<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____________ TO _____________
Commission file number 000-25374
GENERAL MAGIC, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 77-0250147
(State of incorporation) (IRS Employer Identification Number)
420 NORTH MARY AVENUE
SUNNYVALE, CALIFORNIA 94086
(408) 774-4000
(Address and telephone number of principal executive offices)
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [ ]
41,146,428 shares of the registrant's Common Stock, $0.001 par value,
were outstanding as of July 31, 1999.
1
<PAGE> 2
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits have been filed with this report:
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
3.1 Certificate of Designations, Preferences and Rights of Series E
Convertible Preferred Stock filed with the Delaware Secretary of State
on June 17, 1999 is incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-3 filed with the Securities
and Exchange Commission on July 16, 1999 (File No. 333-83075).
4.1 Series E Preferred Stock and Warrant Purchase Agreement by and between
the Company and Excite, Inc. dated June 18, 1999 is incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on
Form S-3 filed with the Securities and Exchange Commission on July 16,
1999 (File No. 333-83075).
4.2 Form of Warrant for the purchase of shares of Series E Convertible
Preferred Stock is incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-3 filed with the Securities
and Exchange Commission on July 16, 1999 (File No. 333-83075).
10.34(1) Field Trial Agreement dated as of October 1, 1998 between the Company
and BellSouth Cellular Corp.
10.35(1) Unified Messaging Services Agreement dated as of April 28, 1999 between
the Company and Excite, Inc.
10.36(1) Amended License Agreement dated as of March 31, 1999 between the Company
and Fonix/Acuvoice, Inc.
10.37 Agreement dated May 24, 1999 between the Company and Kevin J. Surace.
27.1(2) Financial Data Schedule
</TABLE>
(1) Certain portions of this document are subject to an Application for
Confidential Treatment filed with the Commission on August 23, 1999.
(2) Previously filed.
(b) A report on Form 8-K was filed on April 2, 1999, to report under
Item 5, Other Events, a private placement of the Company's securities.
30
<PAGE> 3
GENERAL MAGIC, INC.
FORM 10-Q, June 30, 1999
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 thereunto duly authorized.
DATE: August 23, 1999 /s/ STEVEN MARKMAN
------------------------------------
Name: Steven Markman
Title: Chairman and Chief Executive
Officer (Principal Executive Officer)
DATE August 23, 1999 /s/ JAMES P. McCORMICK
------------------------------------
Name: James P. McCormick
Title: Chief Financial Officer
(Principal Financial and
Accounting Officer)
31
<PAGE> 4
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
3.1 Certificate of Designations, Preferences and Rights of Series E
Convertible Preferred Stock filed with the Delaware Secretary of State
on June 17, 1999 is incorporated by reference to Exhibit 3.1 to the
Company's Registration Statement on Form S-3 filed with the Securities
and Exchange Commission on July 16, 1999 (File No. 333-83075).
4.1 Series E Preferred Stock and Warrant Purchase Agreement by and between
the Company and Excite, Inc. dated June 18, 1999 is incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement on
Form S-3 filed with the Securities and Exchange Commission on July 16,
1999 (File No. 333-83075).
4.2 Form of Warrant for the purchase of shares of Series E Convertible
Preferred Stock is incorporated by reference to Exhibit 4.2 to the
Company's Registration Statement on Form S-3 filed with the Securities
and Exchange Commission on July 16, 1999 (File No. 333-83075).
10.34(1) Field Trial Agreement dated as of October 1, 1998 between the Company
and BellSouth Cellular Corp.
10.35(1) Unified Messaging Services Agreement dated as of April 28, 1999 between
the Company and Excite, Inc.
10.36(1) Amended License Agreement dated as of March 31, 1999 between the Company
and Fonix/Acuvoice, Inc.
10.37 Agreement dated May 24, 1999 between the Company and Kevin J. Surace.
27.1(2) Financial Data Schedule
</TABLE>
(1) Certain portions of this document are subject to an Application for
Confidential Treatment filed with the Commission on August 23, 1999.
(2) Previously filed.
<PAGE> 1
EXHIBIT 10.34
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.80(b)(4), 200.83
AND 230.406.
FIELD TRIAL AGREEMENT
THIS FIELD TRIAL AGREEMENT is made as of this 1st day of October, 1998,
by and between GENERAL MAGIC INC., a Delaware corporation, having its principal
place of business at 420 N. Mary Avenue, Sunnyvale, California 94086
(hereinafter referred to as "Contractor"), and BELLSOUTH CELLULAR CORP., a
Georgia corporation, having its principal place of business at 1100 Peachtree
Street, N.E., Suite 1000, Atlanta, Georgia 30309-4599 (hereinafter referred to
as "BSCC").
IN CONSIDERATION of the mutual covenants set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, BSCC and Contractor hereby agree as follows:
1. Use of Services. BSCC has requested that Contractor provide a field
trial whereby Contractor will demonstrate Contractor's Personal Assistant
Service called Portico (hereinafter referred to as the "Portico Service"). It is
BSCC's desire to operate the field trial and Contractor's desire to participate
in such demonstration by permitting BSCC's customers to use the Portico Service,
upon the terms and conditions hereinafter set forth. The parties agree that the
purpose and goal of this field trial is for BSCC to test and learn from the
Portico Service and its usage, and BSCC may, at a future date, utilize or
develop any such information learned as a result of said demonstration,
utilization or testing.
2. Services Provided. The parties will work together to adopt a mutually
agreeable written plan for the field trial ("Technical Trial Plan") by January
15, 1999. The Technical Trial Plan will include, among other things, the budget,
division of costs, and implementation schedule for the field trial, and will be
attached hereto as Exhibit A.
The Technical Trial Plan may include, among other things, the following
services on the part of Contractor: (1) Contractor will provide to BSCC up to
[**] accounts on the Portico Service for use in the field trial, provision the
users of such accounts ("Field Trial User(s)"); (2) Contractor will provide
support with respect to the use of the Portico Service for Field Trial Users;
and (3) Contractor will provide storage on the servers used by the Portico
Service in its network operations center ("NOC") in Sunnyvale, California for
the Field Trial User accounts. The Technical Trial Plan may include, among other
things, the following services on the part of BSCC: (1) BSCC will provide
telephone line connections to Contractor's NOC for incoming and outgoing calls
to the Portico Service; (2) BSCC will provide the phone numbers which will
provide access to the accounts used by Field Trial Users; and (3) BSCC will
provide analyses of the field trials through focus groups and/or other means.
The use of the Portico Service by Field Trial Users shall be subject to
applicable terms and conditions of Contractor's Individual Subscriber Agreement
in a form to be agreed upon by the parties, and which will be attached hereto as
Exhibit B. At the conclusion of the Trial Period as set forth in Section 4
("Term") of this Agreement, Contractor will [**].
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE> 2
BSCC and Contractor each agree to share their analyses of the field
trial with the other. Such analyses and other information exchanged between the
parties during the course of the field trial will be subject to the terms of the
Information Exchange Agreement dated October 16, 1998 between BSCC and
Contractor.
3. Title. Title to the Portico Service, including all intellectual
property rights therein, shall at all times remain with Contractor and its
suppliers, as applicable.
4. Term. The field trial is scheduled to begin and end on mutually
agreed upon dates specified in the Technical Trial Plan (the "Trial Period").
Either party may terminate this agreement upon seven (7) days prior written
notice to the other party.
5. Termination.
(a) Default - Either party has the right to terminate this
Agreement if the other party breaches or is in default of any obligation
hereunder which default is incapable of cure or which, being capable of cure,
has not been cured within thirty (30) calendar days after written receipt of
notice of such default (or such additional cure period as the non-defaulting
party may authorize). Notwithstanding the previous sentence, if BSCC breaches
Section 2 of this Agreement, Contractor may immediately terminate this
Agreement.
(b) Acts of Insolvency - Either party may terminate this
Agreement by written notice to the other and may regard the other party as in
default of this Agreement, if the other party becomes insolvent, makes a general
assignment for the benefit of creditors, files a voluntary petition of
bankruptcy, suffers or permits the appointment of a receiver for its business or
assets, or becomes subject to any proceedings under any bankruptcy or insolvency
law, whether domestic or foreign, or has wound up or liquidated, voluntarily or
otherwise. In the event that any of the above events occurs, that party shall
immediately notify the other party of its occurrence.
(c) Force Majeure Event - In the event that either party is
unable to perform any of its obligations under this Agreement or to enjoy any of
its benefits because of natural disaster, actions or decrees of government
bodies or communication line failure not the fault of the affected party
(hereafter referred to as "Force Majeure Event"), the party who has been so
affected shall immediately give notice to the other party and shall use
commercially reasonable efforts to resume performance. Upon receipt of such
notice, all obligations under this Agreement shall be immediately suspended
until such "Force Majeure" is resolved.
<PAGE> 3
6. Limitation of Liability.
(a) Contractor makes no express or implied representations or
warranties with respect to the products or services to be provided hereunder or
their condition, merchantability, fitness for any particular purpose or use by
BSCC. Contractor shall not be liable for any (i) special, indirect, incidental,
punitive, or consequential damages, including loss of profits, arising from or
related to the operation or use of the products or services including, but not
limited to, damages arising from loss of data or programming, loss of revenue or
profits, failure to realize savings or other benefits, damage to equipment, and
claims against BSCC by any third person, even if BSCC has been advised of the
possibility of such damages; (ii) damages (regardless of their nature) for any
delay or failure by Contractor to perform its obligations under this Agreement
due to any cause beyond its reasonable control; or (iii) claims made a subject
of legal proceeding against Contractor more than two (2) years after any such
cause of action first arose. Notwithstanding any other provision of this
Agreement, Contractor's total liabilities under this Agreement shall not be
greater than [**].
(b) All persons furnished by Contractor shall be considered
solely Contractor's employees or agents and Contractor shall be responsible for
compliance with all laws, rules, and regulations including, but not limited to,
employment of labor, hours of labor, working conditions, payment of wages, and
payment of taxes, such as unemployment, social security and other payroll taxes,
including applicable contributions from such persons when required by law.
(c) Contractor agrees to indemnify and save BSCC harmless from
any liabilities, claims or demands (including costs, expenses and reasonable
attorneys' fees on account thereof) that may be made: (1) by anyone for
injuries, including death, to persons or damage to tangible property, including
theft, resulting from Contractor's acts or omissions or those of persons
furnished by Contractor; or (2) by persons furnished by Contractor or any
sub-contractors under Workers Compensation or similar acts. Contractor agrees to
defend BSCC, at BSCC's request, against any such liability, claim or demand.
BSCC agrees to notify Contractor promptly of any written claims or demands
against BSCC for which Contractor is responsible hereunder.
(d) Contractor shall maintain, during the Trial Period, all
insurance and/or bonds required by law including, but not limited to: (1)
Workers Compensation as required by law in the state or states where the work is
to be performed; (2) Employers Liability with limits of at least [**] each
employee by disease/[**] policy limit by disease; (3) Commercial General
Liability (CGL) insurance, including but not limited to contractual liability
and products/completed operations, with limits of not less than [**] per
occurrence and in the aggregate (BSCC shall be named as an additional insured to
this policy with respect to the work performed under this Agreement); (4) All
Risks Property insurance on the Contractor's property, tools and equipment used
and necessary in the performance of services under this contract; (5)
Professional Liability/Errors and Omissions coverage with limits of not less
than [**]. The Contractor and its insurers shall waive all rights of subrogation
against BSCC, its agents, employees or assigns. Prior to the start of work and
upon the renewal of each policy, Contractor will furnish certificates of
insurance evidencing the required coverages to BSCC at: BellSouth Cellular
Corp., 1100 Peachtree Street, Suite 910, Atlanta, Georgia 30309-4599 (Attention:
Manager of Contracts). Certificates furnished by Contractor shall indicate that
BSCC will be notified in writing at least thirty (30) days prior to
[**]CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 4
any cancellation of or material change to the policies required under this
contract. BSCC retains the right to disallow coverage from any insurer that does
not maintain a rating of at least B++ VI by A.M. Best Company. Should the
insurance policy limits be exhausted or should the Contractor fail to maintain
the required insurance coverages, Contractor in no way will be released from
liability to BSCC should a loss occur. Contractor shall also require its
subcontractors, if any, who may enter upon BSCC's premises to maintain similar
insurance and to agree to furnish, if requested, certificates or adequate proof
of such insurance. Certificates furnished by Contractor or its subcontractors
shall contain a clause stating that BSCC is to be notified in writing at least
ten (10) days prior to cancellation of, or any material change in, the policy.
7. Arbitration.
a. BSCC and Contractor shall use their best efforts to settle any
dispute or claim arising from or relating to this Agreement. To accomplish this,
they shall negotiate with each other in good faith. If BSCC and Contractor do
not reach agreement within 30 days, instead of suing in court, BSCC and
Contractor agree to arbitrate any and all disputes and claims (including but not
limited to claims based on or arising from an alleged tort) arising out of or
relating to this agreement, or to any prior agreement for cellular products or
service between Contractor and BSCC or any of Contractor's or BSCC's affiliates
or predecessors in interest.
b. Notwithstanding the provisions of paragraph (a), no claim or
dispute shall be submitted to arbitration if, at the time of the proposed
submission, such dispute or claim involves an attempt to collect a debt owed to
BSCC by the Contractor.
c. The arbitration of any dispute or claim shall be conducted in
accordance with the Wireless Industry Arbitration Rules ("WIA Rules") as
modified by this Agreement and as administered by the American Arbitration
Association ("AAA"). The WIA rules and fee information are available from BSCC
or the AAA upon request.
d. BSCC and Contractor acknowledge that this Agreement evidences
a transaction in interstate commerce and that the United States Arbitration Act
and Federal Arbitration law shall govern the interpretation and enforcement of,
and proceedings pursuant to, this or a prior Agreement.
e. Unless BSCC and Contractor agree otherwise, the location of
any arbitration shall be in the city where BSCC's mobile telephone switching
office for Contractor's access number is located.
f. BSCC and Contractor agree that no arbitrator has the authority
to: (1) award relief in excess of what this or a prior agreement provides; (2)
award punitive damages or any other damages not measured by the prevailing
party's actual damages; or (3) order consolidation or class arbitration.
g. Except as otherwise provided herein, all fees and expenses of
the arbitration shall equally borne by Contractor and BSCC.
h. The arbitrator(s) must give effect to the limitations on the
partys' liabilities as set forth in this or a prior Agreement, any applicable
tariff, law, or regulation.
<PAGE> 5
i. In any arbitration utilizing the rules applicable to
Large/Complex cases, as defined under the WIA rules, the arbitrators must also
apply the Federal Rules of Evidence, and the losing party may have the award
reviewed in accordance with the review procedures set forth in the WIA rules.
j. Contractor agrees that BSCC and Contractor each is waiving its
respective right to a trial by jury; Contractor acknowledges that arbitration is
final and binding and subject to only very limited review by a court. If for
some reason this arbitration clause is at some point deemed inapplicable or
invalid, Contractor and BSCC agree to waive, to the fullest extent allowed by
law, any trial by jury, in such case, a judge shall decide the subject dispute
or claim.
k. BSCC, Contractor and Arbitrator(s) shall not disclose the
existence, content, or results of any arbitration. Judgment on the award
rendered by the arbitrator(s) may be entered in any court having jurisdiction
thereof.
8. Publicity. No release shall be made to the news media or to the
general public relating to this Agreement without the prior written approval of
an authorized executive officer for the other party.
9. Plant and Work Rules. Contractor and BSCC employees and agents while
on the premises of the other, shall comply with all plant rules and regulations.
10. Right of Access. Contractor and BSCC shall permit reasonable access
to the other's facilities in connection with work hereunder. No charge shall be
made for such visits. It is agreed that prior notification will be given when
access is required. Contractor agrees to remove any of its employees or agents
from BSCC's premises at BSCC's request. BSCC agrees to remove any of its
employees or agents from Contractor's premises at Contractor's request.
11. Releases Void. Neither Contractor nor BSCC requires waivers or
releases of any personal rights from representatives of the other in connection
with visits to the other's premises and no such releases or waiver shall be
pleaded by Contractor, BSCC or third persons in any action or proceeding.
12. Nonexclusive Market Rights. It is expressly understood and agreed
that this Agreement does not grant to Contractor any exclusive privileges or
rights and BSCC may contract with other manufacturers and suppliers for the
procurement of comparable products and services.
13. Infringements of Patents, Trademarks or Copyrights. Contractor
warrants that it or its suppliers are the owner(s) of the software that runs the
Portico Service and related documentation, and will defend, at its expense, any
action brought against BSCC to the extent that it is based upon a claim that the
software that runs the Portico Service infringes upon a copyright in the United
States, or a United States or foreign letters patent or copyright, trademark or
other proprietary right of the third party. Contractor shall pay such attorneys'
fees and damages as shall be finally awarded against BSCC in such action(s)
which are attributable to such claims, provided however, that Contractor's
obligation hereunder is dependent upon BSCC's notifying Contractor in writing of
such claim promptly for Contractor, at its option, to participate fully in the
defense of such
<PAGE> 6
claim, or agree to any settlement of such claim. If the software that runs the
Portico Service becomes or in Contractor's opinion is likely to become, subject
to a claim of infringement of a United States copyright, a United States patent
or foreign letters patent or copyright, trademark or other proprietary right of
the third party, Contractor may, at its option (a) procure for BSCC the right to
continue using the Portico Service or related documentation, or (b) replace or
modify the software that runs the Portico Service to make it substantially
similar in functionality but not infringing. Contractor shall, however, have no
liability for any claim of infringement of a copyright in the United States, or
a United States or foreign letters patent or copyright, trademark or other
proprietary right of a third party if such infringement is based solely on the
news or other content provided through the Portico Service, or upon material
created, sent or received by users of the Portico Service during the field
trial.
14. Use of Information. Any technical or business information, including
but not limited to programs, files, specifications, drawings, sketches, models,
samples, tools or other data, oral, written or otherwise, (hereinafter called
"Information"), furnished to, or obtained by Contractor hereunder or in
contemplation hereof by BSCC, shall remain BSCC's property. All copies of such
Information in written, graphic or other tangible form shall be returned to BSCC
immediately upon BSCC's request.
15. General Performance Warranty. Contractor warrants to BSCC that the
services provided pursuant to this Agreement shall be performed on or after
January 1, 2000 in the same manner and with the same functionality as the dates
falling on or before December 31, 1999.
16. Compliance with Laws. Contractor agrees to comply with the
provisions of the Fair Labor Standards Act of 1938, as amended, and all other
applicable federal, state, county and local laws, ordinances, regulations, and
codes in the performance of this Agreement, including the procurement of permits
and certificates where needed, and to comply with all laws as to packing,
labeling and shipping, whether the shipments or services are interstate or
intrastate. Contractor further agrees to indemnify BSCC for any loss or damage
that may be sustained by reason of Contractor's failure to so comply.
17. Nondiscrimination. Contractor expressly agrees not to discriminate
against any employee or applicant for employment because of race, color,
religion, sex, national origin or handicap, and shall during the performance of
this Agreement comply with all applicable executive and federal regulations.
18. Severability. If any of the provisions of this Agreement shall be
invalid or unenforceable, such invalidity or unenforceability shall not
invalidate or render unenforceable the entire Agreement, but rather the entire
Agreement shall be construed as if not containing the particular invalid or
unenforceable provision or provisions, and the rights and obligations of each
party shall be construed and enforced accordingly.
19. Assignment. Any assignment of this Agreement or of the work to be
performed, in whole or in part, or of any other interest hereunder without
BSCC's written consent, except an assignment confined solely to monies due or to
become due shall be void. It is expressly agreed that any such assignment of
monies shall be void to the extent that it attempts to impose upon BSCC
obligations to the assignee additional to the payment of such monies, or to
preclude BSCC from
<PAGE> 7
dealing solely and directly with Contractor in all matters pertaining hereto,
including the negotiation of amendments or settlements of amounts due.
It is further agreed that BSCC, upon five (5) days prior written
notice to Contractor may assign all of its rights, duties and obligations under
this Agreement to an affiliate or affiliates of BSCC or to a partnership or
partnerships in which BSCC or its affiliate has an interest. Except as provided
above, neither this Agreement, nor any right granted hereunder shall be
assigned, subleased, or otherwise transferred, in whole or in part, in any
manner, by BSCC without Contractor's prior written consent.
20. Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their successors an permitted assigns or
other legal representatives.
21. Governing Law. This Agreement shall be construed in accordance with
the laws of the State of Georgia, excluding all principles of conflicts of laws.
The parties hereto agree that any action related to this Agreement shall be
venued solely in Fulton County, Georgia, and the parties hereby irrevocably
commit to the jurisdiction and venue of the courts in said county to resolve any
dispute arising hereunder or relating hereto.
22. Entire Agreement. This Agreement and the exhibits attached hereto
shall constitute the entire agreement between the parties hereto with respect to
the subject matter hereof, and supersede all existing contracts or agreements,
written or oral, between the parties hereto, except the Information Exchange
Agreement between the parties dated October 16, 1998.
23. Waiver of Breach. No term or provision hereof shall be deemed waived
and no breach excused unless such waiver shall be in writing and signed by the
party claimed to have waived or consented.
24. Notice. Any notice or other communication pursuant to this Agreement
shall be in writing and shall be deemed to have been fully given or made when
personally delivered by registered or certified mail, postage prepaid, to the
following address or such other address as the parties may provide in writing to
the other from time to time:
If to BSCC: BellSouth Cellular Corp.
1100 Peachtree Street, N.E., Suite 910
Atlanta, Georgia 30309-4599
Attention: Manager of Contracts
If to Contractor: General Magic, Inc.
420 N. Mary Avenue
Sunnyvale, California 94086
Attention: General Counsel
25. Amendments. This Agreement and the terms and conditions contained
herein may be amended only in writing by an authorized executive officer of each
respective party to this Agreement.
<PAGE> 8
26. Headings. Headings contained in this Agreement are for convenience
of reference only and are not intended to have any substantive significance in
interpreting this Agreement.
27. Survival. If for any reason the field trial is terminated prior to
the end of the Trial Period, the terms of this Agreement shall survive until the
end of the Trial Period and shall then expire, except that the following
sections shall survive any expiration or termination of this Agreement: Section
3 ("Title"), Section 6 ("Limitation of Liability"), Section 7 ("Arbitration"),
Section 8 ("Publicity"), Section 13 ("Infringements of Patents, Trademarks or
Copyrights"), Section 14 ("Use of Information"), Section 18 ("Severability"),
and Sections 20 through 27 ("Binding Effect"), ("Governing Law"), ("Entire
Agreement"), ("Waiver of Breach"), ("Notice"), ("Amendments"), ("Headings"), and
("Survival").
IN WITNESS WHEREOF, the parties have executed this Agreement under seal
on the day and year set forth above.
BELLSOUTH CELLULAR CORP. GENERAL MAGIC INC.
By: /s/ Daniel P. Downey By: /s/ Kevin J. Surace
-------------------------------- -------------------------------------
Title: Director, Product Planning Title: Executive Vice President
Development and Management
Attest: Attest:
By: By: /s/ Mary E. Doyle
--------------------------------- -------------------------------------
Title: Title: Secretary
------------------------------ ----------------------------------
(SEAL) (SEAL)
<PAGE> 9
EXHIBIT A
PORTICO PERSONAL ASSISTANT
TECHNICAL FIELD TRIAL
1Q99
BELLSOUTH CELLULAR CORP.
AND
GENERAL MAGIC, INC.
<PAGE> 10
<TABLE>
<S> <C>
OVERVIEW__________________________________________________________________3
PRODUCT DESCRIPTION_____________________________________________________3
PROJECT SCOPE___________________________________________________________3
TRIAL OBJECTIVES__________________________________________________________4
PARTICIPANTS______________________________________________________________5
[**] THE SERVICE__________________________________________________________5
[**]______________________________________________________________________5
[**]______________________________________________________________________5
[**]______________________________________________________________________5
[**]______________________________________________________________________5
[**]______________________________________________________________________5
[**]______________________________________________________________________6
[**]______________________________________________________________________6
[**]______________________________________________________________________6
[**]______________________________________________________________________6
[**]______________________________________________________________________6
[**]______________________________________________________________________6
[**]______________________________________________________________________6
[**]______________________________________________________________________7
TRIAL NETWORK ARCHITECTURE________________________________________________8
Y2K COMPLIANCE____________________________________________________________8
SERVICE AND FEATURE AVAILABILITY__________________________________________9
PROJECT BUDGET [**]______________________________________________________10
PROJECT SCHEDULE_________________________________________________________10
PROJECT TEAM_____________________________________________________________10
</TABLE>
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 11
PORTICO PERSONAL ASSISTANT
LIMITED TECHNICAL TRIAL
OVERVIEW
PRODUCT DESCRIPTION
Personal Assistants feature a sophisticated voice-driven user interface to
provide many of the functions of an administrative assistant for the mobile,
on-the-go, busy worker and consumer. Services include:
o Inbound call management (caller announcement, reach list, voice mail)
o Outbound call management (voice activated dialing, call address book
entries)
o Business information management (scheduling, contacts, tasks/notes)
o Integrated messaging (voice mail, e-mail, fax, paging, print-to-fax)
o Public information access (stocks, news, other Internet information
access, etc.)
Major benefits for BSCC that may emerge from Personal Assistant services
include:
o [**]
o [**]
o [**]
o [**]
o [**]
PROJECT SCOPE
BSCC plans to trial General Magic's Portico Personal Assistant service in the
BMI Atlanta market beginning in Q1, 1999. The trial will include having up to
[**] BMI customers use the Portico service for up to [**], with the intent of
evaluating our customers' interest in Personal Assistant-type services.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 12
PORTICO PERSONAL ASSISTANT
LIMITED TECHNICAL TRIAL
TRIAL OBJECTIVES
Trial objectives will include the following:
1. Value Proposition - Understand the [**]
Additionally, understand the [**]
o Inbound call management (caller announcement, reach list, voice
mail)
o Outbound call management (voice activated dialing, call address book
entries)
o Business information management (scheduling, address book,
tasks/notes)
o Unified messaging (voice mail, e-mail, fax, notification,
print-to-fax)
o Public Information Access (stocks, news, other Internet information
access, etc)
The goal is to [**]
2. [**] test and evaluate [**] Determine if the [**] and if the [**]
3. Voice User Interface - [**].
o Evaluate [**] Also evaluate the [**]
o [**] evaluate the [**]
o [**]
4. [**] Understand how [**]
5. [**] determine [**] Determine how [**]
6. [**] evaluate the [**] to determine the [**]
7. [**] Learn [**]
8. [**] test and determine [**] Understand how [**] and determine how [**]
9. Customer service and technical support - determine the [**]
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 13
PORTICO PERSONAL ASSISTANT
LIMITED TECHNICAL TRIAL
PARTICIPANTS
Up to [**] participants in the trial.
[**] THE SERVICE
o [**]
o [**]
o [**]
o [**]
o [**]
[**]
1. [**]
2. [**]
3. [**]
4. [**]
5. [**]
[**]
[**]
[**]
[**]
1. [**]
2. Distribute [**]
3. Conduct [**]
4. Conduct [**]
5. Conduct [**]
6. Conduct [**]
7. Produce [**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 14
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
This trial is [**] As a result, [**]
o Use [**]
o [**]
o [**]
o [**]
o [**]
o [**]
o Gain [**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 15
[**]
[**]
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 16
PORTICO PERSONAL ASSISTANT
LIMITED TECHNICAL TRIAL
TRIAL NETWORK ARCHITECTURE
Connect from [**] to [**]
Use [**].
Maintain the [**]
[**]
[**]
[**]
[**]
[**]
[**]
Y2K COMPLIANCE
In order for GM to be connected to the BellSouth network, GM must provide a
letter from their president stating the they are Y2K compliant.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 17
PORTICO PERSONAL ASSISTANT
LIMITED TECHNICAL TRIAL
SERVICE AND FEATURE AVAILABILITY
Several [**] features will be available for the trial:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------
PERSONAL ASSISTANT SERVICES AND FEATURES DATE AVAILABLE
- ----------------------------------------------------------------------------
<S> <C>
PA uses [**]
- ----------------------------------------------------------------------------
PA knows [**]
- ----------------------------------------------------------------------------
After the [**] [**]
- ----------------------------------------------------------------------------
PA speaks [**] [**]
- ----------------------------------------------------------------------------
Caller Interface: [**] [**]
- ----------------------------------------------------------------------------
[**] [**]
[**]
[**]
[**]
- ----------------------------------------------------------------------------
More than [**] [**]
- ----------------------------------------------------------------------------
[**] [**]
- ----------------------------------------------------------------------------
[**] [**]
- ----------------------------------------------------------------------------
Support for [**] [**]
- ----------------------------------------------------------------------------
[**] [**]
- ----------------------------------------------------------------------------
When [**]
- ----------------------------------------------------------------------------
[**] [**]
- ----------------------------------------------------------------------------
[**] [**]
- ----------------------------------------------------------------------------
[**] [**]
- ----------------------------------------------------------------------------
[**] [**]
- ----------------------------------------------------------------------------
[**] [**]
- ----------------------------------------------------------------------------
</TABLE>
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 18
PORTICO PERSONAL ASSISTANT
LIMITED TECHNICAL TRIAL
PROJECT BUDGET [**]
[**] will be shared by BSCC and General Magic [**] GM will provide [**] Each
company will [**]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
EXPENSE ITEM LOW HIGH
- ---------------------------------------------------------------------------
<S> <C> <C>
[**] [**] [**]
- ---------------------------------------------------------------------------
[**] [**] [**]
- ---------------------------------------------------------------------------
[**] [**] [**]
- ---------------------------------------------------------------------------
TOTAL [**] [**]
- ---------------------------------------------------------------------------
</TABLE>
PROJECT SCHEDULE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
PROJECT TASKS DATE
- ---------------------------------------------------------------------------
<S> <C>
See separate MS Project schedule
- ---------------------------------------------------------------------------
</TABLE>
PROJECT TEAM
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
NAME COMPANY TELEPHONE FAX EMAIL
- ---------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[**] BSCC [**] [**] [**]
- ---------------------------------------------------------------------------
[**] BSCC [**] [**] [**]
- ---------------------------------------------------------------------------
[**] BST S&T [**] [**]
- ---------------------------------------------------------------------------
[**] GMI [**] [**] [**]
- ---------------------------------------------------------------------------
[**] GMI [**] [**] [**]
- ---------------------------------------------------------------------------
[**] GMI [**] [**] [**]
- ---------------------------------------------------------------------------
</TABLE>
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 19
BSCC - PORTICO TRIAL MEASUREMENTS
[**] MEASUREMENTS
These measurements should be collected for [**]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MEASUREMENT DESCRIPTION USE
- --------------------------------------------------------------------------------
<S> <C> <C>
[**] [**] Gauge of [**]
- --------------------------------------------------------------------------------
[**] [**] Identify [**]
- --------------------------------------------------------------------------------
[**] [**] [**]
- --------------------------------------------------------------------------------
[**] [**] Projection of [**]
- --------------------------------------------------------------------------------
[**] [**] Measure [**]
- --------------------------------------------------------------------------------
[**] [**] Measure [**]
- --------------------------------------------------------------------------------
</TABLE>
[**] MEASUREMENTS
These measurements should be collected for [**]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MEASUREMENT DESCRIPTION USE
- --------------------------------------------------------------------------------
<S> <C> <C>
[**] [**] Gauge of [**]
- --------------------------------------------------------------------------------
[**] [**] Identify [**]
- --------------------------------------------------------------------------------
[**] [**] Indication of [**]
- --------------------------------------------------------------------------------
[**] [**] Indication of [**]
- --------------------------------------------------------------------------------
[**] [**] Measure [**]
- --------------------------------------------------------------------------------
[**] [**] [**]
- --------------------------------------------------------------------------------
[**] [**] Gauge [**]
- --------------------------------------------------------------------------------
</TABLE>
[**] MEASUREMENTS
These measurements should be collected for [**]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MEASUREMENT DESCRIPTION USE
- --------------------------------------------------------------------------------
<S> <C> <C>
[**] [**] Gauge of [**]
- --------------------------------------------------------------------------------
[**] [**] Identifying [**]
- --------------------------------------------------------------------------------
[**] [**] Indication of [**]
- --------------------------------------------------------------------------------
[**] [**] Indication of [**]
- --------------------------------------------------------------------------------
</TABLE>
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 20
BSCC - PORTICO TRIAL MEASUREMENTS
[**] MEASUREMENTS
These measurements should be collected for [**]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MEASUREMENT DESCRIPTION USE
- --------------------------------------------------------------------------------
<S> <C> <C>
[**] [**] Gauge of [**]
- --------------------------------------------------------------------------------
[**] [**] Indication of [**]
- --------------------------------------------------------------------------------
[**] [**] Identify [**]
- --------------------------------------------------------------------------------
[**] [**] Indication [**]
- --------------------------------------------------------------------------------
[**] [**] Gauge [**]
- --------------------------------------------------------------------------------
[**] [**]
- --------------------------------------------------------------------------------
</TABLE>
[**] MEASUREMENTS
These measurements should be collected for [**]
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
MEASUREMENT DESCRIPTION USE
- --------------------------------------------------------------------------------
<S> <C> <C>
[**] [**] Gauge of [**]
- --------------------------------------------------------------------------------
[**] [**] Indication of [**]
- --------------------------------------------------------------------------------
[**] [**] Indication of [**]
- --------------------------------------------------------------------------------
[**] [**] Measure [**]
- --------------------------------------------------------------------------------
</TABLE>
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 21
EXHIBIT B
SERVICE AGREEMENT
THIS AGREEMENT is entered into between the Carrier providing the service
("Company") and the user of the Service ("Customer") and is subject to
acceptance by Company. Customer must be at least 18 years of age to use the
Service. Customer's acceptance is limited to the terms and conditions of this
offer. No additions or subtractions by Customer are acceptable unless and until
expressly and mutually agreed upon.
1. PROVISION OF SERVICE.
(a) Company shall provide and Customer shall accept Service (all Services
provided by Company are referred to herein as "Service") at the rates and
charges shown on the signature slip included with this Agreement, for any lawful
purpose, subject to the terms and conditions specified in this agreement.
Company shall provide Customer with an access number by which Customer may use
Company's system. Customer shall not have any proprietary right to the access
number(s) provided to it by Company. Except as otherwise agreed by Company in
writing, Company reserves the right to revise, in its sole discretion, the
rates, terms, and conditions of its agreement with Customer upon at least 30
days written notice to Customer. Company and its suppliers also reserve the
right to add, remove, change or discontinue features of the enhanced messaging
services at any time. Long distance rates for calls beyond Company's local
service area are subject to change from time to time without notice. Customer
agrees to pay for service pursuant to such revised rates, terms, and conditions,
unless Customer terminates this agreement in accordance with the terms and
conditions of this agreement. Company reserves the right to assign, designate or
change access number(s) when, in its sole discretion, such assignment
designation or change is reasonable or necessary in the conduct of its business.
(b) When Customer's account on the Service is established, Company or its
suppliers will provide Customer with a passcode through which to access enhanced
messaging features. Customer should change this passcode immediately after the
account is established. THIS PASSCODE IS AN IMPORTANT MEANS OF PREVENTING OTHERS
FROM ACCESSING CUSTOMER'S ACCOUNT AND CUSTOMER MUST KEEP IT CONFIDENTIAL.
Customer may disclose the passcode to other people whom Customer wants to have
access to use Customer's account on Customer's behalf, but will be fully
responsible for any and all charges and liabilities incurred through their use
of Customer's account. Customer will also be fully responsible for any charges
and liabilities incurred through use of Customer's account by anyone who obtains
this passcode as a result of Customer's negligence, until Customer notifies
Company's customer service group at [PHONE NUMBER].
(c) Service is subject to transmission limitations caused by atmospheric,
topographical and any other like conditions. Additionally, Service may be
temporarily refused, limited, interrupted or curtailed due to government
regulations or orders, system capacity limitations or irregularities,
limitations
<PAGE> 22
imposed by an underlying carrier, or because of equipment modifications,
upgrades, repairs or reallocations or other similar activities necessary or
proper for the operation or improvement of Company's system. Certain services,
such as directory listings, operator services and roaming in some areas, may be
provided by other carriers. Customer may use these services subject to the
regulations and charges of such other carriers. Paging service is only available
in conjunction with Company's wireless voice capable radio service.
(d) Service to Customer may be refused, discontinued or terminated without
written notice in the event the service is used by Customer in such a manner
that will adversely affect the Company's service to any of its other customers,
if it is determined that the Customer's mobile radio unit is in violation of FCC
rules or adversely affects the Company's service to any of its other customers,
or if Customer uses features of the Service to harass any other person, to
intercept any communications not intended for Customer, or to engage in
"spamming" or similar conduct.
(e) Customer must provide accurate information to Company and its suppliers when
signing up for the Service. Customer understands and agrees that Company and its
suppliers may compile and maintain lists and databases of the information
provided (including Customer's) and other information derived from use of the
Service and that Company and its suppliers may use such information in the
operation, administration, management, and promotion of the Service, and that
Company will own the copyright in the compilation of such information.
2. DEPOSITS.
(a) Company may, from time to time, at its sole discretion and in order to
safeguard its interest, require Customer to make suitable deposit(s) to be held
by Company as a guarantee of the payment of charges. At such time as the
relationship between Company and Customer is terminated, the amount of deposit,
including any accrued interest required by law shall be credited to Customer's
final bill and any remaining amount of deposit, after application to any amount
due and owing by Customer to Company, will be refunded. Any credit balance,
however, may be returned to Customer at any time prior to such termination, at
the sole discretion of Company.
(b) Interest will be paid on all sums retained on deposit by Company to the
extent required by law. No refund of deposit, or interest accrued on such
deposit, will be made until after such time as Customer has maintained the
account in good standing for the lesser of 12 consecutive months or for the
period required by law. No interest shall be paid on a deposit, or any portion
of such deposit, after the day on which a refund is processed.
3. LIMITATION OF COMPANY'S LIABILITY.
(a) CUSTOMER UNDERSTANDS THAT ALTERNATIVE AND COMPETING COMMUNICATIONS CARRIERS
ARE AVAILABLE TO CUSTOMER; INTERRUPTIONS OR IRREGULARITIES IN THE SERVICE MAY
OCCUR; ANY POTENTIAL HARM FROM INTERRUPTIONS OR IRREGULARITIES IN THE SERVICE IS
SPECULATIVE IN NATURE; COMPANY CANNOT OFFER THE SERVICE AT RATES WHICH REFLECT
ITS VALUE TO EACH CUSTOMER; AND COMPANY AND ITS
<PAGE> 23
SUPPLIERS ASSUME NO RESPONSIBILITY OTHER THAN THAT CONTAINED IN THIS AGREEMENT.
ACCORDINGLY, CUSTOMER AGREES THAT EXCEPT AS LIMITED BY LAW, COMPANY'S AND ITS
SUPPLIERS' SOLE LIABILITY FOR LOSS OR DAMAGE ARISING OUT OF MISTAKES, OMISSIONS,
INTERRUPTIONS, DELAYS, ERRORS, OR DEFECTS IN THE SERVICE OR TRANSMISSION OF
SERVICE PROVIDED BY COMPANY, ITS SUPPLIERS OR ANY CARRIER, OR FOR LOSSES OR
DAMAGES ARISING OUT OF THE FAILURE OF COMPANY, ITS SUPPLIERS OR ANY CARRIER TO
MAINTAIN PROPER STANDARDS OF MAINTENANCE AND OPERATION SHALL BE AS FOLLOWS:
(I) A CREDIT ALLOWANCE, AS DESCRIBED IN SUB-SECTION 3 (a)(III) BELOW, WILL BE
MADE AT CUSTOMER'S REQUEST IN THE FORM OF A PRO-RATA ADJUSTMENT OF THE FIXED
MONTHLY CHARGES BILLED TO CUSTOMER. FIXED MONTHLY CHARGES ARE THE MONTHLY
CHARGES FOR ACCESS AND OPTIONAL FEATURES PER ACCESS NUMBER, ALL AS DESCRIBED IN
THE SCHEDULE OF RATES AND CHARGES IN EFFECT AT THE TIME OF INTERRUPTION.
(ii) SUCH CREDIT ALLOWANCE WILL BE BASED UPON THE PERIOD OF TIME DURING WHICH
SUCH MISTAKES, OMISSIONS, DELAYS, ERRORS OR DEFECTS IN THE SERVICE OR ITS
TRANSMISSION CAUSED INTERRUPTIONS IN THE RENDERING OF THE SERVICE. ANY SUCH
PERIOD OF TIME DURING WHICH AN INTERRUPTION OCCURS WILL BE MEASURED FROM THE
TIME IT IS REPORTED TO OR DETECTED BY COMPANY, WHICHEVER OCCURS FIRST. IN THE
EVENT CUSTOMER IS AFFECTED BY SUCH INTERRUPTION FOR A PERIOD OF LESS THAN 24
HOURS, NO SUCH ADJUSTMENT SHALL BE MADE. WHEN AN INTERRUPTION EXCEEDS 24 HOURS,
THE LENGTH OF THE INTERRUPTION WILL BE MEASURED IN 24 HOUR DAYS. A FRACTION OF A
DAY CONSISTING OF LESS THAN 12 HOURS WILL NOT BE CREDITED, BUT A PERIOD OF 12
HOURS OR MORE WILL BE CONSIDERED AN ADDITIONAL DAY.
(iii) THE CREDIT ALLOWANCE WILL BE COMPUTED BY DIVIDING THE LENGTH OF THE
SERVICE INTERRUPTION BY A STANDARD 30 DAY MONTH AND THEN MULTIPLYING THE RESULT
BY COMPANY'S FIXED MONTHLY CHARGES FOR EACH INTERRUPTED ACCESS NUMBER. IN NO
CASE WILL THE CREDIT EXCEED THE FIXED MONTHLY CHARGES.
(iv) A CREDIT ALLOWANCE WILL NOT BE GIVEN FOR MISTAKES, OMISSIONS,
INTERRUPTIONS, DELAYS, ERRORS OR DEFECTS, OR CURTAILMENTS IN THE SERVICE CAUSED
BY THE NEGLIGENCE OR WILLFUL ACT OF CUSTOMER OR OTHER PARTIES NOT AFFILIATED
WITH COMPANY OR ITS SUPPLIERS, OR MISTAKES, OMISSIONS INTERRUPTIONS, DELAYS,
ERRORS, OR DEFECTS CAUSED BY FAILURE OF EQUIPMENT OR SERVICE NOT PROVIDED BY
COMPANY OR ITS SUPPLIERS.
(v) THE SERVICE FURNISHED BY COMPANY AND ITS SUPPLIERS, IN ADDITION TO THE
LIMITATIONS SET FORTH IN THE PRECEDING PARAGRAPHS, IS ALSO SUBJECT TO THE
FOLLOWING LIMITATION: THE LIABILITY OF COMPANY AND ITS SUPPLIERS FOR LOSS OR
DAMAGES ARISING OUT OF MISTAKES, OMISSIONS, INTERRUPTIONS, DELAYS, ERRORS OR
DEFECTS IN THE SERVICE, ITS TRANSMISSION OR FAILURES OR DEFECTS IN FACILITIES
OF THE UNDERLYING CARRIER, OCCURRING IN THE COURSE OF FURNISHING SERVICE AND NOT
CAUSED BY THE NEGLIGENCE OF THE AUTHORIZED USER, SHALL IN NO EVENT EXCEED AN
AMOUNT EQUIVALENT TO THE PROPORTIONATE FIXED MONTHLY CHARGE TO THE CUSTOMER FOR
SERVICE DURING THE PERIOD OF TIME IN WHICH SUCH MISTAKES, OMISSIONS,
INTERRUPTIONS, DELAYS, ERRORS, OR DEFECTS IN SERVICE, ITS TRANSMISSION, OR
FAILURES OR DEFECTS IN FACILITIES
<PAGE> 24
FURNISHED BY COMPANY, ITS SUPPLIERS OR THE UNDERLYING CARRIER OCCURRED.
(b) Company and its suppliers shall in no event be liable for service or
equipment interruptions or delays in transmission, errors or defects in service
or equipment, when caused by acts of God, fire, war, riots, government
authorities, default of supplier, or other causes beyond Company's, its
suppliers' or any carrier's control.
(c) Customer acknowledges that Company's systems use radio channels to transmit
voice and data communications, that Company and its suppliers may, from time to
time, keep audible records of Customer's spoken commands to the enhanced
messaging services in order to improve such services, and that the Service may
not be completely private. Company and its suppliers will not monitor or
disclose any communications Customer sends or receives via the Service, except
as may be required by law or legal process. Company and its suppliers are not
liable to customer for any claims, loss, damages or cost which may result from
lack of privacy on the system.
(d) Customer hereby agrees to indemnify and save Company and its suppliers
harmless against claims for libel, slander, or infringement of copyright from
the transmission of material in any form over its facilities by Customer or
those using Customer's equipment; against claims for infringement of patents
arising from combining or using apparatus or systems of Customer with the
facilities of Company, its suppliers, or any carrier; and against all other
claims arising out of any act or omission of Customer in connection with the
facilities or services provided by Company and its suppliers.
(e) The enhanced messaging services provided by Company and its suppliers
currently provide Customer the ability to retrieve certain news stories, press
releases, stock prices, and similar information supplied by news and information
services (collectively, "Third Party Content"). Customer understands that
Company and its suppliers have no editorial control over any Third Party Content
and that Company and its suppliers do not guarantee the accuracy or completeness
of any Third Party Content. Customer agrees that neither Company nor its
suppliers have any liability to Customer or anyone who uses Customer's account
with regard to any Third Party Content. Customer also understands that the Third
Party Content is the copyrighted material of the third party that supplies it,
is protected by copyright and other applicable laws, and may not be reproduced,
published, broadcast, rewritten, or redistributed without the written permission
of the third party that supplied it, except to the extent allowed under the
"fair use" provisions of the U.S. copyright laws or comparable provisions of
foreign laws. Customer's use of certain stock price information included in the
Third Party Content may be subject to, and Customer agrees to comply with, the
terms of separate agreements provided by the suppliers of such information,
copies of which will be furnished to you by Company or its suppliers upon
written request.
(f) Customer may need to use certain software programs to use or have full
access to certain features of the enhanced messaging
<PAGE> 25
features of the Service. Company or its suppliers will either provide such
software to Customer at no additional charge, or provide instructions for
obtaining such software directly from the company that supplies it. Customer's
use of such software typically will be subject to the terms of a separate
"shrink wrap" or "click screen" license. Customer agrees to comply with the
terms of all licenses for the software Customer uses in connection with the
Service.
(g) Company and its suppliers are not liable for any damage, accident, injury or
the like occasioned by the use of Service or the presence of equipment,
including cellular units and devices, facsimile units, pagers and ancillary
equipment of Customer or Company and its suppliers except as provided herein.
(h) Company and its suppliers are not liable for any defacement or damage to
Customer's motor vehicle or any personal or real property resulting from the
presence of radio and ancillary equipment.
(i) The liability of Company and its suppliers in connection with the Service
provided is subject to the foregoing limitations and Company and its suppliers
make no warranties of any kind, expressed or implied, as to the provision of
such service.
4. DISCLAIMER OF WARRANTIES AND LIMITATION OF REMEDIES.
(a) Customer acknowledges and agrees that Company and its suppliers are not the
manufacturers of equipment and Company and its suppliers, except as limited by
law hereby disclaim all representations and warranties, direct or indirect,
express or implied, written or oral, in connection with the equipment or service
(whether purchased or leased by Customer from Company and its suppliers or
another), including but not limited to any and all express and implied
warranties of title, suitability, durability, merchantability, non-infringement
of third party rights, and fitness for a particular purpose. Enhanced messaging
services are provided on an "AS IS" and "AS AVAILABLE" basis. Company and its
suppliers make no warranty that the enhanced messaging services will meet
Customer's requirements or that use of the enhanced messaging services will be
uninterrupted, timely, secure, or error-free; nor do Company and its suppliers
make any warranty as to the results that may be obtained from use of the
enhanced messaging services or the accuracy or reliability of any information
obtained through the enhanced messaging services (including Third Party
Content), or that any defects in the enhanced messaging services will be
corrected. Customer understands and agrees that any material or data obtained
through use of the enhanced messaging services is at Customer's own discretion
and risk, and that Customer will be solely responsible for any resulting damage
to Customer's computer system or loss of data. Company and its suppliers make no
warranty regarding any goods or services purchased or obtained through the
enhanced messaging services or any transactions entered into through the
enhanced messaging services. Company to the extent permitted by law assigns to
Customer any and all manufacturers' warranties relating to equipment purchased
by Customer, and Customer acknowledges receipt of any and all such
manufacturers' warranties.
<PAGE> 26
(b) Customer acknowledges and agrees that its sole and exclusive remedy in
connection with any defects in the equipment or service, including manufacture
or design, shall be against the manufacturer of the equipment under the
manufacturers' warranties and that Company and its suppliers shall have no
liability to Customer in any event for any loss, damage, injury, or expense of
any kind or nature related directly or indirectly to any equipment or service
provided hereunder. Without limiting the above, Company and its suppliers shall
have no liability or obligation to customer or anyone who uses Customer's
account, in either contract or tort, for special, incidental, or consequential
damages of any kind incurred by Customer, such as, but not limited to, claims or
damages for personal injury, wrongful death, loss of use, loss of anticipated
profits, or other incidental or consequential damages or economic losses of any
kind incurred by Customer directly or indirectly resulting from or related to
any equipment or service described hereunder, whether or not caused by Company's
or its suppliers' negligence, to the full extent same may be disclaimed by law.
Any references to equipment in this paragraph shall be deemed to apply to all
equipment purchased by Customer or leased by Customer from Company or another
lessor. Some states do not allow the exclusion or limitation of incidental or
consequential damages so the above exclusion may not apply. You may also have
other legal rights which vary from state to state.
5. INDEMNIFICATION AND RELEASE. Customer agrees to release, defend, indemnify
and hold harmless Company and its suppliers, and their officers and employees,
to the full extent permitted by law from and against any and all claims,
damages, liabilities and expenses, including legal and attorney fees, of any
nature arising directly or indirectly out of this agreement, including, without
limitation, claims for personal injury or wrongful death to customer or users of
the equipment, products or services provided by Company and its suppliers or
used in conjunction with such equipment, products or services provided by
Company and its suppliers and arising out of the manufacture, purchase,
operation, condition, maintenance, installation, return or use of the equipment
or service, or arising by operation of law, whether the claim is based in whole
or in part on negligent acts or omissions of Company and its suppliers, and
their agents or employees.
6. RATES AND CHARGES. Unless otherwise agreed by Company, Customer will be
billed in advance for monthly access charges and in arrears for usage charges.
Usage of Service shall be measured in one minute increments and each partial
minute shall be rounded up to the next one minute increment. Customer will be
charged a minimum of one minute for every call that is received or placed using
Customer's equipment and sent or answered by the called party. Chargeable time
is measured from time of channel seizure to channel termination. Company
reserves the right to define the hours of peak and off-peak, and nights and
weekends calling times and Customer recognizes that scheduling of such times is
subject to change and that such changes do not constitute changes in
<PAGE> 27
rates. Airtime rates do not include long distance charges for calls beyond
Company's local service area.
7. PAYMENT OF CHARGES.
(a) Unless otherwise agreed by Company, Payment is due to Company upon receipt
of invoice by Customer. Service may be billed to Customer's credit card.
(b) Customer shall be responsible for payment of charges for all services
furnished by Company, including without limitation, Service connection charges,
monthly access charges, charges for air time associated with calls originated by
or completed to Customer's access number and charges for enhanced features as
well as other charges billed to Customer's access number, including sales and
use taxes, other taxes required by law, fees or other exactions imposed by or
for any municipal or other political authority against Company. In addition,
Customer shall pay Company when due for all toll charges resulting from the
origination of mobile calls to points outside Company's Service Area, and for
all other charges attributable to Customer's access number. Customer also agrees
to pay for charges billed to Customer's access number on account of Service
provided to Customer as a "roamer" in other cities or Service areas. Rates and
charges shall be based on prices in effect at the time Service is furnished.
(c) Payments received after the due date of an invoice may incur a late payment
charge of up to the highest rate permitted by law of the unpaid balance for each
month or fraction thereof that such balance shall remain unpaid.
(d) In the event that Customer's equipment is lost, stolen or otherwise absent
from Customer's possession and control, Customer shall nonetheless be liable for
all use, toll, and other usage based charges attributable to the access number
assigned to said unit until such time as Company is notified of the loss, theft,
or other occurrence. The contract shall not terminate due to any such notice.
(e) When payment for Service or equipment is made by check, draft, or other
negotiable instrument, a charge of the maximum amount allowed by law may be made
by Company for each such instrument returned unpaid by a bank to Company for any
reason except to the extent limited by law.
(f) Unless otherwise agreed by Company, Customer shall be responsible for all
outstanding charges for Service rendered and shall be responsible for all
charges through the end of the billing cycle within which termination occurs,
without proration of any such charge.
8. DEFAULT AND WAIVER.
(a) In the event that Customer shall default in the payment when due of any sum
due hereunder, including refusal of charges by Customer's credit card company,
or in the event of any default or breach of the terms and/or conditions of this
agreement, or if any proceeding in bankruptcy, receivership or insolvency or
petition for receivership shall be instituted by or against Customer, Company,
at its option, may:
(i) Proceed by appropriate court action or actions to enforce performance by
Customer of the applicable covenants and terms of
<PAGE> 28
this agreement or to recover damages for the breach thereof; and/or
(ii) Terminate this agreement, whereupon all rights and interests of Customer
shall terminate and Customer shall remain liable for all Services provided.
(b) Customer shall pay to Company on demand any and all past due amounts which
Company may sustain by reason of such default or breach by Customer, together
with all other charges as provided by this agreement, reasonable attorney's fees
incurred by Company in connection with such breach or default by Customer and
all other costs and expenses incurred by Company in collecting such amounts. All
amounts shall be payable by Customer without setoff or deduction of any kind.
(c) The remedies provided in favor of Company in the event of default shall not
be deemed to be exclusive but shall be in addition to all other remedies in its
favor existing at law.
(d) No failure on the part of Company to exercise any right or remedy arising
directly or indirectly under this agreement shall operate as a waiver of any
right or remedy it may have nor shall an exercise of any right or remedy by
Company preclude any other right or remedy Company may have.
9. CERTIFICATE OF AUTHORITY. If Customer is a person, firm, or organization
other than the individual user of the Service, the individual agreeing to this
agreement on behalf of such Customer hereby certifies having authority to agree
on behalf of Customer.
10. GUARANTOR. If Customer is a corporation, partnership or other entity, the
signatory on the signature slip of the Service hereby personally guarantees,
unconditionally and at all times, the payment when due of any indebtedness of
such corporation, partnership or other entity to Company for the Services and/or
equipment provided pursuant to this agreement. The signatory on the signature
slip waives notice of any transaction or obligation which Company may create,
renew, extend or alter in whole or part from time to time during the term of
this agreement to such corporation, partnership or other entity.
11. ASSIGNMENTS. Neither this agreement nor Customer's rights hereunder shall be
assignable by Customer except with Company's prior written consent. The
conditions hereof shall bind any permitted successors and assigns of Customer.
12. ENTIRE AGREEMENT AND GOVERNING LAW. Customer acknowledges that this
agreement contains the entire agreement between the parties relating to the
services and/or equipment described in this agreement and that Company and its
employees have not made orally or in writing any representations, warranties or
agreements inconsistent with the terms of this agreement. No modification,
change or alteration of any of the terms of this agreement shall be valid unless
provided in writing by Company. This agreement supersedes all prior agreements
and understandings, both oral and written, with respect to the subject matter
hereof. Customer agrees to notify Company within 10 days of any change of
address.
This agreement shall be governed by, construed and enforced in accordance with
the laws of the state where Company's Mobile Telephone Switching Office for
Customer's access number is
<PAGE> 29
located. In the event of any conflict between this agreement and the applicable
laws or tariffs on any local, state, or federal body, such laws or tariffs shall
control to the extent applicable.
13. SEVERABLE PROVISIONS. If any part of this agreement is contrary to or
prohibited by or deemed invalid under applicable laws and regulations of any
applicable jurisdiction, the remaining provisions and parts thereof shall remain
and be construed in full force and effect to the extent permitted by law.
14. INTERLATA CARRIER TERMS.
(a) Customer agrees to pay Company a charge for toll restriction if Customer
does not want long distance service.
(b) Company shall have no responsibility for any disputes between Customer and
any long distance carrier other than Company.
15. ELECTRONIC SERIAL NUMBER (ESN). The ESN associated with customer's equipment
is registered as part of this agreement and customer shall not modify nor permit
the modification of this ESN. If such equipment is traded or replaced, Customer
must notify Company to register new ESN.
16. RENEWAL AND TERMINATION. Unless Customer or Company terminates this
agreement as provided herein, and except as otherwise agreed, upon completion of
any initial term, this agreement shall renew on a month-to-month basis. Notice
of Customer intent to terminate this agreement shall be made in writing 30 days
prior to the Company. Company reserves the right to not renew this agreement at
any time prior to the conclusion of the initial or any renewal term by giving
customer notice of same.
17. PRICE. Subject to regulatory requirements, Company agrees that it will not
increase air time charges per minute or monthly access charges to Customer
during the initial term of agreement. Company may from time to time alter the
designation of peak and off-peak, and nights and weekends air time and any
additional costs incurred by Customer due to a change in such designations shall
not be considered an increase in air time charges per minute. The limitation on
rate increases under this paragraph shall apply only to "air time charges per
minute" and "monthly access charges" and Company shall have the option to adjust
rates and prices for all other Services from time to time.
18. LIQUIDATED DAMAGES. Customer acknowledges and agrees that cancellation or
termination of this agreement or any renewal thereof prior to the expiration of
the agreed upon service period by customer, or by company for reasons of
CUSTOMER'S default, will result in damages and loss of profits to company which
are difficult or impossible to determine exactly. Accordingly, the parties agree
that, in the event of any such early cancellation or termination of this
agreement, customer shall thereupon pay to company on demand as liquidated
damages and not as a penalty (in addition to amounts payable under paragraph 7
above) an amount equal to the LIQUIDATED damages amount shown on the signature
slip DIVIDED by the TOTAL number of months in Customers' service
<PAGE> 30
period MULTIPLIED BY the remaining months or parts of months in such service
period.
19. Independent Arbitration (Please read this paragraph carefully. It affects
rights that you may otherwise have.)
(a) Company and customer shall use their best efforts to settle any dispute or
claim arising from or relating to this agreement. To accomplish this, they shall
negotiate with each other in good faith. If Company and Customer do not reach
agreement within 30 days, instead of suing in court, Company and Customer agree
to arbitrate any and all disputes and claims (including but not limited to
claims based on or arising from an alleged tort) arising out of or relating to
this agreement, or to any prior agreement for products or service between
Customer and Company or any of Customer's or Company's affiliates or
predecessors in interest.
(b) Notwithstanding the provisions of paragraph (a), no claim or dispute shall
be submitted to arbitration if, at the time of the proposed submission, such
dispute or claim involves an attempt to collect a debt owed to the Company by
the Customer.
(c) The arbitration of any dispute or claim shall be conducted in accordance
with the wireless industry arbitration rules ("WIA Rules") as modified by this
agreement and as administered by the American Arbitration Association ("AAA").
The WIA Rules and fee information are available from Company or the AAA upon
request.
(d) Company and Customer acknowledge that this agreement evidences a transaction
in interstate commerce and that the United States Arbitration Act and Federal
Arbitration Law shall govern the interpretation and enforcement of, and
proceedings pursuant to, this or a prior agreement.
(e) Unless Company and Customer agree otherwise, the location of any arbitration
shall be in the city where Company's Mobile telephone Switching Office for
Customer's access number is located.
(f) Company and Customer agree that no arbitrator has the authority to: (1)
Award relief in excess of what this or a prior agreement provides; (2) Award
punitive damages or any other damages not measured by the prevailing party's
actual damages; or (3) Order consolidation or class arbitration.
(g) Except as otherwise provided herein, all fees and expenses of the
arbitration shall be equally borne by Customer and Company.
(h) The Arbitrator(s) must give effect to the limitations on Company's liability
as set forth in this or a prior agreement, any applicable tariff, law, or
regulation.
(i) In any arbitration utilizing the rules applicable to large/complex cases, as
defined under the WIA rules, the Arbitrators must also apply the Federal Rules
Of Evidence, and the losing party may have the award reviewed in accordance with
the review procedures set forth in the WIA Rules.
(j) Customer agrees that Company and Customer each is waiving its respective
right to a trial by jury. Customer acknowledges that arbitration is final and
binding and
<PAGE> 31
subject to only very limited review by a court. If for some reason this
arbitration clause is at some point deemed inapplicable or invalid, Customer and
Company agree to waive, to the fullest extent allowed by law, any trial by jury.
In such case, a judge shall decide the subject dispute or claim.
(k) Company, Customer and Arbitrator(s) shall not disclose the existence,
content, or results of any arbitration. Judgement on the award rendered by the
Arbitrator(s) may be entered in any court having jurisdiction thereof.
<PAGE> 1
EXHIBIT 10.35
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.80(b)(4), 200.83
AND 230.406.
UNIFIED MESSAGING SERVICES AGREEMENT
THIS UNIFIED MESSAGING SERVICES AGREEMENT is made effective as of April
28, 1999 (the "Effective Date") by GENERAL MAGIC, INC., a Delaware corporation
having a place of business at 420 North Mary Avenue, Sunnyvale, California 94086
("Magic"), and EXCITE, INC., a Delaware corporation having a place of business
at 555 Broadway, Redwood City, California USA ("Excite").
RECITALS
A. Magic is engaged in the business of, among other things, designing,
developing, and providing integrated network services which include features
such as individual calendar and contact information management and communication
services and which may be accessed either through the World Wide Web or through
the telephone by means of a voice user interface that uses state-of-the-art
speech recognition technology.
B. Excite is engaged in the business of, among other things, developing
and providing products and services through its Web site.
C. Magic and Excite desire to enter into a relationship whereby Magic
will provide unified messaging services to Excite on an OEM basis in order to
make the benefits of both parties' technology available to Excite's customers.
These unified messaging services will consist of (1) a base service to be
offered to all users of the Excite.com and Webcrawler.com services [**], with
the goal of attracting new users and retaining existing users; and (2) a premium
service, [**] to which users of the base service may upgrade. One of the primary
goals of Excite and Magic is to pursue migrating users of the base service to
the more valuable premium service, creating substantial revenues for both Magic
and Excite.
D. Excite desires to purchase from Magic: (1) six million dollars
($6,000,000) in Magic equity securities, and (2) a warrant to purchase one
million dollars ($1,000,000) in Magic equity securities. Terms and conditions of
these transactions will include those set forth below and as otherwise agreed
upon by good faith negotiation of the parties.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
1.
<PAGE> 2
AGREEMENT
1. DEFINITIONS. As used in this Agreement:
1.1. "API" means an applications programmer's interface.
1.2. "BASE SERVICE" means the service described in Exhibit A (Base
Service), which will be provided [**] to ExciteMail Subscribers [**] up to
certain usage limits as set forth in Section 5.1.
1.3. "EXCITE COMPETITOR" means any of the companies listed on Exhibit G
(Excite Competitors). The list of Excite Competitors may be updated by Excite no
more than once per quarter by written notice to Magic, provided that at all
times the list may contain at most seven (7) competitors and that Excite may not
add a company to the list within ninety (90) days after receiving notice from
Magic of a contemplated acquisition or company sale between Magic and such
company.
1.4. "EXCITE SERVICES" means the Excite.com and Webcrawler.com services
offered by Excite as of the Effective Date, and any replacement or similar
services offered by Excite after the Effective Date.
1.5. "EXCITE SUBSCRIBERS" means users of the Excite Services who have
active ExciteMail accounts.
1.6. "EXCITE TECHNOLOGY" means the computer hardware, software,
programming code, APIs, development tools, and other technology used by Excite
to develop and operate the Excite Web Site and to develop, operate and provide
the Excite Services.
1.7. "EXCITE WEB SITE" means the Web site whose home page is currently
(as of the Effective Date) located at the URL "http://www.excite.com," and
"http://www.webcrawler.com" as such Web sites and other Excite owned or operated
Web sites may be modified and updated by Excite from time to time.
1.8. "EXCLUSIVITY PERIOD" means the period beginning on the Effective
Date and expiring [**] after the Launch Date. If material delays in the launch
of the Base Service are caused by Magic, the Exclusivity Period will be extended
for a period of time equal to the amount of the delay. If material delays in the
launch of the Base Service are caused by Excite, the Exclusivity Period will be
reduced by a period of time equal to the amount of the delay.
1.9. "IMPROVEMENTS" means custom features for the Premium Service
created by Magic or Excite pursuant to Section 2.5 ("Custom Features") of this
Agreement.
1.10. "INTELLECTUAL PROPERTY RIGHTS" means all current and future
worldwide copyrights, trade secrets, patents and other patent rights, utility
models, mask work rights, moral rights, trademarks, trade names, service marks,
and all other intellectual property rights, including all applications and
registrations with respect thereto.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
2.
<PAGE> 3
1.11. "LAUNCH DATE" means the first date on which the Base Service is
made commercially available to Excite Subscribers. "Commercially available" will
mean in a commercial version 1.0 or higher release and not in beta form.
1.12. "MAGIC TECHNOLOGY" means the computer hardware, software,
programming code, APIs, development tools, speech recognition engines, and other
technology used by Magic to develop and provide its proprietary integrated
network services including the Unified Messaging Services.
1.13. "NET REVENUE" means gross revenue received less Operating and
Sales Costs incurred by the party receiving such revenue in connection with
provision of the services that generated such revenue or the sale of
advertisements that generated such revenue.
1.14. "OPERATING AND SALES COSTS" means (a) with respect to the Base
Service or the Premium Service, the fully burdened costs directly or indirectly
incurred by Magic (other than allocations of general and administrative costs)
in providing such service (including costs of advertisements and marketing and
promotional activities directed primarily to such service, content licensing
royalties, cost of providing customer service, costs of network operations,
costs of acquiring and/or depreciating computer hardware, software, and other
technology and third party services needed to provide such service, costs of
telecommunication services needed to provide such service, and the value of
rebates, refunds, and credits given to users of such service); and (b) with
respect to sales of online and audio advertising by Excite or Magic, the fully
burdened costs directly or indirectly incurred by Excite or Magic respectively
(other than allocations of general and administrative costs) in making such
sales (including costs of marketing and promotional activities directed
primarily to such sales of such advertisements and the value of rebates,
refunds, and credits given to purchasers of such advertisements). In no
circumstance will Magic Operating and Sales Costs exceed [**] of Magic's gross
revenues from the Premium Service for the purpose of calculating Magic's Net
Revenue during the term of the Agreement. In no circumstance will Excite or
Magic Operating and Sales Costs exceed [**] of their respective gross revenues
from such sale of online and audio advertising and hosting activities for the
Premium Service (if any) for the purpose of calculating Net Revenue during the
term of the Agreement.
1.15. "PREMIUM SERVICE" means the additional premium service or services
that Excite will offer to Excite Subscribers [**], as described in Exhibit B
(Premium Service).
1.16. "TARGET DATES" means the target dates listed in Exhibit C (Target
Dates) for completion of the work to be undertaken by the parties pursuant to
this Agreement, as such list may be modified and updated from time to time by
written agreement of the parties.
1.17. "UNIFIED MESSAGING SERVICES" means the Base Service and the
Premium Service.
1.18. "USER DATA" means data regarding subscribers to the Unified
Messaging Services collected by Magic in the course of providing such services,
including names, addresses, and telephone numbers, as well as all
user-accessible messages and folders created by users of the Unified Messaging
Services.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
3.
<PAGE> 4
2. DEVELOPMENT OF UNIFIED MESSAGING SERVICES
2.1. DESIGN AND DEVELOPMENT. Excite and Magic will cooperate and use
commercially reasonable efforts to design and develop the Unified Messaging
Services by the applicable Target Dates. It is understood and agreed that
neither party can guarantee the results or success of these efforts, the Target
Dates are subject to change as circumstances warrant, and neither party will
have any liability to the other for any change in the Target Dates, or any
failure to complete any portion of this work by the applicable Target Date, as
long as such party is using good faith, commercially reasonable efforts to
fulfill its responsibilities in performing this work. Notwithstanding the
foregoing, the parties agree that if the Launch Date has not occurred on or
before August 31, 1999 for any reason other than delays caused by Excite, Excite
shall be allowed to immediately terminate this Agreement pursuant to Section
9.2.1 as Excite's sole and exclusive remedy. This work is expected to include,
among other things, (a) the development and refinement of technical and
functional specifications for the Unified Messaging Services; (b) the
development of interfaces between the Excite Web Site and the Unified Messaging
Services as needed to allow Excite Subscribers to access the Unified Messaging
Services; and (c) evaluation and testing of the Unified Messaging Services until
both Magic and Excite are satisfied with the quality and reliability of the
Unified Messaging Services such that the Unified Messaging Services are suitable
for commercial release. Magic will make commercially reasonable efforts to [**]
the quality and performance (such as server response times, call blocking rates,
reliability and availability, but not, with respect to the Base Service, any
additional features or functionality) of the Base Service and Premium Service
during the term of this Agreement [**]. Exhibit D (Development Plan) contains an
overview of the parties' responsibilities in performing this work.
2.2. FEATURES AND FUNCTIONALITY. Excite and Magic will jointly determine
and approve the nature, features, functionality, and implementation of the
Unified Messaging Services, provided that the Base Service and the Premium
Service contain, at a minimum, the components for each specified in Exhibit A
and Exhibit B, respectively. Magic will make commercially reasonable efforts to
provide new features, functionality and services with a goal to ensure that the
Premium Service remains [**] commercially viable, technologically advanced,
voice-accessible unified messaging systems. Magic will make commercially
reasonable efforts to [**] the Premium Service during the term of this Agreement
[**] to provide new features, functionality, and services.
2.3. PRODUCT ROADMAPS; PROJECT MANAGERS. Subject to the confidentiality
provisions of Section 6, Magic will allow Excite to have input into Magic's
product plans and "roadmaps" regarding specific features and functions to be
included in future releases of the Unified Messaging Services. Magic and Excite
will appoint product managers to meet on a monthly basis to align product plans,
develop new ideas and features, and evaluate progress made on the specific
initiatives.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
4.
<PAGE> 5
2.4. ACCELERATED DEVELOPMENT EFFORTS. Magic acknowledges that Excite may
desire that certain features or functions that are part of Magic's product plan
or "roadmap" for the Unified Messaging Services be implemented earlier than
Magic intends to make such features or functions generally available. Excite may
wish to enlist Magic to reprioritize its release schedule by funding accelerated
development for a certain feature or function to be carried forward in future
releases of Magic's products and services (including the Unified Messaging
Services). Any such accelerated development will be done pursuant to a separate
agreement, for mutually acceptable fees and on mutually acceptable terms and
conditions. In no instance will [**]. In such cases, Excite will receive such
new features or functions as soon as possible after Magic has made such features
or functions available [**]; however, Excite recognizes and understands that
such [**] agreements between Magic [**] may be subject to confidentiality
obligations that prevent Magic from disclosing such agreements to Excite until
certain dates (such as commercial release), and Excite agrees that nothing
herein will require Magic to breach any obligation to a third party.
Notwithstanding the foregoing, Magic agrees that it shall make commercially
reasonable efforts not to specifically exclude Excite from any accelerated
development efforts.
2.5. CUSTOM FEATURES. Excite will have the opportunity to request custom
features during the normal product development cycle for the Premium Service.
Magic will make commercially reasonable efforts to assign a high development
priority to Excite's custom feature requests. Custom features will be scheduled
based on mutually approved project specifications. Magic will use commercially
reasonable efforts to develop any custom feature for the Premium Service
reasonably requested by Excite pursuant to a development schedule and for
development fees to be agreed upon by the parties on a case-by-case basis. If
Magic is unable to implement Excite's custom feature requests in a timely
fashion, Magic will offer to Excite, [**] the appropriate documentation and
other tools necessary to develop the custom features so that Excite may develop
these custom features, and Excite will have a non-exclusive, non-transferable,
limited license to use such documentation and tools solely to develop and
implement these custom features. Excite will deliver to Magic the complete
source code and technical documentation for any Improvements developed by Excite
of the Magic Technology or any other software delivered by Magic to Excite under
this Section 2.5.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
5.
<PAGE> 6
2.6. TECHNOLOGY DELIVERY AND LICENSES
2.6.1. EXCITE TECHNOLOGY. Excite will deliver to Magic those
components of the Excite Technology as are needed or reasonably requested by
Magic in order for Magic to fulfill its responsibilities in performing the work
described in Section 2.1 (collectively, the "Excite Deliverables"). Magic will
have a non-exclusive, non-transferable, royalty-free license during the term of
this Agreement to use and reproduce, and to the extent necessary modify and
create derivative works from, the Excite Deliverables, solely for the purpose of
performing this work. The Excite Deliverables will be considered Confidential
Information of Excite subject to the provisions of Section 6. The Excite
Deliverables and any derivative works created from them, shall not be considered
to be "Improvements" as that term is defined in this Agreement and Magic agrees
that all rights, title and interest in such derivative works and Excite
Deliverables shall vest in Excite.
2.6.2. MAGIC TECHNOLOGY. Within twenty (20) days of the Effective
Date, Magic will deliver to Excite those components of the Magic Technology as
are needed or reasonably requested by Excite in order for Excite to fulfill its
responsibilities in performing the work described in Section 2.1 (collectively,
the "Magic Deliverables"). Excite will have a non-exclusive, non-transferable,
royalty-free license during the term of this Agreement to use and reproduce, and
to the extent necessary modify and create derivative works from, the Magic
Deliverables, solely for the purpose of performing this work. The Magic
Deliverables will be considered Confidential Information of Magic subject to the
provisions of Section 6. The Magic Deliverables and any derivative works created
from them, shall not be considered to be "Improvements" as that term is defined
in this Agreement and Excite agrees that all rights, title and interest in such
derivative works and Magic Deliverables shall vest in Magic.
2.6.3. SOFTWARE REQUIREMENTS: Magic shall integrate the Unified
Messaging Services with Excite Mail (e.g. [**] etc.). Excite and Magic shall
mutually define the interface for the front-end and back-end software. Both
parties acknowledge there may be substantive work in the areas of
authentication, provisioning, network bridging, and defining the APIs for the
retrieval and storage of messages. The parties shall agree to use mutually
agreed protocols (such as [**] etc.). The parties agree that the final system
design is intended to enable Excite to render voice messages for the user of the
Unified Messaging Services without [**] to Excite.
2.7. OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS. As between Excite and
Magic, (a) Excite will retain exclusive ownership of all Intellectual Property
Rights in the Excite Technology, the front-end Web application for the Unified
Messaging Services, and User Data; and (b) Magic will retain exclusive ownership
of all Intellectual Property Rights in the Magic Technology and the Unified
Messaging Services (except for the front-end Web application), including the
software for the back-end storage and/or delivery of voice and fax information
and the front-end telephone interface. All Improvements created by Magic will be
owned by Magic and Excite hereby irrevocably and unconditionally assigns to
Magic all right, title, and interest (including all Intellectual Property
Rights) in and to all such Improvements. Excite will have a perpetual,
worldwide, royalty-free, non-transferable license to use and reproduce such
Improvements solely in connection with providing the Excite Services to end
users.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
6.
<PAGE> 7
3. OPERATION AND PROMOTION OF THE UNIFIED MESSAGING SERVICES
3.1. RAMP-UP. When Excite and Magic have agreed that the Base Service is
ready for commercial release, they will begin to offer the Base Service to
Excite Subscribers in accordance with Exhibit C (Target Dates). The ramp-up
period will be used to implement the Base Service and ensure the reliability of
the Base Service. Magic believes that it can offer a service that scales to this
capacity and will use commercially reasonable efforts to scale the Base Service
to accomplish the milestones in Exhibit C (which will be updated as agreed by
the parties in writing on a monthly basis). If Magic fails to meet any of these
milestones within sixty (60) days after receipt of written notice from Excite
that Magic is behind schedule, Excite will have the right to terminate this
Agreement without further liability to Magic by written notice to Magic pursuant
to Section 9.2.1. Such termination will be Excite's sole and exclusive remedy
for any failure by Magic to meet such milestones.
3.2. OPERATION OF THE UNIFIED MESSAGING SERVICES. As between Magic and
Excite, except as otherwise provided in this Agreement, Magic [**] the Unified
Messaging Services. Except as set forth in this Agreement and as may be
otherwise agreed by Excite and Magic in writing, Excite [**] the Unified
Messaging Services.
3.3. BRANDING. The Unified Messaging Services will be identified by the
present or future Excite trademarks and trade names in a manner determined by
Excite's in its sole discretion after consultation with Magic. "Voice by General
Magic" or similar words (to be determined by Magic) will appear on all pages of
the Excite Web Site allowing user access to functionality provided in the Base
Service or the Premium Service, in a manner consistent with Magic's branding
guidelines. [**] will be responsible for and will determine, in consultation
with [**],[**] of the Web client that accesses the Unified Messaging Services.
Present or future trademarks and trade names of Magic will be placed on the
inbox and all pages that render faxes or voice messages for users of the Unified
Messaging Services; placement of Magic's trademarks and trade names on these
pages will be at [**]. It is understood that the Portico service and variations
thereof operated by Magic (other than the Unified Messaging Services provided to
Excite hereunder) are, and will continue to be, marketed under and branded with
Magic's trademarks and trade names (or the trademarks and trade names of Magic's
resellers).
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
7.
<PAGE> 8
3.4. PROMOTION. When the parties agree that the Base Service is or soon
will be ready for commercial release, Excite will begin to promote the Base
Service on the Excite Web Site in a manner to be agreed by the parties. In
addition, and provided that the Base Service has been launched and continues in
effect, a permanent and prominent link to the Premium Service on the ExciteMail
inbox page shall be displayed on the Excite Web Site as soon as the Premium
Service is available. Excite will primarily use [**] on the pages used for the
[**] (e.g., [**]). In addition, when the parties agree that the Premium Service
is or soon will be ready for commercial release, Excite will, [**], begin to
prominently promote the Premium Service on the Excite Web Site. At a minimum,
Excite will devote Excite on-line advertising inventory [**] equivalent to [**]
of the [**] inventory to promote the Premium Service, based on the inventory
forecasted to be available during each calendar quarter. Excite will provide
Magic with its initial forecast for the second quarter of 1999 within ten (10)
days after the Effective Date, and will update such forecast on a quarterly
basis thereafter. Excite's promotion will be done in a manner designed to
maximize exposure to the Premium Service and minimize overloading users with
redundant promotions (e.g., [**]) at the sole discretion of Excite.
3.5. CUSTOMER SUPPORT. Magic will provide only Web-based and email
support, which meets or exceeds industry standards for free services, for users
of the Base Service [**] the users. Magic will also provide
telephone, Web-based, and email support, either in-house or out-sourced, for
users of the Premium Service. The [**] such additional support for the Premium
Service will be [**] for the Premium Service. Excite will provide [**] support
to Magic for questions and problems relating or attributable to the Excite Web
Site, the Excite Services, or the Excite Technology. The parties will at all
times cooperate to ensure those customer questions and complaints are handled in
a prompt and professional manner. Notwithstanding the foregoing, Excite shall
have [**] the users of either the Base or Premium Services.
3.6. SUBSCRIBER TERMS AND CONDITIONS. Before the parties begin providing
the Base Service or Premium Service, the parties will jointly approve the terms
and conditions that will be posted on the Excite Web Site and that subscribers
will be required to accept (by clicking an "I accept" button on the Excite Web
Site) before being allowed to receive such services.
3.7. BILLING. Excite will be responsible for billing and receiving
payment for all on-line and audio advertising sold by Excite. Magic will be
responsible for billing and receiving payment for all such advertising sold by
Magic pursuant to Section 5.3.1. Magic will also be responsible for billing and
receiving payment from all subscribers to the Premium Service;
telecommunications services will be measured in increments of [**] after the
[**] per call. Bills for the Premium Service fees will be distributed with the
Excite name and trademarks. The Parties agree that there shall be [**] to users
of the Base Services related to the provision of the Base Services to the Base
Service users and there shall be [**] related to the provision of the Premium
Service.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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3.8. USER DATA. User Data will be kept in a format that is jointly
specified and approved by Magic and Excite. Magic will maintain a tape backup
facility for all User Data. Excite will have the option to request that all or
any portion of the User Data, except voice message data, be delivered to
Excite's facility on a [**] basis or, at Excite's expense, more frequently.
Excite will retain exclusive rights to all User Data for all users who register
for the Base Service or Premium Service. Magic agrees that it will not use its
access to User Data for any purpose other than the furtherance of this
Agreement; in particular, Magic agrees that it will not, during or after the
term of this Agreement, use the User Data to target its or another partner's
comparable services to Excite Subscribers who had subscribed to the Unified
Messaging Services (it being understood that such Excite Subscribers may receive
advertisements and promotions of general circulation that are not targeted to
them and do not mention or refer to the Excite-branded Unified Messaging
Services).
3.9. SERVICE LEVELS. Magic will provide the Unified Messaging Services
in accordance with minimum service levels specified in Exhibit E (Service
Levels). Failure to sustain such levels will subject Magic, as its sole and
exclusive obligation, to the remedies set forth in Exhibit E (Service Levels),
so long as Magic uses commercially reasonable efforts, in light of the specific
service level(s) Magic has failed to meet, to sustain such service level(s). If
Magic does not use such commercially reasonable efforts, Excite will have
whatever remedies are available under this Agreement.
3.10. BUSINESS PLANS. Exhibit H (Business Plans) contains Magic's
business plans for the anticipated costs of providing the Unified Messaging
Services and forecasted usage of the Unified Messaging Services for the initial
[**] following the Launch Date. The parties will review the actual cost and
usage data immediately upon the end of this [**] period and, if the actual
results differ significantly from the anticipated and forecasted results, Magic
may elect immediately upon completion of the review to terminate this Agreement
(subject to Magic's obligations set out in Section 9.4 of this Agreement) on
[**] written notice to Excite. Magic and Excite agree that all obligations set
forth in the Agreement shall remain in full force and effect during any such
[**] notice period. Further, Magic will offer to continue to provide the Unified
Messaging Services to Excite for the balance of the original three (3) year term
of this Agreement, and Magic shall [**] the Base Services to Excite users. For
the purpose of this section, [**] shall be defined to mean [**] providing such
the Base Service [**].
4. EXCLUSIVITY COVENANTS
4.1. BY MAGIC. During the Exclusivity Period, Magic will not
commercially launch a private-labeled or co-branded service similar to the
Unified Messaging Services that includes a [**] offering of Magic services with
any of the seven (7) companies listed on Exhibit G (Excite Competitors) to.
Further, for a [**] period after the Launch Date, Magic shall not engage in
technical discussions with any company listed in Exhibit G. Nothing in the
foregoing sentence shall prevent senior management of Magic from discussing
business terms with the companies listed in Exhibit G during this [**] period.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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4.2. BY EXCITE. During the term of this Agreement, Magic will be the
exclusive provider of the Unified Messaging Services to the Excite Web Site as
defined by the Base Service and Premium Service. As long as Magic has this
"exclusive provider" status, Excite will not launch any services offering
essentially the same functionality as the Unified Messaging Services.
Notwithstanding the foregoing, Excite may offer free web based fax services that
offer a unique 10 digit number to Excite users with a third party vendor,
provided that Magic is unable or unwilling to do the same under similar terms
and at similar performance levels. In addition, Excite agrees that for the term
of this Agreement, and subject to any binding contractual restrictions or duties
it may have as of the Effective Date, before entering into any letter of intent
or agreement with any third party relating to any additional opportunities from
Excite that contemplate access to Web content over a voice user interface
employing both speech recognition and text-to-speech technologies, Excite will
present such opportunity to Magic and give Magic five (5) business days to
respond to such opportunity.
5. FEES AND PAYMENT
5.1. BASE SERVICE. Magic will provide [**] mailboxes (as required [**]
for the Unified Messaging Services) to Excite Subscribers [**] according to
plans set out in the Exhibits hereto. During the initial [**] period after the
Launch Date, Magic will have the right to enforce a limit of [**] of use of the
Base Service for inbound voice and fax messages per [**] by any individual
account. At the end of this initial [**] period, the Base Service shall remain
unchanged except that Magic and Excite will jointly determine an appropriate
[**] limit on use of the Base Service for inbound voice and fax messages;
however, this limit will be no fewer than [**] per [**]. Excite will be
responsible for the billing, collection, and reporting from advertisers of all
fees charged by Excite for advertisements which are sold by Excite pursuant to
this Agreement and in association with the Base Service.
5.2. PREMIUM SERVICE. The Premium Service shall include the features of
the Base Service (as applicable) with the additional functionality as set out in
Exhibit B. The [**] for Premium Service will consist of [**] which may range
from [**] to [**], plus a [**], based on the services selected by the user.
Actual pricing will be determined by Magic to maximize Premium Service revenue,
after consultation with Excite. Magic may choose to offer some portion of the
Premium Service [**] in order to increase the rate at which Excite Subscribers
upgrade to the Premium Service. Magic will be responsible for billing (using the
Excite name in a format agreed to by Excite), collection, and reporting from
users of all charges for the Premium Service.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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5.3. REVENUE SHARING
5.3.1. BY EXCITE. Excite will determine, in consultation with
Magic, which parts of the Unified Messaging Services are appropriate for
presenting advertising (e.g., online and audio) to Excite Subscribers who are
users of the Unified Messaging Services. Excite will pay Magic [**] of all Net
Revenue from online advertising generated by page views on those Web pages used
in connection with the Unified Messaging Services as set forth in Exhibit F
(Sharing Advertising). In addition, Excite will use reasonable efforts to sell
audio advertising to be inserted in the Base Service voice user interface and
will pay Magic [**] of the Net Revenues from such sales. Excite acknowledges
that this revenue is an important part of Magic's business plan for the Unified
Messaging Services. Accordingly, Excite will work with Magic to implement a
sales structure to allow Magic to sell any audio advertising inventory that
Excite is unable to sell. Excite will use its reasonable commercial efforts to
provide a rolling [**] forecast of audio advertising inventory beginning [**]
before the anticipated Launch Date, and Magic will be able to sell any inventory
reflected as unsold in such forecast. However, Excite will otherwise [**] online
and audio advertising inventory (e.g., [**]).
5.3.2. BY MAGIC. Magic will pay Excite [**] of all Net Revenue
from the Premium Service. In addition, Magic will pay Excite [**] of all Net
Revenue from audio advertising sold by Magic pursuant to Section 5.3.1.
5.4. PAYMENT AND REPORTING. Within forty-five (45) days after the
end of each quarter, each party will provide the other with a written report
with Net Revenue received by such party during such quarter (showing gross
revenue received less Operating and Sales Costs incurred, such costs to be
itemized in reasonable detail), along with payment of portion of such Net
Revenue owed to the other party for such quarter.
5.5. AUDIT. Each party will keep complete and accurate records
regarding the amounts owed to the other party hereunder. During the term of this
Agreement and for six (6) months thereafter, each party (the "Auditing Party")
will have the right to have an inspection and audit of the other party's
relevant books and records conducted by an independent audit professional chosen
and paid by the Auditing Party and reasonably acceptable to the other party, no
more often than once every twelve (12) months, during regular business hours at
the other party's offices and in a manner that does not interfere with the other
party's business operations. If any such audit reveals that such party has
underpaid or overpaid the amounts owed to the Auditing Party under this
Agreement, then the other party will promptly pay to the Auditing Party the
amount owed or the Auditing Party will promptly refund to such party the amount
overpaid, as the case may be.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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5.6. TAXES
5.6.1. EXCITE'S RESPONSIBILITY. Excite will be solely responsible for
all applicable taxes or other governmental fees, charges, or assessments
(collectively, "Taxes") imposed on or resulting from the payments by Magic to
Excite hereunder. Excite agrees to indemnify Magic for any liability incurred by
Magic as a result of Excite's failure to pay any such Taxes. If Magic is
required by law to withhold any Taxes from payments made to Excite hereunder,
Magic will use reasonable efforts to provide Excite with copies of official
receipts for the payment of such Taxes to the appropriate governmental
authority.
5.6.2. MAGIC'S RESPONSIBILITY. Magic will be solely responsible for all
applicable Taxes imposed on or resulting from all payments made by Excite to
Magic hereunder. Magic agrees to indemnify Excite for any liability incurred by
Excite as a result of Magic's failure to pay such Taxes. If Excite is required
by law to withhold any Taxes from payments made to Magic hereunder, Excite will
use reasonable efforts to provide Magic with copies of official receipts for the
payment of such Taxes to the appropriate governmental authority.
6. CONFIDENTIALITY
6.1. DEFINITION OF CONFIDENTIAL INFORMATION. For purposes of this
Agreement, "Confidential Information" of a party means the information and
documents identified in this Agreement as confidential information of such
party, as well as any and all other information that (i) such party considers to
be confidential or proprietary to its business (including trade secrets,
technical information relating to ongoing research and development, business
strategies, marketing plans, customer lists, and financial data) and (ii) either
(A) is clearly labeled or identified as confidential or proprietary when
disclosed to the other party or (B) the other party knew, or under the
circumstances should have known, was considered confidential or proprietary by
the other party.
6.2. GENERAL CONFIDENTIALITY OBLIGATIONS. Each party agrees that it will
(i) not disclose the other party's Confidential Information to any third party
(other than independent contractors as provided below); (ii) use the other
party's Confidential Information only to the extent necessary to perform its
obligations or exercise its rights under this Agreement; (iii) disclose the
other party's Confidential Information only to those of its employees and
independent contractors who need to know such information for purposes of this
Agreement and who are bound by confidentiality agreements containing terms no
less restrictive than those in this Section 6.2; and (iv) protect all
Confidential Information of the other party from unauthorized use, access, or
disclosure in the same manner as it protects its own confidential information of
a similar nature, and in no event with less than reasonable care.
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<PAGE> 13
6.3. EXCEPTIONS. Each party's obligations with respect to any portion of
the other party's Confidential Information will terminate when the receiving
party can document that (i) such Confidential Information was in the public
domain at the time it was communicated to the receiving party by the disclosing
party; (ii) such Confidential Information entered the public domain after it was
communicated to the receiving party by the disclosing party through no fault of
the receiving party; (iii) such Confidential Information was in the receiving
party's possession free of any obligation of confidence at the time it was
communicated to the receiving party by the disclosing party; (iv) such
Confidential Information comes into the receiving party's possession from a
third party who is rightfully in possession of such information, and not under
any obligation of confidence to the disclosing party or (v) such Confidential
Information was developed by employees or agents of the receiving party
independently of and without reference to any information communicated to the
receiving party by the disclosing party. In addition, Section 6.2 will not be
construed to prohibit any disclosure that is (A) necessary to establish the
rights of either party under this Agreement or (B) required by a valid court
order or subpoena, provided in the latter case that the party required to make
such disclosure notifies the other party (whose Confidential Information is to
be disclosed) thereof promptly and in writing and cooperates with the other
party if the other party seeks to contest or limit the scope of such disclosure.
6.4. TERMS OF AGREEMENT. Neither party will disclose the existence or
any terms of this Agreement to anyone other than its attorneys, accountants, and
other professional advisors, except (i) pursuant to a mutually acceptable press
release or otherwise approved by the other party in writing; (ii) in connection
with a contemplated change of control of such party or sale of such party's
business (provided that any third party to whom the terms of this Agreement are
to be disclosed signs a confidentiality agreement reasonably satisfactory to the
other party hereto before such disclosure is made); or (iii) as may be required
by law. In addition to any other mutually approved public announcements, the
parties agree that they will make a joint public announcement regarding the
Unified Messaging Services upon the release of a beta version of the base
service as defined in Exhibit C.
7. INDEMNIFICATION
7.1. BY EXCITE. Excite will defend, at its own expense, all suits or
actions against Magic brought by third parties based upon claims that the Excite
Services (other than the Unified Messaging Services), the Excite Technology, the
Excite Web Site, the Excite Deliverables, infringes or misappropriates any
Intellectual Property Right of a third party, and Excite will pay all amounts
agreed to in a monetary settlement of such claims and all damages awarded as a
final judgment by a court of competent jurisdiction, subject to the limitations
on liability in Section 8 and subject to the conditions that (i) Magic give
Excite prompt written notice of the claim, (ii) Magic give Excite sole control
of the defense and settlement of the claim, and (iii) Magic cooperate with
Excite, at Excite's reasonable request and expense, in the defense or settlement
of the claim. Magic may, at its own expense, participate in any such suit or
action with counsel of its own choice.
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<PAGE> 14
7.2. BY MAGIC. Magic will defend, at its own expense, all suits or
actions against Excite brought by third parties based upon claims that the Magic
Deliverables or the Magic Technology infringes or misappropriates any
Intellectual Property Right of a third party, and Magic will pay all amounts
agreed to in a monetary settlement of such claims and all damages awarded as a
final judgment by a court of competent jurisdiction, subject to the limitations
on liability in Section 8 and subject to the conditions that (i) Excite give
Magic prompt written notice of the claim, (ii) Excite give Magic sole control of
the defense and settlement of the claim, and (iii) Excite cooperate with Magic,
at Magic's reasonable request and expense, in the defense or settlement of the
claim. Excite may, at its own expense, participate in any such suit or action
with counsel of its own choice.
8. WARRANTY DISCLAIMERS; LIMITATION OF LIABILITY. MAGIC MAKES NO WARRANTIES TO
EXCITE, EXPRESS OR IMPLIED, REGARDING THE UNIFIED MESSAGING SERVICES, AND
DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR
PURPOSE, AND NON-INFRINGEMENT WITH RESPECT TO THE FOREGOING. EXCEPT FOR DAMAGES
RESULTING FROM A BREACH OF SECTION 6.2 OR 7, NEITHER PARTY WILL BE LIABLE TO THE
OTHER PARTY FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, OR SPECIAL DAMAGES,
INCLUDING LOST PROFITS AND LOSS OF DATA, IN CONNECTION WITH THIS AGREEMENT.
EXCEPT FOR AMOUNTS OWED BY EACH PARTY TO THE OTHER UNDER SECTION 5.3 AND EXCEPT
FOR DAMAGES RESULTING FROM A BREACH OF SECTION 6.2, THE TOTAL, CUMULATIVE
LIABILITY OF EACH PARTY TO THE OTHER PARTY FOR ANY AND ALL CLAIMS AND CAUSES OF
ACTION ARISING FROM OR RELATING TO THIS AGREEMENT UNDER ANY THEORY OF LIABILITY,
WHETHER IN CONTRACT, IN TORT, OR OTHERWISE, WILL NOT EXCEED [**].
9. TERM AND TERMINATION
9.1. INITIAL TERM AND RENEWAL. The term of this Agreement will begin as
of the Effective Date and will continue for an initial term of three (3) years.
This Agreement will automatically renew for additional one- (1) year terms
unless either party gives written notice of non-renewal to the other party at
least six (6) months before the expiration of the current term.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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9.2. TERMINATION RIGHTS.
9.2.1. FOR CAUSE OR DELAY. Each party will have the right to
terminate this Agreement for cause upon written notice to the other party if (i)
the other party has committed a material breach of this Agreement, (ii) the
other party has not cured such breach within sixty (60) days after receipt of
written notice of such breach from the other party, and (iii) such breach
remains uncured as of the effective date of termination. In addition, Excite may
terminate this Agreement in accordance with Section 2.1 (Design and Development)
and 3.1 (Ramp-Up).
9.2.2 FOR FAILURE TO CLOSE EQUITY INVESTMENT. Excite intends to
purchase from Magic, and Magic to sell to Excite, Six Million Dollars
($6,000,000) of Magic equity securities and warrants to purchase One Million
Dollars ($1,000,000) worth of Magic equity securities, on terms in accordance
with those set out in Exhibit I (Equity Terms) of this Agreement and which shall
be negotiated in good faith by the parties, but in any case consistent with
those set forth in Exhibit I (Equity Terms) to this Agreement, and implemented
in a binding, definitive agreement within 30 (thirty) days of the execution of
this Agreement ("Stock Purchase Agreement") or such later date as the parties
may agree. If the Stock Purchase Agreement has not been entered into by the
parties within 30 (thirty) days of the execution of this Agreement, or such
later date as the parties may agree, this Agreement shall automatically
terminate unless the parties otherwise agree in writing.
9.2.3. FOR CHANGE OF CONTROL. Excite will have the right to
terminate this Agreement on ninety (90) days written notice to Magic if all or
substantially all of Magic's assets are acquired by an Excite Competitor. Magic
will provide Excite with at least one business day's notice before the public
announcement of any such transaction and will cooperate with Excite to
communicate with Excite Subscribers regarding the transaction, subject to
applicable securities laws.
9.2.4. FOR CONVENIENCE. After the first year following the
Effective Date, Excite will have the right to terminate this Agreement for
convenience, in its discretion, upon at least ninety (90) days advance written
notice to Magic. If Excite exercises this right to terminate for convenience,
it will be required to pay Magic a termination fee as set forth in Section 9.3.
Excite acknowledges that this termination fee is reasonable and that if Excite
were not required to pay such fee, Magic would not have agreed to give Excite
the right to terminate for convenience.
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<PAGE> 16
9.3. EFFECTS OF TERMINATION. Upon termination of this Agreement
for any reason, (i) each party will promptly return all Confidential Information
of the other party, (ii) each party will pay all outstanding amounts owed to the
other party under this Agreement within forty-five (45) days after the effective
date of such termination, (iii) Magic will provide the User Data to Excite in a
well-defined format to be agreed on by the parties, (iv) Magic will use its
reasonable best efforts to arrange for the transfer to Excite of any toll-free
numbers used for the provision of Unified Messaging Services to Excite Users,
and (v) the following provisions will nonetheless remain in effect: Section 1
(Definitions), Section 2.5 (Ownership of Intellectual Property Rights), Section
5.5 (Audit), and Section 10 (General). In addition, if Excite terminates this
Agreement for convenience pursuant to Section 9.2.4, Excite will pay Magic
[**] per active account per month for the number of months
remaining in the initial three-year term of this Agreement. For these purposes,
an account will be considered "active" as of the effective date of termination
of this Agreement if such account, accessed via the Excite network, has been
used to access any aspect or portion of the Unified Messaging Services at any
time within the thirty (30) days before such termination date.
9.4. MIGRATION. Unless this Agreement is terminated by Magic pursuant to
Section 9.2.1 due to a material, uncured breach by Excite, upon termination of
this Agreement, and subject to Magic's obligations which are set out in section
3.10 Magic will continue to provide- the Unified Messaging Services to Excite
for at least a period of [**], provided that Magic shall no longer be
responsible for [**] the Base Services to Excite users. Magic shall invoice
Excite for [**] the Base Services to Excite users. For the purpose of this
section, [**] shall be defined to mean, [**] providing such services [**]. In
addition, Magic will provide consulting services to Excite, at Magic's standard
rates therefor, as Excite may reasonably request, to assist Excite in
transferring the Unified Messaging Services to another platform. For the purpose
of a smooth transition, Magic will, at Excite's expense, provide User Data to
Excite in a standard data format to be decided by Excite. Excite may opt to have
full and incremental User Data dump(s) during the final [**] termination period.
During the termination period, Magic and Excite will meet on a regular basis but
no less than every two weeks to review migration plans and ensure a smooth
transition from the perspective of the user of the Unified Message Services.
Such meeting will include engineers, operators, administrative and management
personnel as required by either party to accomplish the goal of a smooth
transition. Excite will be responsible for all Unified Messaging Services user
communication during the termination period and should any users contact Magic,
after the termination period has concluded, Magic will promptly forward all such
contacts to Excite.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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9.5. CONTINUATION OF EXCITE UNIFIED MESSAGING SERVICE. The parties agree
to work together to develop a strategy such that, if Magic or its successor
ceases operations, Excite will have options to continue the Unified Messaging
Services. This strategy will include Magic's execution of a source code escrow
and license agreement within 30 days of execution of this Agreement, with Fort
Knox as Escrow Agent which will allow Excite access to the source code of the
Magic Technology software solely for purposes of support and maintenance for the
Unified Messaging Services in the event Magic)ceases operation of the Unified
Messaging Services or enters voluntary or involuntary bankruptcy proceedings. In
the event that the Source Code is accessed by Excite, such license shall be
royalty-bearing at the rate of [**] of the Unified Messaging Services for [**]
after Excite obtains delivery of the source code. Excite will bear all fees and
costs incurred in establishing and maintaining such escrow.
10. GENERAL
10.1. RELATIONSHIP OF PARTIES. Nothing in this Agreement will be
construed as creating any agency, partnership, or other form of joint enterprise
between the parties. Neither party will have the authority to act or create any
binding obligation on behalf of the other party, and neither party will
represent to any third party that it has the authority to act or create any
binding obligation on behalf of the other party.
10.2. NOTICES. All notices, consents, waivers, and other communications
intended to have legal effect under this Agreement must be in writing, must be
delivered to the other party at the address set forth at the top of this
Agreement by personal delivery, certified mail (postage pre-paid), or a
nationally recognized overnight courier, and will be effective upon receipt (or
when delivery is refused). Any such notices sent to Magic must be addressed to
the attention of its General Counsel. Each party may change its address for
receipt of notices by giving notice of the new address to the other party.
10.3. GOVERNING LAW AND VENUE. This Agreement will be governed by and
interpreted in accordance with the laws of the State of California as such laws
apply to contracts made between California residents to be performed entirely
within California. The United Nations Convention for the Sale of International
Goods will not apply to this Agreement. Any suit, action or proceeding arising
from or relating to this Agreement must be brought in a federal court in the
Northern District of California or in state court in Santa Clara County,
California, and each party irrevocably consents to the jurisdiction and venue of
any such court in any such suit, action or proceeding.
10.4. INJUNCTIVE RELIEF. It is understood and agreed that,
notwithstanding any other provision of this Agreement, any breach of Section 6.2
by either party will cause irreparable damage for which recovery of money
damages would be inadequate, and that the non-breaching party will therefore be
entitled to seek timely injunctive relief to protect such party's rights under
this Agreement in addition to any and all remedies available at law.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
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10.5. WAIVER. The failure of either party to require performance by the
other party of any provision of this Agreement will not affect the full right to
require such performance at any time thereafter; nor will the waiver by either
party of a breach of any provision of this Agreement be taken or held to be a
waiver of the provision itself.
10.6. 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 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.
10.7. ASSIGNMENT. Neither this Agreement nor any rights or obligations
of either party under this Agreement may be assigned in whole or in part without
the prior written consent of the other party except in connection with a merger
or sale of all or substantially all of the business or assets of the assigning
party. Any attempted assignment in violation of the preceding sentence will be
void. This Agreement will bind and inure to the benefit of the respective
successors and permitted assigns of the parties.
10.8. FORCE MAJEURE. Neither party will be liable for any failure to
fulfill its obligations hereunder due to causes beyond its reasonable control,
including acts or omissions of government or military authority, acts of God,
shortages of materials, transportation delays, earthquakes, fires, floods, labor
disturbances, riots, or wars.
10.9. FULL POWER. Each party warrants that it has full power to enter
into and perform this Agreement, and the person signing this Agreement on such
party's behalf has been duly authorized and empowered to enter into this
Agreement.
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10.10. CONSTRUCTION. The section headings appearing in this Agreement
are inserted only as a matter of convenience and in no way define, limit,
construe, or describe the scope or extent of such section or in any way affect
this Agreement. Unless otherwise expressly stated, when used in this Agreement
the word "including" means "including but not limited to."
10.11. ENTIRE AGREEMENT AND AMENDMENT. This Agreement including the
Exhibits completely and exclusively states the agreement of the parties
regarding its subject matter. It supersedes, and its terms govern, all prior
understandings, agreements, or other communications between the parties, oral or
written, regarding such subject matter. This Agreement may be executed in
counterparts and may be amended only in a document signed by both parties.
10.12 RELATIONSHIP REVIEW. Magic and Excite will meet quarterly to
review the status of their relationship, specifically including a review of
progress regarding the development objectives of the parties as set in
accordance with Section 2 and will agree to negotiate in good faith any mutually
agreed amendments.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective
Date.
EXCITE, INC. GENERAL MAGIC, INC.
By: /s/ Robert C. Hood By: /s/ Kevin J. Surace
------------------------------ -------------------------------------
Name: Robert C. Hood Name: Kevin J. Surace
---------------------------- -----------------------------------
Title: Executive Vice President Title: Executive Vice President
and Chief Financial Officer ----------------------------------
---------------------------
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EXHIBIT A
BASE SERVICE
Below is an overview of the features Magic and Excite intend to offer as part of
The Base Service. The Base Service Requirements Document further details the
exact specifications of the Base Service. In the event of an incongruity between
Exhibit A and the Base Service Requirements Document, Exhibit A will prevail for
purposes of this Agreement.
At a minimum, the Base Service will consist of the following Phase I feature
set:
PHASE I -- BETA
1. A toll-free number (e.g. 888-Excite2) and a 10-digit PIN used in combination
to receive voicemail and fax messages for all users of the Base Service.
2. Users may select their own unique 10-digit PIN (if that unique PIN is
available) or allow the system to select a unique PIN on their behalf (not
in Beta, only in commercial release).
3. Option to include their toll-free number and PIN with every email message
sent from within Excite Mail.
4. Short voice greeting rendered via TTS to identify the user's mailbox to the
caller. The VUI will play the user's name after the caller has entered their
PIN.
5. [**]
6. After the caller has entered the PIN of the person they are trying to reach,
the system will play a brief [**] sponsorship advertisement before
instructing the caller to leave a voicemail or press "start" on their fax
machine, provided that such ads conform to Excite's then current standards
for such advertisements. Alternatively [**].
7. [**]
8. The personalized Excite home page will display the number of "new messages"
when new email, voicemail, or fax messages have arrived in the Excite
mailbox.
9. A "unified messaging" web interface that displays email, voicemail, and fax
messages all together in the Excite mailbox.
10. Ability to hear voicemail messages using a multimedia computer or web
browser and "RealPlayer" compatible streaming audio player software.
11. Ability to view or print fax messages using a computer or web browser
[**] compatible viewer software.
12. Ability to "Delete", "Forward", and "Move" (to another folder) voicemail and
fax messages using the web interface (but "Forward" will not be available
during Beta).
("Reply" and "Reply All" will be disabled.)
13. Ability to save voicemail (provided users have the proper player software)
and fax messages to a local storage device.
PHASE II -- COMMERCIAL RELEASE
FUTURE ENHANCEMENTS TO THE BASE SERVICE AS DEFINED BY PHASE I ABOVE
1. A "scaled-up" version of the Base Service.
2. [**].
3. [**]. 1, 2
4. [**]. 1
5. [**].
6. [**].
7. [**].
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
20.
<PAGE> 21
PHASE IIIa -- [**]2
FUTURE ENHANCEMENTS TO THE BASE SERVICE AS DEFINED BY PHASE I AND PHASE II ABOVE
1. [**].
2. [**].
3. [**].
4. [**].
5. [**].
6. [**]:
[**] [**] [**]
1 These features are expected to be released before [**].
2 The parties will use good faith efforts to negotiate the addition of these
features and [**] developing and providing these enhancements; provided,
however, the addition of these features will be subject to final written
agreement of the parties.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
21.
<PAGE> 22
EXHIBIT B
PREMIUM SERVICE
SUBJECT TO MODIFICATION UPON MUTUAL WRITTEN AGREEMENT BETWEEN THE PARTIES.
KEY POINTS
1. [**]
2. [**]
3. [**]
4. The parties will discuss [**].
Users may [**]:
A. [**]
1. [**]
2. [**]
B. [**]
1. [**]
2. [**]
3. [**]
4. [**]
5. [**]
6. [**]
7. [**]:
[**] [**] [**]
C. [**]
1. [**]
2. [**]
3. [**]
4. [**]
5. [**]
6. [**]
7. [**]
8. [**]
9. [**]
10. [**]:
[**] [**] [**]
NOTE:
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
22.
<PAGE> 23
EXHIBIT C
TARGET DATES
The Excite Unified Messaging service will be released in two phases according to
the following schedule:
Base Service Limited Release (beta): [**]
Base Service General Public Release (Launch Date): [**]
Premium Service [**]
GROWTH PROJECTIONS- EXCITE UNIFIED MESSAGING (BASE SERVICE)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
1999
Month June July August September October November December
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
DAILY REG [**] [**] [**] [**] [**] [**] [**]
MONTHLY [**] [**] [**] [**] [**] [**] [**]
TOTAL ACCOUNTS [**] [**] [**] [**] [**] [**] [**]
UNIQUE USERS MONTHLY [**] [**] [**] [**] [**] [**] [**]
MONTHLY ACTIVE USERS [**] [**] [**] [**] [**] [**] [**]
- ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
Month 2000 January February March April May June
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
DAILY REG [**] [**] [**] [**] [**] [**]
MONTHLY [**] [**] [**] [**] [**] [**]
TOTAL ACCOUNTS [**] [**] [**] [**] [**] [**]
UNIQUE USERS MONTHLY [**] [**] [**] [**] [**] [**]
MONTHLY ACTIVE USERS [**] [**] [**] [**] [**] [**]
- ---------------------------------------------------------------------------------------
</TABLE>
DEFINITIONS
Account is a person who has ever logged on/ used the service;
NOTE, we may provision more accounts than will actually log on.
For, e.g. our URS population is over [**] today and we have over [**] mailboxes
(people who have ever logged onto/ received mail.)
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
23.
<PAGE> 24
EXHIBIT D
DEVELOPMENT PLAN
EXCITE'S RESPONSIBILITIES.
Excite will [**].
Excite will [**].
Excite will be responsible for [**].
Excite will be responsible for [**].
Excite will develop the [**]. Excite will be responsible for [**] with
assistance of Magic.
Excite will be responsible for [**].
MAGIC'S RESPONSIBILITIES.
Magic will [**].
Magic will [**].
Magic will [**].
Magic will [**].
Magic will be responsible for [**].
Magic will be responsible for [**].
Magic will be responsible for [**]
Magic will [**].
Magic will [**].
JOINT RESPONSIBILITIES.
Excite and Magic will jointly [**]. Both parties acknowledge that [**]. Agreed
upon protocols shall be used ([**]). In the final system design, Excite shall
[**].
Excite and Magic will be jointly responsible for [**].
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
24.
<PAGE> 25
EXHIBIT E
SERVICE PLANS
UPTIME REQUIREMENTS
The portions of the Universal Messaging Services which are operated by Magic
shall have at least the following uptime as measured [**] excluding planned
downtime: for the [**], with a goal of [**]; for [**] with a goal of [**], and
for [**] during the term of the Agreement, [**]. In addition, the Universal
Messaging Services will not experience more than [**] (unscheduled downtime) of
more than [**] in any [**]. The GUI hosted by Excite shall meet this standard
and the VUI and other components hosted by General Magic shall meet this
standard.
Magic will notify Excite within [**] of any known and verified unscheduled
downtime of the Unified Messaging Services and update the status to Excite each
and every [**] until the service is back up. Magic will immediately notify
Excite when the service is restored. Excite will notify Magic within [**] of any
known and verified unscheduled downtime of the Unified Messaging Services and
update the status to Magic every [**] until the service is back up.
Scheduled downtime shall be no greater than [**] and shall happen at a regularly
scheduled time during off-peak periods. The current plan is for scheduled
downtime to occur every [**] between [**] Pacific Time on [**]. Actual scheduled
downtime for the VUI components of the Excite UM service will normally not
exceed [**]. A mechanism will be put in place by which users are notified of
scheduled down time expected to be over [**] before downtime occurs.
Components of the system, where technically feasible, shall be redundant and
fault tolerant for both Excite and Magic's operations.
SYSTEM PERFORMANCE
When callers dial the toll-free number, the VUI will answer the phone in [**],
with a call blocking rate of [**], measured [**].
[**] of successfully recorded messages shall be delivered to the end user's
Excite Mailbox as measured [**].
Delivery of voicemail to the user's inbox shall happen in [**] or less from the
time the caller hangs up [**] of the time, and of the remaining [**] of
messages, no later than in [**] for the [**] and no later than [**] for the
remaining [**], measured [**].
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
25.
<PAGE> 26
Delivery of fax to the user's inbox shall happen in [**] or less from the time
the caller hangs up [**] of the time, and of the remaining [**] of messages, no
later than in [**] for the [**] and no later than [**] for the remaining [**],
measured [**].
The grammar for the VUI for the Base service will perform at [**] or greater for
in-grammar utterances, with a target of [**] over time.
Latency of any data from the time Magic's server receives the request to serve
such data to the time when Magic's server begins to serve such data shall be
less than or equal to [**].
Latency of any data being served from Magic to Excite or Excite to Magic shall
be no greater than [**] (e.g. PIN numbers during registration.), in at least
[**] of cases, and in [**] of cases shall be no greater than [**].
Throughput of all data being served directly to the end user shall be sustained
at least [**] as measured by Excite's monitoring stations, in at least [**] of
monitoring cases, and assuming such monitoring stations can receive sustained
data rates in excess of [**] from most other locations on the Excite site.
PERFORMANCE MEASUREMENT
Magic will provide performance reports [**] of all aspects the service which it
operates (VUI uptime, VUI performance, and latency.) Excite shall provide [**]
performance reports of all aspects of the service which it operates (GUI uptime,
GUI performance) and will also measure latency and throughput of data between
Excite and Magic.
Each party, at its own expense, has the right to use a third party instead to
measure performance. In addition, each party has the right to cross-check the
other party's performance measurements with its own internal performance
measurements or the measurements of an external third party.
CAPACITY
General Magic and Excite shall at all times scale the availability of mailboxes
to stay ahead of demand as required by actual usage of the service, in
combination with planning provided by regular reviews of the user forecast. The
initial expectations are such that the Universal Messaging Service shall require
a minimum of:
- - [**] by [**]
- - [**] by [**]
- - [**] by [**]
Note an account is defined as an Excite 800 number with a 10 digit PIN. Using
the numbers above, the registration systems must scale to meet these numbers.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
26.
<PAGE> 27
We do not expect that all accounts will be active accounts. Any user who
accesses their account at least [**] will be considered active.
In accordance with Excite's then current policies, Excite can request that Magic
will delete and reassign inactive accounts.
CUSTOMER SUPPORT
For the Base Service, Magic shall provide customer service and support for
Excite UM Service users via email only. Customer requests will come first to an
Excite Customer support address. Excite will field the inquiries related to its
technology (the Web GUI).
Inquiries relating to the VUI or other General Magic technology will be passed
by Excite to Magic and fielded by Magic customer service representatives. In
this case, [**]
Magic and Excite Customer service will respond to email messages received during
the hours of 5:00 am to 9:00 pm (PST), Monday through Friday, with the intent of
responding to email inquiries within [**] after receipt.
NETWORK OPERATIONS
The Magic DSC used to host the Excite UM Services components will be connected
[**] to the Excite DSC using [**] for Base and Premium Service.
All connectivity to the public-switched telecommunications network will take
place at [**].
The Magic DSC will be staffed [**]. Operations and support problem resolution
and escalation procedures will be defined and communicated to both the Excite
support and Magic support organizations.
CONSEQUENCES OF BREACH OF EXHIBIT E: SERVICE PLANS
If either party receives written notice of a breach of this section which is not
reasonably and substantially cured within [**], then the injured party shall not
be required to share revenue as set out in Section 5.3.1 for the period of the
uncured service level.
If either party receives written notice of a breach of this section which is not
reasonably and substantially cured within [**], then the injured party may
terminate for material breach.
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
27.
<PAGE> 28
EXHIBIT F
SHARING ADVERTISING
Excite will share advertising revenue with Magic on the following pages:
1. [**]
2. [**]
3. [**]
4. [**]
5. [**]
6. [**]
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
28.
<PAGE> 29
EXHIBIT G
EXCITE COMPETITORS
To be updated quarterly by Excite.
[**]
[**]
[**]
[**]
[**]
[**]
[**]
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
29.
<PAGE> 30
EXHIBIT H
MAGIC BUSINESS PLAN
To be completed solely by General Magic.
30.
<PAGE> 31
EXHIBIT I
EQUITY TERMS AND CONDITIONS
1. Purchase of Equity Securities
a. The security will be a Series E Convertible Preferred
Stock ("Series E") with a purchase price equal to 105%
of the average of the closing bid price of Magic common
stock for the trading five days preceding April 27,
1999, or $3.80 per share. The features of the Series D
will include:
- 5% if and when declared dividend preference,
pari passu with the Series D Preferred Stock
- liquidation preference in the amount of $3.80,
pari passu with the Series D Preferred Stock. A
liquidation event will be defined to include a
merger or other acquisition.
- conversion into common stock at any time at the
option of Excite, initially at a rate of 1 for
1, subject to adjustments for stock splits,
stock dividends and other proportional
antidilution protection.
b. The Series E will not have voting rights except as
required by applicable law.
2. Purchase of Warrant
a. The warrant purchase price will be $10,000
b. The warrant will be exercisable for up to $1,000,000 of
Series E shares at a purchase price of $3.80 per share,
subject to adjustments for stock splits, stock dividends
and other proportional antidilution protection.
c. There will be a net (cashless) exercise right
d. The exercise period will begin upon issuance of the
warrant and continue until fifteen months from the date
of issuance.
3. Liquidity
a. The Magic common stock into which the Series E is
convertible (under both 1 and 2 above) will have
registration rights such that the following percentages
of such shares will be freely tradeable by Excite at the
times indicated below:
<TABLE>
<CAPTION>
Period after Definitive Amount
Equity Agreements Closed Tradeable
------------------------ ---------
<S> <C>
6 months 50%
9 months 75%
12 months 100%
</TABLE>
b. Magic shall bear the registration expenses of all such
registrations including the fees of legal counsel for
Excite up to a cap of $10,000.
31.
<PAGE> 1
EXHIBIT 10.36
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.80(b)(4), 200.83
and 230.406.
AMENDED
LICENSE AGREEMENT
THIS AMENDED LICENSE AGREEMENT ("Agreement") is made and entered
into as of the 31st day of March, 1999 (the "Effective Date"), by and between
GENERAL MAGIC, INC., a Delaware corporation, having a place of business at 420
N. Mary Avenue, Sunnyvale, California 94086 ("General Magic"), and
FONIX/ACUVOICE, INC. a Utah corporation, having a place of business at 1225
Eagle Gate Tower, 60 East South Temple, Salt Lake City, Utah 84111 ("Fonix").
RECITALS
A. General Magic and AcuVoice, Inc., a California corporation
("AcuVoice"), entered into a License Agreement dated September 23, 1997 (the
"License Agreement"), whereby AcuVoice licensed text-to-speech software for use
by General Magic in connection with its voice accessible integrated network
service.
B. AcuVoice was merged into Fonix, and Fonix is the successor in
interest to AcuVoice.
C. The parties desire to amend the License Agreement in its
entirety and to supersede and replace the License Agreement as hereinafter
provided.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the License Agreement is
superseded and replaced by this Agreement and is amended in its entirety to read
as follows:
1. DELIVERABLES. In connection with the execution of the License
Agreement, AcuVoice delivered to General Magic the then-current version of, and
related documentation for, the AcuVoice Telephony/Multimedia API Model AV2001
software using a male voice with standard American English (which, together with
new releases, updates, and bug fixes heretofore delivered to General Magic under
the License Agreement, are referred to hereinafter as the "Licensed Software")
in object code format. General Magic agreed to pay Fonix (i) a license fee of
[**] (the "License Fee") as described in Section 3 of the License Agreement and
(ii) royalties, to be paid in accordance with the terms of Section 3 of the
License Agreement. General Magic acknowledges receipt of the Licensed Software,
and Fonix acknowledges receipt of the License Fee and certain royalties.
2. LICENSE GRANT. In consideration of the License Fee, Additional
Fee and royalties paid and to be paid under the License Agreement and this
Agreement, and subject to the terms of this Agreement, Fonix hereby grants
General Magic (i) a nonexclusive (except as otherwise specifically provided
herein), perpetual, irrevocable, worldwide license to use, reproduce, publicly
display, publicly perform, and distribute the Licensed Software in connection
with General Magic's voice accessed integrated network service offerings
("Network Service Offerings") and (ii) the further right to sublicense some or
all of the foregoing rights to third
[**] CERTAIN INFORMATION ON THIS PAGES HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE> 2
parties through multiple tiers of distribution for purposes of providing General
Magic's Network Service Offerings but not for purposes of providing a
stand-alone text-to-speech engine. From and after the Effective Date, Fonix
shall have no duty to provide bug fixes, new releases, updates, upgrades, or new
versions of the Licensed Software.
3. SOURCE CODE TRANSFER AND LICENSE. Fonix agrees immediately
upon execution of this Amended License Agreement by both parties to transfer to
General Magic a complete and accurate copy of its present source code and
related documentation for the Licensed Software (the "Source Code"), and hereby
grants to General Magic a non-exclusive, perpetual, irrevocable, worldwide
license to use, reproduce, modify, and create derivative works from the Source
Code restricted to use with General Magic's Network Service Offerings. Fonix
shall also grant to General Magic a perpetual, irrevocable worldwide license to
use, reproduce, publicly display, publicly perform, and distribute in object
code form any derivative works General Magic creates from the Source Code.
General Magic shall have no duty to provide Fonix with any derivative works
created by General Magic from the Source Code. For purposes hereof, the Source
Code to be transferred to General Magic hereunder shall be all source code and
data files for the Licensed Software and all associated, documentation, sound
libraries, and tools required to recompile the sound libraries, including those
items listed on Exhibit A hereto. Fonix shall have no duty to provide bug fixes,
new releases, updates, upgrades, or new versions of the Source Code. General
Magic shall have the right to transfer the Source Code and its related license
to any entity which acquires General Magic or substantially all of the assets of
General Magic but shall not have any right to otherwise transfer or sublicense
the Source Code to any other party.
4. LICENSE FEE AND ROYALTIES.
(a) ADDITIONAL LICENSE FEE. General Magic shall pay to
Fonix an additional license fee (the "Additional Fee") of [**]. The Additional
Fee shall be paid in [**] monthly installments of [**], with the first such
payment to be made immediately upon the transfer of the Source Code in
accordance with Section 3, and a similar payment of [**] on each monthly
anniversary thereafter until paid in full.
(b) ROYALTIES. From the Effective Date until March 31,
2003 (the "Term") General Magic shall pay to Fonix a royalty equal to [**] of
General Magic's [**] (as defined below) for any Network Service Offering which
includes or uses the Licensed Software or any derivative works created from the
Source. For purposes hereof, "[**]" shall mean with respect to any General Magic
Network Service Offering, [**] by General Magic from [**].
(c) ALTERNATE LICENSE FEE. In the event that General Magic
sells any product using the Licensed Software or any derivative works created
from the Source Code, or a sublicensee sells any such product, rather than
offering it in connection with a Network Service Offering, such sales shall be
treated as a general resale, and General Magic shall pay Fonix for each such
transaction during the Term, in place and instead of the royalty provided for in
the
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE> 3
preceding paragraph, an amount equal to [**] per [**].
(d) REPORTS, PAYMENT OF ROYALTIES, AUDITS. Within thirty
(30) days following the date hereof, General Magic shall provide Fonix with a
written report in reasonable detail and in a form reasonably acceptable to
Fonix, which sets forth all royalties due and payable under the License
Agreement through the Effective Date. Payment for any royalties due under the
License Agreement, which are unpaid at the date of such report, shall accompany
such report. Within thirty (30) days following the end of each calendar quarter
during the Term, General Magic shall provide Fonix with a written report in
reasonable detail and in a form reasonably acceptable to Fonix which sets forth
the gross revenues and gross margin of all Network Service Offerings provided by
General Magic that are subject to the provisions of Section 4(b) during such
quarter and the aggregate amount of, and basis for, all payments due to Fonix
for such quarter. Payment for the royalties required by subsection (b), above,
shall accompany such report. Within thirty (30) days following the end of each
calendar quarter during the Term, General Magic shall provide Fonix with a
written report in reasonable detail and in a form reasonably acceptable to Fonix
which sets forth the number of run-time licenses distributed during such
quarter. Payment for the run-time licenses shall accompany said report. Any
payments due under this Agreement which are not paid when due shall bear
interest, to the extent permitted by applicable law, at the prime rate as
reported in The Wall Street Journal on the date such payment is due, plus an
additional one and one-half percent (1 1/2%), calculated on the number of days
such payment is delinquent Fonix shall have the right, at its own expense,
through independent auditors selected by Fonix and reasonably acceptable to
General Magic to inspect, no more than once per year, upon reasonable notice and
during regular business hours, the books and records of General Magic necessary
to calculate the royalty to which Fonix is entitled. General Magic agrees to
make and maintain until three (3) years after the transactions to which they
pertain, adequate records, books, and accounts regarding its sales,
distribution, and other activities in order to calculate and confirm its payment
obligations and compliance with other terms and conditions hereunder. If an
audit by Fonix, at Fonix's sole expense, discloses that the royalty or license
fees paid by General Magic were less than that amount to which Fonix is
entitled, then General Magic, within thirty (30) days after being furnished with
a copy of Fonix's audit, shall pay to Fonix the amount of any shortfall,
together with interest thereon at three percentage points (3%) above the prime
interest rate then reported in The Wall Street Journal, and if the shortfall is
greater than five percent (5%) of the royalties set forth in the most recent
royalty report, General Magic shall also pay to Fonix the cost of any such
audit; provided that General Magic shall be entitled to reasonably object to and
protest the results of any such audit and shall not be obligated to make any
payment to Fonix in accordance with the terms and conditions of this section
until such objection and protest have been resolved. Any sublicense granted by
General Magic shall contain a provision allowing Fonix's independent auditors to
audit the books of the sublicensee and providing for terms substantially the
same as those contained in this section. Fonix shall require the independent
auditors to sign a confidentiality agreement reasonably acceptable to the party
being audited before any audit contemplated by this section takes place. All
reports, information, and other materials furnished by General Magic or its
sublicensees to Fonix or its independent auditors under this Section shall be
subject to the confidentiality provisions of this Agreement and the
confidentiality agreement signed by the independent auditors, as applicable.
[**] CERTAIN INFORMATION ON THIS PAGES HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE> 4
5. RESTRICTIONS OF FONIX' RIGHT TO LICENSE. Fonix agrees that
prior to September 1, 2000, Fonix shall not license the Licensed Software for
use by the following companies or their successors in interest: [**] and [**].
6. SUPPORT. Fonix agrees to provide to General Magic reasonable
technical support related to the architecture and programming logic of the
Source Code, and the process of successfully compiling the Source Code into a
working text-to-speech system functionally identical to the Licensed Software as
currently commercially deployed by General Magic, for a fee of [**] per hour.
7. OWNERSHIP. General Magic acknowledges that the copyrights,
patent rights, trade secrets, trademarks, and other intellectual property in or
to the Licensed Software, the Source Code, and/or any documentation are the
exclusive property of Fonix. Notwithstanding anything in this Agreement to the
contrary, Fonix retains title to the Licensed Software, the Source Code, and all
documentation related to the Licensed Software and the Source Code (the
"Documentation") and all copies of the Licensed Software, Source Code, and
Documentation.
8. WARRANTIES.
(a) YEAR 2000 COMPLIANCE. Fonix represents and warrants
that the Licensed Software and Source Code are Year 2000 Compliant as such term
is commonly used in the software industry. Fonix's sole liability pursuant to
this provision shall be to promptly correct or replace the Licensed Software and
Source Code with compliant software.
(b) SOURCE CODE WARRANTY. Fonix hereby represents and
warrants that the Source Code to be delivered pursuant to Section 3 constitutes
a complete and accurate copy of the Source Code for the Licensed Software, and
that it is sufficient to build the Source Code into a working text-to-speech
system functionally identical to the Licensed Software as currently commercially
deployed by General Magic. In the event that the initial delivery pursuant to
Section 3 fails to comply with this representation and warranty, General Magic
may, as its sole remedy, require Fonix to immediately deliver a complete and
accurate copy of the Source Code for the Licensed Software. In the event that
any subsequent delivery fails to comply with this provision, General Magic shall
be entitled to pursue any and all remedies it may have in equity or at law.
9. LIMITATION ON LIABILITY. EXCEPT FOR BREACH OF SECTIONS 3, 5
AND 8(b), THE AGGREGATE LIABILITY OF EITHER PARTY ARISING FROM OR RELATING TO
THIS AGREEMENT OR THE LICENSED SOFTWARE, SOURCE CODE, OR DOCUMENTATION
(REGARDLESS OF THE FORM OF ACTION OR CLAIM - E.G. CONTRACT, WARRANTY, TORT,
MALPRACTICE, FRAUD, AND/OR OTHERWISE) IS LIMITED TO [**] UNDER THIS AGREEMENT.
NEITHER PARTY SHALL IN ANY CASE BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL,
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WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE> 5
CONSEQUENTIAL, INDIRECT, OR PUNITIVE DAMAGES EVEN IF FONIX HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. FONIX IS NOT RESPONSIBLE FOR LOST
PROFITS OR REVENUE, LOSS OF USE OF LICENSED SOFTWARE, LOSS OF USE OF THE SOURCE
CODE, LOSS OF DATA, COSTS OF RE-CREATING LOST DATA, THE COST OF ANY SUBSTITUTE
EQUIPMENT OR PROGRAM, OR CLAIMS BY ANY PARTY OTHER THAN GENERAL MAGIC.
10. SOLE REMEDY AND ALLOCATION OF RISK. FONIX'S SOLE AND
EXCLUSIVE LIABILITIES ARE SET FORTH IN THIS AGREEMENT. THIS AGREEMENT DEFINES A
MUTUALLY AGREED-UPON ALLOCATION OF RISK AND THE AMOUNT PAYABLE TO FONIX REFLECTS
SUCH ALLOCATION OF RISK.
11. CONFIDENTIALITY.
(a) DEFINITION OF CONFIDENTIAL INFORMATION. For purposes
of this Agreement, "Confidential Information" of a party means the Source Code
and the other information and documents identified in this Agreement as
confidential information of such party, as well as any and all other information
that (i) such party considers to be confidential or proprietary to its business
(including trade secrets, technical information relating to ongoing research and
development, business strategies, marketing plans, customer lists, and financial
data) and (ii) either (A) is clearly labeled or identified as confidential or
proprietary when disclosed to the other party or (B) the other party knew, or
under the circumstances should have known, was considered confidential or
proprietary by the other party.
(b) GENERAL CONFIDENTIALITY OBLIGATIONS. Each party agrees
that it will (i) not disclose the other party's Confidential Information to any
third party (other than independent contractors as provided below); (ii) use the
other party's Confidential Information only to the extent necessary to perform
its obligations or exercise its rights under this Agreement; (iii) disclose the
other party's Confidential Information only to those of its employees and
independent contractors who need to know such information for purposes of this
Agreement and who are bound by confidentiality agreements containing terms no
less restrictive than those in this Section 11(b); and (iv) protect all
Confidential Information of the other party from unauthorized use, access, or
disclosure in the same manner as it protects its own confidential information of
a similar nature, and in no event with less than reasonable care.
(c) EXCEPTIONS. Each party's obligations with respect to
any portion of the other party's Confidential Information will terminate when
the receiving party can document that (i) such Confidential Information was in
the public domain at the time it was communicated to the receiving party by the
disclosing party; (ii) such Confidential Information entered the public domain
after it was communicated to the receiving party by the disclosing party through
no fault of the receiving party; (iii) such Confidential Information was in the
receiving party's possession free of any obligation of confidence at the time it
was communicated to the receiving party by the disclosing party; or (iv) such
Confidential Information was developed by employees or agents of the receiving
party independently of and without reference to any information communicated to
the receiving party by the disclosing party. In addition, Section 11(b) will not
be construed to prohibit any disclosure that is (A) necessary to establish the
rights of either party under this Agreement or (B) required by a valid court
order or subpoena, provided in the latter
[**] CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY WITH
THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE
OMITTED PORTIONS.
<PAGE> 6
case that the party required to make such disclosure notifies the other party
(whose Confidential Information is to be disclosed) thereof promptly and in
writing and cooperates with the other party if the other party seeks to contest
or limit the scope of such disclosure.
(d) TERMS OF AGREEMENT. Neither party will disclose any
terms of this Agreement to anyone other than its attorneys, accountants, and
other professional advisors, except (i) pursuant to a mutually acceptable press
release made by the parties, or a press release or other announcement approved
by the other party in writing; or (ii) in connection with a contemplated change
of control of such party or sale of such party's business or financing
arrangements of a party (provided that any third party to whom the terms of this
Agreement are to be disclosed signs a confidentiality agreement reasonably
satisfactory to the other party hereto before such disclosure is made); or (iii)
as may be required by law, government regulation, or court order.
12. TERMINATION. This Agreement shall continue in full force and
effect unless terminated as set forth below.
If either party breaches a material obligation or warranty under
this Agreement and fails to cure such breach within thirty (30) days of written
notice of such breach, then the other party may terminate this Agreement upon
written notice. This right to terminate shall be in addition to, and shall in no
way limit, the other remedies, damages, and relief to which the other party may
be entitled.
13. EXPORT CONTROL. General Magic understands and acknowledges
that Fonix is subject to regulation by agencies of the United States government,
including, but not limited to, the U.S. Department of Commerce, which prohibit
export or diversion of certain software and technology to certain countries. Any
and all obligations of Fonix to provide the Licensed Software, the Source Code,
as well as any other technical information or assistance shall be subject in all
respects to such United States laws and regulations as shall from time to time
govern the license and delivery of technology and software abroad by persons
subject to the jurisdiction of the United States, including the Export
Administration Act of 1979, as amended, any successor legislation, and the
Export Administration Regulations issued by the Department of Commerce, Bureau
of Export Administration. General Magic warrants that it will comply with the
Export Administration Regulations and other United States laws and regulations
governing exports in effect from time to time.
14. SURVIVAL. Upon termination or expiration of this Agreement,
the provisions of Sections 2, 3, 8, 9, 10, and 11, and all payment obligations
incurred prior to the effective date of such termination or expiration shall
survive. The provisions of Section 5 shall survive if General Magic terminates
the Agreement because Fonix has breached a material obligation or warranty under
the Agreement and fails to cure such breach within thirty (30) days of written
notice by General Magic, but shall not survive if Fonix terminates the Agreement
because General Magic has breached a material obligation or warranty under the
Agreement and fails to cure such breach within thirty (30) days of written
notice by Fonix.
15. NOTICES. All demands, notices, and other communications to be
given hereunder, if any, shall be in writing and shall be sufficient for all
purposes if personally
<PAGE> 7
delivered, sent by facsimile, sent by nationally-recognized courier service, or
if sent by registered or certified United States mail, return receipt requested,
postage prepaid, and addressed to the respective party at the postal address set
forth herein or to such other address or addresses as such party may hereafter
designate in writing to the other party as herein provided. The present
addresses of the parties hereto are as set forth above. If personally delivered,
notice under this Agreement shall be deemed to have been given and received and
shall be effective when personally delivered. Notice by facsimile and
nationally-recognized courier service shall be deemed to have been given when
received. Notice by mail shall be deemed effective and complete two (2) days
after deposit in the United States mail.
16. NO PARTNERSHIP. Nothing in this Agreement shall be construed
to constitute a partnership between the parties hereto, and the parties
expressly agree that no such partnership is intended. No person or entity other
than the parties hereto shall have, be deemed to have or claim any third party,
direct or indirect rights or claims to this Agreement or the matters described
herein.
17. BINDING AGREEMENT. This Agreement shall be binding upon and
inure to the benefit of the respective parties hereto, their heirs, legal
representatives, successors, and assigns.
18. ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties and supersedes and replaces the License Agreement
in its entirety. No promise, representation, warranty, or covenant not included
in this Agreement has been or is relied upon by either party. Any prior
negotiations, correspondence, or understandings related to the subject matter of
this Agreement shall be deemed to be merged in this Agreement and shall be of no
further force or effect. No modification or amendment of this Agreement shall be
of any force or effect unless in writing executed by all of the parties.
19. INTERPRETATION. Unless otherwise provided, all terms shall
have the meaning given them in the ordinary English usage and as customarily
used. Words in any gender shall include both other genders. Whenever the context
requires, the singular shall include the plural, the plural shall include the
singular, and the whole shall include any part thereof.
20. INVALIDITY. In the event that any of the provisions of this
Agreement is held to be illegal, unenforceable or invalid by any court of
competent jurisdiction, then such provision shall be construed and deemed
modified to reflect and achieve the intent of the parties to the maximum extent
allowed under applicable law, and in any such case, the remaining provisions of
this Agreement will continue in full force and effect.
21. HEADINGS. The paragraph and other headings contained in this
Agreement are for purposes of reference only and shall not limit, expand, or
otherwise affect the construction of any of the provisions of this Agreement.
22. NO WAIVER. Acceptance by either party of any performance less
than required hereby shall not be deemed to be a waiver of such party to enforce
all of the terms and conditions hereof. No waiver of any such right hereunder
shall be binding unless reduced to writing and signed by the party to be charged
therewith.
<PAGE> 8
23. DEFAULT. If any party shall breach any of the provisions of
this Agreement, the nonbreaching party shall be entitled to recover from the
other party all costs and expenses incurred by the nonbreaching party in
connection with the breach, including reasonable attorneys' fees.
24. GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of California without regard to its conflicts
of law principles.
25. ASSIGNMENT. General Magic may assign this Agreement in a case
of a merger, acquisition or sale of assets, but not otherwise without the prior
written consent of Fonix.
26. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original, and all of which shall together constitute one and the same
instrument.
27. AUTHORIZED EXECUTION. The individuals signing below each
represent and warrant (i) that they are authorized to execute this Agreement for
and on behalf of the party for whom they are signing, (ii) that such party shall
be bound in all respects hereby, and (iii) that such execution presents no
conflict with any other agreement of such party.
28. FACSIMILE SIGNATURES. The parties hereto agree that
transmission to the other party of this Agreement with its facsimile signatures
shall bind the party transmitting this Agreement by facsimile in the same manner
as if such party's original signature had been delivered. Without limiting the
foregoing, each party who transmits this Agreement with its facsimile signature
covenants to deliver the original thereof to the other party as soon as
practicable thereafter.
IN WITNESS WHEREOF, the authorized representatives of General
Magic and Fonix have executed this Agreement as of the day and year first above
written.
GENERAL MAGIC, INC., a FONIX/ACUVOICE, INC., a Utah
Delaware corporation: corporation:
By: /s/ STEVEN MARKMAN By: /s/ ROGER D. DUDLEY
------------------------------ ------------------------------
Its: Chief Executive Officer Its: Vice President
----------------------------- -----------------------------
Steven Markman Roger D. Dudley
- ---------------------------------- ----------------------------------
Print Name Print Name
Date: May 17, 1999 Date: 17 May 1999
---------------------------- ----------------------------
<PAGE> 9
EXHIBIT A
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<PAGE> 10
G. [**]
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[**] CERTAIN INFORMATION ON THIS PAGES HAS BEEN OMITTED AND FILED SEPARATELY
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<PAGE> 11
III. [**]
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[**] CERTAIN INFORMATION ON THIS PAGES HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.
<PAGE> 1
EXHIBIT 10.37
May 24, 1999
Mr. Kevin J. Surace
c/o General Magic, Inc.
420 North Mary Avenue
Sunnyvale, California 94086
Dear Kevin:
This will confirm our agreement, subject to approval of the Board of Directors,
concerning your request for reassignment to the position of Advisor, Business
Development and Strategy, effective May 17, 1999, and your concurrent
resignation as an officer of General Magic, Inc., and resignation from the
position of Executive Vice President, Business Development and Strategy. The
parties acknowledge and agree that this reassignment shall not constitute a
"termination without cause" within the meaning of the Retention Agreement
between you and the company, dated February 5, 1999 (the "Retention Agreement").
As we discussed, you will continue as a full-time employee of General Magic
through August 6, 1999. Commencing August 7, 1999, through and including May 5,
2000, you will serve as a part-time employee of the company, and will not be
called on to work in excess of an average of approximately ten hours each week
during the period. Effective May 6, 2000, we have agreed that your employment
with General Magic will terminate.
As Advisor, Business Strategy and Development, you will report to me, and will
devote your best efforts to such duties as my designee or I may assign you,
consistent with your skills and experience. As we have discussed, these services
will include the transition of your current management responsibilities to
others in the company, and your continued attention to such business and
strategic matters as I may direct. In addition, I will expect you to continue to
advise and assist General Magic in pursuing strategic transactions with
potential partners to be identified by me in writing within five (5) days of
your execution of this letter agreement ("Target Partners"). As we have agreed,
the list of such Target Partners may be modified or supplemented in the sole
discretion of General Magic. Finally, I will look forward to your continued
advice and counsel concerning the business of General Magic.
<PAGE> 2
Kevin J. Surace
May 17, 1999
Page 2 of 7
From and after August 6, 1999, you shall be free to accept other work (as a
consultant or employee), provided, however, that such work shall not interfere
with your duties under this agreement, and further provided that you shall not
accept or perform any work which is adverse to the interests of, or competitive
with, General Magic. You have further agreed that, from May 17, 1999, through
and including May 5, 2000 (the "Term"), and for a period of six months
thereafter, you will not, on behalf of yourself or any other person or entity,
directly or indirectly (i) recruit, solicit the services, or induce the
solicitation of the services, of any of the employees, contractors or service
providers of the company, or in any manner attempt to persuade any such person
or entity to discontinue or in any way limit any relationship with the company,
(ii) induce any customer, partner or supplier of the company to discontinue or
in any way limit its relationship with the company, or (iii) disparage the
company, its business, products, services or employees. Finally, you agree not
to make any public statement or statements to analysts or the press concerning
General Magic, its business, prospects, products, services or employees without
first obtaining written approval from General Magic.
During the Term, you will be compensated at your current base rate of pay, less
all applicable state and federal payroll taxes, payable in accordance with
company policy and procedures then in effect. During the Term, you also will be
eligible to participate in company benefit programs on the same terms and
conditions applicable to company employees during the same period, except that
you shall not be eligible for a bonus under the Executive Bonus Compensation
Plan for your work in 1999 and thereafter. In addition, from and after August 6,
1999, you will not be eligible to participate in the company's life, accident
and long term disability insurance programs, or to accrue paid time off
benefits. Should the reduction in your hours from and after August 6, 1999,
trigger a termination of your medical, dental and vision benefits under
applicable law or the company's insurance policies, General Magic will reimburse
the amount of any COBRA premiums paid by you during the Term for continued group
health insurance coverage under the company's plans. Finally, as we discussed,
your stock options will continue to vest during the Term in accordance with the
terms and conditions of the applicable option agreements, as amended by the
Retention Agreement.
In the event that, either during the Term or at any time during the three-month
period immediately following the expiration of the Term, General Magic concludes
a private placement of the company's securities, a sale, merger, consolidation
or other business combination of the company, or the formation of a joint
venture (a "Transaction"), in each case with a Target Partner actively engaged
by you in significant discussions during the Term, then General Magic shall pay
you a fee in the amount of 1% of the consideration actually received by General
Magic or its stockholders in connection with each such Transaction (the
"Transaction Fee"), not to exceed an aggregate for all such Transactions of $1.0
million. Notwithstanding the foregoing, you shall not be entitled to a
Transaction Fee with respect to any transaction contemplated by that certain
Unified Messaging Services Agreement with Excite Inc., dated April 28, 1999.
<PAGE> 3
Kevin J. Surace
May 17, 1999
Page 3 of 7
For the purposes of the foregoing paragraph, the term "consideration" shall mean
and include (i) in the case of a private placement, the gross proceeds to
General Magic at the closing of any debt or equity financing; (ii) in the case
of a sale, merger, consolidation or other business combination, the cash, the
market value (on the date of receipt) of marketable equity securities or
interests, and the fair market value (on the date of receipt) of unmarketable
equity securities or interests received by General Magic or its stockholders;
and (iii) in the case of the formation of a joint venture, the fair market value
of any capital and/or assets contributed to the joint venture by the Target
Partner at the closing. Notwithstanding the foregoing, no Transaction Fee shall
be due or payable to you with respect to development fees, license fees,
royalties, advertising, service or other revenues received by General Magic
pursuant to a Transaction with a Target Partner, or with respect to any future
or contingent payments to be made to General Magic or its stockholders.
General Magic may refuse to discuss or negotiate a transaction with, or to
permit you to contact or continue to communicate with, a Target Partner for any
reason whatsoever, and may terminate negotiations with any such party at any
time in its sole discretion. General Magic shall have the sole and absolute
right to refuse any offer for any proposed transaction with a Target Partner,
and to cease any further efforts to pursue any such transactions. Any such
refusal shall not entitle you to any compensation hereunder, regardless of the
reason or lack of reason therefor. In addition, absent written authorization
from my designee or me, you shall have no authority to act for, bind or commit
General Magic in any way.
We have agreed that you will work from your present office through August 6,
1999, and that you will thereafter relocate your office to your home or such
other facility as we shall mutually agree.
General Magic will reimburse you for reasonable and necessary out-of-pocket
expenses incurred by you in connection with services provided by you hereunder
(including any additional expenses necessary to establish a home office);
provided that any expense in excess of $500 must first be approved in writing by
me or my designee, and further provided that all requests for reimbursement must
be accompanied by such supporting documentation as may be reasonably requested
by the company.
You hereby acknowledge and agree that, except as provided by this agreement and
Sections 3 through 7 of the Retention Agreement, no further, additional or other
sums, benefits or consideration are due and owing, or will hereafter become due
and owing, to you in consideration of your employment with the company.
You acknowledge and agree that you will continue to be bound by the terms of the
Proprietary Rights and Information Agreement dated November 17, 1996, between
you and General Magic, and that during the Term you also will continue to be
subject to the company's employment policies, including the insider trading
policy.
<PAGE> 4
Kevin J. Surace
May 17, 1999
Page 4 of 7
Except with respect to the obligations created by, acknowledged by, or arising
out of this agreement, you, on behalf of yourself, your heirs, administrators,
representatives, executors, successors and assigns, and each of them, hereby
release General Magic, its current and former stockholders, directors, officers,
employees, agents, attorneys, successors and assigns, and each of them (the
"Released Parties") of and from any and all claims, actions and causes of
action, whether now known or unknown, which you now have, ever had, or shall or
may hereafter have against the Released Parties, or any of them, based upon or
arising out of any matter, cause, fact, thing, act or omission whatsoever
occurring or existing at any time up to and including the date of this letter
agreement, including, but not limited to, any claims of breach of contract,
wrongful termination, fraud, defamation, infliction of emotional distress or
discrimination due to national origin, race, religion, age, sex, sexual
orientation, disability or other discrimination or harassment under the Civil
Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the
Americans with Disabilities Act, the California Fair Employment and Housing Act
or any other applicable law. The foregoing release shall not extend to any right
of indemnification you have or may have for liabilities arising from your
actions within the course and scope of your employment for the company.
Except with respect to the obligations created by, acknowledged by or arising
out of this agreement, General Magic, on behalf of itself, its affiliates,
successors and assigns, and each of them, hereby releases you, your heirs,
administrators, representatives, executors, successors and assigns, and each of
them, of and from any and all claims, actions and causes of action, whether now
known or unknown, which General Magic now has, ever had, or shall or may
hereafter have against any of them based upon or arising out of any matter,
cause, fact, thing, act or omission whatsoever, within the authorized course and
scope of your employment or service as an officer of General Magic, occurring or
existing at any time up to and including the date of this letter agreement.
In connection with the foregoing general release, the parties acknowledge that
they have read and understand Section 1542 of the Civil Code of the State of
California, which provides in full as follows:
A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
The parties hereby expressly waive and relinquish all rights and benefits that
either has or may have under Section 1542 with respect to the release of unknown
claims granted in this agreement. The parties acknowledge that either of them or
their agents may hereafter discover facts or claims in addition to or different
from those either now knows or believes to exist, but that each nevertheless
intends to fully and finally settle all claims released herein.
<PAGE> 5
Kevin J. Surace
May 17, 1999
Page 5 of 7
The parties further warrant and represent that neither has voluntarily, by
operation of law, or otherwise, assigned or transferred to any other person or
entity any interest in all or any portion of those matters released this
agreement.
This agreement will be governed by and construed according to the laws of the
State of California as such laws are applied to agreements entered into and to
be performed entirely within California between California residents. Except as
otherwise provided herein, we shall settle any controversy, claim or cause of
action arising out of or relating to your employment with the company, or the
interpretation, performance or breach of this agreement, whether arising in
tort, contract or otherwise, in accordance with the following procedures:
o We shall attempt to resolve any disputes that may arise between
us in connection with this agreement on an amicable basis
through good faith discussions.
o If we are not able to resolve any dispute through good faith
discussions within thirty (30) days of one of us notifying the
other of a dispute, we hereby agree to submit any disputes
arising under this agreement to binding arbitration in Santa
Clara County, California under the rules and auspices of the
American Arbitration Association ("AAA"). We further knowingly
and willingly hereby waive our respective rights to have any
such disputes or claims tried to a judge or jury.
o A single arbitrator shall be selected according to the AAA rules
within thirty (30) days of submission of the dispute to AAA. The
arbitrator shall conduct the arbitration in accordance with the
California Evidence Code. We each shall be entitled to discovery
as provided in Sections 1283.05 and 1283.1 of the California
Code of Civil Procedure.
o The arbitrator shall have the power to enter any award that
could be entered by a Judge of the Superior Court of the State
of California sitting on the case without a jury. The arbitrator
may also award, in his or her sole discretion, attorneys fees
and costs to a party prevailing in whole or in part on any claim
in the arbitration.
o The arbitration award may be enforced in any court having
jurisdiction over the parties and the subject matter of the
arbitration. The award from any binding arbitration shall be
binding upon us and our successors and permitted assigns,
whether or not one of us fails or refuses to participate
therein, and judgment upon the award rendered by the arbitrator
may be entered in any court having jurisdiction thereof.
Nothing in this provision shall prevent either party from seeking injunctive
relief from a court to avoid irreparable harm pending the outcome of
arbitration.
<PAGE> 6
Kevin J. Surace
May 17, 1999
Page 6 of 7
If any provision of this agreement, or the application thereof, shall for any
reason and to any extent be held invalid or unenforceable under any applicable
law by an arbitrator or a court of competent jurisdiction, the remainder of this
agreement shall be interpreted so as best to reasonably effect the intent of the
parties hereto. We further agree to replace any such invalid or unenforceable
provision with a valid and enforceable provision that will achieve, to the
extent possible, the economic, business and other purposes of the invalid or
unenforceable provision.
You may terminate your employment hereunder immediately in the event that
General Magic fails to make payment of any sums to which you are entitled under
this agreement within fifteen days following written notice from you of
delinquency. General Magic may terminate your employment under this agreement
immediately for cause. For purposes of this paragraph the term "cause" shall
mean: (i) theft, dishonesty, material misconduct, or intentional falsification
of any employment or company records; (ii) failure to perform the duties
assigned to you pursuant to this agreement, which failure is not cured within
fifteen days following your receipt of a written warning from General Magic;
(iii) the material breach of your obligations under the fourth full paragraph of
this letter agreement, or the Proprietary Rights and Information Agreement dated
November 17, 1996; or (iv) your conviction (including any plea of guilty or nolo
contendere) of a felony which causes material harm to the reputation and
standing of the company, as determined in good faith by the Board of Directors.
In the event your employment is terminated pursuant to the preceding paragraph,
you shall not be entitled to any further salary, benefits or other consideration
hereunder (including the continued vesting of your stock options), other than to
the extent due and payable prior to the effective date of termination, provided,
however, that in the event your employment is terminated by you pursuant to the
preceding paragraph, you shall be entitled to a Transaction Fee with respect to
any Transaction concluded with a Target Partner within the three-month period
immediately following the effective date of termination, but only if and to the
extent that the aggregate of the Transaction Fees paid or payable to you
hereunder are less than $1.0 million.
Sections 1 and 3 through 7 of the Retention Agreement are hereby incorporated in
this letter agreement by reference as though set forth in full. The remaining
terms of the Retention Agreement are hereby amended and superseded in their
entirety by the terms set forth in this agreement. This letter agreement,
together with the agreements between you and General Magic evidencing your
options, and the Proprietary Rights and Information Agreement between you and
General Magic dated November 17, 1996, constitute the entire understanding and
agreement between you and General Magic with respect to the subject matter
contained herein and therein, and supersede any prior negotiations, agreements
and understandings, whether written or oral, with respect thereto.
Any waiver, modification or amendment of any provision of this agreement shall
be effective only if in writing and signed by the parties hereto.
<PAGE> 7
Kevin J. Surace
May 17, 1999
Page 7 of 7
Any notice required by this agreement shall be effective with three days of
mailing, or immediately upon personal delivery or documented receipt of a
facsimile transmission addressed as follows:
If to General Magic, to the attention of the Chief Executive officer at:
420 North Mary Avenue
Sunnyvale, California 94086
Facsimile: 408-774-4033
If to you:
726 Pierino Avenue
Sunnyvale, California 94086
Facsimile: 408-730-4721
This agreement is not assignable by either party, except that it may be assigned
by General Magic in connection with an acquisition, merger, consolidation or
sale of all or substantially all of the assets of the company. In the event of
any such merger or transfer of assets, the surviving corporation or the
transferee of General Magic's assets shall be bound by and shall have the
benefit of the provisions of this agreement, and General Magic shall take all
actions necessary to insure that any such corporation or transferee is bound by
the provisions of this agreement.
Lastly, Kevin, I am pleased that we have been able to accommodate your needs and
those of your family, while at the same time addressing the requirements of the
company. You have met the goals I had for you as General Manager of PNSD, and I
very much appreciate all that you have done, and doubtless will continue to do,
for General Magic.
If the provisions of this letter accurately set forth our understanding, please
acknowledge your agreement by signing the enclosed copy of this letter and
returning it to me.
Sincerely,
/s/ Steven Markman
- ----------------------------------
Steven Markman
Acknowledged and agreed:
/s/ Kevin J. Surace
-----------------------------
Kevin J. Surace
