EXHIBIT 10.2
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.80(b)(4), 200.83
AND 230.406.
SERVICES ADDENDUM
THIS SERVICES ADDENDUM is effective as of August 1, 2001 and issued
under the Development and License Agreement effective November 9, 1999
("Agreement"), as amended contemporaneously herewith, by and between GENERAL
MAGIC, INC. ("MAGIC"), a Delaware corporation having a principal place of
business at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and ONSTAR
CORPORATION ("ONSTAR"), a Delaware corporation having a principal place of
business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Any terms not defined herein shall have the same meaning as set forth in
the Agreement.
I. INTRODUCTION
The objective of this Services Addendum is to allow OnStar to have
access to certain dedicated personnel of Magic to (a) drive planned releases of
the OnStar Service and develop various enhanced features and functionality for
the OnStar Service; (b) support and enhance the OnStar Service; and (c) provide
support for certain agreed upon network operations environments that are not
covered by the existing Services Agreement, effective as of January 1, 2001
between OnStar and Magic.
II. SCOPE OF WORK AND RESOURCES
A. DESCRIPTION. While this Services Addendum is in effect and subject to
Section III (Assumptions, Dependencies, and Constraints), Magic will make
available to OnStar at Magic's facility or other location agreed to by the
parties (subject to reimbursement of reasonable travel expenses) during Magic's
normal business working hours, and at other mutually agreed upon times on an as
required basis, the number of dedicated personnel described below ("Dedicated
Personnel") to address OnStar's requirements for the OnStar Service, and OnStar
will pay to Magic the amounts set forth in Section IV (Pricing, Payment Terms,
and Pricing Details) for the availability of such resources. These personnel
will focus on the following activities for the OnStar Service: (a) system design
and architecture; (b) software engineering; (c) build and release management;
(d) engineering services; (e) dialog design, implementation, and tuning; (f)
program and project management; (g) support of testing including systems
integration and user acceptance; (h) quality assurance; (i) maintenance of the
then current production version of the OnStar Service; and (j) other related
services as agreed to by the parties.
ORGANIZATION POSITION NUMBER
Program Management [**] [**]
Engineering [**] [**]
Engineering [**] [**]
Engineering [**] [**]
Engineering [**] [**]
Engineering [**] [**]
Engineering [**] [**]
[**] 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.
Engineering [**] [**]
Engineering [**] [**]
Quality Assurance [**] [**]
Speech and Language [**] [**]
Speech and Language [**] [**]
---------
Total 18
B. OTHER MATTERS. With each monthly invoice issued under this Services
Addendum, Magic will provide OnStar with a labor report that details the
utilization of the Dedicated Personnel during the month in performing services
hereunder. Magic and OnStar will agree upon the format of this report within
thirty (30) days after the execution of this Services Addendum by both parties.
The parties agree to review the labor report on a monthly basis; in the event
the report indicates that Dedicated Personnel are consistently working in excess
of eight hours a day, or five days a week, the parties agree to reevaluate and
increase as reasonably necessary the number of Dedicated Personnel committed to
OnStar under this Agreement. OnStar will provide a single training session (and
retraining as necessary for changes in processes), at no charge, to Magic's
employees at Magic's facility in Sunnyvale, California, on SDP 21 and other
processes that OnStar desires to be employed by the Dedicated Personnel. Cost
for any additional training requested by Magic (including training to address
turnover) shall be paid for by Magic. After these individuals receive such
training, Magic will document development deliverables in accordance with SDP 21
on a going forward basis. If OnStar requires that Magic use any hardware,
software and services in connection with the services to be provided hereunder
and outside the normal course of Magic's business (such items to be identified
by Magic promptly following OnStar's requirement of use of such hardware,
software or services by OnStar), OnStar will notify Magic promptly in writing of
these needs, and subject to OnStar's agreement to reimburse Magic for all costs
incurred in obtaining such items ("Other Costs"), Magic will procure and obtain
such items. Upon OnStar's request during the Term or upon expiration of this
Addendum, Magic shall transfer to OnStar or its designee, ownership of leases or
licenses of any or all such hardware, software or services. Such transfers of
hardware shall be: (i) at net book value; and (ii) free and clear of all liens,
security interests and other encumbrances. All transfers of hardware that is
leased by Magic or software shall be subject to assumption by OnStar or its
designee of any future leasehold or license liabilities in relation to such
leased hardware and software.
C. ONSTAR ACCESS TO MAGIC FACILITIES. Magic shall provide access to its
facilities for such OnStar employees and at such times as the parties shall
agree for the purposes of and to the extent reasonably necessary to collaborate
on the services to be provided by Magic to OnStar hereunder ("OnStar
Employees"). Magic acknowledges and agrees that OnStar may assign up to two of
its employees to regularly work from Magic's facilities. OnStar Employees shall
comply with all applicable security and work rules while on Magic's premises.
Magic shall be responsible for providing to OnStar Employees office space and
office furnishings, office/janitorial services and utilities in connection with
such office space, all of which shall be consistent with those that Magic
provides to the Dedicated Personnel.
[**] 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.
III. ASSUMPTIONS, DEPENDENCIES, AND CONSTRAINTS
The following are assumptions, dependencies, and constraints for the
services provided hereunder: (a) OnStar will provide a prioritization for all
tasks to be performed with consultation and agreement from Magic; (b) the work
to be performed will be undertaken at OnStar's request and in accordance with
OnStar's reasonable instructions; (c) OnStar and Magic will each appoint a
single point of contact to oversee the work efforts to be performed at their
respective companies and to collaborate in performing prioritized tasks; (d)
OnStar and Magic will regularly meet and have conference calls to ensure timely
and accurate communication and coordination for work efforts to be performed;
(e) OnStar has the right to review resumes of and approve for hire, such
approval not to be unreasonably withheld, all key personnel, provided OnStar
responds within one (1) business day of submission of the resume by Magic to
OnStar; (f) both parties agree to create an attachment to this Services Addendum
within 30 days of the execution of this Services Addendum that outlines mutually
agreeable metrics for the parties' performance of their obligations hereunder;
if said attachment is not mutually agreed to within 30 days, this Services
Addendum shall be suspended until such attachment is completed and incorporated
in this Services Addendum; (g) both parties agree to further amend the Agreement
within 60 days of the execution of this Services Addendum to specify the
respective rights of each party in and to intellectual property created
hereunder and under the Agreement; if said amendment is not mutually agreed to
within 60 days, this Services Addendum shall be suspended until such amendment
is completed; and (h) Magic may require up to sixty (60) days to staff positions
in Section II (Scope of Work and Resources). In the event that Magic is unable
to staff a position within 60 days, Magic and ONSTAR may engage mutually agreed
upon third parties on a contractual basis until the position is filled.
IV. PRICING, PAYMENT TERMS, AND PRICING DETAILS
A. PRICING. While this Services Addendum is in effect, OnStar shall pay
Magic on a monthly basis in accordance with Subsection B (Payment Terms) for the
Dedicated Personnel provided under this Services Addendum as set forth in
Subsection C (Pricing Details) (the "Monthly Charge"). If Magic does not make
available during any given month the individuals for all such positions, it will
notify OnStar and reduce the applicable Monthly Charge for such month for the
positions that Magic does not fill for such month by the applicable discounted
rate or portion thereof that applies to such positions. OnStar shall also
reimburse Magic in accordance with Subsection B (Payment Terms) for any of the
following costs incurred in the immediately prior month: (a) crisis management
and holiday bonus costs ("Crisis Management and Holiday Bonuses") (on a
pass-through basis) that Magic incurs according to Magic's Crisis Management and
Holiday Bonus Policy as shown in Attachment 1 for the Dedicated Personnel; (b)
travel expenses (on a pass-through basis) that Magic incurs with respect to the
Dedicated Personnel pursuant to Section II.A (Description); and (c) mutually
agreed Other Costs.
B. PAYMENT TERMS. Magic will invoice OnStar on the 28th day of each
month during the term hereof (or if the 28th falls on a holiday or weekend, then
on the immediately preceding business day) for the Monthly Charge, together with
any Crisis Management and Holiday Bonuses, travel expenses and mutually agreed
Other Costs incurred under this Services Addendum for that month. OnStar will
pay each invoice on the 2nd day of the 2nd calendar month following the date of
the invoice. Upon execution hereof, Magic will invoice OnStar, and OnStar shall
promptly pay, the amount of $483,817, which amount shall be applied to any
3.
amounts due from OnStar in consideration of services rendered during the twelfth
month of this Agreement.
C. PRICING DETAILS. The following is a summary of the discounted rate
per month that OnStar shall pay to Magic for the below number of individuals
assigned to the below positions:
Discounted
Standard Rate per Rate per day Discounted
Organization Position day per employee Number 30% Rate per month
Program Management [**] [**] [**] [**] [**]
Engineering [**] [**] [**] [**] [**]
Engineering [**] [**] [**] [**] [**]
Engineering [**] [**] [**] [**] [**]
Engineering [**] [**] [**] [**] [**]
Engineering [**] [**] [**] [**] [**]
Engineering [**] [**] [**] [**] [**]
Engineering [**] [**] [**] [**] [**]
Engineering [**] [**] [**] [**] [**]
Engineering [**] [**] [**] [**] [**]
Quality Assurance [**] [**] [**] [**] [**]
Speech & Language [**] [**] [**] [**] [**]
Speech & Language [**] [**] [**] [**] [**]
Speech & Language [**] [**] [**] [**] [**]
------------------------------------------
Total 18 $23,330 $483,817
D. ADDITIONAL PERSONNEL. If OnStar or Magic anticipates that additional
personnel resources may be required to perform any services requested by OnStar
hereunder, then OnStar or Magic will notify the other party promptly of the need
for such resources, and if OnStar and Magic agree to add such resources at the
appropriate billing rate, then OnStar and Magic will add such resources and
adjust immediately the Monthly Charges to be paid by OnStar to Magic under this
Services Addendum.
E. SUPPORT PAYMENT. For the period during which this Services Addendum
is in effect, payment of the fees due hereunder shall be in lieu of payment of
the Support Fee for such period under Section 6.5 of the Agreement.
V. HIRE
OnStar and Magic agree that during the Service Addendum Term (defined
below) and for 12 months thereafter they will not solicit for hire or offer
employment to any person employed
[**] 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.
then or within the preceding 12 months by the other without the prior written
approval of the other party.
VI. TERM AND TERMINATION
A. TERM. This Services Addendum will commence on July 1, 2001 and,
unless earlier terminated according to the provisions below, will remain in
effect for the one (1) year period beginning immediately thereafter (the
"Initial Term"). This Services Addendum is subject to renewal for subsequent,
one-year periods (each a "Renewal Term") upon OnStar's written notice of renewal
to Magic at least 120 days before the expiration of the Initial Term or any
then-current Renewal Term. At least one hundred fifty (150) days before the
commencement of each Renewal Term, Magic will notify OnStar in writing of any
adjustments to the pricing for the positions set forth in Subsection C. for such
Term.
B. TERMINATION. This Addendum 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 Addendum and (ii) the other Party has not
cured such material breach within thirty (30) days after receipt of written
notice of such material breach.
C. 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 at least 60 days notice to Magic.
D. 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.
E. SURVIVAL. The terms of this Services Addendum that by their sense and
context are intended to survive shall survive expiration or termination of this
Agreement, including Section V (Hire).
5.
VII. APPROVAL OF SERVICES ADDENDUM
OnStar and Magic hereby accept and approve of this Services Addendum.
The provisions in the Agreement, as amended, and this Services Addendum set
forth the entire understanding between OnStar and Magic regarding the subject
matter of this Services Addendum. If there is a conflict between the provisions
of this Services Addendum and the Agreement, as amended, the provisions of this
Services Addendum, will prevail.
ONSTAR CORPORATION GENERAL MAGIC, INC.
/s/ ▇▇▇ ▇▇▇▇▇▇ /s/ ▇. ▇. ▇▇▇▇▇▇
-------------------------------- -------------------------------
Signature Signature
▇▇▇ ▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇
-------------------------------- -------------------------------
Name
VP--Virtual Advisor President & CEO
-------------------------------- -------------------------------
Title Title
7/30/01 7/31/01
-------------------------------- -------------------------------
Date Date
#146311- SERVICE ADDENDUM TO DEVELOPMENT AND LICENSE AGREEMENT
6.
ATTACHMENT #1
CRISIS MANAGEMENT AND HOLIDAY BONUS POLICY
ELIGIBILITY:
This policy applies only to exempt employees working on the OnStar Project.
Non-exempt employees will be paid based on actual hours worked and are not
eligible under this policy.
CRISIS MANAGEMENT BONUS:
When operating requirements or other needs cannot be met during your regularly
scheduled working hours, you may be asked to work additional hours in order to
handle a systems failure or other crisis of similar magnitude or import to the
OnStar Service ("Crisis"). When possible, advance notification of these
assignments will be provided. If you are selected by your manager to assist in
resolving the Crisis in addition to your regularly scheduled hours, you will be
compensated with a bonus equal to 5% to 10% of your weekly base salary rate, for
each Crisis you participate in, regardless of the amount of time the actual
Crisis takes to complete.
This bonus is also designed to compensate you for the inconvenience caused by
being required to return to work over the weekend, due to a Crisis. If you are
called back to work, outside your regularly scheduled working hours on the
weekend, you will be compensated with a bonus equal to 20% of your weekly base
salary rate, for each Crisis you respond to, regardless of the amount of time
the actual Crisis takes to resolve.
HOLIDAY BONUS:
If an employee is required to work during a holiday, they are compensated for
the holiday in addition to a bonus equal to 40% of their weekly base salary.
Any employee scheduled to work the Saturday and Sunday after the Thanksgiving
Holiday and the Saturday and Sunday during the Christmas shutdown will be
compensated as holiday pay.
APPROVALS:
All bonuses are submitted by managers by using a status change form, along with
signature from Department Head.
7.
