Document:

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                                                                    EXHIBIT 10.4

                                   PEOPLEPC
                            SALES FINANCE AGREEMENT

This Agreement is by and between MBNA AMERICA BANK, N.A., a national banking
association having its principal place of business in Wilmington, Delaware
("MBNA"), and PEOPLEPC, INC, a  Delaware corporation having its principal place
of business in San Francisco, California ("PeoplePC") for themselves, and their
respective successors and assigns.  The Effective Date of this Agreement is as
set forth in Section 1(e) below.

WHEREAS, PeoplePC is and will be engaged in the business of providing personal
computers and related goods and services to its Members; and

WHEREAS, MBNA is engaged in the business of providing various consumer credit
products; and

WHEREAS, PeoplePC and MBNA desire that MBNA provide various Loan Accounts to
Members, certain of which shall be offered in conjunction with a purchase
financing program for PeoplePC Products.

1.   DEFINITIONS

When used in this Agreement,

(a)  "Agreement" means this agreement and Schedules A, B, C, and D, and Exhibit
     1.

(b)  "Completed Application" means an application for a Loan Account submitted
by a Member to MBNA, pursuant to the Referral Procedures, and for which no
additional information is required by MBNA prior to decisioning, as determined
solely by MBNA. A Completed Application shall include, at a minimum the
following completed application fields: (i) name; (ii) address; (iii) social
security number; (iv) home and business phone; (v) date of birth; (vi) annual
salary; and, (viii) employer.

(c)  "Customer" means any Member who is a participant in the Program.

(d)  "Credit Information" means all information collected by MBNA in connection
with a Member's credit application, including credit reports and credit scores,
and all subsequent transactions and all other activity on a Loan Account, and
the Loan Accounts themselves.

(e)  "Effective Date" means the day on which the last of the following events
occurs: (a) this Agreement is mutually executed by the parties, and (b) MBNA
provides PeoplePC with initial written approval over the PeoplePC website
pursuant to Section 4(c).

(f)  "Loan Account" means a revolving loan account opened by a Customer in
response to marketing efforts made pursuant to the Program. The Loan Account is
proprietary to MBNA and

Confidential treatment has been requested with respect to the omitted portions
of this exhibit. The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as [*]. A complete version of
this exhibit of this exhibit has been filed separately with the Securities and
Exchange Commission.

                                       1
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and will have the terms and features listed on Schedule A, as they may be
modified pursuant to Section 9 of this Agreement.

(g)  "Member" means any end-user purchaser or potential purchaser of PeoplePC
Products and/or other potential participants mutually agreed upon by PeoplePC
and MBN.

(h)  "Member Information" means demographic and other information concerning the
Members commonly collected by PeoplePC in its ordinary course of business, in
conjunction with an application for membership with PeoplePC.

(i)  "PeoplePC Products" means the personal computers and other products and
services created, provided or offered by PeoplePC, its employees, agents and
representatives and other items financed with a Loan Account, as mutually agreed
upon by the parties.

(j)  "Phase 1" means the initial period of this Agreement beginning on the
Effective Date and ending at 11:59 PM on March 20, 2000, or at an earlier date
as determined by PeoplePC and agreed to by MBNA.

(k)  "Pre-Effective Date Applications" means those applications for credit
submitted by Members prior to the Effective Date.

(l)  "Program" means the marketing, origination and processing of the Loan
Accounts and all related rights and obligations of PeoplePC and MBNA related
thereto as set forth in this Agreement.

(m)  "Referral Procedures" means the procedures provided by MBNA pursuant to
which Members interested in Loan Accounts will be referred to MBNA or otherwise
offered Loan Accounts, as the Procedures may be amended from time to time.

(n)  "Settlement Account" means a banking account designated by PeoplePC and
described on Schedule C hereto, to be used for receipt of certain Loan Account
proceeds.

(o)  "Trademarks" means any design, image, visual representation, logo, service
mark, trade dress, trade name, or trademark used or acquired by MBNA or
PeoplePC, as the case may be, during the term of this Agreement.

2.   TWO PHASE PROGRAM ROLL-OUT

The parties agree to make the Program available to Members in two separate
phases.

(a)  Phase 1: During Phase 1, MBNA shall approve only those Members with FICO
credit scores of [*] or higher (and which otherwise meet MBNA's credit approval
criteria), and shall decline all other Member applications for credit. For all
such applications approved by MBNA during Phase 1, MBNA shall offer a Loan
Account with an annual percentage rate of approximately 10.95% for PeoplePC
Product purchases, and PeoplePC shall pay to MBNA a discount payment equal to
the amount described on Schedule B (the "Phase 1 Discount") for such Loan
Account. The total aggregate Phase 1 Discount earned by MBNA each day shall be
offset on a daily basis against

*****Certain information on this page has been omitted and filed separately with
     the Securities and Exchange Commission. Confidential treatment has been
     requested with respect to the omitted portions.
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PeoplePC's Settlement Account. All other rights and obligations for the parties
otherwise set forth in this Agreement shall apply during Phase 1.

(b)  Post Phase 1:  After the completion of Phase 1, MBNA shall apply its then-
current standard Loan Account application decisioning strategies, as they may be
modified from time to time, in decisioning Member applications for credit
(including the use of a sliding scale of annual percentage rates based on credit
worthiness, among other things); provided, however, that Members with FICO
credit scores of [*] or higher (and which otherwise meet MBNA's credit approval
criteria) will be approved for a Loan Account with an APR of approximately
10.95% for PeoplePC Product purchases. MBNA shall notify PeoplePC of each such
member approved at such a rate and PeoplePC shall pay to MBNA a discount payment
equal to the amount described on Schedule B (the "Standard Discount") for such
Loan Account. The total aggregate Standard Discount earned by MBNA each day
shall be offset on a daily basis against PeoplePC's Settlement Account. All
other rights and obligations for the parties otherwise set forth in this
Agreement shall apply after Phase 1.

3.   MBNA RIGHT OF FIRST DECISION

(a)  Subject to subsection 3(b) below, PeoplePC shall refer one hundred percent
(100%) of its Members desiring financing to MBNA for initial decisioning (the
"Right of First Decision"). If a Loan Account application is declined by MBNA,
PeoplePC shall be free to refer the Member to a third party lender; provided
that MBNA has no obligation whatsoever to assist in such application referral,
and shall incur no expense in regard to any such application referral.

(b)  MBNA's Right of First Decision shall not be deemed to apply to the extent
that a PeoplePC affiliate offers consumer-purpose financing to Members of the
type offered by MBNA. In the event that any PeoplePC affiliate issues consumer-
purpose loans or lines of credit to Members, and such affiliate elects to sell
the portfolio of such accounts, in its ordinary course of business, then MBNA
shall have a right of first refusal to purchase that portfolio, the terms of
such a purchase and sale to be negotiated at that time. MBNA will notify
PeoplePC (or the seller if different from PeoplePC) of its intent to exercise
such right with thirty (30) days after MBNA's receipt of the notice of sale,
pursuant to Section 15(f) hereof.

4.   PROGRAM

(a)  Design and Administration:  Subject to PeoplePC's rights of prior approval
as otherwise set forth herein, MBNA shall design, develop and administer the
Program for the Members. The Program will offer Customers the right to request
additional advances on Loan Accounts. MBNA reserves the right to evaluate the
Program periodically to determine its compliance with applicable laws, rules and
regulations and make all adjustments to the Loan Accounts and the Program, as
deemed necessary and advisable by MBNA, or its legal advisors. For example, but
without limitation, MBNA may make adjustments to the Program to ensure that the
Loan Accounts are open-end lines of credit under the Truth In Lending Act, as
implemented by Regulation Z, and that the Loan Accounts offered under the
Program are not covered by the Federal Trade Commission's "Holder Rule" (16
C.F.R. (S)443).

*****Certain information on this page has been ommitted and filed
     separately with the Securities and Exchange Commission. Confidential
     treatment has been requested with respect to the omitted portions.
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(b)  PeoplePC Website Procedures / Notification of Decision: PeoplePC will
maintain the appropriate links and textual information on its website to
facilitate the submission of applications for Loan Accounts by the Members to
MBNA. For each Completed Application decisioned by MBNA utilizing MBNA's then-
current instant decisioning tool, MBNA shall promptly notify PeoplePC of the
final credit decision.

(c)  PeoplePC Product Marketing; Publicity: In connection with the promotion,
offer or sale of PeoplePC Products, PeoplePC may refer to MBNA, the Program, or
the Loan Accounts, provided, however, that should any PeoplePC Product
advertising, solicitation or other materials make such reference, MBNA shall
have the right of prior approval over all such materials, such approval not to
be unreasonably withheld or delayed. PeoplePC shall provide MBNA with prompt
and, where practicable, prior notice of all other publicity dealing with the
Program and/or Loan Accounts (including, for example, press interviews) and all
such publicity shall be accurate and consistent with the then-current materials
provided or approved by MBNA.  All such marketing and publicity shall be at
PeoplePC's sole cost and expense. Notwithstanding the above, PeoplePC may
respond to individual inquiries about the Program from Members on an individual
basis, provided that said responses are accurate and consistent with the then-
current materials provided or approved by MBNA. Any correspondence received by
PeoplePC that is intended for MBNA (e.g., payments, billing inquiries, etc.)
shall be forwarded to MBNA via overnight courier within two business days of
receipt.  All charges incurred for this service will be paid by MBNA.

(d)  Educational and Loan Account Materials: If MBNA and PeoplePC agree to
develop special marketing, educational or background materials, MBNA and
PeoplePC shall develop such materials jointly. Both MBNA and PeoplePC shall have
the right of prior approval over the final version of all such materials, such
approval not to be unreasonably withheld.

(e)  Compliance with Applicable Law: Subject to its right to review the website
or other PeoplePC-controlled media whereby Loan Accounts are offered to Members
or other consumers, and provided that PeoplePC has notified MBNA of website
changes, MBNA shall be responsible for ensuring that the Loan Accounts are
offered and processed in compliance with all applicable federal and state law.
PeoplePC agrees to comply with MBNA's instructions regarding the offering and
processing of Loan Accounts. Further, PeoplePC shall ensure that each of its
employees, agents or representatives and all other persons who assist with
offering or processing of Loan Accounts are educated and knowledgeable regarding
the Referral Procedures, Loan Accounts and the laws, rules and regulations
applicable to the offering and processing of Loan Accounts, and comply with the
same. MBNA may monitor or test any credit solicitation process by PeoplePC
employees, agents or representatives, including through off-site listening as
permitted by law.

(f)  Settlement of Loan Accounts: Payment of funds owing to PeoplePC as the
result of PeoplePC Products financed by Loan Accounts shall be handled in the
following manner. PeoplePC shall transmit to MBNA each day, but not more than
once daily, to MBNA Hallmark Information Systems, Inc., (or other entity
designated by MBNA) a settlement file pertaining to purchases made on Loan
Accounts containing account number, amount of transaction, transaction date, and
name and address of Customer and other agreed upon information. PeoplePC shall
delay submission of each settlement file to MBNA until the corresponding
PeoplePC Products have been shipped to the

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Customer. Provided PeoplePC submits settlement files as described above, MBNA
shall credit the Settlement Account described on Schedule C hereto within (i)
six (6) business days after MBNA's receipt of such settlement file for
settlement pertaining to Completed Applications submitted in the direct
marketing channel, and (ii) three (3) business days after MBNA's receipt of such
settlement file for settlement pertaining to Completed Applications submitted in
the internet marketing channel. The parties agree that MBNA's occasional
deviation from these settlement times shall not constitute a material breach of
this Agreement. For purposes of the prior sentence, "occasional deviation" shall
mean not more frequently than five (5) occurrences in any given two-month period
(beginning with the March/April 2000 period, followed by the May/June 2000
period, etc.), of MBNA's delaying settlement transmission. MBNA may deduct from
the Settlement Account any amounts already credited which related to the
Customer's legitimate rejection of the Loan Accounts, as permitted pursuant to
federal law, rule or regulation.

(g)  MBNA Customer Service Performance Standards:  MBNA shall provide services
to the Customers in accordance with MBNA's standard policies and practices in
effect from time to time.

5.   CREDIT INFORMATION AND MEMBER INFORMATION

(a)  The parties acknowledge and agree that Credit Information is confidential
and proprietary to MBNA and that Membership Information is confidential and
proprietary to PeoplePC. Both parties disclaim any property right or interest in
confidential information that is the property of the other party. MBNA and
PeoplePC agree, subject to restrictions which may now or in the future be
imposed by applicable law, that they may share such information with the other
for the purpose of marketing products and services to the Customers. Both
parties agree that any such confidential information belonging to the other
party coming into the possession of the non-owner party shall be held in
absolute and strict confidence and shall not be shared, copied, sold or
transferred to any other person in any manner whatsoever. Both parties agree to
use such confidential information, regardless of which party may own such
information, in a manner consistent with that party's respective privacy policy.

(b)  MBNA and PeoplePC acknowledge and agree that, from time to time, either
party may, in the operation of the Program, use the other party's confidential
information. MBNA and PeoplePC agree that such use is limited to purposes
directly necessary to the non-owner party's performance under this Agreement or
as the owner party permits in writing. Both parties agree to comply with the
reasonable request of the other party with respect to security procedures to
maintain the confidentiality of the Credit Information and the Membership
Information, including providing reasonable training and oversight of employees,
agents and/or representatives who have access to such information.
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6.   TRADEMARKS

PeoplePC and MBNA each hereby grants the other party a limited, exclusive
license to use its Trademarks solely in conjunction with the Program, including
the promotion thereof, as evidenced by the granting party's prior written
approval of any use of a Trademark pursuant to Sections 4(c)-(e).  The
Trademarks may not be used by any other person for any other reason except as
specifically approved for the Program.  This license shall remain in effect for
the duration of this Agreement, and shall apply to the Trademarks,
notwithstanding the transfer of such Trademarks by operation of law or otherwise
to any permitted successor, corporation, organization or individual.  Nothing in
this Agreement prohibits PeoplePC or MBNA from granting to other persons a
license to use the Trademarks in conjunction with the providing of any other
service or product.

7.   DISPUTES AND REFUNDS.

(a)  PeoplePC Responsibilities: PeoplePC shall promptly resolve Member disputes
regarding PeoplePC, including any objection by a Customer to repayment of a Loan
Account, whether arising directly or indirectly through MBNA or PeoplePC, and
shall do so in a manner in satisfaction of applicable laws, rules and
regulations.

(b)  MBNA Responsibilities: MBNA shall promptly resolve Customer disputes
regarding the grant or denial of an application for a Loan Account by MBNA,
whether arising directly or indirectly through MBNA or PeoplePC, in a manner in
satisfaction of applicable laws, rules and regulations.

(c)  Mutual Responsibilities: In the event a Customer dispute encompasses
matters set forth in both subsections (a) and (b) above, PeoplePC and MBNA shall
use their reasonable efforts to jointly resolve such complaint.

(d)  Refunds/Finance Charges: MBNA acknowledges and agrees that PeoplePC permits
Members to cancel their memberships and obtain a full refund of the membership
fee within 7 days of becoming a Member. PeoplePC does not permit any
cancellation or return by a Member after the expiration of that 7-day period for
disputes related to the quality of the PeoplePC Products. In the event of such
refunds, PeoplePC will remit any funds that it has received from the canceling
Customer directly to that Customer. Notwithstanding the above, MBNA reserves the
right to charge back to PeoplePC the unpaid balance (plus accrued but unpaid
fees and finance charges) of any Loan Account for which PeoplePC has failed to
respond to MBNA regarding the PeoplePC decision for each Member dispute, as such
obligation is set forth in 6(a) above, within 45 days from the date the dispute
arose.

(e)  PeoplePC Product Disputes: If Customers refuse to pay any amounts owing
under a Loan Account due to legitimate, bona fide disputes about the ready
availability of services or the fitness of goods constituting the PeoplePC
Products, MBNA may from time to time provide information to PeoplePC regarding
such disputes.  PeoplePC shall research the disputes and provide prompt feedback
to MBNA on the disputes.  PeoplePC and MBNA shall negotiate in good faith to
reduce the incidence and severity of such disputes.  If the incidence and
severity of the disputes are unacceptable to MBNA in its reasonable business
judgment, and PeoplePC does not cure such disputes within forty
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five (45) days after receipt of notice from MBNA about such disputes, then MBNA
reserves the right to terminate the Program upon forty five (45) days prior
notice to PeoplePC.

8.   REPRESENTATIONS AND WARRANTIES

(a)  Mutual Representations: PeoplePC and MBNA each represents and warrants to
the other that as of the Effective Date and throughout the term of this
Agreement:

     1.   It is duly organized, validly existing and in good standing.

     2.   It has all necessary power and authority to execute and deliver this
          Agreement and to perform its obligations under this Agreement.

     3.   This Agreement constitutes a legal, valid and binding obligation of
          such party, enforceable against such party in accordance with its
          terms, except as such enforceability may be limited by bankruptcy,
          insolvency, receivership, reorganization or other similar laws
          affecting the enforcement of creditors' rights generally and by
          general principles of equity.

     4.   No consent, approval or authorization from any third party is required
          in connection with the execution, delivery and performance of this
          Agreement, except such as have been obtained and are in full force and
          effect.

     5.   The execution, delivery and performance of this Agreement by such
          party will not constitute a violation of any law, rule, regulation,
          court order or ruling applicable to such party.

     6.   It is currently meeting scheduled events with regard to its formulated
          plan to remediate any problems or issues arising from the Year 2000
          Problem. The Year 2000 Problem as used herein means any significant
          risk that computer hardware or software used in the receipt,
          transmission, processing, manipulation, storage, retrieval,
          retransmission or other utilization of data or in the operation of
          mechanical or electrical systems of any kind will not, in the case of
          dates or time periods occurring after December 31, 1999, function as
          effectively as in the case of dates or time periods occurring prior to
          January 1, 2000.

     7.   It has the right and power to license its Trademarks to the other
          party for use as contemplated by this Agreement.

(b)  PeoplePC Representations: PeoplePC additionally represents and warrants to
MBNA that  as the Effective Date and throughout the term of the Agreement:

     1.   It will comply in all material respects with the PeoplePC corporate
          fraud policy (attached hereto as Exhibit 3) and will give MBNA 60 days
          prior notice of any change to such fraud policy.

     2.   It will comply in all material respects with any contract or terms of
          sale with the Customer and the terms of any warranty liability,
          express or implied, applicable to the PeoplePC Products financed or
          otherwise offered in connection with the Program
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     3.   All applications, agreements and other materials used for the Program
          shall be those supplied by MBNA specifically for the Program, and
          PeoplePC shall not have any knowledge of any material misstatements or
          omissions in any application submitted for a credit decision.

     4.   All applications will be available to the public: (i) without regard
          to race, color, religion, national origin, sex, marital status, or age
          (provided the applicant has the capacity to enter into a binding
          contract) and (ii) not in any manner which would discriminate against
          an applicant or discourage an applicant from applying for a Loan
          Account.

     5.   Financing will be made available only to consumers for personal,
          family or household purposes, and that no defense, set off, or
          counterclaim exists as to the sale of the PeoplePC Products as a
          result of any act or omission of PeoplePC or its employees or agents.

     6.   PeoplePC has no obligation (whether arising out of contract or
          otherwise) to refer any Pre-Effective Date Application(s) to any third
          party lender, and has no knowledge of any reason why MBNA would incur
          any loss, liability, damage, expense, cause of action or claim (other
          than standard credit risk typically associated with MBNA's business)
          with regard to MBNA's decisioning the Pre-Effective Date Applications.

9.   PROGRAM ADJUSTMENTS

A summary of the current features of the Program is set forth in Schedule A.
MBNA reserves the right to make periodic adjustments to the Program and its
terms and features and shall give PeoplePC reasonable notice of any such
material adjustments.  Delaware and applicable federal law currently require
each open-end credit account Customer be given the opportunity to reject a
proposed change and pay the existing balance under the prior terms if the
proposed adjustment increases the annual percentage rate on such account.

10.  CROSS INDEMNIFICATION

PeoplePC and MBNA each will indemnify and hold harmless the other party, its
directors, officers, agents, employees, affiliates, insurers, successors and
assigns (the "Indemnitees") from and against any and all loss, liability,
damage, expense, cause of action, claim, and the reasonable and actual costs
incurred in connection therewith ("Losses"), resulting from the material breach
of this Agreement by PeoplePC or MBNA, respectively as the case may be, or its
directors, officers or employees.  PeoplePC will indemnify and hold harmless
MBNA and its Indemnitees from and against any and all Losses arising from (i)
any actual or alleged damages to any person or property arising from any
PeoplePC Product; (ii) acts of fraud perpetrated by any Member in connection
with a Loan Account application and acts of fraud by PeoplePC or its employees
or agents, and (iii) the Pre-Effective Date Applications.  Each party shall
promptly notify the other party in the manner
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provided herein upon learning of any claims or complaints that may reasonably
result in the indemnification by the other party.

11.  CONFIDENTIALITY OF AGREEMENT

The terms of this Agreement, any proposal, financial information and proprietary
information provided by or on behalf of one party to the other party prior to,
contemporaneously with, or subsequent to, the execution of this Agreement
("Information") are confidential as of the date of disclosure.  Such Information
will not be disclosed by such other party to any other person or entity, except
as permitted under this Agreement or as mutually agreed in writing.  MBNA and
PeoplePC shall be permitted to disclose such Information (i) to their
accountants, legal, financial and marketing advisors, and employees as necessary
for the performance of their respective duties, provided that said persons agree
to treat the Information as confidential in the above described manner and (ii)
as required by law or by any governmental regulatory authority.

12.  STATE LAW GOVERNING AGREEMENT

This Agreement shall be governed by and subject to the laws of the State of
Delaware (without regard to its conflict of laws principles) and shall be deemed
for all purposes to be made and fully performed in Delaware.

13.  TERMINATION

(a)  Breach; Notice; Cure: In the event of any material breach of this Agreement
by MBNA or PeoplePC, the other party may terminate this Agreement by giving
notice, as provided herein, to the breaching party. This notice shall (i)
describe the material breach; and (ii) state the party's intention to terminate
this Agreement. If the breaching party does not cure or substantially cure such
breach within forty five (45) days after receipt of notice, as provided herein
(the "Cure Period"), then this Agreement shall terminate forty five (45) days
after the Cure Period.

(b)  Mutual Termination Right: Either party shall have the right to terminate
this Agreement upon ninety days prior written notice to the other; provided,
however, that PeoplePC shall not be entitled to exercise this right of
termination until such time as MBNA has received a minimum of [*] Completed
Applications generated through marketing channels approved by MBNA (such as the
internet), exclusive of the Pre-Effective Date Applications.

(c)  Insolvency: If either MBNA or PeoplePC becomes insolvent in that its
liabilities exceed its assets, or is adjudicated insolvent, or take advantage of
or is subject to any insolvency proceeding, or makes an assignment for the
benefit of creditors or is subject to receivership, conservatorship or
liquidation then the other party may immediately terminate this Agreement.

(d)  Effect on Trademarks: Upon termination of this Agreement, each party shall,
in a manner consistent with this Section of this Agreement, cease to use the
other party's Trademarks. Each party agrees that upon such termination it will
not claim any right, title, or interest in or to the Trademarks provided
pursuant to this Agreement. However, each party may conclude all solicitation
that is required by law.

*****Certain information on this page has been omitted and filed separately with
     the Securities and Exchange Commission. Confidential treatment has been
     requested with respect to the omitted portions.
<PAGE>

(e)  MBNA Right of Prior Review:  MBNA shall have the right to prior review and
approval of any notice in connection with, relating or referring to the
termination of this Agreement to be communicated by PeoplePC to the Members.
Such approval shall not be unreasonably withheld. Upon termination of this
Agreement, PeoplePC shall not attempt to cause the removal of the PeoplePC
identification or Trademarks from any Customer's checks or records existing as
of the effective date of the termination of this Agreement

14.  LIMITATION OF LIABILITY

IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY SPECULATIVE,
INDIRECT, SPECIAL, OR PUNITIVE DAMAGES, INCLUDING BUT NOT LIMITED TO LOST
PROFITS OR LOST REVENUE, EVEN IF ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH
DAMAGES, IN CONNECTION WITH PERFORMANCE UNDER THIS AGREEMENT.

15.  MISCELLANEOUS

(a)  This Agreement cannot be amended except by written agreement signed by the
authorized agents of both parties hereto.

(b)  The obligations in Sections 2 (only with regard to PeoplePC's obligation to
pay a discount to MBNA for Loan Accounts approved at approximately 10.95%);
3(b), 4(c), 5, 7, 10, 11, 12, 13(d), 13(e), and 14 shall survive any termination
of this Agreement.

(c)  The failure of any party to exercise any rights under this Agreement shall
not be deemed a waiver of such right or any other rights.

(d)  The section captions are inserted only for convenience and are in no way to
be construed as part of this Agreement.

(e)  If any part of this Agreement shall for any reason be found or held invalid
or unenforceable by any court or governmental agency of competent jurisdiction,
such invalidity or unenforceability shall not affect the remainder of this
Agreement which shall survive and be construed as if such invalid or
unenforceable part had not been contained herein.

(f)  All notices relating to this Agreement shall be in writing and shall be
deemed given (i) upon receipt by hand delivery, facsimile or overnight courier,
or (ii) three (3) business days after mailing by registered or certified mail,
postage prepaid, return receipt requested. All notices shall be addressed as
follows:
<PAGE>

(1) If to PeoplePC:                       (2) If to MBNA:

        PeoplePC, Inc.                           MBNA America Bank, N. A.
        100 Pine Street, Suite 1100              400 Christiana Road, MS 1522
        San Francisco, CA 94108                  Newark, Delaware 19713
        Attention:  Dan Kohler                   Attention:  Ann Balthis
        Title  Chief Operating Officer           Title:  Director, Sales Finance
        Fax #: (415) 837-3857                    Fax #:  (302) 458-3516

Any party may change the address to which communications are to be sent by
giving notice, as provided herein, of such change of address.

(g)  This Agreement contains the entire agreement of the parties with respect to
the matters covered herein and supersedes all prior promises and agreements,
written or oral, with respect to the matters covered herein. Without the prior
written consent of MBNA, which shall not be unreasonably withheld, PeoplePC may
not assign any of its rights or obligations under or arising from this
Agreement. MBNA may assign or transfer its rights and/or obligations under this
Agreement without the written consent of PeoplePC, and shall give PeoplePC
notice of any such assignment or transfer.

(h)  MBNA and PeoplePC are not agents, representatives or employees of each
other and neither party shall have the power to obligate or bind the other in
any manner except as otherwise expressly provided by this Agreement.

(i)  Nothing expressed or implied in this Agreement is intended or shall be
construed to confer upon or give any person other than PeoplePC and MBNA, their
successors and assigns, any rights or remedies under or by reason of this
Agreement.

(j)  Neither party shall be in breach hereunder by reason of its delay in the
performance of or failure to perform any of its obligations herein if such delay
or failure is caused by strikes, acts of God or the public enemy, riots,
incendiaries, interference by civil or military authorities, or compliance with
governmental laws, rules, regulations.

(k)  This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
<PAGE>

IN WITNESS WHEREOF, each of the parties, by its representative, has executed
this Agreement as of the Effective Date.

     MBNA AMERICA BANK, N.A.                     PEOPLEPC, INC.

By:       /s/ Thomas W. Horne              By:       /s/ Nick Grouf

Name:     Thomas W. Horne                  Name:     Nick Grouf

Title:    SEVP                             Title:    CEO

Date:     February 29, 2000                Date:     February 29, 2000
<PAGE>

                                  SCHEDULE A

TERMS AND FEATURES

Subject to (i) MBNA's right to vary the Program and its terms and features, and
(ii) the applicable agreement entered into between MBNA and each Customer:

LOAN ACCOUNTS

     1.   There is no annual fee.

     2.   The current APR may be as low as approximately 10.95%; individual
          customers may receive a higher rate up to 26.99% depending on income
          and creditworthiness.

     3.   The accounts may be used for any bona fide purpose, except it cannot
          be used solely to payoff or paydown another MBNA account.

     4.   Additional advances may be requested at any time.

     5.   Customers may be offered other benefits under the Program, such as
          credit insurance and travel services.
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                                  SCHEDULE B

                             FINANCIAL ARRANGEMENT

I.  Phase 1 Discount: For all Customers approved by MBNA at an APR of
approximately  10.95%, PeoplePC shall subsidize the APR with a discount to MBNA
as follows:

     [*] of the total U.S. Dollar amount of the initial PeoplePC Product
          purchase(s) made by Customers directly to Loan Accounts and processed
          via deposit into the Settlement Account.

II. Standard Discount: For all Customers approved by MBNA at an APR of
approximately 10.95%, PeoplePC shall subsidize the APR with a discount to MBNA
as follows:

     An amount calculated by subtracting [*] from the Prime Rate (as published
     in The Wall Street Journal on the last day of the preceding calendar
     quarter) multiplied by the total U.S. Dollar amount of the initial PeoplePC
     Product purchase(s) made by Customers directly to Loan Accounts and
     processed via deposit into the Settlement Account.  If the Prime Rate drops
     to or below [*], then during each such time that the Prime Rate is at or
     below [*], PeoplePC's obligations to pay a discount to MBNA as set forth
     above shall be suspended.

*****Certain information on this page has been omitted and filed with the
     Securities and Exchange Commission. Confidential treatment has been
     requested with respect to the omitted portions.
<PAGE>

                                  SCHEDULE C

               SETTLEMENT INFORMATION for all ACH transmissions

Name of Account Holder:    ______________

Name of Bank:              ______________

Account #:                 ______________

ABA #:                     ______________
<PAGE>

                                  SCHEDULE D

            Attach IRS Form W-9 which has been executed by PeoplePC
<PAGE>

                                   EXHIBIT 1

Capitalized but undefined terms used on this Exhibit 1 shall have the meanings
given them in the relevant documentation between PeoplePC and each Member.

Part 1

Policy Statement

PeoplePC will protect customers from entry and use of fraudulent information by
other individuals.

Policy Guidelines

Customer information that is collected for membership application will be
verified at several points in the application process.

Process
     1.   Customer credit information (Name, Address, social security, employer,
          annual income) will be used to run a credit check for customers
          applying for the PeoplePC Monthly Payment Plan. This will serve as
          verification that the person whose information was submitted for
          application is the person who applied for membership. If the credit
          check fails, the customer information will not be processed for the
          monthly membership plan.
     2.   Upon delivery a signature is required and captured by the delivery
          service to be used for verification that the order was received by the
          appropriate person.

Part 2

Policy Statement

PeoplePC will protect customer information that is resident in the PeoplePC
systems.

Policy Guidelines

Access to the system housing member information will be limited and regulated.

Procedure
     1.   All call center representatives and PeoplePC employees must have a
          certificate installed on their desktop computer in order to access the
          PeoplePC OrderSupport system.
     2.   Change made to member records in the Order Support Site are updated in
          the PeoplePC database.
<PAGE>

     3.   Distribution center employees do not have direct access to the
          PeoplePC OrderSupport System. Their access to information is through
          the distribution center system. Only name, address, and member number
          are available.
     4.   Returns to PeoplePC are regulated by the distributor and PeoplePC
          Headquarters. Returns are not accepted without an RMA and credits for
          returned systems are not given without verification that the system
          has been received.<PAGE>

                                                                    EXHIBIT 10.5

                                 PEOPLEPC INC.

                           INDEMNIFICATION AGREEMENT

     This Indemnification Agreement ("Agreement") is entered into as of the ___
day of ______________, 2000 by and between PeoplePC Inc. a Delaware corporation
(the "Company") and  _________________ ("Indemnitee").

                                   RECITALS
                                   --------

     A.  The Company and Indemnitee recognize the continued difficulty in
obtaining liability insurance for its directors, officers, employees, agents and
fiduciaries, the significant increases in the cost of such insurance and the
general reductions in the coverage of such insurance.

     B.  The Company and Indemnitee further recognize the substantial increase
in corporate litigation in general, subjecting directors, officers, employees,
agents and fiduciaries to expensive litigation risks at the same time as the
availability and coverage of liability insurance has been severely limited.

     C.  Indemnitee does not regard the current protection available as adequate
under the present circumstances, and Indemnitee and other directors, officers,
employees, agents and fiduciaries of the Company may not be willing to continue
to serve in such capacities without additional protection.

     D.  The Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and, in part, in
order to induce Indemnitee to continue to provide services to the Company,
wishes to provide for the indemnification and advancing of expenses to
Indemnitee to the maximum extent permitted by law.

     E.  In view of the considerations set forth above, the Company desires that
Indemnitee be indemnified by the Company as set forth herein.

     NOW, THEREFORE, the Company and Indemnitee hereby agree as follows:

     1.  Indemnification.
         ---------------

         (a)  Indemnification of Expenses.  The Company shall indemnify
              ---------------------------
Indemnitee to the fullest extent permitted by law if Indemnitee was or is or
becomes a party to or witness or other participant in, or is threatened to be
made a party to or witness or other participant in, any threatened, pending or
completed action, suit, proceeding or alternative dispute resolution mechanism,
or any hearing, inquiry or investigation that Indemnitee in good faith believes
might lead to the institution of any such action, suit, proceeding or
alternative dispute resolution mechanism, whether civil, criminal,
administrative, investigative or other (hereinafter a "Claim") by reason of (or
arising in part out of) any event or occurrence related to the fact that
Indemnitee is or was a director, officer, employee, agent or fiduciary of the
Company, or any subsidiary of the Company, or is or was serving at the
<PAGE>

request of the Company as a director, officer, employee, agent or fiduciary of
another corporation, partnership, joint venture, trust or other enterprise, or
by reason of any action or inaction on the part of Indemnitee while serving in
such capacity (hereinafter an "Indemnifiable Event") against any and all
expenses (including attorneys' fees and all other costs, expenses and
obligations incurred in connection with investigating, defending, being a
witness in or participating in (including on appeal), or preparing to defend, be
a witness in or participate in, any such action, suit, proceeding, alternative
dispute resolution mechanism, hearing, inquiry or investigation), judgments,
fines, penalties and amounts paid in settlement (if such settlement is approved
in advance by the Company, which approval shall not be unreasonably withheld) of
such Claim and any federal, state, local or foreign taxes imposed on Indemnitee
as a result of the actual or deemed receipt of any payments under this Agreement
(collectively, hereinafter "Expenses"), including all interest, assessments and
other charges paid or payable in connection with or in respect of such Expenses.
Such payment of Expenses shall be made by the Company as soon as practicable but
in any event no later than five days after written demand by Indemnitee therefor
is presented to the Company.

         (b)  Reviewing Party.  Notwithstanding the foregoing, (i) the
              ---------------
obligations of the Company under Section 1(a) shall be subject to the condition
that the Reviewing Party (as described in Section 10(e) hereof) shall not have
determined (in a written opinion, in any case in which the Independent Legal
Counsel referred to in Section 1(c) hereof is involved) that Indemnitee would
not be permitted to be indemnified under applicable law, and (ii) the obligation
of the Company to make an advance payment of Expenses to Indemnitee pursuant to
Section 2(a) (an "Expense Advance") shall be subject to the condition that, if,
when and to the extent that the Reviewing Party determines that Indemnitee would
not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the
Company) for all such amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Party
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance until a final judicial determination is made
with respect thereto (as to which all rights of appeal therefrom have been
exhausted or lapsed). Indemnitees' obligation to reimburse the Company for any
Expense Advance shall be unsecured and no interest shall be charged thereon. If
there has not been a Change in Control (as defined in Section 10(c) hereof), the
Reviewing Party shall be selected by the Board of Directors, and if there has
been such a Change in Control (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 1(c) hereof. If there has been
no determination by the Reviewing Party or if the Reviewing Party determines
that Indemnitee substantively would not be permitted to be indemnified in whole
or in part under applicable law, Indemnitee shall have the right to commence
litigation seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, including the legal
or factual bases therefor, and the Company hereby consents to service of process
and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.

                                      -2-
<PAGE>

         (c)  Change in Control.  The Company agrees that if there is a Change
              -----------------
in Control of the Company (other than a Change in Control which has been
approved by a majority of the Company's Board of Directors who were directors
immediately prior to such Change in Control) then, with respect to all matters
thereafter arising concerning the rights of Indemnitees to payments of Expenses
and Expense Advances under this Agreement or any other agreement or under the
Company's Certificate of Incorporation or Bylaws as now or hereafter in effect,
Independent Legal Counsel (as defined in Section 10(d) hereof) shall be selected
by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to what extent
Indemnitee would be permitted to be indemnified under applicable law and the
Company agrees to abide by such opinion. The Company agrees to pay the
reasonable fees of the Independent Legal Counsel referred to above and to fully
indemnify such counsel against any and all expenses (including attorneys' fees),
claims, liabilities and damages arising out of or relating to this Agreement or
its engagement pursuant hereto.

         (d)  Mandatory Payment of Expenses.  Notwithstanding any other
              -----------------------------
provision of this Agreement other than Section 9 hereof, to the extent that
Indemnitee has been successful on the merits or otherwise, including, without
limitation, the dismissal of an action without prejudice, in defense of any
action, suit, proceeding, inquiry or investigation referred to in Section (1)(a)
hereof or in the defense of any claim, issue or matter therein, Indemnitee shall
be indemnified against all Expenses incurred by Indemnitee in connection
therewith.

     2.  Expenses; Indemnification Procedure.
         -----------------------------------

         (a)  Advancement of Expenses.  The Company shall advance all Expenses
              -----------------------
incurred by Indemnitee. The advances to be made hereunder shall be paid by the
Company to Indemnitee as soon as practicable but in any event no later than five
days after written demand by Indemnitee therefor to the Company.

         (b)  Notice/Cooperation by Indemnitee.  Indemnitee shall, as a
              --------------------------------
condition precedent to Indemnitees' right to be indemnified under this
Agreement, give the Company notice in writing as soon as practicable of any
Claim made against Indemnitee for which indemnification will or could be sought
under this Agreement. Notice to the Company shall be directed to the Chief
Executive Officer of the Company at the address shown on the signature page of
this Agreement (or such other address as the Company shall designate in writing
to Indemnitee). In addition, Indemnitee shall give the Company such information
and cooperation as it may reasonably require and as shall be within Indemnitees'
power.

         (c)  No Presumptions; Burden of Proof.  For purposes of this
              --------------------------------
Agreement, the termination of any Claim by judgment, order, settlement (whether
with or without court approval) or conviction, or upon a plea of nolo
                                                                 ----
contendere, or its equivalent, shall not create a presumption that Indemnitee
----------
did not meet any particular standard of conduct or have any particular belief or
that a court has determined that indemnification is not permitted by applicable
law. In addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of
conduct or had any particular belief, nor an actual determination by the

                                      -3-
<PAGE>

Reviewing Party that Indemnitee has not met such standard of conduct or did not
have such belief, prior to the commencement of legal proceedings by Indemnitee
to secure a judicial determination that Indemnitee should be indemnified under
applicable law, shall be a defense to Indemnitee's claim or create a presumption
that Indemnitee has not met any particular standard of conduct or did not have
any particular belief. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified
hereunder, the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.

         (d)  Notice to Insurers.  If, at the time of the receipt by the
              ------------------
Company of a notice of a Claim pursuant to Section 2(b) hereof, the Company has
liability insurance in effect which may cover such Claim, the Company shall give
prompt notice of the commencement of such Claim to the insurers in accordance
with the procedures set forth in the respective policies. The Company shall
thereafter take all necessary or desirable action to cause such insurers to pay,
on behalf of Indemnitee, all amounts payable as a result of such action, suit,
proceeding, inquiry or investigation in accordance with the terms of such
policies.

         (e)  Selection of Counsel.  In the event the Company shall be obligated
              --------------------
hereunder to pay the Expenses of any Claim, the Company shall be entitled to
assume the defense of such Claim with counsel approved by Indemnitee, which
approval shall not be unreasonably withheld, upon the delivery to Indemnitee of
written notice of its election so to do. After delivery of such notice, approval
of such counsel by Indemnitee and the retention of such counsel by the Company,
the Company will not be liable to Indemnitee under this Agreement for any fees
of counsel subsequently incurred by Indemnitee with respect to the same Claim;
provided that, (i) Indemnitee shall have the right to employ Indemnitees'
counsel in any such Claim at Indemnitee expense and (ii) if (A) the employment
of counsel by Indemnitee has been previously authorized by the Company, (B)
Indemnitee shall have reasonably concluded that there is a conflict of interest
between the Company and Indemnitee in the conduct of any such defense, or (C)
the Company shall not continue to retain such counsel to defend such Claim, then
the fees and expenses of Indemnitee counsel shall be at the expense of the
Company. The Company shall have the right to conduct such defense as it sees fit
in its sole discretion, including the right to settle any claim against
Indemnitee without the consent of the Indemnitee.

     3.  Additional Indemnification Rights; Nonexclusivity.
         -------------------------------------------------

         (a)  Scope.  The Company hereby agrees to indemnify Indemnitee to the
              -----
fullest extent permitted by law, notwithstanding that such indemnification is
not specifically authorized by the other provisions of this Agreement, the
Company's Certificate of Incorporation, the Company's Bylaws or by statute. In
the event of any change after the date of this Agreement in any applicable law,
statute or rule which expands the right of a Delaware corporation to indemnify a
member of its Board of Directors or an officer, employee, agent or fiduciary, it
is the intent of the parties hereto that Indemnitee shall enjoy by this
Agreement the greater benefits afforded by such change. In the event of any
change in any applicable law, statute or rule which narrows the right of a
Delaware corporation to indemnify a member of its Board of Directors or an
officer, employee, agent or fiduciary, such change, to the extent not otherwise
required by such law, statute or rule to be applied to this

                                      -4-
<PAGE>

Agreement, shall have no effect on this Agreement or the parties' rights and
obligations hereunder except as set forth in Section 8(a) hereof.

         (b)  Nonexclusivity.  The indemnification provided by this Agreement
              --------------
shall be in addition to any rights to which Indemnitee may be entitled under the
Company's Certificate of Incorporation, its Bylaws, any agreement, any vote of
stockholders or disinterested directors, the General Corporation Law of the
State of Delaware, or otherwise. The indemnification provided under this
Agreement shall continue as to Indemnitee for any action Indemnitee took or did
not take while serving in an indemnified capacity even though Indemnitee may
have ceased to serve in such capacity.

     4.  No Duplication of Payments.  The Company shall not be liable under this
         --------------------------
Agreement to make any payment in connection with any Claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under any insurance policy, Certificate of Incorporation, Bylaw or otherwise)
of the amounts otherwise indemnifiable hereunder.

     5.  Partial Indemnification.  If Indemnitee is entitled under any
         -----------------------
provision of this Agreement to indemnification by the Company for some or a
portion of Expenses incurred in connection with any Claim, but not, however, for
all of the total amount thereof, the Company shall nevertheless indemnify
Indemnitee for the portion of such Expenses to which Indemnitee are entitled.

     6.  Mutual Acknowledgement.  Both the Company and Indemnitee acknowledge
         ----------------------
that in certain instances, Federal law or applicable public policy may prohibit
the Company from indemnifying its directors, officers, employees, agents or
fiduciaries under this Agreement or otherwise. Indemnitee understands and
acknowledges that the Company has undertaken or may be required in the future to
undertake with the Securities and Exchange Commission to submit the question of
indemnification to a court in certain circumstances for a determination of the
Company's right under public policy to indemnify Indemnitee.

     7.  Liability Insurance.  To the extent the Company maintains liability
         -------------------
insurance applicable to directors, officers, employees, agents or fiduciaries,
Indemnitee shall be covered by such policies in such a manner as to provide
Indemnitee the same rights and benefits as are accorded to the most favorably
insured of the Company's directors, if Indemnitee is a director; or of the
Company's officers, if Indemnitee is not a director of the Company but is an
officer; or of the Company's key employees, agents or fiduciaries, if Indemnitee
is not an officer or director but is a key employee, agent or fiduciary.

     8.  Exceptions.  Any other provision herein to the contrary
         ----------
notwithstanding, the Company shall not be obligated pursuant to the terms of
this Agreement:

         (a)  Excluded Action or Omissions.  To indemnify Indemnitee for
              ----------------------------
Indemnitee's acts, omissions or transactions from which Indemnitee or the
Indemnitee may not be relieved of liability under applicable law;

                                      -5-
<PAGE>

         (b)  Claims Initiated by Indemnitee.  To indemnify or advance expenses
              ------------------------------
to Indemnitee with respect to Claims initiated or brought voluntarily by
Indemnitee and not by way of defense, except (i) with respect to actions or
proceedings brought to establish or enforce a right to indemnification under
this Agreement or any other agreement or insurance policy or under the Company's
Certificate of Incorporation or Bylaws now or hereafter in effect relating to
Claims for Indemnifiable Events, (ii) in specific cases if the Board of
Directors has approved the initiation or bringing of such Claim, or (iii) as
otherwise required under Section 145 of the Delaware General Corporation Law,
regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may
be;

         (c)  Lack of Good Faith.  To indemnify Indemnitee for any expenses
              ------------------
incurred by Indemnitee with respect to any proceeding instituted by Indemnitee
to enforce or interpret this Agreement, if a court of competent jurisdiction
determines that each of the material assertions made by Indemnitee in such
proceeding was not made in good faith or was frivolous; or

         (d)  Claims Under Section 16(b).  To indemnify Indemnitee for expenses
              --------------------------
and the payment of profits arising from the purchase and sale by Indemnitee of
securities in violation of Section 16(b) of the Securities Exchange Act of 1934,
as amended, or any similar successor statute.

     9.  Period of Limitations.  No legal action shall be brought and no cause
         ---------------------
of action shall be asserted by or in the right of the Company against
Indemnitee, Indemnitee's estate, spouse, heirs, executors or personal or legal
representatives after the expiration of two years from the date of accrual of
such cause of action, and any claim or cause of action of the Company shall be
extinguished and deemed released unless asserted by the timely filing of a legal
action within such two-year period; provided, however, that if any shorter
                                    --------  -------
period of limitations is otherwise applicable to any such cause of action, such
shorter period shall govern.

     10. Construction of Certain Phrases.
         -------------------------------

         (a)  For purposes of this Agreement, references to the "Company" shall
include, in addition to the resulting corporation, any constituent corporation
(including any constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would have had power and
authority to indemnify its directors, officers, employees, agents or
fiduciaries, so that if Indemnitee is or was a director, officer, employee,
agent or fiduciary of such constituent corporation, or is or was serving at the
request of such constituent corporation as a director, officer, employee, agent
or fiduciary of another corporation, partnership, joint venture, employee
benefit plan, trust or other enterprise, Indemnitee shall stand in the same
position under the provisions of this Agreement with respect to the resulting or
surviving corporation as Indemnitee would have with respect to such constituent
corporation if its separate existence had continued.

         (b)  For purposes of this Agreement, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include any
excise taxes assessed on Indemnitee with respect to an employee benefit plan;
and references to "serving at the request of the Company" shall include any
service as a director, officer, employee, agent or fiduciary of the Company
which imposes duties on, or involves services by, such director, officer,
employee, agent or fiduciary with

                                      -6-
<PAGE>

respect to an employee benefit plan, its participants or its beneficiaries; and
if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan, Indemnitee shall be deemed to have acted in a manner "not opposed
to the best interests of the Company" as referred to in this Agreement.

     (c)  For purposes of this Agreement a "Change in Control" shall be deemed
to have occurred if (i) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or a corporation owned directly or indirectly by the stockholders of the
Company in substantially the same proportions as their ownership of stock of the
Company, (A) who is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined voting power
of the Company's then outstanding Voting Securities, increases his beneficial
ownership of such securities by 5% or more over the percentage so owned by such
person, or (B) becomes the "beneficial owner" (as defined in Rule 13d-3 under
said Act), directly or indirectly, of securities of the Company representing
more than 20% of the total voting power represented by the Company's then
outstanding Voting Securities, (ii) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director whose election by the Board of
Directors or nomination for election by the Company's stockholders was approved
by a vote of at least two-thirds of the directors then still in office who
either were directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any reason to
constitute a majority thereof, or (iii) the stockholders of the Company approve
a merger or consolidation of the Company with any other corporation other than a
merger or consolidation which would result in the Voting Securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into Voting Securities of the
surviving entity) at least 80% of the total voting power represented by the
Voting Securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or the stockholders of the
Company approve a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of (in one transaction or a series of
transactions) all or substantially all of the Company's assets.

     (d)  For purposes of this Agreement, "Independent Legal Counsel" shall mean
an attorney or firm of attorneys, selected in accordance with the provisions of
Section 1(c) hereof, who shall not have otherwise performed services for the
Company or Indemnitee within the last three years (other than with respect to
matters concerning the rights of Indemnitee under this Agreement, or of other
indemnitees under similar indemnity agreements).

     (e)  For purposes of this Agreement, a "Reviewing Party" shall mean any
appropriate person or body consisting of a member or members of the Company's
Board of Directors or any other person or body appointed by the Board of
Directors who is not a party to the particular Claim for which Indemnitee are
seeking indemnification, or Independent Legal Counsel.

     (f)  For purposes of this Agreement, "Voting Securities" shall mean any
securities of the Company that vote generally in the election of directors.

                                      -7-
<PAGE>

     11. Counterparts.  This Agreement may be executed in one or more
         ------------
counterparts, each of which shall constitute an original.

     12.  Binding Effect; Successors and Assigns.  This Agreement shall be
          --------------------------------------
binding upon and inure to the benefit of and be enforceable by the parties
hereto and their respective successors, assigns, including any direct or
indirect successor by purchase, merger, consolidation or otherwise to all or
substantially all of the business and/or assets of the Company, spouses, heirs,
and personal and legal representatives. The Company shall require and cause any
successor (whether direct or indirect by purchase, merger, consolidation or
otherwise) to all, substantially all, or a substantial part, of the business
and/or assets of the Company, by written agreement in form and substance
satisfactory to Indemnitee, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. This Agreement shall
continue in effect with respect to Claims relating to Indemnifiable Events
regardless of whether Indemnitee continues to serve as a director, officer,
employee, agent or fiduciary of the Company or of any other enterprise at the
Company's request.

     13. Attorneys' Fees.  In the event that any action is instituted by
         ---------------
Indemnitee under this Agreement or under any liability insurance policies
maintained by the Company to enforce or interpret any of the terms hereof or
thereof, Indemnitee shall be entitled to be paid all Expenses incurred by
Indemnitee with respect to such action, regardless of whether Indemnitee is
ultimately successful in such action, and shall be entitled to the advancement
of Expenses with respect to such action, unless, as a part of such action, a
court of competent jurisdiction over such action determines that each of the
material assertions made by Indemnitee as a basis for such action was not made
in good faith or was frivolous. In the event of an action instituted by or in
the name of the Company under this Agreement to enforce or interpret any of the
terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses
incurred by Indemnitee in defense of such action (including costs and expenses
incurred with respect to Indemnitee counterclaims and cross-claims made in such
action), and shall be entitled to the advancement of Expenses with respect to
such action, unless, as a part of such action, a court having jurisdiction over
such action determines that each of Indemnitee material defenses to such action
was made in bad faith or was frivolous.

     14.  Notice.  All notices and other communications required or permitted
          ------
hereunder shall be in writing, shall be effective when given, and shall in any
event be deemed to be given (a) five (5) days after deposit with the U.S. Postal
Service or other applicable postal service, if delivered by first class mail,
postage prepaid, (b) upon delivery, if delivered by hand, (c) one business day
after the business day of deposit with Federal Express or similar overnight
courier, freight prepaid, or (d) one day after the business day of delivery by
facsimile transmission, if delivered by facsimile transmission, with copy by
first class mail, postage prepaid, and shall be addressed if to Indemnitee, at
the Indemnitee address as set forth beneath Indemnitee signatures to this
Agreement and if to the Company at the address of its principal corporate
offices (attention:  Secretary) or at such other address as such party may
designate by ten days' advance written notice to the other party hereto.

     15.  Consent to Jurisdiction.  The Company and Indemnitee each hereby
          -----------------------
irrevocably consent to the jurisdiction of the courts of the State of Delaware
for all purposes in connection with any action or proceeding which arises out of
or relates to this Agreement and agree that any action

                                      -8-
<PAGE>

instituted under this Agreement shall be commenced, prosecuted and continued
only in the Court of Chancery of the State of Delaware in and for New Castle
County, which shall be the exclusive and only proper forum for adjudicating such
a claim.

     16.  Severability.  The provisions of this Agreement shall be severable
          ------------
in the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
Furthermore, to the fullest extent possible, the provisions of this Agreement
(including, without limitations, each portion of this Agreement containing any
provision held to be invalid, void or otherwise unenforceable, that is not
itself invalid, void or unenforceable) shall be construed so as to give effect
to the intent manifested by the provision held invalid, illegal or
unenforceable.

     17.  Choice of Law.  This Agreement shall be governed by and its provisions
          -------------
construed and enforced in accordance with the laws of the State of Delaware, as
applied to contracts between Delaware residents, entered into and to be
performed entirely within the State of Delaware, without regard to the conflict
of laws principles thereof.

     18.  Subrogation.  In the event of payment under this Agreement, the
          -----------
Company shall be subrogated to the extent of such payment to all of the rights
of recovery of Indemnitee who shall execute all documents required and shall do
all acts that may be necessary to secure such rights and to enable the Company
effectively to bring suit to enforce such rights.

     19.  Amendment and Termination.  No amendment, modification, termination or
          -------------------------
cancellation of this Agreement shall be effective unless it is in writing signed
by both the parties hereto.  No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

     20.  Integration and Entire Agreement.  This Agreement sets forth the
          --------------------------------
entire understanding between the parties hereto and supersedes and merges all
previous written and oral negotiations, commitments, understandings and
agreements relating to the subject matter hereof between the parties hereto.

     21.  No Construction as Employment Agreement.  Nothing contained in this
          ---------------------------------------
Agreement shall be construed as giving Indemnitee any right to be retained in
the employ of the Company or any of its subsidiaries.

                                      -9-
<PAGE>

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

                                   PEOPLEPC INC.

                                   By:___________________________

                                   Title:________________________

                                   Address:  100 Pine Street, Suite 1100
                                             San Francisco, CA 94111

     AGREED TO AND ACCEPTED BY:

     Signature:___________________

     Printed Name:________________

     Address:_____________________

             _____________________

                                      -10-

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