February 12, 2020

AT&T/DirecTV (DOJ 2014)

Deal SummaryCooperation | Conditions Precedent |Defense Strategy | Litigation Commitments | Remedy Commitments | Reverse Break Fees | Termination Provisions

(a)               Deal Summary. On May 18, 2014, DIRECTV and AT&T entered into an Agreement and Plan of Merger whereby DIRECTV will merge with AT&T for a proposed $48.5 billion. Pursuant to the agreement, AT&T and its subsidiaries are required to take any actions that, in the aggregate, are de minimis, but are not required to agree to any remedies, such as divestitures or hold separates. AT&T did not agree to a reverse break fee. The agreement may be terminated if not consummated by May 18, 2015, subject to an extension for certain cases to a date not beyond November 13, 2015. DOJ closed its investigation into the merger on July 21, 2015.

(b)               Cooperation. §6.5(a): The Company and Parent shall, subject to Section 6.2, cooperate with each other and use, and shall cause their respective Subsidiaries to, use their respective reasonable best efforts to take or cause to be taken all actions, and do or cause to be done all things, necessary, proper or advisable on its part under this Agreement and applicable Laws to consummate and make effective the Merger and the other transactions contemplated by this Agreement as promptly as reasonably practicable (it being understood that nothing contained in this Agreement shall require Parent to obtain any consents, registrations, approvals, permits, expirations of waiting periods or authorizations prior to the Termination Date), including preparing and filing as promptly as reasonably practicable all documentation to effect all necessary notices, reports and other filings (including by filing no later than 20 calendar days after the date of this Agreement all applications required to be filed with the FCC and the notification and report form required under the HSR Act; provided that the failure to file within such 20-day period shall not constitute a breach of this Agreement) and to obtain as promptly as reasonably practicable all consents, registrations, approvals, permits, expirations of waiting periods and authorizations necessary or advisable to be obtained from any third party and/or any Governmental Entity in order to consummate the Merger or any of the other transactions contemplated by this Agreement. … To the extent permitted by applicable Law, each party shall provide the other with copies of all correspondence between it (or its advisors) and any Governmental Entity relating to the Merger and the other transactions contemplated by this Agreement and, to the extent reasonably practicable, all telephone calls and meetings with a Governmental Entity regarding the transactions contemplated by this Agreement shall include representatives of Parent and the Company. In exercising the foregoing rights, the Company and Parent each shall act reasonably and as promptly as reasonably practicable.

(c)                Conditions Precedent. §7.1(c): (i) The waiting period applicable to the consummation of the Merger under the HSR Act shall have expired or been earlier terminated and (ii) all Governmental Consents required to be obtained from the FCC for the consummation of the Merger shall have been obtained and be in full force and effect. For purposes of this Agreement, the term “Governmental Consents” shall mean all notices, reports and other filings required to be made prior to the Effective Time by the Company or Parent or any of their respective Subsidiaries with, and all consents, registrations, approvals, permits, expirations of waiting periods and authorizations required to be obtained prior to the Effective Time by the Company or Parent or any of their respective Subsidiaries from, any Governmental Entity in connection with the execution and delivery of this Agreement and the consummation of the Merger and the other transactions contemplated hereby.


(d)              Defense Strategy. §6.5(a):
… To the extent necessary or advisable to obtain any consent, registration, approval, permit, expiration of waiting period or authorization from any Governmental Entity in order to consummate the Merger prior to the Termination Date, (x) Parent shall, and shall cause its Subsidiaries to, and commit to cause the Company and its Subsidiaries to, take the actions and agree to those undertakings set forth on Section 6.5(a) of the Parent Disclosure Letter and (y) Parent shall, and shall cause its Subsidiaries to take, other actions involving Parent and its Subsidiaries that are in the aggregate de minimis (for the avoidance of doubt, not involving any divestiture, holding separate any business or assets or other similar action). Except as provided in the immediately preceding sentence, nothing in this Agreement shall require, or be construed to require, (i) Parent or any of its Subsidiaries to take or refrain from taking any action (including any divestiture, holding separate any business or assets or other similar action) or to agree to any restriction or condition with respect to any assets, operations, business or the conduct of business of Parent or any of its Subsidiaries and (ii) Parent, the Company or any of their respective Subsidiaries to take or refrain from taking any action (including any divestiture, holding separate any business or assets or other similar action) or to agree to any restriction or condition with respect to any assets, operations, business or the conduct of business of the Company and its Subsidiaries, if, in the case of this clause (ii), any such action, failure to act, restriction, condition or agreement, individually or in the aggregate, would reasonably be likely to have a Company Material Adverse Effect (read without regard to the exceptions set forth therein and without giving effect to clause (A) thereof) (except as provided in the immediately preceding sentence, the occurrence of any of the matters specified in clause (i) or clause (ii) above shall constitute a “Regulatory Material Adverse Effect”). In addition, in measuring whether a Regulatory Material Adverse Effect has occurred, the expected loss of any reasonably expected synergies (both cost and revenue) relating to any restriction or condition shall be taken into account as if the Company had an adverse effect to its financial condition and results of operations equal to the expected amount of applicable synergies affected by any such restriction or condition.

(d)               Litigation Commitments. N/A.

(e)                Remedy Commitments. §6.5(a): To the extent necessary or advisable to obtain any consent, registration, approval, permit, expiration of waiting period or authorization from any Governmental Entity in order to consummate the Merger prior to the Termination Date, (x) Parent shall, and shall cause its Subsidiaries to, and commit to cause the Company and its Subsidiaries to, take the actions and agree to those undertakings set forth on Section 6.5(a) of the Parent Disclosure Letter and (y) Parent shall, and shall cause its Subsidiaries to take, other actions involving Parent and its Subsidiaries that are in the aggregate de minimis (for the avoidance of doubt, not involving any divestiture, holding separate any business or assets or other similar action). Except as provided in the immediately preceding sentence, nothing in this Agreement shall require, or be construed to require, (i) Parent or any of its Subsidiaries to take or refrain from taking any action (including any divestiture, holding separate any business or assets or other similar action) or to agree to any restriction or condition with respect to any assets, operations, business or the conduct of business of Parent or any of its Subsidiaries and (ii) Parent, the Company or any of their respective Subsidiaries to take or refrain from taking any action (including any divestiture, holding separate any business or assets or other similar action) or to agree to any restriction or condition with respect to any assets, operations, business or the conduct of business of the Company and its Subsidiaries, if, in the case of this clause (ii), any such action, failure to act, restriction, condition or agreement, individually or in the aggregate, would reasonably be likely to have a Company Material Adverse Effect (read without regard to the exceptions set forth therein and without giving effect to clause (A) thereof) (except as provided in the immediately preceding sentence, the occurrence of any of the matters specified in clause (i) or clause (ii) above shall constitute a “Regulatory Material Adverse Effect”). In addition, in measuring whether a Regulatory Material Adverse Effect has occurred, the expected loss of any reasonably expected synergies (both cost and revenue) relating to any restriction or condition shall be taken into account as if the Company had an adverse effect to its financial condition and results of operations equal to the expected amount of applicable synergies affected by any such restriction or condition. The Company and its Subsidiaries shall not agree to any actions, restrictions or conditions with respect to obtaining any consents, registrations, approvals, permits, expirations of waiting periods or authorizations in connection with the Merger and the other transactions contemplated by this Agreement without the prior written consent of Parent (which, subject to this Section 6.5(a) may be withheld in Parent’s sole discretion). Subject to applicable Laws relating to the exchange of information, Parent and the Company shall have the right to review in advance, and to the extent practicable each will consult the other on, all of the information relating to Parent or the Company, as the case may be, and any of their respective Subsidiaries, that appears in any filing made with, or written materials submitted to, any third party and/or any Governmental Entity in connection with the Merger and the other transactions contemplated by this Agreement.

(f)                Reverse Break Fees. N/A.

(g)               Time Period and Other Conditions Under Which the Parties May Walk Away from the Agreement. §8.1. Termination by Mutual Consent. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time, whether before or after the adoption of this Agreement by the stockholders of the Company referred to in Section 7.1(a), by mutual written consent of the Company and Parent, by action of their respective Boards of Directors. 

                        §8.2. Termination by Either Parent or the Company. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time by action of the Board of Directors of either Parent or the Company if (a) the Merger shall not have been consummated by May 18, 2015 (as it may be extended below, the “Termination Date”), whether such date is before or after the date of adoption of this Agreement by the stockholders of the Company referred to in Section 7.1(a);provided that, (i) if either the Company or Parent determines that additional time is necessary in connection with obtaining a Required Governmental Consent from the FCC or any PUC listed in Section 7.2(c) of the Parent Disclosure Letter and foreign Governmental Entities listed in Section 7.2(c) of the Company Disclosure Letter or in connection with the expiration of the waiting period pursuant to the HSR Act, the Termination Date may be extended by either Parent or the Company from time to time by written notice to the other up to a date not beyond August 17, 2015 and (ii) if the Termination Date has been extended to August 17, 2015, the Termination Date may be extended further by the mutual written agreement of Parent and the Company from time to time up to a date not beyond November 13, 2015, which date or dates pursuant to clauses (i) or (ii) of this Section 8.2, as extended from time to time, shall thereafter be deemed to be the Termination Date, (b) the adoption of this Agreement by the stockholders of the Company referred to in Section 7.1(a) shall not have occurred at a meeting duly convened therefor or at any adjournment or postponement thereof at which a vote upon the adoption of this Agreement was taken, (c) any Order permanently restraining, enjoining or otherwise prohibiting consummation of the Merger shall become final and non-appealable, whether before or after the adoption of this Agreement by the stockholders of the Company referred to in Section 7.1(a), provided that the right to terminate this Agreement pursuant to this Section 8.2 shall not be available to any party that has breached in any material respect its obligations under this Agreement in any manner that shall have proximately contributed to the failure of the Merger to be consummated, or (d) the FCC adopts a hearing designation order in respect of the transactions contemplated by this Agreement.

                        §8.3. Termination by the Company. This Agreement may be terminated and the Merger may be abandoned (a) at any time prior to the Effective Time, whether before or after the adoption of this Agreement by the stockholders of the Company referred to in Section 7.1(a), by action of the Board of Directors of the Company if there has been a breach of any representation, warranty, covenant or agreement made by Parent or Merger Sub in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 7.3(a) or 7.3(b) would not be satisfied and such breach or failure to be true is not curable or, if curable, is not cured by the 30th day following notice to Parent from the Company of such breach or failure; provided, that the Company shall not have the right to terminate the Agreement pursuant to this Section 8.3 if the Company is then in material breach of any of its representations, warranties, covenants or agreements under this Agreement or (b) at any time prior to the Company Requisite Vote being obtained, (i) if the Board of Directors of the Company authorizes the Company, subject to complying with the terms of Section 6.2, to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal that did not result from a material breach of this Agreement, (ii) concurrently with the termination of this Agreement the Company, subject to complying with the terms of Section 6.2, enters into an Alternative Acquisition Agreement providing for a Superior Proposal that did not result from a material breach of this Agreement and (iii) prior to or concurrently with such termination, the Company pays to Parent in immediately available funds any fees required to be paid pursuant to Section 8.5(b), subject to and in accordance with Section 8.5(c).

                        §8.4. Termination by Parent. This Agreement may be terminated and the Merger may be abandoned at any time prior to the Effective Time by action of the Board of Directors of Parent if (a) the Board of Directors of the Company shall have made a Change in Recommendation prior to the adoption of this Agreement by the stockholders of the Company referred to in Section 7.1(a), or (b) whether before or after the adoption of this Agreement by the stockholders of the Company referred to in Section 7.1(a), there has been a breach of any representation, warranty, covenant or agreement made by the Company in this Agreement, or any such representation and warranty shall have become untrue after the date of this Agreement, such that Section 7.2(a) or 7.2(b) would not be satisfied and such breach or failure to be true is not curable or, if curable, is not cured by the 30th day following notice to the Company of such breach or failure; provided, that Parent shall not have the right to terminate the Agreement pursuant to this Section 8.4(b) if Parent is then in material breach of any of its representations, warranties, covenants or agreements under this Agreement.