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EXHIBIT 10.20
ASSET PURCHASE AGREEMENT
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THIS ASSET PURCHASE AGREEMENT (the "Agreement"), made and entered
into as of the
___ day of December, 2006, by and between the Buyer, as defined
below, and the
Seller, as defined below.
As used in this Agreement, the term "Buyer" means ERF Bundled
Wireless Services,
Inc., a wholly-owned Texas subsidiary of ERF Wireless, Inc., a
Nevada
corporation, ("Parent") with its principal place of business in
League City,
Texas.
As used in this Agreement, the term "Seller" means Southwest
Enhanced Network
Services, LP, with its principal place of business at 4001 Rodney
Parham Road,
Little Rock, Arkansas 72212.
W I T N E S S E
T H:
WHEREAS, Seller desires to sell substantially all of the assets,
customers and
contracts of its business operations engaged in providing fixed
wireless
broadband Internet solutions and bandwidth in the Lubbock, Texas
panhandle area
and areas in New Mexico as represented by the Seller, commonly
known as "The
Door to the Internet", excluding all dial-up and DSL Internet
components of such
business operations and associated dial-up assets (collectively
"the Business");
Buyer desires to purchase the Business from Seller, on the terms
and subject to
the conditions set forth herein.
NOW, THEREFORE, Buyer and Seller, in consideration of the mutual
promises
hereinafter set forth, do hereby promise, and agree as follows:
ARTICLE ONE: ASSETS TO BE PURCHASED
1.1 SUBJECT ASSETS. Upon the terms and subject to the conditions
set forth in
this Agreement, Seller hereby sells to Buyer and Buyer hereby
purchases from
Seller, on the Closing Date, all of Seller's right, title, and
interest in
substantially all of the assets associated with the Business,
including the
following:
o
all
wireless network infrastructure equipment, including subscriber
units, access nodes, backhaul links, radios, antennas,
switches,
routers and servers with related software, which software is
open
source with the exception of "steel-belted radius" software which
is a
box license;
o
all
transferable FCC licensed spectrum currently being utilized to
provide services to existing wireless broadband customers,
including
Lubbock National Bank, specifically a 6 GHz Point to Point
radio
between Opydyke Tower, Lubbock, Texas, and Metro Tower
Building,
Lubbock, Texas, and 38 GHz Point to Point DS3 radios used as
follows:
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- Multiple Lubbock National Bank Locations;
- Backbone Connection between 50th Street and Metro Tower
Building;
- Christmas Decor (customer connection);
- Beck Steel (customer connection);
o
all
inventory, equipment, goods, documents pertaining to the
operations and instruments of the Business;
o
all rights
to equipment, tower and office space leases for the
Business ("Assumed Leases");
o
all
transferable customer and contractual rights held by the
Business,
including ISP Subscriber Agreements, all Design Agreements,
Equipment
Purchase Agreements, Internet Access and Monitoring and
Maintenance
Agreements with customers with fixed wireless broadband;
o
all
general intangibles (including trademarks, trade names and
symbols
used in connection with The Door to the Internet), but any
trade
secrets, intellectual property, and general intangibles of
Windstream
Corporation, or its subsidiaries and/or affiliates, are
expressly
excluded, including ownership, registration, and any related
extensions for the following domain names: door.net,
hubofthe.net,
odsy.net, lookingglass.net, roswell.net, ruidoso.org, and
trailnet.net;
o
all work
in progress, and all other contracts and agreements relating
to the Business;
o
all
transferable equipment and software related to the Business,
excluding any billing systems or informational systems utilized
by
Windstream Corporation or any of its affiliates;
o
Ten
vehicles utilized by the Business, a list of which is attached
as
Exhibit 2.
o
all
Internet address space registered with the American Registry
for
Internet Numbers, ("ARIN") by "The Door to the Internet" that
is
transferable according to the rules, regulations or procedures
promulgated by ARIN;
o
a fiber
optic cable route, that is both aerial and buried, that spans
approximately 37 miles from Lubbock, Texas, to Oakley, Texas;
o
all
legally assignable government permits, licenses and
certifications
for the Business ("Governmental Permits"); and
o
all
documents, files and records containing technical support, all
additions, accessions and substitutions thereto and other
information
pertaining to the Business in Seller's possession or control.
All of the assets being purchased by Buyer as described in this
Paragraph 1.1
are hereinafter referred to as the "Subject Assets." The Buyer and
Seller
specifically agree that Subject Assets do not include any dial-up
or DSL
internet customers of Seller or any records, documents, or licenses
associated
with the dial-up internet services provided by Seller. Seller is
retaining all
dial-up customers and the dial-up operations and any assets
associated with the
dial-up operations, unless the assets are shared assets used to
provide wireless
and dial-up services ("Shared Assets"). Shared Assets are
considered Subject
Assets, except that the following Shared Assets will be retained by
Seller and
are specifically excluded from the Subject Assets: 1) Nortel CVX
RAS, Cisco 7206
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router used by the RAS server, Riverstone RSS800 used by the RAS
server, all
associated cables, and any other equipment utilized by Seller
located in the
Metro Tower Building, Third Floor, Lubbock, Texas; 2) RAS server
located in
Alamogordo, New Mexico; 3) RAS server in Roswell, New Mexico; 4)
one Dell
accelerator proxy server located in the Metro Tower Building,
Nineteenth Floor,
Lubbock, Texas; and 5) any web-hosting servers at any current
location utilized
by Seller.
The parties acknowledge that 19 Assumed Leases for tower, office
space, or
equipment require consent for assignment. If consent cannot be
obtained for
assignment of these Assumed Leases, the lease(s) shall not be a
Subject Asset
and, subject to Section 2.2, Seller agrees to retain said lease(s).
As set forth
herein, Seller shall use Commercially Reasonable Efforts to obtain
necessary
consents to assignment within 60 days of the Closing Date. With
respect to each
Assumed Lease, Seller and Buyer shall execute an Assignment and
Assumption of
Lease in the same or substantially the same form of Exhibit 3,
attached hereto
and incorporated herein.
The parties agree that current wireless customers with email
addresses
containing any of the domain names door.net, hubofthe.net,
odsy.net,
lookingglass.net, roswell.net, ruidoso.org, and trailnet.net, which
are
specifically excluded from the Subject Assets, may continue to use
said email
addresses from the Closing Date until June 30, 2007, during which
time period
Buyer will convert current wireless customers to email addresses
provided by
Buyer. Buyer acknowledges that it has no ownership rights to the
domain names at
any time and that access to said email domains will be withdrawn by
Seller on
June 30, 2007, at 12:01a.m., and Seller has no obligation to grant
any
extensions beyond said date and time.
Documentation that will be provided pursuant to this Agreement will
include
copies of the following books, records, manuals and other materials
in any
tangible form to the extent relating to the Business and/or the
Subject Assets
in Seller's possession or control:
records relating to customers that are parties to any contracts,
records
relating to vendors, and all other books, records, files,
correspondence,
documents and information owned by Seller relating to the Business,
however
maintained or stored (collectively, the "Records"), it being
understood that the
Seller may cause to be deleted confidential information that does
not relate to
the Subject Assets or the Business. The Records are made available
without
representation by Seller or recourse to Seller, and Buyer relies on
such
information at its own risk. Without limiting the generality of the
foregoing,
Buyer acknowledges that Seller has made no representations (express
or implied)
regarding the accuracy of the Records provided by Seller, the
qualifications of
the parties preparing such information, or the conclusions set
forth therein.
1.2 PURCHASE PRICE; PAYMENT OF PURCHASE PRICE. In addition to the
Assumed
Liabilities described below, the aggregate consideration for the
Subject Assets
(the "Purchase Price") shall be the amount equal to $1.00 (the
"Purchase
Price").
1.3 PAYMENT TERMS. The Purchase Price will be payable to Seller by
Buyer on the
Closing Date.
1.4 ASSUMED LIABILITIES. As partial consideration for the Subject
Assets, Buyer
will assume and agree to pay or perform all of the: (i) liabilities
and
obligations arising in connection with the Business, including all
Assumed
Leases, except for the ones specifically excluded below; (ii) all
of the
contracts and agreements associated with the Business assigned to
Buyer,
including ISP subscriber contracts and utilities in effect
pertaining to the
Business, and maintenance agreements in existence with all wireless
customers;
(iii) certain billings in excess of earnings (customer prepayments)
and (iv)
liabilities for any interruption of service to customers that
occurs when the
Subject Assets are transferred to Buyer or in any conversion
process pursued by
Buyer and Seller as part of the transfer of the Subject Assets
(hereinafter
"Assumed Liabilities"). Buyer shall not assume or be obligated
under, or become
liable for, any debt, liability, or obligation whatsoever of Seller
or the
Business arising out of:
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(i) any tax liability or obligation relating to transactions or
periods prior to
and including the Closing Date (but excluding any sales, use,
transfer or other
tax obligation resulting from the transactions contemplated by this
Agreement,
which Buyer hereby agrees to be responsible for);
(ii) any liability or obligation to Seller's employees whatsoever,
whether for
salaries and wages, sick pay, or any other employee benefit and
whether relating
to the termination of their employment or otherwise arising,
relating to periods
prior to and including the Closing Date;
(iii) any liability or obligation arising out of the lawsuit filed
by Thomas K.
Payne, The Door to the Internet, Inc., and Internet Holdings, Inc.,
against
Seller, in the 72nd District Court of Lubbock, Texas; or
(iv) any Assumed Lease that cannot be assigned due failure to
obtain the
necessary Lessor consent to the assignment (hereinafter
collectively "the
Retained Liabilities").
Regarding current employees, Buyer agrees to adhere to arrangements
made with
Seller's current employees regarding continued employment and
severance
benefits, specifically:
o
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employees, previously identified to Buyer by Seller, have been
offered employment with the Business through 2/1/07, and Buyer
agrees
to utilize employees until said date;
o
8
employees, previously identified to Buyer by Seller, have been
offered employment with the Business through 3/1/07, and Buyer
agrees
to utilize employees until said date;
o
All
employees to receive four weeks of severance pay;
o
Richard
Garner, Supervisor-IT, to receive four weeks of severance pay
and retention bonus;
o
All
employees eligible for Standard Severance Benefits, including
but
not limited to, 2007 vacation payout, COBRA benefit continuation,
and
outplacement Assistance.
Employees will remain Seller's employees and will be eligible for
all above
mentioned benefits provided they work until the above-referenced
release
dates. Buyer agrees to only utilize current employees for work
performed in
the
ordinary course of the Business until said release dates. These
arrangements do not constitute Assumed Liabilities on the part of
the
Buyer. Further, Buyer may contact current employees regarding
continued
employment with Buyer to commence after the employee's release date
defined
above, unless said employee chooses to leave prior to his/her
release date.
The intention of the parties is that Seller will have no further
liability or
obligation regarding the Business, except for the Retained
Liabilities, after
the Closing Date, and Buyer agrees to indemnify, protect and hold
harmless
Seller and its affiliates and their respective members, managers,
shareholders,
directors, officers, employees and agents from any and all damages,
losses,
actions, demands, judgments, costs, expenses, claims or other
liabilities
arising out of Seller's operation of the Business prior to the
Closing Date.
ARTICLE TWO: CLOSING
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2.1 TIME AND PLACE OF CLOSING; CLOSING DELIVERIES. The closing of
the purchase
and sale contemplated herein shall take place at 1:00 p.m., on
December 15,
2006, at Buyer's offices, located at League City, Texas, or, if the
parties
desire, by courier service and facsimile/email at a time and date
as the parties
may agree upon. The date of closing is referred to herein as the
"Closing Date."
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2.2