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 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
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 ▇ ▇▇▇ ▇▇▇▇▇ to Point radio
between Opydyke Tower, Lubbock, Texas, and Metro Tower Building,
Lubbock, Texas, and ▇▇ ▇▇▇ ▇▇▇▇▇ 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);
- ▇▇▇▇ 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: ▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇.▇▇▇,
▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇.▇▇▇, and
▇▇▇▇▇▇▇▇.▇▇▇;
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, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ used by the RAS server, all
associated cables, and any other equipment utilized by Seller located in the
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇; 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇; 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 ▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇.▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇.▇▇▇, ▇▇▇▇▇▇▇.▇▇▇, and ▇▇▇▇▇▇▇▇.▇▇▇, 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 ▇▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇ ▇.
▇▇▇▇▇, The Door to the Internet, Inc., and Internet Holdings, Inc., against
Seller, in the ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇; 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 6 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 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, 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 SELLER'S OBLIGATIONS. The obligations of Seller include:
Seller shall pay Buyer $825,000 ("the Assumption Cost"); with $500,000 due at
Closing and the remaining $325,000, due on February 28, 2007, as consideration
for the Buyer agreeing to accept the Assumed Liabilities set forth in Section
1.4. The amount of the Assumption Cost is based on the intention of the parties
that all of the Assumed Leases requiring consent for assignment will be properly
assigned with the Buyer assuming all obligations thereunder. Seller shall use
Commercially Reasonable Efforts to obtain all necessary written consents to
assignment within 60 days after the Closing Date. For each Assumed Lease for
which consent is not obtained, the Assumption Cost shall be reduced accordingly
and as pursuant to the Total Amount Column Exhibit 1. As consents are obtained
post-Closing Date, Buyer shall, at Seller's request, execute the Assignment and
Assumption of Lease in the same or substantially the same form attached hereto
as Exhibit 3.
Further, for any Assumed Lease not requiring consent to assignment, Buyer agrees
to be responsible for lease payments under the Assumed Leases immediately upon
execution of this Agreement and agrees to execute the Assumption and Assignment
of Lease, attached hereto, contemporaneously with this Agreement. For any
Assumed Lease requiring consent, Seller agrees to be responsible for lease
payments until consent to assignment is obtained. Buyer agrees to immediately
execute the Assignment and Assumption of Lease when the consent to assignment is
provided.
On or before the Closing Date, Seller shall provide Buyer with actual or
constructive physical possession of the Subject Assets and the Records, except
as expressly excluded herein. Seller's obligations are specifically contingent
upon Buyer complying with Section 4.2 herein regarding Cooperation and the
parties entering into a mutually acceptable change control process agreement
that prohibits any changes to systems, access or services affecting dial-up and
web-hosting services retained by the Seller during the transfer of the Subject
Assets or until February 28, 2007, whichever period is longer. The agreement
must be entered into within 30 days of the Closing Date, and will be attached as
Exhibit 4 to this Agreement and incorporated herein upon execution.
ARTICLE THREE: WARRANTIES AND REPRESENTATIONS OF BUYER AND SELLER
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3.1 SELLER'S WARRANTIES AND REPRESENTATIONS.
Seller hereby warrants and represents to Buyer that:
The individual signing this Agreement on behalf of Seller has the authority to
bind the Seller to the agreements set forth herein. Seller makes no
representations regarding the Subject Assets and BUYER ACKNOWLEDGES THAT BUYER
IS NOT RELYING ON ANY WRITTEN, ORAL, IMPLIED OR OTHER REPRESENTATIONS,
STATEMENTS OR WARRANTIES BY SELLER OR ANY AGENT OF SELLER. ALL PREVIOUS WRITTEN,
ORAL, IMPLIED OR OTHER STATEMENTS, REPRESENTATIONS, WARRANTIES OR AGREEMENTS, IF
ANY, ARE MERGED IN THIS AGREEMENT. EXCEPT AS EXPRESSLY SET FORTH HEREIN, SELLER
SHALL HAVE NO LIABILITY TO BUYER, AND BUYER HEREBY RELEASES SELLER FROM ANY
LIABILITY (INCLUDING CONTRACTUAL AND/OR STATUTORY ACTIONS FOR CONTRIBUTION OR
INDEMNITY), FOR, CONCERNING OR REGARDING (1) THE NATURE AND CONDITION OF THE
SUBJECT ASSETS, INCLUDING THE SUITABILITY THEREOF FOR ANY ACTIVITY OR USE; OR
(2) THE COMPLIANCE OF THE SUBJECT ASSETS WITH ANY LAWS, RULES, ORDINANCES OR
REGULATIONS OF ANY GOVERNMENT OR OTHER BODY. THE FOREGOING INCLUDES A RELEASE OF
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SELLER FROM CLAIMS BASED ON SELLER'S NEGLIGENCE IN WHOLE OR IN PART AND CLAIMS
BASED ON STRICT LIABILITY. SELLER HAS NOT MADE, DOES NOT MAKE AND EXPRESSLY
DISCLAIMS, ANY WARRANTIES, REPRESENTATIONS, COVENANTS OR GUARANTEES, EXPRESSED
OR IMPLIED, OR ARISING BY OPERATION OF LAW, AS TO THE MERCHANTABILITY,
HABITABILITY, QUANTITY, QUALITY OR ENVIRONMENTAL CONDITION OF THE SUBJECT ASSETS
OR THEIR SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE.
BUYER AFFIRMS THAT PRIOR TO CLOSING BUYER SHALL HAVE (i) INVESTIGATED AND
INSPECTED THE SUBJECT ASSETS, TO THE BEST OF ITS ABILITY AND IS SATISFIED WITH
THE CONDITION OF THE SUBJECT ASSETS OR WHAT COULD BE LEARNED ABOUT THE SUBJECT
ASSETS, AND (ii) MADE ITS OWN DETERMINATION AS TO (a) THE MERCHANTABILITY,
QUANTITY, QUALITY AND CONDITION OF THE SUBJECT ASSETS, AND (b) THE SUBJECT
ASSETS' SUITABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR USE. BUYER HEREBY
ACCEPTS THE SUBJECT ASSETS IN THEIR PRESENT CONDITION ON AN "AS IS", "WHERE IS"
AND "WITH ALL FAULTS", INCLUDING ENVIRONMENTAL, BASIS AND ACKNOWLEDGES THAT (i)
WITHOUT THIS ACCEPTANCE, THIS SALE WOULD NOT BE MADE, AND (ii) THAT SELLER SHALL
BE UNDER NO OBLIGATION WHATSOEVER TO UNDERTAKE ANY REPAIR, ALTERATION,
REMEDIATION OR OTHER WORK OF ANY KIND WITH RESPECT TO THE SUBJECT ASSETS. IF THE
CLOSING OCCURS, BUYER AND ITS SUCCESSORS AND ASSIGNS HAVE, AND SHALL BE DEEMED
TO HAVE, ASSUMED ALL RISK AND LIABILITY WITH RESPECT TO THE PRESENCE OF TOXIC OR
HAZARDOUS SUBSTANCES, MATERIALS OR WASTES OR OTHER ACTUAL OR POTENTIAL
ENVIRONMENTAL CONTAMINATES, WHETHER KNOWN OR UNKNOWN, APPARENT, NON-APPARENT OR
LATENT, AND WHETHER EXISTING PRIOR TO, AT OR SUBSEQUENT TO TRANSFER OF THE
SUBJECT ASSETS TO BUYER. SELLER IS HEREBY RELEASED BY BUYER AND ITS SUCCESSORS
AND ASSIGNS OF AND FROM ANY AND ALL RESPONSIBILITY, LIABILITY, OBLIGATIONS AND
CLAIMS, KNOWN OR UNKNOWN, INCLUDING (1) ANY OBLIGATION TO TAKE THE SUBJECT
ASSETS BACK OR REDUCE THE PRICE, OR (2) ACTIONS FOR CONTRIBUTION OR INDEMNITY,
THAT BUYER OR ITS SUCCESSORS AND ASSIGNS MAY HAVE AGAINST SELLER OR THAT MAY
ARISE IN THE FUTURE. BUYER FURTHER ACKNOWLEDGES THAT THE PROVISIONS OF THIS
SECTION HAVE BEEN FULLY EXPLAINED TO BUYER AND THAT BUYER FULLY UNDERSTANDS AND
ACCEPTS THE SAME. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE CLOSING DATE.
There is no other pending litigation involving Seller or the Business, except
the lawsuit referenced above, and there are no potential claims which have not
yet been filed of which Seller has been placed on notice.
3.2 BUYER'S WARRANTIES AND REPRESENTATIONS. Buyer hereby warrants and represents
to Seller that:
The individual signing this Agreement on behalf of Buyer has the authority to
bind the Buyer to the agreements set forth herein.
Buyer has the financial wherewithal, ability and expertise to immediately
operate the Business on a going forward basis in substantially the same manner
as the Business has historically operated.
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ARTICLE FOUR: ADDITIONAL COVENANTS
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4.1 COMMERCIALLY REASONABLE EFFORTS. "Commercially Reasonable Efforts" means the
efforts that a prudent Person desirous of achieving a result would use in
similar circumstances to achieve that result as expeditiously as possible,
provided, however, that a Person required to use Commercially Reasonable Efforts
under this Agreement will not be thereby required to take actions that would
result in a material adverse change in the benefits to such Person of this
Agreement and the contemplated transactions or to dispose of or make any change
to its business, expend any material funds or incur any other material burden.
4.2 COOPERATION. Seller shall cooperate with Buyer and use Commercially
Reasonable Efforts to cause respective officers, employees, and representatives,
if any, of Seller to cooperate with Buyer after the Closing Date to facilitate
the orderly transition of the Business and the Subject Assets to Buyer and to
minimize any disruption to the Business that might result from the transactions
contemplated hereby. Buyer shall cooperate with Seller and allow Seller access
to office space and equipment until February 28, 2007, to allow Seller to
migrate, including migration for any Shared Assets, existing web-hosting and
dial-up services and dial-up customers to existing facilities owned or operated
by Seller, its parent company, Windstream Corporation, an affiliate, or a third
party. Buyer shall cooperate with Seller and provide to Seller, at Seller's
request, any documents or information needed for the Retained Liabilities. This
duty to cooperate regarding information required for the Retained Liabilities
survives the Closing Date and February 28, 2007.
4.3 EXECUTION OF ADDITIONAL DOCUMENTS. From time to time, as and when requested,
the parties shall execute and deliver, or cause to be executed and delivered,
all such mutually acceptable documents and instruments of conveyance and shall
take, or cause to be taken, all such mutually acceptable actions as are
necessary to consummate the transactions contemplated by this Agreement and to
convey, assign, transfer and deliver to the other any of the properties or
assets intended to be conveyed, assigned, transferred and delivered pursuant to
this Agreement.
4.4 INDEMNIFICATION. To the extent allowed by law, the parties to this Agreement
hereby release and agree to indemnify, defend, protect and hold harmless the
other, its employees, officers, directors, agents, shareholders and affiliates,
from and against liability for:
4.4.1 Any third party claims for injury, loss or damage to any
person, tangible property or facilities of any person or entity (including
reasonable attorneys' fees and costs), to the extent any such third party
injury, loss or damage arises out of or results from the acts or omissions,
negligent or otherwise, of the indemnifying party, its officers, employees,
servants, affiliates, agents or contractors in connection with its performance
under this Agreement; and
4.4.2 Any third party claims, liabilities or damages arising
out of any violation by the indemnifying party of regulations, rules, statutes
or court orders of any local, state or federal governmental agency, court or
body in connection with its performance under this Agreement.
4.4.3 Nothing contained herein shall operate as a limitation
on the right of either party to this Agreement hereto to bring an action for
damages against any third party, including indirect, special or consequential
damages, based on any acts or omissions of such third party as such acts or
omissions may affect the Business; provided, however, that each party hereto
shall assign such rights or claims, execute such documents and do whatever else
may be reasonably necessary to enable the other party to pursue any such action
against such third party.
4.5 LIMITATION OF LIABILITY. Notwithstanding any provision of this Agreement to
the contrary, in no event shall either party to this Agreement be liable to the
other party for any special, incidental, indirect, punitive, reliance or
consequential damages, whether foreseeable or not, arising out of, or in
connection with the Business, including but not limited to, damage or loss of
property or equipment, loss of profits or revenue, cost of capital, cost of
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replacement services, or claims of customers, whether occasioned by any repair
or maintenance performed by, or failed to be performed by, any party to this
Agreement, or any other cause whatsoever, including, without limitation, breach
of contract, breach of warranty, negligence, or strict liability. No claims for
damages with respect to this Agreement may be made more than (2) two years after
the date that the event giving rise to such claim is known or reasonably should
have been known to the person or entity making such claim; and no claim for
indemnification under Section 4.4 of this Agreement may be made more than (2)
two years after the first notice of any claim received by the party claiming
under such indemnification provision.
4.6 CONFIDENTIALITY. Buyer covenants that it will not, until the Closing Date,
disclose the existence of this Agreement and its terms to any person, except to
its respective directors, officers, employees, attorneys and advisors, who are
directly involved in the Buyer's obligations under this Agreement. Buyer agrees
that it will not make, and will use its best efforts to ensure that the
foregoing parties do not make any public announcement of this Agreement or the
transactions contemplated herein until the Closing Date, without the prior
written consent of Seller, which consent may be withheld by Seller, at Seller's
option, unless such announcement is necessary to comply with applicable law.
After the Closing Date, neither party shall issue a press release disclosing the
Purchase Price or the Assumption Cost. This obligation survives the Closing
Date.
4.7 ASSIGNMENT. Neither party shall assign or otherwise transfer this Agreement
in whole or in part without the other party's prior written consent.
4.8 BROKERS. Each party represents and warrants to the other that no brokers or
finders have been engaged by it in connection with the transaction contemplated
by this Agreement or, to its knowledge, is in any way connected with this
transaction. In the event of any claim for broker's or finder's fees or
commissions in connection with the negotiation, execution or consummation of
this Agreement, then each party shall indemnify, save and hold harmless and
defend the other party from and against such claim if it shall be based upon any
statement or representation or agreement made by or allegedly made by the
indemnifying party. This indemnity shall survive the Closing Date or termination
of this Agreement.
4.9 ORAL AGREEMENTS WITH THIRD PARTIES. Buyer acknowledges that Seller may have
certain agreements with individuals or entities relating to equipment necessary
to operate the Business placed on property owned by the individuals or entity.
To its knowledge, Seller has no written documentation regarding these
agreements, and Buyer agrees that it will be responsible for identifying the
individuals or entities with whom the agreements were made; notifying these
individuals or entities of the transfer of ownership of the equipment in
question; entering into any written agreements for future use of property owned
by the individuals or entities; and deciding what "credits" should be issued to
the individuals or entities in exchange for use of property. Seller agrees to
use Commercially Reasonable Efforts to provide to Buyer within 30 days after the
Closing Date all information that it possesses regarding these oral agreements.
These oral agreements shall not constitute Retained Liabilities.
ARTICLE FIVE: MISCELLANEOUS
5.1 EXPENSES. The parties hereto shall pay their own expenses, including
accountants' and attorneys' fees, incurred in connection with the negotiation
and consummation of the transactions contemplated by this Agreement. Buyer shall
be liable for and shall pay and discharge when due any sales or transfer taxes
incurred in connection with the purchase and sale of the Subject Assets pursuant
to this Agreement.
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5.2 BINDING EFFECT. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective legal representatives, heirs,
beneficiaries, successors and permitted assigns. Nothing expressed or implied in
this Agreement is intended or shall be construed to confer upon or give any
person other than the parties hereto and their permitted successors or assigns
any rights or remedies under or by reason of this Agreement or any transaction
contemplated hereby.
5.3 SEVERABILITY. The parties agree that if any provision of this Agreement
shall under any circumstances be deemed invalid or inoperative, this Agreement
shall be construed with the invalid or inoperative provision deleted, and the
rights and obligations of the parties shall be construed and enforced
accordingly.
5.4 APPLICABLE LAW. This Agreement in all respects, including as to its
validity, interpretation, enforcement and effect, shall be governed by the Laws
of the State of Texas.
5.5 ALLOCATION OF PURCHASE PRICE. Buyer and Seller will cooperate to determine,
in accordance with applicable U.S. Treasury regulations promulgated under
Section 1060 of the U.S. Revenue Code, as amended, and other applicable tax
laws, rules or regulations, the allocation of the Purchase Price, Assumption
Cost, and Retained Liabilities, among the Subject Assets as of the Closing Date.
Each party will file all tax returns and information reports, including IRS Form
8594, in a manner consistent with such agreed allocation. This obligation shall
survive the Closing Date.
5.6 RE-BRANDING. Within 30 days of the Closing date, Buyer agrees to remove any
reference to the Seller, parent company for Seller, Windstream Corporation, or
any affiliate, from any of the Subject Assets.
5.7 COUNTERPARTS. This Agreement may be executed in one or more counterparts,
all of which shall be considered but one and the same agreement, and shall
become effective when one or more such counterparts have been signed by each of
the parties and delivered to the other party.
ARTICLE SIX: DEFAULT
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6.1 SELLER BREACH/DEFAULT. In the event Seller shall fail to timely convey the
Subject Assets to Buyer in accordance with this Agreement for any reason except
Buyer's default, or shall otherwise fail to comply with its obligations
hereunder, Buyer's sole and exclusive remedy, whether at law or in equity, shall
be to terminate this Agreement. Notwithstanding the foregoing, Seller shall have
30 days, after Buyer's written notice of Seller's default of any provision of
this Agreement, (other than Seller's failure to close [not resulting from
Buyer's default]) to cure said default.
6.2 BUYER BREACH/DEFAULT. In the event Buyer fails to purchase the Subject
Assets in accordance with this Agreement for any reason other than Seller's
default hereunder, or fails to comply with its obligations hereunder, Seller
shall have the right, as Seller's sole and exclusive remedy, to terminate this
Agreement and withhold payment of the Purchase Price or Assumption Cost, or seek
return of the Assumption Cost. Notwithstanding the foregoing, Buyer shall have
30 days, after Seller's written notice of Buyer's default of any provision of
this Agreement (other than Buyer's failure to close [not resulting from Seller's
default] or to pay any sum due hereunder) to cure said default.
9
ARTICLE SEVEN: NOTICE PROVISIONS
--------------------------------
All notices and communications concerning this Agreement shall be addressed to
the other Party as follows:
IF TO SOUTHWEST ENHANCED NETWORK SERVICES, LP:
Southwest Enhanced Network Services, LP
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Mailstop: B1F03-1324B
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
With a copy to:
Windstream Communications, Inc.
Legal Department
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Mailstop: B1F03-71A
Facsimile: 501.748.5172
IF TO ERF BUNDLED WIRELESS SERVICES, INC.:
ERF Bundled Wireless Services, Inc.
Attn: R. ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇.▇▇▇.▇▇▇▇
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day,
month and year first above written.
BUYER
ERF Wireless, Inc., a Texas corporation
("Parent")
By: _______________________________
Name: Dr. H. ▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman & CEO
ERF Bundled Wireless Services, Inc., a Texas
corporation
("Buyer")
By: _______________________________
Name: R. ▇▇▇▇ ▇▇▇▇▇
Title: President
SELLER
Southwest Enhanced Network Services, LP
By: Valor Telecommunications Enterprises, LLC,
General Partner for Seller
By: ______________________________
Name: ___________________________
Title: _____________________________
10