**EXHIBIT 10.14**

 

**eCOST.COM, INC. 2004 STOCK INCENTIVE PLAN**

 **NOTICE OF STOCK OPTION AWARD**

Grantee's Name and  Address:                                                                                                

                                                                                                                                               

You (the "Grantee") have been  granted an option to purchase shares of Common Stock, subject to the terms and  conditions of this Notice of Stock Option Award (the "Notice"), the eCOST.com,  Inc. 2004 Stock Incentive Plan, as amended from time to time (the "Plan") and  the Stock Option Award Agreement (the "Option Agreement") attached hereto, as  follows.  Unless otherwise defined herein, the terms defined in the Plan shall  have the same defined meanings in this Notice.

  Award Number                                                                                                                      

  Date of Award                                                                                                                       

  Vesting Commencement Date                                                                                                 

  Exercise Price per Share                         $                                                                             

  Total Number of Shares Subject  to the Option (the "Shares")                                                                                                    

  Total Exercise Price                                $                                                                             

  Type of Option:                                     ______       Incentive  Stock Option

                                                              ______        Non-Qualified Stock Option

  Expiration Date:                                                                                                                     

  Post-Termination Exercise Period:          Ninety (90) Days

**Vesting Schedule:**

Subject to the Grantee's  Continuous Service and other limitations set forth in this Notice, the Plan  and the Option Agreement, the Option may be exercised, in whole or in part, in  accordance with the following schedule:

Vesting:  ___% of  the Shares subject to the Option shall vest ___ months after the Vesting  Commencement Date, and ___% of the Shares subject to the Option shall vest on  each _____ anniversary of the Vesting Commencement Date thereafter, such that  the Option will be fully vested ___ years after the Vesting Commencement Date.

Limitation on Exercise:  Notwithstanding the  vesting schedule set forth herein, the Option may not be exercised in whole or  in part until after the earlier of (i) the Separation or (ii) eighteen (18)  months following the Registration Date.

Acceleration:  In  the event of a Corporate Transaction, 

(a) for  the portion of the Option that is neither Assumed nor Replaced, the Vesting  Schedule (set forth above) with respect to such portion of the Option shall be  accelerated so that those Shares that would have vested within twelve (12)  months after the date of the Corporate Transaction will be deemed to be vested  and exercisable immediately prior to the specified effective date of such  Corporate Transaction, provided that the Grantee's Continuous Service has not  terminated prior to such date; and 

(b) for  the portion of the Option that is Assumed or Replaced, the vesting schedule  with respect to such portion of the Option (if Assumed) or the replacement  award (if Replaced) shall be accelerated so that those Shares that would have  vested within twelve (12) months after the date of the Corporate Transaction  will be deemed to be vested and exercisable immediately upon termination of  the Grantee's Continuous Service if such Continuous Service is terminated by  the successor company or the Company without Cause within twelve (12) months  after the Corporate Transaction.

Leave of Absence:   During any authorized leave of absence, the vesting of the Option as provided  in this schedule shall be suspended after the leave of absence exceeds a  period of ninety (90) days.  Vesting of the Option shall resume upon the  Grantee's termination of the leave of absence and return to service to the  Company or a Related Entity.  The Vesting Schedule of the Option shall be  extended by the length of the suspension.

Termination for Cause:   In the event of termination of the Grantee's Continuous Service for Cause, the  Grantee's right to exercise the Option shall terminate concurrently with the  termination of the Grantee's Continuous Service, except as otherwise  determined by the Administrator.

**IN WITNESS WHEREOF,** the  Company and the Grantee have executed this Notice and agree that the Option is  to be governed by the terms and conditions of this Notice, the Plan, and the  Option Agreement.

**eCOST.COM, INC.**

By:                                                                              

  Title: ____________________________________ 

             THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION  SHALL VEST, IF AT ALL, ONLY DURING THE PERIOD OF THE GRANTEE'S CONTINUOUS  SERVICE (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THE OPTION OR  ACQUIRING SHARES HEREUNDER).  THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT  NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON  THE GRANTEE ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE  GRANTEE'S CONTINUOUS SERVICE, NOR SHALL IT INTERFERE IN ANY WAY WITH THE  GRANTEE'S RIGHT OR THE RIGHT OF THE COMPANY OR RELATED ENTITY TO WHICH THE  GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE'S CONTINUOUS SERVICE, WITH  OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE.  THE GRANTEE ACKNOWLEDGES THAT  UNLESS THE GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE  CONTRARY, THE GRANTEE'S STATUS IS AT WILL.

The  Grantee acknowledges receipt of a copy of the Plan and the Option Agreement,  and represents that he or she is familiar with the terms and provisions  thereof, and hereby accepts the Option subject to all of the terms and  provisions hereof and thereof.  The Grantee has reviewed this Notice, the  Plan, and the Option Agreement in their entirety, has had an opportunity to  obtain the advice of counsel prior to executing this Notice, and fully  understands all provisions of this Notice, the Plan and the Option Agreement.   The Grantee hereby agrees that all questions of interpretation and  administration relating to this Notice, the Plan and the Option Agreement  shall be resolved by the Administrator in accordance with Section 13 of the  Option Agreement.  The Grantee further agrees to the venue selection and  waiver of a jury trial in accordance with Section 14 of the Option Agreement.   The Grantee further agrees to notify the Company upon any change in the  residence address indicated in this Notice.

Dated: ______________________                 Signed:  __________________________________ 

                                                          Grantee
 

**Award Number:             _              **

**eCOST.COM, INC. 2004 STOCK INCENTIVE PLAN**

 **STOCK OPTION AWARD AGREEMENT**

1.                   Grant of Option.   eCOST.com, Inc., a Delaware corporation (the "Company"), hereby grants to the  Grantee (the "Grantee") named in the Notice of Stock Option Award (the  "Notice"), an option (the "Option") to purchase the Total Number of Shares of  Common Stock subject to the Option (the "Shares") set forth in the Notice, at  the Exercise Price per Share set forth in the Notice (the "Exercise Price")  subject to the terms and provisions of the Notice, this Stock Option Award  Agreement (the "Option Agreement") and the Company's 2004 Stock  Incentive Plan, as amended from time to time (the "Plan"), which are  incorporated herein by reference.  Unless otherwise defined herein, the terms  defined in the Plan shall have the same defined meanings in this Option  Agreement.

If designated in the Notice as an Incentive Stock  Option, the Option is intended to qualify as an Incentive Stock Option as  defined in Section 422 of the Code.  However, notwithstanding such  designation, to the extent that the aggregate Fair Market Value of Shares  subject to Options designated as Incentive Stock Options which become  exercisable for the first time by the Grantee during any calendar year (under  all plans of the Company or any Parent or Subsidiary of the Company) exceeds  $100,000, such excess Options, to the extent of the Shares covered thereby in  excess of the foregoing limitation, shall be treated as Non-Qualified Stock  Options.  For this purpose, Incentive Stock Options shall be taken into  account in the order in which they were granted, and the Fair Market Value of  the Shares shall be determined as of the date the Option with respect to such  Shares is awarded.

2.                   Exercise of Option.

(a)                Right to Exercise.  The  Option shall be exercisable during its term in accordance with the Vesting  Schedule set out in the Notice and with the applicable provisions of the Plan  and this Option Agreement.  Notwithstanding the Vesting Schedule set out in  the notice, the Option may not be exercised in whole or in part until after  the earlier to occur of (i) the Separation or (ii) eighteen (18) months  following the Registration Date.  The Option shall be subject to the  provisions of Section 11 of the Plan relating to the exercisability or termination  of the Option in the event of a Corporate Transaction or Change in Control.   The Grantee shall be subject to reasonable limitations on the number of  requested exercises during any monthly or weekly period as determined by the  Administrator.  In no event shall the Company issue fractional Shares.   

(b)                Method of Exercise.  The  Option shall be exercisable by delivery of an exercise notice (a form of which  is attached as Exhibit A) or by such other procedure as specified from time to  time by the Administrator which shall state the election to exercise the  Option, the whole number of Shares in respect of which the Option is being  exercised, and such other provisions as may be required by the Administrator.   The exercise notice shall be delivered in person, by certified mail, or by  such other method (including electronic transmission) as determined from time  to time by the Administrator to the Company accompanied by payment of the  Exercise Price.  The Option shall be deemed to be exercised upon receipt by  the Company of such notice accompanied by the Exercise Price, which, to the  extent selected, shall be deemed to be satisfied by use of the broker-dealer  sale and remittance procedure to pay the Exercise Price provided in  Section 3(d), below.

(c)                 Taxes.  No Shares will  be delivered to the Grantee or other person pursuant to the exercise of the  Option until the Grantee or other person has made arrangements acceptable to  the Administrator for the satisfaction of applicable income tax and employment  tax withholding obligations, including, without limitation, such other tax  obligations of the Grantee incident to the receipt of Shares or the  disqualifying disposition of Shares received on exercise of an Incentive Stock  Option.  Upon exercise of the Option, the Company or the Grantee's employer  may offset or withhold (from any amount owed by the Company or the Grantee's  employer to the Grantee) or collect from the Grantee or other person an amount  sufficient to satisfy such tax withholding obligations.

3.                   Method of Payment.   Payment of the Exercise Price shall be made by any of the following, or a  combination thereof, at the election of the Grantee; provided, however, that  such exercise method does not then violate any Applicable Law and, provided  further, that the portion of the Exercise Price equal to the par value of the  Shares must be paid in cash or other legal consideration permitted by the  Delaware General Corporation Law:

(a)                cash;

(b)               check;

(c)                surrender of Shares or delivery  of a properly executed form of attestation of ownership of Shares as the  Administrator may require which have a Fair Market Value on the date of  surrender or attestation equal to the aggregate Exercise Price of the Shares  as to which the Option is being exercised, provided, however, that Shares  acquired under the Plan or any other equity compensation plan or agreement of  the Company must have been held by the Grantee for a period of more than six  (6) months (and not used for another Award exercise by attestation during such  period); or

(d)               payment  through a broker-dealer sale and remittance procedure pursuant to which the  Grantee (i) shall provide written instructions to a Company-designated  brokerage firm to effect the immediate sale of some or all of the purchased  Shares and remit to the Company sufficient funds to cover the aggregate  exercise price payable for the purchased Shares and (ii) shall provide written  directives to the Company to deliver the certificates for the purchased Shares  directly to such brokerage firm in order to complete the sale transaction. 

4.                   Restrictions on Exercise.   The Option may not be exercised if the issuance of the Shares subject to the  Option upon such exercise would constitute a violation of any Applicable  Laws.  In addition, the Option may not be exercised until such time as the  Plan has been approved by the stockholders of the Company.  If the  exercise of the Option within the applicable time periods set forth in  Section 6, 7 and 8 of this Option Agreement is prevented by the provisions of  this Section 5, the Option shall remain exercisable until one (1) month after  the date the Grantee is notified by the Company that the Option is  exercisable, but in any event no later than the Expiration Date set forth in  the Notice.

5.                   Termination or Change of  Continuous Service.  In the event the Grantee's Continuous Service  terminates, other than for Cause, the Grantee may, but only during the  Post-Termination Exercise Period, exercise the portion of the Option that was  vested at the date of such termination (the "Termination Date").  The  Post-Termination Exercise Period shall commence on the Termination Date.  In  the event of termination of the Grantee's Continuous Service for Cause, the  Grantee's right to exercise the Option shall, except as otherwise determined  by the Administrator, terminate concurrently with the termination of the  Grantee's Continuous Service (also the "Termination Date").  In no event,  however, shall the Option be exercised later than the Expiration Date set  forth in the Notice.  In the event of the Grantee's change in status from  Employee, Director or Consultant to any other status of Employee, Director or  Consultant, the Option shall remain in effect and the Option shall continue to  vest in accordance with the Vesting Schedule set forth in the Notice;  provided, however, that with respect to any Incentive Stock Option that shall  remain in effect after a change in status from Employee to Director or  Consultant, such Incentive Stock Option shall cease to be treated as an  Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on  the day three (3) months and one (1) day following such change in status.   Except as provided in Sections 6 and 7 below, to the extent that the Option was unvested on the  Termination Date, or if the Grantee does not exercise the vested portion of  the Option within the Post-Termination Exercise Period, the Option  shall terminate.

6.                   Disability of Grantee.  In the event the Grantee's Continuous Service  terminates as a result of his or her Disability, the Grantee may, but only  within twelve (12) months commencing on the Termination Date (but in no event  later than the Expiration Date), exercise the portion of the Option that was  vested on the Termination Date; provided, however, that if such Disability is  not a "disability" as such term is defined in Section 22(e)(3) of the Code and  the Option is an Incentive Stock Option, such Incentive Stock Option shall  cease to be treated as an Incentive Stock Option and shall be treated as a  Non-Qualified Stock Option on the day three (3) months and one (1) day  following the Termination Date.  To the extent that the Option was unvested on  the Termination Date, or if the Grantee does not exercise the vested portion  of the Option within the time specified herein, the Option shall terminate.   Section 22(e)(3) of the Code provides that an individual is permanently and  totally disabled if he or she is unable to engage in any substantial gainful  activity by reason of any medically determinable physical or mental impairment  which can be expected to result in death or which has lasted or can be  expected to last for a continuous period of not less than twelve (12) months.

7.                   Death of Grantee.  In the event of the termination of the Grantee's  Continuous Service as a result of his or her death, or in the event of the  Grantee's death during the Post-Termination Exercise Period or during the  twelve (12) month period following the Grantee's termination of Continuous  Service as a result of his or her Disability, the person who acquired the  right to exercise the Option pursuant to Section 8 may exercise the portion of  the Option that was vested at the date of termination within twelve (12)  months commencing on the date of death (but in no event later than the  Expiration Date).  To the extent that the Option was unvested on the date of  death, or if the vested portion of the Option is not exercised within the time  specified herein, the Option shall terminate.

8.                   Transferability of Option.   The Option, if an Incentive Stock Option, may not be transferred in any manner  other than by will or by the laws of descent and distribution and may be  exercised during the lifetime of the Grantee only by the Grantee.  The Option,  if a Non-Qualified Stock Option, may not be transferred in any manner other  than by will or by the laws of descent and distribution, provided, however,  that a Non-Qualified Stock Option may be transferred during the lifetime of  the Grantee to the extent and in the manner authorized by the Administrator.   Notwithstanding the foregoing, the Grantee may designate one or more  beneficiaries of the Grantee's Incentive Stock Option or Non-Qualified Stock  Option in the event of the Grantee's death on a beneficiary designation form  provided by the Administrator.  Following the death of the Grantee, the  Option, to the extent provided in Section 7, may be exercised (a) by the  person or persons designated under the deceased Grantee's beneficiary  designation or (b) in the absence of an effectively designated beneficiary, by  the Grantee's legal representative or by any person empowered to do so under  the deceased Grantee's will or under the then applicable laws of descent and  distribution.  The terms of the Option shall be binding upon the executors,  administrators, heirs, successors and transferees of the Grantee. 

9.                   Term of Option.  The  Option must be exercised no later than the Expiration Date set forth in the  Notice or such earlier date as otherwise provided herein.  After the  Expiration Date or such earlier date, the Option shall be of no further force  or effect and may not be exercised.

10.               Tax  Consequences.  Set forth below is a brief summary as of the date of this  Option Agreement of some of the federal tax consequences of exercise of the  Option and disposition of the Shares.  THIS SUMMARY IS NECESSARILY INCOMPLETE,  AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.  THE GRANTEE SHOULD  CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING OF THE SHARES.

(a)                 Exercise of Incentive Stock  Option.  If the Option qualifies as an Incentive Stock Option, there will  be no regular federal income tax liability upon the exercise of the Option,  although the excess, if any, of the Fair Market Value of the Shares on the  date of exercise over the Exercise Price will be treated as income for  purposes of the alternative minimum tax for federal tax purposes and may  subject the Grantee to the alternative minimum tax in the year of exercise.   However, the Internal Revenue Service issued proposed regulations which would  subject the Grantee to withholding at the time the Grantee exercises an  Incentive Stock Option for Social Security and Medicare based upon the excess,  if any, of the Fair Market Value of the Shares on the date of exercise over  the Exercise Price.  These proposed regulations are subject to further  modification by the Internal Revenue Service and, if adopted, would be  effective only for the exercise of an Incentive Stock Option that occurs two  years after the regulations are issued in final form.

(b)                Exercise of Incentive Stock  Option Following Disability.  If the Grantee's Continuous Service  terminates as a result of Disability that is not permanent and total  disability as such term is defined in Section 22(e)(3) of the Code, to the  extent permitted on the date of termination, the Grantee must exercise an  Incentive Stock Option within three (3) months of such termination for the  Incentive Stock Option to be qualified as an Incentive Stock Option.   Section 22(e)(3) of the Code provides that an individual is permanently and  totally disabled if he or she is unable to engage in any substantial gainful  activity by reason of any medically determinable physical or mental impairment  which can be expected to result in death or which has lasted or can be  expected to last for a continuous period of not less than twelve (12) months.   

(c)                 Exercise of Non-Qualified  Stock Option.  On exercise of a Non-Qualified Stock Option, the Grantee  will be treated as having received compensation income (taxable at ordinary  income tax rates) equal to the excess, if any, of the Fair Market Value of the  Shares on the date of exercise over the Exercise Price.  If the Grantee is an  Employee or a former Employee, the Company will be required to withhold from  the Grantee's compensation or collect from the Grantee and pay to the  applicable taxing authorities an amount in cash equal to a percentage of this  compensation income at the time of exercise, and may refuse to honor the  exercise and refuse to deliver Shares if such withholding amounts are not  delivered at the time of exercise.

(d)                Disposition of Shares.   In the case of a Non-Qualified Stock Option, if Shares are held for more than  one year, any gain realized on disposition of the Shares will be treated as  long-term capital gain for federal income tax purposes.  In the case of an  Incentive Stock Option, if Shares transferred pursuant to the Option are held  for more than one year after receipt of the Shares and are disposed more than  two years after the Date of Award, any gain realized on disposition of the  Shares also will be treated as capital gain for federal income tax purposes  and subject to the same tax rates and holding periods that apply to Shares  acquired upon exercise of a Non-Qualified Stock Option.  If Shares purchased  under an Incentive Stock Option are disposed of prior to the expiration of  such one-year or two-year periods, any gain realized on such disposition will  be treated as compensation income (taxable at ordinary income rates) to the  extent of the difference between the Exercise Price and the lesser of (i) the  Fair Market Value of the Shares on the date of exercise, or (ii) the sale  price of the Shares.

11.               Entire  Agreement: Governing Law.  The Notice, the Plan and this Option Agreement  constitute the entire agreement of the parties with respect to the subject  matter hereof and supersede in their entirety all prior undertakings and  agreements of the Company and the Grantee with respect to the subject matter  hereof, and may not be modified adversely to the Grantee's interest except by  means of a writing signed by the Company and the Grantee.  Nothing in the  Notice, the Plan and this Option Agreement (except as expressly provided  therein) is intended to confer any rights or remedies on any persons other  than the parties.  The Notice, the Plan and this Option Agreement are to be  construed in accordance with and governed by the internal laws of the  State of California without giving effect to any choice of law rule that would  cause the application of the laws of any jurisdiction other than the internal  laws of the State of California to the rights and duties of the parties.   Should any provision of the Notice, the Plan or this Option Agreement be  determined to be illegal or unenforceable, such provision shall be enforced to  the fullest extent allowed by law and the other provisions shall nevertheless  remain effective and shall remain enforceable.  

12.               Construction.  The  captions used in the Notice and this Option Agreement are inserted for  convenience and shall not be deemed a part of the Option for construction or  interpretation.  Except when otherwise indicated by the context, the singular  shall include the plural and the plural shall include the singular.  Use of  the term "or" is not intended to be exclusive, unless the context clearly  requires otherwise.

13.               Administration and  Interpretation.  Any question or dispute regarding the administration or  interpretation of the Notice, the Plan or this Option Agreement shall be  submitted by the Grantee or by the Company to the Administrator.  The  resolution of such question or dispute by the Administrator shall be final and  binding on all persons.  

14.               Venue and Waiver of Jury Trial.   The Company, the Grantee, and the Grantee's assignees pursuant to Section 8  (the "parties") agree that any suit, action, or proceeding arising out of or  relating to the Notice, the Plan or this Option Agreement shall be brought in  the United States District Court for the Central District of California (or  should such court lack jurisdiction to hear such action, suit or proceeding,  in a California state court in the County of Los Angeles) and that the parties  shall submit to the jurisdiction of such court.  The parties irrevocably  waive, to the fullest extent permitted by law, any objection the party may  have to the laying of venue for any such suit, action or proceeding brought in  such court.  THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT THEY HAVE OR MAY HAVE  TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING.  If any one or more  provisions of this Section 14 shall for any reason be held invalid or  unenforceable, it is the specific intent of the parties that such provisions  shall be modified to the minimum extent necessary to make it or its  application valid and enforceable.

15.               Notices.  Any notice  required or permitted hereunder shall be given in writing and shall be deemed  effectively given upon personal delivery, upon deposit for delivery by an  internationally recognized express mail courier service or upon deposit in the  United States mail by certified mail (if the parties are within the United  States), with postage and fees prepaid, addressed to the other party at its  address as shown in these instruments, or to such other address as such party  may designate in writing from time to time to the other party.

**END OF  AGREEMENT**
 
 

**EXHIBIT A**

**eCOST.COM, INC. 2004 STOCK INCENTIVE PLAN**

**EXERCISE NOTICE**

eCOST.com, Inc.

2555 West 190th Street, Suite 106

Torrance, California90504Attention: Secretary

1.                  Exerciseof Option.  Effective as of today, ______________, ___ the undersigned (the"Grantee") hereby elects to exercise the Grantee's option to purchase___________ shares of the Common Stock (the "Shares") of eCOST.com, Inc. (the"Company") under and pursuant to the Company's 2004 Stock Incentive Plan, asamended from time to time (the "Plan") and the [  ] Incentive [X] Non-QualifiedStock Option Award Agreement (the "Option Agreement") and Notice of Stock OptionAward (the "Notice") dated ________________.  Unless otherwise defined herein,the terms defined in the Plan shall have the same defined meanings in thisExercise Notice.

2.                  Representations of the Grantee.  The Grantee acknowledges that the Granteehas received, read and understood the Notice, the Plan and the Option Agreementand agrees to abide by and be bound by their terms and conditions.  

3.                  Rights asStockholder.  Until the stock certificate evidencing such Shares is issued(as evidenced by the appropriate entry on the books of the Company or of a dulyauthorized transfer agent of the Company), no right to vote or receive dividendsor any other rights as a stockholder shall exist with respect to the Shares,notwithstanding the exercise of the Option.  The Company shall issue (or causeto be issued) such stock certificate promptly after the Option is exercised.  Noadjustment will be made for a dividend or other right for which the record dateis prior to the date the stock certificate is issued, except as provided inSection 10 of the Plan.

4.                  Deliveryof Payment.  The Grantee herewith delivers to the Company the full ExercisePrice for the Shares, which, to the extent selected, shall be deemed to besatisfied by use of the broker-dealer sale and remittance procedure to pay theExercise Price provided in Section 3(d) of the Option Agreement.

5.                  TaxConsultation.  The Grantee understands that the Grantee may suffer adversetax consequences as a result of the Grantee's purchase or disposition of theShares.  The Grantee represents that the Grantee has consulted with any taxconsultants the Grantee deems advisable in connection with the purchase ordisposition of the Shares and that the Grantee is not relying on the Company forany tax advice.

6.                  Taxes.  The Granteeagrees to satisfy all applicable foreign, federal, state and local income andemployment tax withholding obligations and herewith delivers to the Company thefull amount of such obligations or has made arrangements acceptable to theCompany to satisfy such obligations.  In the case of an Incentive Stock Option,the Grantee also agrees, as partial consideration for the designation of theOption as an Incentive Stock Option, to notify the Company in writing withinthirty (30) days of any disposition of any shares acquired by exercise of theOption if such disposition occurs within two (2) years from the Date of Award orwithin one (1) year from the date the Shares were transferred to the Grantee. If the Company is required to satisfy any foreign, federal, state or localincome or employment tax withholding obligations as a result of such an earlydisposition, the Grantee agrees to satisfy the amount of such withholding in amanner that the Administrator prescribes.  

7.                  Successors and Assigns. The Company may assign any of its rights under this Exercise Notice to single ormultiple assignees, and this agreement shall inure to the benefit of thesuccessors and assigns of the Company.  This Exercise Notice shall be bindingupon the Grantee and his or her heirs, executors, administrators, successors andassigns.

8.                  Construction.  Thecaptions used in this Exercise Notice are inserted for convenience and shall notbe deemed a part of this agreement for construction or interpretation.  Exceptwhen otherwise indicated by the context, the singular shall include the pluraland the plural shall include the singular.  Use of the term "or" is not intendedto be exclusive, unless the context clearly requires otherwise.

9.                  Administration andInterpretation.  The Grantee hereby agrees that any question or disputeregarding the administration or interpretation of this Exercise Notice shall besubmitted by the Grantee or by the Company to the Administrator.  The resolutionof such question or dispute by the Administrator shall be final and binding onall persons.  

10.                  Governing Law;Severability.  This Exercise Notice is to be construed in accordance withand governed by the internal laws of the State of California without givingeffect to any choice of law rule that would cause the application of the laws ofany jurisdiction other than the internal laws of the State of California to therights and duties of the parties.  Should any provision of this Exercise Noticebe determined by a court of law to be illegal or unenforceable, such provisionshall be enforced to the fullest extent allowed by law and the other provisionsshall nevertheless remain effective and shall remain enforceable.

11.                  Notices.  Any noticerequired or permitted hereunder shall be given in writing and shall be deemedeffectively given upon personal delivery, upon deposit for delivery by aninternationally recognized express mail courier service or upon deposit in theUnited States mail by certified mail (if the parties are within the UnitedStates), with postage and fees prepaid, addressed to the other party at itsaddress as shown below beneath its signature, or to such other address as suchparty may designate in writing from time to time to the other party.

12.                  Further Instruments. The parties agree to execute such further instruments and to take such furtheraction as may be reasonably necessary to carry out the purposes and intent ofthis agreement.

13.                  Entire Agreement.  TheNotice, the Plan and the Option Agreement are incorporated herein by referenceand together with this Exercise Notice constitute the entire agreement of theparties with respect to the subject matter hereof and supersede in theirentirety all prior undertakings and agreements of the Company and the Granteewith respect to the subject matter hereof, and may not be modified adversely tothe Grantee's interest except by means of a writing signed by the Company andthe Grantee.  Nothing in the Notice, the Plan, the Option Agreement and thisExercise Notice (except as expressly provided therein) is intended to confer anyrights or remedies on any persons other than the parties.  

    Submitted by:
    Accepted by:
    GRANTEE:
    eCOST.COM, INC.
     
    By:                                                                                       
                                                                

    Signature of Grantee
    Title:                                                                                     
Address:
Address:
                                                                
    2555 West 190th Street, Suite 106    Torrance, California 90504