Exhibit 4.1
SUBSCRIPTION AGREEMENT
This subscription (this "Subscription") is dated March __, 2002 between
_________________________ ("Buyer") and General Magic, Inc., a Delaware
corporation ("Seller"), whereby the parties agree as follows:
1. Subscription.
a) The Buyer shall buy and the Seller agrees to sell and issue to the
Buyer ______________ shares of the Seller's common stock (the
"Shares"), on the date hereof, at a price per Share equal to $0.21
for an aggregate purchase price of $______________ (the "Purchase
Price").
b) The Shares have been registered on a Form S-3, File No. 333-66126,
which registration statement (the "Registration Statement") has
been declared effective by the Securities and Exchange Commission,
has remained effective since such date and is effective on the
date hereof.
c) On the date hereof, the Seller shall deliver the Shares to the
Buyer via the Depository Trust Company's ("DTC") Deposit
Withdrawal Agent Commission ("DWAC") system via the DTC
instructions set forth on the signature page hereto. The Purchase
Price shall be paid to the Seller as set forth in the escrow
agreement, entered into among the Purchaser, the Company and the
escrow agent signatory thereto, in the form of Exhibit A hereto
(the "Escrow Agreement"). On or before the date hereof, the Buyer
shall have wired the Purchase Price to the escrow agent pursuant
to the wire instructions set forth in the Escrow Agreement. The
obligations of the parties hereunder shall be conditioned upon the
execution and delivery by each other party of the Escrow
Agreement. The Shares must be unlegended and free of any resale
restrictions that may be imposed by or on behalf of the Seller.
Both parties hereby agree and acknowledge that delivery of the
Shares via DTC's DWAC system is a material obligation of the
Seller and furthermore, with respect to each parties obligations
hereunder, time is of the essence.
d) Pursuant to Section 424(b)(2), the Seller agrees to file a
prospectus supplement on Form 424(b)(2) in the form of Exhibit B
hereto regarding the sale of the Shares to Buyer.
2. Seller Representations and Warranties. The Seller represents and
warrants that: (a) it has full right, power and authority to enter into this
Subscription and to perform all of its obligations hereunder; (b) this
Subscription has been duly authorized and executed by and constitutes a valid
and binding agreement of the Seller enforceable in accordance with its terms,
except as such enforceability may be limited by general principles of equity or
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of creditors'
rights and
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remedies; (c) the execution and delivery of this Subscription and the
consummation of the transactions contemplated hereby do not conflict with or
result in a breach of (i) the Seller's certificate of incorporation or by-laws,
or (ii) in any material respect, any agreement to which the Seller is a party or
by which any of its property or assets is bound; (d) upon issuance in accordance
with the terms hereof, the Shares shall be duly and validly issued and
outstanding, fully paid and non-assessable, and the Buyer shall be entitled to
all rights accorded to a holder of Common Stock; and (e) the Registration
Statement and the final prospectus included therein do not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading in light of the circumstances under which they were made.
3. Buyer Representations and Warranties. The Buyer represents and warrants
with respect only to itself that:
a) Compliance with Securities Laws. The sale of the Shares will be in
compliance with all applicable state and federal securities laws.
b) Authorization; Enforceability. This Subscription has been duly and
validly authorized, executed and delivered on behalf of such Buyer and
constitutes a valid and binding agreement of such Buyer, enforceable against
such Buyer in accordance with its terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies.
c) Investigation; Economic Risk. Such Buyer has had such opportunity
as such Buyer has deemed adequate to obtain from publicly available sources or
from representatives of the Company such information as is necessary to permit
such Buyer to evaluate the merits and risks of its investment in the company.
Such Buyer understands that its investment in the Shares involves a high degree
of risk and hereby represents that it is able to bear the economic risk of
holding such Shares as may be acquired pursuant to this Subscription.
d) Absence of Annual Report. Such Buyer understands that it is
acquiring the Shares prior to the filing of the Seller's 2001 annual report on
Form 10-K with the Securities and Exchange Commission, and as such, such Buyer
is knowingly investing in the Shares without first reviewing the 2001 audited
financial statements of the Seller, the Seller's Management's Discussion and
Analysis, or such other information as is to be provided in the Seller's annual
report. Such Buyer has nevertheless elected to invest in the Shares based upon
its investigation of the Company. Such Buyer is a sophisticated investor and has
received such information as it deems necessary to permit such Buyer to evaluate
the risks and merits of investing in the Shares in the absence of the Seller's
annual report.
4. Indemnification.
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a) The Seller agrees that it shall indemnify and hold harmless, the
Buyer, its stockholders, directors, officers, employees, agents,
affiliates and controlling persons within the meaning of Section
20 of the Securities Exchange Act of 1934 and Section 15 of the
Securities Act of 1933, each as amended (any and all of whom are
referred to as an "Indemnified Party"), from and against any and
all losses, claims, damages, liabilities, or expenses, and all
actions in respect thereof (including, but not limited to, all
legal or other expenses reasonably incurred by an Indemnified
Party in connection with the investigation, preparation, defense
or settlement of any claim, action or proceeding, whether or not
resulting in any liability (provided, however, that the Seller
shall only pay for one separate legal counsel for the Indemnified
Parties, and such counsel shall be selected by Buyers holding a
majority-in-interest of the Shares included in the Registration
Statement to which the claim relates)), incurred by an Indemnified
Party arising out of or resulting from: (1) any actions taken or
omitted to be taken by the Seller, its affiliates, employees or
agents arising out of or resulting from (i) the execution,
delivery, performance, breach by the Company or enforcement of
this Subscription, (ii) any transaction financed or to be financed
in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Shares, excluding losses resulting solely from
a decline in the market value of the Company's securities, or
(iii) solely the status of such Buyer of the Shares as an investor
in the Company; or (2) any untrue statement or alleged untrue
statement of a material fact contained in any of the financial or
other information contained in the registration statement and/or
final prospectus furnished to the Buyer by or on behalf of the
Seller or the omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading; provided, however, the Seller will not be liable
(i) to the extent, and only to the extent, that any loss, claim,
damage, liability or expense is finally judicially determined to
have resulted primarily from the Buyer's willful misconduct,
fraudulent action(s), or negligence in performing its obligations
hereunder (ii) for any amounts paid in settlement of any claim if
such settlement is effected without the prior written consent of
the Seller, which consent shall not be unreasonably withheld,
(iii) for any claim arising out of or based upon any information
furnished in writing to the Seller by any Indemnified Party
expressly for use in connection with the preparation of the
Prospectus or any amendment or supplement thereto or (iv) for any
claim, if applicable, based on a failure of the Buyer to deliver
or to cause to be delivered the Prospectus made available by the
Seller.
b) If the indemnification provided for herein is conclusively
determined (by an entry of final judgment by a court of competent
jurisdiction and the expiration of the time or denial of the right
to appeal) to be unavailable or
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insufficient to hold any Indemnified Party harmless in respect to
any losses, claims, damages, liabilities or expenses referred to
herein, then the Seller shall contribute to the amounts paid or
payable by such Indemnified Party in such proportion as is
appropriate and equitable under all circumstances taking into
account the relative benefits received by the Seller on the one
hand and the Buyer on the other, from the transaction or proposed
transaction under this Subscription or, if allocation on that
basis is not permitted under applicable law, in such proportion as
is appropriate to reflect not only the relative benefits received
by the Seller on the one hand and the Buyer on the other, but also
the relative fault of the Seller and the Buyer.
c) The Seller shall not settle or compromise or consent to the entry
of any judgment in or otherwise seek to terminate any pending or
threatened action, claim, suit or proceeding in which any
Indemnified Party is or could be a party and as to which
indemnification or contribution could have been sought by such
Indemnified Party hereunder (whether or not such Indemnified Party
is a party thereto), unless such consent or termination includes
an express unconditional release of such Indemnified Party,
reasonably satisfactory in form and substance to such Indemnified
Party, from all losses, claims, damages, liabilities or expenses
arising out of such action, claim, suit or proceeding.
d) In the event any Indemnified Party shall incur any expenses
covered by this Section 4, the Seller shall reimburse the
Indemnified Party for such covered expenses within ten (10)
business days of the Indemnified Party's delivery to the Seller of
an invoice therefor, with receipts attached. Such obligation of
the Seller to so advance funds may be conditioned upon the
Seller's receipt of a written undertaking from the Indemnified
Party to repay such amounts within ten (10) business days after a
final, non-appealable judicial determination that such Indemnified
Party was not entitled to indemnification hereunder.
e) The foregoing indemnification and contribution provisions are not
in lieu of, but in addition to, any rights which any Indemnified
Party may have at common law hereunder or otherwise, and shall
remain in full force and effect following the expiration or
termination of the Buyer's engagement and shall be binding on any
successors or assigns of the Seller and successors or assigns to
all or substantially all of the Seller's business or assets.
5. Notice. All communications hereunder, except as may be otherwise
specifically provided herein, shall be in writing and shall be deemed to have
been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
when sent by facsimile transmission (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) on the next business day after deposit with a
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nationally recognized overnight courier with next-day delivery guaranteed. The
address and facsimile numbers for such communications shall be:
To the Seller: 000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Buyer: as set forth on the signature page hereto.
6. Jurisdiction. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of New York for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each of the parties consents to the exclusive
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection based on
forum non conveniens, to the bringing of any such proceeding in such
jurisdiction. To the extent determined by such court, the prevailing party shall
reimburse the other party for any reasonable legal fees and disbursements
incurred in enforcement of, or protection of any of its rights under this
Agreement.
7. Miscellaneous.
a) This Subscription constitutes the entire understanding and
agreement between the parties with respect to its subject matter
and there are no agreements or understandings with respect to the
subject matter hereof which are not contained in this
Subscription. This Subscription may be modified only in writing
signed by the party to be charged hereunder.
b) This Subscription may be executed in any number of counterparts,
all of which taken together shall constitute one and the same
instrument and shall become effective when counterparts have been
signed by each party and delivered to the other parties hereto, it
being understood that all parties need not sign the same
counterpart. Execution may be made by delivery by facsimile.
c) The provisions of this Subscription are severable and, in the
event that any court or officials of any regulatory agency of
competent jurisdiction shall determine that any one or more of the
provisions or part of the provisions contained in this
Subscription shall, for any reason, be held to be invalid, illegal
or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a
provision of this Subscription and this Subscription shall be
reformed and construed as if such invalid or illegal or
unenforceable provision, or part of such
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provision, had never been contained herein, so that such
provisions would be valid, legal and enforceable to the maximum
extent possible, so long as such construction does not materially
adversely effect the economic rights of either party hereto.
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If the foregoing correctly sets forth our agreement, please confirm
this by signing and returning to us the duplicate copy of this letter.
AGREED AND ACCEPTED:
SELLER:
GENERAL MAGIC, INC.
By:____________________________________
Name:
Title:
AGREED AND ACCEPTED:
BUYER:
_____________________________ Address for Notice:
_________________________
_________________________
By: _________________________ _________________________
Name: Attn: ___________________
Title:
DTC Instructions:
_________________________
_________________________
_________________________
_________________________
_________________________
_________________________
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EXHIBIT B
Filed Pursuant to Rule 424(b)(2) Registration No. 333-66126
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED _________________)
GENERAL MAGIC, INC.
___________ shares of Common Stock
You should read this prospectus supplement and the accompanying
prospectus carefully before you invest. Both documents contain information you
should consider when making your investment decision.
AN INVESTMENT IN OUR SECURITIES INVOLVES SUBSTANTIAL RISKS. THESE RISKS
ARE DESCRIBED UNDER THE CAPTION "RISK FACTORS" BEGINNING ON PAGE ___ OF THE
PROSPECTUS ACCOMPANYING THIS PROSPECTUS SUPPLEMENT.
We are offering _____________ shares of our common stock to
institutional investors pursuant to this prospectus supplement. The purchase
price for these shares of common stock is $_______ in the aggregate, or $_____
per share.
Our common stock is quoted on the Nasdaq National Market under the
symbol "GMGC". On _______, the last reported sales price of our common stock as
quoted on the Nasdaq National Market was $____ per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE RELATED PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus supplement is ________________.
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