M & A Law Prof Blog

Editor: Brian JM Quinn
Boston College Law School

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Tuesday, December 20, 2011

T-Mobile wants to get paid

So the termination of the AT&T/T-Mobile deal was no surprise.  And on cue, here's T-Mobile's "pay me" letter agreement which terminates the merger agreement and stipulates that AT&T will make payment on the reverse termination fee within three days. In relevant part: 

... (i) AT&T, or one of its Affiliates, shall (A) within three Business Days following the date of this letter agreement, pay to DT the cash amount set forth on Annex E of the Purchase Agreement by wire transfer of immediately available funds and (B) deliver to the Company, or as otherwise directed by DT, the assets set forth on Annex E of the Purchase Agreement in accordance with the obligations under Section 7.5(b) of the Purchase Agreement (which shall continue in effect as to such matters notwithstanding the termination of the Purchase Agreement), and (ii) pursuant to Section 2(a) of the Roaming Agreement and in full satisfaction of AT&T’s obligations under Section 7.5(b) of the Purchase Agreement with respect to the roaming agreement referenced therein, all of the sections of the Roaming Agreement that were not effective as of the execution date of the Roaming Agreement shall come into full force and effect on the date hereof and shall be implemented as set forth in the Roaming Agreement or as the parties thereto otherwise shall agree.  Upon and after the payment of such cash amount, so long as AT&T is in good faith attempting to comply with its obligations under Section 7.5(b) of the Purchase Agreement with respect to the transfer(s) of the assets set forth on Annex E of the Purchase Agreement, the sole and exclusive remedy of DT and its Subsidiaries and their respective officers, directors and Affiliates against AT&T and its Subsidiaries and their respective officers, directors and Affiliates for any Damages resulting from, arising out of, or incurred in connection with, the Purchase Agreement (including termination thereof) or any transactions ancillary thereto shall be as set forth in Section 7.5(c) of the Purchase Agreement.

Shouldn't be hard for AT&T to come up with $3 billion in cash. After all, they re-upped their $5 billion revolving credit facility just yesterday. Maybe in anticipation of having to cut a big check?  (h/t footnoted.com)

Grading exams and all sorts of end of year activities, so posting will be light.  Happy Holidays!

-bjmq

http://lawprofessors.typepad.com/mergers/2011/12/t-mobiles-pay-me-letter.html

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