Document:

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                                                                    EXHIBIT 10.8

                                 Confidential
                             MARKETING AGREEMENT*
                             --------------------

     This Marketing Agreement (the "Agreement"), dated as of June 17, 1999 (the
"Effective Date"), is 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
                                  ------------

     AOL and eMachines each desires to enter into an marketing relationship
whereby eMachines will distribute and promote certain products and or services
that are owned, operated, distributed or authorized to be distributed by or
through AOL or any of its Affiliates pursuant to the terms and conditions
contained herein. Defined terms used but not defined in the body of the
Agreement will be as defined on Exhibit A attached hereto.
                                ---------

                                     TERMS
                                     -----

1.  eMachines Distribution of the AOL Software. eMachines shall distribute the
    ------------------------------------------
    AOL Software through all Products, and any other products subsequently
    agreed upon by the Parties. eMachines shall load the AOL Software onto each
    Product (including, without limitation, any new builds of the Products
    during the Term) by burning the AOL Software into the hard drive or other
    applicable storage mechanism of such Products. The AOL Software to be loaded
    shall include, in each case, the thencurrent version of the AOL Classic
    Service, 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
    fully installed in each Product (i.e., not in setup.exe file form),
    provided, however, that eMachines' bundling obligations under this Section 1
    shall not commence until eMachines' June 1999 product build cycle that is
    scheduled for retail distribution in early August, 1999. eMachines shall use
    best efforts, including but not limited to, making the necessary revisions
    to software preloads in order to meet such schedule and in no event shall
    the bundling obligations hereunder commence later than September, 1999. The
    AOL Software combined with the Products is sometimes referred to herein as
    the "Bundled Products".

-------------------------
    * CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
      SEPARATELY FILED WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN
      REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

2.  eMachines Promotion of the AOL Software.
    ---------------------------------------

    2.1  Desktop Icons. For each Bundled Product, eMachines shall include one
         -------------
         desktopicon (outside of, and in addition to the placements within, the
         online services folder and ICW) for each AOL Service and prominent
         shortcuts for the AOL Classic Service, the CompuServe Service, Netscape
         Navigator Browser, AIM Service and ICQ Service from the "Start" menu
         and, with respect to the AOL Classic Service and the CompuServe
         Service, the "Task Bar" of the Bundled Products (including, with
         respect to the desktop icon, any future items with similar
         functionality).

    2.2  Online Services Folder. The AOL Classic Service shall have the first
         ----------------------
         position within the "online services folder" (or successor or
         replacement product) on each Product. The CompuServe Service shall have
         the second position within the "online services folder" (or successor
         or replacement product) on each Product, provided that upon the launch
         date of eMachines.Net, eMachines.Net shall have the first position
         within the "online services folder", AOL Services shall have the second
         position within the "online services folder", and the Compuserve
         Service shall have the third position within the "online services
         folder".

    2.3  Packaging. eMachines shall prominently promote the AOL Services on and
         ---------
         in the packaging of the Bundled Products through (a) insertion of the
         documentation, brochures, and similar materials related to use of the
         AOL Classic Service, the CompuServe Service, Netscape Navigator
         Browser, AIM Service and ICQ Service which AOL will provide to
         eMachines for distribution to end users of the Bundled Products (the
         "Documentation"), (b) insertion of CD-ROM pack-ins containing the AOL
         Classic Software and CompuServe Software which AOL will provide to
         eMachines, and (c) display of AOL-supplied stickers on the Products
         (e.g., on-box, on-package, on-monitor). AOL will provide said
         materials, at its expense, delivered to the point of manufacture of the
         Products.

    2.4  Internet Connection Wizard. eMachines will include the AOL Classic
         --------------------------
         Service and the CompuServe Service within the Internet Connection
         Wizard (or successor or replacement product) (the "ICW") on each
         Bundled Product with the "most prominent and favorable promotion" (as
         described below). For purposes of the preceding sentence, the term
         "most prominent and favorable promotion" shall mean that (a) the AOL
         Classic Service and the CompuServe Service shall have the first and
         second positions, respectively, in any list of Interactive Services
         which appears within the ICW on the Bundled Products, provided, that
         after the launch date of eMachines.Net, eMachines.Net shall have the
         first position in any list of Interactive Services and AOL Classic
         Service and Compuserve Service will move to the second and third
         positions, respectively, (b) until the launch date of eMachines.Net,
         the AOL Classic Service shall be the default Interactive Service which
         is automatically selected.

                                      -2-
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         when a user opens a page which contains a list of Interactive Services
         (i.e., AOL shall be highlighted within the list of Interactive Services
         and information regarding the AOL Classic Service, and no other
         Interactive Service, shall appear in the adjacent window) and (c) no
         information regarding any Interactive Service (other than the AOL
         Classic Service, CompuServe Service, or eMachines.Net) shall appear
         when one of such AOL Services is highlighted on a page within the ICW
         which contains a list of Interactive Services.

    2.5  Exclusivity; Preferred Placement. During the Exclusive Period,
         --------------------------------
         eMachines agrees that, other than eMachines.Net, the AOL Services shall
         be the only Interactive Services to be bundled or otherwise distributed
         with the Products; provided that notwithstanding the foregoing,
         eMachines shall be permitted to distribute through the Products
         Microsoft's Internet Explorer and any Interactive Services sponsored by
         Microsoft only to the extent eMachines is so obligated under agreements
         in connection with its use of Microsoft Windows and the license of the
         Microsoft operating system (the "Microsoft Agreements"). In addition,
         eMachines shall give AOL thirty (30) days written notice prior to a
         review of the eMachines.Net connectivity provider (currently to be
         provided by UUNet) (the "Connectivity Provider Review") and shall give
         AOL the opportunity to bid on becoming the eMachines.Net connectivity
         provider and shall otherwise allow AOL to participate in the
         negotiations during the Connectivity Provider Review. With respect to
         eMachines' obligations under the Microsoft Agreement to promote certain
         other Interactive Services on the Products and with respect to
         eMachines.Net, eMachines agrees that the AOL Services shall be promoted
         no less favorably than such Interactive Services on the Products.
         During the term of this Agreement or until otherwise addressed in
         Section 19 of this Agreement, eMachines shall not change the default
         portal of eMachines.Net (i.e. Netscape Netcenter) without the prior
         written consent of AOL, such consent shall be in AOL's sole discretion.
         Notwithstanding the provisions of this Section 2, eMachines obligations
         under this Agreement are subject to the Microsoft Agreements, its
         existing Agreement with UUNet, and its existing agreement with Trigem
         and with regard to any future agreements between eMachines and
         Microsoft Corporation, eMachines shall not subscribe to or make
         available a Microsoft sponsored Interactive Service unless obligated to
         do so under eMachines' license of the Microsoft operating system.

    3.   Trademark License. eMachines shall be entitled to use the Marks in
         -----------------
         connection with the fulfillment of its obligations hereunder.

    4.   Payments. AOL shall pay eMachines a fee of [*] for each Qualified New
         --------
         Member to the AOL Classic Service acquired through the distribution of
         the Bundled Products. AOL shall pay eMachines a fee of [*] for each
         Qualified New Member to the Compuserve Service acquired through the
         distribution of the Bundled Products. AOL shall pay such amounts to
         eMachines on a quarterly basis, within thirty (30) days of

[*] Confidential Information has been omitted and separately filed with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                      -3-
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     the end of each calendar quarter. For the purposes hereof, a "Qualified New
     Member" shall mean any person or entity who registers for the AOL Classic
     Service or the CompuServe Service during the Term using eMachines' special
     promotion identifier and who pays the then-standard fees required for
     membership to the AOL Classic Service or the CompuServe Service through at
     least three (3) consecutive billing cycles (not including any standard free
     trial period). Notwithstanding this Section 4, eMachines hereby agrees and
     acknowledges that AOL shall have no bounty payment obligations with respect
     to customers who subscribe to the Compuserve Service in connection with the
     Consumer Rebate Offer described in Section 13.

5.   Expenses. Except as otherwise expressly provided for herein, eMachines
     --------
     shall be responsible for the costs and expenses associated with its
     marketing, promotion and distribution of the AOL Software through the
     Bundled Products.

6.   AOL Materials. AOL shall, at its expense, provide to eMachines the AOL
     -------------
     Software, documentation and related promotional materials to be included by
     eMachines within the Bundled Products (the "AOL Deliverables") delivered at
     AOL's expense, to the point of manufacture of the Products. The AOL
     Software and the CompuServe Software will be delivered in the form of a
     master diskette or CD-ROM to be pre-loaded by eMachines on each Product.
     eMachines acknowledges and agrees that AOL requires at least thirty (30)
     days to complete the preparation and delivery of the AOL Deliverables.
     eMachines shall use commercially reasonable efforts to order sufficient
     quantities of the AOL Deliverables and allow AOL at least thirty (30) days
     lead-time to develop and deliver such orders. AOL shall use commercially
     reasonable efforts to provide eMachines with the requested AOL Deliverables
     within thirty (30) days of receiving an order for such AOL Deliverables
     from eMachines.

7.   Testing. eMachines shall test the AOL Software and shall notify AOL of its
     -------
     acceptance or rejection of such software within twenty (20) business days
     of its receipt of such software, and shall cooperate with AOL on a timely,
     priority basis in order to report and resolve issues associated with the
     testing process. eMachines shall not distribute any Bundled Products
     hereunder without AOL's prior written approval.

8.   Reporting. From time to time upon AOL's request (but no more than once
     ---------
     every quarter), eMachines shall provide AOL with a report, in a detailed
     format reasonably satisfactory to AOL, setting forth (i) the total number
     of Bundled Products distributed and sold, and (ii) future forecasts
     regarding distribution and sales of Bundled Products. AOL shall provide
     eMachines with quarterly reports setting forth the number of Qualified New
     Members acquired by AOL through the distribution of the Bundled Products in
     the preceding quarter, and eMachines shall have right to an independent
     third party audit of such quarterly reports.

9.   International Distribution. The Parties agree that the provisions of this
     --------------------------
     Agreement shall also be applicable to Canadian distribution of the Bundled
     Products (including any variations of Products distributed in Canada, e.g.,
     with respect to name or model

                                      -4-
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     number). For any other country (outside of the United States and Canada) in
     which AOL or an Affiliate offers an Interactive Service, the Parties will
     use best efforts (subject to the written agreement of any applicable
     Affiliate) to enter into an addendum to extend this Agreement to such other
     country on appropriate terms, and in the event that the parties cannot
     reach an agreement with respect to a particular country within sixty days
     of beginning negotiations in such county, but in no event less that six (6)
     months from the Effective Date, the exclusivity provisions contained in
     this Agreement with respect to such country shall be removed, provided,
     that with respect to entering an agreement in Japan, the parties
     acknowledge that eMachines has an existing partner in Japan ("Hikari") and
     the parties shall make good faith efforts to reach an agreement within
     sixty days of the Effective Date under which Hikari's retail outlets shall
     be an integral part of the distribution channels under such agreement, and
     if the parties, despite such good faith efforts, cannot reach a three party
     agreement, the exclusivity provisions of this agreement with respect to
     Hikari in Japan shall be removed. A standard form of such addendum shall be
     made available to eMachines upon request. In addition, AOL and eMachines
     shall discuss and use best efforts to enter into an agreement to launch a
     consumer rebate program in England whereby eMachines computers shall be
     exclusively bundled with a Consumer Rebate Offer for a commitment to a
     UK/AOL Service for distribution as promptly as possible following the
     Effective Date.

10.  Direct Mail. eMachines shall provide AOL with access to eMachines' direct
     -----------
     mail or other customer lists, to the extent such lists exist, excluding
     subscribers to eMachines.Net service, for AOL's mailing and acquisition
     efforts. Notwithstanding Section 10 of the Standard Terms, defined in
     Section 21, eMachines shall remain free to use and dispose in its sole
     discretion its customer lists and information.

11.  Additional Activities. eMachines and AOL shall use good faith efforts to
     ---------------------
     work together on additional promotional activities on a case-by-case basis
     with the goal of maximizing registration of Qualified New Members and
     selling Bundled Products (i.e., cooperative contribution to the Parties
     promotional efforts, promotion in traditional media, other products and
     peripherals, etc.). eMachines agrees to promote the AOL Services in all of
     its media advertising to the extent it has the ability to influence the
     creative content of such advertisements, except for (i) promotions
     surrounding eMachines.Net, (ii) promotions that interfere with any non
     competitive third party cooperative advertising programs, and (iii)
     promotions that have an unreasonable material effect on the cost of the
     underlying advertisement campaign. Further, in eMachines' development of
     Products other than laptop and desktop computers, eMachines shall use
     commercially reasonable best efforts (with AOL's reasonable cooperation) to
     make all such Products compatible with one or more AOL Services.

                                      -5-
<PAGE>

12.  Warrants and Investment.
     -----------------------

     12.1  Grant of Warrants. Subject to the closing of the AOL Investment (as
           -----------------
           defined below), eMachines hereby grants to AOL warrants (the
           "Warrants") representing the right for a five-year period to purchase
           such shares of eMachines common stock equal to the value of Twelve
           Million Five Hundred Thousand dollars (US$12,500,000) divided by the
           eMachines' Stock Price, defined below. eMachines Stock Price shall
           equal (X) a number equal to the price per share of eMachines' common
           stock during an initial public offering of its common stock (an
           "IPO"), multiplied by a factor of 1.25, provided that the eMachines
           Stock Price shall be no less than a number equal to the initial
           issuance price per share of the Series A Preferred Stock of eMachines
           multiplied by a factor of 1.25, or (Y) in any other scenario besides
           an IPO, a number equal to the price per share of eMachines' common
           stock based on a One Billion Two Hundred Fifty Million dollar
           (US$1,250,000,000) valuation of eMachines on a post-money number of
           shares basis. If eMachines does not satisfy the requirements of the
           AOL Investment Review by July 15, 1999, pursuant to Section 12.5 of
           this Agreement, then AOL will receive twenty five percent (25%)
           warrant coverage in the Series A Financing as long as AOL elects to
           invest no less than Thirty Million dollars (US$30,000,000). If
           eMachines requests AOL in writing to invest less than Fifty Million
           Dollars (US$50,000,000) in the Series A Financing or does not permit
           AOL to invest prior to December 31, 1999, eMachines shall issue the
           full Warrant regardless of the size of AOL's investment so long as
           AOL invests the amount requested by eMachines in a timely manner,
           provided that, in the event that eMachines does not satisfy the
           requirements of the AOL Investment Review and the requested
           investment by AOL is on terms less favorable than those proposed in
           the PPM, then AOL shall receive the full warrants whether or not it
           invests.

     12.2  Vesting of Warrants. All Warrants granted to AOL hereunder shall vest
           -------------------
           upon the issuance of the Warrants, discussed in Section 12.4 of this
           Agreement, and shall contain a cashless exercise provision.

     12.3  Terms and Conditions. Any shares of stock acquired by AOL upon
           --------------------
           exercise of the Warrants shall possess rights, preferences, and
           privileges that are no less favorable than the rights, preferences,
           and privileges accorded to holders of Common Stock of the Company.
           Additionally, AOL shall be entitled to the same registration rights
           as the current common stockholders of eMachines (including Form S1
           and Form S3 demand registration rights and piggyback registration
           rights), in connection with any shares of stock received upon
           exercise of the Warrants.

      12.4 Final Agreement. The provisions of this Section 12 contain all of the
           ---------------
           principal and essential terms and conditions of the Warrants to be
           issued to AOL hereunder, and without limiting the foregoing, as soon
           as practicable, but in no event later than five (5) days after the
           closing of the AOL

                                      -6-
<PAGE>

           Investment eMachines shall issue a warrant in a form reasonably
           acceptable to AOL; notwithstanding, in the event that the Warrant is
           not issued by the date five (5) days after the AOL Investment and on
           such date AOL is performing its obligations hereunder without
           material breach then after such date the Warrants shall be deemed to
           have been issued in accordance herewith and AOL shall have the right
           to cease performance of its obligations hereunder until such time as
           eMachines shall have issued the Warrants.

     12.5  AOL Investment. AOL, subject to AOL's Investment Review, defined
           --------------
           below, will purchase ("AOL Investment") Fifty Million dollars
           (US$50,000,000) of preferred stock of eMachines in its Series A
           financing (the "Series A Financing") in accordance with the terms and
           conditions set forth in the Summary of Terms included in the
           Confidential Offering Memorandum of eMachines dated May 14, 1999 (the
           "PPM"), provided, however, that AOL shall have board observer rights
           as set forth in such documentation and the terms of the AOL
           Investment shall be no less favorable than the terms contained in the
           PPM. AOL's Investment Review shall mean the following:

    (X) AOL's approval, not to be unreasonably withheld, of the following
  matters related to the Series A Financing: (i) the lead investor of the Series
  A Financing, (ii) the additional coinvestors of the Series A Financing,
  provided that the list of co-investors or their affiliates (with the exception
  of any affiliates of Comcast Interactive Capital Group) delivered to AOL prior
  to the Effective Date and attached as Exhibit C have been previously approved
  by AOL; (iii) the size of the Series A Financing, provided that One Hundred
  and Fifty Million (US$150,000,000) is hereby approved by AOL, and (iv)
  approval of the terms and conditions of the definitive documents related to
  the Series A Financing, provided that to the extent the terms and conditions
  of such documents are generally applicable to all investors of the Series A
  Financing, the terms and conditions of such documents are presumed to be
  reasonable; and (Y) AOL's approval, not to be unreasonably withheld, of the
  following due diligence matters (i) review of the audited December 31, 1998,
  and March 31, 1999 financial quarters of eMachines, (ii) the review of the
  interim financial statements from the end of the March 31, 1999 quarter up to
  May 31, 1999, (iii) confirmation from Trigem that it has the ability and
  commitments in place to satisfy the production requirements of eMachines as
  represented in the Business Plan of the PPM for years 1999 and 2000, and (iv)
  no material adverse change in the operations and financial condition of
  eMachines from the Effective Date until the closing of the AOL Investment.

    13. eMachines Consumer Rebate Offer. eMachines and AOL hereby agree to
        -------------------------------
        participate in a program offering consumers a rebate in accordance with
        the terms and conditions set forth on Exhibit B attached hereto.

    14. Term, Renewal, Termination.
        --------------------------

        14.1  Term. Unless earlier terminated, as set forth herein, the initial
              ----
              term of this Agreement will be five (5) years from the Effective
              Date (the "Initial Term").

       [*] Confidential Information has been omitted and separately filed with
       the Commission. Confidential treatment has been requested with respect to
       the omitted portions.

                                      -7-
<PAGE>

    14.2  Renewal. This Agreement may be renewed for an additional five (5) year
          -------
          term (the "Renewal Period") upon mutual written agreement of the
          parties as set forth in Section 14.3 below. If this Agreement has not
          otherwise been terminated under this Agreement prior to the end of the
          Initial Term, AOL shall (A) extend the payment to eMachines of the
          revenue share under the eCommerce Package, defined in Section 16, for
          keyboards and Desktop channels only and AOL shall not be responsible
          to pay eMachines [*] per each member per month under the eCommerce
          Package; and (B) continue to pay eMachines a fee of [*] per month for
          each consumer who participated in the Rebate Offer Contract described
          in Section 13 (or other amounts as relate to any agreed upon
          modification to the Consumer Rebate Offer) for the remainder of such
          consumer's continuous membership to the appropriate AOL Service
          whether or not the Parties elect to enter into a Renewal Period.
          Further, eMachines will be paid bounties for those customers that
          activated their membership during the term of the Agreement but become
          Qualified New Members after termination of the Agreement.

    14.3  Declaration of Intent. Each Party is required to deliver to the other
          ---------------------
          Party no later than thirty (30) days prior to the fourth (4th)
          anniversary of the Effective Date of this Agreement a written notice
          stating whether or not such Party intends to negotiate in good faith
          for a Renewal Period. In the event that AOL declares in its notice
          that it is not interested in negotiating in good faith for a Renewal
          Period and eMachines declares in its notice that it is interested in
          negotiating in good faith for a Renewal Period, then on the fourth
          (4th) anniversary of the Effective Date, the Exclusive Period shall
          terminate.

    14.4  Termination for Breach. Except as expressly provided elsewhere in this
          ----------------------
          Agreement, either Party may terminate this Agreement at any time in
          the event of a material breach of the Agreement by the other Party
          which remains uncured after thirty (30) days written notice thereof to
          the other Party (or such shorter period as may be specified elsewhere
          in this Agreement). In the event this Agreement is terminated upon the
          material breach of the Agreement by AOL, AOL will (A) extend the
          payment to eMachines of the revenue share under the eCommerce Package,
          defined in Section 16, for keyboards and Desktop channels only and AOL
          shall not be responsible to pay eMachines [*] per each member per
          month under the eCommerce Package; (B) continue to pay eMachines a fee
          of [*] per month for each consumer who participated in the Rebate
          Offer Contract described in Section 13 (or other amounts as relate to
          any agreed upon modification to the Consumer Rebate Offer) for the
          remainder of such consumer's continuous membership to the appropriate
          AOL Service; and (C) pay bounties for those customers that activated
          their membership during the term of the Agreement but become Qualified
          New Members after termination of the Agreement.

[*] Confidential Information has been omitted and separately filed with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                      -8-
<PAGE>

     14.5 Termination for Bankruptcy/Insolvency. Either Party may terminate this
          -------------------------------------
          Agreement immediately following written notice to the other Party if
          the other Party (i) ceases to do business in the normal course, (ii)
          becomes or is declared insolvent or bankrupt, (iii) is the subject of
          any proceeding related to its liquidation or insolvency (whether
          voluntary or involuntary) which is not dismissed within ninety (90)
          calendar days or (iv) makes an assignment for the benefit of
          creditors.

15.  Promotional Materials/Press Releases. Each Party will submit to the other
     ------------------------------------
Party, for its prior written approval, which will not be unreasonable withheld
or delayed, any marketing, advertising, press releases, and all other
promotional materials related to the transactions contemplated hereunder and/or
referencing the AOL Services and the AOL Software or the other Party and/or its
trade names, trademarks, and the AOL Services marks (the "Materials"). Each
Party will solicit and reasonably consider the views of the other Party in
designing and implementing such Materials.

16.  ECommerce Package. During the Term of this Agreement, eMachines and AOL
     -----------------
agree to work together to create a package (the "eCommerce Package") to sell to
third parties that shall include:

     (a)  Keyboard keys: eMachines will manufacture a keyboard which provides
          -------------
one touch access to the internet through keyboard keys, or the functional
equivalent, if a user is an AOL or Compuserve subscriber, which (1) shall
initially be dedicated and point directly to a related destinations designated
by AOL and (2) that the technical design of the keyboard buttons allows the
Parties to modify the initial URL or other programming with which it is was
originally shipped.

     (b)  Desktop "channels": The parties agree to work together with a 3rd
          -----------------
party software developer to create a desktop tool containing designated
promotional space and links which (1) shall initially be dedicated and point
directly to a related destinations designated by AOL and (2) that the technical
design of the promotional space and links allows the Parties to modify the
initial URL or other programming with which it is was originally shipped.

     (c)  AOL Services buttons/links (i.e. pop-ups) that will contain
promotional space and links the technical design of the promotional space and
allows the Parties to modify the initial URL or other programming with which it
is was originally shipped.

     (d)  Pricing: The Parties agree to [*] of the eCommerce Package, [*] AOL
          -------
shall pay eMachines [*] against eMachines share of the revenue to be derived
from sales of the eCommerce Package.

17.  Customer Service. During the Term of this Agreement, eMachines and AOL
     ----------------
agree to work together to develop a program (the "Call Center Acquisition
Program") to enable additional new member registrations to the AOL Services.

[*] Confidential Information has been omitted and separately filed with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                      -9-
<PAGE>

18.  Technical Support. AOL will be responsible for providing all technical
     -----------------
support and customer service relating to the consumers' use of the appropriate
AOL products and services as bundled under this Agreement and the Consumer
Rebate Offer and eMachines will be responsible for the providing all technical
support and customer service relating to the consumers' use of the Products and
eMachines' services under this Agreement.

19.  Netscape Portal. The parties hereto shall agree, to be added as an
     ---------------
addendum of this Agreement, within 30 days of the Effective Date, to develop a
customized Netcenter portal which shall include a custom Netcenter homepage (the
"Custom Netcenter Home Page"), registration process for eMachines.Net, and a
process for transitioning the allocation of revenues and users between the
Parties at the end of term of such agreement. Such addendum shall include the
following terms:

     (a)  AOL and eMachines shall work together to create a portal to (i)
maximize member experience/retention, (ii) maximize revenue, and (iii) meet the
objective of launching the eMachines.Net Interactive Service within 90 days of
the Effective Date.

     (b)  AOL shall create a discrete area (the "eMachines Area") on the Custom
Netcenter Home Page whereby eMachines shall possess complete flexibility to
create eMachines' specific channels as desired and to arrange third party
relationships if so desired, including the ability to sell custom channel space
to these partners in return for ecommerce revenues for those referrals and
click-throughs. In order to maintain consistency with the successful Netcenter
programming model, the promotion of these sold partnerships is envisioned as a
feature frame on the Custom Netcenter Home Page containing a prominent link to
an eMachines "Commerce Partner" aggregation site and a rotating photo/text
promotion featuring partner special offers. For these eMachines derived sales,
eMachines will have control of the deal terms and shall retain [*] of the
revenue. Should AOL sell space within the eMachines Area, AOL and eMachines will
split the revenue (percentages to be determined) from those sales. The parties
agree that sales in this area will not be to competitors of either AOL or
eMachines, nor will it be to sites that are improper (i.e. pornography sites,
etc.).

     (c)  AOL shall pay eMachines [*] of incremental advertising and eCommerce
revenue, net of commissions, derived from the traffic driven to the Netcenter
portal content areas through the eMachines.Net. Such payments will be a product
of CPM (typically between [*] depending on AOL's ability to sell the advertising
and commerce space at a premium), click through rate, sell through rate and
characteristics of portal use by the eMachines.Net users. Provided, however,
eMachines shall have the right to sell desktop channels, keyboard keys and
desktop icons, in a form similar to those keyboard keys and desktop channels
contemplated in Section 16 of this document, to third parties on systems sold
under eMachines.Net offers without payment to AOL. Such sales are subject to the
same terms and conditions outlined above with respect to links to competitive
and inappropriate sites.

[*] Confidential Information has been omitted and separately filed with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                      -10-
<PAGE>

     (d)  eMachines.Net will at not any time co-brand or market eMachines.net
service with a connectivity provider that is a retail branded Interactive
Service, including but not limited to any marketing, advertising, press releases
and all other promotional materials, other than AOL without the prior written
consent of AOL, such consent shall be in AOL's sole discretion.

20.  Hardware Development and Sales. eMachines and AOL agree to work together
     ------------------------------
to develop a special bundle or SKU that is offered exclusively through AOL's
sales efforts for AOL members, such products to be available at wholesale prices
to AOL for AOL's use in reselling to AOL members AOL shall consider auctioning
eMachines closeout products on the AOL Classic Service. AOL and eMachines may
explore co-development of new Internet devices and products that work with AOL's
existing DSL and Broadband technologies and services on a case by case basis.

21.  Standard Terms and Conditions. This Agreement incorporates by reference
     -----------------------------
AOL's standard legal terms & conditions (the "Standard Terms"), including terms
related to licenses, representations and warranties, confidentiality, limitation
of liability, disclaimers, indemnifications, use of AOL member information and
miscellaneous legal terms. The Standard Terms appear at keyword "Standard
Marketing Terms 2" on the America Online(R) brand commercial online service and
at http://mediaspace.aol.com/markterm2.html on AOL.com. A hard copy of the
Standard Terms will be provided to eMachines upon written request. eMachines
acknowledges that it has been provided an opportunity to review the Standard
Terms and agrees to be bound by them. For purposes of the Standard Terms, (a)
the defined term "Service" shall include both the AOL Services, and (b) the
defined term "Software" shall include the AOL Software. Notwithstanding the
foregoing, to the extent that Section 10 of Standard Terms contradicts the terms
of the other provisions of this Agreement, the other provisions of this
Agreement shall control.

22.  Counterparts. This Agreement 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.

                   (the following page is a signature page)

                                      -11-
<PAGE>

      IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the Effective Date.

AMERICA ONLINE, INC.                         eMACHINES

By: /s/David M. Colburn                      By: /s/Stephen Dukker
   ---------------------------                  ------------------------

Print Name: David M. Colburn                 Print Name: Stephen Dukker
           -------------------                          ----------------

Title: Senior Vice President                 Title: President & CEO
      ------------------------                     ---------------------

                                      -12-
<PAGE>

                                   EXHIBIT A

                                  DEFINITIONS
                                  -----------

          "Affiliate" shall mean an entity in which AOL holds at least a
     nineteen percent (19%) equity interest.

          "AIM Service" shall mean the AOLbranded service, currently available
     through the Internet, that enables endusers of such service to exchange, in
     real-time, private, personalized messages with, and to monitor the online
     status of, other end-users of such service and AOL Members.

          "AIM Software" shall mean the client software (U.S. version) developed
     and distributed by AOL that enables end-users to access and use the AIM
     Service, and any updates, patches, new version and bug fixes thereto.

          "AOL Services" shall include the following services (each an "AOL
     Service") the AOL Classic Service, the CompuServe Service, Netscape
     Navigator Browser, AIM Service and ICQ, and such other services as AOL may
     designate to eMachines in writing during the Term.

          "AOL Classic Service" shall mean the U.S. version of the America
     Online(R) brand commercial online service.

          "AOL Classic Software" shall mean the proprietary software used to
     connect to and use the U.S. version of the America Online(R) brand service.

          "AOL Software" shall mean the AOL Classic Software, the CompuServe
     Software, the Netscape Navigator Software, the AIM Software, the ICQ
     Software, and such other software for an AOL Service as AOL may designate
     to eMachines in writing during the Term.

          "CompuServe Service" shall mean the U.S. version of the CompuServe(R)
     brand commercial online service.

          "CompuServe Software" shall mean the proprietary software used to
     connect to and use the U.S. version of the CompuServe(R) brand service.

          Eligible Computer Product shall mean the following Products of
     eMachines: all desktop and laptop computers purchased from a Qualified
     Retailer.

          "Exclusive Period" shall mean the Term of this Agreement, unless such
     Exclusive Period is sooner terminated pursuant to Section 14.3.

          eMachines.Net shall mean the eMachines' branded Interactive Service,
     with connectivity services currently to be provided by UUNet and with
     Netscape Netcenter as the default portal.

          "ICQ" shall mean the standard narrowband English language version of
     the ICQ brand communications and messaging service available in the U.S.

                                      -13-
<PAGE>

          "ICQ Software" shall mean the client software developed and
     distributed by AOL that enables end-users to access and use ICQ, and any
     updates, patches, new version and bug fixes thereto.

          "Interactive Service" shall mean any entity offering one or more of
     the following: (i) online or Internet connectivity services (e.g., an
     Internet service provider); (ii) an interactive site or service featuring a
     broad selection of aggregated third party interactive content or navigation
     thereto (e.g., an online service or search and directory service) and/or
     marketing a broad selection of products and/or services across numerous
     interactive commerce categories (e.g., an online mall or other leading
     online commerce site); and (iii) communications software capable of serving
     as the principal means through which a user creates, sends and receives
     electronic mail or real time online messages.

          "Marks" shall mean the following tradenames, trademarks and service
     marks: "America Online(R)" service, "AOL Canada(TM)" service, "AOL(R)"
     service/software, AOL's triangle logo, the "CompuServe(R)" service/software
     and logo, Netscape Navigator(R), ICQ(TM), and AOL Instant Messenger(TM).

          "Netscape Navigator Browser" shall mean the commercially release
     executable code of Netscape Navigator.

          "Netscape Navigator Software" shall mean shall mean the client
     software that enables end-users to access and use Netscape Navigator, and
     any updates, patches, new version and bug fixes thereto.

          "Products" shall mean any personal desktop and laptop computers
     manufactured, marketed and/or sold by eMachines (or its affiliates) during
     the Term and any devices manufactured, marketed and/or sold by eMachines
     (or its affiliates) during the Term to the extent such devices are
     compatible with any Interactive Service.

          "Qualified Purchaser" shall mean any individual or entity who during
     the Rebate Offer Period (as defined below) (a) during the Rebate Offer
     Period, purchases an Eligible Computer Product, (b) is qualified by the
     Bank for the Consumer Rebate Offer through a credit approval process
     administered by the respective Qualified Retailer and the Bank at the time
     of the purchase, (c) registers for a new account for the Compuserve Service
     in the United States utilizing the Compuserve Software preloaded on the
     Eligible Computer Product, (d) agrees to the Rebate Offer Contract (which
     shall include, without limitation, a commitment to remain a Compuserve
     Service member and pay the associated membership fee to the Bank for three
     (3) years) mails the Rebate Offer Contract to the designated fulfillment
     house, (e) is eighteen years or older and a resident of one of the fifty
     (50) United States or Washington D.C. and (f) such other conditions as the
     Parties and the Bank may reasonably determine.

          "Rebate Offer Contract" shall mean that certain contract between the
     consumer and the Bank containing the terms and conditions of the Consumers
     obligation to remain a Compuserve Service member and pay the associated
     membership fee to the Bank for three (3) years) and the Bank's obligations
     to such consumer.

                                      -14-
<PAGE>

                                   EXHIBIT B

                             CONSUMER REBATE OFFER

    A.  Consumer Rebate Offer. AOL shall use commercially reasonable efforts  to
        ---------------------
enter, promptly as possible following the Effective Date, an agreement with a
financial institution ___________ (the "Bank") (the "Joint Marketing Agreement")
whereby the Bank will offer (the "Consumer Rebate Offer") to Qualified
Purchasers. Notwithstanding the above sentence, AOL shall use commercially
reasonable efforts to launch a consumer rebate offer (the "Consumer Rebate
Offer") on a test basis (including no less than two (2) national Computer Retail
Chains) by July 1, 1999; deploy a launch at Staples, Inc. by July 8, 1999; and
deploy a full channel launch by July 18, 1999. The Consumer Rebate Offer will
consist of three separate programs whereby under one program Qualified
Purchasers will receive two hundred dollars (US$200.00) for a three year
commitment at $19.95 (the "$200 Program"), under a separate program Qualified
Purchasers will receive three hundred dollars (US$300.00) for a three year
commitment at $19.95 (the "$300 Program"), and under a third program, Qualified
Purchasers will receive four hundred dollars (US$400.00) for a three year
commitment at $21.95 (US$400.00) (the "$400 Program"); provided that, after
October 31, 1999, AOL shall have the right to increase the standard monthly
dollar amount commitment to the Compuserve Service of Qualified Purchasers under
the $200 Program and the $300 Program to $21.95. If AOL increases its standard
pricing for the Compuserve Service to or above such amount and either [*].

    B.  [*] The Parties hereby agree to enter into any additional agreements
that may be necessary to implement the Consumer Rebate Offer discussed herein.
Upon execution of this Agreement, eMachines shall provide AOL with a list of
retailers that will be participating in the Consumer Rebate Offer ("Qualified
Retailers"), provided, that eMachines shall have the opportunity to update such
list by delivering fifteen (15) days written notice to AOL of such revisions,
subject to AOL's reasonable approval. eMachines may be a Qualified Retailer to
the extent eMachines sells an Eligible Computer Product directly to a Qualified
Purchaser and advertises the Consumer Rebate Offer during the Rebate Offer
Period.

    B.  [*]

    C.  Promotion of Consumer Rebate Offer. eMachines will submit to AOL, for
        ----------------------------------
its prior written approval, any marketing, advertising, press releases, and all
other promotional materials related to the transactions contemplated hereunder
and/or referencing the other Party and/or its trade names, trademarks, and
service marks (the "Materials"). Each Party will solicit and reasonably consider
the views of the other Party in designing and implementing such Materials.
eMachines, subject to the prior written approval of AOL, shall provide the
Qualified Retailers with the following ("Promotional Deliverables"): (i)
provision of point of sale merchandising (tear pads, shelf talkers, flyers,
danglers) and (ii) pre-approved ad slick for use in POP, to be used in
circulars. eMachines shall use its best efforts to ensure that each Qualified
Retailer provides sufficient space within its store where the Consumer Rebate
Offers will be prominently and regularly displayed. AOL shall have final
approval on all descriptions of the Consumer Rebate Offer and use of the Marks.

[*] Confidential Information has been omitted and separately filed with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                      -15-
<PAGE>

    D.  Service Provider. eMachines agrees, other than eMachines.Net, that the
AOL Services shall be the only Interactive Services to be bundled with any
eMachines Consumer Rebate Offer.

    E.  Rebate Offer Period. [*] Over the course of the five year term, the
Parties agree to work together to develop new and/or additional consumer offers
with the intention of (a) meeting market and consumer conditions and
expectations; (b) maintaining competitiveness for both parties in their
respective marketplace; and (c) maintaining financially viable business models.
Such consumer offers could include an extension of the existing Consumer Rebate
Offer, the introduction of additional consumer rebate offers and/or the
replacement of the existing Consumer Rebate Offer with a new consumer rebate
offer(s). Such consumer offers to be similar in structure to the original
Consumer Rebate Offer and could include AOL Classic Service, CompuServe Service
and/or eMachines.Net. The Parties acknowledge that this agreement to work
together in the development of future consumer rebate offers does not mean that
the Parties must match the economic terms of other consumer rebate offers in the
marketplace.

[*] Confidential Information has been omitted and separately filed with the
Commission. Confidential treatment has been requested with respect to the
omitted portions.

                                      -16-
<PAGE>

                                   EXHIBIT C

                 LIST OF COINVESTORS TO THE SERIES A FINANCING

   Amerindo Investment Advisors
   Banque Paribas
   Bowman Capital Management
   Chelsey Capital
   Comcast Interactive Capital Group
   Credit Suisse First Boston
   Franklin Templeton
   Hikari Tsushin
   Omega Venture Partners
   Rho Management
   RRE Investors
   Van Wagoner Capital Management

                                      -17-
<PAGE>

     AOL Standard Marketing Terms & Conditions (v.2)

     Standard Legal Terms & Conditions

     1.  Agreement. MP acknowledges that these Standard Terms and Conditions are
         ---------
expressly referenced in and made a part of the Marketing Agreement which has
been executed by AOL and MP (the "Marketing Agreement", and collectively with
these Standard Terms and Conditions, the "Agreement"). Any defined term used in
these Standard Terms and Conditions without definition, shall have the meaning
ascribed to such term in the Marketing Agreement.

     2.  License. AOL hereby grants MP a nonexclusive license to distribute and
         -------
promote the Software and Documentation through the Bundled Products during the
Term, solely to the limited extent and for the express purposes contemplated
hereunder.

     3.  Trademark License. Solely in connection with the marketing, promotion
         -----------------
and distribution obligations specified in this Agreement, and subject to the
other provisions of this Agreement, MP shall be entitled to use the Marks,
provided that MP (a) does not create a unitary composite mark involving a Mark
without the prior written approval of AOL; and (b) displays symbols and notices
clearly and sufficiently indicating the trademark status and ownership of the
Marks in accordance with applicable trademark law and practice. In using the
Marks, MP acknowledges and agrees that: (i) the Marks are and shall remain the
sole property of AOL; (ii) MP shall not now or in the future contest the
validity of the Marks; (iii) nothing in this Agreement shall confer in MP any
right of ownership in the Marks; and (iv) MP acknowledges that its utilization
of the Marks will not create in it, nor will it represent it has, any right,
title or interest in or to such Marks other than the licenses expressly granted
herein.

     4.  Quality Standards. MP agrees that the nature and quality of its
         -----------------
products and services supplied in connection with the Marks shall conform to
quality standards communicated in writing by AOL for use of its trademarks. MP
agrees to supply to AOL, upon request, with a reasonable number of samples of
any materials publicly disseminated by MP which utilize the Marks. MP shall
comply with all applicable laws, regulations and customs and obtain any required
government approvals pertaining to use of the Marks.

     5.  Infringement Proceedings. MP agrees to promptly notify AOL of any
         ------------------------
unauthorized use of the Marks of which it has actual knowledge. AOL shall have
the sole right and discretion to bring proceedings alleging infringement of the
Marks or unfair competition related thereto; provided, however, that MP agrees
to provide AOL with its reasonable cooperation and assistance with respect to
any such infringement proceedings.

     6.  Ownership. MP acknowledges that the Software, Documentation and any
         ---------
other AOL Deliverables and any enhancements and improvements thereto are and
shall remain the exclusive property of AOL and MP shall not in any way alter,
interfere with or modify the Software, the Service functionality, user interface
or experience. Except as explicitly described in this Agreement, MP shall have
no rights to copy, use, reverse engineer, reproduce, display, modify or transfer
the Software, Documentation or any other AOL Deliverables, or any derivative
works thereof.

     7.  Representations and Warranties. Each Party represents and warrants to
         ------------------------------
the other Party that: (i) such Party has the full corporate right, power and
authority to enter into this Agreement and to perform the acts required of it
hereunder; (ii) the execution of this Agreement by such Party, and the
performance by such Party of its obligations and duties hereunder, do not and
will not violate any agreement to which such Party is a party or by which it is
otherwise bound; (iii) when executed and delivered by such Party, this Agreement
will constitute the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms; and (iv) such Party
acknowledges that the other Party makes no representations, warranties or
agreements related to the subject matter hereof that are not expressly provided
for in this Agreement. MP further represents that the content of the Products
will neither infringe on any copyright, U.S. patent or any other third party
right nor violate any applicable law or regulation.

                                      -18-
<PAGE>

     8.  Confidentiality. During the term of this Agreement, and for a period of
         --------------
three (3) years following expiration or termination of this Agreement, each
Party acknowledges that Confidential Information may be disclosed to the other
Party during the course of this Agreement. Each Party agrees that it will take
reasonable steps, at least substantially equivalent to the steps it takes to
protect its own proprietary information, to prevent the duplication or
disclosure of Confidential Information of the other Party, other than by or to
its employees or agents who must have access to such Confidential Information to
perform such Party's obligations hereunder, who will each agree to comply with
this section. Notwithstanding the foregoing, either Party may issue a press
release or other disclosure containing Confidential Information without the
consent of the other Party, to the extent such disclosure is required by law,
rule, regulation or government or court order. In such event, the disclosing
Party will provide at least five (5) business days prior written notice of such
proposed disclosure to the other Party. For the purposes hereof, "Confidential
Information" shall mean any information relating to or disclosed in the course
of the Agreement, which is or should be reasonably understood by the receiving
Party to be confidential or proprietary to the disclosing Party, including, but
not limited to, the terms of the Agreement, information about AOL Members,
technical processes and formulas, source codes, product designs, sales, cost and
other unpublished information, product and business plans, projections, and
marketing data. "Confidential Information" will not include information (a)
already lawfully known to or independently developed by the receiving Party, (b)
disclosed in published materials, (c) generally known to the public, or (d)
lawfully obtained from any third party.

     9.  Limitation of Liability; Disclaimer; Indemnification.
         ----------------------------------------------------

     9.1 Liability. UNDER NO CIRCUMSTANCES WILL EITHER PARTY BE LIABLE TO THE
         ---------
OTHER PARTY FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL OR EXEMPLARY
DAMAGES (EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES), ARISING FROM BREACH OF THE AGREEMENT, THE USE OR INABILITY TO USE THE
SERVICE, OR ARISING FROM ANY OTHER PROVISION OF THIS AGREEMENT, SUCH AS, BUT NOT
LIMITED TO, LOSS OF REVENUE OR ANTICIPATED PROFITS OR LOST BUSINESS
("COLLECTIVELY, "DISCLAIMED DAMAGES"); PROVIDED THAT EACH PARTY WILL REMAIN
LIABLE TO THE OTHER PARTY TO THE EXTENT ANY DISCLAIMED DAMAGES ARE CLAIMED BY A
THIRD PARTY AND ARE SUBJECT TO INDEMNIFICATION PURSUANT TO SECTION 9.3.

     9.2 No Additional Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
         ------------------------
AGREEMENT, NEITHER PARTY MAKES ANY, AND EACH PARTY HEREBY SPECIFICALLY DISCLAIMS
ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE PRODUCTS,
THE SERVICE, THE SOFTWARE OR DOCUMENTATION, INCLUDING ANY IMPLIED WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE AND IMPLIED WARRANTIES
ARISING FROM COURSE OF DEALING OR COURSE OF PERFORMANCE.

     9.3 Indemnity. AOL agrees to defend, indemnify and hold MP and the
         ---------
officers, directors, agents, affiliates, distributors, franchisees and employees
(the "Affiliated Parties") of MP harmless against any loss, damage, expense, or
cost, including reasonable attorneys fees (including allocated costs for in-
house legal services) ("Liabilities") arising out of any claim, demand,
proceeding, or lawsuit by a third party based on any assertion that the Software
breaches the patent, copyright, trademark, trade secret or other proprietary
right of such third party. MP agrees to defend, indemnify and hold AOL and the
Affiliated Parties of AOL harmless against any Liabilities arising out of any
claim, demand, proceeding, or lawsuit by a third party based on any assertion
that a Product breaches the patent, copyright, trademark, trade secret or other
proprietary right of such third party. Either Party will defend, indemnify, save
and hold harmless the other Party and its Affiliated Parties from any and all
Liabilities arising out of any claim, demand, proceeding or lawsuit by a third
party resulting from the indemnifying Party's material breach of any duty,
representation, or warranty of this Agreement, except where Liabilities result
from the gross negligence or knowing and willful misconduct of the other Party.

                                      -19-
<PAGE>

     9.4  Claims. Each Party agrees to (i) promptly notify the other Party in
          ------
writing of any indemnifiable claim and give the other Party the opportunity to
defend or negotiate a settlement of any such claim at such other Party's
expense, and (ii) cooperate fully with the other Party, at that other Party's
expense, in defending or settling such claim. AOL reserves the right, at its own
expense, to assume the exclusive defense and control of any matter otherwise
subject to indemnification by MP hereunder.

     9.5  Acknowledgment. AOL and MP each acknowledges that the provisions of
          --------------
this Agreement were negotiated to reflect an informed, voluntary allocation
between them of all risks (both known and unknown) associated with the
transactions contemplated hereunder. The provisions of this Section 9 will be
enforceable independent of and severable from any other enforceable or
unenforceable provision of this Agreement.

     10.  Solicitation of AOL Members. (a) During the term of the Agreement and
          ---------------------------
for a two year period thereafter, MP will not use the Service or any other
product or service owned, operated, distributed or authorized to be distributed
by or through AOL or its Affiliates worldwide (the "AOL Network") (including,
without limitation, the e-mail network contained therein) to solicit any
authorized user of the AOL Network, including any sub-accounts using the AOL
Network under an authorized master account ("an AOL Member") on behalf of
another Interactive Service. More generally, MP will not send unsolicited,
commercial e-mail (i.e., "spam") through or into AOL's products or services,
absent a Prior Business Relationship. For purposes of this Agreement, a "Prior
Business Relationship" will mean that the AOL Member to whom commercial e-mail
is being sent has voluntarily either (i) engaged in a transaction with MP or
(ii) provided information to MP through a contest, registration, or other
communication, which included clear notice to the AOL Member that the
information provided could result in commercial e-mail being sent to that AOL
Member by MP or its agents. Any commercial e-mail to be sent through or into
AOL's products or services shall also be subject to AOL's then standard
restrictions on distribution of bulk e-mail (e.g., related to the time and
manner in which such e-mail can be distributed through or into the AOL product
or service in question).

     (b) MP shall ensure that its collection, use and disclosure of information
obtained from AOL Members under this Agreement ("Member Information") complies
with (i) all applicable laws and regulations and (ii) AOL's standard privacy
policies, available on the America Online(R) brand commercial online service at
the keyword term "Privacy" (or any successor keyword) (or, in the case of an MP
interactive site or area (e.g., MP's site on the Internet) that is linked to a
specific area of the AOL Network that MP developed, manages or markets, MP's
standard privacy policies so long as such policies are prominently published on
the site and provide adequate notice, disclosure and choice to users regarding
MP's collection, use and disclosure of user information). MP will not disclose
Member Information collected hereunder to any third party in a manner that
identifies AOL Members as end users of an AOL product or service or use Member
Information collected under this Agreement to market another Interactive
Service.

     11.  Excuse. Neither Party will be liable for, or be considered in breach
          ------
of or default under this Agreement on account of, any delay or failure to
perform as required by this Agreement as a result of any causes or conditions
which are beyond such Party's reasonable control and which such Party is unable
to overcome by the exercise of reasonable diligence.

     12.  Independent Contractors. AOL and MP are independent contractors.
          -----------------------
Neither AOL nor MP is an agent, representative or partner of the other. Neither
AOL nor MP will have any right, power or authority to enter into any agreement
for or on behalf of, or incur any obligation or liability of, or to otherwise
bind, the other. This Agreement will not be interpreted or construed to create
an association, agency, joint venture or partnership between AOL and MP or to
impose any liability attributable to such a relationship upon either AOL or MP.

     13.  Notice. Any notice, approval, request, authorization, direction or
          ------
other communication under this Agreement will be given in writing and will be
deemed to have been delivered and given for all purposes: (i) on the delivery
date if delivered by electronic mail on the AOL Network (to screenname
"AOLNotice@aol.com" in the case of AOL), through a confirmed facsimile or if
delivered personally to the Party to whom the same is directed; (ii) one (1)
business day after deposit with a commercial overnight carrier, with written
verification of receipt, or (iii) five (5)

                                      -20-
<PAGE>

business days after the mailing date, whether or not actually received, if sent
by U.S. mail, return receipt requested, postage and charges prepaid, or any
other means of rapid mail delivery for which a receipt is available, to the
person(s) specified below at the address of the Party set forth in the first
paragraph of the Agreement. In the case of AOL, such notice will be provided to
both the Senior Vice President for Business Affairs (fax no. 703-265-1206) and
the Deputy General Counsel (fax no. 703-265-1105), each at the address of AOL
set forth in the first paragraph of the Marketing Agreement. In the case of MP,
except as otherwise specified herein, the notice address shall be the address
for MP set forth in the first paragraph of the Marketing Agreement, with the
other relevant notice information, including the recipient for notice and, as
applicable, such recipient's fax number or e-mail address, to be as reasonable
identified by AOL.

     14.  No Waiver. The failure of either Party to insist upon or enforce
          ---------
strict performance by the other Party of any provision of this Agreement or to
exercise any right under this Agreement will not be construed as a waiver or
relinquishment to any extent of such Party's right to assert or rely upon any
such provision or right in that or any other instance; rather, the same will be
and remain in full force and effect.

     15.  Return of Information. Upon the expiration or termination of this
          ---------------------
Agreement, each Party will, upon the written request of the other Party, return
or destroy (at the option of the Party receiving the request) all confidential
information, documents, manuals and other materials specified by the other
Party.

     16.  Survival. Sections 8 through 23 of these Standard Terms and Conditions
          --------
will survive the completion, expiration, termination or cancellation of this
Agreement.

     17.  Entire Agreement. This Agreement sets forth the entire agreement and
          ----------------
supersedes any and all prior agreements of the Parties with respect to the
transactions set forth herein. Neither Party will be bound by, and each Party
specifically objects to, any term, condition or other provision which is
different from or in addition to the provisions of this Agreement (whether or
not it would materially alter this Agreement) and which is proffered by the
other Party in any correspondence or other document, unless the Party to be
bound thereby specifically agrees to such provision in writing.

     18.  Amendment. No change, amendment or modification of any provision of
          ---------
this Agreement will be valid unless set forth in a written instrument signed by
the Party subject to enforcement of such amendment, and in the case of AOL, by
an executive of at least the same standing as the executive who signed the
Agreement.

     19.  Further Assurances. Each Party will take such action (including, but
          ------------------
not limited to, the execution, acknowledgment and delivery of documents) as may
reasonably be requested by any other Party for the implementation or continuing
performance of this Agreement.

     20.  Assignment. MP will not assign this Agreement or any right, interest
          ----------
or benefit under this Agreement without the prior written consent of AOL.
Subject to the foregoing, this Agreement will be fully binding upon, inure to
the benefit of and be enforceable by the Parties hereto and their respective
successors and assigns.

     21.  Construction; Severability. In the event that any provision of this
          --------------------------
Agreement conflicts with the law under which this Agreement is to be construed
or if any such provision is held invalid by a court with jurisdiction over the
Parties to this Agreement, (i) such provision will be deemed to be restated to
reflect as nearly as possible the original intentions of the Parties in
accordance with applicable law, and (ii) the remaining terms, provisions,
covenants and restrictions of this Agreement will remain in full force and
effect.

     22.  Injunctive Relief; Remedies. MP acknowledges a violation of this
          ---------------------------
Agreement could cause irreparable harm to AOL for which monetary damages may be
difficult to ascertain or an inadequate remedy. MP therefore agrees that AOL
will have the right, in addition to its other rights and remedies, to seek and
obtain injunctive relief for any violation of this Agreement. Except where
otherwise specified, the rights and remedies granted to a Party under this
Agreement

                                      -21-
<PAGE>

are cumulative and in addition to, and not in lieu of, any other rights or
remedies which the Party may possess at law or in equity.

     23.  Applicable Law; Jurisdiction. This Agreement will be interpreted,
          ----------------------------
construed and enforced in all respects in accordance with the laws of the
Commonwealth of Virginia except for its conflicts of laws principles. Each Party
irrevocably consents to the exclusive jurisdiction of the courts of the
Commonwealth of Virginia and the federal courts situated in the Commonwealth of
Virginia, in connection with any action to enforce the provisions of this
Agreement, to recover damages or other relief for breach or default under this
Agreement, or otherwise arising under or by reason of this Agreement.

     24.  Statements to Third Parties. MP shall not make, publish, or otherwise
          ---------------------------
communicate, or cause to be made, published, or otherwise communicated, any
deleterious remarks to any third parties concerning AOL or its Affiliates,
directors, officers, employees or agents.

     25.  Export Controls. Both Parties will adhere to all applicable laws,
          ---------------
regulations and rules relating to the export of technical data and will not
export or re-export any technical data, any products received from the other
Party or the direct product of such technical data to any proscribed country
listed in such applicable laws, regulations and rules unless properly
authorized.

     26.  Headings. The captions and headings used in this Agreement are
          --------
inserted for convenience only and will not affect the meaning or interpretation
of this Agreement.

                                      -22-<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

                                 EXHIBIT 10.20

                     ORIGINAL DESIGN MANUFACTURER AGREEMENT

                                    between

                             TRIGEM COMPUTER, INC.

                                      and

                                EMACHINES, INC.*

                                January 24, 2000

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

                    ORIGINAL DESIGN MANUFACTURER AGREEMENT*

     This Original Design Manufacture Agreement ("Agreement") is entered into on
this 24th day of January, 2000, between TRIGEM COMPUTER, INC., a Korean
corporation whose principal office is located at TriGem Computer Bldg., 45-2
Yoido-dong, Youngdeungpo-ku, Seoul 150-010, Korea ("Original Design
Manufacturer" or "ODM") and EMACHINES, INC., a Delaware corporation whose
principal office is located at 14350 Myford Road, Bldg. 100, Irvine, California
92606-1002, U.S.A. ("EMACHINES").  ODM and EMACHINES shall be referred
collectively as "Parties" or individually as "Party."  Unless otherwise noted,
all capitalized terms in this Agreement shall have the meanings set forth in
Article 1.

                                  WITNESSETH:

WHEREAS, ODM and EMACHINES desire to enter into a relationship whereby ODM will
manufacture, assemble and provide Support for the Products whereby the Products
will be ODM's design but may incorporate certain EMACHINES Components and Third
Party Components;

WHEREAS, the Parties desire the Products to be marketed and sold by EMACHINES
under the EMACHINES label on a worldwide basis; and

WHEREAS, the Parties desire to set forth the terms and conditions of their
relationship in this Agreement.

NOW, THEREFORE, in consideration of the mutual premises and covenants contained
hereinbelow, the Parties hereby agree as follows:

ARTICLE 1. DEFINITIONS

"Affiliate" means any EMACHINES Subsidiary, subcontractor or other third party
authorized to purchase Products under this Agreement as listed in a Product
Addendum.

"Annual Plan" shall have the meaning set forth in Section 3.1.

"Applicable Percentage" means LIBOR plus 3%, as adjusted on calendar quarter
basis.

"Class Failure" shall have the meaning set forth in Section 8.5.

"Components" means EMACHINES Components, ODM Components and Third Party
Components.

"Confidential Information" shall have the meaning in Section 13.1.

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

"Defective Product" means any Product that does not comply with the
Specifications, the requirements of the Purchase Order, Product Addendum, or
other provisions of this Agreement.

"Delivery Date" means the date specified in a Purchase Order for the delivery of
Products by ODM to the Shipping Port.

"Documentation" means any user and technical materials that EMACHINES makes
available for the Products.

"Effective Date" means the date this Agreement is executed by the Parties.

"EMACHINES Components" means all EMACHINES hardware, EMACHINES Software and
other EMACHINES materials and Documentation that ODM will incorporate into the
Products that are either provided or sold to ODM by EMACHINES or EMACHINES'
designee; provided, however, that if the same components from EMACHINES'
designees are being used by ODM in other products that it manufactures for its
other clients, then such components shall be designated as the Third Party
Component for the purposes of this Agreement.

"EMACHINES Custom Parts" means keyboards, speakers, mice, chassis, front bezel,
packing boxes and Documentation which contain EMACHINES Marks purchased by ODM
to fulfill a Purchase Order.  For avoidance of any doubt, in the event that
EMACHINES provides, whether directly or indirectly, the EMACHINES Custom Parts
to ODM, then such EMACHINES Custom Parts shall be deemed to be EMACHINES
Components.

"EMACHINES Property" means all property, including without limitation, models,
tools, equipment, copies of designs and documentation and other materials that
may be provided to ODM by EMACHINES or by a third party on EMACHINES' behalf, or
separately paid for by EMACHINES for use by ODM to manufacture (but not
incorporate into) Products under this Agreement.  However, EMACHINES Property
shall not include chassis tooling, packaging tooling and plastic molds unless
such items are paid for by EMACHINES.

"Excess Components" means Components that (a) were purchased solely to fulfill a
Requisition and are remaining on the last day covered by the Requisition and (b)
are not scheduled to be used in the immediately following Requisition.

"Intellectual Property Rights" means all rights in patents, copyrights, trade
secrets, mask works, Marks and other similar rights.

"Lead Time" means the time between the date a Purchase Order is acknowledged by
ODM and the Delivery Date.

"Marks" means the trademarks, service marks, trademark and service mark
applications, trade dress, trade names, logos, insignia, symbols, designs or
other marks identifying a Party or its products.

"Month" means a calendar month.

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -2-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

"ODM Components" means all ODM hardware, ODM Software, packaging materials,
inserts and other ODM materials that ODM will incorporate into the Products.

"Parts" means the replacement parts, components, consumables or other products
that may be supplied in conjunction with the Products.

"Price" shall have the meaning set forth in Section 5.1.

"Product Addendum" means the addendum to the description of Products and
Product-specific requirements in the form attached to this Agreement as Exhibit
A, and any subsequent addendum entered into between ODM and EMACHINES,
containing the information required in Section 4.1.

"Products" means the finished and assembled products listed in the Product
Addendum to this Agreement.

"Purchase Order" means a written or electronic purchase order issued by
EMACHINES or its Affiliate to ODM for purchase of the Products.

"Shipping Port" means the shipping port stated in the Product Addendum.

"Software" means any software or firmware included or bundled with the Products.

"Software Build" means the specific operating system and bundled software
packages and drivers loaded on the Products listed in each Product Addendum.

"Specifications" means the technical and functional requirements for the
assembly of the Products as specified or referenced in a Product Addendum.

"Subsidiary" means an entity controlled by or under common control with a Party,
through ownership or control of more than 50% of the voting power of the shares
or other means of ownership or control, provided that such control continues to
exist.

"Support" means ongoing maintenance and technical support by ODM for the
Products as more fully described in Exhibit B.

"Term" shall have the meaning in Section 14.1.

"Third Party Components" means all third party hardware, third party Software
and other third party materials that ODM procures and incorporates into the
Products.

ARTICLE 2.  SALE AND PURCHASE OF PRODUCTS

Subject to the terms and conditions in this Agreement, ODM agrees to design,
procure, directly or indirectly, certain Components, manufacture, assemble and
provide Support for the Products, and to sell the same to EMACHINES in
accordance with the terms hereof.

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -3-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

ARTICLE 3.  ORDERS FOR PRODUCTS AND SUPPORT

3.1  Annual Plan.  The annual plan ("Annual Plan") shall set forth the projected
     -----------
     monthly breakdown of the Products required by EMACHINES. The Annual Plan
     for the first year of this Agreement is set forth in Exhibit F. Thereafter,
     the Parties shall mutually agree on revised Annual Plans for the year by
     January 15th of that year. The Annual Plan shall be subject to quarterly
     adjustment on the mutual agreement of the Parties.

3.2  Forecasts.  [*] days before the commencement of each three (3) Month
     ---------
     period, EMACHINES shall provide a three (3) Month rolling forecast of its
     projected purchases of Products for such quarter ("Forecast"). The Forecast
     shall consist of an approximation of such prospective purchases of the
     Products, broken down by price band, per Month in the forecasted period.
     Any quantities listed in any Forecast or other correspondence between the
     Parties are only estimates made as an accommodation for planning purposes
     and do not constitute EMACHINES' commitment to purchase any such quantity.

3.3  Requisitions.  [*] EMACHINES shall provide to ODM such Month's binding
     ------------
     requisition for projected purchases of the Products ("Requisition").
     Immediately after the Forecast has been issued by EMACHINES in accordance
     with Section 3.2, the Parties shall meet and determine the Requisition for
     the next Month's projected purchases. ODM shall accept the Requisitions;
     provided that (a) Components are available to ODM to build the Products in
     the Requisition; and (b) the Requisition is within the capacity levels set
     forth in the Annual Plan. The Requisition shall consist of EMACHINES'
     purchases broken down by model number, price of each Product model, unit
     quantity and week of delivery, and shall be implemented through the
     issuance of Purchase Orders in accordance with Section 3.4.

3.4  Purchase Order.  [*] EMACHINES shall place a Purchase Order electronically
     --------------
     or through facsimile for purchase of Products to ODM. Each Purchase Order
     shall include: (i) a reference to the Product Addendum; (ii) Product unit
     quantity; (iii) Shipping Port; (iv) Delivery Date; (v) price of each
     Product model, and (vi) other instructions or requirements pertinent to the
     Purchase Order. The Purchase Orders for the relevant Month may exceed the
     Requisition [*] subject to ODM's Component availability. ODM shall use
     commercially reasonable efforts to manage its inventory of Components to
     absorb such [*] flexibility, provided that in the months of September,
     October and November, such flexibility shall be subject to both ODM's
     Component availability and ODM's production capacity, provided that
     capacity shall be allocated on a most favored basis.

3.5  Delivery Destination.  Unless otherwise agreed by ODM, all Products ordered
     --------------------
     through Purchase Orders shall be delivered to the Shipping Port. Subject to
     Section 6.5, ODM, at EMACHINES cost, may assist EMACHINES with shipping
     documentation to have the Products delivered to a location desired by
     EMACHINES from the Shipping Port.

3.6  Order Acknowledgment.  A Purchase Order shall be deemed to have been placed
     --------------------
     as of the date ODM acknowledges receipt of a Purchase Order electronically
     or through facsimile to

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -4-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

     EMACHINES [*] Purchase Order(s) within Lead Time requirements of this
     Agreement shall be deemed accepted upon acknowledgement by ODM. If a
     Purchase Order shortens the Lead Time or EMACHINES requests an adjustment
     to a Purchase Order, ODM will use commercially reasonable efforts to adjust
     the Purchase Order or accommodate such shorter Lead Time. Any reasonable
     costs incurred by ODM to adjust the Purchase Order or accommodate a shorter
     Lead Time shall be borne by EMACHINES; provided that EMACHINES has approved
     of such costs in advance in writing. If EMACHINES does not approve such
     costs, the Products shall be delivered at the originally scheduled Delivery
     Date.

3.7  Change in Components or Specifications.  Upon mutual agreement of the
     --------------------------------------
     Parties, EMACHINES may change EMACHINES Components or Specifications at any
     time prior to manufacture of corresponding Products. If such change
     reasonably and directly affects the Price, number of Product units or
     delivery schedule for the Products, an equitable adjustment shall be made
     provided ODM makes a written claim for an adjustment.

3.8  Materials Procurement and Liability. At the time a Requisition is made, the
     -----------------------------------
     Parties will meet and discuss whether any Components cannot reasonably be
     returned, sold or used for other customers of ODM in the event Components
     procured by ODM in reliance on a Requisition are not consumed for the
     Products. If ODM identifies such Components to EMACHINES, ODM shall also
     identify reasonable substitutes, where possible, which could be sold,
     returned or used by ODM for its other customers and the Parties will work
     together to maximize the use of such substitutes. In the event EMACHINES's
     Purchase Orders for the relevant Month do not match the Requisitions and
     Excess Components remain, [*] ("Initial Period"), ODM will use commercially
     reasonable efforts to mitigate damages including, without limitation,
     canceling Components orders, using such Components for ODM's support
     obligations, rescheduling Components orders, or selling Components, as well
     as using the Components for other Products or the products of other
     customers of ODM when ODM cannot sell, cancel or reschedule Components that
     were purchased solely to support a Requisition. EMACHINES shall either (a)
     compensate ODM for any Excess Components at any time after the end of the
     applicable Requisition; or (b) request ODM to continue holding such Excess
     Components for up to [*] after the Initial Period, [*] In cases where ODM
     cannot sell the Components to any third party for the same price as the
     price set forth in the Requisition, the Parties will mutually agree on an
     amount to be paid to ODM prior to ODM selling such Components at a lower
     price. ODM will sell such Components at the best commercially available
     price in the marketplace or according to EMACHINES's written direction and
     EMACHINES shall be entitled to set-off the amount received by ODM for such
     sale against any EMACHINES expense for which EMACHINES would otherwise be
     liable.

ARTICLE 4. PRODUCT ADDENDUM

4.1  New Product Addenda.  EMACHINES and ODM may, from time to time, add
     -------------------
     products to this Agreement by executing a Product Addendum. Each Product
     Addendum shall include the following information: (i) Product description
     and model number; (ii) Product number; (iii) Price components and
     configuration and profit percentage; (iv) Software Build; (v)

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -5-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

     packaging and packing specifications; (vi) Affiliates authorized to
     purchase Products and Support; (vii) Shipping Port; (viii) Product
     specifications; (ix) tentative price; and (x) other terms and conditions as
     agreed by the Parties.

4.2  Precedence.  Unless a Product Addendum specifically refers to and amends a
     ----------
     term of this Agreement, the terms and conditions of this Agreement will
     control and take precedence over any conflicting terms in a Product
     Addendum.

4.3  New Products Configuration Lead Time.  EMACHINES may request a change (i)
     ------------------------------------
     in the configuration (memory, processors and mass storage) with a Lead Time
     of [*]; (ii) for motherboards in production with a Lead Time of [*]; and
     (iii) for new motherboards with a Lead Time of [*].

ARTICLE 5.  PRICE; PAYMENT TERMS

5.1  Price.  Subject to Section 5.2, ODM's price for the Products shall be as
     -----
     agreed upon by the Parties and tentative, non-binding price or pricing
     formula shall be stated in the Product Addendum ("Price"). [*] Prices shall
     be calculated on a "cost plus" basis, [*]:

     5.1.1  [*]

     5.1.2  [*]

     5.1.3  [*]

     5.1.4  [*]

     5.1.5  [*]

     5.1.6  [*]

     5.1.7  [*]

     5.1.8. [*]

5.2  Price Adjustments. Prices shall be agreed [*] in the Requisition, and shall
     -----------------
be based on ODM's then current cost as calculated in accordance with Section
5.1. Pricing shall take into account any inventory effects for the BOM agreed by
the Parties, and shall also reflect any change in BOM cost during the previous
Month.

5.3  Most Favored Pricing. The Prices shall not exceed those offered to other
     --------------------
ODM customers purchasing similar products and services in like or lesser
quantities under similar terms and conditions. If ODM offers prices to other
customers for like or lesser quantities during the same time period which are
lower than those offered to EMACHINES, then those prices shall become available
to EMACHINES at the time of availability to that other customer.

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -6-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

5.4  Payment Terms.  After ODM has delivered the Products to the Shipping
     -------------
     Port, ODM shall transmit to EMACHINES the executed bill of lading and other
     shipping documents for the Products. Full payment for the Products shall be
     due within net [*] from the estimated arrival date to the destination port
     ("Due Date"). Unless otherwise instructed by ODM, all payments shall be
     made to ODM's Subsidiary, TriGem America Corporation ("TGA"), in United
     States currency, by check, money order or wire transfer (as may be agreed
     upon by the Parties) to an account designated by ODM or TGA. ODM shall be
     responsible for ensuring that TGA complies with the terms of this Agreement
     and ODM shall be liable to EMACHINES for any breach by TGA.

5.5  Early Payment; Late Payment.  Payment which is received by TGA or ODM,
     ---------------------------
     as the case may be, prior to the Due Date shall be discounted by ODM and
     credited to the account of EMACHINES at the Applicable Percentage of the
     Price based on the following formula:

               [*]

     Similarly, if EMACHINES is late in its payments to ODM or TGA, as the case
     may be, a late fee shall be assessed on the Price using the following
     formula:

               [*]

5.6  Taxes; Duties.  Upon delivery of the Products to the Shipping Port,
     -------------
     EMACHINES shall be wholly responsible for all applicable taxes, duties and
     any other fees or costs related to the Products, except for those expressly
     included in the Prices. In the event ODM pays for any such taxes or fees
     that accrue after delivery to the Shipping Port, EMACHINES shall repay ODM
     or its designee within ten (10) days of ODM's demand for immediate
     repayment of the same after presentation of documents evidencing such
     payment.

5.7  Price Audit. Upon prior written notice, EMACHINES or its representative may
     -----------
     inspect ODM's relevant records to confirm that EMACHINES is receiving
     Prices equal to or better than those offered by ODM to other customers
     pursuant to Section 5.3, and the accuracy of the computation of "cost"
     pursuant to Section 5.1. The audit shall not be performed more than once
     per year ("Initial Audit"), [*] Further, audits shall be conducted at a
     reasonable time and during normal hours of operation. If the audit reveals
     that ODM has not complied with the terms of Sections 5.1 and 5.3 and there
     has been an overcharge to EMACHINES, then ODM shall promptly pay such
     overcharge, without interest, to EMACHINES. If, however, the audit reveals
     that ODM has not complied with the terms of Sections 5.1 and 5.3 and there
     has been an undercharge to EMACHINES, then EMACHINES shall promptly pay
     such undercharge, without interest, to ODM. [*]

ARTICLE 6.  SHIPMENT

6.1  Product Labeling.  To the extent EMACHINES timely provides ODM with
     ----------------
     specific instructions on and samples of EMACHINES' current labeling
     requirements and Marks,

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -7-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------
     ODM will ensure that the Products and the packaging contain such
     information and EMACHINES' Marks.

6.2  Complete Delivery.  All Product units specified in a Purchase Order
     -----------------
     are to be shipped complete. In the event ODM knows that only a portion of
     the Products will be available for shipment to meet a Delivery Date, ODM
     shall immediately notify EMACHINES. In such event, EMACHINES shall have the
     option to accept partial shipment or direct ODM to reschedule the shipment.

6.3  Option to Accept Overshipment.  If ODM ships more Product units than
     -----------------------------
     ordered, EMACHINES may accept the amount of the overshipment with payment
     due.

6.4  Delays.  If ODM knows it cannot meet or has missed the Delivery Date,
     ------
     ODM shall immediately notify EMACHINES of such event. ODM shall take any
     and all necessary actions, and EMACHINES shall inform ODM of the delivery
     dates to the Products affected. Such affected Products shall be shipped by
     air transportation or other expedient means acceptable to EMACHINES to a
     destination port as set forth in the bill of lading. If, however, the delay
     is to the extent that ODM can not meet the estimated arrival date at the
     destination port but reasonably believes that it can meet EMACHINES'
     reasonable commitment to deliver to EMACHINES' customer destination
     ("Commitment Destination"), then ODM shall ship the Products to the
     Commitment Destination by EMACHINES' required delivery dates to its
     customers. ODM shall pay for any resulting increase in the freight cost
     over that which EMACHINES would have been required to pay by the standard
     method of transportation. If delay has been notified to EMACHINES or has
     occurred, EMACHINES shall have the right to cancel any Purchase Order if
     (a) EMACHINES notifies ODM of the Commitment Destination and delivery date
     to the Commitment Destination and (b) (i) ODM acknowledges that it can not
     meet the delivery date to the Commitment Destination; or (ii) ODM misses
     the delivery date to the Commitment Destination. EMACHINES shall undertake
     commercially reasonable methods to mitigate ODM's costs associated with
     above described expedient delivery for the affected Products.
     Notwithstanding the foregoing, this Section 6.4 shall be subject to Article
     12 in the event of a force majeure.

6.5  Title and Risk of Loss.  [*]
     ----------------------

6.6  Packing List.  Each delivery of Products must include a packing list
     ------------
     that contains at least: (i) EMACHINES model number; (ii) quantity of
     Products shipped; and (iii) date of shipment.

6.7  Packaging; Damages.  ODM shall properly package, handle and pack all
     ------------------
     Products so as to protect the Products from loss or damage, in conformance
     with good commercial practice, the Specifications, government regulations,
     and other applicable standards. Special static protection must be provided
     for Products requiring such packaging.

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -8-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

ARTICLE 7.  COMPLIANCE WITH LAWS AND REGULATIONS

7.1    Compliance with Laws and Regulations.  ODM shall comply with all
       ------------------------------------
       applicable laws and regulations applicable to the Products and/or Parts
       in jurisdictions in which EMACHINES sell the Products and/or the Parts.
       EMACHINES shall provide the jurisdictions in which the Products and/or
       the Parts will be sold at the time in which the Forecast is issued to ODM
       and shall reasonably assist ODM to comply with applicable laws and
       regulations. In no event shall ODM be held liable or responsible for any
       non-compliance with applicable laws and regulations for the jurisdictions
       in which EMACHINES failed to timely inform ODM.

7.2    Compliance. Subject to Section 7.1, ODM shall be responsible for
       ----------
       providing regulatory agencies and standards organizations with proof of
       compliance to the requirements in Section 7.1 for each Product and, as
       applicable, for Parts and Components associated with such Product. ODM
       shall mark the Products and, as applicable, the Parts and Components with
       regulatory, safety and standards organizations marks which signify
       compliance with the requirements of those organizations. Upon request by
       EMACHINES, ODM shall provide EMACHINES with a copy of each report issued
       by the foregoing agencies and organizations related to compliance testing
       and approvals for Products, Components and Parts. ODM will obtain the
       prior approval of the relevant agencies or organizations prior to
       implementing any change that may affect the compliance status of any
       Product previously approved by such agency or organization. EMACHINES
       shall provide any and all assistance requested by ODM to obtain such
       prior approval from the relevant agencies and organizations. In addition
       to the foregoing, ODM agrees to notify EMACHINES in writing of any change
       it proposes to make to any Product that affects its performance, quality
       or reliability.

7.3    Origin Certification; Marking.  Upon EMACHINES' request, ODM will
       -----------------------------
       provide EMACHINES with an appropriate certificate stating the country of
       origin for the Products. ODM shall also mark each Product, or the
       container if there is no room on the Product, with the country of origin
       in compliance with customs requirements.

7.4    WHQL Certification.  ODM warrants that the Products will meet all
       ------------------
       Microsoft Windows Hardware Qualification Laboratories certifications.

7.5    Indemnification.  Each Party shall indemnify and hold the other Party
       ---------------
       harmless from and against any claim, liability, loss, judgment, expense
       or cost arising from the breach or claimed breach of any of the
       provisions in this Article 7.

ARTICLE 8.  PRODUCT QUALITY

8.1    Quality Program.  ODM shall maintain a quality program for all
       ---------------
       Products in accordance with its current policies which has been provided
       to EMACHINES prior to the Effective Date and, if applicable, any
       additional or substitute quality requirements agreed to by the Parties.
       ODM will conform to the requirements of ISO 9001 at all times. ODM
       further represents and warrants that it currently is or will, within
       twelve (12) Months of the Effective Date of

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -9-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

       this Agreement become certified under ISO 14000, and during the term of
       this Agreement will remain ISO 9001 and 14000 certified. If at any time
       hereafter certification under ISO 9001 is no longer generally
       appropriate, ODM will ensure that it is certified under another
       comparable or higher standard which is acceptable to EMACHINES.

8.2    Inspection of ODM Plants; Subcontractors.  Upon prior written request
       ----------------------------------------
       by EMACHINES, EMACHINES or its representatives may inspect the Products
       and associated manufacturing processes at ODM's plants. Inspections shall
       be conducted at a reasonable time and during normal hours of operation,
       unless such inspection disrupts the operation or business of ODM's
       plants. Subject to the approval of ODM's vendor or subcontractor,
       EMACHINES or its representatives may also inspect such vendor or
       subcontractor. ODM shall use commercially reasonable efforts to obtain
       the approval of ODM's vendor or subcontractor.

8.3    Safety Standard Changes.  ODM shall promptly notify EMACHINES if any
       -----------------------
       upgrade, substitution or other change to any ODM Component or Third Party
       Component is required to make the Component meet applicable safety
       standards or other governmental statutes, rules, orders or regulations.
       If an ODM Component or Third Party Component meets applicable safety
       standards and other governmental requirements at the time of manufacture,
       EMACHINES and ODM will allocate the costs of any subsequent upgrade,
       substitution or other required change in an equitable manner based on
       good faith discussions between the Parties.

8.4    Failure Rate.  A "Failure Rate" shall mean the cumulative percentage
       ------------
       of Defective Products shipped under a Product Addendum in relation to the
       total Products shipped under that Product Addendum. ODM and EMACHINES
       acknowledge that a Failure Rate set forth in a Product Addendum is
       expected by the Parties. If the actual Failure Rate for Products exceeds
       the expected rate, ODM shall provide EMACHINES with a root cause analysis
       and a corrective action plan within [*] working days after the occurrence
       of such failure.

       8.4.1     [*]

       8.4.2     The corrective action plan will describe the additional
                 engineering and technical support that ODM will provide to
                 bring the actual Failure Rate within the specified Failure Rate
                 in the Product Addendum, and other necessary corrective
                 measures as agreed to by the Parties.

8.5    Class Failures.  Unless otherwise stated in the Product Addendum, "Class
       --------------
       Failure" shall mean a cumulative return rate for a specific Product of at
       least [*]; provided however, defects related to Software shall only be
       included as a Class Failure if (i) the defect cannot be fixed by
       download, (ii) the defect is known as "catastrophic" such that the
       Product cannot perform basic functions and is inoperable, and (iii) the
       defect is directly attributable to ODM. A "Class Failure" occurring
       before the Effective Date shall mean a cumulative return rate of at least
       [*].

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -10-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

8.6  Class Failure Remedies. Upon the occurrence of a Class Failure, EMACHINES
     ----------------------
shall have the remedies set forth in Exhibit B.

ARTICLE 9.  WARRANTIES

9.1  Product Warranties.  ODM warrants that all Products will be free from
     ------------------
     defects in design, material and workmanship and will conform to the
     Specifications and other criteria referred to in this Agreement or agreed
     to by the Parties in writing. The warranty period for each Product shall
     continue from the actual Delivery Date and continue until fifteen (15)
     Months thereafter. Warranty claims shall be processed in accordance with
     Exhibit B. ODM further warrants that all Products will:

     9.1.1  Be new, except as otherwise provided by the Parties.

     9.1.2  Be free and clear of all liens, encumbrances, restrictions, and
            other claims against title or ownership.

9.2  Component Warranties.  ODM warrants that all ODM Components and Third Party
     --------------------
     Components when assembled into the Product will:

     9.2.1  Conform to the Specifications, and other criteria referred to in
            this Agreement or agreed to by the Parties in writing.

     9.2.2  Be new, except as otherwise provided by the Parties.

     9.2.3  Be free from defects in design, material and workmanship.

     9.2.4  Be free and clear of all liens, encumbrances, restrictions, and
            other claims against title or ownership.

9.3  Support Warranties.  ODM will provide EMACHINES with Support for the
     ------------------
     Products as specified in the Support Terms, attached as Exhibit B, during
     the Term of this Agreement and notwithstanding the expiration or
     termination of this Agreement, [*]; provided, that separate fees will be
     paid by EMACHINES for Support required after the expiration of the warranty
     period for the Products. ODM will maintain such number of qualified
     personnel and Parts as are necessary to provide timely and knowledgeable
     maintenance and Support. ODM warrants that all Support will be provided in
     a professional and workmanlike manner. ODM shall not independently offer
     and provide support services to Product customers. However, in no event may
     ODM disclose EMACHINES Confidential Information or use EMACHINES Property
     to provide such support without EMACHINES' prior consent.

9.4  No Warranty on EMACHINE Components.  Notwithstanding any provision to the
     ----------------------------------
     contrary in this Agreement, ODM shall not be liable for any damages or
     losses to EMACHINES or any third party resulting from defective EMACHINES
     Components, except for those

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -11-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

     EMACHINES Components which have been qualified by ODM pursuant to a test
     program set by ODM which ODM shall implement in connection with EMACHINES
     Components.

9.5  Third Party Royalties and Fees.  Unless otherwise noted in the Product
     ------------------------------
     Addendum, ODM warrants that the fees set forth in the Product Addendum are
     inclusive of all royalties and other fees relating to Third Party
     Components.

9.6  Year 2000 Compliance Warranty.  ODM warrants that all Products delivered
     -----------------------------
     under this Agreement shall perform without error, loss of data or loss of
     functionality arising from any failure to process, calculate, compare or
     sequence date data accurately. In addition, the Products will not cause any
     associated products or systems in which they may be used to fail in any of
     the ways described above. ODM shall take all reasonable actions to ensure
     that all of its suppliers and shipping agents and their products and
     services are Year 2000 Compliant.

9.7  Remedies for Breach of Warranty.  If a Product is deemed to be a Defective
     -------------------------------
     Product, the procedures set forth in Exhibit B shall apply.

9.8  Survival of Warranties.  Unless otherwise specified in the Product
     ----------------------
     Addendum, all warranties shall be effective for the term stated in Section
     9.1.

9.9  DISCLAIMER; LIMITATION OF LIABILITY FOR DEFECTIVE PRODUCTS. EXCEPT AS
     ----------------------------------------------------------
     EXPRESSLY PROVIDED IN THIS AGREEMENT, AND SUBJECT TO ANY RIGHTS EMACHINES
     OR ITS CUSTOMERS MAY HAVE UNDER LAW THAT CANNOT BE EXCLUDED UNDER THIS
     AGREEMENT, ODM MAKES NO OTHER WARRANTY, EXPRESS OR IMPLIED, REGARDING THE
     PRODUCTS AND COMPONENTS, THEIR MERCHANTABILITY OR THEIR FITNESS FOR A
     PARTICULAR PURPOSE. EXCEPT AS OTHERWISE PROVIDED HEREIN, ODM'S SOLE AND
     EXCLUSIVE LIABILITY AND EMACHINES' SOLE AND EXCLUSIVE REMEDY FOR DEFECTIVE
     PRODUCTS DURING THE WARRANTY PERIOD SHALL BE LIMITED TO REPAIR OR
     REPLACEMENT OF THE DEFECTIVE PRODUCT.

ARTICLE 10.  MARKETING AND LICENSING

10.1 Marketing Authority.  EMACHINES shall have the right to use its own
     -------------------
     business and license terms for all marketing and distribution of the
     Products.

10.2 No Rights in Marks.  Except as otherwise specified in Section 6.1, nothing
     ------------------
     in this Agreement shall be construed to grant either Party any rights in
     the Marks of the other Party. The Products shall be affixed with copyright
     notices sufficient to give notice as to the rights of the Parties in their
     respective products. As between the Parties, the exterior Product design,
     manuals, EMACHINES Marks, manuals and Product model names (the "EMACHINES
     Elements") are the property of EMACHINES. Accordingly, ODM shall not use
     the EMACHINES Elements except in connection with fulfillment of ODM's
     obligations hereunder; provided, however, that EMACHINES Elements that were
     used by ODM prior to

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -12-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

     the Effective Date as set forth in Exhibit D shall continue to be used by
     ODM. Further ODM shall reasonably assist EMACHINES at EMACHINES's expense
     to provide necessary materials so that EMACHINES can have the EMACHINES
     Elements reproduced by itself or other manufacturers.

ARTICLE 11.  MUTUAL INFRINGEMENT INDEMNIFICATION

11.1 ODM Intellectual Property Warranty.  ODM warrants that the manufacturing
     ----------------------------------
     processes used to manufacture the Products do not and will not violate or
     infringe any third party Intellectual Property Rights. ODM further warrants
     that the ODM Components and Third Party Components do not violate or
     infringe any third party Intellectual Property Rights.

11.2 EMACHINES Intellectual Property Warranty.  EMACHINES warrants to ODM that
     ----------------------------------------
     EMACHINES Components do not and will not violate or infringe any third
     party Intellectual Property Rights.

11.3 Duty to Indemnify.  The Parties warrant to each other that neither is
     -----------------
     aware of any such facts upon which such Intellectual Property Rights
     infringement claims could be made (except as set forth in Exhibit E). In
     the event an infringement claim is filed, the Parties agree to indemnify
     and hold the other Party harmless, as the case may be, from and against any
     such claims, losses, liabilities, costs and expenses (including the actual
     fees of attorneys and other professionals and all related costs and
     expenses) the indemnified Party may incur as a result of the other Party's
     breach or claimed breach of its warranties in Sections 11.1, 11.2 and 11.3.

11.4 Notification of Claim.  If either Party learns of any claim or any facts
     ---------------------
     upon which a claim could be made, such Party shall immediately notify the
     other Party. If after such notice, the indemnifying Party does not
     diligently pursue resolution of the claim nor provide the indemnified Party
     with reasonable assurances that it will diligently pursue resolution, then
     the indemnified Party may, without in any way limiting its other rights and
     remedies, defend the claim.

11.5 Remedies For Infringing Products.  If the use or combination of any
     --------------------------------
     Product provided hereunder is enjoined and is not subject to
     indemnification by EMACHINES under Section 11.3 ("Infringing Product"), ODM
     may, in its sole discretion:

     (i)   Procure for EMACHINES and its customers the right to continue using
           or combining the Infringing Product;

     (ii)  Replace the Infringing Product with a non-infringing product of
           equivalent function and performance; or

     (iii) Modify the Infringing Product to be non-infringing, without
           detracting from function or performance.

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -13-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

11.6  Limitations.  ODM shall be relieved of its indemnification obligations
      -----------
      under this Article 11 to the extent Section 11.2 applies or the claim
      arises from ODM's compliance with EMACHINES's Specifications.

ARTICLE 12. FORCE MAJEURE

12.1  Notification.  If the performance of either Party is affected by any event
      ------------
      of force majeure, including act of God, actions or directive of a court or
      public authority or government, war or civil disturbance, fire, explosion,
      flood, shortage of fuel, power, materials, disruption of transportation or
      communications, strikes or other labor disruption, destruction of
      machinery or equipment, or any other natural or man-made event beyond the
      reasonable control of such Party, such Party shall immediately notify the
      other Party, in writing, giving details of the event. For clarification
      purposes, an industry wide inability to obtain a Component is a force
      majeure event; however, other supplier shortages shall not be force
      majeure events.

12.2  Suspension of Performance.  The performance of the Party affected by such
      -------------------------
      force majeure shall be suspended only for as long as the event of force
      majeure continues, but the Parties shall consult and will use their best
      efforts to find alternative means of accomplishing such performance.

12.3  Commencement of Performance.  Immediately upon cessation of the event of
      ---------------------------
      force majeure, the Party affected by force majeure will notify the other
      Party in writing and will take steps to recommence or continue the
      performance that was suspended.

12.4  Disaster Recovery Plan. As of the Effective Date of this Agreement, ODM
      ----------------------
      shall have a disaster recovery plan in place and approved by EMACHINES for
      each Product to ensure the supply of such Products to EMACHINES is not
      interrupted. Such plans may include multiple sources of supply for each
      Component and multiple manufacturing facilities. Any changes to the
      disaster recovery plan shall be subject to EMACHINES's prior written
      concurrence.

ARTICLE 13. CONFIDENTIALITY

13.1  Definition of Confidentiality.  As used in this Article 13, Confidential
      -----------------------------
      Information shall mean any and all information exchanged by the Parties
      expressly marked as confidential or proprietary (or similar variations
      thereof), including such information which would normally be deemed
      confidential if not expressly marked including, but not limited to, any
      information concerning either Party's business operations, strategies,
      customers, suppliers, technology, know-how, and financial information.
      Confidential Information shall also include the terms and conditions as
      well as the existence of this Agreement.

13.2  Obligation of Confidentiality.  All Confidential Information shall be kept
      -----------------------------
      in strict confidence by the Parties and shall not be used otherwise than
      in connection with the implementation of the terms and conditions of this
      Agreement, except as follows:

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -14-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

      (i)   to the extent it was known when received by the receiving Party;

      (ii)  as it is obtained by the receiving Party from other sources without
            such duty as to confidentiality and non-use;

      (iii) to the extent such information is generally available to the public;

      (iv)  to the extent such duty as to confidentiality and non-use is waived
            by the disclosing Party; or

      (v)   as may be required by court order or any governmental agency.

13.3  Survival.  The foregoing obligation as to confidentiality and non-use
      --------
      shall survive any expiration or termination of this Agreement. Upon
      expiration or termination of this Agreement, each Party shall promptly
      return to the other Party all Confidential Information (including any
      reproductions thereof or notes therefrom) received from such Party not
      within the above exceptions.

ARTICLE 14. TERM; TERMINATION

14.1  Term.  This Agreement shall commence as of the Effective Date and continue
      ----
      for two (2) years ("Term"), unless terminated earlier. After the initial
      Term, this Agreement will renew automatically for additional one-year
      periods, unless either Party provides the other Party at least one hundred
      and eighty (180) days written notice of its intent to terminate prior to
      the expiration of the initial Term or any subsequent Term.

14.2  Outstanding Orders.  All Purchase Order(s) accepted by ODM prior to the
      ------------------
      expiration of this Agreement shall be fulfilled pursuant to and subject to
      the terms of the Purchase Order.

14.3  Termination
      -----------

      14.3.1  Notice of Breach.  If either Party is in material breach of any
              ----------------
              provision of this Agreement, the non-breaching Party may, by
              notice to the breaching Party, terminate the whole or any part of
              this Agreement or any Purchase Order, unless the breaching Party
              cures the breach [*] after receipt of notice.

      14.3.2  Causes of Breach.  For purposes of Section 14.3.1 above, "breach"
              ----------------
              includes, without limitation, any:

              (1)  Proceeding, whether voluntary or involuntary, in bankruptcy
                   or insolvency by or against a Party; or the inability to pay
                   debts as they become due (except those contested in good
                   faith);

              (2)  Appointment, with or without the other Party's consent, of a
                   receiver or an assignee for the benefit of creditors;

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -15-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

              (3)  Failure by ODM to deliver the Products in accordance with the
                   requirements of this Agreement or any Purchase Order, not as
                   a result of force majeure;

              (4)  Failure by ODM to replace or repair Defective Products in a
                   timely manner as required by Article 9;

              (5)  Failure by EMACHINES to make its payments in accordance with
                   Article 5; or

              (6)  Any other failure by a Party to comply with any material
                   provision of this Agreement with additional failure to
                   provide the non-breaching party, upon request, with
                   reasonable assurances of future performance.

14.4  LIMITATION OF LIABILITY. UNLESS OTHERWISE STATED IN THIS AGREEMENT,
      -----------------------
      NEITHER PARTY SHALL BE LIABLE FOR ANY SPECIAL OR CONSEQUENTIAL DAMAGES OF
      THE OTHER ARISING OUT OF ANY PERFORMANCE OF THIS AGREEMENT OR IN
      FURTHERANCE OF THE PROVISIONS OR OBJECTIVES OF THIS AGREEMENT, REGARDLESS
      OF WHETHER SUCH DAMAGES ARE BASED ON TORT, WARRANTY, CONTRACT OR ANY OTHER
      LEGAL THEORY, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

ARTICLE 15. DISPUTE RESOLUTION

15.1  Amicable Resolution.  The Parties agree to carry out this Agreement in a
      -------------------
      spirit of mutual cooperation and good faith, and shall attempt to resolve
      any differences, disputes or controversies which may arise between them
      amicably.

15.2  Escalation.  If such negotiations and meetings do not resolve the dispute
      ----------
      within ten (10) days of written communications of the dispute, then each
      Party shall nominate one senior officer of the rank of Vice President, or
      higher, as their respective representative. The senior representatives
      shall meet within ten (10) days of their nomination to resolve such
      dispute. If the dispute is not resolved to the satisfaction of the
      representatives within thirty (30) days from the date of the original
      communication, then either Party may terminate this Agreement in whole or
      in part and seek arbitration under Section 15.3.

15.3  Arbitration.  Any disagreement, dispute, controversy or claim arising out
      -----------
      of or relating to this Agreement or the interpretation hereof or any
      arrangements relating hereto or contemplated herein or the breach,
      termination or invalidity hereof shall be finally settled by arbitration.

15.4  Arbitration Venue.  The arbitration shall be conducted in London, United
      -----------------
      Kingdom, and shall be conducted in accordance with the Rules of
      Arbitration of the International Chamber of Commerce ("ICC Rules").

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -16-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

15.5  Arbitrators.  The arbitral tribunal shall consist of three arbitrators.
      -----------
      One arbitrator shall be appointed by ODM, one arbitrator shall be
      appointed by EMACHINES, and the third arbitrator shall be appointed by
      mutual consent of the two appointed arbitrators.

15.6  Language.  The language used in the arbitration shall be the English
      --------
      language.

15.7  Binding Decision.  Any decision or award of the arbitral tribunal shall be
      ----------------
      final and binding upon the Parties. To the extent permitted by law, the
      Parties waive any rights to appeal or to review of such award by any court
      or tribunal. The Parties further agree that the arbitral award may be
      enforced against the Parties to the arbitration proceeding or their assets
      wherever they may be found and that a judgement upon the arbitral award
      may be entered in any court having jurisdiction thereof.

ARTICLE 16. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of
the State of New York,  without reference to its conflicts of laws provisions.

ARTICLE 17. NOTICE

17.1  Notice Address.  Any notices given hereunder shall be in writing and shall
      --------------
      be served by hand at, or by being sent by facsimile transmission or
      prepaid post to, the following addresses and numbers:

      To ODM:

            TRIGEM COMPUTER, INC.
            45-2 Yoido-dong, Youngdeunpo-ku
            Seoul 150-010, Korea
            Attention: J.R. Lee, Vice President
            Facsimile: 82-345-492-0466

      To EMACHINES:

            EMACHINES, INC.
            14350 Myford Road, Bldg. 100
            Irvine, California 92606-1002
            U.S.A.
            Attention: General Counsel
            Facsimile: 1-714-505-5048

17.2  Method of Notice.  Any such notice shall be deemed to be served at the
      ----------------
      time of delivery (if delivered by hand), at the time of transmission (if
      served by facsimile) or on the fifth (5th) working day immediately after
      the date of posting with an internationally recognized courier (if served
      by courier). Evidence that the notice was properly addressed and placed
      with an

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -17-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

      internationally recognized courier shall be conclusive evidence of
      posting. Without prejudice to the effectiveness thereof, a notice served
      by facsimile shall be confirmed promptly in writing delivered by hand or
      sent by courier.

17.3  Change of Address.  Any Party may, by seven (7) days' written notice
      -----------------
      served to the aforesaid addresses of the other Parties, change the address
      or facsimile number for service referred to above.

ARTICLE 18. MISCELLANEOUS

18.1  Non-Recurring Expenses.  EMACHINES shall pay ODM certain non-recurring
      ----------------------
      expenses as contained in Exhibit C. Upon payment of the non-recurring
      expenses, EMACHINES shall own all rights in any work product resulting
      from such expenses as well as all intellectual property rights therein,
      and ODM agrees to provide all reasonable cooperation and assistance and
      execute all documents necessary to evidence or perfect EMACHINES's
      ownership of such rights.

18.2  Surviving Provisions.  The following provisions shall survive expiration
      --------------------
      or termination of this Agreement: Warranties in Article 9, Indemnification
      in Article 11, Confidential Information in Article 13, Limitation of
      Liability in Section 14.4, Dispute Resolution in Article 15, Governing Law
      in Article 16 and the miscellaneous provisions in this Article 18 (except
      for the proviso in Section 18.7).

18.3  Entire Agreement.  This Agreement and any attachments and exhibits
      ----------------
      attached hereto shall, as of the date of execution hereof, supersede all
      previous representations, understandings or agreements, oral or written,
      among the Parties with respect to the subject matter hereof.

18.4  Application to Prior Sales.  The provisions in Articles 1, 7, 9, 11, 13,
      --------------------------
      Section 10.2 and Section 18.3 shall apply to the relationship of the
      Parties prior to the Effective Date.

18.5  Waivers.  No waiver by any Party of any breach or failure to comply with
      -------
      any provision of this Agreement shall be construed as, or constitute, a
      continuing waiver of such provision or a waiver of any other breach of, or
      failure to comply with, any other provision of this Agreement.

18.6  Further Assurances.  Each of the Parties hereto agrees to execute and
      ------------------
      deliver such other documents and take such other action as may be
      necessary to more effectively consummate the purposes and subject matter
      of this Agreement.

18.7  Successors and Assigns.  This Agreement and each and every covenant, term
      ----------------------
      and condition hereof shall be binding upon and inure to the benefit of the
      Parties hereto and their respective successors and assigns; provided,
      however, that neither Party may assign any of its rights or delegate any
      of its duties under this Agreement without obtaining the prior consent of
      the other Party, except that EMACHINES, in the event of a transfer or sale
      of all or substantially

                                      -18-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

      all of its (a) assets related to this Agreement, or (b) its equity, shall
      have the right to assign this Agreement the acquiring entity without ODM's
      consent, provided the assignee is not a direct competitor of ODM and the
      assignee agrees in writing to assume EMACHINES's obligations hereunder.

18.8  Relationship.  This Agreement shall not be construed to create a
      ------------
      partnership, joint venture, agency or employment relationship between the
      Parties.

18.9  Amendments.  This Agreement may be amended or modified only by an
      ----------
      instrument in writing duly executed by the Parties.

18.10 Severability of Provisions.  If any term of provision of this Agreement
      --------------------------
      is for any reason found invalid, illegal or unenforceable in any respect,
      such invalidity, illegality or unenforceability shall not affect the
      validity of any remaining portion, which shall remain in full force and
      effect as if the invalid portion was never a part of this Agreement when
      it was executed.

18.11 Headings.  Headings of Articles and Sections in this Agreement are for
      --------
      convenience only and shall not substantively affect the terms of this
      Agreement.

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -19-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

IN WITNESS WHEREOF, the Parties have executed this Agreement on this 24th day of
January, 2000.

TRIGEM COMPUTER, INC.                    EMACHINES, INC.

By: /s/ Doo Soo Kim                    By:  /s/ Stephen Dukker
    ---------------                         -------------------
Name: Doo Soo Kim                      Name: Stephen Dukker
Title:  President                      Title: Chief Executive Officer

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -20-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

                                   EXHIBIT A

                                PRODUCT ADDENDUM

                         [TO BE AGREED BY THE PARTIES]

---------------------------------------------
Model Number
---------------------------------------------
Product Specification
---------------------------------------------
Tentative Price
---------------------------------------------

Price:
-----

Price Components, Configurations and Profit Percentages:  See attachment
------------------------------------------------------------------------

Software Build and Royalties:  [*]
----------------------------

Shipping Port:
--------------

Product Specifications:  See attachment
---------------------------------------

Packaging and Packing Specifications:  See attachment
-----------------------------------------------------

Affiliates Authorized to Purchase the Products and Support:
----------------------------------------------------------

Expected Products Failure Rate and Class Failure Rate:
-----------------------------------------------------   ----------

Individuals Designated for Receipt of Notices:
---------------------------------------------

EMACHINES, INC.                    TRIGEM COMPUTER, INC.
Stephen Dukker                     J. R. Lee
14350 Myford Road, Bldg. 100       Panwol Industrial Complex 603-4
Irvine, California 92606-1002      1055 Shinkil-Dong
United States of America           Ansan, Kyunggi-Do, Korea
Facsimile: 1-714-505-5048          Facsimile:  82-345-492-0466

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -21-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

APPROVED AND AGREED:

EMACHINES, INC.                      TRIGEM COMPUTER, INC.

By:                                  By:
   ----------------------------         -----------------------------

Name:                                Name:
     --------------------------           ---------------------------

Title:                               Title:
      -------------------------            --------------------------

Date:                                Date:
     --------------------------            --------------------------

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -22-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

                                   EXHIBIT B

                                 SUPPORT TERMS

     ODM and EMACHINES agree to the following terms and processes for Product
Support which shall be updated and amended every six month period starting from
the Effective Date:

I.  Definitions. As used in this Exhibit B, the following terms shall be defined
    -----------
    as follows:

    A.  "DF" shall mean defects found.

    B.  "NDF" shall mean no defects found.

    C.  "RA" shall mean the return to EMACHINES of a specific Product by
        EMACHINES' resellers.

    C.  "RMA" shall mean the return to EMACHINES of a specific Product by an end
        user during the warranty period ("User").

II.  New Programs.
     ------------
     A.  RA:  Effective April 1, 2000:

         (1)  If the Product is DF, then EMACHINES shall be entitled to a full
              credit for the returned Product from ODM.

         (2)  If the Product is NDF such that the cumulative rate of the NDF is
              less than [*], then EMACHINES shall be entitled to a full credit
              for the returned Products from ODM.

         (3)  If the Product is NDF such that the cumulative rate of the NDF is
              [*], or more, then EMACHINES shall pay ODM [*] per returned
              Product unit.

     B.  RMA:  Effective May 1, 2000

         (1)  If the Product is DF, [*].

         (2)  If the Product is NDF, [*].

         (3)  [*]

III. Old Programs. For Products returned prior to April 1, 2000 (for RA) and May
     1, 2000 (for RMA), the following shall apply for both RA and RMA:

     A.  If the Product is DF:

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -23-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

        1.  and the age of the Product is less than [*] from the Delivery Date,
            EMACHINES shall be entitled to a credit equal to [*] of the relevant
            invoice Price and EMACHINES shall receive a refurbished Product; or

        2.  and the age of the Product is 120 days or more from the Delivery
            Date, EMACHINES shall be entitled to a refurbished Product only.

    B.  If the Product is NDF, then EMACHINES shall pay TGA the amount of [*]
        and ODM shall provide EMACHINES with a refurbished Product.

    C.  Weekly Status Reports. EMACHINES shall provide ODM and TGA with accurate
        records of RA on a [*] basis.

IV. Class Failures

    A.  Recall. From the Effective Date, in the event EMACHINES deems a specific
        Product model or certain Product batch (those Products that can be
        identified by a sequence of serial numbers or other reasonable method)
        to be a Class Failure, EMACHINES, after consultation with ODM, may [*].

    B.  Old Class Failures. In the event of a Class Failure prior to the
        Effective Date, regardless whether DF or NDF, then EMACHINES shall be
        entitled to [*].

V.  Additional Terms

    1.  ODM and TGA shall only accept Defective Products from EMACHINES or Users
        at EMACHINES' directions.

    2.  Unless otherwise stated in Article 9 (Warranties), the Support Terms and
        the relevant Product Addendum, ODM shall be responsible for all costs to
        repair or replace Defective Products and Parts.

    3.  [*]

    4.  ODM and TGA, as applicable, shall provide EMACHINES with weekly reports
        on Product repair. The format of such reports will be mutually agreed
        upon by ODM and EMACHINES.

    5.  For a period of [*] after the last Product is delivered to the Shipping
        Port by ODM, inclusive of the applicable warranty period, ODM or its
        Subsidiary will provide return-to-factory repair or replacement of
        Defective Products and Parts for EMACHINES' customers on a per incident
        basis at a charge to be determined by EMACHINES and ODM prior to the
        date the Products are delivered to the Shipping Port. Such agreement may
        be set forth in the Product Addendum.

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -24-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

    6.  ODM agrees to maintain adequate service personnel and stock of the
        original Parts or their functional equivalent to ensure compliance with
        the requirements of this Exhibit B.

    7.  ODM agrees to provide EMACHINES' support team with bill of materials and
        any updates to it during the support life of each Product listed in
        Product Addenda.

    8.  Upon request by EMACHINES, ODM shall disclose its inspection process
        used to determine whether a returned Product is a Defective Product to
        EMACHINES, and shall permit EMACHINES and its representatives to inspect
        such process and audit any documentation related to such process or the
        determination of whether any Product returned hereunder is defective.

    9.  [*]

    10. [*]

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -25-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

                                    EXHIBIT C

                             NON-RECURRING EXPENSES

                         [TO BE AGREED BY THE PARTIES]

ODM and EMACHINES have agreed that EMACHINES shall reimburse ODM or TGA for the
following non-recurring expenses that ODM has incurred on EMACHINES' behalf :

Packaging Tooling:    US$ [to be determined]
Certification Fees:   US$ [to be determined]
Chassis Tooling:      US$ [to be determined]

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -26-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

                                    EXHIBIT D

                       Description of Continued Use Model

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -27-
<PAGE>

                                                                    CONFIDENTIAL
                                                                    ------------

                                   EXHIBIT E

                            [TO BE COMPLETED BY ODM]

Intellectual Infringement Disclosure

* CERTAIN CONFIDENTIAL INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND
SEPARATELY FILED WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

                                      -28-

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