Document:

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                                                                    Exhibit 10.1

                     CONFIDENTIAL TREATMENT REQUESTED UNDER
              17 C.F.R. SECTIONS 200.80(B)(4), 200.83 AND 230.406.

                      TRIAL LICENSE AND SERVICES AGREEMENT

         This Trial License and Services Agreement ("Agreement"), is effective
as of March 20, 2002, by and between General Magic, Inc. ("Consultant") having a
place of business at 420 North Mary Avenue, Sunnyvale, CA 94085 and Citibank,
N.A., a national banking association having a place of business at 909 Third
Avenue, 16th Floor, New York, NY 10043.

                                   WITNESSETH

         WHEREAS, Consultant wishes to provide certain services to Citibank; and

         WHEREAS, Citibank wishes to procure such services from Consultant, for
good and valuable consideration.

         NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:

1.       SCOPE OF WORK.

         Citibank agrees to retain Consultant on a non-exclusive basis, to
         provide services relating to the development and evaluation of an
         Application as more fully described hereafter in Appendix A. Consultant
         agrees to perform the professional services (hereinafter referred to as
         "Services"), as set forth in Appendix A, which is attached hereto and
         is incorporated herein by reference. Consultant also agrees to employ
         all reasonable efforts to meet Citibank's assignment deadlines and
         documentation standards, as applicable.

         Citibank shall assign a Citibank employee (the" Project Manager") to
         manage and/or coordinate the project and/or assignment. The Project
         Manager shall be responsible to monitor Consultant's progress and for
         the review and approval of out-of-pocket expenses and invoice
         documentation. Unless otherwise agreed upon, Consultant shall meet with
         the Project Manager every two weeks to discuss and review the progress
         of the project and/or assignment and to report on and deliver work
         completed during the preceding two weeks.

2.       TERM.

         This Agreement shall commence on the effective date as noted above and
         shall terminate upon the conclusion of the sixty (60) day hosting
         period described in Attachment 1, provided that upon fourteen (14) days
         notice to Consultant prior to the then expiring term, Citibank may
         extend the term of the hosting services for successive thirty-day
         periods at the rate of $[**] per month. For the avoidance of the doubt,
         any such extension shall be deemed to extend the term of this Agreement
         for a like period.

3.       PAYMENT FOR SERVICES.

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         Citibank agrees to compensate Consultant in accordance with the fee
         schedule set forth in Appendix A, which is attached hereto and is
         incorporated herein by reference. Consultant agrees to submit to the
         Project Manager an itemized invoice for the Services to be rendered
         during the term of this Agreement and said invoice shall be payable
         within [**] of receipt. Consultant agrees to maintain the necessary
         records to ascertain the correctness of the invoice.

4.       TRAVEL/REIMBURSABLE EXPENSES.

         All travel by Consultant must be necessary and cost effective and
         authorized in advance by the Project Manager, in accordance with
         Citibank's expense guidelines.

         The Project Manager should make all arrangements for Consultant for air
         travel, hotel reservations and rental car usage required in connection
         with the Services provided under this Agreement, through the
         appropriate Citibank approved travel agency, using the business unit's
         account number.

         It is expected that all expenses associated with ground transportation
         (e.g., taxi cabs) and meals incurred by the Consultant, while
         conducting activities on behalf of Citibank, will be at reasonable
         rates and that the Consultant will exercise prudence in incurring such
         expenses.

         To the extent possible, all disbursements should be paid by the
         Consultant using a Citibank Visa card, Citibank Mastercard or Diners
         Club charge card.

         Citibank will reimburse Consultant's approved business expenses at
         cost. Request for reimbursement of expenses in excess of $50.00 (for
         any given expense) will require submittal of acceptable substantiating
         documentation for each such expense.

         Disbursements will be reimbursed at the cost paid by the Consultant,
         without mark-up; however, the following disbursements will not be
         reimbursed;

         (i)      Secretarial or word processing services;

         (ii)     Photocopy expenses at more than 5 cents per page. Photocopy
                  costs in excess of $1,000 for a single job must be authorized
                  in advance by the Project/Assignment Manager;

         (iii)    Any other charges incurred by the Consultant's support staff,
                  such as meals, filing or proofreading, regardless of when
                  incurred;

         (iv)     Any other overhead items (e.g., office supplies, furniture,
                  conference room space, heating/air conditioning, etc.); and

         (v)      Local telephone or fax expenses.

5.       INDEPENDENT CONTRACTOR.

         It is expressly understood and agreed that Consultant is an Independent
         Contractor and shall not be considered for any purpose to be an
         employee of Citibank. Apart from the payment of the agreed upon fees as
         outlined above, Citibank is not responsible for any other compensation,
         nor for employee benefits and/or matters relating thereto (including
         but not limited to the withholding

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         and/or payment of federal, state and local income and other payroll
         taxes) nor for Workers Compensation, disability benefits or any other
         additional legal requirements of a similar nature.

6.       PROPRIETARY RIGHTS.

         A. For the purposes of this Agreement, "Intellectual Property Rights"
         means all current and future worldwide copyrights, trade secrets,
         patents and other patent rights, utility models, and other intellectual
         property rights (other than trade names, trademarks, and service
         marks), including all applications and registrations with respect
         thereto.

         B. Consultant. Citibank hereby acknowledges that, as and for the
         Services, Consultant is building and hosting a proof of concept [**]
         application ("Application") built on Consultant's Voice Infrastructure
         Software ("Software") to which Citibank will have access under the
         terms and conditions of this Agreement. Therefore, Citibank agrees
         that, as between the parties, Consultant and its suppliers exclusively
         own all right, title and interest in and to the hardware and software
         used by Consultant in connection with the provision of the Services,
         including the Application (except as set forth in Section 6.C. below)
         and the Software and all modifications, enhancements and derivatives
         thereof, and all information, reports, studies, charts, plans,
         diagrams, presentations and any other tangible or intangible
         information, deliverables and all inventions, discoveries,
         specifications, designs, methods, devices, writings, compilations of
         information, and/or materials developed or produced by Consultant
         hereunder, together with all Intellectual Property Rights in the
         foregoing (collectively, "Consultant Proprietary Information")
         exclusive of Citibank Proprietary Information.

         C. Citibank. Consultant agrees that, as between the parties, Citibank
         and its affiliates exclusively own all right, title and interest in and
         to the (i) information and technology to be delivered by Citibank to
         Consultant for use in connection with the development and hosting of
         the Application, including the Citibank [**] platform and all
         modifications, derivatives and enhancements thereof, (ii) Citibank
         Confidential Information; and (iii) all Intellectual Property Rights in
         the foregoing (collectively "Citibank Proprietary Information").

         D. [**] Technology. [**] shall [**] for the Application under this
         Agreement and all Intellectual Property Rights therein ("Scripts"), and
         [**] shall have [**] the Scripts. [**] will require any [**] with any
         use, sale, distribution, modification, license or other exploitation of
         the Scripts. [**]. The parties agree that the Scripts are Confidential
         Information, which shall be subject to protection as provided under
         Section 9 below. Each party will render all customary and reasonable
         assistance to the other party, including without limitation execution
         and delivery of all additional documents reasonably requested by the
         other party, free of charge, as the requesting party may request in
         good faith in order for such requesting party to perfect and register
         all Intellectual Property Rights relating to such requesting party's
         [**] in any and all countries.

7.       LICENSE TO ACCESS SOFTWARE.

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         Subject to the terms of this Agreement, including, without limitation,
         the payment of the fees set forth in Section 3 above, Consultant hereby
         grants to Citibank a non-sublicensable, non-transferable (except as
         otherwise provided in Section 19), non-exclusive license to access the
         Software through Consultant's Network Operations Center ("NOC") and use
         the Software hosted on the NOC solely for Citibank's internal business
         purposes in connection with its evaluation of the Software and
         Application.

8.       WARRANTY DISCLAIMER; INDEMNITY.

         A. Disclaimer. CITIBANK HEREBY ACKNOWLEDGES THAT THE SOFTWARE AND
         SERVICES ARE PROVIDED TO CITIBANK AS A PROOF OF CONCEPT AND AS SUCH,
         THE SOFTWARE AND SERVICES ARE PROVIDED "AS IS" WITHOUT ANY WARRANTY OF
         ANY KIND WHATSOEVER. CONSULTANT, ON BEHALF OF ITSELF AND ITS SUPPLIERS,
         HEREBY EXPRESSLY DISCLAIMS ALL WARRANTIES WITH REGARD TO THE SOFTWARE
         AND SERVICES, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE,
         INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTIES OF
         MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE AND
         NON-INFRINGEMENT.

         B. Indemnity. Consultant shall, at its expense, defend or settle any
         third party claim against Citibank that the Services, as provided in
         accordance with this Agreement, or the Application and Software, when
         used in accordance with this Agreement, infringe any third party's [**]
         or misappropriates any third party's [**] ("Claim") and Consultant
         shall pay any final judgments awarded, or settlements entered into,
         provided that Citibank (a) promptly notifies Consultant in writing of
         the Claim, (b) gives Consultant sole control of the defense thereof and
         all related settlement negotiations, and (c) provides Consultant with
         the assistance, information and authority necessary to perform its
         obligations under this Section 8.B. Consultant will reimburse
         reasonable out-of-pocket expenses incurred by Customer in providing
         such assistance.

9.       CONFIDENTIAL INFORMATION.

         The provision, disclosure and use of all Confidential Information under
         this Agreement (including the Consultant Proprietary Information and
         the Citibank Proprietary Information) shall be governed by the terms
         and conditions of the Mutual Non-Disclosure Agreement entered into by
         the parties on October 1, 2001 (the "NDA"), except to the extent that
         any provisions of the NDA are inconsistent with the terms of this
         Agreement, in which case the terms of this Agreement shall govern.

         Consultant shall comply with Citibank's reasonable privacy policies and
         its Privacy Promise concerning the privacy and confidentiality of
         Citibank customer information, including as they may be amended from
         time to time. Citibank shall make such policies and Privacy Promise
         available to Consultant upon request. As part of such policies and
         Privacy Promise, Citibank reserves the right to conduct an on-site
         audit and review of Consultant's systems, sites and procedures, and
         those of its subcontractors, at Citibank's expense, at reasonable times
         and for a reasonable duration and upon reasonable advance notice to
         Consultant to ensure the privacy and

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         confidentiality of any Citibank customer information. In the event
         Citibank privacy policy standards are not met, the parties shall
         mutually agree upon a re-mediation plan.

10.      LIMITATION OF LIABILITIES.

         EXCEPT FOR BREACH OF SECTIONS 6 OR 9, OR CONSULTANT'S INDEMNITY
         OBLIGATIONS UNDER SECTION 8.B. NEITHER PARTY SHALL HAVE ANY LIABILITY
         FOR ANY CLAIM RELATING TO THIS AGREEMENT IN EXCESS OF THE FEES AND
         EXPENSES PAID TO CONSULTANT HEREUNDER. EXCEPT FOR BREACH OF SECTIONS 6
         OR 9, OR PURSUANT TO SECTION 8.B. IN NO EVENT SHALL EITHER PARTY BE
         LIABLE FOR ANY INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
         EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

11.      INSURANCE.

         Consultant shall maintain, throughout the performance of its
         obligations under this Agreement, a policy of Worker's Compensation and
         Employer Liability Insurance with coverage limits as may be required by
         law of the state in which the Services are to be performed. Consultant
         further agrees to maintain adequate Comprehensive General Liability
         Insurance (minimum coverage $500,000.00) providing coverage against
         liability for bodily injury, death and property damage which may arise
         out of or based upon any act or omission of Consultant or any of its
         employees, subcontractors, or agents under this Agreement. Upon written
         request, Consultant shall promptly provide certificate(s) from its
         insurers indicating the amount of insurance coverage, nature of such
         coverage and expiration date(s) of each applicable policy.

12.      COMPLIANCE WITH CITIBANK'S POLICIES & PROCEDURES.

         Consultant agrees to comply with Citibank's Drug Abuse Policy, which
         prohibits the selling, distributing, manufacturing, processing, using
         or being under the influence of illegal drugs or illicit narcotics (non
         prescriptive medication) as defined by the state in which the Services
         are to be performed and/or the Federal Government, while on Citibank
         business or on Citibank premises. Consultant acknowledges that its
         employees, subcontractors, or agents may be required to undergo drug
         testing based on the nature of their assignment. In the event that any
         of Consultant's employees, subcontractors, or agents refuses to undergo
         such testing or violates the aforementioned policy, said person will be
         barred from performing any further Services for Citibank and this
         Agreement may be terminated by Citibank.

         Consultant acknowledges that the Financial Institutions Reform,
         Recovery and Enforcement Act of 1989, which prohibits a federally
         insured institution from knowingly engaging any person with a criminal
         conviction, which includes crimes involving breach of trust or
         dishonesty, (collectively referred to as "criminal background") from
         participating directly or indirectly in the conduct of the affairs of
         the institution. Consultant agrees that it shall not assign any person
         to provide Services to Citibank hereunder that Consultant knows,
         suspects or has reason to believe has a criminal background. Consultant
         acknowledges that its employees, subcontractors, or agents may be
         required to be fingerprinted based on the nature of their assignment.
         In the event that any of Consultant's employees, subcontractors, or
         agents refuse to undergo such fingerprinting or violates the
         aforementioned prohibition, said person will be barred from performing
         any further Services for Citibank and this Agreement may be terminated
         by Citibank.

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         The Consultant further acknowledges that its representative has
         received and read Citibank's Code of Conduct & Ethical Policies and
         will abide by all applicable policies and requirements contained
         therein. The Consultant agrees to comply with all Citibank standard
         safety and security policies and procedures which have been
         communicated to Consultant by Citibank.

         Consultant agrees that it will comply with all of Citibank's (i)
         standard physical and information security procedures and rules in
         place at such Citibank locations where Consultant is performing work
         and (ii) web standards, where applicable.

13.      COMPLIANCE WITH LAWS.

         Consultant agrees to comply with all applicable federal, state, county
         and local laws, ordinances, regulations and codes in the performance of
         its obligations under this Agreement, including but not limited to the
         procurement of permits, licenses and certificates where required and
         payment of applicable taxes.

14.      TERMINATION

         This Agreement may be terminated by Citibank at any time, upon [**]
         prior written notice. Consultant shall be paid for all work which was
         authorized by Citibank prior to such notice of termination and which is
         completed by the Consultant before the effective date of said
         termination.

         Upon completion of the project and/or assignment or upon any
         termination of this Agreement, each party shall return to the other
         party all of its Confidential Information and its Proprietary
         Information, and all documents, data and materials and copies thereof
         supplied to the other party in connection with this Agreement. Further,
         Consultant shall (i) discontinue providing any further access to the
         Software and Application by Citibank; and (ii) discontinue any further
         use of any Citibank Proprietary Information.

15.      TAXES.

         The fees and/or charges reflected in Appendix A hereof, are exclusive
         of any sales, use, personal property, value-added and goods/services
         taxes. When applicable, said taxes will appear as a separate item on
         Consultant's invoice and Citibank shall be liable for payment of such
         taxes to Consultant.

         Notwithstanding the foregoing, Citibank shall not be responsible for
         any foreign, federal, state or local taxes based on the net income or
         receipts, or any other such taxes based on Consultant's doing business
         in a particular jurisdiction.

16.      PUBLICITY.

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         Consultant agrees not to use the name of Citibank or any of its
         subsidiaries or affiliates in any sales or marketing publication or
         advertisement including internal and external publications, without the
         prior written consent of Citibank. Consultant also agrees not to make
         any public disclosure except as may be legally required, relating to
         this Agreement or Citibank or its affiliated companies, without
         obtaining the prior written consent of Citibank.

17.      NONDISCRIMINATION.

         Consultant agrees to comply and to cause its subcontractors and/or
         agents to comply with the provisions of all applicable federal, state,
         and local laws, regulations and executive orders relating to equal
         opportunity and nondiscrimination in employment, and the use of
         minority business enterprises, to the extent that any such laws, orders
         and regulations are applicable in the performance of their Services
         hereunder. For the purpose of this Agreement, the provisions of such
         laws, orders and regulations shall be deemed an integral part of this
         Agreement to the same extent as if they were written at length herein.

18.      NON-SUBORNATION.

         Consultant agrees that in performance of its obligations under this
         Agreement, it will not make or offer to make any payments to, or
         confer, or offer to confer any benefit upon any employee, agent or
         fiduciary of any third party, with the intent to influence the conduct
         of such employee, agent or fiduciary in relation to the business of
         such third party, in connection with this Agreement.

19.      GENERAL PROVISIONS.

         Paragraph Headings. Paragraph headings are for convenience only and
         shall not be a part of the Terms and Conditions of this Agreement.

         Waiver. Failure by either party at any time to enforce any obligation
         by the other party, to claim a breach of any term of this Agreement or
         to exercise any power agreed to hereunder will not be construed as a
         waiver of any right, power or obligation under this Agreement, will not
         affect any subsequent breach, and will not prejudice either party as
         regards any subsequent action.

         Severability. If any term or provision of this Agreement should be
         declared invalid by a court of competent jurisdiction, the remaining
         terms and provisions of this Agreement shall remain unimpaired and in
         full force and effect.

         Subcontractors/Agents. Citibank reserves the right of approval of all
         subcontractors and/or agents, which approval will not be unreasonably
         withheld by Citibank. Approval of any subcontractor and/or agent by
         Citibank shall not constitute the superseding or waiver of any right of
         Citibank to reject work which is not in conformance with its standards
         or this Agreement. Consultant shall be fully responsible for its
         subcontractors and/or agents. Nothing in this Agreement shall be
         construed to create any contractual relationship between Citibank and
         any subcontractor and/or agent, nor any obligation on the part of
         Citibank to pay or to see to the payment of any money due any
         subcontractor and/or agent as may otherwise be required by law.

         Assignment. Neither party may assign any of its rights or obligations
         under this Agreement without the prior consent of the other; provided,
         however, that either party may assign any rights

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         or obligations to a parent, subsidiary or affiliate (including any
         successor in interest thereof) upon notice to the other party.

         Modification. No modification, waiver or amendment of any term or
         conditions of this Agreement shall be effective unless and until it
         shall be reduced to writing and signed by both of the parties hereto or
         their legal representatives.

         Survival. Sections 3, 5, 6, 8, 9, 10, 14 and 19 will survive the
         expiration or termination of this Agreement for any reason.

         Governing Law. This Agreement shall be governed by and construed and
         enforced in accordance with the substantive laws of the State of New
         York as if the Agreement were made in New York for performance entirely
         within the State of New York.

         Complete Agreement. This Agreement together with Appendix A constitutes
         the entire agreement of the parties with respect to this subject matter
         and may not be modified in any way except by written agreement signed
         by both parties. There are no other agreements either express of
         implied with regard to this subject matter.

IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers,
have executed this Agreement as of the effective date first set forth above.

Citibank, N.A.                                       General Magic, Inc.

By:  /s/ signature illegible                         By:  /s/ David H. Russian
     _______________________                              ____________________

Print Name:_________________                         Print Name: David Russian
                                                                 _____________

Title:______________________                         Title: CFO
                                                            __________________

Date:_______________________                         Date: March 18, 2002
                                                           ___________________

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                                   APPENDIX A

                                Statement of Work

[**] Proof-of-Concept  ("Project")

                                                 Start Date: February 1, 2002
                                                 Completion Date: March 15, 2002

I.       Services to be Rendered and Deliverable to be Provided:

         Services to be performed and Deliverables ("Deliverables") in
         connection with developing an [**] applications. More specific
         information is set forth in Attachment 1 which is attached hereto and
         incorporated herein by reference.

II.      Deliverables/Milestones:

         All Services shall be completed on or before the Completion Date set
         forth above unless the parties hereafter revise the completion date.

III.     Fees:

1.       Fees:

         (a)  Fixed Price Project:                   $[**]
         (b)  Reimbursable Expenses                  $[**]

2        Estimated Total Fees:                                          $[**]

3.       Estimated Taxes:                                             uncertain

5.       Estimated Total Cost (exclusive of taxes)                      $[**]

Consultant shall not charge any fees in excess of those set forth in the absence
Citibank's prior written approval.

IV.      Acceptance Criteria: As set up forth in Attachment 1 to this Appendix A

V.       Miscellaneous: Not withstanding anything contained in this appendix,
         Citibank shall not be obligated to proceed with any further activities
         or services shall be subject to a separate written agreement therefor.

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Citibank, N.A.                                       General Magic, Inc.

By:  /s/ Alan Young                                  By:  /s/ David H. Russian
     ____________________                                 _____________________

Print Name:  Alan Young                              Print Name:  David Russian
             ____________                                         _____________

Title:___________________                            Title:  CFO
                                                             __________________

Date:____________________                            Date:  3-18-2002
                                                            ___________________

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                                  Attachment 1

                                      [**]

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                  BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

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                                                                     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

                                       3
<PAGE>
              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

                                       4
<PAGE>
nationally recognized overnight courier with next-day delivery guaranteed. The
address and facsimile numbers for such communications shall be:

         To the Seller:    420 North Mary Avenue
                           Sunnyvale CA 94085
                           Telephone: (408) 774-4000
                           Facsimile:  (408) 774-4023

         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

                                       5
<PAGE>
              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.

                             ***********************

                                       6
<PAGE>
         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:

                                       _________________________
                                       _________________________
                                       _________________________
                                       _________________________
                                       _________________________
                                       _________________________

                                       7
<PAGE>
                                                                       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 ________________.

                                       8

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