<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 22, 1998
------------------------
GENERAL MAGIC, INC.
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(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 000-25374 77-0250147
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(State or other jurisdiction of (Commission File Number) (I.R.S. Employer)
incorporation or organization) Identification No.)
</TABLE>
<TABLE>
<S> <C>
420 NORTH MARY AVENUE
SUNNYVALE, CALIFORNIA 94086
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(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (408) 774-4000
--------------
Not applicable.
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On October 22, 1998, the Registrant and the holders of the Registrant's
Series C Convertible Preferred Stock (the "Series C Stockholders") entered into
a Voting and Waiver Agreement (the "Agreement") pursuant to which the Registrant
and the Series C Stockholders agreed to amend (i) the Certificate of
Designation, Preferences and Rights of the Series C Convertible Preferred Stock
of the Registrant (the "Certificate") and (ii) the Securities Purchase Agreement
dated June 24, 1998 by and among the Registrant and the Series C Stockholders
(the "Securities Purchase Agreement").
The amendments to the Certificate, which are subject to the approval of
the Registrant's stockholders on or before January 31, 1999, provide the
Registrant with the right to issue in any given one year period shares of its
Common Stock with an aggregate value not to exceed approximately 5% of the
Registrant's total market capitalization in connection with mergers,
acquisitions and other strategic transactions without triggering anti-dilution
protection-related adjustments to the number of shares of Common Stock into
which the Series C Convertible Preferred Stock may be converted. In exchange for
this right, the Fixed Conversion Price (as such term is defined in the
Certificate) for the Series C Convertible Preferred Stock was reduced from
$19.49 to $10.00. The amendment to the Securities Purchase Agreement provides
that the Registrant must hold a special meeting of its stockholders on or before
January 31, 1999 to seek and obtain the approval of the Registrant's issuance of
the Series C Convertible Preferred Stock and certain related warrants to
purchase shares of the Registrant's Common Stock pursuant to the Securities
Purchase Agreement.
The foregoing description of the Agreement is qualified in its
entirety by the copy of the Agreement which is attached as an exhibit to this
Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. Not applicable.
(B) PRO FORMA FINANCIAL INFORMATION. Not applicable.
(C) EXHIBITS.
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<CAPTION>
Exhibit No. Description
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<S> <C>
4.1 Voting and Waiver Agreement, dated October 22, 1998
by and among the Registrant and the holders of the
Registrant's Series C Convertible Preferred Stock
</TABLE>
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
General Magic, Inc.
October 27, 1998 By: /s/ Mary E. Doyle
-------------------------------
Mary E. Doyle
General Counsel and Secretary
<PAGE> 4
EXHIBIT INDEX
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<CAPTION>
Exhibit No. Description
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<S> <C>
4.1 Voting and Waiver Agreement, dated October 22, 1998 by
and among the Registrant and the holders of the
Registrant's Series C Convertible Preferred Stock
</TABLE>
<PAGE> 1
GENERAL MAGIC, INC.
VOTING AND WAIVER AGREEMENT
THIS VOTING AND WAIVER AGREEMENT (the "Agreement") is made and entered into
as of October 22, 1998, by and among General Magic, Inc., a Delaware corporation
(the "Company"), and the undersigned holders (each a "Stockholder," and
collectively, the "Stockholders") of all of the issued and outstanding shares of
Series C Convertible Preferred Stock of the Company (the "Series C Preferred
Stock").
WHEREAS, on June 25, 1998, the Company issued and sold to the Stockholders
a total of 3,000 shares of its Series C Preferred Stock (the "Shares") pursuant
to a Securities Purchase Agreement dated as of June 24, 1998 by and among the
Company and the Stockholders (the "Securities Purchase Agreement") and in
connection therewith the Company filed a Certificate of Designations,
Preferences and Rights with respect to the Series C Preferred Stock with the
Delaware Secretary of State (the "Certificate").
WHEREAS, the Company and the Stockholders have agreed to certain
modifications to the Certificate relating to, among other things, adjustments in
the conversion price of the Series C Preferred Stock and to effectuate such
modifications, the Stockholders have agreed to, among other things, vote their
shares of Series C Preferred Stock in favor of an amendment to the Certificate
as more fully described below.
WHEREAS, the Company and the Stockholders have agreed to an amendment to
the Securities Purchase Agreement relating to approval of the issuance of the
Series C Preferred Stock by the Company's stockholders.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Agreement Upon Transfer. Each Stockholder agrees not to transfer, sell
or exchange (collectively, "Transfer") any of its Shares to any transferee
unless such transferee agrees in writing to be bound by the terms and provisions
of this Agreement, including, without limitation, the obligation to execute and
deliver a Proxy (as defined below).
2. Agreement to Vote Shares. Subject to Section 7 hereof, at every
meeting of the stockholders of the Company and at every adjournment thereof, and
on every action or approval by written consent of the stockholders of the
Company, each Stockholder shall vote its Shares, unless otherwise directed in
writing by the Company, in favor of approval of an amendment to the Certificate
such that the designations, preferences and rights of the Series C Preferred
Stock will be amended in accordance with the form of the Certificate of
Amendment to the Certificate attached hereto as Exhibit A (the "Certificate
Amendment"). Each Stockholder agrees that it shall not enter into any agreement
or understanding with any person to vote or give instructions
<PAGE> 2
in any manner inconsistent with this Section 2. The date of filing of the
Certificate Amendment shall be deemed to be the "Modification Date."
3. Waiver of Rights Under the Certificate. Subject to Section 7 hereof,
prior to the Modification Date, each Stockholder agrees to waive any and all
rights and/or benefits under the Certificate unless such Stockholder would be
entitled to such right or benefit under the Certificate, as amended by the
Certificate Amendment. Subject to Section 7 hereof, each Stockholder agrees that
for all purposes the Certificate, as proposed to be amended in accordance with
the Certificate Amendment, shall be deemed to be the governing charter document
with respect to the Series C Preferred Stock as if the Certificate Amendment had
been filed on June 25, 1998.
4. Securities Purchase Agreement. Effective as of June 24, 1998, the
Company and each Stockholder hereby amend clause (ii) of the first sentence of
Section 4(l) of the Securities Purchase Agreement by inserting the date "January
31, 1999" in place of the words "60 days after the Proxy Statement Trigger
Date." The parties hereto agree and acknowledge that the failure of the Company
to obtain the stockholder approval described in Section 4(l) of the Securities
Purchase Agreement on or before January 31, 1999 shall be deemed to be a
Triggering Event pursuant to Section 3(d)(v) of the Certificate.
5. Irrevocable Proxy. Concurrently with the execution of this Agreement,
each Stockholder shall deliver to the Company a proxy in the form attached
hereto as Exhibit B (the "Proxy"), which, subject to Section 7 hereof, shall be
irrevocable to the fullest extent permitted by law, covering the total number of
its Shares beneficially owned (as such term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended) by such Stockholder as set forth
therein.
6. Effective Time. This Agreement shall be effective upon the execution
hereof by the Company and all of Stockholders.
7. Termination. If on or prior to January 31, 1999, for any reason or for
no reason, the Modification Date has not occurred or the Company fails to obtain
stockholder approval for each of (i) the Certificate of Amendment and (ii) the
Company's issuance of all of the securities contemplated by the Securities
Purchase Agreement, then this Agreement (except with respect to Section 4 hereof
which shall survive any termination of this Agreement pursuant to this Section
7) and the Proxy delivered in connection herewith shall terminate, be null and
void and shall have no further force and effect as of 11:59 p.m. EST on January
31, 1999.
8. Stockholders Representations and Warranties. Each Stockholder
severally and not jointly represents and warrants to the Company with respect to
only itself that:
a. Authorization; Enforcement. This Agreement has been duly and
validly authorized, executed and delivered on behalf of such Stockholder and
each is a valid and binding agreement of such Stockholder enforceable against
such Stockholder in accordance with its terms.
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b. No Conflicts. The execution, delivery and performance of this
Agreement by such Stockholder and the consummation by such Stockholder of the
transactions contemplated hereby will not result in a violation of the
certificate of incorporation, by-laws or other documents of organization of such
Stockholder.
c. Ownership of Shares. Such Stockholder is the beneficial owner
with sole voting power with respect to the number of Shares set forth opposite
its name on the Schedule of Buyers to the Securities Purchase Agreement
9. Representations and Warranties of the Company. The Company represents
and warrants to each of the Stockholders that:
a. Organization and Qualification. The Company is a corporation duly
organized and validly existing in good standing under the laws of the State of
Delaware and has the requisite corporate power and authorization to own its
properties and to carry on its business as now being conducted.
b. Authorization; Enforcement; Compliance with Other Instruments.
(i) The Company has the requisite corporate power and authority to enter into
and perform this Agreement, (ii) the execution and delivery of this Agreement by
the Company and the consummation by it of the transactions contemplated hereby
have been duly authorized by the Company's Board of Directors and no further
consent or authorization is required by the Company or its Board of Directors,
(iii) this Agreement has been duly executed and delivered by the Company, and
(iv) this Agreement constitutes the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
c. No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby will not (i) result in a violation of its Certificate of
Incorporation, as amended, any Certificate of Designations, Preferences and
Rights of any outstanding series of Preferred Stock of the Company or its
By-laws; (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment, acceleration or cancellation of, any
material agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party; or (iii) result in a violation of any law, rule,
regulation, order, judgment or decree (including federal and state securities
laws and regulations and the rules and regulations of the principal market or
exchange on which the Common Stock is traded or listed) applicable to the
Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected. Except as specifically
contemplated by this Agreement, the Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with, any
court or governmental agency or any regulatory or self-regulatory agency in
order for it to execute, deliver or perform any of its obligations under or
contemplated by this Agreement in accordance with the terms hereof. Other than
the approval of its stockholders, all consents, authorizations, orders, filings
and registrations which the Company is required to obtain or make pursuant to
the
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preceding sentence have been obtained or effected on or prior to the date
hereof. The Company and its subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.
d. Acknowledgment Regarding Stockholders' Agreeing to Amend. The
Company acknowledges and agrees that each of the Stockholders is acting solely
in the capacity of arm's length holder of Preferred Shares with respect to this
Agreement and the transactions contemplated hereby. The Company further
acknowledges that each Stockholder is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to this
Agreement and the transactions contemplated hereby and any advice given by any
of the Stockholders or any of their respective representatives or agents in
connection with this Agreement and the transactions contemplated hereby is
merely incidental to such Stockholder's holding Preferred Shares and having
purchased the Preferred Shares. The Company further represents to each
Stockholder that the Company's decision to enter into this Agreement has been
based solely on the independent evaluation by the Company and its
representatives.
e. No Other Agreements. The Company has not, directly or indirectly,
made any agreements with any Stockholders relating to the terms or conditions of
the transactions contemplated by this Agreement except as set forth herein and
in the Transaction Documents (as defined in the Securities Purchase Agreement)
and the Certificate or the Certificate Amendment.
10. Miscellaneous.
a. Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of New York without giving
effect to any choice or conflict of laws provision or rule (whether of the State
of New York or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of New York.
b. Filing of Form 8-K. On or before the third business day following
the date of this Agreement, the Company shall file a Form 8-K with the SEC
describing the terms of the transaction contemplated by this Agreement, in each
case in the form required by the Securities and Exchange Act of 1934 Act, as
amended.
c. Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
d. Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
e. Severability. If any provision of this Agreement is unenforceable
or invalid under any applicable law or is so held by applicable court decision,
such unenforceability
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or invalidity will not render this Agreement unenforceable or invalid as a
whole, and such provision will be changed and interpreted so as to best
accomplish the objectives of such unenforceable or invalid provision within the
limits of applicable law or applicable court decisions.
f. Entire Agreement; Amendments. Except as specifically amended and
superseded hereby, the Transaction Documents and the Certificate shall remain in
full force and effect. No provision of this Agreement may be amended other than
by an instrument in writing signed by the Company and the holders of at least
two-thirds (2/3) of the Shares then outstanding, and no provision hereof may be
waived other than by an instrument in writing signed by the party against whom
enforcement is sought. No such amendment shall be effective to the extent that
it applies to less than all of the holders of the Shares then outstanding. No
consideration shall be offered or paid to any person to amend or consent to a
waiver or modification of any provision of any of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.
g. Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one (1) business day after deposit
with a nationally recognized overnight delivery service, in each case properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be:
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If to the Company: General Magic, Inc. 420 North Mary Avenue
Sunnyvale, California 94086 Telephone: (408) 774-4000 Facsimile: (408) 774-4033
Attention: President
With a copy to: Gray Cary Ware & Freidenrich LLP
400 Hamilton Avenue
Palo Alto, California 94301
Telephone: (650) 328-6561
Facsimile: (650) 327-3699
Attention: Diane Holt Frankle, Esq.
</TABLE>
If to a Stockholder, to its address and facsimile number on the Schedule of
Buyers to the Securities Purchase Agreement, with copies to such Stockholder's
representatives as set forth on the Schedule of Buyers.
h. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Shares. The Company shall not assign this
Agreement or any rights or obligations
5
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hereunder without the prior written consent of the holders of two-thirds (2/3)
of the Shares then outstanding including by merger or consolidation. A
Stockholder may assign some or all of its rights hereunder without the consent
of the Company only in connection with a transfer of the Shares in which the
rights and obligations of such Stockholder hereunder are expressly assumed by
such assignee. Any such assignment shall release such Stockholder from its
obligations hereunder with respect to such Shares so transferred. Each
Stockholder agrees that they shall not transfer any Shares unless its transferee
expressly agrees to be bound by this Agreement with respect to such Shares so
transferred.
i. No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other person.
j. Publicity. The Company and each Stockholder shall have the right
to approve before issuance any press releases or any other public statements
with respect to the transactions contemplated hereby; provided, however, that
the Company shall be entitled, without the prior approval of any Stockholder, to
make any press release or other public disclosure with respect to such
transactions as is required by applicable law and regulations (although each
Stockholder shall be consulted by the Company in connection with any such press
release or other public disclosure prior to its release and shall be provided
with a copy thereof).
k. Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
l. No Strict Construction. The language used in this Agreement will
be deemed to be the language chosen by the parties to express their mutual
intent, and no rules of strict construction will be applied against any party.
m. Remedies. Each Stockholder and each holder of Shares shall have
all rights and remedies set forth in this Agreement and, except as provided
herein, all rights and remedies which such holders have been granted at any time
under any other agreement or contract and all of the rights which such holders
have under any law. Any person having any rights under any provision of this
Agreement shall be entitled to enforce such rights specifically (without posting
a bond or other security), to recover damages by reason of any breach of any
provision of this Agreement and to exercise all other rights granted by law.
n. Payment Set Aside. To the extent that the Company makes a payment
or payments to the Stockholders hereunder or the Stockholders enforce or
exercise their rights hereunder , and such payment or payments or the proceeds
of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the
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Company, a trustee, receiver or any other person under any law (including,
without limitation, any bankruptcy law, state or federal law, common law or
equitable cause of action), then to the extent of any such restoration the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such enforcement or setoff had not occurred.
o. Indemnification. In consideration of each Stockholder's execution
and delivery of this Agreement and in addition to all of the Company's other
obligations under this Agreement, the Transaction Documents, the Certificate,
the Certificate Amendment, the Company shall defend, protect, indemnify and hold
harmless each Stockholder and each other holder of the Shares and all of their
stockholders, officers, directors, employees and direct or indirect investors
and any of the forgoing person's agents or other representatives (including,
without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the "Indemnitees") from and
against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys' fees
and disbursements (the "Indemnified Liabilities"), incurred by any Indemnitee as
a result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Company in this Agreement
or any other certificate, instrument or document contemplated hereby, (b) any
breach of any covenant, agreement or obligation of the Company contained in this
Agreement or any other certificate, instrument or document contemplated hereby,
or (c) any cause of action, suit or claim brought or made against such
Indemnitee and arising out of or resulting from the execution, delivery,
performance or enforcement of this Agreement. Notwithstanding the foregoing,
Indemnified Liabilities shall not include any liability of an Indemnitee arising
solely out of such Indemnitee's willful misconduct or fraudulent action(s). To
the extent that the foregoing undertaking by the Company may be unenforceable
for any reason, the Company shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is permissible
under applicable law. Except as otherwise set forth herein, the mechanics and
procedures with respect to the rights and obligations under this Section 10(o)
shall be the same as those set forth in Sections 6(a) and (d) of the
Registration Rights Agreement (as defined in the Securities Purchase Agreement),
including, without limitation, those procedures with respect to the settlement
of claims and the Company's rights to assume the defense of claims.
* * * * * *
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day and year first above written.
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COMPANY: STOCKHOLDERS:
GENERAL MAGIC, INC. THEMIS PARTNERS L.P.
By: Promethean Investment Group L.L.C.
Its: General Partner
By: /s/ James P. McCormick
---------------------------
Name: James P. McCormick
Its: Chief Financial Officer By: /s/ James F. O'Brien, Jr.
---------------------------------
Name: James F. O'Brien, Jr.
Its: President
HERACLES FUND
By: Promethean Investment Group L.L.C.
Its: Investment Advisor
By: /s/ James F. O'Brien, Jr.
---------------------------------
Name: James F. O'Brien, Jr.
Its: President
RGC INTERNATIONAL INVESTORS,
LDC
By: Rose Glen Capital Management, L.P.
Its: Investment Manager
By: RGC General Partner Corp.
Its: General Partner
By: /s/ Wayne Bloch
---------------------------------
Name: Wayne Bloch
Its: Managing Director
</TABLE>
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<TABLE>
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HALIFAX FUND, L.P.
By: The Palladin Group, L.P.
Its: Attorney-in-Fact
By: /s/ Robert Chender
---------------------------------
Name: Robert Chender
Title: Managing Director
PALLADIN PARTNERS I, L.P.
By: Palladin Asset Management, L.L.C.
Its: General Partner
By: /s/ Robert Chender
---------------------------------
Name: Robert Chender
Title: Managing Director
PALLADIN OVERSEAS FUND LIMITED
By: The Palladin Group L.P.
Its: Attorney-in-Fact
By: /s/ Robert Chender
---------------------------------
Name: Robert Chender
Title: Managing Director
THE GLENEAGLES FUND COMPANY
By: The Palladin Group L.P
Its: Attorney-in-Fact
By: /s/ Robert Chender
---------------------------------
Name: Robert Chender
Title: Managing Director
</TABLE>
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<TABLE>
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PALLADIN SECURITIES, LLC
By: /s/ Robert Chender
---------------------------------
Name: Robert Chender
Title: Principal
COLONIAL PENN LIFE INSURANCE COMPANY
By: The Palladin Group L.P.
Its: Attorney-in-Fact
By: /s/ Robert Chender
---------------------------------
Name: Robert Chender
Title: Managing Director
</TABLE>
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SCHEDULE OF STOCKHOLDERS
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NAME ADDRESS NUMBER STOCKHOLDER'S REPRESENTATIVES'
AND FACSIMILE NUMBER OF ADDRESS
PREFERRED AND FACSIMILE NUMBER
SHARES
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Themis Partners L.P. Promethean Investment Group, L.L.C. 250 Promethean Investment Group,
40 West 57th Street, Suite 1520 L.L.C.
New York, New York 10019 40 West 57th Street, Suite 1520
Attn: James F. O'Brien, Jr. New York, New York 10019
Facsimile: 212-698-0505 Attn: James F. O'Brien, Jr.
E. Kurt Kim
Residence: New York Facsimile: 212-698-0505
Katten Muchin & Zavis
525 West Monroe, Suite 1600
Chicago, Illinois 60661-3693
Attn: Robert J. Brantman, Esq.
Facsimile: 312-902-1061
Heracles Fund Bank of Bermuda (Cayman) Limited 550 Promethean Investment Group,
P.O. Box 513 L.L.C.
3rd Floor British American Center 40 West 57th Street, Suite 1520
Dr. Roy's Drive New York, New York 10019
Georgetown, Grand Cayman Attn: James F. O'Brien, Jr.
Cayman Island, BWI E. Kurt Kim
Attn: Allen J. Bernardo Facsimile: 212-698-0505
Facsimile: 809-949-7802
Katten Muchin & Zavis
Residence: Gayman Islands 525 West Monroe, Suite 1600
Chicago, Illinois 60661-3693
Attn: Robert J. Brantman, Esq.
Facsimile: 312-902-1061
RGC International c/o Rose Glen Capital Management, L.P. 1,200 Rose Glen Capital Management,
Investors, LDC 3 Bala Plaza East, Suite 200 L.P.
Bala Cynwyd, Pennsylvania 3 Bala Plaza East, Suite 200
Attn: Gary Kaminsky Bala Cynwyd, Pennsylvania
Facsimile: 610-617-0570 Attn: Gary Kaminsky
Facsimile: 610-617-0570
Residence: Pennsylvania
Palladin Partners I, L.P. c/o The Palladin Group L.P. 100 The Palladin Group L.P.
40 West 57th Street As Investment Advisor
15th Floor 40 West 57th Street
New York, NY 10019 15th Floor
Attn: Kevin Gerlitz New York, NY 10019
Facsimile: 212-698-0563 Attn: Kevin Gerlitz
Facsimile: 212-698-0563
Residence: New York
Halifax Fund, L.P. c/o Citco Fund Services (Cayman 700 The Palladin Group L.P.
Islands) Ltd. As Investment Advisor
Corporate Centre, West Bay Road 40 West 57th Street
P.O. Box 31106 SMB 15th Floor
</TABLE>
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<TABLE>
<S> <C> <C> <C>
Grand Cayman, Cayman Islands New York, NY 10019
Facsimile: 345-949-3877 Attn: Kevin Gerlitz
Facsimile: 212-698-0563
Residence: Cayman Islands
The Gleneagles Fund c/o Citco Fund Services (Cayman 50 The Palladin Group L.P.
Company Islands) Ltd. As Investment Advisor
Corporate Centre, West Bay Road 40 West 57th Street
P.O. Box 31106 SMB 15th Floor
Grand Cayman, Cayman Islands New York, NY 10019
Facsimile: 345-949-3877 Attn: Kevin Gerlitz
Facsimile: 212-698-0563
Residence: Cayman Islands
Palladin Overseas Fund c/o Citco Fund Services (Cayman 50 The Palladin Group L.P.
Limited Islands) Ltd. As Investment Advisor
Corporate Centre, West Bay Road 40 West 57th Street
P.O. Box 31106 SMB 15th Floor
Grand Cayman, Cayman Islands New York, NY 10019
Facsimile: 345-949-3877 Attn: Kevin Gerlitz
Facsimile: 212-698-0563
Residence: Cayman Islands
Colonial Penn Life Colonial Penn Life Insurance Company 50 The Palladin Group L.P.
Insurance Company 1818 Market Street As Investment Advisor
Philadelphia, PA 19181 40 West 57th Street
15th Floor
Residence: Pennsylvania New York, NY 10019
Attn: Kevin Gerlitz
Facsimile: 212-698-0563
Palladin Securities, LLC c/o The Palladin Group L.P. 50 The Palladin Group L.P.
40 West 57th Street As Investment Advisor
15th Floor 40 West 57th Street
New York, NY 10019 15th Floor
Attn: Kevin Gerlitz New York, NY 10019
Facsimile: 212-698-0563 Attn: Kevin Gerlitz
Facsimile: 212-698-0563
Residence: New York
</TABLE>
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EXHIBIT A
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS OF SERIES C
CONVERTIBLE PREFERRED STOCK
OF
GENERAL MAGIC, INC.
General Magic, Inc., a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the "Company"),
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of the Company
resolutions were duly adopted setting forth a proposed amendment to the
Certificate of Designations, Preferences and Rights of the Company's Series C
Convertible Preferred Stock (the "Certificate"), declaring said amendment to be
advisable and calling a special meeting of the stockholders of the Company for
consideration thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, that Section (2)(b)(ii) of the Certificate be amended and
restated to read as follows:
"FIXED CONVERSION PRICE" means $10.000.";
RESOLVED FURTHER, that Section (2)(d)(i) of the Certificate be amended and
restated to read as follows:
"Adjustment of Fixed Conversion Price upon Issuance of Common Stock. If and
whenever on or after the Issuance Date, the Company issues or sells, or is
deemed to have issued or sold, any shares of Common Stock (other than the
Conversion Shares (as defined in the Securities Purchase Agreement), the
Warrant Shares (as defined in the Securities Purchase Agreement), the
Discretionary Shares (as defined below) and shares of Common Stock deemed
to have been issued by the Company in connection with an Approved Stock
Plan (as defined below)) for a consideration per share less than a price
(the "APPLICABLE PRICE") equal to the Fixed Conversion Price in effect
immediately prior to such issuance or sale, then immediately after such
issue or sale, the Fixed Conversion Price then in effect shall be reduced
to an amount (A) in the event such issue or sale occurs on or prior to the
date which is the earlier of (I) the date on which an aggregate of at least
1,800 Preferred Shares have been converted pursuant to Section 2 and (II)
the date which is one year after the date the Registration Statement is
declared effective by the SEC, then equal to the consideration per share
which the Company issued or sold, or was deemed to have issued or sold, for
one share of Common Stock pursuant to such issuance
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or sale or (B) in the event such issue or sale occurs after the date on
which an aggregate of at least 1,800 Preferred Shares have been converted
pursuant to Section 2, then equal to the product of (x) the Fixed
Conversion Price in effect immediately prior to such issue or sale and (y)
the quotient determined by dividing (1) the sum of (I) the product of the
Applicable Price and the number of shares of Common Stock Deemed
Outstanding (as defined below) immediately prior to such issue or sale, and
(II) the consideration, if any, received by the Company upon such issue or
sale, by (2) the product of (I) the Applicable Price and (II) the number of
shares of Common Stock Deemed Outstanding immediately after such issue or
sale. For purposes of determining the adjusted Fixed Conversion Price under
this Section 2(d)(i), the following shall be applicable:"; and
RESOLVED FURTHER, that Section (2)(d)(i)(D)(II) of the Certificate be
renumbered as Section (2)(d)(i)(D)(III) and Section (2)(d)(i)(D)(II) of the
Certificate be amended and restated as follows:
"DISCRETIONARY SHARES" shall mean shares of Common Stock (A) which have
been issued or sold, or deemed to have been issued or sold, by the Company
(i) in connection with a merger or consolidation, (ii) in connection with
any strategic partnership or joint venture (the primary purpose of which is
not to raise equity capital) or (iii) in connection with the acquisition of
a business, product, license or other assets by the Company, for a
consideration per share (based on the Closing Bid Price of such Common
Stock on the date of the issuance or sale, or deemed issuance or sale) less
than the Applicable Price (as defined above) ("Acquisition Shares") and (B)
the issuance or sale, or deemed issuance or sale, of which was not in
violation of the applicable Discretionary Share Cap (as defined below). For
the purposes hereof, "Discretionary Share Cap" shall mean that amount with
respect to a Discretionary Share Measurement Period (as defined below) as
calculated from time to time as of the date ("Measurement Date") of a given
issuance or sale, or deemed issuance or sale, of Acquisition Shares which
is equal to (A) the product of (x) the number of shares of Common Stock
actually outstanding on the last day of the Discretionary Share Measurement
Period, multiplied by the Closing Bid Price of the Common Stock on the
Measurement Date and (y) .05, less (B) the number of Acquisition Shares
issued or sold, or deemed to have been issued or sold, by the Company
during the Discretionary Share Measurement Period, multiplied by the
Closing Bid Price of the Common Stock on each applicable Measurement Date
with respect to such Acquisition Shares. A given issuance or sale, or
deemed issuance or sale, of Acquisition Shares shall be deemed to violate
the Discretionary Share Cap if the product of (x) the number of such
Acquisition Shares, multiplied by (y) the Closing Bid Price of the Common
Stock on the Measurement Date exceeds the Discretionary Share Cap. The
"Discretionary Share Measurement Period" shall mean with respect to a given
issuance or sale, or deemed issuance or sale, of Acquisition Shares, that
364-day period ending on and including the date immediately prior to the
date of the issuance or sale, or deemed issuance or sale, of such
Acquisition Shares."
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SECOND: That thereafter, pursuant to a resolution of its Board of
Directors, a special meeting of the stockholders of the Company was duly called
and held, upon notice in accordance with Section 222 of the General Corporation
Law of the State of Delaware at which meeting the necessary number of shares as
required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with Section 242
of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Amendment of Certificate of Designations to be signed by its duly authorized
officer, this ___ day of _____, 1998.
GENERAL MAGIC, INC.
By:
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Title:
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EXHIBIT B
IRREVOCABLE PROXY
The undersigned stockholder of General Magic, Inc., a Delaware corporation
("General Magic"), hereby appoints Steven Markman, Mary E. Doyle and James
McCormick respectively of General Magic, and each of them, as the sole and
exclusive attorneys and proxies of the undersigned, with full power of
substitution and resubstitution, to vote all of the shares of Series C
Convertible Preferred Stock that now are or hereafter may be beneficially owned
by the undersigned (the "Shares"), in accordance with the terms of this Proxy.
The Shares beneficially owned by the undersigned stockholder of General Magic as
of the date of this Proxy are listed on the final page of this Proxy, along with
the number(s) of the share certificate(s) which represent such Shares. Upon the
undersigned's execution of this Proxy, any and all prior proxies given by each
undersigned with respect to any Shares are hereby revoked and the undersigned
agrees not to grant any subsequent proxies with respect to the Shares until
after the earlier to occur of Modification Date , as such term is defined in the
Voting and Waiver Agreement dated October 22, 1998 by and among General Magic,
the undersigned, and all other holders of General Magic's Series C Convertible
Preferred Stock (the "Voting Agreement") or 11:59 PM EST on January 31, 1999.
This Proxy is irrevocable to the fullest extent permitted by law, is
coupled with an interest and is granted pursuant to the Voting Agreement.
Notwithstanding the foregoing, this Proxy shall expire and be of no further
force and effect immediately following the earlier to occur of Modification Date
or 11:59PM EST on January 31, 1999.
The attorneys and proxies named above, and each of them, are hereby
authorized and empowered by the undersigned, at any time on or before the
earlier to occur of the Modification Date or 11:59PM EST on January 31, 1999, to
act as the undersigned's attorney and proxy to vote the Shares, and exercise all
voting rights of the undersigned with respect to the Shares at every annual,
special or adjourned meeting of stockholders of General Magic, and in every
written consent in lieu of such a meeting, to vote in favor of approval of an
amendment to the Certificate of Designations, Preferences and Rights of General
Magic's Series C Convertible Preferred Stock as set forth in Exhibit A to the
Voting Agreement.
The attorneys and proxies named above may not exercise this Proxy on any
other matter except as provided above. The undersigned stockholder may vote the
Shares on all other matters to which they may be otherwise entitled to vote
pursuant to General Magic's Certificate of Incorporation and Delaware law.
Dated: __________, 1998 INSERT NAME OF STOCKHOLDER]
By:
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Name:
Its:
______ shares of General Magic Series C
Convertible Preferred Stock
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