so indemnified underapplicable law, the Company shall be entitled to be reimbursed by the Indemnitee(who hereby agrees to reimburse the Company) for all such amounts theretoforepaid; provided, however, that if the Indemnitee has commenced legal proceedingsin a court of competent jurisdiction pursuant to Section 5 below to secure adetermination that the Indemnitee should be indemnified under applicable law,any determination made by the Reviewing Party that the Indemnitee would not bepermitted to be indemnified under applicable law shall not be binding and theIndemnitee shall not be required to reimburse the Company for any ExpenseAdvance until a final judicial determination is made with respect thereto (as towhich all rights of appeal therefrom have been exhausted or have lapsed).   TheIndemnitee's obligation to reimburse the Company for Expense Advances pursuantto this Section 4 shall be unsecured and no interest shall be charged thereon. If there has not been a Change in Control, the Reviewing Party shall be selectedby the Board, and if there has been such a Change in Control, other than aChange in Control which has been approved by a majority of the Company's Boardwho were directors immediately prior to such Change in Control, the ReviewingParty shall be the special independent counsel referred to in Section 6 hereof.

 

5.            **Enforcement of Indemnification Rights.**  If the ReviewingParty determines that the Indemnitee substantively would not be permitted to beindemnified in whole or in part under applicable law, or if the Indemnitee hasnot otherwise been paid in full pursuant to Sections 2 and 3 above within 30days after a written demand has been received by the Company, the Indemniteeshall have the right to commence litigation in any court in the State ofDelaware having subject matter jurisdiction thereof and in which venue is properto recover the unpaid amount of the demand (an "Enforcement Proceeding")and, if successful in whole or in part, the Indemnitee shall be entitled to bepaid any and all Expenses in connection with such Enforcement Proceeding.  TheCompany hereby consents to service of process for such Enforcement Proceedingand to appear in any such Enforcement Proceeding.  Any determination by theReviewing Party otherwise shall be conclusive and binding on the Company and theIndemnitee.

 

6.            **Change in Control**.  The Company agrees that if there is aChange in Control of the Company, other than a Change in Control which has beenapproved by a majority of the Company's Board who were directors immediatelyprior to such Change in Control, then with respect to all matters thereafterarising concerning the rights of the Indemnitee to indemnity payments andExpense Advances under this Agreement or any other agreement or under applicablelaw or the Company's Certificate of Incorporation or Bylaws now or hereafter ineffect relating to indemnification for Indemnifiable Events, the Company shallseek legal advice only from special independent counsel selected by theIndemnitee and approved by the Company, which approval shall not be unreasonablywithheld.  Such special independent counsel shall not have otherwise performedservices for the Company or the Indemnitee, other than in connection with suchmatters, within the last five years.  Such independent counsel shall not includeany person who, under the applicable standards of professional conduct thenprevailing, would have a conflict of interest in representing either the Companyor the Indemnitee in an action to determine the Indemnitee's rights under thisAgreement.  Such counsel, among other things, shall render its written opinionto the Company and the Indemnitee as to whether and to what extent theIndemnitee would be permitted to be indemnified under applicable law.  TheCompany agrees to pay the reasonable fees of the special independent counselreferred to above and to indemnify fully such counsel against any and allexpenses (including attorneys' fees), claims, liabilities and damages arisingout of or relating to this Agreement or the engagement of special independentcounsel pursuant to this Agreement.

 

7.            **Establishment of Trust**.  In the event of a Potential Changein Control, the Company shall, upon written request by the Indemnitee, create atrust (the "Trust") for the benefit of the Indemnitee, and from time totime upon written request of the Indemnitee shall fund such Trust, to the extentpermitted by law, in an amount sufficient to satisfy any and all Expensesreasonably anticipated at the time of each such request to be incurred inconnection with investigating, preparing for and defending any Proceedingrelating to an Indemnifiable Event, and any and all judgments, fines, penaltiesand settlement amounts of any and all Proceedings relating to an IndemnifiableEvent from time to time actually paid or claimed, reasonably anticipated orproposed to be paid.  The amount or amounts to be deposited in the Trustpursuant to the foregoing funding obligation shall be determined by theReviewing Party, in any case in which the special independent counsel referredto in Section 6 is involved.  The terms of the Trust shall provide that upon aChange in Control (i) the Trust shall not be revoked or the principal thereofinvaded, without the written consent of the Indemnitee, (ii) the trustee of theTrust (the "Trustee") shall advance, within ten business days of arequest by the Indemnitee, any and all Expenses to the Indemnitee, to the extentpermitted by law, (and the Indemnitee hereby agrees to reimburse the Trust underthe circumstances under which the Indemnitee would be required to reimburse theCompany under Section 4 of this Agreement), (iii) the Trust shall continue to befunded by the Company in accordance with the funding obligation set forth above,(iv) the Trustee shall promptly pay to the Indemnitee all amounts for which theIndemnitee shall be entitled to indemnification pursuant to this Agreement orotherwise, and (v) all unexpended funds in the Trust shall revert to the Companyupon a final determination by the Reviewing Party or a court of competentjurisdiction, as the case may be, that the Indemnitee has been fully indemnifiedunder the terms of this Agreement.  The Trustee shall be a bank or trust companyor other individual or entity chosen by the Indemnitee and acceptable to andapproved of by the Company.  Nothing in this Section 7 shall relieve the Companyof any of its obligations under this Agreement.  All income earned on the assetsheld in the Trust shall be reported as income by the Company for federal, state,local and foreign tax purposes.

 

8.            **Partial Indemnity**.  If the Indemnitee is entitled under anyprovision of this Agreement to indemnification by the Company for some or aportion of the Expenses and  Liabilities, but not, however, for all of the totalamount thereof, the Company shall nevertheless indemnify the Indemnitee for theportion thereof to which the Indemnitee is entitled.  Moreover, notwithstandingany other provision of this Agreement, to the extent that the Indemnitee hasbeen successful on the merits or otherwise in defense of any or all Proceedingsrelating in whole or in part to an Indemnifiable Event or in defense of anyissue or matter therein, including dismissal without prejudice, the Indemniteeshall be indemnified against all Expenses incurred in connection therewith.  Inconnection with any determination by the Reviewing Party or otherwise as towhether the Indemnitee is entitled to be indemnified hereunder, the burden ofproof shall be on the Company to establish that the Indemnitee is not soentitled. 

 

9.            **Non-exclusivity**.  The rights of the Indemnitee hereundershall be in addition to any other rights the Indemnitee may have under anystatute, provision of the Company's Certificate of Incorporation or Bylaws, voteof stockholders or disinterested directors or otherwise, both as to action in anofficial capacity and as to action in another capacity while holding suchoffice.  To the extent that a change in the DGCL permits greater indemnificationby agreement than would be afforded currently under the Company's Certificate ofIncorporation and Bylaws and this Agreement, it is the intent of the partieshereto that the Indemnitee shall enjoy by this Agreement the greater benefits soafforded by such change.  

 

10.         **Liability Insurance**.  To the extent the Company maintains an insurancepolicy or policies providing directors' and officers' liability insurance, theIndemnitee shall be covered by such policy or policies, in accordance with itsor their terms, to the maximum extent of the coverage available for any directoror officer of the Company.

 

11.         **Settlement of Claims**.  The Company shall not be liable to indemnify theIndemnitee under this Agreement (a) for any amounts paid in settlement of anyaction or claim effected without the Company's written consent, which consentshall not be unreasonably withheld; or (b) for any judicial award if the Companywas not given a reasonable and timely opportunity, at its expense, toparticipate in the defense of such action.

 

12.         **No Presumption**.  For purposes of this Agreement, to the fullest extentpermitted by law, the termination of any Proceeding, action, suit or claim, byjudgment, order, settlement (whether with or without court approval) orconviction, or upon a plea of nolo contendere, or its equivalent, shall notcreate a presumption that the Indemnitee did not meet any particular standard ofconduct or have any particular belief or that a court has determined thatindemnification is not permitted by applicable law.

 

13.         **Period of Limitations**.  No legal action shall be brought and no cause ofaction shall be asserted by or on behalf of the Company or any affiliate of theCompany against the Indemnitee, the Indemnitee's spouse, heirs, executors orpersonal or legal representatives after the expiration of two years from thedate of accrual of such cause of action, or such longer period as may berequired by state law under the circumstances, and any claim or cause of actionof the Company or its affiliate shall be extinguished and deemed released unlessasserted by the timely filing of a legal action within such period; provided,however, that if any shorter period of limitations is otherwise applicable toany such cause of action, such shorter period shall govern.

 

14.         **Amendment of this Agreement**.  No supplement, modification or amendment ofthis Agreement shall be binding unless executed in writing by both of theparties hereto.  No waiver of any of the provisions of this Agreement shall bedeemed or shall constitute a waiver of any other provisions hereof (whether ornot similar), nor shall such waiver constitute a continuing waiver.  Except asspecifically provided herein, no failure to exercise or any delay in exercisingany right or remedy hereunder shall constitute a waiver thereof.

 

15.         **Subrogation**.  In the event of payment under this Agreement, the Companyshall be subrogated to the extent of such payment to all of the rights ofrecovery of the Indemnitee, who shall execute all papers required and shall doeverything that may be necessary to secure such rights, including the executionof such documents necessary to enable the Company effectively to bring suit toenforce such rights.

 

16.         **No Duplication of Payments**.  The Company shall not be liable under thisAgreement to make any payment in connection with any claim made againstIndemnitee to the extent the Indemnitee has otherwise actually received payment(under any insurance policy, Bylaw, vote, agreement or otherwise) of the amountsotherwise indemnifiable hereunder.

 

17.         **Binding Effect**.  This Agreement shall be binding upon and inure to thebenefit of and be enforceable by the parties hereto and their respectivesuccessors, assigns, including any direct or indirect successor by purchase,merger, consolidation or otherwise to all or substantially all of the businessand/or assets of the Company, spouses, heirs, and personal and legalrepresentatives.  The Company shall require and cause any successor (whetherdirect or indirect by purchase, merger, consolidation or otherwise) to all,substantially all, or a substantial part, of the business and/or assets of theCompany, by written agreement in form and substance satisfactory to theIndemnitee, expressly to assume and agree to perform this Agreement in the samemanner and to the same extent that the Company would be required to perform ifno such succession had taken place.  This Agreement shall continue in effectregardless of whether the Indemnitee continues to serve as a director or officerof the Company or of any other enterprise at the Company's request.

 

18.         **Severability**.  The provisions of this Agreement shall be severable in theevent that any of the provisions hereof (including any provision within a singlesection, paragraph or sentence) is held by a court of competent jurisdiction tobe invalid, void or otherwise unenforceable, and the remaining provisions shallremain enforceable to the fullest extent permitted by law.  Furthermore, to thefullest extent possible, the provisions of this Agreement (including, withoutlimitation, each portion of this Agreement containing any provision held to beinvalid, void or otherwise unenforceable, that is not itself invalid, void orunenforceable) shall be construed so as to give effect to the intent manifestedby the provision held invalid, illegal or unenforceable.

 

19.         **Governing Law**.  This Agreement shall be governed by and construed andenforced in accordance with the laws of the State of Delaware applicable tocontracts made and to be performed in such State without giving effect to theprinciples of conflicts of laws.

 

20.         **Counterparts**.  This Agreement may be executed in one or morecounterparts, each of which shall be deemed an original, but all of whichtogether shall constitute one and the same instrument.

 

21.         **Notices**.  All notices, demands, and other communications required orpermitted hereunder shall be made in writing and shall be deemed to have beenduly given if delivered by hand, against receipt, or mailed, postage prepaid,certified or registered mail, return receipt requested, and addressed to theCompany at:

 

PC Mall,Inc.

2555 West190th Street

Torrance,CA 90504

 

                        and to the Indemnitee at the address set forth below theIndemnitee's signature.

 

Notice ofchange of address shall be effective only when done in accordance with thisSection.  All notices complying with this Section shall be deemed to have beenreceived on the date of delivery or on the third business day after mailing.

 

 

IN WITNESSWHEREOF, the parties hereto have duly executed and delivered this Agreement asof the day first set forth above.

 

**THE COMPANY:**

** **

**PC MALL,INC.**

 

 

By:                                                                  

 

Name:                                                              

 

Title:                                                                 

 

 

 

**                                                                       INDEMNITEE:**

 

 

                                                                                                                                    

                                                                                        Signature

 

 

                                                            Print Name:                                                        

 

 

                                                            Address:                                                           

                                                                                                                                    

                                                                                                                                    

 

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The Registrant has entered into the above form ofindemnification agreement, identical in all material respects except the partythereto and the date, with the following directors and executive officers of theRegistrant: 

 

Frank Khulusi

Ted Sanders

Dan DeVries

Kristin Rogers

Ron Reck

Mark Layton

Tom Maloof