Motricity (MOTR) Seen Lower After AT&T (T) Terminates Agreement

December 24, 2012 8:13 AM EST
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On December 17, 2012, Motricity, Inc. (Nasdaq: MOTR) received notice from AT&T Mobility LLC (NYST: T) that AT&T is terminating the Second Amended and Restated Wireless Service Agreement #0001429 dated July 22, 2005 between the Company and AT&T, as amended, and all services thereunder effective June 30, 2012 pursuant to its right to termination for convenience thereunder.

Under the Portal Agreement, the Company hosts AT&T’s MediaNet and portals in exchange for a monthly fee based on the number of subscribers and certain other fixed fees.

In 2011 and the first nine months of 2012, the Portal Agreement accounted for 39% and 42%, respectively, of the Company’s revenue. This revenue contributed positively to the Company’s cash flow from operations during these periods.
The Master Service Agreement, dated as of October 1, 2010, between the Company and AT&T, pursuant to which the Company hosts AT&T’s AppCenter storefront (the “Master Service Agreement”), remains in effect. No material relationship exists between the Company or its affiliates and AT&T, except in connection with the Portal Agreement and the Master Service Agreement.

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