Document:

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                                                                   Exhibit 10.25

                    FIRST AMENDMENT TO MARKETING AGREEMENT
                    --------------------------------------

     This First Amendment to Marketing Agreement (this "Amendment"), effective
as of May 25/th/, 2000 (the "Effective Date"), is made and entered into by and
between America Online, Inc. ("AOL"), a Delaware corporation, with offices at
22000 AOL Way, Dulles, Virginia 20166, and eMachines, Inc. ("eMachines"), a
Delaware corporation, with offices at 14350 Myford Drive, Suite 100, Irvine,
California 92606.  AOL and eMachines may be referred to individually as a
"Party" and collectively as "Parties."

                                 INTRODUCTION
                                 ------------

     WHEREAS, AOL and eMachines are parties to a Marketing Agreement dated as of
June 17, 1999 (the "Original Agreement"); and

     WHEREAS, the Parties desire to modify certain terms of the Original
Agreement, as provided below.

     NOW, THEREFORE, in consideration of the terms and conditions set forth in
this Amendment and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, AOL and eMachines hereby agree to
amend the Original Agreement in accordance with the following terms and
conditions:

                                     TERMS
                                     -----

1.   3 Month AOL Offer.  Section 23 is hereby added to the document after
     -----------------
Section 22 of the Original Agreement as follow:

     "23.  3 Month AOL Offer.  During the period from the Effective Date (as
           -----------------
     defined in the First Amendment to Marketing Agreement) through September
     30, 2000, eMachines and AOL hereby agree to participate in a program
     offering consumers three (3) months of AOL in accordance with the terms and
     conditions set forth on Exhibit D attached hereto.

2.   Definitions.  Capitalized terms used but not defined herein shall have the
     -----------
meanings given thereto in the Original Agreement.

3.   Original Agreement.  Except as specifically amended hereby, the Original
     ------------------
Agreement remains in full force and effect.

4.   Counterparts.  This Amendment may be executed in counterparts, each of
     ------------
will be deemed an original and all of which together will constitute one and the
same document.

                   [SIGNATURES APPEAR ON THE FOLLOWING PAGE]
<PAGE>

                                                                  EXECUTION COPY

     IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.

AMERICA ONLINE, INC.                    eMACHINES, INC.

By: /s/ Eric L. Keller                  By: /s/ John Dickinson
    -------------------------               -------------------------

Print Name: Eric L. Keller              Print Name: John Dickinson
            -----------------                       -----------------

Title: SVP, Business Affairs            Title: Senior Vice President
       ----------------------                  ----------------------

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                                                                  EXECUTION COPY

                                   Exhibit D

                               3 Month AOL Offer

1. eMachine's Distribution the AOL Classic Software. AOL shall, at its expense,
   ------------------------------------------------
provide to eMachines the AOL Packages, delivered at AOL's expense, to eMachine's
distribution center (the "DC") of the Products.  After the AOL Packages arrive
at the DC, and through the Offer Term, defined in Section 6 below, eMachines
shall use its best efforts to affix the AOL Package to the outside of each
Product that eMachines distributed to (i) Priceclub/Costco, (ii) QVC, (iii)
retailers who agree to promote the Promo Offer and (iv) other channels that the
Parties agree to.  The "AOL Package" shall mean an AOL-supplied diskette or CD
ROM containing the AOL Classic Software containing the three (3) months of the
AOL Classic Service for free upon registration (the "Promo Offer") and related
promotional and packaging materials.

2. eMachines Promotion of the Promo Offer.  In addition to the distribution
   --------------------------------------
obligations in Section 1 above, during the Offer Term, eMachines shall promote
the Promo Offer as follows:

   a.  eMachines shall promote the Promo Offer on the first screen of eMachines'
       Internet web site located at the URL www.e4me.com appearing "above the
                                            ------------
       fold". AOL will approve promotional copy for such web promotion.

   b.  eMachines shall use commercially reasonable efforts to cause QVC to
       promote the Promo Offer and the availability of the AOL Package through
       its promotions (e.g. on-air and special visuals) of the Products on QVC.
       If QVC does not agree to promote the Promo Offer and the availability of
       the AOL Package through its promotions of the Products on QVC, then
       eMachines shall have no obligation to affix the AOL Package to the
       outside of each Product that eMachines distributes to QVC under Section
       1(ii) above.

   c.  eMachines and AOL shall agree to use commercially reasonable efforts to
       promote the Promo Offer through other retailers that distribute the
       Products, such retailers to be agreed to by the Parties.

3. Promo Offer Materials.  All marketing, advertising, or other materials
   ---------------------
related to the Promo Offer must be approved by AOL.  Without limiting the
foregoing, eMachines agrees that the Promo Offer shall be offered as being
brought to you by eMachines (e.g. "compliments of eMachines") not by AOL.

4. Payments by eMachines.  In consideration for the AOL Classic Software
   ---------------------
containing the three (3) months of the AOL Classic Service included for free
upon registration being available to eMachines, eMachines shall pay AOL forty-
three dollars and ninety cents (US$43.90) per end-user who registers under the
Promo Offer for three months of the AOL Classic Service included at no charge
(the "Registered Program Member") within thirty (30) days from the end of the
month in which such registration takes place.

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                                                                  EXECUTION COPY

5.  Payments by AOL.  In consideration for eMachines' distribution of the AOL
    ---------------
Package and promotion of the Promo Offer, AOL shall pay eMachines a promotional
bounty of forty-three dollars and ninety cents (US$43.90) per each Registered
Program Member within thirty (30) days from the end of the month in which such
registration takes place.  In addition, AOL shall pay eMachines a promotional
bounty of thirty dollars ($30.00) for each Qualified Registered Program Member
within thirty (30) days from the end of the month in which such registration
takes place.  A "Qualified Registered Program Member" shall be any person or
entity who registers for the AOL Classic Service through the promo code
associated with the Promo Offer during the Term of the Original Agreement using
eMachines' special promotion identifier and who pays the then-standard fees
required for membership to such service through at least two (2) consecutive
billing cycles after the three (3) months of the AOL Classic Service included
for free upon registration has been completed.

6.  Offer Term. The term of the Promo Offer shall be from the Effective Date (as
    ----------
defined in the First Amendment to Marketing Agreement) until September 30, 2000.

                                       4<PAGE>

                                                                   EXHIBIT 10.26

                                                                  Execution Copy

                    SECOND AMENDMENT TO MARKETING AGREEMENT
                    ---------------------------------------

     This Second Amendment to Marketing Agreement (this "Amendment"), effective
as of October 5, 2000, is made and entered into by and between America Online,
Inc. ("AOL"), a Delaware corporation, with offices at 22000 AOL Way, Dulles,
Virginia 20166, and eMachines, Inc. ("eMachines"), a Delaware corporation, with
offices at 14350 Myford Drive, Suite 100, Irvine, California 92606. AOL and
eMachines may be referred to individually as a "Party" and collectively as
"Parties."

                                 INTRODUCTION
                                 ------------

     WHEREAS, AOL and eMachines have entered into that certain Marketing
Agreement, dated June 17, 1999, as amended by First Amendment to Marketing
Agreement dated as of May 25, 2000 (including all exhibits thereto, the
"Original Agreement"); and

     WHEREAS, the Parties desire to amend and supplement the terms of the
Original Agreement to implement a new promotional program pursuant to the terms
provided below.

     NOW, THEREFORE, in consideration of the terms and conditions set forth in
this Amendment and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, AOL and eMachines hereby agree to
amend and supplement the Original Agreement in accordance with the following
terms and conditions:

                                     TERMS
                                     -----

1.   3 Month AOL Offer.  Section 23 of the Original Agreement is hereby amended
     -----------------
by adding the following language to the end of the section:

     "After the expiration of the promotional program set forth above in this
     Section 23, and during the period from October 5, 2000 through September
     30, 2001, eMachines and AOL hereby agree to participate in a new program
     offering consumers three (3) months of AOL in accordance with the terms and
     conditions set forth on Exhibit E attached hereto (the "New Program").
     Irrespective of the New Program, AOL and eMachines shall continue to engage
     in all other distribution and promotional programs set forth in the
     Original Agreement, as it is now, or subsequently shall be, amended.  The
     New Program is in addition to and in no way modifies or replaces all other
     distribution and promotional programs set forth in the Original Agreement,
     as it is now, or subsequently shall be, amended."

2.   Definitions.  Capitalized terms used but not defined herein shall have the
     -----------
meanings given thereto in the Original Agreement.

3.   Original Agreement. Except as specifically amended and supplemented hereby,
     ------------------
the Original Agreement remains in full force and effect.

4.   Counterparts. This Amendment may be executed in counterparts, each of which
     -------------
will be deemed an original and all of which together will constitute one and the
same document.

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                                                                  Execution Copy

                   [SIGNATURES APPEAR ON THE FOLLOWING PAGE]

                                       2
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                                                                  Execution Copy

     IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of
the date first above written.

AMERICA ONLINE, INC.                     eMACHINES, INC.

By: /s/ Eric Keller                      By: /s/ John Dickinson
   --------------------------------         --------------------------------

Print Name: Eric Keller                  Print Name: John Dickinson
           ------------------------                 ------------------------
Title: SVP, Business Affairs             Title: Senior VP
      -----------------------------            -----------------------------

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                                                                  Execution Copy

                                   Exhibit E

                       3 Month AOL Classic Service Offer

1.   eMachines' Distribution of the AOL Software. During the Offer Term, defined
     -------------------------------------------
in Section 5 below, eMachines and AOL agree that the AOL Classic Service shall
be promoted under a new program (the "Three-Month Included Promo Offer") that
will entitle the end user to three (3) months of the AOL Classic Service at no
cost to the end user upon registration in accordance with the terms and
conditions set forth below. eMachines agrees to make this Three-Month Included
Promo Offer the primary Interactive Service promotional offer on all of its
Products and throughout all of its marketing and sales channels in the United
States.  For purposes of this Exhibit E, "Products" shall be as defined in the
Original Agreement, but shall exclude any devices which do not use a Windows
based operating system or successor operating system.  As set forth in Section
1.3, eMachines agrees to promote the Three-Month Included Promo Offer during the
Offer Term as the primary Interactive Service during the initial installation
and set-up of each Bundled Product and Three-Month Included Package Bundled
Product (as defined in Section 1.4 below), and said agreement to provide AOL
with this primary promotional position shall supercede any conflicting provision
contained in Section 2 of the Original Agreement.  eMachines shall distribute
through all Products a special version of the AOL Classic Software containing
the Three-Month Included Promo Offer as follows:

     1.1(a)  Software Testing.  AOL shall submit to eMachines a Gold Master of
             ----------------
             its AOL Software, that AOL has already tested using AOL's then
             standard virus-checking procedures, upon execution of this
             Amendment. eMachines shall test the AOL Software and shall notify
             AOL of its acceptance or rejection of such software within ten (10)
             business days of its receipt of such software. Both Parties shall
             cooperate on a timely, priority basis in order to report and
             resolve issues associated with the testing process. The foregoing
             testing process and rights and obligations set forth in this
             Section 1.1(a) shall also be applicable to the AOL Software
             included on the Three-Month Included Packages and on the SOAF/MTM
             Kit, and to any updated versions of the AOL Software provided to
             eMachines under the production time guidelines set forth by
             eMachines.

     1.1(b)  Special Software Build.  Upon satisfactory testing of the AOL
             ----------------------
             Software as set forth in Section 1.1(a), eMachines shall pre-
             install the AOL Software, including the special version of the AOL
             Classic Software containing the Three-Month Included Promo Offer,
             onto each Product by burning the AOL Software into the hard drive
             or other applicable storage mechanism of such Products. The AOL
             Software combined with an eMachines Product is referred to herein
             and in the Original Agreement as a "Bundled Product." The AOL
             Software to be pre-installed shall include, in each case, the then-
             current version of the AOL Classic Service (as modified by the
             Three-Month Included Promo Offer), the CompuServe Service, Netscape
             Navigator Browser Software, AIM Software, and ICQ Software
             (replacing, if necessary, any older versions of such software
             contained in the online services folder or similar area on the
             Products). The AOL Software for each respective AOL Service shall
             each be pre-installed in each Product (i.e., not in setup.exe file
             form). AOL shall, at its expense, provide to eMachines the AOL
             Software for use in distribution, marketing or promotion

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                                                                  Execution Copy

             by eMachines in accordance with this Section 1. A Master of the AOL
             Software will be delivered in the form of a master diskette, Gold
             Master or CD-ROM to be tested as set forth in Section 1.1(a) and
             pre-installed as set forth in this Section 1.1(b).

     1.2     Special Three-Month Included Promo Offer Desktop Icon.  eMachines
             -----------------------------------------------------
             shall ensure that the pre-installed AOL Software installed upon
             each Bundled Product results in the placement of a special AOL-
             designed desktop icon that promotes the Three-Month Included Promo
             Offer (the "Promo Icon"). If an end-user clicks on the Promo Icon,
             this will initiate the process for the end-user to register for AOL
             Classic Service under the terms and conditions of the Three-Month
             Included Promo Offer. AOL shall, at its expense, design and provide
             to eMachines the necessary visuals and copy related to the Promo
             Icon, and eMachines shall have the opportunity to approve such
             Promo Icon.

     1.3     Increased Promotion of the Three-Month Included Promo Offer during
             ------------------------------------------------------------------
             MS OOBE. eMachines shall increase the placement and promotion of
             -------
             the Three-Month Included Promo Offer during an end-user's initial
             installation and set-up of the Bundled Product as follows:
             eMachines may continue to promote eMachines.net, provided that the
             Three-Month Included Promo Offer shall be the primary Interactive
             Service offer promoted during MS OOBE, and eMachines.net shall be
             promoted less-favorably. AOL shall, at its expense, provide art and
             copy to eMachines for such MS OOBE increased promotion, and
             eMachines shall have the opportunity to approve such MS OOBE
             increased promotion. Such MS OOBE promotion shall not be
             implemented until the next MS OOBE is included with the Products,
             which is anticipated to be January 2001.

     1.4     Three-Month Included Package Bundled Product. Provided that the
             --------------------------------------------
             requirements in Section 1.1(a) are met, the Parties anticipate that
             eMachines will be able to pre-install the AOL Software on the
             Products as set forth in Section 1.1(b) in January 2001. Until
             eMachines is able to pre-install the AOL Software pursuant to
             Section 1.1(b), eMachines shall bundle a Three-Month Included
             Package with each eMachines Product by placing the Three-Month
             Included Package inside the cardboard box packaging of each
             Product. The "Three-Month Included Package" shall mean an AOL-
             supplied diskette or CD-ROM containing the special AOL Classic
             Software containing the Three-Month Included Promo Offer and
             related promotional and packaging materials. eMachines shall have
             the right to approve the size of the Three-Month Included Package
             so that it fits in the box without modification of the existing
             box. The Three-Month Included Package combined with the Product is
             referred to herein as a "Three-Month Included Package Bundled
             Product." AOL shall, at its expense, provide and deliver to
             eMachines the Three-Month Included Packages to eMachines'
             distribution center (the "DC") of the Three-Month Included Package
             Bundled Products. eMachines shall provide AOL a written request for
             a sufficient quantity of Three-Month Included Packages to meet its
             production expectations. eMachines acknowledges and agrees that AOL
             may require at least thirty (30) days to complete the preparation
             and delivery of such quantity of Three-Month Included Packages to
             eMachines. After the Three-Month Included Packages arrive at the
             DC, and through the Offer Term, defined in Section 5 below,

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             eMachines shall use its best efforts to enclose a Three-Month
             Included Package inside each Product that eMachines distributes
             until the AOL Software is pre-installed pursuant to Section 1.1(b).
             If AOL does not distribute sufficient Three-Month Included Packages
             to eMachines within thirty (30) days of a written request for such
             packages, then eMachines shall not have any obligation under this
             Section 1.4 with respect to those Products for which there are no
             Three-Month Included Packages. In the event that eMachines
             instructs AOL to deliver the Three-Month Included Packages to a
             destination outside the United States, then AOL shall be permitted
             forty-five (45) days to deliver the Three-Month Included Packages,
             before eMachines shall be relieved of its obligation to bundle such
             packages as set forth in this Section 1.4.

     1.5     SOAF/MTM Bundling Obligation. On the date that eMachines complies
             ----------------------------
             with Section 1.1(b) above, eMachines shall not be obligated to
             carry out the bundling obligations set forth in Section 1.4 above;
             provided that eMachines thereafter agrees to use commercially
             reasonable efforts to bundle a SOAF/MTM Kit with any Bundled
             Product. A "SOAF/MTM Kit" shall mean an AOL-supplied Sign-On A
             Friend/Month-to-Month Offer diskette or CD-ROM containing the
             special AOL Classic Software containing one (1) month of pre-paid
             AOL Service included and related promotional and packaging
             materials. AOL shall, at its expense, provide to eMachines the
             SOAF/MTM Kits, delivered at AOL's expense, to such location as
             determined by eMachines. eMachines shall have the right to approve
             the size of the SOAF/MTM Kit so that it fits in the box without
             modification of the existing box. eMachines shall provide AOL a
             written request for a sufficient quantity of SOAF/MTM Kits to meet
             its production expectations. eMachines acknowledges and agrees that
             AOL may require at least thirty (30) days to complete the
             preparation and delivery of such quantity of SOAF/MTM Kits to
             eMachines. If AOL does not distribute sufficient SOAF/MTM Kits to
             eMachines within thirty (30) days of a written request for such
             kits, then eMachines shall not have any obligation under this
             Section 1.5 with respect to those Products for which there are no
             SOAF/MTM Kits. In the event that eMachines instructs AOL to deliver
             the SOAF/MTM Kits to a destination outside the United States, then
             AOL shall be permitted forty-five (45) days to deliver the SOAF/MTM
             Kits, before eMachines shall be relieved of its obligation to
             bundle such packages as set forth in this Section 1.5. AOL will pay
             to eMachines the fee set forth in Section 4 of the Original
             Agreement for Qualified New Members who register for the AOL
             Classic Service through the SOAF/MTM Kit and AOL shall provide
             eMachines with the reports as set forth in Section 8 of the
             Original Agreement with respect to Qualified New Members who
             register for the AOL Classic Service through the SOAF/MTM Kit.

     1.6     Post Manufacturing Insertion Costs. The Parties mutually understand
             ----------------------------------
             that in order for the Three-Month Included Packages to be included
             in the boxes of Products (as set forth in Section 1.4) scheduled to
             be distributed during the period between the effective date of this
             Amendment and December 31, 2000 (the "Immediate Distribution
             Period"), eMachines may have to open previously sealed Product
             containers. In the event this occurs, eMachines will incur costs to
             insert the Three-Month Included Packages into the sealed boxes of
             such Products (the "Post Manufacturing Insertion Costs"). AOL
             agrees to pay eMachines the Post Manufacturing Insertion Cost per
             Product, requiring reopening in order to

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          bundle a Three-Month Included Package as set forth in Section 1.4
          above, in an amount equal to $1.00 per such Product. AOL shall pay
          such Post Manufacturing Insertion Cost for the first 400,000 Products
          requiring such Post Manufacturing Insertion Costs during the Immediate
          Distribution Period. In the event that eMachines will incur Post
          Manufacturing Insertion Costs for any Product after the first 400,000
          Products, eMachines shall provide written notice to AOL prior to its
          incurring any further Post Manufacturing Insertion Costs, and AOL
          shall have the discretion to choose to allow those Products to be
          distributed without including the Three-Month Included Package. AOL
          shall notify eMachines in writing of its choice within two (2)
          business days of its receipt of eMachines' written notice. Further,
          AOL shall not pay Post Manufacturing Insertion Costs for any eMachines
          Products that are distributed after the Immediate Distribution Period.
          Notwithstanding the above, AOL shall have the right upon two (2)
          business days prior written notice to stop eMachines from including
          the Three-Month Included Packages in the Product boxes as set forth in
          Section 1.4; provided, that (a) AOL shall be responsible for disposing
          of or removing the remaining Three-Month Included Packages from the
          DC; and (b) AOL shall pay to eMachines the Post Manufacturing
          Insertion Costs with respect to Products which include the Three-Month
          Included Packages in the box up to and including the date of
          termination pursuant to this sentence.

     1.7  Post Manufacturing Insertion Cost Reporting. eMachines will report to
          -------------------------------------------
          AOL the number of Products distributed each week that required Post
          Manufacturing Insertion Costs. AOL agrees to pay eMachines the Post
          Manufacturing Insertion Costs within thirty (30) days of the end of
          the month during which eMachines reports such costs.

     1.8  General Distribution Obligations. eMachines shall not bundle the AOL
          --------------------------------
          Software with any other products other than eMachines' Products or
          otherwise distribute the AOL Software in a manner not expressly set
          forth herein.  eMachines may, however, request in writing that AOL
          permit eMachines to bundle the AOL Software or distribute the AOL
          Software in a manner not provided for in this Exhibit so long as any
          such request is made at least thirty (30) calendar days in advance of
          any such desired bundling or distribution arrangement.  Any request
          not affirmatively approved by AOL in writing within fifteen (15) days
          of the notice from eMachines shall be deemed denied.

2.   eMachines Promotion of the Three-Month Included Promo Offer.  In addition
     ------------------------------------------------------------
to the distribution obligations in Section 1 above, during the Offer Term,
eMachines shall promote the Three-Month Included Promo Offer as follows:

     2.1  eMachines Web Site.  eMachines shall use all commercially reasonable
          ------------------
          efforts to promote the Three-Month Included Promo Offer on eMachines'
          Internet web site located at the URL www.e4me.com, with a prominently
                                               -------------
          placed promotion, as soon as commercially possible.

     2.2  Print, Radio and Television Advertising.  eMachines agrees to use all
          ---------------------------------------
          commercially reasonable efforts to promote prominently the Three-Month
          Included Promo Offer, in a manner to be approved by AOL, in all of
          eMachines'

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          own offline media promotions, including but not limited to print,
          radio, and TV advertising, where eMachines' Products are featured, if
          any of such media are being used at such time.

     2.3  Offline Retailer Promotions. eMachines agrees to use all commercially
          ---------------------------
          reasonable efforts to promote the Three-Month Included Promo Offer
          through offline retailers mutually agreed to by the Parties that
          distribute and sell the Bundled Products or Three-Month Included
          Package Bundled Products.

     2.4  QVC Promotions.  eMachines agrees to use all commercially reasonable
          --------------
          efforts to cause QVC to market the Three-Month Included Promo Offer
          and promote the availability of the Three-Month Included Promo Offer
          through its promotions (e.g. on-air and special visuals) of the
          Bundled Products or Three-Month Included Package Bundled Products on
          QVC.

     2.5  Online Retailer Promotions.  eMachines agrees to use all commercially
          --------------------------
          reasonable efforts to promote the Three-Month Included Promo Offer
          through online retailers that distribute the Bundled Products or
          Three-Month Included Package Bundled Products, including but not
          limited to Buy.com and Outpost.com.

     2.6  "Caller-on-Hold" Promotions.  eMachines shall use all commercially
          ---------------------------
          reasonable efforts to promote the Three-Month Included Promo Offer on
          all of the "caller-on-hold" music or messages played on its telephone
          system including but not limited to calls made to eMachines' technical
          support lines, customer support lines, and product purchasing and/or
          ordering lines.

     2.7  Packaging.  eMachines also agrees as soon as commercially practicable
          ---------
          to incorporate AOL-provided promotional artwork on the front bezel of
          each Bundled Product or Three-Month Included Package Bundled Product
          through the use of special adhesive stickers (as specified by
          eMachines) supplied by AOL to such destination as directed by
          eMachines.  Such stickers and the delivery thereof will be fully paid
          for by AOL.  eMachines shall have the right to approve such stickers
          prior to using them.  Such stickers will replace the current stickers
          used on the Bundled Products and may be different for each model of
          Bundled Product.

     2.8  Joint Targeted Retailer Promotions.  eMachines and AOL agree to work
          ----------------------------------
          together with Target Retailers to promote the Three-Month Included
          Promo Offer in Retail Stores in an effort to increase registration
          rates. For registrations realized in-store under the Three-Month
          Included Promo Offer, through an eMachines promo/tracking code through
          only these Target Retailers, through kiosks and the like (and not
          through Three-Month Included Package Bundled Products, Bundled
          Products, the MS OOBE, the SOAF/MTM Kits or the Promo Icon), eMachines
          agrees to contribute 25% of its bounty payments under Section 4 below
          to help fund this program. eMachines' contribution will take the form
          of a 25% reduced bounty payment for registrations realized in-store
          under the Three-Month Included Promo Offer, through an eMachines
          promo/tracking code through only these Target Retailers. "Target
          Retailers" shall be defined as those retailers agreeing to sign up end
          users under this Three-Month Included Promo Offer.

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          AOL shall be responsible for acquiring such Target Retailers. These
          registrations will fall under a special tracking code that AOL will be
          responsible for tracking. AOL agrees to provide eMachines reasonable
          advance written notice of Target Retailer activities under this
          Section 2.8 (e.g. cancellation, continuation, or new sign-ups).
          Notwithstanding the above, any registrations resulting from the Three-
          Month Included Package Bundled Products, the Bundled Products, the MS
          OOBE, the SOAF/MTM Kits or the Promo Icon shall not be subject to the
          25% decrease described above in this Section 2.8.

3.   Three-Month Included Promo Offer Materials.  All visuals, logos, artwork,
     -------------------------------------------
and copy used in marketing, advertising, or other materials related to the
Three-Month Included Promo Offer shall be provided by AOL at AOL's expense. AOL
and eMachines shall have approval rights (which shall not be unreasonably
withheld or delayed) over any and all advertising programs related to the Three-
Month Included Promo. Without limiting the foregoing, eMachines agrees that the
Three-Month Included Promo Offer shall be offered as being brought to you by
eMachines (e.g. "compliments of eMachines") not by AOL.

4.   Payments.  AOL shall pay eMachines a promotional bounty for each Qualified
     --------
First Tier Registered Program Member and Qualified Second Tier Registered
Program Member. The promotional bounties set forth in this Section 4 shall be
the only payments made by AOL to eMachines for any Bundled Products or Three-
Month Included Package Bundled Products sold under this Three-Month Included
Promo Offer. The amount of the promotional bounty paid for each Qualified
Registered Program Member shall vary in accordance with the following
qualification schedule:

     4.1  Qualified First Tier Registered Program Members.  For each person or
          -----------------------------------------------
          entity who is a Qualified First Tier Registered Program Member, AOL
          shall pay eMachines a promotional bounty of thirty-five dollars
          ($35.00), within thirty (30) days from the end of the month in which
          such qualification takes place. A "Qualified First Tier Registered
          Program Member" shall be any person or entity who is among the first
          seventy-five thousand (75,000) to register for the AOL Classic Service
          through a unique promo code identifier specific to eMachines and
          associated with the Three-Month Included Promo Offer (whether through
          Bundled Products, Three-Month Included Packaged Bundled Products, the
          MS OOBE or the Promo Icon), including such promo codes assigned to the
          Target Retailers under Section 2.8, during the Offer Term (subject to
          the last sentence of Section 5), and who pays the then-standard fees
          required for membership to such service through at least two (2)
          consecutive billing cycles after the three (3) months of the AOL
          Classic Service included for free upon registration has been completed
          (the "3 Month Included Free Period"). Upon the qualification of the
          seventy-five thousandth (75,000th) Qualified First Tier Registered
          Program Member, the promotional bounty payment set forth in this
          Section 4.1 shall no longer apply, and all future promotional bounty
          payments for additional registrants under this Three-Month Included
          Promo Offer shall be paid in accordance with Section 4.2 below.

     4.2  Qualified Second Tier Registered Program Members. A "Qualified Second
          ------------------------------------------------
          Tier Registered Program Member" shall be any person or entity who
          registers for the AOL Classic Service through a unique promo code
          identifier specific to

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                                                                  Execution Copy

          eMachines and associated with the Three-Month Included Promo Offer
          (whether through Bundled Products, Three-Month Included Packaged
          Bundled Products, the MS OOBE or the Promo Icon), including such promo
          codes assigned to the Target Retailers under Section 2.8, during the
          Offer Term (subject to the last sentence of Section 5) after the
          qualification of the first seventy-five thousand (75,000) Qualified
          First Tier Registered Program Members, and who pays the then-standard
          fees required for membership to such service through at least one (1)
          billing cycle after the 3 Month Included Free Period. For each
          Qualified Second Tier Registered Program Member, AOL shall pay
          eMachines a promotional bounty payment up to a maximum of fifty-five
          dollars ($55), as follows: (a) thirty-five dollars ($35.00) upon
          completion and payment of one (1) billing cycle after the 3 Month
          Included Free Period; (b) ten dollars ($10) upon completion and
          payment of three (3) consecutive billing cycles after the 3 Month
          Included Free Period; and (c) ten dollars ($10) upon completion and
          payment of nine (9) consecutive billing cycles after the 3 Month
          Included Free Period. All such bounty payments earned by eMachines in
          Section 4.2 shall be paid by AOL within thirty (30) days of the end of
          the completed and paid billing cycle in which each bounty payment
          specified in 4.2(a), (b) or (c) is earned.

5.   Offer Term.  The term of the Three-Month Included Promo Offer shall be
     ----------
     from October 1, 2000 until September 30, 2001 (the "Offer Term").
     Notwithstanding the foregoing, AOL shall have the right to terminate the
     Three-Month Included Promo Offer at any time upon reasonable written notice
     to eMachines if it determines that the Three-Month Included Promo Offer is
     not resulting in sufficient registrations to justify the cost of the
     promotional program, such determination to be reasonably made by AOL. In
     the event that AOL terminates the Three-Month Included Promo Offer prior to
     September 30, 2001, the Offer Term shall end on such date of termination
     and AOL and eMachines agree that the Parties shall continue to engage in
     all other distribution and promotional programs set forth in the Original
     Agreement, as it is now, or subsequently shall be, amended. Notwithstanding
     the above, AOL shall honor all Three-Month Included Promo Offers that have
     been bundled on Products prior to termination of the Offer Term and shall
     make payments pursuant to Sections 4.1 and 4.2 related thereto, through the
     term of the Original Agreement.

6.   Reports.  AOL shall provide eMachines with reports within thirty (30) days
     -------
     of the end of each month that sets forth the number of Qualified First Tier
     Registered Program Members and the number of Qualified Second Tier
     Registered Program Members acquired by AOL through the distribution of the
     Bundled Products and the Three-Month Included Package Bundled Products
     during the previous month and the promo code that such Qualified First Tier
     Registered Program Member or Qualified Second Tier Program Member used. In
     addition such reports shall set forth, with respect to a Qualified Second
     Tier Program Member, which subsection of 4.2 is applicable and the amount
     to be paid to eMachines.

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