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EXHIBIT 4.7
COVENANT NOT TO ▇▇▇
This Covenant Not to ▇▇▇ ("Agreement") is made and entered into as of
February ____, 1998 by and between General Magic, Inc., a Delaware corporation
(the "Company"), and Microsoft Corporation, a Washington corporation
("Microsoft").
RECITALS
A. Microsoft has agreed to purchase from the Company, and the Company
has agreed to sell to Microsoft, an aggregate of fifty thousand (50,000) shares
of the Company's Series A Convertible Preferred Stock, par value $0.001 (the
"Series A Shares"), upon the terms and conditions set forth in that certain
Preferred Stock Purchase Agreement of even date herewith by and between the
Company and Microsoft (the "Preferred Stock Purchase Agreement").
B. Microsoft and the Company will enter into a Patent License Agreement
("Patent License Agreement") concurrently with the closing of the purchase
contemplated by the Preferred Stock Purchase Agreement.
C. In connection with the purchase and sale of the Series A Preferred
Shares and the execution of the Patent License Agreement, the parties desire to
enter into this Agreement setting forth certain terms and conditions regarding
the agreement by the Company not to pursue claims related to its patents, as
more fully described herein. The parties intend that this Agreement shall be
supplemental to the Patent License Agreement pursuant to 11 U.S.C. Section
365(n).
AGREEMENT
NOW, THEREFORE, the parties hereto agree as follows:
1. Definitions.
1.1 Subsidiary. The term "Subsidiaries" means any corporation,
company or other entity: (i) at least 50% of whose outstanding shares or
securities (representing the right to vote for the election of directors or
other such managing authority) are, now or hereafter, owned or controlled
directly or indirectly by a part hereto, but such corporation, company, or other
entity shall be considered to be a Subsidiary only so long as such ownership or
control exists; or (ii) which does not have outstanding shares or securities, as
may be the case with a partnership, joint venture, or unincorporated
association, but at least 50% of whose ownership interest representing the right
to make decisions for such corporation, company, or other entity is, now or
hereafter, owned or controlled, directly or indirectly by a party hereto, but
such corporation, company, or other entity shall be considered to be a
Subsidiary only so long as such ownership or control exists.
1.2 Investment Period. The term "Investment Period" means the period
that commences upon the closing date of the Preferred Stock Purchase Agreement
and terminates
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upon Microsoft's sale or disposition of more than fifty percent (50%) of the
Series A Shares issued under the Preferred Stock Purchase Agreement, or shares
of Common Stock of the Company issued upon conversion of such Series A Shares.
1.3 Patents. The term "Patents" means all patents throughout the
world, other than design patents or the equivalents, which are entitled to an
effective filing date before or during the Investment Period and which are owned
or acquired by the Company or its Subsidiaries, or for which the Company or its
Subsidiaries has or acquires rights to, as of the Closing Date of the Preferred
Stock Purchase Agreement or during the Investment Period, including without
limitation those patents identified on Schedule 1.3.
1.4 Immunity Period. The term "Immunity Period" means the period
that commences upon the first filing and terminates upon the last to expire, of
any of the Patents in any jurisdiction.
2. Covenant of the Company Not To ▇▇▇. As partial consideration for the
Preferred Stock Purchase Agreement and other rights contemplated therein, and in
further consideration of Microsoft's agreement to evaluate the potential for a
further working relationship between the parties, the company and its
Subsidiaries agree not to (A) ▇▇▇, or (B) bring, prosecute, assist or
participate in any judicial, administrative or other proceedings of any kind
against Microsoft or its Subsidiaries or its licensees (including without
limitation OEM customers and end users) for infringement of Patents which occurs
during the Immunity Period on account of the manufacture, use, sale, importation
or distribution of any releases of Microsoft products or products of Microsoft's
Subsidiaries. In the event the Company or its Subsidiaries assign any Patent or
rights to enforce any Patent, the Company or its Subsidiaries shall require as a
condition of any such assignment that the assignee agree to be bound by the
provisions of this Agreement, and any attempted assignment of any Patent or
rights to enforce any Patent in violation of the foregoing shall be deemed
invalid, null and void, and of no force or effect, and further shall have the
effects set forth in Section 3 below.
3. License in the Event of Breach. In the event Company assigns or
attempts to assign any Patent or rights to enforce any Patent in violation of
Section 2 hereof, Company shall be deemed to have granted a license to Microsoft
or its Subsidiaries or its licensees (including without limitation OEM customers
and end users) under the Patents, with such license having the same scope of the
license grant contained in Sections 2.1 and 2.2 of the Patent License Agreement.
4. General Provisions.
4.1 Termination; Survival. This Agreement and each of the covenants
and obligations contained herein shall terminate at the end of the Immunity
Period and shall not be affected by and shall survive (i) termination of the
Preferred Stock Purchase Agreement, the Patent License Agreement and any other
agreements contemplated in connection therewith, (ii) any merger or sale of
stock by any party hereto, (iii) dissolution or liquidation of any party hereto,
and (iv) any sale, assignment or exclusive license of one or more of the Patents
by the
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Company or its Subsidiaries, provided that no such sale or exclusive license
shall be consummated unless in compliance with Section 2 hereof.
4.2 Specific Performance. The parties agree that damages in the
event of breach of this Agreement by the Company or its Subsidiaries would be
difficult, if not impossible, to ascertain, and it is therefore agreed that
Microsoft, in addition to and without limiting any other remedy or right it may
have, shall have the right to an immediate injunction or other equitable relief
in any court of competent jurisdiction, enjoining any such threatened or actual
breach, and without posting any bond or other security. The existence of this
right shall not preclude Microsoft from pursuing any other rights and remedies
at law or in equity which Microsoft may have, including recovery of damages.
4.3 Waiver. The failure of either party to require performance by
the other party of any provision hereof shall not affect the full right to
require such performance at any time thereafter, nor shall the waiver of either
party of a breach of any provision hereof be taken or held to be a waiver of the
provision itself.
4.4 Entire Agreement. This Agreement contains all of the terms and
conditions agreed upon by the parties relating to the subject matter of this
Agreement and supersedes all prior agreements, negotiations, correspondence,
undertakings, and communications of the parties, whether oral or written,
respecting that subject matter.
4.5 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware.
4.6 Headings. The headings contained in this Agreement are intended
principally for convenience and shall not, by themselves, determine the rights
of the parties to this Agreement.
4.7 Severability. In the event any provision of this Agreement shall
be unenforceable or invalid under any applicable law or be so held by applicable
court decision, such unenforceability or invalidity shall not render this
Agreement unenforceable or invalid as a whole, and, in such event, such
provision shall be changed and interpreted so as to best accomplish the
objectives of such provision within the limits of applicable law or applicable
court decisions.
4.8 Assignment. Except as provided in Section 2 hereof, no party to
this Agreement may assign, by operation of law or otherwise, all or any portion
of its rights, obligations, or liabilities under this Agreement.
4.9 Counterparts. This Agreement may be executed in two or more
partially or fully executed counterparts and by facsimile signatures each of
which shall be deemed an original and shall bind the signatory, but all of which
together shall constitute but one and the same instrument. The execution and
delivery of a signature page in the form annexed to this Agreement by any party
hereto who shall have been furnished the final form of this Agreement shall
constitute the execution and delivery of this Agreement by such party.
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4.10 Amendment. This Agreement may not be amended except by an
instrument in writing signed on behalf of each of the parties hereto.
4.11 Notices. All notices, requests, demands, or other
communications which are required or may be given pursuant to the terms of this
Agreement shall be in writing and shall be deemed to have been duly given: (i)
on the date of delivery if personally delivered by hand, (ii) upon the third day
after such notice is (a) deposited in the United States mail, if mailed by
registered or certified mail, postage prepared, return receipt requested, or (b)
sent by a nationally recognized overnight express courier, or (iii) by facsimile
upon written confirmation (other than the automatic confirmation that is
received from the recipient's facsimile machine) of receipt by the recipient of
such notice:
If to Microsoft: Microsoft Corporation
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to GM: General Magic, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ & Freidenrich LLP
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Such addresses may be changed, from time to time, by means of a notice given in
the manner provided in this Section 4.11.
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4.12 Interpretation. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section, Exhibit
or Schedule to this Agreement unless otherwise indicated. The words "include,"
"includes," and "including" when used therein shall be deemed in each case to be
followed by the words "without limitation." The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
"COMPANY" "MICROSOFT"
GENERAL MAGIC, INC. MICROSOFT CORPORATION
By:_______________________________ By:______________________________________
Title:____________________________ Title:___________________________________
Date:_____________________________ Date:____________________________________
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