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Marketing and Product Development Agreement - First Virtual Holdings Inc. and First Data Corp.

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                   MARKETING AND PRODUCT DEVELOPMENT AGREEMENT


         This Marketing and Product Development Agreement (the "Agreement") is
made as of this 21st day of August, 1996, by and among First Virtual Holdings
Incorporated, a Delaware corporation ("First Virtual"), and First Data
Corporation, a Delaware corporation ("FDC"). First Virtual and FDC shall
sometimes be referred to herein as the "Parties."


                                    Recitals

         1. As of August 21, 1996, First Virtual and FDC entered into a Series D
Stock Purchase Agreement ("Stock Purchase Agreement"), whereby FDC agreed to
purchase shares of First Virtual's Series D Preferred Stock.

         2. Pursuant to the Stock Purchase Agreement, First Virtual has agreed
to issue a warrant to purchase up to 1,500,000 shares of its Common Stock in the
form attached hereto as Exhibit A, the exercise of which is contingent upon
FDC's development and implementation of an integrated marketing plan mutually
acceptable to First Virtual and FDC and the activation of such a specified
number of First Virtual VirtualPINs distributed pursuant to such plan. The goal
of the marketing plan is to maximize the penetration of activated VirtualPIN
accounts among holders of payment cards serviced by FDC.

         3. First Virtual and FDC are interested in cooperating on certain
mutually beneficial marketing programs and in working together to co-develop new
products and services.

         In consideration of the mutual promises in this Agreement, and for
other good and valuable consideration, the Parties agree as follows:

Section 1.        FDC's VirtualPIN Marketing Plan.

         1.1 Overview of Plan. Upon the execution of this Agreement, FDC shall
commence development of a mutually agreed upon First Virtual VirtualPIN
marketing plan ("Marketing Plan"). The goal of the Marketing Plan shall be to
maximize the penetration rate of activated VirtualPIN numbers among the 120
million credit Cardholder accounts ("FDC Cardholder Accounts") serviced by FDC,
its subsidiaries and affiliates ("FDC Entities") and to encourage issuers of
credit cards serviced by FDC (the "Affiliate Banks") to participate in the
Marketing Plan and distribute VirtualPINs to their cardholders (Affiliate Banks
electing to so participate are hereinafter referred to as "Participating
Banks").

         1.2 Plan Development. The Marketing Plan shall be developed by FDC and
shall be subject to First Virtual's approval, which approval shall not be
unreasonably withheld.
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         1.3 Plan Requirements. The Marketing Plan will consist of strategic
initiatives involving Affiliate Banks and FDC Cardholders. All costs related to
the development and implementation of the Marketing Plan, and each part of it,
shall be borne solely by FDC. All advertising and promotional materials employed
pursuant to the Marketing Plan shall be subject to First Virtual's prior
approval, which shall not be unreasonably withheld.

         1.4 Marketing Expenditure. At a minimum, the Marketing Plan shall
provide for, and FDC shall incur, minimum out-of-pocket media, publicity and
advertising development expenditures of $1,000,000 prior to December 30, 1997
(the "Minimum Marketing Expenditure"). The parties agree that First Virtual's
sole remedy with respect to any failure by FDC to comply with this Section 1.4
shall be for FDC to pay to First Virtual no later than January 30, 1998, an
amount equal to 50% of the difference between the Minimum Marketing Expenditure
and FDC's actual out-of-pocket media, publicity and advertising development
expenditures prior to December 30, 1997.

                  In order to accurately measure the number of VirtualPINs
distributed pursuant to the Marketing Plan for the purposes of FDC's exercise of
the warrant issued by First Virtual, FDC shall pay to First Virtual a monthly
amount equal to $37,500 in cash for the four-month period commencing on
September 1, 1996. Such amounts shall be used to develop and implement an
automated system, including but not limited to software, the goal of which is to
enable First Virtual and FDC to identify the cardholders of the Affiliate Banks
that have activated VirtualPINs. First Virtual shall retain title and all
intellectual property rights to such system, and shall grant a non-exclusive
license to FDC to use the system through the later of December 30, 1997 or the
date on which the Marketing Plan expires. The amounts paid by FDC to First
Virtual for such four-month period shall be considered part of the Minimum
Marketing Expenditure.

         1.5 Assignment of VirtualPINs. If so requested by a Participating Bank,
First Virtual will assign to each Cardholder of each Participating Bank a unique
VirtualPIN to facilitate implementation of the Marketing Plan. FDC shall be
solely responsible for all expenses connected with the transmission of all
necessary Participating Bank credit card information into First Virtual's system
for the purposes of assigning VirtualPINs. FDC and First Virtual will cooperate
to ensure that VirtualPIN data are supplied to Participating Banks for
distribution to Cardholders.

         1.6 Customer Support. FDC and First Virtual will develop a mutually
cooperative plan for providing customer support to facilitate the establishment
and activation of VirtualPIN accounts assigned to Cardholder of Participating
Banks. This plan will include setting up and managing customer service support
centers and systems to answer customer questions. FDC shall be responsible for
all expenses connected with provision of customer support services pursuant to
such plan. Access to the support centers will be by various channels, including
toll-free numbers, Websites, e-mail and regular mail.

         1.7 Payment Processing Services. First Virtual agrees that any of the
FDC Entities, including merchant bank alliances, may act as payment card
transaction acquirors and provide payment processing services in connection with
First Virtual transactions.


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Section 2.        Foreign Exchange Processing.

         2.1 Development. Within 180 days of the date of this Agreement, FDC
will present to First Virtual a proposal ("FX Proposal") to assume all of First
Virtual's foreign exchange settlement transactions ("FX Transactions") for as
long as FDC is capable of doing so on commercially reasonable terms or until
December 22, 1999, whichever occurs first. The FX Proposal shall provide for the
deposit of payments to overseas merchants directly to local bank accounts of
such merchants in their respective currencies. All costs and expenses incurred
for preparing the FX Proposal shall be the sole responsibility of FDC. In the
event FDC does not have a satisfactory interface with First Virtual to
facilitate FX Transactions within 240 days after the date of this Agreement, all
rights of FDC to conduct the FX Transactions shall terminate.

                  2.1.1 Approval by First Virtual. After receiving the FX
Proposal, First Virtual shall have the right, in its sole discretion, for any
reason or for no reason, to accept or reject FDC as a provider of FX
Transactions. In all cases, legally binding obligations concerning FX
Transactions will arise only in the event that FDC and First Virtual negotiate
and execute a definitive agreement ("FX Agreement"). Nothing in this Agreement
shall imply any obligation on the part of First Virtual or FDC to approve any FX
Proposal or to enter into an FX Agreement.

Section 3.        Digital Currency.

         3.1 Development. Following the date of this Agreement, FDC will begin
to negotiate an agreement ("Development Agreement") by which First Virtual and
FDC will develop a proprietary Internet-based "digital currency" payment system
("Digital Currency") allowing consumers to use pre-paid credit units to
instantaneously purchase goods and services from Web merchants. It is
anticipated that First Virtual will be primarily responsible for developing the
Digital Currency, but that FDC will reimburse First Virtual, on a monthly basis,
for all costs, consulting and licensing fees associated with such development
and a reasonable allocation of overhead costs. In the event First Virtual and
FDC are unable to agree upon a Development Agreement within 270 days of the date
of this Agreement, neither Party shall have any obligations to the other in
connection with Digital Currency. Nothing in this Agreement shall imply an
obligation on the part of FDC or First Virtual to enter into a Development
Agreement or to otherwise develop and market a Digital Currency. Each of FDC and
First Virtual may decline to enter into a Development Agreement or otherwise
develop and market a Digital Currency in its sole discretion, for any reason or
for no reason.

         3.2 Exclusivity. During the term of this Agreement, FDC shall be the
sole credit provider with respect to any digital currency system developed
pursuant to any Development Agreement entered into by FDC and First Virtual, for
so long as it is able and willing to provide such credit on competitive terms.
The interest float generated by any such digital currency system shall be shared
in equal parts by FDC and the Company.

Section 4.        FDC Representations and Warranties.


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<PAGE>   4
                  FDC hereby represents and warrants as follows:

                  (a) It and all FDC Entities performing services hereunder are
duly organized and validly existing corporations, in good standing under the
laws of all countries and states in which they do business.

                  (b) It and all FDC Entitles performing services hereunder have
all requisite corporate power, authority and capacity to enter into this
Agreement and the execution of this Agreement does not violate any agreements to
which it or the FDC Entities are a party.

                  (c) The obligations set forth or contemplated by this
Agreement of it and all FDC Entities are not and will not be in violation of any
applicable charter, certificate of incorporation, bylaw, mortgage, indenture,
agreement, instrument, judgment, decree, order, statute, rule or regulation.

                  (d) It and all FDC Entities performing services hereunder hold
all required licenses and are in compliance with all local, state and federal
laws governing all services that will be provided under this Agreement.

                  (e) No representations, warranties or written statements made
by FDC in this Agreement or given to First Virtual in connection with the
transactions contemplated by this Agreement, contains any untrue statement of a
material fact.

                  (f) FDC shall be solely responsible to ensure that all aspects
its and the Participating Banks' performance pursuant to the Marketing Plan are
in compliance with all applicable laws and regulations.

                  (g) There are at least 120 million FDC Cardholder Accounts.

                  (h) Neither the execution and delivery nor performance of this
Agreement by FDC will, with or without the passage of time, conflict with,
result in default under, or require any consent pursuant to any agreement,
franchise, license or understanding to which FDC is bound or conflict with or
result in a default pursuant to any law, ordinance, rule or regulation, or any
order, judgment, award or decree to which FDC is a party or by which it is
bound.

Section 5.        Indemnification.

         5.1 Indemnification Rights. Each Party to this Agreement (the
"Indemnifying Party") shall defend, at its expense, any suit, action, or
proceeding ("Suit") brought by a third party against the other Party or its
officers, directors, and employees (each, an "Indemnified Party") to the extent
such Suit results from (i) a breach by the Indemnifying Party of a material
obligation under this Agreement and failure to cure such breach or (ii) the
negligence or willful misconduct in the performance of the Indemnifying Party's
obligations under this Agreement. The Indemnifying Party shall indemnify and


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<PAGE>   5
hold harmless each Indemnified Party from and against any damages and expenses
(including reasonable attorney's fees) which are awarded in a final order or
agreed to in a compromise or settlement and which are directly attributable to
such Suit ("Damages"), provided that the Indemnified Party performs its
obligations as set forth below. In addition, the Indemnifying Party shall
indemnify the Indemnified Party for costs and expenses actually incurred and
paid by the Indemnified Party ("Costs") resulting from (A) a breach by the
Indemnifying Party of a material obligation under this Agreement and failure to
cure such breach or (B) the negligence or willful misconduct in the performance
of the Indemnifying Party's obligations under this Agreement. In no event shall
an Indemnifying Party have any obligation to indemnify the Indemnified Party for
any loss, damage, cost, expense or other amount resulting from the Indemnified
Party's breach of a material obligation under this Agreement or the negligence
or willful misconduct of the Indemnified Party. In all cases the Indemnifying
Party's obligation to defend and indemnify hereunder is subject to the
limitations set forth in Section 7.5 and Section 7.6, provided that Damages and
Costs shall not be considered "exemplary, punitive, special, incidental,
indirect or consequential damages" for purposes of Section 7.6 hereof. In no
event shall any third party be considered a third party beneficiary of this
indemnity.

         5.2 Defense of Action. In the event that a Suit by a third party for
which indemnification may be available under this Agreement is made or filed
against the Indemnified Party, the Indemnified shall promptly notify the
Indemnifying Party of same in writing. Within thirty (30) days after notice, or
a shorter period if required to avoid prejudice in the Suit, the Indemnifying
Party may elect to defend, compromise, or settle the Suit at its expense. In any
Suit that the Indemnifying Party may elect to defend, compromise, or settle, the
Indemnifying Party shall not after the election be responsible for the expenses,
including counsel fees, of the Indemnified Party, but the Indemnified Party may
participate therein and retain counsel at its own expense. In any third party
Suit, the Indemnified Party will not consent to the entry of any judgment or
enter into any settlement with respect to the matter without the consent of the
Indemnifying Party, which shall not be unreasonably withheld. The Indemnifying
Party will not consent to the entry of any judgment or enter into any settlement
with respect to the matter without the consent of the Indemnified Party, which
consent shall not unreasonably withheld. The Indemnified Party shall provide to
the Indemnifying Party all information, assistance, and authority reasonably
required in order to evaluate any third party Suit and affect its defense,
compromise, or settlement.

         5.3 Sole Remedy. Except for remedies that cannot be waived as a matter
of law (and injunctive or provisional relief), the provisions of this Section 5
shall be the Indemnified Parties' sole and exclusive remedy for claims or other
actions or proceedings to which Indemnifying Party's indemnification obligations
pursuant to this Section 5 apply.

Section 6.        Arbitration.

         6.1 Arbitration. In the event of any dispute, controversy or claim
arising out of, connected with, or relating to this Agreement, or the breach,
validity or enforceability of any provision of this Agreement, such dispute,
controversy or claim shall be resolved by final and binding arbitration by a


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<PAGE>   6
panel of three (3) arbitrators in accordance with and subject to the Commercial
Arbitration Rules of the JAMS, Inc. ("JAMS") then in effect. Following notice of
a Party's election to require arbitration the Parties each will within thirty
(30) days select one arbitrator from the JAMS' list of commercial arbitrators,
and those two arbitrators will within thirty (30) days thereafter select a third
arbitrator. If the two arbitrators are unable to agree on a third arbitrator
within thirty (30) days, the JAMS will within thirty (30) days thereafter select
one arbitrator from the JAMS' list of commercial arbitrators. Arbitration shall
take place at a location within California chosen by the arbitrators. All
expenses associated with obtaining and utilizing the services of the JAMS and
the arbitrators shall be shared equally by the Parties to the arbitration. The
JAMS and the arbitrators shall be made aware of this provision and shall agree
to request payment separately from each of the Parties for said services,
including all expenses directly related to the arbitration, other than the
expense of witnesses, which shall be borne by the Party producing such
witnesses.

         Notwithstanding the foregoing, each Party shall bear its own respective
costs of preparing for and participating in the arbitration, including, without
limitation, attorneys' fees, expert and/or witness fees, and the Party's cost of
complying with discovery requests. Discovery as permitted by the Federal Rules
of Civil Procedure then in effect will be allowed in connection with arbitration
to the extent consistent with the purpose of arbitration and as allowed by the
arbitrators. Judgment upon the award rendered in any arbitration may be entered
in any court of competent jurisdiction, or application may be made to such court
for a judicial acceptance of the award and an enforcement, as the law of the
state having jurisdiction may require or allow. The fact that arbitration is or
may be allowed will not impair the exercise of any termination rights under this
Agreement.

Section 7.        Miscellaneous.

         7.1 No Agency or Joint Venture. This Agreement will not be deemed to
constitute the Parties as partners or joint venturers. Each is an independent
contractor and none of the Parties shall be the agent of the other.

         7.2 Assignment. No assignment of this Agreement or of any right or of
any duty, responsibility or obligation hereunder shall be made in whole or in
part, by any Party without the prior written consent of the other Parties.
Subject to the foregoing, this Agreement shall be binding upon and shall inure
to the benefit of each party hereto and its respective legal representatives,
successors and assigns.

         7.3 Confidentiality.

                  (a) "Confidential Information" shall mean any information
disclosed by the Company to any Party or its affiliates (the "Receiving Party")
pursuant to this Agreement or otherwise that is designated visually or in
writing as confidential at the time of disclosure, or which is disclosed to any
person serving on the Board of Directors of the Company in connection with such
person's service as a director of the Company.


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<PAGE>   7
                  (b) Confidential Information shall not include information
which: (i) was generally known and available in the public domain at the time it
was disclosed, or becomes generally known and available in the public domain
through no fault of the Receiving Party, its employees, agents, successors or
assigns; (ii) was known to Receiving Party at the time of disclosure, as shown
by contemporaneous written records; (iii) was independently developed by the
Receiving Party without the use of or reliance on any Confidential Information,
as shown by contemporaneous written records; or (iv) becomes known to the
Receiving Party from a third party who has no obligation of confidentiality to
disclosing Party.

                  (c) No Receiving Party shall disclose Confidential Information
to any third party unless authorized in advance in writing. No Receiving Party
shall disclose Confidential Information to its employees, accountants and legal
counsel, except on a "need to know" basis where such disclosure is necessary and
required to exercise its rights and perform its obligations under this
Agreement. No Receiving Party shall use Confidential Information except as
necessary and required to exercise its rights and perform its obligations under
this Agreement. No Receiving Party shall disclose Confidential Information to
any employee of such Shareholder unless such employee has signed a non-use and
non-disclosure agreement in content at least as protective as the form attached
hereto as Exhibit A, prior to any disclosure of Confidential Information to such
employee. Each Party shall take reasonable measures to protect the secrecy of
and avoid disclosure and unauthorized use of the Confidential Information.
Without limiting the foregoing, such party shall take at least those measures
that it takes to protect its own most highly confidential information. Each
Receiving Party shall immediately notify the Company in the event of any
unauthorized use or disclosure of the Confidential Information.

                  (d) Each Party acknowledges that any breach of the provisions
of this Section 7.3 may cause irreparable harm and significant injury to the
Company to an extent that may be extremely difficult to ascertain. Accordingly,
each Party agrees that the Company will have, in addition to any other rights or
remedies available to it at law or in equity, the right to seek injunctive
relief to enjoin any breach or violation of this Section 7.3.

         7.4 FDC Statements. Each party shall supply the other party on a
monthly basis with such statements and other materials as the Requesting Party
may reasonably request in order to verify FDC's performance with the terms of
this agreement. At the request of any Party (the "Requesting Party"), the other
party shall cause its independent auditors to make a determination with respect
to the accuracy of the information contained in the statements supplied to the
Requesting Party; provided, however, that such other party shall not be required
to cause its auditors to conduct such a review more than once in any three-month
period.

         7.5 Limitation on Liability.

         (a) Neither party may assert any cause of action against the other
party under this Agreement that has accrued more than two (2) years prior to the
filing of the suit (or commencement of arbitration proceedings) alleging such
cause of action.


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<PAGE>   8
         (b) Each party shall have the duty to mitigate damages for which the
other party may become responsible.

         (c) Notwithstanding any provision in this Agreement to the contrary,
each party's cumulative liability to the other party (i) shall not exceed
$5,000,000 for all losses, claims, suits, controversies, breaches, or damages
for any cause whatsoever arising out of any performance, non-performance,
omission, breach or other action or inaction under this Agreement (including any
claim pursuant to Section 5 hereof), regardless of the form of action or legal
theory, and (ii) shall not exceed $2,000,000 for all losses, claims, suits,
controversies, breaches, or damages for any cause whatsoever arising out of any
performance, non-performance, omission, breach or other action or inaction under
any provision of this Agreement other than the provisions of Section 5 hereof;
provided, however, that this limitation shall not apply to or include claims to
damages arising under Section 1.4 or based on the wilful misconduct of a party
or breach of the confidentiality provision of Section 7.3 hereof. Each party
understands this limitation on damages to be a reasonable allocation of risk and
expressly consents with respect to such allocation or risk.

         7.6 Consequential Damages.

         NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT
SHALL FIRST DATA OR FIRST VIRTUAL, ANY OF THEIR SUBSIDIARIES OR ANY OF THEIR
SUBSIDIARIES' DIRECTORS, OFFICERS, EMPLOYEES, AGENTS OR SUBCONTRACTORS BE LIABLE
IN CONNECTION WITH THIS AGREEMENT UNDER ANY THEORY OF TORT, CONTRACT, STRICT
LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR LOST PROFITS, EXEMPLARY,
PUNITIVE, SPECIAL, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, EACH OF WHICH
IS HEREBY EXCLUDED BY AGREEMENT OF THE PARTIES REGARDLESS OF WHETHER SUCH
DAMAGES WERE FORESEEABLE OR WHETHER EITHER PARTY OR ANY ENTITY HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.

         7.7 No Third Party Beneficiaries. The Parties hereto agree that this
Agreement does not create nor shall it be construed to create any rights
enforceable by any entity not a Party to this Agreement and at no time will any
entity be deemed to be a third-party beneficiary under this Agreement or to have
any contractual relationship with either Party pursuant to this Agreement. This
Agreement is for the sole and exclusive benefit of the Parties hereto.

         7.8 Section Headings. Section headings are for convenience only and do
not in any way limit or otherwise define the rights and liabilities of the
Parties.

         7.9 Plurals and Gender. In construing the words of this Agreement,
plural constructions will include the singular, and singular constructions will
include plural. No significance will be attached to whether a pronoun is
masculine, feminine, or neuter.


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<PAGE>   9
         7.10 Provisions Severable. If any provision of this Agreement is held
to be void or unenforceable by any court of competent jurisdiction or any
governmental regulatory agency, such provision will be considered by all Parties
to be severed from this Agreement. All remaining provisions of this Agreement
will be considered by the Parties to remain in full force and effect.

         7.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, and all of such
counterparts together shall constitute one and the same instrument and may be
sufficiently evidenced by one counterpart, provided that such counterpart is
executed by the party to be charged. Execution of this Agreement at different
times and places by the parties shall not affect the validity of this Agreement.

         7.12 Attorneys' Fees and Costs. Should any arbitration, legal action or
proceeding be commenced by any Party in order to enforce this Agreement or any
term of its, or in connection with any alleged dispute, breach, default, or
misrepresentation in connection with any provision of it, the prevailing Party
shall be entitled to recover reasonable attorneys' fees and costs incurred
arising under such arbitration or proceeding, including costs of negotiation and
preparation of any settlement arrangements, in addition to such other relief as
may be granted.

         7.13 Notices. Any request, notice or other communication by any Party
shall be given in writing and delivered personally by messenger or private mail
courier service, or sent by registered or certified mail, return receipt
requested, postage prepaid, as follows:

                         To First Virtual: 11975 El Camino Real, Suite 300
                                           San Diego, CA 92130
                                           Attention:  Lee H. Stein

                           with a copy to: Wilson, Sonsini, Goodrich & Rosati
                                           650 Page Mill Road
                                           Palo Alto, CA 94304
                                           Attn.: Ramsey Hanna, Esq.

                                   To FDC: 6200 South Quebec Street
                                           Inglewood, CO 80111
                                           Attn.: Charles Fote

                           with a copy to: First Data Corporation
                                           2121 North 117th Ave. NP-30
                                           Omaha, NE 68164
                                           Attn.: Thomas A. Rossi, Esq.

                  All notices shall be deemed effective upon receipt.


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         7.14 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties and supersedes any contemporaneous or previous written or
oral agreements, representations or undertakings concerning the subject matter
of and the arrangements provided for in this Agreement; provided, however, that
this Agreement will not in any way affect any outstanding amounts owed by any
Party to any of the others or any written obligations that a Party has to
another Party that pre-existed this Agreement. No supplement, modification or
amendment to this Agreement shall be binding unless executed in writing by the
Parties affected. No waiver of any provision of this Agreement shall be deemed a
waiver of any other provision, whether or not similar, nor shall any waiver
constitute a continuing waiver of such provision.

         7.15 Choice of Law. This Agreement and each term or provision of its,
and all of the respective rights, duties, responsibilities, obligations and
liabilities of the parties, shall be interpreted and construed pursuant to and
in accordance with the internal laws (but not the conflict of law doctrine) of
the State of California, except insofar as Section 6.1 shall be subject to the
Federal Arbitration Act.

         IN WITNESS OF THIS AGREEMENT, each party has caused this Agreement to
be signed on its behalf and bit its duly authorized officer as of the date first
set forth above.

                  First Virtual:    First Virtual Holdings Incorporated


                                    By:  /s/  Lee H. Stein
                                         ---------------------------------------
                                         Lee H. Stein

                                    Its: Chairman and Chief Executive  Officer
                                         ---------------------------------------




                  FDC:              First Data Corporation


                                    By:  /s/  Tom Rossi
                                         ---------------------------------------
                                         Tom Rossi

                                    Its: Assistant Secretary
                                         ---------------------------------------


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