Document:

Form of Employee Benefit Matters Agreement

 EXHIBIT 10.3 
  
 FORM OF 
 EMPLOYEE BENEFIT MATTERS AGREEMENT 
  
 THIS
EMPLOYEE BENEFIT MATTERS AGREEMENT (this “Agreement”) is entered into on                 , 2004, by and between PC Mall, Inc., a Delaware corporation
(“PC Mall”) and eCost.com, Inc., a Delaware corporation (“eCost”). 
  
 RECITALS: 
  
 WHEREAS,
eCost is currently a wholly-owned subsidiary of PC Mall; 
  
 WHEREAS, eCost is considering an initial public offering of its Common Stock (“IPO”); 
  
 WHEREAS, PC Mall will own not less than eighty percent (80%) of the issued and outstanding shares of eCost’s common stock (the “Retained
Shares”) following the IPO; 
  
 WHEREAS, subject to the terms
and conditions set forth in that certain Master Separation and Distribution Agreement (the “Master Separation and Distribution Agreement”), by and between PC Mall and eCost, dated as of the date hereof, PC Mall intends to distribute to its
stockholders, approximately six months following the closing of the IPO, all of the Retained Shares in a tax-free distribution; and 
  
 WHEREAS, in furtherance of the foregoing, PC Mall and eCost desire to enter into this Agreement to allocate between them assets, liabilities and
responsibilities with respect to certain employee compensation, benefit plans and programs, and certain employment matters. 
  
 NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements set forth below, the parties hereto agree as follows: 
  
 ARTICLE 1 
  
 DEFINITIONS 
  
 Except as otherwise expressly provided herein, all capitalized terms used and not defined herein shall have the respective meanings assigned to them in
the Master Separation and Distribution Agreement. In addition, the following terms, as used herein, shall have the following meanings: 
  
 1.1 “Adjusted Option” shall have the meaning set forth in Section 5.1(a) of this Agreement. 
  
 1.2 “Administrative Services Agreement” shall have the
meaning set forth in Article I of the Separation Agreement. 

 1.3 “Affiliate” shall mean, when used with respect to a Person, another Person that
controls, is controlled by, or is under common control (within the meaning of Section 414(b), (c), (m) or (o) of the Code) with the Person specified. 
  
 1.4 “Ancillary Agreements” shall have the meaning set forth in Article I of the Separation Agreement. 
  
 1.5 “Board of Directors” shall mean, when used with respect
to a specified corporation, the board of directors of the corporation so specified. 
  
 1.6 “COBRA” shall mean the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, and the regulations promulgated thereunder, including any successor legislation. 
  
 1.7 “Code” shall mean the Internal Revenue Code of 1986, as
amended, and the regulations promulgated thereunder, including any successor legislation. 
  
 1.8 “Distribution Date” shall mean the date on which PC Mall’s interest in eCost shall be distributed, as further defined in the Separation Agreement. 
  
 1.9 “Distribution Ratio” shall have the meaning set forth in
Section 5.1(a) of this Agreement. 
  
 1.10
“eCost” shall have the meaning set forth in the recitals hereto. 
  
 1.11 “eCost Adjusted Exercise Price to Market Price Ratio” shall have the meaning set forth on Schedule 5.1(b) of this Agreement. 
  
 1.12 “eCost Employees” shall mean persons who are employed by eCost (including persons who would otherwise
be deemed to be eCost Employees who are absent from work by reason of disability or leave of absence and inactive employees treated as such by agreement therewith). 
  
 1.13 “eCost Employment Liabilities” shall have the meaning set forth in Section 7.1(c) of this Agreement.

  
 1.14 “eCost Flex Plan” shall have the meaning
set forth in Section 4.2 of this Agreement. 
  
 1.15
“eCost Option” shall have the meaning set forth in Section 5.1(a) of this Agreement. 
  
 1.16 “eCost Option Plans” shall mean that certain eCost 1999 Stock Incentive Plan and that certain eCost 2004 Stock Incentive Plan.

  
 1.17 “eCost Savings Plan” shall have the
meaning set forth in Section 3.2(a) of this Agreement. 
  

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 1.18 “eCost Welfare Plan” shall have the meaning set forth in Section 4.1 of this
Agreement. 
  
 1.19 “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder, including any successor legislation. 
  
 1.20 “Group Status Change” shall mean the cessation of PC Mall’s ownership of at least 80% of the combined voting power of all
classes of stock entitled to vote or the total value of all shares of all classes of stock of eCost then outstanding. PC Mall’s ownership of outstanding eCost stock shall be determined pursuant to Sections 414 and 1563 of the Code. 

 
 1.21 “Group Status Change Date” shall mean the earlier of
(i) the Distribution Date or (ii) the date on which the Group Status Change occurs, or such other date as PC Mall and eCost shall mutually agree upon. 
  
 1.22 “Offering Date” shall mean the date on which the eCost initial public offering closes, as further defined in the Separation
Agreement. 
  
 1.23 “PC Mall” shall have the
meaning set forth in the recitals hereto. 
  
 1.24 “PC
Mall Adjusted Exercise Price to Market Price Ratio” shall have the meaning set forth on Schedule 5.1(b) of this Agreement. 
  
 1.25 “PC Mall Adjusted Option” shall have the meaning set forth in Section 5.1(a) of this Agreement. 
  
 1.26 “PC Mall Employees” shall mean persons who, immediately
prior to the Group Status Change Date are employed by the PC Mall Group (including persons who would otherwise be deemed to be PC Mall Employees who are absent from work by reason of disability or leave of absence and inactive employees treated as
such by agreement therewith). 
  
 1.27 “PC Mall
Group” shall mean PC Mall, together with all its wholly-owned subsidiaries, excluding eCost. 
  
 1.28 “PC Mall Option Number” shall have the meaning set forth in Section 5.1(a) of this Agreement. 
  
 1.29 “PC Mall Retained Employees” shall mean persons who,
immediately after the Group Status Change Date, are employed by the PC Mall Group (including persons who would otherwise be deemed to be PC Mall Retained Employees who are absent from work by reason of disability or leave of absence and inactive
employees treated as such by agreement therewith) but shall not include any persons who are or become eCost Employees on or after such date. 
  

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 1.30 “PC Mall Welfare Plan” shall mean the “PC Mall, Inc. Welfare Benefits
Plan” as in effect from time to time. 
  
 1.31 “PC
Mall Savings Plan” shall mean the “Creative Computers, Inc. 401(k) Plan,” as in effect from time to time. 
  
 1.32 “PC Mall Stock Option” shall mean any option to purchase PC Mall common stock. 
  
 1.33 “PC Mall Stock Option Plans” shall mean that certain PC
Mall Amended and Restated 1994 Stock Incentive Plan, as amended, and that certain PC Mall Amended and Restated Directors’ Non-Qualified Stock Option Plan. 
  

1.34 “Person” shall mean an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated
organization, a limited liability entity, any other entity, and any federal, state, local, foreign or international court, government, department, commission, board, bureau, agency, official or other regulatory, administrative or governmental
authority. 
  
 1.35 “Plans” shall mean any
“employee benefit plans” (within the meaning of Section 3(3) of ERISA), retirement, pension, savings, profit-sharing, welfare, stock purchase, stock option, equity-based, severance, employment, change-in-control, fringe benefit, bonus,
incentive, deferred compensation, disability, worker’s compensation and all other employee benefit plans, agreements, programs, policies or other arrangements (including any funding mechanisms therefor), whether or not subject to ERISA, whether
formal or informal, oral or written, legally binding or not. 
  
 1.36 “Plan Transfer Date” shall have the meaning set forth in Section 3.2(b) of this Agreement. 
  
 1.37 “Pre-Distribution Exercise Price to Market Price Ratio” shall have the meaning set forth on Schedule 5.1(b) of this Agreement.

  
 1.38 “Welfare Benefit Plan” shall mean, any
Plan providing welfare benefits within the meaning of Section 3(1) of ERISA. 
  
 1.39 “Securities Act” shall mean the Securities Act of 1933, as amended. 
  
 1.40 “Separation Agreement” shall mean that certain Master Separation and Distribution Agreement, by and between PC Mall and eCost, of
even date herewith. 
  
 1.41 “Tax Allocation and
Indemnification Agreement” shall mean that certain Tax Allocation and Indemnification Agreement, by and between PC Mall and eCost, of even date herewith. 
  

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 ARTICLE 2 
  

PRE-STATUS CHANGE PLAN PARTICIPATION 
  
 2.1 Continuing Participation in PC Mall Plans. Except as specified otherwise in this Agreement, or as PC Mall may otherwise direct, eCost shall
continue as a “participating company” in the PC Mall Plans in effect as of the Offering Date, to the extent that eCost has not yet established comparable Plans of its own. 
  
 2.2 PC Mall’s General Obligations as Plan Sponsor. The PC Mall Group shall continue to administer, or cause to
be administered, in accordance with their terms and applicable law, such PC Mall Plans, and shall have the sole and absolute discretion and authority to modify and interpret such Plans, as set forth therein. 
  
 2.3 eCost’s General Obligations as Participating Company. eCost
shall perform with respect to its participation in the PC Mall Plans, the duties of a participating company as set forth in each such Plan or any procedures adopted pursuant thereto, including (without limitation): (i) assisting in the
administration of claims, to the extent requested by the claims administrator of the applicable Plan; (ii) prompt payment of its allocable share expenses and costs relating to its participation; (iii) cooperating fully with Plan auditors, benefit
personnel and benefit vendors; (iv) preserving the confidentiality of all financial arrangements the PC Mall Group has or may have with any vendors, claims administrators, trustees or any other entity or individual with whom the PC Mall Group has
entered into an agreement relating to such Plans; and (v) preserving the confidentiality of participant information to the extent not specified otherwise in this Agreement. 
  
 2.4 Termination of Participating Company Status. Except as otherwise may be specified by PC Mall, effective as of the
Group Status Change Date or such other date as eCost establishes a comparable Plan (as specified in Section 3.2 or otherwise in this Agreement), eCost shall automatically cease to be a Participating Company in the corresponding PC Mall Plan.

  
 2.5 Terms of Participation for eCost Plans. 

 
         (a) Non-Duplication of
Benefits. As of the Group Status Change Date or such later date that applies to the particular eCost Plan established thereafter, the eCost Plans shall be, with respect to eCost Employees, in all respects the successors in interest to, and shall
not provide benefits that duplicate benefits provided by, the corresponding PC Mall Plans. PC Mall and eCost shall mutually agree, if necessary, on methods and procedures, including amending the respective Plan documents, to prevent eCost Employees
from receiving duplicate benefits from the PC Mall Plans and the eCost Plans. 
  
         (b) Service Credit. Except as specified otherwise in this Agreement, with respect to eCost Employees, each eCost Plan shall provide that all service, all
compensation and all other benefit-affecting determinations that, as of the 
  

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 Group Status Change Date, were recognized under the corresponding PC Mall Plan shall, as of the Group Status Change Date,
receive full recognition and credit and be taken into account under such eCost Plan to the same extent as if such items occurred under such eCost Plan, except to the extent that duplication of benefits would result. The service crediting provisions
shall be subject to any respectively applicable “break in service,” “employment date,” or “eligibility date” rules under the eCost Plans and the PC Mall Plans. 
  
 2.6 Right to Amend or Terminate. Except as specifically provided
herein, nothing in this Agreement shall be construed or interpreted to restrict PC Mall’s right or authority to amend or terminate the PC Mall Plans at any time it deems necessary or appropriate. 
  
 2.7 Access to Information. The PC Mall Group and eCost shall share, or
cause to be shared, all participant information that is necessary or appropriate for the efficient and accurate administration of each of the PC Mall Plans and eCost Plans during the respective periods applicable to such Plans as PC Mall and eCost
may mutually agree. The PC Mall Group, eCost and their respective authorized agents shall, subject to applicable laws of confidentiality and data protection, be given reasonable and timely access to, and may make copies of, all information relating
to the subjects of this Agreement in the custody of the other party or its agents, to the extent necessary or appropriate for such administration. 
  
 ARTICLE 3 
  
 SAVINGS PLANS 
  
 3.1 PC Mall Savings Plan. From and after the Group Status Change Date, PC Mall shall continue to sponsor the PC Mall Savings Plan for the benefit of PC Mall Retained Employees who, prior to such date, were
participants thereunder. Active participation of all eCost Employees in the PC Mall Savings Plan shall cease immediately prior to the Group Status Change Date, and the trustee of such plan shall not accept or permit further contributions made by or
on behalf of the eCost Employees, other than contributions that accrued prior to the Group Status Change Date. Except as may be required by Section 411(d)(3) of the Code or other applicable law, nothing contained in this Article 3 shall have the
effect of accelerating the degree to which any individual has a vested interest in the PC Mall Savings Plan or the eCost Savings Plan. 
  
 3.2 eCost Savings Plan. 
  
 (a) Effective as of the Group Status Change Date, eCost shall adopt a defined contribution plan that is intended to qualify under Sections 401(a) and
40l(k) of the Code (the “eCost Savings Plan”), under which retirement benefits shall generally be provided for eCost Employees. Subject to such adoption, eCost agrees to use its reasonable best efforts to cause the applicable fiduciaries
of the eCost Savings Plan to accept a transfer of assets and liabilities from the PC Mall Savings Plan, in accordance with the spin-off provisions set forth under Section 414(l) of the Code and 
  

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 other applicable law, representing the full account balances of eCost Employees for all periods of participation in the
PC Mall Savings Plan through the Group Status Change Date (including all contributions and all earnings attributable thereto). 
  
 (b) Prior to the date on which the transfer of assets and liabilities to the eCost Savings Plan may occur (the “Plan Transfer Date”), which date
shall occur as promptly as practicable following the Group Status Change Date and be subject to the fiduciaries of the eCost Savings Plan accepting a transfer of assets and liabilities under Section 3.2(a), PC Mall shall (i) cause the trustee of the
PC Mall Savings Plan to segregate, in accordance with the spin-off provisions set forth under Section 414(l) of the Code and other applicable law, the assets of the PC Mall Savings Plan representing the full account balances of eCost Employees for
all periods of participation in the PC Mall Savings Plan through the Group Status Change Date (including all contributions and all earnings attributable thereto); (ii) make all required filings and submissions to the appropriate governmental
agencies; and (iii) make all required amendments to the PC Mall Savings Plan and related trust agreement necessary to provide for the segregation of assets described in this Section 3.2(b). 
  
 (c) On the Plan Transfer Date, PC Mall shall cause the trustee of the PC Mall
Savings Plan to transfer to the trustee of the eCost Savings Plan the account balances (inclusive of outstanding participant loans) of any participating eCost Employees, as determined under Section 3.2(b). Such transfer shall be “in kind,”
based on those investment funds in which such account balances are then invested or in such other form as PC Mall and eCost may mutually agree; provided, however, that any participant loans to eCost Employees shall be transferred in the form of
notes. In consideration of the segregation and transfer of assets described herein, the eCost Savings Plan shall, as of the Plan Transfer Date, assume all liabilities attributable to such assets. Upon the full completion of the transfer described
herein, the PC Mall Group and the PC Mall Savings Plan shall be relieved of, and eCost and the eCost Savings Plan shall assume, all liabilities for the payment of any account balances transferred from the PC Mall Savings Plan to the eCost Savings
Plan. 
  
 3.3 Outstanding Participant Loans. Subject to the
fiduciaries of the eCost Savings Plan accepting a transfer of assets and liabilities under Section 3.2(c), with respect to any eCost Employees who have outstanding plan loans originally made from the eCost Savings Plan, such Employees shall be
permitted to repay such loans to the eCost Savings Plan by way of regular deductions from their paychecks, and, prior to the Plan Transfer Date, the PC Mall Group or eCost (as the case may be) shall cause all such deductions to be forwarded to the
PC Mall Savings Plan as promptly as practicable. From and after the Plan Transfer Date, all plan loan repayments made by eCost Employees shall be remitted exclusively to the eCost Savings Plan but only to the extent such plan loans are transferred
to the eCost Savings Plan. Unless expressly contemplated by this Agreement, in no event will the transactions contemplated by this Agreement alter the terms of the applicable notes or the loan provisions of the eCost Savings Plan or the PC Mall
Savings Plan. 
  

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 3.4 Allocation of Liabilities. From and after the Group Status Change Date, the eCost Savings Plan
shall assume all liabilities relating to the payment of benefits to eCost Employees in the PC Mall Savings Plan. The PC Mall Group shall retain all other liabilities relating to the PC Mall Savings Plan. 
  
 ARTICLE 4 
  
 WELFARE PLANS 
  
 4.1 Transition for Welfare Plan Participation. From and after the Group Status Change Date, the PC Mall Group shall continue to maintain the PC
Mall Welfare Plan for the PC Mall Retained Employees who, prior to such date, were receiving benefits under such plan. Active participation of all eCost Employees in the PC Mall Welfare Plan shall cease as of 11:59 p.m. Pacific Time on the earlier
of: (1) the day immediately preceding the Group Status Change Date; or (2) the 90th day following PC Mall’s
notification to eCost that the eCost Employees will no longer be eligible to participate in the PC Mall Welfare Plan. From and after such time, eCost shall adopt and maintain the eCost Welfare Plan for the benefit of eCost Employees. Notwithstanding
the foregoing, neither PC Mall nor eCost shall have any obligation to sponsor any specific Welfare Plan prior to or after the Group Status Change Date. 
  
 4.2 Adoption of eCost Flex Plan. Effective as of the Group Status Change Date, eCost shall adopt a “flexible benefit plan” under Section
125 of the Code for the benefit of the eCost Employees (the “eCost Flex Plan”), the material terms of which plan shall be substantially similar to those set forth in the “flexible benefits” component of the PC Mall Welfare Plan.
As provided in Section 4.1 above, active participation of all eCost Employees in the flexible benefits component of the PC Mall Welfare Plan shall cease immediately prior to the Group Status Change Date, and such plan shall not accept further
contributions made by or on behalf of the eCost Employees, other than contributions that accrued prior to the Group Status Change Date. With respect to amounts deferred into the PC Mall Welfare Plan by eCost Employees prior to the Group Status
Change Date, such amounts shall remain available for reimbursement of qualified medical and dependent care expenses incurred prior to the [Employee Transfer Date] for a period of time to be mutually agreed upon by PC Mall and eCost (the
“Run-out Period”). Any claims relating to expenses incurred prior to the Group Status Change Date that are not submitted to administrator for the PC Mall Welfare Plan prior to the end of the Run-out Period shall not be eligible for
reimbursement. Any amounts deferred by eCost Employees under the PC Mall Welfare Plan that are not paid out in connection with claims submitted prior to the end of the Run-out Period shall be forfeited. Reimbursement for medical and dependent care
expenses incurred after the Group Status Change Date shall be subject to the terms of the eCost Code Flex Plan. 
  
 4.3 Continuance of Elections, Co-Payments and Maximum Benefits. 
  
 (a) As of the Group Status Change Date, eCost shall cause the eCost Welfare Plans to maintain comparable coverage and
contribution elections made by eCost Employees under the PC Welfare Plan and apply such elections under the eCost 
  

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 Welfare Plans for the remainder of the period or periods for which such elections are by their terms applicable. The
transfer or other movement of employment between the PC Mall Group and eCost at any time upon or before the Group Status Change Date shall constitute neither a “change in status event” under the PC Mall Welfare Plan or the eCost Welfare
Plans nor a “qualifying event,” as defined under COBRA. 
  
 (b) On and after the Group Status Change Date, eCost shall cause the eCost Welfare Plans to recognize and give credit for (A) all amounts applied to deductibles, out-of-pocket maximums, co-payments and other applicable benefit coverage
limits with respect to which such expenses have been incurred by eCost Employees under the PC Mall Welfare Plan for the remainder of the calendar year in which the Group Status Change Date occurs, and (B) all benefits paid to eCost Employees under
the PC Mall Welfare Plan for purposes of determining when such persons have reached their lifetime maximum benefits under the eCost Welfare Plan. Notwithstanding the above, eCost’s obligations under this Subsection 4.3(b) shall be limited by
the market availability of health insurance products or other arrangements satisfying the criteria described above. eCost shall use its commercially reasonable best efforts to locate and engage the services of a vendor whose policies or other
arrangements meet the requirements above. 
  
 4.4 Allocation of
Liabilities. 
  
 (a) Except to the extent welfare benefits are
funded by employee contributions or as otherwise provided in this Agreement, the PC Mall Group shall retain responsibility for and continue to pay all premiums, expenses and benefits relating to the PC Mall Welfare Plan with respect to claims
incurred or premiums due prior to the Group Status Change Date by PC Mall Employees (including eCost Employees participating in the PC Mall Welfare Plan prior to such date) as well as their covered dependents. 
  
 (b) Except to the extent welfare benefits are funded by employee
contributions or as otherwise provided in this Agreement, eCost shall assume responsibility for and pay all premiums, expenses and benefits relating to the eCost Welfare Plan with respect to claims incurred or premiums due from and after the Group
Status Change Date by eCost Employees as well as their covered dependents. 
  
 (c) For the purposes of this Section 4.4, a claim is deemed incurred when the services that are the subject of the claim are performed; in the case of life insurance, when the death occurs; in the case of long-term
disability, when the disability occurs; and, in the case of a hospital stay, when the employee first enters the hospital. 
  
 (d) The eCost Welfare Plan shall be responsible for making COBRA continuation coverage available with respect to the eCost Employees (and their covered
dependents) subsequent to the Group Status Change Date. 
  

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 ARTICLE 5 
  

EQUITY COMPENSATION 
  
 5.1 PC Mall Stock Options. PC Mall Stock Options shall be treated as follows: 
  
 (a) As of the Distribution Date, each PC Mall Stock Option outstanding as of the Distribution Record Date and not exercised
prior to the Distribution Date shall be adjusted as set forth in this Section 5.1. Each PC Mall Stock Option shall be converted (an “Adjusted Option”), as of the Distribution Date, into two options: an option (the “PC Mall Adjusted
Option”) to purchase the same number of shares of PC Mall Common Stock covered by the PC Mall Stock Option and as to which the PC Mall Stock Option has not been exercised as of the Distribution Date (“PC Mall Option Number”) and an
option (the “eCost Option”) to purchase a number of shares of eCost Common Stock equal to the PC Mall Stock Option Number times a fraction, the numerator of which is the total number of shares of eCost Common Stock distributed to PC Mall
stockholders in the Distribution and the denominator of which is the total number of shares of PC Mall Common Stock outstanding on Distribution Record Date (the “Distribution Ratio”). The terms of the PC Mall Adjusted Option and the eCost
Option (other than the exercise price and the number of shares) shall be substantially the same as the PC Mall Stock Option. 
  
 (b) The exercise prices per share for each PC Mall Adjusted Option and the eCost Option shall be established, as set forth in Schedule 5.1(b) hereto, in a
manner so that: (a) the aggregate “intrinsic value” (i.e. the market value of the stock underlying the option, less the exercise price of such option, multiplied by the number of shares then covered by such option) after the Distribution
of the PC Mall Adjusted Option plus the eCost Option is not greater than the intrinsic value of the related PC Mall Stock Option immediately prior to the Distribution, and (b) the ratio of the exercise price per option to the market value per share
after the Distribution is not lower than the ratio of the exercise price of the PC Mall Stock Option to the market value per share of PC Mall Common Stock immediately prior to the Distribution. The determination of the exercise prices for each PC
Mall Adjusted Option and eCost Option shall be made by PC Mall as advised by its professional advisors. 
  
 (c) The eCost Options to be granted with respect to each Adjusted Option shall be issued under the eCost 2004 Stock Incentive Plan, and eCost shall take
all corporate action and make all required filings under applicable state blue sky laws and the Securities Act to (i) issue the eCost Options required under this Section 5.1 and (ii) to register or qualify the eCost Options and/or the underlying
shares of eCost Common Stock so that the shares of eCost Common Stock acquired upon exercise of each eCost Option are freely tradable under the Securities Act (except for shares acquired by Affiliates of eCost) and each applicable state’s blue
sky laws. 
  
 (d) The Board of Directors of PC Mall may determine
that certain PC Mall Stock Options described above may not be adjusted as described above, 
  

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 but instead shall be subject to such conditions as the Board of Directors of PC Mall (or the compensation committee
thereof) shall determine to the extent necessary to avoid adverse tax consequences to option holders who are not U.S. residents. 
  
 (e) PC Mall and eCost acknowledge that the adjustment to PC Mall Stock Options under this Article V will be implemented in part by the issuance of the
eCost Options under the terms of the eCost 2004 Stock Incentive Plan. 
  
 (f) After the Distribution Date, (i) PC Mall Stock Options, regardless of by whom held, shall be settled by PC Mall pursuant to the terms of the applicable PC Mall Stock Option Plans, and (ii) eCost Options, regardless of by whom held,
shall be settled by eCost pursuant to the terms of the eCost 2004 Stock Incentive Plan. 
  
 5.2 Allocation of Liabilities. Except as provided in Article VII of the Tax Allocation and Indemnification Agreement, (a) eCost shall assume all liabilities with respect to awards granted pursuant to the eCost
Option Plans, and (b) the PC Mall Group shall retain all other liabilities with respect to awards granted pursuant to the PC Mall Stock Option Plans (including, but not limited to, awards granted to PC Mall Retained Employees). 
  
 ARTICLE 6 
  
 EMPLOYEE TRANSITION 
  
 6.1 No-Hire Transition Period. Unless PC Mall and eCost otherwise
mutually agree in writing, for the period beginning on the Offering Date and ending on the second anniversary thereof, neither eCost nor the PC Mall Group will, nor will they permit their applicable Affiliates to, solicit or hire any employee of the
other or of the other’s Affiliates or any person who, within the six months immediately preceding such solicitation or hiring, was employed by the other or the other’s Affiliates. 
  
 ARTICLE 7 
  
 INDEMNIFICATION 
  
 7.1 Indemnification. Article V of the Master Separation and
Distribution Agreement shall govern the rights of PC Mall and eCost with respect to indemnification. The term “PC Mall Liabilities” in that Article shall be read to include all liabilities assumed or retained by the PC Mall Group pursuant
to this Agreement. The term “eCost Liabilities” in that Article shall be read to include all liabilities assumed or retained by eCost pursuant to this Agreement. 
  

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 ARTICLE 8 
  

DISPUTE RESOLUTION 
  
 8.1 Dispute Resolution. Article IX of the Master Separation and Distribution Agreement shall govern the rights of the PC Mall Group and eCost with
respect to dispute resolution. 
  
 ARTICLE 9 
  
 MISCELLANEOUS 
  
 9.1 Counterparts, Entire Agreement, Corporate Power. This Agreement
may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party. This
Agreement and the Schedules hereto contain the entire agreement between the parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with
respect to such subject matter, and there are no agreements or understandings between the parties other than those set forth or referred to herein or therein. 
  

9.2 Governing Law. This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of California
(other than as to its laws of arbitration which shall be governed under the United States Arbitration Act, 9 U.S.C. §§ 1-14, as the same may be amended from time to time, or other applicable federal law pursuant to Article IX of the
Separation Agreement), irrespective of the choice of laws principles of the State of California, as to all matters, including matters of validity, construction, effect, enforceability, performance and remedies. 
  
 9.3 Assignability. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and thereto, respectively, and their respective successors and assigns; provided, however, that no party hereto or thereto may assign its respective rights or delegate its respective obligations under
this Agreement without the express prior written consent of the other parties hereto or thereto. 
  
 9.4 Third Party Beneficiaries. The provisions of this Agreement are solely for the benefit of the parties and are not intended to confer upon any
Person except the parties any rights or remedies hereunder, and (b) there are no third party beneficiaries of this Agreement, and this Agreement shall not provide any third person with any remedy, claim, liability, reimbursement, claim of action or
other right in excess of those existing without reference to this Agreement. No party hereto shall have any right, remedy or claim with respect to any provision of this Agreement to the extent such provision relates solely to the other two parties
hereto or the members of such other two parties’ respective Groups. 
  

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 9.5 Notices. All notices, requests, demands, waivers and other communications under this
Agreement, any Ancillary Agreement or the Tax Indemnification and Allocation Agreement shall be in writing and shall be deemed to have been duly given if delivered personally or by facsimile transmission or mailed (certified or registered mail,
postage prepaid, return receipt requested): 
  

			
	 If to PC Mall, to:
	  	 PC Mall, Inc.
 2555 West 190th Street, Suite
201
 Torrance, California 90504
 Attention: Chief Executive
Officer
  
 Fax No.: (310) 354-[_______]

		
	 with a copy to:
	  	 PC Mall, Inc.
 2555 West 190th Street, Suite
201
 Torrance, California 90504
 Attention: General
Counsel
  
 Fax No.: (310) 354-[_______]

		
	 If to eCOST:
	  	 eCOST.com, Inc.
 2555 West 190th Street, Suite
106
 Torrance, California 90504
 Attention: Chief Executive
Officer
  
 Fax No.: (310) 354-[________]

  
 or to such other person or address as
any party shall specify by notice in writing to the other party. All such notices, requests, demands, waivers and communications shall be deemed to have been received on the date on which hand delivered, upon transmission of the facsimile
transmission by the sender and issuance by the transmitting machine of a confirmation slip confirming that the number of pages constituting the notice have been transmitted without error, or on the third business day following the date on which so
mailed, except for a notice of change of address, which shall be effective only upon receipt thereof. In the case of a notice sent by facsimile transmission, the sender shall contemporaneously mail a copy of the notice to the addressee at the
address provided for above. However, such mailing shall in no way alter the time at which the facsimile notice is deemed received. In no event shall the provision of notice pursuant to this Section 10.5 constitute notice for service of process.

  
 9.6 Severability. If any provision of this Agreement or
the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or
circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and 
  

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 effect and shall in no way be affected, impaired or invalidated thereby, so long as the economic or legal substance of
the transactions contemplated hereby or thereby, as the case may be, is not affected in any manner adverse to any party. Upon such determination, the parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable
provision to effect the original intent of the parties. 
  
 9.7
Force Majeure. No party shall be deemed in default of this Agreement to the extent that any delay or failure in the performance of its obligations under this Agreement results from any cause beyond its reasonable control and without its fault
or negligence, such as acts of God, acts of civil or military authority, embargoes, epidemics, war, riots, insurrections, fires, explosions, earthquakes, floods, unusually severe weather conditions, labor problems or unavailability of parts, or, in
the case of computer systems, any failure in electrical or air conditioning equipment. In the event of any such excused delay, the time for performance shall be extended for a period equal to the time lost by reason of the delay. 
  
 9.8 Expenses. eCOST shall pay all third-party costs, fees and expenses
relating to the performance of its obligations under this Agreement. 
  
 9.9 Headings. The article, section and paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 
  
 9.10 Waivers of Default. Waiver by any party of any default by the
other party of any provision of this Agreement shall not be deemed a waiver by the waiving party of any subsequent or other default, nor shall it prejudice the rights of the other party. 
  
 9.11 Specific Performance. In the event of any actual or threatened default in, or breach of, any of the terms,
conditions and provisions of this Agreement, the party or parties who are or are to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and
all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any
loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived. 
  
 9.12 Amendments. No provisions of this Agreement shall be deemed
waived, amended, supplemented or modified by any party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the party against whom it is sought to enforce such waiver, amendment,
supplement or modification. 
  
 9.13 Interpretation. Words
in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other genders as the context requires. The terms “hereof,” “herein,” and “herewith” and words of
similar 
  

 14 

 import shall, unless otherwise stated, be construed to refer to this Agreement (or the applicable Ancillary Agreement) as
a whole (including all of the Schedules, Exhibits and Appendices hereto and thereto) and not to any particular provision of this Agreement (or such Ancillary Agreement). Article, Section, Exhibit, Schedule and Appendix references are to the
Articles, Sections, Exhibits, Schedules and Appendices to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified. The word “including” and words of similar import when used in this Agreement (or the applicable
Ancillary Agreement) shall mean “including, without limitation,” unless the context otherwise requires or unless otherwise specified. The word “or” shall not be exclusive. 
  
 9.14 Cooperation. PC Mall and eCost agree to, and to cause their
Affiliates to, cooperate and use reasonable efforts to promptly (i) comply with all requirements of this Agreement, ERISA, the Code and other laws and regulations which may be applicable to the matters addressed herein, and (ii) subject to
applicable law, provide each other with such information reasonably requested by the other Party to assist the other Party in administering its Plans and complying with applicable law and regulations and the terms of this Agreement. 
  
 9.15 Subsidiaries. Each of the parties hereto shall cause to be
performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth herein to be performed by any Subsidiary of such party or by any entity that is contemplated to be a Subsidiary of such party on and after the
Group Status Change Date. 
  
 9.16 Fiduciary Matters; Consent
of Third Parties. PC Mall and eCost each acknowledge that actions required to be taken pursuant to this Agreement may be subject to fiduciary duties or standards of conduct under ERISA or other applicable law, and no party shall be deemed to be
in violation of this Agreement if it fails to comply with any provisions hereof based upon its good faith determination that to do so would violate such a fiduciary duty or standard. If any provision of this Agreement is dependent on the consent of
any third party and such consent is withheld, PC Mall and eCost shall use their reasonable best efforts to implement the applicable provisions of this Agreement to the full extent practicable. If any provision of this Agreement cannot be implemented
due to the failure of such third party to consent, PC Mall and eCost shall negotiate in good faith to implement the provision in a mutually satisfactory manner. 
  

9.17 Governmental Notices; Cooperation. Notwithstanding anything in this Agreement to the contrary, all actions contemplated herein which are to
be consummated pursuant to this Agreement shall be subject to such notices to, and/or approvals by, the Internal Revenue Service (or any other governmental agency or entity) as are required or deemed appropriate by the sponsor of the applicable
Plan. Each of PC Mall and eCost agrees to use its commercially reasonable efforts to cause all such notices and/or approvals to be filed or obtained, as the case may be. Each party hereto shall reasonably cooperate with the other parties with
respect to any government filings, employee notices or any other actions reasonably necessary to maintain and implement the Plans covered by this Agreement. 
  

 15 

 9.18 Limitation of Damages. NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT OR ANY ANCILLARY
AGREEMENT TO THE CONTRARY, IN NO EVENT WILL EITHER PARTY OR ANY OF ITS GROUP MEMBERS BE LIABLE FOR ANY SPECIAL, INCIDENTAL, INDIRECT, COLLATERAL, CONSEQUENTIAL OR PUNITIVE DAMAGES OR LOST PROFITS IN CONNECTION WITH ANY CLAIMS, LOSSES, DAMAGES, OR
INJURIES ARISING OUT OF THE CONDUCT OF SUCH PARTY PURSUANT TO THIS AGREEMENT. 
  
 IN WITNESS WHEREOF, the parties have duly executed and entered into this Agreement, as of the date first above written. 
  

					
	 PC MALL, INC.
  

		
	By:	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

  

					
	 ECOST.COM, INC.
  

		
	By:	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

  

 16 

 Schedule 5.1(b) 
  
 The exercise prices for each PC Mall Adjusted Option and eCost Option will be determined as follows: 
  
 1. Calculate the aggregate intrinsic value of the PC Mall Stock Option
immediately prior to the Distribution and determine the ratio of the exercise price for the PC Mall Stock Option to the market value of PC Mall Common Stock immediately prior to the Distribution (the “Pre-Distribution Exercise Price to Market
Price Ratio”). 
  
 2. Calculate the preliminary PC Mall
Adjusted Option exercise price by dividing (x) the market value of PC Mall Common Stock (without eCost) immediately after the Distribution by (y) the sum of (i) the market value of PC Mall Common Stock immediately after the Distribution and (ii) the
market value of eCost Common Stock immediately after the Distribution multiplied by the Distribution Ratio, and multiplying the result by the exercise price for the PC Mall Stock Option. 
  
 3. Divide the preliminary PC Mall Adjusted Option exercise price by the market value of PC Mall Common Stock immediately
after the Distribution to determine the “PC Mall Adjusted Exercise Price to Market Price Ratio.” If the PC Mall Adjusted Exercise Price to Market Price Ratio is less than the Pre-Distribution Exercise Price to Market Price Ratio, increase
the preliminary PC Mall Adjusted Option exercise price to align the PC Mall Adjusted Exercise Price to Market Ratio with the Pre-Distribution Exercise Price to Market Price Ratio in order to determine the final Adjusted PC Mall Option exercise
price. 
  
 4. Calculate the preliminary eCost Option exercise
price by multiplying the exercise price for the PC Mall Stock Option by the result obtained by dividing (z) one minus the fraction calculated in paragraph 2 above by (w) the Distribution Ratio. 
  
 5. Divide the preliminary eCost Option exercise price by the market value of
eCost Common Stock immediately after the Distribution to determine the “eCost Adjusted Exercise Price to Market Price Ratio.” If the eCost Adjusted Exercise Price to Market Ratio is less than the Pre-Distribution Exercise Price to Market
Price Ratio, increase the preliminary eCost Option exercise price to align the eCost Adjusted Exercise Price to Market Price Ratio with the Pre-Distribution Exercise Price to Market Price Ratio in order to determine the final eCost Option exercise
price. 
  
 6. Add the aggregate intrinsic values of the Adjusted
PC Mall Option and eCost Option and compare the sum to the aggregate intrinsic value calculated in paragraph 1 above and make final adjustments, if necessary, so that the aggregate intrinsic values of the Adjusted PC Mall Option and eCost Option do
not exceed the original aggregate intrinsic value of the PC Mall Stock Option.Form of Administrative Services Agreement

 EXHIBIT 10.4 
  
 FORM OF 
 ADMINISTRATIVE SERVICES AGREEMENT 
  
 THIS
ADMINISTRATIVE SERVICES AGREEMENT (this “Agreement”) is entered into on                     , 2004 by and between AF Services, Inc.,
a Delaware corporation (“AF Services”), and eCOST.com, Inc., a Delaware corporation (“eCost”). Capitalized terms used and not otherwise defined herein shall have the meanings given to them in the Master Separation and
Distribution Agreement (as defined below). 
  
 WHEREAS,
eCost and AF Services are currently wholly-owned subsidiaries of PC Mall, Inc., a Delaware corporation (“PC Mall”), and eCost obtains certain general accounting and financial services, sales tax services, human resources services, customer
database management services and other general administrative services from AF Services; 
  
 WHEREAS, eCost is considering an initial public offering of its Common Stock (“IPO”); 
  
 WHEREAS, PC Mall will own not less than eighty percent (80%) of the issued and outstanding shares of eCost’s common stock (the “Retained
Shares”) following the IPO; 
  
 WHEREAS, subject to the terms
and conditions set forth in that certain Master Separation and Distribution Agreement (the “Master Separation and Distribution Agreement”), by and between PC Mall and eCost, dated as of the date hereof, PC Mall intends to distribute to its
stockholders, approximately six months following the closing of the IPO, all of the Retained Shares in a tax-free distribution; and 
  
 WHEREAS, eCost desires to continue to obtain certain general accounting and financial services, sales tax services, human resources services, customer
database management services and other general administrative services from AF Services, and AF Services desires to continue to provide such services following the IPO as more fully set forth herein. 
  
 NOW, THEREFORE, for and in consideration of the promises and the obligations
undertaken by the parties pursuant hereto, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, AF Services and eCost hereby agree as follows: 
  
 ARTICLE I 
  
 ENGAGEMENT OF AF SERVICES; DUTIES 
  
 1.1 Engagement. Effective as of the closing date of the IPO (the “Effective Date”), eCost hereby retains AF
Services to perform the general accounting and financial services, sales tax services, human resources services, customer database management services and other 

 general administrative services set forth on Exhibit A attached hereto, including such services as may be related,
ancillary, or necessary to perform such services (each, a “Service”, and collectively, the “Services”). 
  
 1.2 Duties and Rights. 
  
 (a) AF Services Obligations. 
  
 (i) AF Services hereby covenants and agrees that it shall, during the term of this Agreement, perform the Services. AF Services covenants and agrees that
it shall maintain accurate records and accounts of all transactions relating to the Services performed pursuant to this Agreement. Such records and accounts shall contain such information as would normally be examined by an independent accountant in
performing a complete audit pursuant to United States generally accepted auditing standards for the purpose of certifying financial statements, and as would normally be required by a government taxing authority in order to verify provision of the
Services. 
  
 (ii) AF Services shall perform the Services
pursuant to this Agreement in a manner and at a level of service substantially similar to that provided by AF Services to eCost prior to the date hereof and shall exercise the same care and skill as it exercises in performing similar services for
other subsidiaries of PC Mall. In the event AF Services engages third parties to perform one or more Services under the supervision of AF Services pursuant to Section 1.2(c), AF Services shall cause such third parties to perform such Service under
the same applicable performance standard. 
  
 (b) eCost
Obligations. eCost hereby covenants and agrees that it shall pay AF Services fees for Services in accordance with Section 2.1. eCost further covenants and agrees that it shall provide AF Services with all documents and information necessary for
AF Services to perform the Services pursuant to this Agreement. To the extent required, eCost shall authorize AF Services to perform such actions as may be necessary for the performance of the Services. 
  
 (c) Right to Subcontract. In the performance of its obligations
hereunder, AF Services shall have the right, in its sole discretion, to subcontract its rights and responsibilities to any third party, provided that AF Services shall remain responsible for the performance of any such third party. 
  
 (d) No Additional Resources. Unless otherwise agreed in writing, AF
Services shall not be required to perform the Services at a level that is substantially greater than the level of use required by eCost immediately prior to the Effective Date. Without limiting the foregoing, in connection with the performance of
the Services, in no event shall AF Services be required to hire any additional employees, maintain the employment of any specific employee or purchase, lease or license any additional equipment or intellectual property. 
  
 1.3 Independent Contractors. The relationship of AF Services and eCost
established by this Agreement is that of independent contractors, and nothing contained in this Agreement 
  

 2 

 shall be construed to: (i) constitute the parties as partners, joint venturers, co-owners or otherwise as participants in
a joint or common undertaking; (ii) create the relationship of principal and agent between the parties; (iii) prevent AF Services from entering into any other business; or (iv) allow AF Services to create or assume obligations on behalf of or in the
name of eCost. Except as provided herein, all financial obligations associated with each party’s businesses are the sole responsibility of each respective party, and nothing in this Agreement is intended to make either party responsible for the
financial obligations of the other. 
  
 1.4 Additional
Services. From time to time after the Effective Date, the parties may identify additional services that AF Services will provide to eCost in accordance with the terms and conditions of this Agreement (“Additional Services”). The
parties shall create an Exhibit for each Additional Service setting forth a description of the Additional Service, the charge, if any, applicable thereto, and any other applicable terms and conditions with respect to such Additional Service. In
order to become a part of this Agreement, such Exhibit must be executed by a duly authorized representative of each party, at which time such Additional Service shall be deemed to constitute a “Service” for purposes hereof and shall be
subject to the terms and conditions of this Agreement. For the avoidance of doubt, the parties may, but shall not be required to, agree on Additional Services during the term of this Agreement. Notwithstanding anything to the contrary in the
foregoing or elsewhere in this Agreement, any service actually performed by AF Services upon a written or verbal request by eCost in connection with this Agreement shall be deemed to constitute a “Service” for purposes of Sections 4.1 and
4.2. 
  
 1.5 Cooperation; Consents; Alternatives.

  
 (a) Cooperation and Consents. The parties will use
good faith efforts to cooperate with each other in all matters relating to the provision and receipt of the Services, including, without limitation, cooperating in connection with obtaining all consents, approvals licenses or sublicenses reasonably
necessary in order for AF Services to perform the Services. eCost shall be solely responsible for any costs incurred by AF Services in connection with obtaining such consents or approvals or procuring such licenses or sublicenses. 
  
 (b) Alternatives. In the event that AF Services reasonably believes
that it is unable to provide any Service because of a failure to obtain any consent, approval, license or sublicense, the parties shall in good faith discuss and agree to an alternative approach; provided that, in no event shall AF Services be
required to provide such Service until such time that the parties have agreed to an alternative approach or the relevant consent, approval, license or sublicense has been obtained. eCost shall be solely responsible for any increased cost in
providing a Service resulting from any agreed alternative approach. 
  
 ARTICLE II 
  
 FEES 
  
 2.1 Fees. In consideration of AF Services’ performance of the
Services, eCost shall pay AF Services a monthly fee in the amount of One Hundred One Thousand, Six Hundred 
  

 3 

 Dollars ($101,600) (the “Monthly Fee”). In the event that eCost terminates any Service in accordance with
Section 3.2(b) below, the parties will in good faith negotiate and agree to an appropriate adjustment to the Monthly Fee. 
  
 2.2 Invoicing. AF Services shall invoice eCost on a monthly basis. Such invoices shall set forth the Monthly Fee, and provide reasonable detail
regarding each of the Services provided during the applicable month. AF Services’ invoices shall be due and payable by eCost, in immediately available funds and as an electronic funds transfer or by such other manner mutually agreed by the
parties, not later than fifteen (15) days after the date of invoice. Late payments under this Article II shall bear interest at the prime rate plus two percent (2%) per annum or the maximum amount permitted by applicable law, whichever is less.

  
 2.3 Taxes. All amounts payable for Services provided
hereunder are exclusive of any taxes. All taxes and other charges imposed by any taxing authority on any Service provided hereunder shall be added to the appropriate invoice and shall be payable by eCost in accordance with Section 2.2. 

 
 2.4 Audit Adjustments. In the event of a tax audit adjustment
relating to the pricing of any Service provided pursuant to this Agreement in which it is determined by a taxing authority that any of the fees charged hereunder, individually or in combination, did not constitute an arm’s length payment, the
parties will in good faith discuss and agree to make adjustments to the applicable fees in order to achieve arm’s length pricing. Any adjustment made pursuant to this Section 2.4 shall be reflected in each party’s books and records, and
shall create a right to receive payment, in the case of the party that either overpaid or was under-compensated (as applicable), and an obligation to make payment, in the case of the party that either underpaid or was over-compensated (as
applicable), in accordance with Section 2.2. 
  
 ARTICLE III

  
 TERM; TERMINATION; 
 OBLIGATIONS OF AF SERVICES UPON TERMINATION 
  
 3.1 Term. The term of this Agreement shall commence on the Effective Date and shall continue for a period of 1 year, unless earlier terminated in
accordance with Section 3.2 below. 
  
 3.2 Termination.

  
 (a) Agreement. This Agreement shall be terminated upon
the occurrence of any of the following events: 
  
 (i) The
mutual agreement of eCost and AF Services; 
  
 (ii) Ninety (90)
days written notice, with or without cause, by either party; or 
  

 4 

 (iii) Thirty (30) days written notice of non-payment from AF Services to eCost, unless eCost pays all
overdue amounts, together with interest, within twenty-one (21) days of such notice. 
  
 (iv) Thirty (30) days written notice of material breach from eCost Services to AF Services, unless AF Services cures such breach within twenty-one (21) days of such notice (provided that such notice shall indicate the
nature and basis of such breach, with reference to the applicable provisions of this Agreement and eCost’s intention to terminate this Agreement in the event that AF Services has not cured such breach by such twenty-one (21) day period).

  
 (b) Services. Any Services listed on Exhibit A
may be terminated by eCost upon ninety (90) days’ written notice to AF Services. In any such event, this Agreement shall continue in full force and effect with respect to any remaining Services not terminated hereby. 
  
 3.3 Termination Obligations. Termination or expiration of this
Agreement shall not affect, negate or obviate any obligation of either party to the other arising prior to the date of such termination or expiration. By a date that is reasonably practical prior to the date of termination or expiration of this
Agreement, AF Services shall transfer to eCost all data, records, files and other information, in whatever format maintained, solely concerning eCost and the performance of the Services. AF Services shall provide reasonable access to such data,
records, files and information, and shall support eCost and respond to eCost inquiries as reasonably necessary to allow eCost to understand, interpret and use all such data, records, files and information, so that eCost may provide for, after the
date of such termination or expiration, the performance of the Services by either itself or a third party. 
  
 3.4 Survival. The terms and conditions of the following provisions will survive the termination or expiration of this Agreement: Article II;
Sections 1.4, 3.3, 3.4, 4.1, 4.2 and 4.4; Article VI; and Article VII. 
  
 ARTICLE IV 
  
 LIMITATION OF LIABILITY;
WARRANTY DISCLAIMER; FORCE MAJEURE 
  
 4.1 Limitation
of Liability. EXCEPT WITH RESPECT TO LOSSES OR DAMAGES ACTUALLY SUFFERED OR INCURRED BY ECOST AS A RESULT OF AF SERVICES’ WILLFUL MISCONDUCT OR GROSS NEGLIGENCE IN PROVIDING THE SERVICES, AF SERVICES OR ANY AFFILIATE THEREOF SHALL HAVE NO
LIABILITY FOR DAMAGES IN CONNECTION WITH THIS AGREEMENT AND THE SERVICES PROVIDED HEREUNDER, REGARDLESS OF THE FORM OF ACTION GIVING RISE TO SUCH LIABILITY (WHETHER UNDER CONTRACT, TORT, STATUTORY OR OTHERWISE). TO THE EXTENT PERMITTED BY APPLICABLE
LAW AND NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, NEITHER AF SERVICES NOR ANY AFFILIATE THEREOF SHALL BE LIABLE FOR ANY INDIRECT, EXEMPLARY, SPECIAL, CONSEQUENTIAL OR INCIDENTAL DAMAGES 
  

 5 

 OF ANY KIND, OR FOR ANY DAMAGES RESULTING FROM LOSS OR INTERRUPTION OF BUSINESS, LOST DATA OR LOST PROFITS, ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE PROVISION OF THE SERVICES OR AF SERVICES’ PERFORMANCE UNDER THIS AGREEMENT, HOWEVER CAUSED, EVEN IF AF SERVICES HAS BEEN ADVISED OF OR SHOULD HAVE KNOWN OF THE POSSIBILITY OF SUCH DAMAGES. 
  
 4.2 Disclaimer of Warranties. EXCEPTED AS OTHERWISE EXPRESSLY PROVIDED
HEREIN, AF SERVICES MAKES NO, AND DISCLAIMS ALL, WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NONINFRINGEMENT, WITH RESPECT TO THE SERVICES. AF
SERVICES MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE QUALITY, SUITABILITY OR ADEQUACY OF THE SERVICES FOR ANY PURPOSE OR USE. 
  
 4.3 Force Majeure. 
  
 (a) Definition. “Force Majeure Event” means any event or condition, not existing as of the date of this Agreement, not reasonably
foreseeable as of such date and not reasonably within the control of AF Services, which prevents in whole or in material part the performance by AF Services of its obligations hereunder or which renders the performance of such obligations so
difficult or costly as to make such performance commercially unreasonable. Without limiting the foregoing, the following will constitute a Force Majeure Event: acts of state or governmental action, riots, disturbance, war, strikes, lockouts,
slowdowns, prolonged shortage of energy supplies, epidemics, fire, flood, hurricane, typhoon, earthquake, lightning and explosion. 
  
 (b) Release of AF Services. Upon being affected by a Force Majeure Event and after notice to eCost, AF Services will be released without any
liability on its part from the performance of its obligations under this Agreement, but only to the extent and only for the period that its performance of such obligations is prevented by such Force Majeure Event. Such notice must include a
reasonable description of the nature and cause of the Force Majeure Event. AF Services will as soon as reasonably practical notify eCost at such time that it is no longer affected by the Force Majeure Event and is able to resume providing Services.

  
 (c) Cover. eCost is entitled, following the occurrence
of the Force Majeure Event and the receipt of notice from AF Services in accordance with Section 4.3(b), to contract or provide for the performance of the Services otherwise performed by AF Services hereunder. Upon notice of termination of the Force
Majeure Event, eCost shall consent to AF Services resuming performance of the Services and obligations hereunder. 
  
 4.4 Work Product. 
  
 (a) Ownership. As used herein, the term “Work Product” means all materials, software, tools, data, inventions, works of authorship,
documentation and other innovations of any kind, including, without limitation, any improvements or modifications to AF Services’ 
  

 6 

 proprietary computer software programs and related materials, that AF Services, or personnel working for or through AF
Services, may make, conceive, develop or reduce to practice, alone or jointly with others, in the course of performing the Services or as a result of such Services, whether or not eligible for patent, copyright, trademark, trade secret or other
legal protection. eCost agrees that all Work Product shall be the property of AF Services and hereby assigns all rights it may have in the Work Product and in all related patents, patent applications, copyrights, mask work rights, trademarks, trade
secrets, rights of priority and other proprietary rights to AF Services. eCost acknowledges that AF Services, in its sole discretion, shall have the right to license the Work Product or any portion thereof, and/or incorporate the Work Product or any
portion thereof into AF Services products, for use by other licensees or customers of AF Services. At AF Services’ request and expense, eCost shall assist and cooperate with AF Services in all reasonable respects and shall execute documents,
give testimony and take further acts as reasonably requested by AF Services to acquire, transfer, maintain and enforce patent, copyright, trademark, mask work, trade secret and other legal protection for the Work Product. 
  
 (b) License of Work Product. Subject to eCost’s performance of
its obligations hereunder, AF Services hereby grants to eCost a worldwide, non-exclusive, non-transferable license to use, within eCost’s enterprise only, the Work Product solely for eCost’s internal business purposes. eCost shall not,
without the written consent of AF Services: (a) decompile, disassemble or otherwise reverse engineer the Work Product or any portion thereof; or (b) rent, lease, sublicense, sell, transfer or otherwise grant rights in or to the Work Product (in
whole or in part) to any third party in any form. 
  
 (c)
Reservation of Rights. Except as otherwise expressly provided herein, nothing in this Agreement shall be deemed to grant, directly or by implication, estoppel or otherwise, any right or license with respect to any technology or other
intellectual property rights, and each party retains all right, title and interest in and to their respective technologies and other intellectual property rights. 
  
 ARTICLE V 
  
 REQUESTS FOR INFORMATION 
  
 AF Services shall, at eCost’s cost and expense, provide reasonable access to eCost to any documents, records, data or information reasonably
requested by eCost concerning eCost or the Services provided hereunder as soon as reasonably practicable after the receipt of a written request therefor from eCost or its authorized representatives. In addition, upon reasonable notice from eCost and
at eCost’s cost and expense, AF Services shall provide authorized representatives of eCost with reasonable access to the books and records maintained by AF Services that pertain to the Services provided hereunder. 
  

 7 

 ARTICLE VI 
  

CONFIDENTIALITY 
  
 Each party shall hold, and shall cause its employees, accountants, attorneys and other authorized representatives to hold, in confidence, and shall
otherwise not disclose to anyone other than each of their respective accountants, attorneys and other authorized representatives, together with such other individuals or organizations as may from time to time be authorized in writing by the other
party or as may otherwise be required by any administrative body or required by law, all documents, records, data and information of each party (“Confidential Information”) disclosed by such party to the other party in connection with the
performance of this Agreement. Confidential Information shall not include information that (i) is already or otherwise becomes publicly available through no act of receiving party; (ii) is lawfully received by receiving party from third parties
subject to no restriction of disclosure; or (iii) can be shown by receiving party to have been independently developed by such party. Each party shall promptly notify the other party of any subpoena or other request or demand made to such party
seeking documents, records, data or information concerning the other party or the Services provided hereunder, and shall resist production of any such materials consistent with its obligations pursuant to this Article. Neither party shall use the
Confidential Information of the other party except to exercise its rights and perform its obligations hereunder. 
  
 ARTICLE VII 
  
 MISCELLANEOUS 
  
 7.1 Further
Assurances. AF Services and eCost agree, upon the reasonable request of the other, to execute, acknowledge and deliver any and all such further instruments, and to do and perform any and all such other acts as may be necessary or appropriate in
order to carry out the intent and purposes of this Agreement. 
  
 7.2 Waivers or Modifications. No waiver, modification or cancellation of any term or condition of this Agreement shall be effective unless executed in writing by the party to be charged therewith. No written waiver shall excuse the
performance of any act(s) other than those specifically referred to therein. A waiver of any breach by any party hereunder shall not constitute a waiver of any subsequent breach(es) by such party hereunder. 
  
 7.3 Governing Law. This Agreement shall be governed by the laws of the
State of California (regardless of the laws that might otherwise govern under applicable principles of conflicts of law) as to all matters, including, but not limited to, matters of validity, construction, effect, performance and remedies.

  

 8 

 7.4 Notices. All notices requests, demands, waivers and other communications under this Agreement
shall be in writing and shall be deemed to have been duly given if delivered personally or by facsimile transmission or mailed (certified or registered mail, postage prepaid, return receipt requested): 
  

			
	 If to AF Services, to:
	 	 AF Services, Inc.
 2555 West 190th Street, Suite 204
 Torrance, California 90504
 Attention: President
 Fax No.: (310)
354-[                    ]

		
	 If to eCOST:
	 	 eCOST.com, Inc.
 2555 West 190th Street, Suite 106
 Torrance, California 90504
 Attention: Chief Executive Officer
 Fax No.: (310)
354-[                    ]

  
 or to such other person or address as
any party shall specify by notice in writing to the other party. All such notices, requests, demands, waivers and communications shall be deemed to have been received on the date on which hand delivered, upon transmission of the facsimile
transmission by the sender and issuance by the transmitting machine of a confirmation slip confirming that the number of pages constituting the notice have been transmitted without error, or on the third business day following the date on which so
mailed, except for a notice of change of address, which shall be effective only upon receipt thereof. In the case of a notice sent by facsimile transmission, the sender shall contemporaneously mail a copy of the notice to the addressee at the
address provided for above. However, such mailing shall in no way alter the time at which the facsimile notice is deemed received. In no event shall the provision of notice pursuant to this Section 7.4 constitute notice for service of process.

  
 7.5 Severability. If any provision of this Agreement is
held to be illegal, invalid or unenforceable, such provision will be fully severed and this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision never comprised a part hereof; and the remaining provisions
hereof will remain in full force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there will be added
automatically as part of this Agreement a provision as similar in its terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable. 
  
 7.6 Entire Agreement. This Agreement, the Master Separation and Distribution Agreement, the other Ancillary
Agreements and the exhibits and schedules referenced or attached hereto and thereto constitute the entire agreement between the parties hereto pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations
and discussions, whether oral or written, of or by and between the parties hereto in respect of such subject matter and may not be amended except by a written instrument hereafter signed by each of the parties hereto. 
  
 7.7 Assignment. Except to the extent expressly provided herein,
neither party has the right to, directly or indirectly, in whole or in part, assign, delegate, convey or otherwise transfer, whether voluntarily, involuntarily or by operation of law, its rights and obligations under this Agreement, except with the
prior written approval of the other party. Any such prohibited action will be null and void. Notwithstanding anything to the contrary in the foregoing, AF Services shall have the right to assign this Agreement without eCost’s prior approval to
any successor of AF Services in connection with a corporate reorganization. 
  

 9 

 7.8 Binding Agreement. This Agreement is binding upon, and inures to the benefit of, the parties
and their respective successors. Nothing in this Agreement, expressed or implied, is intended to confer on any person, other than the parties or their respective successors, any rights, remedies or liabilities under this Agreement. 
  
 7.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which when so executed shall be deemed an original, and such counterparts together shall constitute one and the same instrument. 
  
 7.10 No Impairment of Rights. No delay or omission by either party hereto in exercising any right, power or privilege hereunder will impair such
right, power or privilege, nor will any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege. 
  
 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives as of the day and year first above written. 
  

			
	 AF SERVICES, INC.

		
	 By:
	 	  

	 Name:
	 	 Simon Abuyounes

	 Title:
	 	 President

	
	 ECOST.COM, INC.

		
	 By:
	 	  

	 Name:
	 	 Adam W. Shaffer

	 Title:
	 	 Chief Executive Officer

  

 10 

 Exhibit A 
  
 AF Services shall provide eCost accounting and finance services, sales tax services, human resources administration
services, record maintenance services, credit card processing services and database management services, in each case on a basis consistent with past practices.

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