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Exhibit 10.23
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
IS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE
SECURITIES ACT OF 1933, AS AMENDED.
February 9, 1998
James O. Mitchell
VP Operations and Chief Financial Officer
First Virtual Corporation
3393 Octavius Drive
Santa Clara, California
Re: IBM Reference Selling of FVC Products
Dear Jim,
This letter sets forth the terms and conditions under which International
Business Machines Corporation (IBM) will have the right to refer customers or
potential customers to First Virtual Corporation (FVC) in connection with IBM
marketing efforts where there is a potential opportunity for FVC to market FVC's
video products in conjunction with IBM's ATM based hardware and services
offerings.
1. RIGHT TO REFERENCE FVC
IBM shall have the right, but not the obligation, to refer customers to FVC or
recommend that FVC contact a particular customer in marketing situations where
IBM believes there may be a demand for a FVC video solution.
Each party shall sell their respective products pursuant to their own terms,
conditions and warranties. Neither party shall be considered an agent, reseller
or remarketer of the other party and neither party will make any statement or
representation to any customer or other third party that would imply or suggest
that the other party has any obligation to the customer concerning the selling
party's products.
2. COMPENSATION BY FVC
For all sales of FVC products to customers where the customer was referred to
FVC by IBM or to customers where IBM recommended that FVC contact the customer
as set forth in Section 1 above FVC shall pay IBM as set forth below. For
purposes of this Section sales shall include follow-on sales made to the
customer for a period of [*] after the initial sale.
FVC shall pay IBM as follows:
(a) [*] % of FVC's gross sales revenues, after adjusting for applicable
trade and volume discounts, on the products sold by FVC to the
customer shall be paid to IBM as a sales commission which IBM shall
pass along to the appropriate IBM sales representatives;
CONFIDENTIAL TREATMENT REQUESTED
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(b) [*] % of FVC's gross sales revenues, after adjusting for applicable
trade and volume discounts, on the products sold by FVC to the
customer shall be paid to IBM to be used for the funding of
education and training and other promotional efforts as set forth in
Section 3 below.
Payments under this section shall be made within 30 days after each calendar
quarter. The payment will be accompanied by a report detailing the sales
activity and related commission. Payment shall be mailed to the following
address:
IBM Corporation
Daniel Knepper
3039 Cornwallis Rd.
P.O. Box 12195
Building 656/E103
Research Triangle Park, NC 27709
3. TRAINING AND PROMOTIONAL EFFORTS
The [*] % commission set forth in 2(b) above will be used by IBM for training
and education of certain IBM sales personnel and for other promotional and
marketing efforts related to FVC products. The details of this training shall be
discussed between FVC and IBM provided however that IBM shall, at its own
discretion, determine the specific resources and personnel it will provide in
connection with any training and will have full discretion as to how the
commission dollars will be spent. The training may include, but shall not be
limited to, joint training with FVC to inform IBM sales personnel of the FVC
product line and the customer value of the combined FVC/IBM product set. Where
appropriate and possible IBM, at its discretion, may include FVC in sales
kickoff meetings, customer briefings, and industry shows. IBM may also utilize
the commission dollars to purchase or upgrade FVC demo equipment. IBM shall have
no obligation to expend any funds for purposes of this training and promotion in
excess of the [*] % commission received from FVC for product sales.
4. The representatives of each party who shall be responsible for the
coordination of this Agreement currently are:
For IBM: Nick Balafas
3039 Cornwallis Road
P.O. Box 12195
Building 660/D309
Research Triangle Park, NC 27709
For FVC: James O. Mitchell
3393 Octavius Drive
Suite 102
Santa Clara, California 95054
CONFIDENTIAL TREATMENT REQUESTED
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If a party changes a representative it shall notify the other party of the
change in writing. All notices or other communications under this Agreement
shall be mailed to each party's representative at the addresses set forth in
this Section.
5. Either party may terminate this Agreement upon 30 (thirty) days written
notice without any further obligation to the other party other than the payment
of money owing.
6. Neither party makes any representations or warranties to the other concerning
the success of any marketing efforts related to this Agreement or the products
of either party. This Agreement does not obligate either party to market or sell
the other party's products. IBM shall have full discretion in determining if and
when to refer a customer to FVC or recommend that FVC contact a customer and IBM
makes no representations or warranties that it will make any such references or
that any customers referred to FVC will make any purchases.
7. This Agreement shall be governed in all respects by the laws of the state of
New York as they apply to contracts executed and fully performed in New York.
IBM and FVC each waive the right to a jury trial in any proceeding arising under
or in connection with this Agreement.
8. This Agreement embodies the entire agreement and
understanding between the parties and supersedes all prior agreements, written
or oral, relating to the subject matter hereof. No amendments or modifications
hereof shall be valid or binding upon the parties, unless made in writing and
signed by authorized representatives of each party.
9. Neither party shall sell, transfer, or assign any right or obligation
hereunder without the prior written consent of the other party. Any attempted
act in derogation of the foregoing shall be null and void.
10. If any provision of this Agreement is held to be illegal, invalid, or
unenforceable, the remaining provisions shall not be affected.
11. Except as expressly noted elsewhere, each party shall bear its own costs and
expenses associated with the performance of this Agreement.
12. Except for FVC's obligation to pay commission hereunder either parties'
total liability for damages to the other for any and all causes whatsoever under
or in connection with this Agreement shall be limited to a total of [*] except
that in the case of a breach of the second paragraph in Section 1 entitled
"RIGHT TO REFERENCE FVC" the limitation of shall be [*].
IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, OR
INDIRECT DAMAGES, INCLUDING LOST PROFITS OR LOST SAVINGS EVEN IF ADVISED OF THE
POSSIBLITY OF SUCH DAMAGES. NEITHER
CONFIDENTIAL TREATMENT REQUESTED
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PARTY WILL BE LIABLE FOR ANY CLAIMS OR DAMAGES BASED UPON ANY THIRD PARTY
CLAIMS.
IN WITNESS OF THE FOREGOING, IBM AND FVC HAVE CAUSED THIS LETTER AGREEMENT TO BE
EXECUTED BY THEIR AUTHORIZED REPRESENTATIVES AS OF THE DAY AND YEAR LAST WRITTEN
BELOW.
ACCEPTED AND AGREED TO:
INTERNATIONAL BUSINESS FIRST VIRTUAL CORPORATION
MACHINES CORPORATION
By: /s/ James R. McHugh By: /s/ J.O. Mitchell
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Name: James R. McHugh Name: J.O. Mitchell
Title: Manager, Sales Operations Title: COO/CFO
Date: 2/10/98 Date: 2/11/98
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