Exhibit 10.2
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ASSET EXCHANGE AGREEMENT
between
PRIMECO PCS, L.P.
and
VIRGINIA RSA 6 CELLULAR LIMITED PARTNERSHIP
dated as of
May 17, 2000
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TABLE OF CONTENTS
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Page
---- ARTICLE I CERTAIN DEFINITIONS 2
1.1 Defined Terms.................................................................. 2
1.2 Other Definitional Provisions.................................................. 9 ARTICLE II THE TRANSACTION 10
2.1 Exchange of Assets............................................................. 10
2.2 Net Working Capital Adjustment................................................. 10
2.3 Closing........................................................................ 14
2.4 Deliveries and Proceedings at Closing.......................................... 14
2.5 Regarding Consents............................................................. 16 ARTICLE III REPRESENTATIONS AND WARRANTIES 18
3.1 Representations and Warranties of PrimeCoPCS................................... 18
3.1.1 PrimeCoPCS Existence................................................... 18
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3.1.2 The Company's Existence and Qualification............................. 18
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3.1.3 Compliance with Law; Authorizations................................... 18
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3.1.4 Litigation............................................................ 19
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3.1.5 Contracts and Other Agreements........................................ 19
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3.1.6 Validity of Contemplated Transactions, Etc............................ 21
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3.1.7 Taxes................................................................. 21
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3.1.8 Environmental Matters................................................. 22
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3.1.9 Title; Real and Personal Property..................................... 23
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3.1.10 Condition of Tangible Assets.......................................... 24
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3.1.11 Accounts Receivable................................................... 24
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3.1.12 Inventory............................................................. 24
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3.1.13 Material Changes...................................................... 24
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3.1.14 Assets Necessary to Conduct of Company Businesses..................... 25
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3.1.15 Intellectual Property Matters......................................... 25
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3.1.16 Books of Account; Financial Statements................................ 26
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3.1.17 No Interest in Other Entities......................................... 26
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3.1.18 Availability of Documents............................................. 26
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3.1.19 Brokers or Finders.................................................... 26
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3.1.20 Mobile Telephone Numbers; Form of Agreements......................... 26
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3.1.21 Labor Relations...................................................... 27
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3.1.22 Employee Benefit Plans............................................... 27
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3.1.23 Insurance............................................................ 29
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3.1.24 No Undisclosed Liabilities........................................... 29
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3.1.25 Communications Act................................................... 30
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3.2 Representations and Warranties of VA-6LP..................................... 30
3.2.1 VA-6LP Existence, Etc................................................ 30
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3.2.2 Communications Act................................................... 30
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3.2.3 VA-5 Partnership..................................................... 30
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3.2.4 Compliance with Law; Authorizations.................................. 31
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3.2.5 Litigation........................................................... 31
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3.2.6 Contracts and Other Agreements....................................... 32
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3.2.7 Validity of Contemplated Transactions, Etc........................... 33
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3.2.8 Taxes................................................................ 33
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3.2.9 Environmental Matters................................................ 34
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3.2.10 Title; Real and Personal Property.................................... 34
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3.2.11 Condition of Tangible Assets......................................... 35
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3.2.12 Accounts Receivable.................................................. 35
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3.2.13 Inventory............................................................ 35
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3.2.14 Material Changes..................................................... 35
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3.2.15 Assets Necessary to Conduct of VA-6 Partnership Business............. 36
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3.2.16 Intellectual Property Matters........................................ 36
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3.2.17 Books of Account; Financial Statements............................... 36
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3.2.18 No Interest in Other Entities........................................ 37
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3.2.19 Availability of Documents............................................ 37
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3.2.20 Brokers or Finders................................................... 37
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3.2.21 Mobile Telephone Numbers; Form of Agreements......................... 37
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3.2.22 Employee Matters..................................................... 38
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3.2.23 Insurance............................................................ 38
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3.2.24 No Undisclosed Liabilities........................................... 38
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3.3 Survival of Representations and Warranties................................... 39
3.4 No Representations or Warranties Implied..................................... 39
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ARTICLE IV COVENANTS AND AGREEMENTS...................................................... 39
4.1 Agreements of PrimeCoPCS Pending the Closing................................... 39
4.1.1 Conduct of the Company Businesses in the Ordinary Course............... 39
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4.1.2 Distributions.......................................................... 41
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4.1.3 Access................................................................. 41
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4.1.4 DOJ Approval........................................................... 41
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4.1.5 Casualty Insurance Proceeds............................................ 41
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4.1.6 Company National Accounts.............................................. 41
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4.1.7 PrimeCo National Outlet Agreements..................................... 42
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4.1.8 Non-Solicitation....................................................... 42
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4.1.9 PrimeCo Name........................................................... 42
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4.1.10 PrimeCoPCS Cooperation................................................. 42
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4.1.11 Consents............................................................... 42
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4.1.12 Approvals and Disapprovals............................................. 42
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4.1.13 Control of Systems Pending Closing..................................... 43
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4.1.14 Retention of Books and Records......................................... 43
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4.1.15 Communications Act..................................................... 43
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4.2 Agreements of VA-6LP.......................................................... 43
4.2.1 Conduct of VA-6LP's Business in the Ordinary Course.................... 43
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4.2.2 Distributions.......................................................... 44
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4.2.3 Access................................................................. 44
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4.2.4 Casualty Insurance Proceeds............................................ 45
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4.2.5 Non-Solicitation....................................................... 45
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4.2.6 Consents............................................................... 45
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4.2.7 Approvals and Disapprovals............................................. 45
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4.2.8 Control of Systems Pending Closing..................................... 45
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4.2.9 Retention of Books and Records......................................... 45
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4.2.10 Communications Act..................................................... 45
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4.2.11 Agreement Regarding DOJ Final Judgment................................. 46
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4.3 Covenants of PrimeCoPCS and VA-6LP............................................ 46
4.3.1 FCC Authorizations..................................................... 46
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4.3.2 HSR Act................................................................ 46
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4.3.3 DOJ Final Judgment..................................................... 46
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4.3.4 Copies of Regulatory Filings................................................... 47
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4.3.5 Confidentiality................................................................ 47
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4.3.6 Cooperation.................................................................... 48
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4.3.7 Other Regulatory Requirements.................................................. 48
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4.3.8 Litigation..................................................................... 48
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4.3.9 Section 1031 Exchange.......................................................... 50
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4.3.10 Updating of Schedules.......................................................... 50
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4.3.11 JLL Subleases.................................................................. 51
------------- ARTICLE V CONDITIONS PRECEDENT TO CLOSING...................................................... 51
5.1 Conditions Precedent to Obligations of VA-6LP......................................... 51
5.1.1 Representations and Warranties True as of Closing.............................. 51
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5.1.2 Compliance with this Agreement................................................. 52
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5.1.3 CFW Shareholder Vote and CFW High-Yield Issuance............................... 52
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5.1.4 Closing Certificate............................................................ 52
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5.1.5 Other Agreements............................................................... 52
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5.1.6 Regulatory Opinion............................................................. 52
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5.2 Conditions Precedent to Obligations of PrimeCoPCS..................................... 52
5.2.1 Representations and Warranties True as of Closing.............................. 52
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5.2.2 Compliance with this Agreement................................................. 53
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5.2.3 Closing Certificate............................................................ 53
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5.2.4 Other Agreements............................................................... 53
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5.2.5 Bell/GTE Merger................................................................ 53
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5.2.6 Regulatory Opinion. Unless the Alternative Transaction is to be consummated,.. 53
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5.3 Conditions Precedent to the Obligations of VA-6LP and PrimeCoPCS...................... 53
5.3.1 Regulatory and Other Approvals................................................. 54
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5.3.2 No Pending Governmental Litigation............................................. 54
---------------------------------- ARTICLE VI INDEMNIFICATION...................................................................... 54
6.1 General Indemnification Obligation of PrimeCoPCS...................................... 54
6.2 General Indemnification Obligation of VA-6LP.......................................... 55
6.3 Limitations on Claims for Losses...................................................... 57
6.4 Indemnification Procedure as to Third-Party Claims.................................... 58
6.5 Adjustment For Insurance.............................................................. 59
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6.6 Payment........................................................................ 59
6.7 Other Rights and Remedies...................................................... 59 ARTICLE VII MISCELLANEOUS................................................................ 60
7.1 Termination.................................................................... 60
7.2 Expenses....................................................................... 61
7.3 Tax Administration; Mutual Assistance.......................................... 61
7.4 Further Assurances............................................................. 62
7.5 Additional Post Closing Confidentiality Undertakings........................... 62
7.6 Contents of Agreement.......................................................... 62
7.7 Assignment and Binding Effect.................................................. 62
7.8 Waiver......................................................................... 63
7.9 Notices........................................................................ 63
7.10 Remedies....................................................................... 64
7.11 Knowledge...................................................................... 64
7.12 Applicable Law; Consent to Jurisdiction........................................ 65
7.13 No Benefit to Others........................................................... 65
7.14 Headings....................................................................... 65
7.15 Severability................................................................... 65
7.16 Counterparts................................................................... 65
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EXHIBITS --------
Exhibit A - Company BTAs Exhibit B - Company Assignment and Assumption Exhibit C - VA-6 Bill of Sale Exhibit D-1 - Form of Fuji Sublease Exhibit D-2 - Form of Nomura Sublease Exhibit D-3 - Form of Sublease Guaranty Exhibit E-1 - Form of PrimeCo License Agreement Exhibit E-2 - Form of CFW License Agreement
SCHEDULES ---------
Schedule A Transferred Assets Schedule 2.1(b) VA-6 Excluded Assets and Liabilities Schedule 2.2 Calculation of Assumed Closing Date Net Working Capital Schedule 2.5(c) Consents for Transferred Assets Schedule 3.1.2 Company Agreement Schedule 3.1.3(a) Company FCC Authorizations Schedule 3.1.3(b) Non-Compliance with Requirements of Law; Company
Authorizations Schedule 3.1.4 Litigation Schedule 3.1.5(a) Contracts and Other Agreements Schedule 3.1.6 PrimeCoPCS Consents Schedule 3.1.7 Tax Matters Schedule 3.1.8 Environmental Matters Schedule 3.1.9(a) Liens Schedule 3.1.9(b) Real Property Schedule 3.1.9(c) Title Exceptions Schedule 3.1.10 Third Party Property Schedule 3.1.11 Accounts Receivable Schedule 3.1.13 Material Changes Schedule 3.1.14 Assets Necessary to Conduct Company Businesses Schedule 3.1.15 Claims of Infringement Relating to Intellectual Property Schedule 3.1.16 Company Financial Statements Schedule 3.1.18 Contracts Subject to Confidentiality Provisions Schedule 3.1.19 PrimeCoPCS Brokers and Finders Schedule 3.1.20 Standard Rate Plans; Products and Services Provided to
Subscribers; Forms of Customer Agreements Schedule 3.1.21 Labor Matters Schedule 3.1.22(c) PrimeCo Employee Benefit Plans Schedule 3.1.22(h) Pending Actions Against PrimeCo Employee Benefit Plans Schedule 3.1.22(j) Post-Employment Benefits Schedule 3.1.24 Company Liabilities Schedule 3.2.4(a) VA-6 FCC Authorizations
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Schedule 3.2.4(b) Non-Compliance with Requirements of Law; VA-6
Authorizations Schedule 3.2.5 Litigation Schedule 3.2.6(a) Contracts and Other Agreements Schedule 3.2.7 VA-6 Consents Schedule 3.2.8 Tax Matters Schedule 3.2.9 Environmental Matters Schedule 3.2.10(a) Liens Schedule 3.2.10(b) Real Property Schedule 3.2.10(c) Title Exceptions Schedule 3.2.11 Third Party Property Schedule 3.2.12 Accounts Receivable Schedule 3.2.14 Material Changes Schedule 3.2.15 Assets Necessary to Conduct VA-6LP Business Schedule 3.2.16 Claims of Infringement Relating to Intellectual Property Schedule 3.2.17 VA-6 Financial Statements Schedule 3.2.19 Contracts Subject to Confidentiality Provisions Schedule 3.2.20 VA-6LP Brokers and Finders Schedule 3.2.21 Standard Rate Plans; Products and Services Provided to
Subscribers; Forms of Customer Agreements Schedule 3.2.24 Certain VA-6 Liabilities Schedule 4.1.1(g) Planned Changes in Company Marketing and Promotions Schedule 4.2.1(g) Planned Changes in VA-6 Marketing and Promotions Schedule 5.3.1 Regulatory and Other Approvals Schedule 7.11 Knowledge
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ASSET EXCHANGE AGREEMENT
THIS ASSET EXCHANGE AGREEMENT ("Agreement"), dated as of May 17, 2000, is
--------- entered into between PRIMECO PCS, L.P., a Delaware limited partnership
("PrimeCoPCS"), and VIRGINIA RSA 6 CELLULAR LIMITED PARTNERSHIP, a Virginia ------------ limited partnership ("VA-6LP").
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R E C I T A L S
WHEREAS, effective March 31, 2000, PrimeCo Personal Communications, L.P.
("PrimeCo") transferred the assets, properties and rights set forth on Schedule --------- A hereto (the "Transferred Assets") to Richmond 20MHz, LLC, a Delaware limited
------------------ liability company (the "Company")
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WHEREAS, PrimeCoPCS owns the entire membership interest (the "Company
------- Interest") in the Company; --------
WHEREAS, the Company is the holder of certain licenses granted by the United States Federal Communications Commission ("FCC") for the Basic Trading
--- Areas ("BTAs") set forth on Exhibit A attached hereto (collectively, the
---- --------- "Company BTAs"); -------------
WHEREAS, the Company is the owner of wireless telecommunications systems in the Company BTAs and, in connection therewith, is engaged in the business of marketing, selling and providing Personal Communications Services in the Company BTAs (such businesses, as conducted by Company and its predecessors in interest which are or were Affiliates of PrimeCoPCS, are referred to herein collectively as the "Company Businesses");
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WHEREAS, subject only to the limitations and exclusions contained in this Agreement, PrimeCoPCS desires to exchange, through the transfer of the Company Interest on the terms and conditions set forth herein, certain assets, properties and rights of the Company for cash, property of like kind to the property to be transferred by PrimeCoPCS to VA-6LP on the Closing Date within the meaning of Section 1031 of the Code, and other property;
WHEREAS, VA-6LP is the holder of certain licenses granted by the FCC for Virginia RSA 6, and is the owner of wireless telecommunications systems in Virginia RSA 6 and, in connection therewith, is engaged in the business of marketing, selling and providing Cellular Services in Virginia RSA 6;
WHEREAS, subject only to the limitations and exclusions contained in this Agreement, VA-6LP desires to exchange, on the terms and conditions set forth herein, substantially all of the assets, properties and rights of VA-6LP for other property of like kind within the meaning of Section 1031 of the Code;
NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants, agreements and conditions herein contained, and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Defined Terms. For purposes of this Agreement (including the Schedules
------------- hereto), the terms defined in this Agreement shall have the respective meanings specified herein, and, in addition, the following terms shall have the following meanings:
"Affiliate" or "affiliate" means, as to any Person, any other Person which,
--------- --------- directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. The term "control" (including, with correlative
------- meanings, the terms "controlled by" and "under common control with"), as applied
------------- ------------------------- to any Person, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other ownership interest, by contract or otherwise. Without limiting the foregoing, PrimeCo shall for all purposes of this Agreement be deemed an Affiliate of PrimeCoPCS and, prior to consummation of the purchase and sale of the Company Interest hereby contemplated, of the Company.
"Agreement" means this Asset Exchange Agreement, and all Schedules and
--------- Exhibits hereto, as amended, modified or supplemented from time to time in accordance with the terms hereof.
"Alternative Transaction" is defined in Section 2.1(b).
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"Assumed Closing Date Net Working Capital" is defined in Section 2.2(a).
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"Authorizations" means, as to any Person, all licenses, permits,
-------------- franchises, orders, approvals, concessions, registrations, qualifications and other authorizations with or under all federal, state, lo ...
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