EXHIBIT 10.1
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R.
SECTIONS 200.80(B)(4), 200.83 AND 230.406.
GENERAL MAGIC
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (the "AGREEMENT") is made effective as of
January 1, 2001 (the "EFFECTIVE DATE") by and between General Magic, Inc., a
Delaware corporation having a place of business at 000 Xxxxx Xxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx 00000 ("MAGIC"), and OnStar Corporation, a Delaware
corporation having a place of business at 0000 Xxxxxxxxxx Xxxxxxx, Xxxx,
Xxxxxxxx 00000 ("ONSTAR"). OnStar and Magic may each be referred to herein as a
"PARTY" and may together be referred to herein as the "PARTIES."
BACKGROUND
A. Magic has designed, developed, and deployed a voice-accessible
service known as the Portico virtual assistant service (the "PORTICO SERVICE").
In addition, Magic has expertise in building and operating voice-accessible
network services.
B. OnStar licensed from Magic a customized version of the Portico
Service (the "VIRTUAL ADVISOR SERVICE") pursuant to that certain Development and
License Agreement between Magic and OnStar, dated as of November 9, 1999 (the
"DEVELOPMENT AGREEMENT").
C. The Development Agreement contemplates that Magic will initially
operate the Virtual Advisor Service for OnStar.
D. OnStar desires Magic, and Magic is willing, to operate the Virtual
Advisor Service on the terms and conditions set forth in this Agreement.
The Parties therefore agree as follows:
AGREEMENT
I. DEFINITIONS
Except as otherwise provided herein, defined terms shall have the
meaning ascribed to them in the Development Agreement.
II. VIRTUAL ADVISOR SERVICES
2.1 SERVICES. Magic will operate the Virtual Advisor Service in Magic's
network operations center (the "NETWORK OPERATIONS CENTER"), and in connection
therewith will use commercially reasonable efforts to (i) operate the Virtual
Advisor Service twenty-four hours a day, seven days a week, for the term of this
Agreement; provided, however, that Magic may suspend such operation to conduct
routine scheduled maintenance of its Network Operations Center or the Virtual
Advisor Service upon ten (10) days prior notice to and approval from OnStar
(which approval shall not be unreasonably withheld or delayed), (ii) contract
with third party content providers for the provision of stock quote, news, and
weather information to the Virtual Advisor Service, and for such other
information as the parties may agree, (iii) maintain the service levels set
forth in Exhibit A (Service Level Agreement) and (iv) provide second level
customer support as set forth in Exhibit B (Customer Support) (collectively, the
"SERVICES"). Exhibit B shall be updated from time to time upon the mutual
agreement of the parties.
2.2 Magic's Obligations.
2.2.1 Compliance with Law.
Magic represents, warrants and covenants to OnStar that the performance
of its obligations hereunder will not violate any applicable laws or cause a
breach of any agreements with any third parties.
2.2.2 Commitment of Resources.
Magic will provide such resources and utilize such employees as it deems
commercially reasonable to perform the Services in accordance with the service
levels set forth in Exhibit A (Service Level Agreement).
2.2.3 Manner of Performance.
The manner and means used by Magic to perform the Services desired by
OnStar are in the sole discretion and control of Magic.
2.2.4 Place of Performance.
All work to be performed by Magic in connection with the Services shall
be conducted at Magic's Sunnyvale, California facility; provided, however, that
Magic may conduct all or a portion of services from another facility or
facilities upon prior notice to and approval from OnStar (which approval shall
not be unreasonably withheld or delayed).
2.2.5 Service Level Limits.
The Parties acknowledge that Magic's agreement to provide the Services
at the compensation set forth in Article IV is predicated on the assumption that
the Virtual Advisor Service contains those functions and features defined in the
document entitled "OnStar Virtual Advisor Phase 1.1 Product Requirements
Document, Version 1.6," dated September 26, 2000 (the "September 26 PRD"). To
the extent the parties agree to modify the September 26 PRD, they will negotiate
in good faith any warranted changes to the compensation provided to General
Magic under Article IV.
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2.2.6 Breach of Magic's Warranties and Covenants.
In the event of any material breach by Magic of the foregoing warranties
or covenants, in addition to other remedies available at law or in equity,
OnStar will have the right, in its sole discretion, to suspend its use of the
Services if deemed reasonably necessary by OnStar to prevent any harm to OnStar,
its customers or its business. OnStar must provide notice and an opportunity to
cure before suspending Services in accordance with the terms of this Agreement.
The Monthly Service Fee will be adjusted on a prorated basis for any period that
Services are suspended under this Section 2.2.6; provided, however, that if the
Services are suspended by OnStar for a period exceeding seven consecutive days
in any six-month period, or exceeding thirty non-consecutive days in any
six-month period, and OnStar has not issued Magic a notice of its intention to
terminate this Agreement for cause pursuant to Section 5.2, Magic shall provide
written notice to OnStar that such action shall be deemed a Termination for
Convenience under Section 5.2, effective five (5) days after said notice, unless
Services are recommenced or the parties agree otherwise in writing.
2.3 OnStar's Obligations.
2.3.1 Compliance with Law. OnStar represents, warrants and
covenants to Magic that the performance of its obligations hereunder and the use
of the Virtual Advisor Service by Subscribers and other OnStar users will not
violate any applicable laws, or cause a breach of any agreements with any third
parties or unreasonably interfere with the use of Magic's services by other
customers of Magic.
2.3.2 Responsibility for Online Conduct. OnStar acknowledges
that Magic will exercise no control whatsoever over the substance of the
information passing through the Network Operations Center, such as emails and
content secured from third party providers pursuant to Section 2.1(ii) of this
Agreement. Notwithstanding the foregoing, nothing in this Section 2.3.2 shall be
construed to limit Magic's obligation to OnStar pursuant to Sections 2.1(ii),
(iii) or (iv), including its obligation to properly deliver to the Virtual
Advisor Service content secured from third party providers, and to promptly take
all steps reasonably necessary to correct interruptions or failures in the
delivery to General Magic of content secured from third party providers.
2.3.3 Breach of OnStar Warranties and Covenants. In the event of
any breach by OnStar of the foregoing warranties or covenants, in addition to
any other remedies available at law or in equity, Magic will have the right, in
its sole reasonable discretion, to suspend the Services if deemed reasonably
necessary by Magic to prevent any harm to Magic, its customers or its business.
Before suspending the Services, Magic will provide OnStar notice and, to the
extent possible, an opportunity to cure any such breach. In the event Services
are suspended, Magic will promptly recommence the Services once the breach is
cured.
2.4 SERVICE MODIFICATIONS. In the event that OnStar desires at any time
to deploy modifications of the OnStar Items on the Virtual Advisor Service,
OnStar and Magic will cooperate with one another to deploy such modifications in
a reasonably
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prompt fashion; provided, however, that OnStar will have access to the Network
Operations Center only with the prior written consent of Magic (which consent
shall not be unreasonably withheld or delayed).
III. LICENSE GRANTS AND OWNERSHIP OF INTELLECTUAL PROPERTY RIGHTS
3.1 License Grant by OnStar.
3.1.1 License of OnStar Technology and Intellectual Property
Rights. OnStar grants Magic a royalty-free, non-exclusive, world-wide license
under all applicable Intellectual Property Rights to use, reproduce, perform,
display, modify and create Improvements to the OnStar Background Technology and
the OnStar Items for the purpose of performing the Services during the term of
this Agreement.
3.1.2 Authority. OnStar represents and warrants that it has
obtained all necessary permissions, licenses and/or consents for the license of
all third-party Intellectual Property Rights granted to Magic under this
Agreement.
3.1.3 Ownership. As between the Parties, the Development
Agreement governs ownership of the technologies that are the subject of this
Agreement. In the event of any inconsistency between this Agreement and the
Development Agreement with respect to the ownership of Intellectual Property
Rights, the Development Agreement shall be controlling.
3.2 General Skills and Knowledge. Notwithstanding anything to the
contrary in this Agreement, neither party will be prohibited or enjoined at any
time by the other party from utilizing any skills or knowledge of a general
nature acquired during the course of providing the Services, including, without
limitation, information publicly known or available or that could reasonably be
acquired in performing similar work.
IV. PAYMENTS AND PAYMENT TERMS
4.1 Fees and Expenses.
4.1.1 Monthly Service Fees. OnStar shall pay to Magic a monthly
service fee as set forth in Exhibit C (Monthly Service Fees) hereto (the
"MONTHLY SERVICE FEE"). On or before the 15th day of each calendar month, Magic
shall invoice OnStar the Monthly Service Fee for the immediately preceding
calendar month. The invoice shall specify the dates of service. OnStar will make
payment of each such invoice on or before the second day of the second month
following receipt of the services by OnStar. For example, if service is provided
in October and an invoice is issued to OnStar (showing the dates of service) on
or before November 15th, payment of all non-disputed amounts would be made by
December 2nd.
4.1.2 Expenses. OnStar shall reimburse Magic for actual,
reasonable travel and out-of-pocket expenses incurred (including lodging, meals
and related incidental expenses) in
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connection with the provision of the Services or at the request of OnStar, if
such provision must be performed away from Magic's facilities. Such expenses
shall be reimbursed in accordance with OnStar's travel and expense guidelines,
attached hereto as Exhibit D (OnStar Travel Guidelines).
4.2 Payment Terms.
4.2.1 Currency. All sums due or payable under this Agreement
shall be paid in the United States in U.S. dollars.
4.2.2 Taxes. Fees are exclusive of all taxes, levies or duties,
and OnStar shall be responsible for the payment of the same, except for taxes
based on Magic's net income. In the event that Magic has the legal obligation to
pay or collect taxes for which OnStar is responsible pursuant to this Section
4.2.2, the appropriate amount shall be invoiced to and paid by OnStar unless
OnStar provides Magic with a valid tax exemption certificate authorized by the
appropriate taxing authority.
V. TERM AND TERMINATION
5.1 Term. The initial term of this Agreement will commence on the
Effective Date and will terminate on the second anniversary of the Launch Date;
provided, however, that this Agreement shall automatically renew for successive
three-month periods unless either Party gives the other written notice of
nonrenewal not less than ninety (90) days prior to the expiration of the
then-current term.
5.2 Termination. This Agreement may be terminated by either Party for
cause upon written notice to the other Party if (i) the other Party has
committed a material breach of this Agreement and (ii) the other Party has not
cured such material breach within thirty (30) days after written notice of such
material breach. In addition, OnStar may terminate this Agreement at any time
within two years following the Launch Date upon sixty (60) days prior written
notice to Magic ("TERMINATION FOR CONVENIENCE"); provided, however, that
concurrently with such notice, OnStar shall pay to Magic a termination fee
totaling the amount of Monthly Service Fees otherwise payable from the date of
the notice through the second anniversary of the Launch Date.
5.3 Termination for Change of Control of General Magic. In the event (i)
of a sale of all or substantially all of the assets of Magic; or (ii) any
"person" (as the term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), other than a trustee or
other fiduciary holding securities of Magic under an employee benefit plan of
Magic, becomes the "beneficial owner" (as defined in Rule 13d-3 promulgated
under the Exchange Act), directly or indirectly, of securities of Magic
representing 50% or more of the outstanding shares of common stock of the
company, or representing 35% or more of the combined voting power of the
company's then outstanding securities entitled to vote generally in the election
of directors, where OnStar reasonably determines, in its sole discretion, that
any such event has created a substantial uncertainty as to Magic's continued
ability to perform the Services or a conflict of interest between Magic and
OnStar, OnStar may terminate this Agreement on
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at least 60 days notice to Magic, and such termination shall not be deemed a
Termination for Convenience.
5.4 Termination for Insolvency. In the event that either party is unable
to pay its debts generally as they come due or is declared insolvent or
bankrupt, is the subject of any proceedings relating to its liquidation,
insolvency or for the appointment of a receiver or similar officer for it, makes
an assignment for the benefit of all or substantially all of its creditors, or
enters into an agreement for the composition, extension, or readjustment of all
or substantially all of its obligations, then the other party hereto may, by
giving written notice thereof to such party, terminate the Agreement as of the
date specified in the notice of termination, and such termination shall not be
deemed a Termination for Convenience.
5.5 Survival. The terms of this Agreement that by their sense and
context are intended to survive shall survive expiration or termination of this
Agreement, including Articles I (Definitions), VI (Limited Warranties and
Exceptions for Magic Services), VII (Indemnification and Liabilities), VIII
(Dispute Resolution) and IX (Miscellaneous).
VI. LIMITED WARRANTIES AND EXCEPTIONS FOR MAGIC SERVICES
6.1 Express Warranty. Magic warrants (i) that it will use reasonable
commercial efforts to achieve the service levels set forth in the Service Level
Agreement attached to this Agreement as Exhibit A and (ii) that it will perform
the Services in a manner consistent with industry standards reasonably
applicable to the performance thereof.
6.2 No Other Warranty. Except for the express warranty set forth in
Section 6.1 hereof, the Services are provided on an "AS IS" basis, and OnStar's
use of the Services is at its own risk. Magic does not warrant that the Services
will be uninterrupted, error-free, or completely secure or that the Services
will meet all of OnStar's requirements. Magic does not make, and hereby
disclaims, any and all other express and/or implied warranties, including, but
not limited to, warranties of merchantability, fitness for a particular purpose,
noninfringement and title, and any warranties arising from a course of dealing,
usage or trade practice. Magic makes no warranty as to the results that may be
obtained from use of the Services or the accuracy or reliability of any
transactions conducted or information, goods or services obtained through the
Services (including content provided by third parties).
6.3 Disclaimer of Actions Caused by and/or Under the Control of Third
Parties. Magic does not and cannot control the flow of data to or from Magic's
Network Operations Center. Such flow depends in large part on the performance of
Internet and telecommunications services provided or controlled by third
parties. At times, actions or inactions of such third parties can impair or
disrupt OnStar's connections to the Internet (or portions thereof) and/or to the
telecommunications networks (or portions thereof). Although Magic will use
commercially reasonable efforts
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to take all actions it deems appropriate to remedy and avoid such events, Magic
cannot guarantee that such events will not occur. Accordingly, Magic disclaims
any and all liability resulting from or related to such events. Notwithstanding
the foregoing, Magic will notify OnStar of any such event promptly upon
discovery thereof and use reasonable commercial efforts to ensure uninterrupted
use of the Services in accordance with the service levels set forth in Exhibit A
(Service Level Agreement).
6.4 Warranty Remedies. In the event Magic does not meet the service
levels or its warranty obligations, Magic shall grant OnStar a service level
credit as calculated pursuant to Exhibit C (Monthly Service Fees).
6.5 Warranty Claims. In order to receive warranty remedies, deficiencies
in the Services must be reported to Magic in writing within sixty (60) calendar
days of the discovery thereof by OnStar or its agents.
VII. INDEMNIFICATION AND LIABILITIES
Each of the Parties hereto shall be entitled to indemnity from the other
on the terms and subject to the conditions and limitations provided in Sections
9.1 through 9.9 of the Development Agreement, which are incorporated herein
mutatis mutandis by this reference.
VIII. DISPUTE RESOLUTION
Any controversy or claim arising out of, or relating to, this Agreement,
including questions concerning the scope and applicability of this Article shall
be resolved in accordance with Sections 11.1 through 11.3 of the Development
Agreement, which are incorporated herein mutatis mutandis by this reference.
IX. MISCELLANEOUS
9.1 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, nor will either Party represent to any
third party that it has the authority to act or create any binding obligation on
behalf of the other Party.
9.2 No Third Party Beneficiaries. Magic and OnStar agree that, except as
otherwise expressly provided in this Agreement, there shall be no third-party
beneficiaries to this Agreement, including but not limited to any insurance
providers for either Party or the customers or Subscribers of OnStar.
9.3 Marketing. OnStar agrees that during the term of this Agreement
Magic may publicly refer to OnStar, orally and in writing, as a customer of
Magic in words substantially to such effect.
9.4 Notices. All notices, consents, waivers, and other communications
intended to have legal effect under this Agreement must be in writing, must be
delivered
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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 must be addressed to the attention of the other
Party's General Counsel. Each Party may change its address for receipt of
notices by giving notice of the new address to the other Party.
9.5 Governing Law. This Agreement is made under and will be governed by
and construed in accordance with the laws of the State of New York (except that
body of law controlling conflicts of law).
9.6 Severability. In the event any provision of this Agreement is held
by a tribunal of competent jurisdiction to be contrary to the law, such
unenforceability or invalidity will not render this Agreement unenforceable or
invalid as a whole, the remaining provisions of this Agreement will remain in
full force and effect 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 decision.
9.7 Waiver. The waiver of any breach or default under any provision of
this Agreement will not constitute a waiver of any subsequent breach or default
of such provision.
9.8 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 (a) Magic may assign this
entire Agreement in connection with a merger or sale of all or substantially all
of its business or assets to a third party that agrees in writing to assume this
Agreement, and (b) OnStar may assign any or all of its rights under this
Agreement to any of its Affiliates. Any attempted assignment in violation of the
preceding sentence will be void. This Agreement will bind and inure to the
benefit of each Party's successors and permitted assigns.
9.9 Force Majeure.
(a) Except as provided in Section 9.9(b) below, Magic will not
be liable for any failure or delay in its performance under this Agreement due
to any cause beyond its control, including but not limited to: acts of God,
fire, explosion, vandalism, cable cut, storm, extreme temperatures, earthquake,
flood, embargo, sabotage, failure of the Internet, failure of any
telecommunications networks or other similar happenstances; any law, order,
regulation, direction, action or request of the United States government, or of
any other government, including state and local governments having jurisdiction
over either of the parties, or of any department, agency, commission, court,
bureau, corporation or other instrumentality of any one or more said governments
or of any civil or military authority; national emergencies, insurrection,
riots, wars, or strikes, lock-outs, work stoppages or other labor difficulties;
actions or inactions of a third-party provider or operator of facilities or
services employed in provision of the Service, or any other
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conditions or circumstances beyond the sole control of Magic which impede or
affect the Services or the transmission of Internet or telecommunications
services.
(b) If any failure of performance on the part of Magic described
in Section 9.9(a) shall be: (i) for thirty (30) calendar days or less, then this
Agreement shall remain in effect, but OnStar shall be relieved of any obligation
to pay for that portion of the Services affected for the period of such failure
of performance; or (ii) for more than thirty (30) days, then OnStar may
terminate this Agreement in its entirety for cause pursuant to Section 5.2
(Termination) hereof.
9.10 Non-Solicitation. During the Term of this Agreement and for one
year thereafter, neither Party may solicit, directly or indirectly, any employee
of the other Party, or hire, as an employee or independent contractor or
otherwise, any person who at that time is, or who in the proceeding six (6)
months was, an employee of the other Party. It is understood that general
employment advertisements not targeted at the other Party's employees will not
constitute a breach of this Section 9.10.
9.11 Construction. The section headings appearing in this Agreement are
inserted 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." Each reference to an
"ARTICLE" is a reference to an article of this Agreement, unless otherwise
specified. Each reference to a "SECTION" is a reference to a section in this
Agreement, unless otherwise specified. Each Party represents that it has had the
opportunity to participate in the preparation of this Agreement and hence the
Parties agree that the rule of construction that ambiguities be resolved against
the drafting party will not apply to this Agreement.
9.12 Entire Agreement and Amendment. This Agreement and the Development
Agreement, together with the Exhibits thereto, completely and exclusively state
the agreement of the Parties regarding its subject matter. Except for the
Development Agreement, this Agreement 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 two or more counterparts, each of which will be deemed an original, but all
of which together shall constitute one and the same instrument. Once signed, any
reproduction of this Agreement made by reliable means (e.g., photocopy,
facsimile) is considered an original. This Agreement may be changed only by a
written document signed by authorized representatives of both Parties in
accordance with this Section 9.12. For purposes of this Agreement, the term
"WRITTEN" means anything reduced to a tangible form by a Party, including a
printed or hand written document, email or other electronic format.
[The remainder of this page is intentionally left blank.]
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Authorized representatives of OnStar and Magic have read the foregoing
and all documents incorporated therein and agree and accept such terms effective
as of the date first above written.
GENERAL MAGIC, INC.,
a Delaware corporation
By: /s/ X.X. XXXXXX
-------------------------------------
Name: X.X. Xxxxxx
Title: CEO
ONSTAR CORPORATION,
a Delaware corporation
By: /s/ X.X. XXXXX
-------------------------------------
Name: X.X. Xxxxx
Title: Vice President
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EXHIBIT A
SERVICE LEVELS
1. This Section sets forth the descriptions of the Critical Service Levels.
1.1. SYSTEM AVAILABILITY
1.1.a. DEFINITION. The percentage of time, excluding downtime scheduled
pursuant to Section 2.1(i) ("Scheduled Downtime"), that the
Magic Operations Center in support of OnStar is available to
accept and successfully [**] incoming OnStar Virtual Advisor
calls each day.
1.1.b. MEASURED. This is measured by Magic through the [**].
1.2. FEATURE AVAILABILITY
1.2.a. DEFINITION. The percentage of time, excluding Scheduled
Downtime, that the Magic Operations Center in support of OnStar
is available to deliver each of the services that comprise the
OnStar Virtual Advisor at any point in time. At launch the
services that comprise the OnStar Virtual Advisor are: News,
Weather, Sports, Stock Quotes and Email.
1.2.b. MEASURED. This is measured by Magic through the [**].
1.3. INCOMING CALL CONNECTION SUCCESS RATE
1.3.a. DEFINITION. The percentage of calls, excluding those placed
during Scheduled Downtime, that gets answered. This allows the
measurement of blocked or unanswered calls.
1.3.b. MEASURED. This is measured by Magic based on the [**] for the
Virtual Advisor Service.
1.4. VOICE RECOGNITION
1.4.a. DEFINITION. The percentage of time each in grammar consumer
utterance spoken is recognized correctly by the OnStar Virtual
Advisor system.
1.4.b. MEASURED. This is measured through custom work performed by
Magic based on [**].
2. Magic will measure each of the Critical Service Levels as provided above,
commencing with the Effective Date. Service Level Measurement Reports will
be provided to OnStar [**] detailing [**] performance. Monthly Service
Level Measure Reports will be provided to OnStar before the second Tuesday
of the following month.
3. An Operations Board Meeting will be held on the second Tuesday of each
month between OnStar and General Magic.
Exhibit A
[**] 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. The following table sets forth the goal, expected result and minimum result
for Magic's performance with respect to each Critical Service Level. Within
two weeks following September 30, 2001, the parties will meet to review
Magic's performance with respect to each Critical Service Level, and to
negotiate in good faith any warranted revision to goals, expected results,
and minimum results.
EXPECTED MINIMUM
MEASURE GOAL RESULT RESULT
---- ------ ------
System Availability [**] [**] [**]
Feature Availability [**] [**] [**]
Call Connection [**] [**] [**]
Recognition Accuracy [**] [**] [**]
5. Not more than once each calendar quarter, OnStar may propose the addition
or deletion of one or more critical service levels upon written notice to
Magic. OnStar will provide such written notice to Magic at least 45 days
prior to the next measurement quarter for inclusion in that period. Magic
will initiate discussions with OnStar concerning the proposal promptly
following receipt of the notice, resulting in a written agreement between
the parties regarding the service level to be added or deleted, and, where
the proposal contemplates addition of a service level, the method of
measurement, the service level commitment, and the price of the addition.
6. OnStar will authorize [**] to provide Magic monthly Call Detail Reports for
the Virtual Advisor Service within ten (10) days of the beginning of each
month for the preceding month.
Exhibit A
[**] 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.
EXHIBIT B
CUSTOMER SUPPORT
See attached.
Exhibit B
EXHIBIT C
MONTHLY SERVICE FEE
Commencing January 1, 2001, and for so long as utilization of the Virtual
Advisor Service does not exceed four million minutes of use per month, the
Monthly Service Fee will be US$95,000 per month. When utilization exceeds four
million minutes of use per month, the Monthly Service Fee shall be determined by
reference to the following table.
MINUTES OF USE/MONTH INCREMENTAL PER MINUTE RATE RANGE OF MONTHLY FEE
-------------------- --------------------------- --------------------
4,000,001 -- 4,499,999 .056 $ 95,000 -- 123,000
4,500,000 -- 4,999,999 .040 $123,000 -- 143,000
5,000,000 -- 5,499,999 .035 $143,000 -- 160,500
5,500,000 -- 5,999,999 .031 $160,500 -- 176,000
6,000,000 -- 6,499,999 .027 $176,000 -- 189,500
6,500,000 -- 6,999,999 .025 $189,500 -- 202,000
7,000,000 -- 7,499,999 .023 $202,000 -- 213,500
7,500,000 -- 7,999,999 .022 $213,500 -- 224,500
8,000,000 -- 8,999,999 .021 $224,500 -- 245,500
9,000,000 -- 9,999,999 .020 $245,500 -- 265,500
10,000,000 -- 19,999,999 .019 $265,500 -- 455,500
20,000,000 + .018 $455,500 +
SERVICE LEVEL CREDITS
Commencing July 1, 2001, for any [**] that Magic fails to meet its service level
commitments, determined as provided in Exhibit A to this Agreement, OnStar will
be entitled to financial credits based on the following definitions:
Exhibit C
[**] 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.
Measurement Period
Measurements for each Critical Service Level will be collected and available to
be reported on a [**] basis and a [**] aggregate basis, except that the
measurement for the recognition accuracy service level shall be collected and
available to be reported on a [**] basis. Service level credit awards will be
based on [**] performance (except service level credit awards for recognition
accuracy, which will be based on [**] performance), and earnbacks will be based
on [**] aggregate performance.
Service Level Credits
A service level credit is equal to 1/30 of the monthly hosting rate for the
month in which the service level commitment is not met. For example, at the
start of the hosting agreement the service level credit will be equal to 1/30 *
$220,000, or $7,333.
Service level credit awards are calculated based on [**] performance (other than
for voice recognition accuracy, which is calculated based on [**] performance).
For each [**] (or [**], as applicable) the expected service level commitment for
a given Critical Service Level is not met, but the minimum is exceeded, a credit
will be awarded to OnStar equal to 50% of the service level credit. For each
[**] (or [**], as applicable) the minimum service level commitment for a given
Critical Service Level is not met, a credit will awarded to OnStar equal to 100%
of the service level credit.
Service Level Commitments
Service Level Commitments will be determined pursuant to Exhibit A. For the
purpose of calculating credits and earnbacks, they will include expected and
minimum levels of performance for each of the Critical Service Levels.
Earnbacks
Earnbacks are based on [**] aggregate performance and apply to all service level
credits awarded. Service level credits awarded for performance below the minimum
level can be earned back up to 50%. Service credits awarded for performance
between the minimum and expected levels can be earned back up to 100%. Earnbacks
are available for performance that meets or exceeds the expected level of
performance over the [**] period. The [**] period is fixed and based on each
[**] of the [**].
Example (for purpose of illustration only):
Hosting: $220,000 per month
(A) Service level credit = 1/30 * $220,000 = $7,333
Critical Service Level:
Expected Level -- 98%
Minimum Level -- 95%
Exhibit C
[**] 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.
Performance: (B) [**] at 93% - less than minimum, resulting in the award
of a full service level credit
(C) [**] at 97% - less than expected and greater than
minimum, resulting in the award of 50% of the service
level credit for each of the 2 days
(D) [**] performance at 98.4% - greater than expected,
resulting in an earnback, calculated below
Credits Awarded: ((B*A) + (C*(.5*A)) = $14,666
Earnbacks: ((B*A)*.5) + ((C*(.5*A)*1) = $11,000
Net Service Level Credit Award: $3,666
Limits on Service Credits
OnStar shall not be entitled to a credit in excess of (i) one thirtieth (1/30)
of the Monthly Service Fee for any [**] on which Magic fails to meet a service
level commitment (or, with respect to recognition accuracy, for any [**] in
which Magic fails to meet its service level commitment), regardless of whether
Magic fails to meet one or more service level commitments for that [**] or [**],
as applicable, or (ii) a total of one third (1/3) of the Monthly Service Fee for
any [**] with respect to which Magic fails to meet one or more service level
commitments. Notwithstanding the foregoing, for the months of July, August and
September, 2001, OnStar shall not be entitled to a credit in excess of a total
of 5%, 10% and 20%, respectively, of the Monthly Service Fee for any [**] with
respect to which Magic fails to meet one or more service level commitments. In
addition, OnStar shall not be entitled to a credit in the event that failure to
meet any service level commitment is attributable to a force majeure event, as
described in Section 9.9(a) of the Agreement, including any failure resulting
from a failure or change in facilities, systems or equipment maintained by
OnStar, its vendors or suppliers (other than Magic).
Exhibit C
[**] 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.
EXHIBIT D
TRAVEL GUIDELINES
THE FOLLOWING ARE GUIDELINES FOR REPORTING OF BUSINESS-RELATED TRAVEL EXPENSES:
Original copies of receipts are required for all airfare, hotel, car rental and
transportation expenditures, plus any individual expenditures such as parking,
gasoline purchases, highway tolls, etc. Include the last copy of the airline
ticket. Receipts are to be obtained where customarily available and attached to
the expense report submitted by Seller. Receipts other than restaurant tabs are
required for expenditures of $25.00 or more. All travel and per diem for which
Magic seeks reimbursement will be submitted to OnStar on Magic's standard
vouchers with substantiating documentation and will accompany the monthly
invoices. The employee, his or her immediate supervisor and an authorized OnStar
representative must sign the expense report form.
Normally a maximum of two members are permitted to travel on the same business
trip. If more than two members are required, approval must be obtained in
advance. Magic is responsible for making travel reservations, hotel/motel
accommodations and rental cars.
Coach fare is the only authorized form of domestic air travel. Business class is
the authorized form for overseas travel. Taxis, hotel shuttles or airport limos
should be used when a reduction in expense can be obtained versus a rental car.
Personal car mileage is reimbursed for miles driven in excess of miles commuted
to and from the driver's normal workplace at a rate of $.325 per mile. Parking
fees and highway tolls are reimbursable items, and receipts are required.
Traffic violations are NOT reimbursable.
Itemize hotel xxxx by day including tax. Separate charges (i.e. telephone,
restaurant, etc.) should be shown on the appropriate expense report line. Hotel
movies or alcoholic beverages are personal expenses and should NOT be included
on the expense report.
Meal charges should reflect actual expenses incurred and will be considered for
approval based on trip location and reasonableness (there is no set allowance
per day). Any meal expense greater than $15.00 requires a receipt and a business
purpose. Meals will NOT be reimbursed for non-overnight trips except in the case
of late return or early arrival occasioned by travel outside normal working
hours. When claiming dinner on the last day of travel, the traveler must return
after 7:00 p.m. (flight arrival time). Breakfast on the first day of the trip
should be at the traveler's expense, unless he or she leaves before 7:00 a.m.
(flight departure). When claiming breakfast on the first day of a trip or dinner
on the last day of a trip, the traveler must list the time departure and/or
return in order to be reimbursed.
All telephone charges require an explanation of person called and the nature of
expense. Reasonable valet and laundry expenses are authorized for stays
exceeding five consecutive days or in case of emergency.
Home computer expenses including hardware, software, and data/phone lines are
NOT reimbursable expenses. Political contributions/donations of any type are NOT
reimbursable.
All expenses must be reasonable and are subject to audit.
Exhibit D
