Document:

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                                                                     EXHIBIT 4.1

                SERIES G PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT

                                        BETWEEN

                                  GENERAL MAGIC, INC.

                                          AND

                              GENERAL MOTORS CORPORATION,

                          BY AND THROUGH ITS ONSTAR DIVISION

                                DATED NOVEMBER 9, 1999

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                            SERIES G PREFERRED STOCK

                         AND WARRANT PURCHASE AGREEMENT

        THIS SERIES G PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT (this
"Agreement") is made as of November 9th, 1999, by and between GENERAL MAGIC,
INC., a Delaware corporation with its principal office at 420 North Mary Avenue,
Sunnyvale, California 94086 (the "Company"), and GENERAL MOTORS CORPORATION, a
Delaware corporation, by and through its ONSTAR DIVISION, with an address at 888
West Big Beaver Avenue, Suite 200, Troy, Michigan 48084 (the "Purchaser").

                                    AGREEMENT

        IN CONSIDERATION of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the Company and the Purchaser agree as follows:

        1.     AGREEMENT TO SELL AND PURCHASE.

               1.1 AUTHORIZATION OF SECURITIES. Subject to the terms and
conditions of this Agreement, the Company has, or before the Closing (as defined
below) will have, authorized the sale and issuance of (a) up to 1,500 shares of
its Series G Convertible Preferred Stock (the "Series G Stock") having the terms
set forth in the Certificate of Designations, Preferences and Rights in
substantially the form attached as Exhibit A (the "Certificate of Designations")
and (b) a warrant, in substantially the form attached hereto as Exhibit B (the
"Warrant"), to purchase up to 500 additional shares of the Company's Series G
Stock. The Series G Stock and the Warrant are collectively referred to herein as
the "Securities."

               1.2 SALE AND PURCHASE. Subject to the terms and conditions of
this Agreement, and in reliance on the representations and warranties contained
herein, at the Closing the Company agrees to issue and sell to the Purchaser,
and the Purchaser agrees to purchase from the Company for an aggregate purchase
price of $15,001,000: (a) 1,500 shares of Series G Stock at purchase price of
$10,000.00 per share, and (b) the Warrant at a purchase price of $1,000.00. The
shares of Series G Stock issuable upon exercise of the Warrant will be
hereinafter referred to as the "Warrant Shares." The shares of the Company's
Common Stock issuable upon conversion of the shares of Series G Stock purchased
and sold pursuant to this Agreement and the shares of Common Stock issuable upon
conversion of Series G Stock purchasable under the Warrant will be collectively
hereinafter referred to as the "Conversion Shares."

        2.     CLOSING AND DELIVERY.

               2.1 CLOSING. Subject to the terms and conditions of Section 6,
the closing of the sale and purchase of the Series G Stock and the Warrant shall
be held at 2:00 p.m. on the third business day immediately following the
completion of all conditions to closing hereunder or waiver of such conditions,
including receipt of any necessary governmental approvals (the

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"Closing Date") at the offices of the Company, or at such other time and place
as the Company and Purchaser may agree.

               2.2 DELIVERY. At the Closing, subject to the terms and conditions
hereof, the Company will issue and deliver to Purchaser (a) a stock certificate,
in the name designated by Purchaser, representing the shares of Series G Stock
deliverable at such Closing, dated as of the Closing, and (b) the Warrant, in
each case against payment of the purchase price therefor by wire transfer,
unless other means of payment shall have been agreed upon by Purchaser and the
Company.

        3.     REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Subject to and
except as disclosed by the Company in the Schedule of Exceptions attached hereto
as Exhibit C, the Company hereby represents and warrants and covenants to
Purchaser as of the date of this Agreement and as of the Closing Date as
follows:

               3.1 AUTHORIZATION. All corporate action necessary for the
authorization, execution and delivery of this Agreement has been taken. The
Company has the requisite corporate power to enter into this Agreement and carry
out and perform its obligations under the terms of this Agreement. At the
Closing, the Company will have the requisite corporate power to sell the shares
of Series G Stock and the Warrant to be sold at such Closing. This Agreement has
been duly authorized, executed and delivered by the Company and, upon due
execution and delivery by Purchaser, this Agreement will be a valid and binding
obligation of the Company, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by equitable principles.

               3.2 NO CONFLICT WITH OTHER INSTRUMENTS. The execution, delivery
and performance by the Company of its obligations under this Agreement, the
Certificate of Designations and the Warrant and the consummation by the Company
of the transactions contemplated hereby and thereby (including, without
limitation, the reservation for issuance and issuance of the Conversion Shares
and the Warrant Shares) will not (i) result in a violation of the Certificate of
Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or the By-laws of the
Company; (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment or acceleration or cancellation of, any
material agreement, indenture or instrument to which the Company is a party; or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations and the
rules and regulations of the principal market or exchange on which the Common
Stock is traded or listed) applicable to the Company or by which any property or
asset of the Company is bound or affected. The Company is not in violation of
any term of or in default under (x) its Certificate of Incorporation, any
Certificate of Designations, Preferences and Rights of any outstanding series of
preferred stock or By-laws, or (y) any contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any statute,
rule or regulation applicable to the Company, except for such violations which
have not had and, to the knowledge of the Company, will not have a material
adverse effect on the condition (financial or otherwise), business or results of
operations of the Company (a "Material Adverse Effect"). The business of the
Company is not being conducted in violation of any law, ordinance or regulation
of any governmental entity, except for

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any violations that individually or in the aggregate will not have a Material
Adverse Effect. Except as set forth in Schedule 3.2, the Company complies with
and is not in violation of the listing requirements of The Nasdaq National
Market ("Nasdaq") as in effect on the date hereof and the Closing Date and is
not aware of any facts which would reasonably lead to delisting or suspension of
the Common Stock by Nasdaq in the foreseeable future. Immediately after the
Closing, the Company shall meet the "net tangible assets" requirement required
under "Maintenance Standard 1" as set forth in Section 4450(1)(a)(3) of the
Marketplace Rule of Nasdaq.

               3.3 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own, lease and operate its properties and carry on its business as
now conducted and as proposed to be conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify or be in good standing would have a Material Adverse
Effect.

               3.4 CAPITALIZATION.

                      (a) The authorized capital stock of the Company consists
of 100,000,000 shares of Common Stock, of which 41,254,159 shares were issued
and outstanding as of November 5, 1999, and 50,000 shares of Series A Preferred
Stock, of which 50,000 shares are outstanding, 12,000 shares of Series B
Preferred Stock, no shares of which are outstanding, 3,000 shares of Series C
Preferred Stock, no shares of which are outstanding, 1,000 shares of Series D
Preferred Stock, of which 1,000 shares are outstanding, 699 shares of Series E
Preferred Stock, of which 599 shares are outstanding, 1,000 shares of Series F
Preferred Stock, of which 1,000 shares are outstanding, and 2,000 shares of
Series G Preferred Stock, none of which are outstanding immediately prior to the
Closing. All issued and outstanding shares have been duly authorized and validly
issued, and are fully paid and nonassessable, and such shares and all
outstanding options, warrants, convertible notes and other securities of the
Company have been issued in compliance with all applicable federal and state
securities laws.

                      (b) Except as described on Schedule 3.4(b), after giving
effect to the sale of the securities hereunder, there are no preemptive or other
outstanding rights, options, warrants, conversion rights or agreements for the
purchase or acquisition from the Company of any shares of its capital stock or
other securities of the Company. Except as described on Schedule 3.4(b), the
Company has not granted or agreed to grant to any person or entity any rights
(including piggyback registration rights) to have any securities of the Company
registered with the United States Securities and Exchange Commission ("SEC") or
any other governmental authority.

               3.5 SUBSIDIARIES. Except as set forth on Schedule 3.5, the
Company does not presently own or control, directly or indirectly, and has no
stock or other interest as owner or principal in, any other corporation or
partnership, joint venture, association or other business venture or entity.

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               3.6 VALID ISSUANCE OF STOCK.

                      (a) The shares of Series G Stock (the "Purchased Shares")
and the Warrant which will be purchased by Purchaser hereunder, when issued,
sold and delivered in accordance with the terms hereof for the consideration
expressed herein, will be duly and validly authorized and issued, fully paid and
nonassessable, will be delivered to Purchaser free and clear of all liens,
pledges, claims, encumbrances, security interests or other restrictions, except
for restrictions on transfer contemplated herein or imposed to ensure compliance
with the Securities Act of 1933, as amended (the "Securities Act"), and, based
in part upon the representations of Purchaser in Section 4.3 of this Agreement,
will be issued in compliance with all applicable federal and state securities
laws.

                      (b) The Warrant Shares and Conversion Shares have been
duly and validly reserved for issuance, and upon issuance in accordance with the
terms of the Warrant and the Certificate of Designations, respectively, will be
duly and validly issued, fully paid and nonassessable, will be delivered to
Purchaser free and clear of all liens, pledges, claims, encumbrances, security
interests or other restrictions, except for restrictions on transfer
contemplated herein or imposed to ensure compliance with the Securities Act,
and, based in part upon the representations of Purchaser in Section 4.3 of this
Agreement, will be issued in compliance with all applicable federal and state
securities laws.

                      (c) The shares of Series G Stock and the Conversion Shares
are not subject to preemptive rights, rights of first refusal or any other
similar rights of the stockholders of the Company.

                      (d) Except as set forth on Schedule 3.6(d), the issuance
of the Securities will not require the Company to issue any additional capital
stock of the Company pursuant to any anti-dilution provision or otherwise.

               3.7 LITIGATION. There is no action, suit or proceeding pending
nor, to its knowledge, any action, suit, proceeding or investigation currently
threatened against the Company, nor, to its knowledge, is there any basis
therefor, which could have a Material Adverse Effect. The foregoing includes,
without limitation, any action, suit, proceeding or investigation, pending or
threatened, that questions the validity of this Agreement or the right of the
Company to enter into the Agreement.

               3.8 GOVERNMENTAL CONSENTS. Except as set forth on Schedule 3.8,
no consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state, local or provincial
governmental authority on the part of the Company is required in connection with
the consummation of the transactions contemplated by this Agreement, except for
notices required or permitted to be filed with certain state and federal
securities commissions, which notices will be filed on a timely basis.

               3.9 NO MATERIAL CHANGE. Except as set forth on Schedule 3.9,
since June 30, 1999, there has been no material adverse change in the financial
condition, business or results of operations of the Company which has not been
publicly disclosed pursuant to an SEC filing or otherwise disclosed to Purchaser
in the Schedule of Exceptions as of the date of this Agreement.

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               3.10 PROPRIETARY RIGHTS AND INFORMATION AGREEMENT. Each former
and current employee, officer, consultant and contractor of the Company has
entered into and executed a Proprietary Rights and Information Agreement in the
form attached to this Agreement as Exhibit D or an employment or consulting
agreement containing substantially similar terms.

               3.11 INTELLECTUAL PROPERTY. The Company owns or possesses
adequate rights or licenses to use all trademarks, trade names, service marks,
service mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct its business as now conducted. Except as set forth
on Schedule 3.11, none of the Company's trademarks, trade names, service marks,
service mark registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets or
other intellectual property rights have expired or terminated, or are expected
to expire or terminate within two (2) years from the date of this Agreement,
where the result of such expiration or termination would have, individually or
in the aggregate, a Material Adverse Effect. The Company does not have any
knowledge of any infringement by the Company of trademarks, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service mark registrations, trade secret or other similar rights of
others which infringement could have a Material Adverse Effect, and, except as
set forth on Schedule 3.11, there is no claim, action or proceeding being made
or brought against, or to the Company's knowledge, being threatened against, the
Company regarding trademarks, trade name rights, patents, patent rights,
inventions, copyrights, licenses, service names, service marks, service mark
registrations, trade secrets or other infringement. The Company has taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of its intellectual properties.

               3.12 COMPLIANCE. The Company has not been advised, and has no
reason to believe, that it is not conducting its business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, including, without limitation, all applicable local, state
and federal environmental laws and regulations; except where failure to be so in
compliance would not have a Material Adverse Effect.

               3.13 SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company has filed
in a timely manner all documents that it was required to file with the SEC under
Sections 13, 14(a) and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), during the twelve (12) months preceding the date of this
Agreement. As of their respective filing dates (or, if amended prior to the date
of this Agreement, when amended), all documents filed by the Company with the
SEC (the "SEC Documents") complied in all material respects with the
requirements of the Exchange Act. None of the SEC Documents as of their
respective dates contained any untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto. The Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied and fairly present the financial position of the Company at
the dates thereof and the results of its operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to normal,
recurring adjustments).

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               3.14 NO BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based on arrangements made
by the Company.

               3.15 DISCLOSURE. Neither the representations or warranties made
by Company in this Agreement, nor in the final Schedule of Exceptions or any
certificate or document executed and/or delivered by the Company pursuant to
this Agreement, when taken together, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements or
facts contained herein or therein not misleading in light of the circumstances
in which they were furnished.

        4.     REPRESENTATIONS AND WARRANTIES OF PURCHASER.

        Purchaser hereby represents and warrants to the Company as follows:

               4.1 LEGAL POWER. Purchaser has the requisite legal power to enter
into this Agreement, to carry out and perform its obligations under the terms of
this Agreement and, at the Closing, will have the requisite legal power to
purchase the Securities.

               4.2 DUE EXECUTION. This Agreement has been duly authorized,
executed and delivered by Purchaser, and, upon due execution and delivery by the
Company, this Agreement will be a valid and binding obligation of Purchaser,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
or by equitable principles.

               4.3 INVESTMENT REPRESENTATIONS. In connection with the purchase
of the Securities, the Purchaser makes the following representations:

                      (a) the Purchaser is knowledgeable, sophisticated and
experienced in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that involved in
the purchase of the Securities, including investments in securities issued by
the Company, and has requested, received, reviewed and considered all
information it deems relevant in making an informed decision to purchase the
Securities;

                      (b) the Purchaser is acquiring the Securities in the
ordinary course of its business and for its own account for investment only (as
defined for purposes of the Hart-Scott-Rodino Antitrust Improvement Act of 1976
and the regulations thereunder) and with no present intention of distributing
any such Securities or any arrangements or understanding with any other persons
regarding the distribution of such Securities;

                      (c) the Purchaser will not, directly or indirectly, offer,
sell, pledge, transfer, or otherwise dispose of (or solicit any offers to buy,
purchase or otherwise acquire or take a pledge of) any of the Securities or
capital stock of the Company issuable upon exercise or conversion thereof except
in compliance with the Securities Act, the rules and regulations of the SEC, and
the restrictions provided under the Registration Rights Agreement to be entered
into by the parties in substantially the form attached hereto as Exhibit E;

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                      (d) the Purchaser has completed or caused to be completed
the Stock Certificate Questionnaire, attached hereto as Appendix I, and the
answers thereto are true and correct to the best knowledge of the Purchaser as
of the date hereof;

                      (e) the Purchaser has not, in connection with its decision
to purchase the Securities, relied upon representations and warranties of the
Company other than those contained herein;

                      (f) the Purchaser is an "accredited investor" within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act;

                      (g) the Purchaser understands that (i) the Securities have
not been registered under the Securities Act by reason of a specific exemption
therefrom, that such Securities must be held by Purchaser, and that Purchaser
must, therefore, bear the economic risk of such investment, until a subsequent
disposition thereof is registered under the Securities Act or is exempt from
such registration; (ii) the Securities will be endorsed with the following
legends:

                             (1) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER
THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS
ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS
PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO
REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES MAY REQUIRE
AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE
EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND
ANY APPLICABLE STATE SECURITIES LAWS.

                             (2) THE TRANSFER OF THE SHARES REPRESENTED BY THIS
STOCK CERTIFICATE IS RESTRICTED PURSUANT TO THE TERMS OF A REGISTRATION RIGHTS
AGREEMENT DATED NOVEMBER __, 1999; and

                             (3) Any legend required to be placed thereon by the
Company's Bylaws or under applicable state securities laws; and

(iii) the Company will instruct any transfer agent not to register the transfer
of the shares of Securities purchased pursuant to this Agreement (or any portion
thereof) unless the conditions specified in the foregoing legends are satisfied,
until such time as a transfer is made pursuant to the terms of this Agreement
and in compliance with Rule 144 or pursuant to a registration statement or if
the opinion of counsel referred to above is to the further effect that such
legend is not required in order to establish compliance with any provisions of
the Securities Act or this Agreement; and

                      (h) the Purchaser has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Securities purchased hereunder.

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               4.4 NO BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based on arrangements made
by Purchaser.

        5.     OTHER COVENANTS.

               5.1 THIRD PARTY CONSENTS. Each party shall use its commercially
reasonable efforts to obtain and to cooperate with the other party in the effort
to obtain, as soon as reasonably practicable, all permits, authorizations,
consents, waivers and approvals from third parties or governmental authorities
necessary to consummate this Agreement and the transactions contemplated hereby.
All such consents shall be at each party's own expense.

               5.2 CERTAIN NOTIFICATIONS. Each party shall promptly notify the
other in writing of the occurrence of any event which will or could reasonably
be expected to result in the failure to satisfy any of the conditions to the
obligations of such party specified in Section 6.1 or 6.2, as the case may be,
of this Agreement.

               5.3 ANTITRUST MATTERS. The Company and Purchaser shall prepare
and file, and shall in all respects cooperate with each other in the preparation
and filing of, any documents required in connection with providing notification
to the Federal Trade Commission and the Antitrust Division of the Department of
Justice of the transactions contemplated hereunder, and shall respond, or
cooperate in responding, to any inquiry made by either with respect to such
transactions.

        6.     CONDITIONS TO CLOSING.

               6.1 CONDITIONS TO OBLIGATIONS OF PURCHASER AT CLOSING.
Purchaser's obligation to purchase the Series G Stock and Warrant at the Closing
is subject to the fulfillment to Purchaser's satisfaction, on or prior to the
Closing, of all of the following conditions, any of which may be waived by
Purchaser in writing:

                      (a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in Section 3
hereof shall be true and correct in all material respects on the Closing Date
with the same force and effect as if they had been made on and as of said date,
and the Company shall have performed and complied with all obligations and
conditions herein required to be performed or complied with by it on or prior to
the Closing.

                      (b) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to counsel to the Purchaser, and counsel to
the Purchaser shall have received all such counterpart executed originals or
certified or other copies of such documents as they may reasonably request,
including, but not limited to, the Warrant.

                      (c) CERTIFICATE OF DESIGNATIONS. The Certificate of
Designations shall have been filed with the Delaware Secretary of State.

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                      (d) QUALIFICATIONS, LEGAL INVESTMENT. All authorizations,
approvals, or permits, if any, of any governmental authority or regulatory body
of the United States or of any state that are required in connection with the
lawful sale and issuance of the Securities shall have been duly obtained and
shall be effective on and as of the Closing. No stop order or other order
enjoining the sale of such Securities shall have been issued and no proceedings
for such purpose shall be pending or, to the knowledge of the Company,
threatened by the SEC, or any commissioner of corporations or similar officer of
any state having jurisdiction over this transaction. At the time of the Closing,
the sale and issuance of the Securities shall be legally permitted by all laws
and regulations to which the Purchaser and the Company are subject.

                      (e) OPINION OF COMPANY COUNSEL. Purchaser shall have
received an opinion from Cooley Godward LLP, counsel for the Company, dated as
of the date of the Closing.

                      (f) TRANSACTION DOCUMENTS. The Company shall have executed
and delivered to the Purchaser this Agreement, the Registration Rights
Agreement, in substantially the form attached hereto as Exhibit E, and the
Development and License Agreement, in substantially the form attached hereto as
Exhibit F.

                      (g) OFFICER'S CERTIFICATE. The Company shall have executed
and delivered to the Purchaser a writing signed on its behalf by its Chief
Executive Officer certifying the completion of the conditions required by
Section 6.1(a).

                      (h) CLOSING. The Closing shall have occurred on or before
December 31, 1999, or such later date as may be agreed by the parties in
writing, except to the extent failure to close by such date is caused by the
delay of Purchaser.

If any of the foregoing conditions are not either satisfied or waived in writing
by Purchaser, Purchaser may terminate this Agreement without further liability.

               6.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY AT CLOSING. The
Company's obligation to issue and sell the Securities to be sold at the Closing
is subject to the fulfillment to the Company's satisfaction, on or prior to the
Closing of the following conditions, any of which may be waived by the Company:

                      (a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties made by the Purchaser in Section 4 hereof shall
be true and correct in all material respects at the date of the Closing with the
same force and effect as if they had been made on and as of the date hereof.

                      (b) PERFORMANCE OF OBLIGATIONS. Purchaser shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by it on or before the Closing.

                      (c) QUALIFICATIONS, LEGAL INVESTMENT. All authorizations,
approvals, or permits, if any, of any governmental authority or regulatory body
of the United States or of any state that are required in connection with the
lawful sale and issuance of the Securities shall have been duly obtained and
shall be effective on and as of the Closing. No stop order or other

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order enjoining the sale of such Securities shall have been issued and no
proceedings for such purpose shall be pending or, to the knowledge of the
Company, threatened by the SEC, or any commissioner of corporations or similar
officer of any state having jurisdiction over this transaction. At the time of
the Closing the sale and issuance of the Securities shall be legally permitted
by all laws and regulations to which the Purchaser and the Company are subject.

                      (d) TRANSACTION DOCUMENTS. The Purchaser shall have
executed and delivered to the Company the Registration Rights Agreement, in
substantially the form attached hereto as Exhibit E, and the Development and
License Agreement, in substantially the form attached hereto as Exhibit F.

                      (e) CLOSING. The Closing shall have occurred on or before
December 31, 1999, or such later date as may be agreed by the parties in
writing, except to the extent failure to close by such date is caused by the
delay of the Company.

If any of the foregoing conditions are not either satisfied or waived in writing
by the Company, the Company may terminate this Agreement, without further
liability.

        7.     MISCELLANEOUS.

               7.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein and in the certificates for the securities delivered
pursuant hereto shall survive the execution of this Agreement, the delivery to
the Purchaser of the Securities being purchased and the payment therefor and
shall expire on the fourth anniversary of the date hereof.

               7.2 GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the substantive laws of the State of California
and the United States of America, without regard to choice of law rules.

               7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, and permitted assigns of the parties hereto.

               7.4 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto, and
the other documents delivered pursuant hereto, constitute the full and entire
understanding and agreement among the parties with regard to the subjects hereof
and no party shall be liable or bound to any other party in any manner by any
representations, warranties, covenants, or agreements except as specifically set
forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto and their
respective successors and permitted assigns, any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided herein.

               7.5 SEVERABILITY. Whenever possible, each provision of the
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Agreement is held to be prohibited
by or invalid under applicable law, such

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provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of the Agreement. In the event of
such invalidity, the parties shall seek to agree on an alternative enforceable
provision that preserves the original purpose of this Agreement.

               7.6 AMENDMENT AND WAIVER. Except as otherwise provided herein,
any term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), with the written consent of the Company and the holders of a
majority of the Series G Stock then outstanding.

               7.7 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
and received (a) upon personal delivery, (b) on the fifth day following mailing
by registered or certified mail, return receipt requested, postage prepaid,
addressed to the Company or to Purchaser, as the case may be, at their
respective addresses first above written, (c) upon transmission of telegram or
facsimile (with telephonic notice), or (d) upon confirmed delivery by overnight
commercial courier service.

               7.8 FEES AND EXPENSES. Except as otherwise provided herein, each
of the Company and the Purchaser shall bear the expenses and legal fees incurred
on its behalf with respect to this Agreement and the transactions contemplated
hereby.

               7.9 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

               7.10 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument.

               7.11 NASDAQ. The Company will promptly file a Notification of
Listing of Additional Shares with Nasdaq covering the Securities. The Company
agrees to take all action reasonably necessary to maintain the listing of its
Common Stock on Nasdaq.

               7.12 FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of the Purchaser or the Company, the Company and the
Purchaser shall execute and deliver such instruments, documents or other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.

               7.13 PUBLICITY. The Company and Purchaser shall each have the
right to prior approval of the issuance of any press release or other public
statement with respect to the transactions contemplated hereby with the
understanding that the parties shall make a joint press release upon execution
of this Agreement. Notwithstanding the foregoing, each party shall be entitled,
without the prior approval of the other party, to make any press release or
other public disclosure with respect to such transaction as is required by
applicable law and regulations

                                       11
<PAGE>   13

(although such other party shall be consulted in connection with any such press
release or other public disclosure prior to its release and shall be provided a
copy thereof).

                                       12
<PAGE>   14

        IN WITNESS WHEREOF, the foregoing Agreement is hereby executed as of the
date first above written.

                                            COMPANY:

                                            GENERAL MAGIC, INC.

                                            By: /s/ Steven Markman
                                               ---------------------------------

                                            Name: Steven Markman
                                                 -------------------------------

                                            Title: CEO
                                                  ------------------------------

                                            PURCHASER:

                                            GENERAL MOTORS CORPORATION,
                                            BY AND THROUGH ITS ONSTAR DIVISION

                                            By: /s/ F.H. Cooke
                                               ---------------------------------

                                            Name:  F.H. Cooke
                                                 -------------------------------

                                            Title:  Executive Director, OnStar
                                                  ------------------------------

<PAGE>   15

                                   APPENDIX I

                               GENERAL MAGIC, INC.
                         STOCK CERTIFICATE QUESTIONNAIRE

        In connection with the Agreement, please provide us with the following
information:

1.      The exact name that your shares of
        Series G Stock are to be registered
        in (this is the name that will appear
        on your stock certificate(s)). You
        may use a nominee name if
        appropriate:
                                                 General Motors Corporation
                                                 ------------------------------
2.      The relationship between the
        Purchaser of the Series G Stock and
        the Registered Holder listed in
        response to item 1 above:                Same
                                                 ------------------------------
3.      The mailing address of the Registered
        Holder listed in response to item 1
        above:

                                                 c/o General Motors Legal Staff
                                                 ------------------------------

                                                 Attention:  Kimberly K. Hudolin
                                                 ------------------------------

                                                 New Center One Building
                                                 ------------------------------

                                                 Mail Code:  482-208-835
                                                 ------------------------------

                                                 3031 West Grand Boulevard
                                                 ------------------------------

                                                 Detroit, Michigan  48202
                                                 ------------------------------
4.      The Social Security Number or Tax
        Identification Number of the
        Registered Holder listed in response
        to item 1 above:                         38-0572515
                                                 ------------------------------<PAGE>   1
                                                                     EXHIBIT 4.2

                           General Motors Corporation
                                     OnStar
                             1400 Stevenson Highway
                              Troy, Michigan 48083

                                                          As of December 9, 1999

General Magic, Inc.
420 N. Mary Avenue
Sunnyvale, CA  94086

Ladies and Gentlemen:

        Reference is made to the Series G Preferred Stock and Warrant Purchase
Agreement, dated November 9, 1999 (the "STOCK PURCHASE AGREEMENT"), by and
between General Magic, Inc., a Delaware corporation (the "COMPANY"), and General
Motors Corporation, a Delaware corporation ("GENERAL MOTORS"), by and through
its Onstar Division and the Warrant for the Purchase of Shares of Series G
Convertible Preferred Stock dated December 9, by and among the Company and
General Motors. All capitalized terms used in this letter agreement have the
meaning defined for them in the Stock Purchase Agreement unless otherwise
defined in this letter agreement.

        This letter will confirm the agreement of the Company and General Motors
as follows:

        1. LIMITATION ON NUMBER OF CONVERSION SHARES. Notwithstanding any
provision of the Stock Purchase Agreement, the Warrant or the Certificate of
Designations, General Motors shall not exercise, and will not permit any
subsequent transferee holding shares of the Series G Stock (A "TRANSFEREE") to
exercise, the right to convert shares of the Series G Stock into shares of the
Company's Common Stock to the extent that the shares of Common Stock issuable
upon conversion would exceed 19.99% of the outstanding shares of the Company's
Common Stock as of December 9, 1999 (the "EXCHANGE CAP"), except that such
limitation shall not apply in the event that the Company (i) obtains the
approval of its stockholders as required by Rule 4460(i) (attached) and
applicable regulations of NASDAQ for issuance of Common Stock (or securities
convertible into or exercisable for Common Stock) in excess of the Exchange Cap
or (ii) obtains a written opinion from outside counsel to the Company that such
approval is not required, which opinion shall be reasonably satisfactory to
General Motors.

        2. LIMITATION ON EXERCISE OF WARRANT. Notwithstanding any provision of
the Warrant, General Motors shall not exercise, and will not permit any
Transferee to exercise, the Warrant unless the Company (i) obtains the approval
of its stockholders as required by Rule 4460(i) (attached) and applicable
regulations of NASDAQ for issuance of Common Stock (or securities convertible
into or exercisable for Common Stock) in excess of 19.99% of the outstanding
shares or voting power of the Company's Common Stock as of December 9, 1999 or
(ii) obtains a written opinion from outside counsel to the Company that such
approval is not required, which opinion shall be reasonably satisfactory to
General Motors.

        3. STOCKHOLDER APPROVAL. The Company shall, at its 2000 Annual Meeting
of Stockholders (or any Special Meeting of Stockholders called for other
purposes prior to such

<PAGE>   2
General Magic, Inc.
December 9, 1999

Annual Meeting), seek and use reasonable best efforts to obtain stockholder
approval, as required by the applicable rules and regulations of NASDAQ, for the
issuance by the Company of (a) that portion of the Series G Stock that may not
be converted without exceeding the Exchange Cap, (b) the Warrant and (c) shares
of Common Stock (or securities convertible into or exercisable for Common Stock)
issuable upon conversion of such portion of the Series G Stock or upon exercise
of the Warrant.

        4. FAILURE TO OBTAIN STOCKHOLDER APPROVAL OR OPINION. In the event that
the Company shall fail to obtain the approval of its stockholders as set forth
in paragraph 3 above or an opinion of counsel as contemplated by paragraphs 1
and 2 above, the Company shall, in full satisfaction of any claims of General
Motors that may arise in connection with such failure under this side letter
agreement, the Stock Purchase Agreement, the Warrant, the Certificate of
Designations, or any related documents, remit to General Motors $7 million to be
distributed, at the sole option of the Company, in one of the following two
forms: (i) the Company may pay (or cause to be paid) to General Motors $7
million in cash, or (ii) the Company may pay (or cause to be paid) to General
Motors $3.5 million in cash and credit $3.5 million against amounts then owed or
next owing to the Company, including amounts due or owing under or in connection
with the Development and License Agreement dated effective November 9, 1999, by
and among the Company and General Motors. In the event that the Company shall
fail to obtain such stockholder approval or such opinion of counsel, General
Motors shall return to the Company for cancellation (i) the Warrant and (ii) a
stock certificate or stock certificates (duly endorsed or accompanied by duly
executed stock powers) representing that portion of the Series G Stock that may
not be converted without exceeding the Exchange Cap.

        5. GOVERNING LAW. This letter agreement shall be construed and enforced
in accordance with, and governed by, the internal laws of the State of
California, without regard to its conflict of laws rules.

        6. COUNTERPARTS. This letter agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                                         Very truly yours,

                                         GENERAL MOTORS CORPORATION
                                         by and through its Onstar Division

                                         By: /s/ F. H. Cooke
                                            ------------------------------------
                                            Name: F. H. Cooke
                                                 -------------------------------
                                            Title: Executive Director
                                                  ------------------------------

Agreed and Accepted:

GENERAL MAGIC, INC.

By: /s/ Steven Markman
   ------------------------------------
   Name: Steven Markman
        -------------------------------
   Title: Chairman, President and CEO
         ------------------------------

<PAGE>   3
             Attachment to Letter Agreement dated December 9, 1999

                               NASD Rule 4460(i)

(i)  Shareholder Approval

     (1)  Each NNM issuer shall require shareholder approval of a plan or
arrangement under subparagraph (A) below, or prior to the issuance of
designated securities under subparagraph (B), (C), or (D) below:

          (A)  when a stock option or purchase plan is to be established or
     other arrangement made pursuant to which stock may be acquired by officers
     or directors, except for warrants or rights issued generally to security
     holders of the company or broadly based plans or arrangements including
     other employees (e.g. ESOPs). In a case where the shares are issued to a
     person not previously employed by the company, as an inducement essential
     to the individual's entering into an employment contract with the company,
     shareholder approval will generally not be required. The establishment of a
     plan or arrangement under which the amount of securities which may be
     issued does not exceed the lesser of 1% of the number of shares of common
     stock, 1% of the voting power outstanding, or 25,000 shares will not
     generally require shareholder approval;

          (B)  when the issuance will result in a change of control of the
     issuer;

          (C)  in connection with the acquisition of the stock or assets of
     another company if:

               (i)  any director, officer or substantial shareholder of the
          issuer has a 5% or greater interest (or such persons collectively have
          a 10% or greater interest), directly or indirectly, in the company or
          assets to be acquired or in the consideration to be paid in the
          transaction or series of related transactions and the present or
          potential issuance of common stock, or securities convertible into or
          exercisable for common stock, could result in an increase in
          outstanding common shares or voting power of 5% or more; or

               (ii) where, due to the present or potential issuance of common
          stock, or securities convertible into or exercisable for common stock,
          other than a public offering for cash:

                    a. the common stock has or will have upon issuance voting
               power equal to or in excess of 20% of the voting power
               outstanding before the issuance of stock or securities
               convertible into or exercisable for common stock; or

                    b. the number of shares of common stock to be issued is or
               will be equal to or in excess of 20% of the number of shares or
               common stock outstanding before the issuance of the stock or
               securities; or

          (D)  in connection with a transaction other than a public offering
     involving:
<PAGE>   4
                        (i) the sale or issuance by the issuer of common stock
                (or securities convertible into or exercisable for common
                stock) at a price less than the greater of book or market value
                which together with sales by officers, directors or substantial
                shareholders of the company equals 20% or more of common stock
                or 20% or more of the voting power outstanding before the
                issuance; or

                        (ii) the sale or issuance by the company of common stock
                (or securities convertible into or exercisable common stock)
                equal to 20% or more of the common stock or 20% or more of the
                voting power outstanding before the issuance for less than the
                greater of book or market value of the stock.

        (2) Exceptions may be made upon application to Nasdaq when:

                (A) the delay in securing stockholder approval would seriously
        jeopardize the financial viability of the enterprise; and

                (B) reliance by the company on this exception is expressly
        approved by the Audit Committee or a comparable body of the Board of
        Directors.

                A company relying on this exception must mail to all
        shareholders not later than ten days before issuance of the securities a
        letter alerting them to its omission to seek the shareholder approval
        that would otherwise be required and indicating that the Audit Committee
        of the Board or a comparable body has expressly approved the exception.

        (3) Only shares actually issued and outstanding (excluding treasury
shares or shares held by a subsidiary) are to be used in making any calculation
provided for in this paragraph (i). Unissued shares reserved for issuance upon
conversion of securities or upon exercise of options or warrants will not be
regarded as outstanding.

        (4) Voting power outstanding as used in this Rule refers to the
aggregate number of votes which may be cast by holders of those securities
outstanding which entitle the holders thereof to vote generally on all matters
submitted to the company's security holders for a vote.

        (5) An interest consisting of less than either 5% of the number of
shares of common stock or 5% of the voting power outstanding of an issuer or
party shall not be considered a substantial interest or cause the holder of
such an interest to be regarded as a substantial security holder.

        (6) Where shareholder approval is required, the minimum vote which will
constitute shareholder approval shall be a majority of the total votes cast on
the proposal in person or by proxy.

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