WIRELESS BROADCASTING SYSTEMS OF AMERICA INC, S-1/A, 1996-10-02

WIRELESS BROADCASTING SYSTEMS OF AMERICA INC
S-1/A, 1996-10-02
CABLE & OTHER PAY TELEVISION SERVICES

Previous: SUPERIOR TELECOM INC, 8-A12B, 1996-10-02

Next: T F PURIFINER INC, 10SB12B/A, 1996-10-02

<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 1, 1996

REGISTRATION NO. 333-9737

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

AMENDMENT NO. 1 TO

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------

<TABLE>
<S> <C> <C>
DELAWARE 4841 36-3939250
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) (IDENTIFICATION NUMBER)
</TABLE>

9250 EAST COSTILLA AVENUE, SUITE 325
ENGLEWOOD, COLORADO 80112
TELEPHONE (303) 649-1195
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------

JENNIFER L. RICHTER
VICE PRESIDENT AND GENERAL COUNSEL
9250 EAST COSTILLA AVENUE, SUITE 325
ENGLEWOOD, COLORADO 80112
TELEPHONE (303) 649-1195
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)

COPIES TO:

<TABLE>
<S> <C>
SUSAN M. HERMANN DANIEL J. ZUBKOFF
PEDERSEN & HOUPT, P.C. CAHILL GORDON & REINDEL
161 N. CLARK STREET, SUITE 3100 80 PINE STREET
CHICAGO, ILLINOIS 60601 NEW YORK, NEW YORK 10005
TELEPHONE (312) 641-6888 TELEPHONE (212) 701-3000
</TABLE>

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box: / /

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: / /

If the Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /

<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED PRICE(1) REGISTRATION FEE
<S> <C> <C>
- ------------------------------------------------------------------------------------------------
Class A Common Stock, par value $.01 per share..... $50,000,000 $17,241.38
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>

(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION (A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

SUBJECT TO COMPLETION -- DATED OCTOBER 1, 1996

PROSPECTUS
- --------------------------------------------------------------------------------

2,350,000 Shares

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC.
WBS LOGO

Class A Common Stock
- --------------------------------------------------------------------------------

All of the shares of Class A common stock, par value $.01 per share (the "Class
A Common Stock") offered hereby are being sold by Wireless Broadcasting Systems
of America, Inc. ("WBSA" or the "Company").

Prior to this offering (the "Offering") there has been no public market for the
Class A Common Stock of the Company. It is currently anticipated that the
initial public offering price will be between $14.00 and $16.00 per share. See
"Underwriting" for a discussion of the factors to be considered in determining
the initial public offering price.

The Company has two classes of common stock (collectively, the "Common Stock").
The Class A Common Stock offered hereby has one vote per share, and the Class B
common stock, par value $.01 per share, of the Company (the "Class B Common
Stock"), has ten votes per share. The economic rights of each class of Common
Stock are identical. Immediately following the Offering, the executive officers
and directors of the Company and related parties will have approximately 56.4%
of the ownership interests of the Common Stock and approximately 66.5% of the
combined voting power of the Common Stock assuming no exercise of the
Underwriters' over-allotment option. See "Description of Capital Stock" and
"Principal Stockholders."

The Company has applied for the inclusion of the Class A Common Stock in The
Nasdaq Stock Market's National Market (the "Nasdaq National Market") under the
symbol "WBSA."

SEE "RISK FACTORS" ON PAGES 9 TO 15 FOR A DISCUSSION OF CERTAIN MATERIAL FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE CLASS A COMMON
STOCK OFFERED HEREBY.

- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
Underwriting
Price to Discounts and Proceeds to
Public Commissions(1) Company(2)
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
Per Share.............................. $ $ $
- ------------------------------------------------------------------------------------------------------
Total(3)............................... $ $ $
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
</TABLE>

(1) The Company has agreed to indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."

(2) Before deducting expenses payable by the Company estimated to be $800,000.

(3) The Company has granted the several Underwriters a 30-day over-allotment
option to purchase up to 352,500 additional shares of Class A Common Stock
on the same terms and conditions as set forth above. If all such additional
shares are purchased by the Underwriters, the total Price to Public
will be $ , the total Underwriting Discounts and Commissions will be
$ , and the total Proceeds to Company will be $ . See
"Underwriting."

- --------------------------------------------------------------------------------

The shares of Class A Common Stock are offered by the several Underwriters
subject to delivery by the Company and acceptance by the Underwriters, to prior
sale and to withdrawal, cancellation or modification of the offer without
notice. Delivery of the shares to the Underwriters is expected to be made at the
office of Prudential Securities Incorporated, One New York Plaza, New York, on
or about October , 1996.

PRUDENTIAL SECURITIES INCORPORATED LEHMAN BROTHERS

October , 1996

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAW OF
ANY SUCH STATE.
<PAGE> 3

[WIRELESS BROADCASTING SYSTEMS OF AMERICA INC. MAP]
------------------------

IN CONNECTION WITH THE OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A COMMON
STOCK OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

ii
<PAGE> 4

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information and the Consolidated Financial Statements and Notes thereto
contained elsewhere in this Prospectus, including information contained in "Risk
Factors." Unless otherwise indicated herein, this Prospectus (i) gives effect
to: (a) the creation of Class A Common Stock and Class B Common Stock; (b) the
conversion of existing common stock into Class B Common Stock; (c) the
conversion of all outstanding shares of Class A Cumulative Convertible Preferred
Stock into Class B Common Stock and the accrued dividend thereon into Class A
Common Stock (estimated as of October 31, 1996); and (d) a 5.753:1 reverse stock
split of its common stock; and (ii) assumes that the Underwriters' over-
allotment option will not be exercised.

As used in this Prospectus, except as the context otherwise requires, the
term "Company" or "WBSA" means Wireless Broadcasting Systems of America, Inc., a
Delaware corporation, its subsidiaries, and WJB-TV Limited Partnership (the
"Predecessor Partnership"). The "Glossary," which begins on page 63 of this
Prospectus, contains definitions for certain technical and industry as well as
other defined terms used in this Prospectus.

THE COMPANY

Wireless Broadcasting Systems of America, Inc. acquires, owns, develops and
operates wireless cable systems in two regions of the United States. The Company
currently provides subscription television services in its Florida region
through wireless cable systems located in Fort Pierce and Melbourne and in its
Northwest region through wireless cable systems located in Boise, Idaho;
Sacramento, California; and Yakima, Washington (collectively, the "Operating
Systems"). In the 12 month period ended June 30, 1996, the Operating Systems
experienced substantial subscriber growth from approximately 52,700 to 63,100,
an increase of approximately 19.7%, which represents a penetration rate (see
"Glossary") of 4.8%. As of August 31, 1996, the Company's subscriber base had
grown to 65,400. In addition to the Operating Systems, the Company plans to
launch new systems in West Palm Beach, Florida; Coos Bay, Oregon; Eureka,
California; Helena, Montana; Kennewick, Washington; Klamath Falls, Oregon; and
Roseburg, Oregon (collectively, the "Planned Systems"). The Company's markets
encompass over 2.5 million line-of-sight ("LOS") households.

The Company strives to develop its markets in a manner that produces
sustainable subscriber growth and positive System EBITDA (see "Glossary") at
relatively low subscriber penetration levels. The Company's benchmarks in each
of its markets for the necessary subscriber penetration to achieve positive
System EBITDA vary on the basis of market-specific factors. By maintaining
control over operating expenses and targeting its marketing efforts, the Company
has been able to achieve positive System EBITDA in its Melbourne System, the
Company's most recently launched system, at a subscription level of
approximately 6,000 subscribers within 12 months of launch. In the 12 month
period ended June 30, 1996, the Company generated $19.6 million of revenues and
$3.7 million of EBITDA. See "Glossary."

The Company has assembled a management team that has one of the most
extensive subscription television operating backgrounds in the wireless cable
industry. Leading the management team is William W. Kingery, Jr., President and
Chief Executive Officer, who has over two decades of management, financial and
operating experience in the subscription television industry. Mr. Kingery served
as chief financial officer of United Cable Television Corporation, president of
Daniels & Associates, Inc., and most recently as executive vice president of
United Artists Cable Systems Corporation, where he had responsibility for 90
cable systems serving 1.3 million subscribers. See "Management."

The Company employs the following strategies to achieve its business
objectives:

3
<PAGE> 5

management, marketing, training, customer service and billing and enhance
opportunities for additional revenues.

Differentiate Service Offering. The Company believes that it offers greater
value to its customers than that afforded by its hard-wire cable and direct
broadcast satellite subscription television competitors. The Company seeks to
differentiate its service offering from other subscription television providers
by: (i) offering attractive channel line-ups; (ii) pricing its service
competitively; and (iii) providing superior customer satisfaction.

Maximize Profitable Subscriber Growth. The Company seeks efficiencies in
all aspects of its operations. In an effort to achieve continued, consistent
subscriber growth, the Company targets persons that the Company's marketing
research indicates could be long-term subscribers likely to increase their
services over time. To minimize turnover of subscribers, the Company charges
installation fees, conducts credit checks and actively manages its billing. The
Company's incentive compensation program promotes efficient subscriber service
and system operation by rewarding employees for achieving targeted subscriber
service goals, minimizing subscriber turnover and attaining budgeted System
EBITDA.

Own Wireless Cable Channel Licenses. The Company seeks to own, rather than
lease, the majority of available wireless cable channel licenses in its markets.
Benefits of ownership include: (i) increased EBITDA by eliminating variable
channel leasing costs; (ii) enhanced flexibility in deploying digital
compression and other technological innovations; and (iii) reduced dependence on
third party channel lessors.

Maintain Disciplined Approach to New Technologies. The Company evaluates
the implementation of new technologies on a market-by-market basis as dictated
by subscriber demands and competitive conditions. Specifically, installation of
whole-house decoders, which are fully addressable, is targeted for the Company's
smaller markets where digital technology is not expected to be cost-effective in
the near term. Digital technology, which the Company expects to be commercially
viable in 1997, will be incorporated into the Company's larger, more competitive
markets.

The Company intends to complement its Operating and Planned Systems by
acquiring additional wireless cable systems in markets that meet its selection
criteria, including: (i) demographic profile of the market, including size of
potential subscriber base and projected household growth rates; (ii) proximity
to existing markets; (iii) topography of the transmission area; (iv)
availability of wireless cable channel rights and licenses; and (v) the
competitive environment. The Company seeks to take advantage of economies of
scale and operating efficiencies, particularly where it can add to existing
regional clusters or develop new regional clusters of operating systems and
intends to utilize the experience of its management in evaluating, acquiring and
operating such potential systems.

HISTORY

In April 1992, the Company acquired its initial wireless cable assets in
Fort Pierce, Florida and subsequently launched the Fort Pierce System in May
1992. The Company expanded its presence in Florida with the launch of the
Melbourne System in November 1993. In March 1994, the Company entered the
Northwest region of the United States with the acquisition of the Sacramento
System. In March and April 1995, Boston Ventures, a private investment firm,
invested $35.0 million in the Company through the purchase of shares of Class A
Cumulative Convertible Preferred Stock (the "Convertible Preferred Stock") in
connection with which the Company acquired the Boise and Yakima Systems.
Immediately prior to closing of the Offering, Boston Ventures will convert its
Convertible Preferred Stock into Class B Common Stock and the accrued dividend
thereon into shares of Class A Common Stock. In March 1996, the Company acquired
the exclusive right to apply for currently and subsequently available commercial
channels for five new markets.

The Company's executive offices are located at 9250 East Costilla Avenue,
Suite 325, Englewood, Colorado 80112, and the Company's telephone number is
(303) 649-1195.

4
<PAGE> 6

THE COMPANY'S MARKETS

The following table outlines the characteristics of the markets in which
the Company operates or where it anticipates launching systems.

<TABLE>
<CAPTION>
ESTIMATED PROJECTED
LOS NUMBER OF LOS PERCENTAGE
HOUSEHOLDS SUBSCRIBERS HOUSEHOLD OF
AS OF AS OF GROWTH NUMBER OF AMOUNT OF COMMERCIAL
DECEMBER 31, JUNE 30, MARKET 1995 TO CHANNELS SPECTRUM LICENSES
1995(1) 1996(2) PENETRATION(3) 2000(4) CONTROLLED(5) CONTROLLED(5) OWNED(6)
------------ ----------- -------------- --------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
FLORIDA MARKETS:
Ft. Pierce, FL.......... 244,000 12,800 5.2% 10.0% 34 202MHz 100.0 %
Melbourne, FL........... 219,000 14,600 6.7 11.2 36 214 100.0
West Palm Beach,
FL(7)................. 1,010,000 -- -- 10.8 31 186 84.6
NORTHWEST MARKETS:
Boise, ID............... 130,000 12,300 9.5 15.4 33 196 85.7
Sacramento, CA.......... 654,000 16,000 2.4 7.0 29 174 15.4
Yakima, WA.............. 64,000 7,400 11.6 10.5 33 196 66.7
Coos Bay, OR............ 26,000 -- -- 5.4 20 118 95.2
Eureka, CA.............. 42,000 -- -- 4.1 10 58 76.9
Helena, MT.............. 22,000 -- -- 9.7 21 118 100.0
Kennewick, WA(8)........ 72,000 -- -- 14.4 33 196 69.2
Klamath Falls, OR....... 23,000 -- -- 4.4 21 100 100.0
Roseburg, OR............ 32,000 -- -- 4.3 21 124 100.0
--------- ------ ---- ---- ----------
TOTALS................ 2,538,000 63,100 4.8%(3) 9.8%(4) Avg. 82.8 %
========= ====== ==== ==== ==========
</TABLE>

- -------------------------
(1) LOS is defined as the number of households in the market that can receive an
unobstructed signal through a receiving antenna that is elevated 30 feet
above ground level. Estimated LOS Households are based upon engineering
studies performed for the Company.

(2) Number of Subscribers includes single family homes, the number of units in
each multiple dwelling unit ("MDU") and commercial subscribers.

(3) Market Penetration was derived by dividing the Number of Subscribers in each
market as of June 30, 1996 by the number of Estimated LOS Households as of
December 31, 1995 in that market. Total Market Penetration was derived by
dividing the Total Number of Subscribers as of June 30, 1996 for all
Operating Systems by the total Estimated LOS Households as of December 31,
1995 for all Operating Systems.

(4) Based upon estimates of household growth by CACI Marketing Systems ("CACI")
and the Company's LOS household engineering studies, the Company estimates
the LOS households in its markets will increase by 9.8% from 1995 to 2000.
CACI projects a U.S. mean household growth rate of 5.3% for the same period.

(5) Spectrum is measured in megahertz ("MHz"), with each wireless cable channel
containing 6 MHz of bandwidth except for channel 2A which contains 4 MHz.
The Sacramento System includes channel 2, which is a full 6 MHz of
bandwidth, but all of the remaining systems include channel 2A. The Number
of Channels Controlled and Amount of Spectrum Controlled figures include one
6 MHz Low Power Television ("LPTV") channel in Fort Pierce and three 6MHz
LPTV channels in Melbourne.

(6) Percentage of Commercial Licenses Owned is calculated by dividing the number
of commercial channels for which licenses are owned by the Company by the
total number of commercial channels for which licenses are available in each
market, in each case exclusive of LPTV channels. The Company owns the
licenses for the following number of commercial channels in each market:
Fort Pierce, 13; Melbourne, 13; West Palm Beach, 11; Boise, 18; Sacramento,
2; Yakima, 14; Coos Bay, 20; Eureka, 10; Helena, 21; Kennewick, 9; Klamath
Falls, 21; and Roseburg, 21. The total number of commercial channels
available for license ownership in Fort Pierce, Melbourne, West Palm Beach,
Sacramento, Eureka and Kennewick is 13 and the total number of commercial
channels available for license ownership in Boise, Yakima, Coos Bay, Helena,
Klamath Falls and Roseburg is 21, of which 8 are commercially available ITFS
channel licenses. See "Business -- Licenses and Channel Leases." In the
markets where ITFS channel licenses are commercially available, the Company,
as the holder of the exclusive right to apply for currently and subsequently
available commercial channels (the "BTA Authorization"), has the exclusive
right to file license applications under FCC rules and regulations, subject
only to applications of educational and non-profit institutions and
restrictions resulting therefrom. See "Risk Factors -- Uncertainty of
Ability to Obtain FCC Authorizations."

(7) The Number of Channels Controlled, Amount of Spectrum Controlled and the
Percentage of Commercial Licenses Owned data for West Palm Beach are subject
to the receipt of certain approvals from the FCC and/or third party
interference agreements. Any delays or failures in obtaining governmental
approvals or interference agreements may delay the Company from launching
the West Palm Beach System, transmitting the maximum number of channels it
controls, or may cause the Estimated LOS Households in West Palm Beach to be
decreased. See "Risk Factors -- Interference Issues."

(8) The Number of Channels Controlled, Amount of Spectrum Controlled and
Percentage of Commercial Licenses Owned data contained in the table for the
Kennewick System are subject to the consummation of the Kennewick

acquisition. See "Business -- History."

5
<PAGE> 7

THE OFFERING

<TABLE>
<S> <C>
Class A Common Stock Offered Hereby................ 2,350,000 shares
Common Stock to be Outstanding after the Offering:
Class A Common Stock.......................... 3,062,621 shares(1)
Class B Common Stock.......................... 8,366,515 shares(2)(3)
----------------------------------------
Total.................................... 11,429,136 shares(3)
=======================================
Voting Rights...................................... Each share of Class A Common Stock is
entitled to one vote and each share of
Class B Common Stock is entitled to ten
votes on all matters requiring a
shareholder vote. Each class of Common
Stock has identical economic rights. See
"Description of Capital Stock -- Common
Stock."
Use of Proceeds.................................... To repay in full its outstanding
indebtedness under the Revolving Credit
Facility and to finance further
expansion and development of the
Operating Systems, capital expenditures
and operating expenses in connection
with the launch and development of the
Planned Systems and possible
acquisitions of additional wireless
cable systems, assets or channel rights.
Proposed Nasdaq National Market Symbol............. WBSA
</TABLE>

- -------------------------

(1) Reflects the 2,350,000 shares of Class A Common Stock offered hereby and an
additional 712,621 shares of Class A Common Stock issuable in payment of the
accrued dividend on the Convertible Preferred Stock through October 31, 1996
(the estimated closing date of the Offering). The actual number of shares of
Class A Common Stock issued in the conversion of the accrued dividend will
be dependent on the actual closing date of the Offering.

(2) Class B Common Stock is convertible into Class A Common Stock on a
one-for-one basis at the option of the holder and in certain other
circumstances. See "Description of Capital Stock -- Common Stock."

(3) Does not include 407,475 shares of Class B Common Stock issuable upon
exercise of stock options anticipated to be outstanding as of October 31,
1996, of which options to purchase 355,328 shares have an exercise price of
$8.37, and options to purchase 52,147 shares have an exercise price at the
initial public offering price per share. As of October 31, 1996 options to
purchase 123,275 shares are currently exercisable. See "Description of
Capital Stock."

6
<PAGE> 8

SUMMARY CONSOLIDATED FINANCIAL DATA

The summary consolidated financial data as of and for each period in the
three year period ended December 31, 1995 have been derived from audited
financial statements of the Company and its subsidiaries. The following summary
consolidated financial data for the six month periods ended June 30, 1995 and
June 30, 1996 have been derived from unaudited consolidated financial statements
that in the opinion of the Company reflect all adjustments (consisting of normal
recurring adjustments) necessary to present fairly the financial data for such
periods.

The summary pro forma consolidated statement of operations and other data
give effect to: (a) the acquisition of the Boise and Yakima Systems (the
"Acquisitions"); (b) the application of the proceeds from the issuance of the
Convertible Preferred Stock to effect the Acquisitions; and (c) the conversion
of all outstanding shares of Convertible Preferred Stock into Class B Common
Stock and the accrued dividend into Class A Common Stock (the "Conversion"), as
if all such events had occurred on January 1, 1995. The Acquisitions, the
issuance of Convertible Preferred Stock and the Conversion are referred to
collectively herein as the "Transactions." The pro forma data should not be
considered indicative of actual results that would have been achieved had the
events described above been consummated on the date or for the periods indicated
and do not purport to indicate results of operations for any future period.

These data should be read in conjunction with the Consolidated Financial
Statements of the Company and Notes thereto, "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Pro Forma
Consolidated Financial Data," each of which is included elsewhere in this
Prospectus. The Consolidated Financial Statements include operations of the
Predecessor Partnership to March 1994, and the operations of the Company
thereafter. The Company's acquisition and development of its systems during the
periods reflected in the Summary Consolidated Financial Data materially affect
the comparability of that data from one period to another. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
-------------------------------------------------- -----------------------------------------
PRO FORMA PRO FORMA PRO FORMA
1992 1993 1994 1995 1995(B) 1995 1996 1995(B) 1996(B)
------- ------- ------- -------- --------- ------- ------- --------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:(A)
Revenues....................... $ 361 $ 2,669 $ 9,591 $ 16,874 $18,431 $ 7,480 $10,190 $ 9,037 $10,190
Expenses....................... 1,804 6,758 13,998 24,054 25,801 10,559 13,604 13,604 13,604
Loss from operations........... (1,443) (4,089) (4,407) (7,180) (7,370) (3,079) (3,414) (3,269) (3,414)
Interest income (expense),
net.......................... 94 39 (539) (447) (169) (274) (493) 4 (493)
Net loss....................... (1,337) (4,015) (4,938) (7,627) (7,539) (3,353) (3,907) (3,265) (3,907)
Preferred stock dividend
requirement.................. -- -- -- (2,414) -- (611) (1,894) -- --
Net loss applicable to
common stock................. (1,337) (4,015) (4,938) (10,041) (7,539) (3,964) (5,801) (3,265) (3,907)
Net loss per common share(c)... $ (1.17) $ (2.10) $ (1.31) $ (2.40) $ (0.83) $ (0.95) $ (1.39) $ (0.36) $ (0.43)
Weighted average common and
common equivalent shares
outstanding(c)............... 1,144 1,913 3,762 4,181 9,074 4,181 4,181 9,074 9,074
</TABLE>

<TABLE>
<CAPTION>
JUNE 30, 1996
------------------------
AS
ACTUAL ADJUSTED(D)
------- -----------
(IN THOUSANDS)
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................................................. $ 217 $19,655
Investment in wireless cable systems, net................................................. 54,755 54,755
Total assets.............................................................................. 58,271 77,709
Long-term debt, including current portion................................................. 12,545 --
Convertible preferred stock............................................................... 39,308 --
Total stockholders' equity................................................................ 1,080 72,370
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
------------------------------------------------- -----------------------------------------
PRO FORMA PRO FORMA PRO FORMA
1992 1993 1994 1995 1995(B) 1995 1996 1995(B) 1996(B)
------- ------- ------- ------- --------- ------- ------- --------- ---------
(IN THOUSANDS, EXCEPT SYSTEM AND SUBSCRIBER DATA)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
OPERATING AND OTHER DATA:
EBITDA(e)....................... $(1,069) $(2,489) $ 242 $ 3,169 $ 3,778 $ 1,477 $ 1,971 $ 2,086 $ 1,971
Systems in operation at
end of period................. 1 2 3 5 5 5 5 5 5
Total subscribers at end of
period........................ 3,500 11,500 34,600 57,000 57,000 52,700 63,100 52,700 63,100
</TABLE>

- -------------------------

(footnotes on next page)

7
<PAGE> 9

(a) During the period from inception (October 1991) through March 15, 1994, the
Company operated as a Delaware limited partnership. Subsequent to March 15,
1994, the Company has operated as a Delaware corporation.

(b) The summary pro forma consolidated statement of operations and other data
give effect to the Transactions as if such events had occurred on January 1,
1995. See "Pro Forma Consolidated Financial Data."

(c) Excludes the common stock equivalents of employee stock options, as the
effect on all periods presented is anti-dilutive. The computation of
weighted average common and common equivalent shares outstanding and net
loss per common share for years prior to 1995 assumes a pro forma issuance
of common shares to the partners in exchange for their partnership interests
at the time of, and in proportion to, partner capital contributions to the
Predecessor Partnership.

(d) As adjusted (i) to reflect sale of 2,350,000 shares of Class A Common Stock
offered hereby at an offering price of $15.00 per share (the mid-point of
the range of the anticipated initial public offering price) after deducting
underwriting discounts and commissions and estimated offering expenses, and
the application of the estimated net proceeds therefrom; and (ii) the
Transactions.

(e) "EBITDA" means net income (loss) before interest income, interest expense,
income taxes, depreciation and amortization expenses. EBITDA is commonly
used as a measure of performance in the subscription television industry;
however, EBITDA does not purport to represent cash provided by or used in
operating activities and should not be considered in isolation or as a
substitute for measures of performance in accordance with generally accepted
accounting principles. EBITDA is also a primary factor in determining the
effective interest rate and maximum borrowings under the Revolving Credit
Facility. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- Liquidity and Capital Resources."

8
<PAGE> 10

RISK FACTORS

An investment in the Class A Common Stock offered hereby involves a high
degree of risk. Prospective investors should carefully consider the following
risk factors, in addition to the other information in this Prospectus, in
connection with an investment in the Class A Common Stock offered hereby.

This Prospectus contains statements which constitute forward looking
statements within the meaning of Section 27A of the Securities Act of 1933, as
amended (the "Securities Act") and Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Those statements appear in a number of
places in this Prospectus and include statements regarding the intent, belief or
current expectations of the Company, its directors or its officers with respect
to, among other things: (i) potential acquisitions or joint ventures by the
Company; (ii) the use of the proceeds of the Offering; (iii) the Company's
financing plans; (iv) trends affecting the Company's financial condition or
results of operations; (v) the Company's growth strategy and operating strategy;
(vi) the declaration and payment of dividends; or (vii) regulatory matters
affecting the Company. Prospective investors are cautioned that any such forward
looking statements are not guarantees of future performance and involve risks
and uncertainties, and that actual results may differ materially from those
projected in the forward looking statements as a result of various factors. The
accompanying information contained in this Prospectus, including without
limitation the information set forth under the headings "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" and "Business," identifies important factors that could cause such
differences.

LIMITED OPERATIONS; HISTORY OF LOSSES. The Company's operations commenced
in May 1992. The Operating Systems include the Fort Pierce and Melbourne
Systems, in which the Company initiated service in 1992 and 1993, respectively,
and the Sacramento, Boise and Yakima Systems, which the Company acquired in
March 1994, March 1995 and April 1995, respectively. Prospective investors,
therefore, have limited historical financial information about the Company upon
which to base an evaluation of the Company's performance and an investment in
the Class A Common Stock. Given the Company's limited operating history, there
can be no assurance that it will be able to compete successfully in the
subscription television industry.

The Company has recorded net losses in each year of its operations. At June
30, 1996, the Company's accumulated deficit was approximately $26.1 million.
Losses incurred since inception are attributable primarily to start-up costs,
subscriber service costs, interest expense and depreciation of assets required
to develop wireless cable systems. The Company expects to continue to experience
net losses while it develops and expands its wireless cable systems. There can
be no assurance that the Company will generate sufficient operating revenues to
sustain positive EBITDA or to achieve positive net income in the foreseeable
future. See "Capitalization" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

CAPITAL REQUIREMENTS FOR GROWTH; NEED FOR ADDITIONAL FINANCING. The growth
of the Company's business requires substantial investment on a continuing basis
to finance capital expenditures and related expenses for expansion of the
Company's subscriber base and system development. The Company may require
additional financing, through debt or equity financings, joint ventures or other
arrangements, to cover ongoing operating losses. Additional equity or debt also
may be required to finance future acquisitions of wireless cable operations,
assets or channel interests. There can be no assurance that the Company will be
able to obtain additional debt or equity on satisfactory terms, or at all, to
meet its future financing needs. The Company's future capital requirements also
will depend upon a number of factors, including marketing expenses, staffing
levels and subscriber growth, as well as other factors that are not within the
Company's control, such as competitive conditions, programming costs and capital
costs. The lack of available additional capital could have a material adverse
effect on the Company and its ability to compete successfully in the
subscription television industry. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources."

CONTROL BY EXISTING STOCKHOLDERS; CONFLICT OF INTEREST. As of October 31,
1996 and after giving effect to the Offering, Boston Ventures would have owned
approximately 42.4% of the Common Stock which would have represented 48.3% of
the voting power of the Common Stock. Pursuant to the Stockholders Agreement,

9
<PAGE> 11

Boston Ventures has the right to designate two persons to be elected to the
Company's Board of Directors who may not be removed except by a unanimous vote
of the Board of Directors and whose vote is required to approve certain material
transactions. As a result of its ownership interest and its contractual
relationships with the Company, Boston Ventures, although not involved in the
day-to-day management of the Company, is in a position to influence material
events affecting the business and affairs of the Company. In addition, as of
October 31, 1996 approximately 13.7% of the Common Stock representing 18.0% of
the voting power of the Common Stock, after giving effect to the Offering, is
beneficially owned by Dean L. Buntrock or members of his family. There can be no
assurance that the interests of these stockholders and the other stockholders
will not conflict. See "Principal Stockholders -- Stockholders Agreement," "--
Preferred Stock Purchase Agreement" and "-- Authority to Issue Preferred Stock;
Anti-Takeover Provisions." Also, under the Company's Revolving Credit Facility,
specified changes in the percentage of Common Stock held by certain of the
Company's shareholders could result in an event of default.

COMPETITION AND NEW TECHNOLOGIES. The subscription television industry is
highly competitive. While wireless cable systems typically compete directly with
both hard-wire cable companies and satellite delivery systems, recent regulatory
changes and technological developments have encouraged new competitors, such as
telephone companies, to enter the subscription television business. Many of the
Company's existing or potential competitors have substantially greater name
recognition and greater financial, technical and human resources than the
Company and therefore may be better able to develop and operate subscription
television systems. The hard-wire cable companies competing in the Company's
operating markets currently offer approximately 12 to 70 channels to their
subscribers, compared to between 29 and 36 channels offered by the Company.
While the Company believes that its lower prices provide a competitive
advantage, aggressive price competition by any existing or new competitor would
likely have a material adverse effect on the Company's results of operations and
financial condition. The subscription television industry also competes with
conventional over-the-air broadcast television stations and, in areas where
several off-air television signals can be received free, subscription television
systems have found market penetration to be more difficult.

New and advanced technologies for the subscription television industry,
such as Local Multipoint Distribution Service ("LMDS") and direct broadcast
satellite services ("DBS"), are in various stages of development. In addition,
digital video compression ("DVC") and fiber optic networks are being implemented
and supported by entities such as hard-wire cable companies and regional
telephone companies which are likely to have greater resources than the Company.
When fully deployed, these new technologies could have a material adverse effect
on the demand for wireless cable services. There can be no assurance that the
Company will be able to compete successfully with existing competitors or new
entrants in the market for subscription television services. See "Industry
Overview -- Competition."

DIFFICULTIES AND UNCERTAINTIES OF A NEW INDUSTRY. Wireless cable television
is a developing industry with a relatively short operating history. Potential
investors should be aware of the difficulties and uncertainties normally
associated with developing industries, such as a lack of consumer acceptance,
difficulty in obtaining financing, increasing competition, advances in
technology and changes in laws and regulations. There can be no assurance that
the wireless cable industry will develop and survive as a viable industry. See
"Industry Overview -- Wireless Cable Industry."

GOVERNMENT REGULATION. The right to transmit video programming,
entertainment services and other information on wireless frequencies is
regulated by the Federal Communications Commission (the "FCC"). In each
metropolitan market, the FCC has allocated 33 channels for the primary purpose
of wireless transmissions of video programming. Licenses for both Multipoint
Distribution Service ("MDS") and Instructional Television Fixed Service ("ITFS")
channels are granted based upon applications filed with the FCC. Depending upon
availability and interference considerations, the FCC also may license LPTV
channels in certain markets that can be used in conjunction with the MDS and
ITFS channels in a wireless cable system. FCC approval is also required for
license amendments, license modifications, license assignments, transfers of
control of licensees and license renewals. The FCC imposes restrictions and
conditions upon the use and operation of channels. FCC licenses are limited in
duration and subject to renewal procedures.

UNCERTAINTY OF ABILITY TO OBTAIN FCC AUTHORIZATIONS. All of the channels
composing a wireless cable system must operate from the same transmitter site so
that subscribers may receive a clear picture on all

10
<PAGE> 12

channels offered. In the Company's seven Planned Systems, it does not currently
have the right to operate a sufficient number of channels from a single
transmitter site. In these markets, the Company is dependent upon the following
types of approvals from the FCC before operations in a coordinated manner can
begin: (i) grant of pending applications for new licenses or for modification of
existing licenses; and (ii) grant of new station applications and license
modification applications, which have not yet been filed with the FCC.
Currently, the Company has applications pending with the FCC in most of its
markets. See "Business -- The Company's Markets." There can be no assurance that
any of these applications will be granted by the FCC. The Company believes that
denial of any single application will not adversely affect the Company. However,
denial of several applications, particularly if concentrated in one or a few of
the Company's markets, could have a material adverse effect on the ability of
the Company to serve such market or markets. See "Industry Overview --
Regulatory Environment -- Licensing Procedures."

MDS authorizations may not be granted to a cable operator if a portion of
the MDS station's protected service area is within a franchise area actually
served by the cable operator. Although the Company is not a cable operator and
its investors, including Boston Ventures, are not cable operators, two
affiliates of Boston Ventures own interests in Falcon Holding Group, L.P.
("Falcon"). Under the FCC's attribution rules, these interests could be
attributed to Boston Ventures and the Company and thereby call into question the
cable cross-ownership rules in communities where the Company owns or seeks to
own MDS authorizations and Falcon operates cable systems. In March 1995, before
Boston Ventures invested in the Company, the Company sought and received a
waiver of the cable cross-ownership rules from the FCC relating to the extent of
cross-ownership between the Company and Falcon. The market of particular concern
at that time was Melbourne. However, subsequent to receiving the waiver, the
Company bid for and won the BTA Authorizations for Melbourne and three other
markets where Falcon operates cable systems: Coos Bay, Eureka and Roseburg.
While an additional waiver request may not have been necessary, the Company has
requested waivers from the FCC in each of the three other markets, although no
additional waiver was requested for Melbourne. The FCC has informally raised
with the Company the issue of whether the waiver would encompass the entire
Melbourne BTA. There can be no assurance that the Company will obtain the
requisite governmental approvals for these or any other markets where the
conflict may exist.

While current FCC rules are intended to promote development of a
competitive subscription television industry, the statutes, rules and
regulations affecting the subscription television industry could change and any
future changes in FCC rules, regulations, policies or procedures could have a
material adverse effect on the industry as a whole and the Company in
particular.

EFFECT OF THE TELECOMMUNICATIONS ACT OF 1996. In February 1996, the
Telecommunications Act of 1996 (the "1996 Act") was enacted, resulting in
comprehensive changes to the regulatory environment for the telecommunications
industry as a whole and the competitive environment in which the Company
operates. The 1996 Act substantially reduces regulatory authority over hard-wire
cable rates and affords hard-wire cable operators greater flexibility to offer
different rates to certain of their subscribers, and thereby permits them to
offer discounts on hard-wire cable service to the Company's subscribers or
prospective subscribers. The 1996 Act also permits telephone companies to enter
the video distribution business, subject to certain conditions. The entry into
the video distribution business by telephone companies who have existing coaxial
and in certain instances, fiber optic, cable networks and greater access to
capital and other resources, could provide significant competition to wireless
cable providers, including the Company. In addition, the legislation affords
relief to DBS service by preempting the authority of local governments to impose
certain taxes. The 1996 Act delegates to the FCC the authority to adopt
regulations implementing certain of its provisions. The Company cannot
reasonably predict the substance of rules and policies to be adopted by the FCC
or the effect of the legislation and any such rules on the Company's operations.
See "Industry Overview -- Regulatory Environment -- The 1996 Act."

PHYSICAL LIMITATIONS OF WIRELESS CABLE TRANSMISSION. Line-of-sight wireless
cable programming is transmitted via microwave frequencies from a head-end to a
small receive-site antenna at each subscriber's location. Reception of wireless
cable programming generally requires a direct, unobstructed line-of-sight from
the head-end to the subscriber's receive-site antenna. Therefore, in communities
with hilly terrain, dense foliage, tall buildings or other obstructions in the
transmission path, wireless cable transmissions can be

11
<PAGE> 13

difficult or impossible to receive at certain locations. Consequently, the
Company may not be able to supply service to certain potential subscribers
within its service areas. While the Company intends to employ signal repeaters
to overcome line-of-sight obstructions, there can be no assurance that it will
be able to secure the necessary FCC authorizations for the repeaters. In
addition to line-of-sight obstructions, in limited circumstances extremely
adverse weather can damage individual receive-site antennae as well as
transmission equipment.

INTERFERENCE ISSUES. Interference from other wireless cable systems can
limit the ability of a wireless cable system to serve any particular point.
Historically, the FCC's primary concern in licensing MDS and ITFS stations has
been avoiding situations where proposed new or modified stations are predicted
to cause interference to the reception of previously proposed or authorized
stations. Since conclusion of the Basic Trading Area ("BTA") auctions (the "BTA
Auctions"), the FCC also is now concerned that proposed stations not cause
interference along BTA boundaries. MDS and ITFS licensees that were in existence
before the advent of the BTA Auctions ("incumbent licensees") are protected from
interference within a 35-mile radius of their transmission site. Licenses issued
in connection with a BTA Authorization will be protected from interference from
other proposed new or modified BTA Authorizations at the BTA boundary. The FCC
has recently indicated that additional interference protections may also be
available for such licenses.

Where the FCC-prescribed interference protection standards cannot be met,
negotiation of interference agreements with nearby licensees is necessary in
order to receive FCC grant of pending applications. At this time, the Company is
aware that it will be required to negotiate interference agreements in West Palm
Beach, Yakima and Kennewick (following acquisition) in order to obtain the grant
of its pending applications. See "Business -- The Company's Markets." In
launching or upgrading a system, the Company may wish to relocate its
transmission facility or increase its height or signal power in order to serve
its targeted market. If such changes would cause the Company's signal to violate
the above-referenced interference standards in the protected service areas of
other wireless license holders, the Company would be required to negotiate
interference agreements with such other license holders. There can be no
assurance that the Company will be able to negotiate all necessary interference
agreements on terms acceptable to the Company or that the FCC will approve the
Company's applications. In the event that the Company cannot obtain interference
agreements required to implement the Company's plans for a market, the Company
may have to curtail or modify operations in that market, utilize a less optimal
tower location or reduce the height or power of the transmission facility, which
could have a material adverse effect on the growth of the Company in that
market.

With respect to the Company's planned West Palm Beach System, the Company
is a party to a settlement agreement which resolves mutually exclusive
applications for ITFS licenses, and is seeking FCC approval to modify existing
and proposed ITFS facilities. License holders who intend to initiate a wireless
cable service in Miami have opposed the proposed settlement agreement. The
Company has filed a formal objection to the opposition by the Miami license
holders, and believes that an agreement acceptable to all parties can be
reached. However, there can be no assurance that the Company will be able to
negotiate successfully such an agreement. The Company believes that the failure
to negotiate an interference agreement could lead to interference affecting
approximately 25.0% of the LOS households in the West Palm Beach market.

DEPENDENCE ON KEY INDIVIDUALS. The Company is dependent in large part on
the experience and knowledge of its senior management, particularly William W.
Kingery, Jr., President and Chief Executive Officer of the Company. The loss of
the services of Mr. Kingery could have a material adverse effect upon the
Company, including causing a default under the Company's $40.0 million revolving
credit facility (the "Revolving Credit Facility"). The Company has entered into
an employment agreement with Mr. Kingery. See "Management -- Employment
Agreements."

NEED TO MANAGE GROWTH. Since inception, the Company has experienced rapid
growth in the number of its employees, the scope of its operating and financial
systems and the geographic area of its operations. This growth has increased the
operating complexity of the Company and the level of responsibility for
management personnel. Through acquisition of new systems and the development of
its Operating Systems and Planned Systems, the Company expects to continue to
experience rapid growth. In managing this growth, the

12
<PAGE> 14

Company will be required to continue to expand its operating and financial
systems and to train and manage its employee base. There can be no assurance
that the Company will be able to attract and retain qualified employees to meet
the Company's needs during its growth.

DEPENDENCE UPON PROGRAM MATERIAL AND CHANNEL LEASE AGREEMENTS. The Company
has fixed-term contracts with various program suppliers, such as CNN, ESPN and
HBO. These contracts generally cover a period of one to ten years and are
typically renewable upon expiration. Although the Company has no reason to
believe that these contracts will not be renewed upon expiration, if the
contracts are not renewed, the Company will be required to seek program material
from other sources. While current legislation requires that vertically
integrated multiple cable system operators ("MSOs") sell programming to their
competitors on fair and reasonable terms, there can be no assurance that the
Company will be able to procure programming at favorable rates. Certain portions
of that legislation unrelated to programming access are the subject of various
legal challenges. See "Industry Overview -- Regulatory Environment."

Although the Company's strategy is to own a significant number of the
available wireless cable channel licenses in each of its markets, the Company,
particularly in its Sacramento System, is dependent on leases with third parties
for some of its wireless cable channels. Under FCC rules, the terms of certain
of the leases cannot exceed ten years. While many of the Company's leases
provide for automatic renewals, or provide the Company with a right of first
refusal in the event the lessor proposes to lease channels to a third party,
there can be no assurance that these leases will be renewed or extended beyond
their current terms or on terms satisfactory to the Company. Similarly, the
failure by these lessors to comply with the terms of their FCC authorizations or
rules could result in the termination or forfeiture of their authorizations or
the denial of their license renewal by the FCC. While the Company's lease
agreements with license holders typically require the license holders, at the
Company's expense, to use their best efforts, in cooperation with the Company,
to make various required filings with the FCC in connection with the maintenance
and renewal of licenses, any terminations, forfeitures or denial of license
renewal by the FCC or failure to obtain renewal of channel lease agreements
would result in a reduction of the amount of programming the Company offers in
some markets. In addition, while the Company's leases with MDS and ITFS
licensees require their cooperation, it is possible that one or more of such
licensees may hinder or delay the Company's efforts to use the channels. See
"Business -- Licenses and Channel Leases."

SHARES ELIGIBLE FOR FUTURE SALE. Upon completion of the Offering and based
on the shares of Common Stock outstanding as of October 31, 1996, the Company
will have a total of 11,429,136 shares of Common Stock outstanding, assuming no
exercise of vested options after October 31, 1996. Of these shares, the
2,350,000 shares of Class A Common Stock offered hereby (2,702,500 shares if the
Underwriters' over-allotment option is exercised in full) will be freely
tradable without restriction or registration under the Securities Act by persons
other than "affiliates" of the Company, as defined under the Securities Act. The
712,621 shares of Class A Common Stock issued in connection with the Conversion
as of October 31, 1996, the 8,366,515 shares of Class B Common Stock outstanding
and any shares purchased in this Offering by an affiliate are "restricted
shares" as that term is defined by Rule 144 as promulgated under the Securities
Act ("Restricted Shares"). Because Class B Common Stock is convertible into
Class A Common Stock, however, sales of Restricted Shares in the public market,
or the availability of such shares for sale, could adversely affect the market
price of the Class A Common Stock. Of the 9,079,136 shares of Common Stock
currently held by the Company's stockholders, agreements with respect to
9,074,269 of such shares have been entered into providing that the holders of
such shares will not directly or indirectly, offer, sell, offer to sell,
contract to sell, pledge, grant any option to purchase or otherwise sell or
dispose (or announce any offer, sale, offer of sale, contract of sale, pledge,
grant of any option to purchase or other sale or disposition) of any shares of
Common Stock or other capital stock, or any securities convertible into, or
exercisable or exchangeable for, any shares of Common Stock or other capital
stock of the Company, for a period of 180 days after the date of this
Prospectus, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters.

In addition, holders of 8,366,515 shares of Class B Common Stock may
require the Company to register their shares of Class B Common Stock under the
Securities Act, which would permit such holders to resell

13
<PAGE> 15

without complying with Rule 144. Such holders have, however, waived their
registration rights with respect to the Offering. See "Principal
Stockholders -- Stockholders Agreement" and "Description of Capital Stock."

The Company has reserved for issuance 200,000 shares of Class B Common
Stock under the Directors Plan and 539,371 shares of Class B Common Stock under
the Stock Option Plan. As of October 31, 1996, options to purchase a total of
407,475 shares of Class B Common Stock pursuant to the Stock Option Plan were
outstanding, of which options to purchase 355,328 shares have an exercise price
of $8.37 and options to purchase 52,147 shares have an exercise price at the
initial public offering price per share. As of October 31, 1996, options to
purchase 123,275 shares are exercisable. Of the shares issuable upon exercise of
outstanding options, 399,792 are subject to a similar lock-up period with
respect to such shares. See "Management -- Stock Option Plan" and
"Underwriting."

Rule 701 under the Securities Act provides that, beginning 90 days after
the date of this Prospectus, shares of Common Stock acquired upon the exercise
of outstanding options may be resold by persons other than affiliates subject
only to the manner of sale provisions of Rule 144, and by affiliates subject to
all provisions of Rule 144 except its two-year minimum holding period. The
Company intends to file one or more registration statements on Form S-8 under
the Securities Act to register shares of Common Stock subject to stock options.
See "Management -- Non-Employee Director Stock Option Plan."

Sales of substantial amounts of such shares in the public market, or the
perception that such sales could occur, could adversely affect the trading price
of the Class A Common Stock and could impair the Company's future ability to
raise capital through an offering of its equity securities. See "-- Absence of a
Public Market and Substantial Possible Volatility of Stock Price," "Shares
Eligible for Future Sale" and "Description of Capital Stock."

AUTHORITY TO ISSUE PREFERRED STOCK; ANTI-TAKEOVER PROVISIONS. The Company's
Board of Directors has the authority to issue up to 10,000,000 shares of
preferred stock and to determine the price, rights, preferences and privileges
of those shares without any further vote or action by the Company's
stockholders. In addition, the rights of the holders of Common Stock will be
subject to, and may be adversely affected by, the rights of the holders of any
shares of preferred stock which may be issued in the future. While the Company
has no present intention to issue shares of preferred stock, such issuance,
while providing desirable flexibility in connection with possible acquisitions
and other corporate purposes, could have the effect of making it more difficult
for a third party to acquire a majority of the outstanding voting stock of the
Company. In addition, such preferred stock may have other rights, including
economic rights senior to the Common Stock, and, as a result, the issuance
thereof could have a material adverse effect on the market value of the Common
Stock.

Certain provisions of the Company's Second Restated Certificate of
Incorporation (the "Certificate") could delay, defer or prevent a takeover
attempt that a stockholder might consider in the Company's best interest. These
provisions may adversely affect prevailing market prices for the Class A Common
Stock. These provisions include the terms of the Class B Common Stock, which has
ten votes per share for every one vote per share by Class A Common Stock, and
the authority of the Board of Directors to issue preferred stock in one or more
series without the consent of the holders of Class A Common Stock. In addition,
Section 203 of the Delaware General Corporation Law (the "Delaware Act")
prohibits the Company from engaging in a "business combination" with an
"interested stockholder" for a period of three years after the date of the
transaction in which the person first becomes an "interested stockholder" unless
the business combination is approved in a prescribed manner. The application of
Section 203 also could have the effect of delaying or preventing a change of
control of the Company. The Stockholders Agreement also may make it difficult in
some respects to effect a change in control of the Company and replace incumbent
management. The existence of these provisions may have a negative impact on the
price of the Class A Common Stock, may discourage third party bidders from
making a bid for the Company. See "Principal Stockholders -- Stockholders
Agreement" and "Description of Capital Stock."

LACK OF DIVIDEND HISTORY. The Company has never declared or paid any cash
dividends on any of its Common Stock and does not expect to declare any such
dividends in the foreseeable future. Payment of any future dividends will depend
upon earnings and capital requirements of the Company, the terms of the
Company's credit facilities, the terms of any preferred stock and other factors
the Board of Directors consider

14
<PAGE> 16

appropriate. The Company currently intends to retain earnings, if any, to
support continuing growth and expansion. In connection with the conversion of
the Convertible Preferred Stock immediately prior to the closing of the Offering
the accrued dividend on such shares will be converted into shares of Class A
Common Stock. See "Dividend Policy" and "Management's Discussion and Analysis of
Financial Condition -- Liquidity and Capital Resources."

DILUTION. The anticipated initial public offering price of the Class A
Common Stock of $15.00 per share (the mid-point of the range of the anticipated
initial public offering price) is substantially higher than the net tangible
book value per share of Common Stock. Investors in shares of Class A Common
Stock offered hereby will incur immediate and substantial dilution in the net
tangible book value per share of Common Stock from the initial public offering
price, and may incur substantial additional dilution upon the exercise of
outstanding stock options by holders thereof. See "Dilution."

ABSENCE OF A PUBLIC MARKET AND SUBSTANTIAL POSSIBLE VOLATILITY OF STOCK
PRICE. Prior to the Offering, there has been no public market for the Class A
Common Stock, and there can be no assurance that an active trading market will
develop or be sustained. The price of the Class A Common Stock offered hereby
will be determined through negotiations between the Company and the Underwriters
and may not reflect the market price of the Class A Common Stock after the
Offering. See "Underwriting." The market price of the Class A Common Stock could
be subject to wide fluctuations in response to variations in operating results,
announcements of technological innovations or new services by the Company or its
competitors and other events and factors. In addition, in recent years the stock
market has experienced extreme price and volume fluctuations that have affected
the market prices for many emerging growth companies, often being unrelated to
their operating performance. Such market fluctuations could have a material
adverse effect on the market price of the Class A Common Stock.

15
<PAGE> 17

USE OF PROCEEDS

The net proceeds to the Company from the sale of the 2,350,000 shares of
Class A Common Stock offered by the Company assuming an offering price of $15.00
per share (the mid-point of the range of the anticipated initial public offering
price) and after deducting underwriting discounts and commissions and estimated
offering expenses are estimated to be approximately $32.0 million (approximately
$36.9 million if the Underwriters' over-allotment option is exercised in full).
The Company intends to apply the net proceeds to repay all outstanding amounts
under its $40.0 million Revolving Credit Facility, which as of September 30,
1996, was approximately $17.0 million, and to finance further expansion and
development of the Operating Systems, capital expenditures and operating
expenses in connection with the launch and development of the Planned Systems
and possible acquisitions of additional wireless cable systems, assets or
channel rights. Pending use by the Company for the foregoing purposes, the net
proceeds will be invested in short-term, investment grade interest-bearing
securities.

DIVIDEND POLICY

The Company has never declared or paid any cash dividends on any class of
its Common Stock and does not expect to declare any such dividends for the
foreseeable future. Immediately prior to the Offering, the holders of the
Convertible Preferred Stock will convert those shares into shares of Class B
Common Stock and the accrued dividend on the Convertible Preferred Stock into
shares of Class A Common Stock. The Company may not declare dividends on the
Class B Common Stock without declaring an equal per share dividend on the Class
A Common Stock. In addition, the terms of the Revolving Credit Facility prohibit
the payment of dividends so long as any loans are outstanding or the commitment
to lend remains in place. See "Management Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."
Payments of any future dividends (other than stock dividends) will depend upon
earnings and capital requirements of the Company, the Company's credit
facilities, the terms of any preferred stock issued in the future and other
factors the Company's Board of Directors considers appropriate. The Company
currently intends to retain earnings, if any, to support continuing growth and
expansion.

16
<PAGE> 18

CAPITALIZATION

The following table sets forth the capitalization of the Company at June
30, 1996 and as adjusted to: (i) give effect to the sale by the Company of
2,350,000 shares of Class A Common Stock offered hereby, assuming an offering
price of $15.00 per share (the mid-point of the range of the anticipated initial
public offering price) and after deducting underwriting discounts and
commissions and estimated offering expenses and the application of the proceeds
therefrom; and (ii) reflect the Conversion, as of October 31, 1996, of all
outstanding shares of Convertible Preferred Stock to 4,180,824 shares of Class B
Common Stock and the accrued dividend thereon into 712,621 shares of Class A
Common Stock. This table should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Description of Capital Stock -- Convertible Preferred Stock" and the
Consolidated Financial Statements and related Notes thereto included elsewhere
in this Prospectus.

<TABLE>
<CAPTION>
JUNE 30, 1996
----------------------
ACTUAL AS ADJUSTED
------- -----------
(UNAUDITED, $ IN
THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................................ $ 217 $ 19,655
======= =======
Current portion of long term debt........................................ $ 45 $ --
======= =======
Long-term debt:
Revolving Credit Facility(1)........................................... $12,500 $ --
Convertible Preferred Stock, $.01 par value, 35,000 shares authorized,
issued and outstanding, stated at liquidation value, including
cumulative dividends of $4,307,835..................................... 39,308 --
Stockholders' equity:
Preferred Stock, $.01 par value, 10,000,000 shares authorized............ -- --
Class A Common Stock, $.01 par value, 10,000,000 shares authorized, no
shares issued and outstanding; 3,062,621 shares issued and outstanding,
as adjusted............................................................ -- 31
Class B Common Stock, $.01 par value, 15,000,000 authorized, 4,185,691
shares issued and outstanding; 8,366,515 shares issued and outstanding,
as adjusted(2)......................................................... 42 84
Additional paid in capital............................................... 27,170 100,045
Accumulated deficit (3).................................................. (26,132) (27,790)
------- -------
Total stockholders' equity........................................ 1,080 72,370
------- -------
Total capitalization........................................... $52,888 $ 72,370
======= =======
</TABLE>

- -------------------------

(1) In November 1995, the Company entered into the Revolving Credit Facility.
The Revolving Credit Facility becomes a term loan on December 31, 1998, at
which time outstanding borrowings are amortized on a quarterly basis through
December 31, 2002. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

(2) The capitalization table does not reflect 407,475 shares of Class B Common
Stock issuable upon exercise of stock options outstanding as of October 31,
1996 of which options to purchase 355,328 shares have an exercise price of
$8.37 and options to purchase 52,147 shares have an exercise price at the
initial public offering price per share. As of October 31, 1996, options to
purchase 123,275 shares are exercisable. See "Description of Capital Stock."

(3) Reflects the additional accrued dividend on the Convertible Preferred Stock
of approximately $1,658,000 for the period June 1, 1996 through October 31,
1996, the estimated closing date of the Offering.

17
<PAGE> 19

DILUTION

Purchasers of the shares of Class A Common Stock offered hereby will
experience an immediate and substantial dilution in the net tangible book value
per share of their Class A Common Stock from the initial public offering price.
As of June 30, 1996, and after giving effect to the Conversion as of October 31,
1996, the net tangible book value of the Company was $9.1 million, or $0.98 per
share. Net tangible book value per share represents the amount of total tangible
assets less total liabilities, divided by the total number of shares of Common
Stock outstanding. Assuming no changes in the net tangible book value after June
30, 1996, other than to give effect to the sale of the 2,350,000 shares of Class
A Common Stock offered hereby assuming an offering price of $15.00 per share
(the mid-point of the range of the anticipated initial public offering price)
and after deducting underwriting discounts and commissions and estimated
offering expenses, the pro forma net tangible book value of the Company as of
June 30, 1996 would have been $40.9 million, or $3.58 per share ($3.89 per share
if the Underwriters' over-allotment option is exercised in full), representing
an immediate increase in net tangible book value per share of $2.60 to existing
stockholders and an immediate dilution of $11.42 per share to new investors
purchasing shares of Class A Common Stock in the Offering. The following table
illustrates this per share dilution:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share................ $15.00
Net tangible book value before the Offering, as adjusted for
the Conversion............................................ $0.98
Increase per share attributable to sale of shares to new
investors................................................. 2.60
-----
Pro forma net tangible book value after the Offering........... 3.58
------
Dilution of net tangible book value to new investors........... $11.42
======
</TABLE>

The following table sets forth as of June 30, 1996, and after giving effect
to the Conversion, as of October 31, 1996, the number of shares of Common Stock
purchased from the Company, the total effective cash consideration paid, and the
average price per share paid by existing stockholders and by new investors
purchasing shares sold by the Company in the Offering.

<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION
--------------------- ----------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ------------ ------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders................... 9,079,136 79.4% $ 68,684,011 66.1% $ 7.57
New investors........................... 2,350,000 20.6 35,250,000 33.9 15.00
---------- ----- ----------- -----
Total............................ 11,429,136 100.0% $103,934,011 100.0%
========== ===== =========== =====
</TABLE>

The foregoing tables do not include 739,371 shares of Class B Common Stock
reserved for issuance under the Company's stock option plans, of which options
to purchase 407,475 shares are outstanding as of October 31, 1996, of which
options to purchase 355,328 shares have an exercise price of $8.37 and options
to purchase 52,147 shares have an exercise price at the initial public offering
price. As of October 31, 1996, options to purchase 123,275 shares are currently
exercisable. See "Description of Capital Stock."

18
<PAGE> 20

PRO FORMA CONSOLIDATED FINANCIAL DATA

The following unaudited pro forma consolidated statement of operations for
the year ended December 31, 1995, gives effect to: (a) the acquisition of the
Boise and Yakima Systems; (b) the application of the proceeds from the issuance
of the Convertible Preferred Stock to effect the Acquisitions; and (c) the
conversion of all outstanding shares of Convertible Preferred Stock into Class B
Common Stock and the accrued dividend thereon into Class A Common Stock, as if
all such events had occurred on January 1, 1995.

As the acquisitions of the Boise and Yakima Systems occurred in March and
April 1995, respectively, the results of operations from those acquisitions are
included in the Company's historical results of operations subsequent to the
date of acquisition. Accordingly, the Company has not presented an unaudited pro
forma June 30, 1996 consolidated balance sheet or an unaudited consolidated
statement of operations for the six month period ended June 30, 1996. Assuming
the Convertible Preferred Stock was converted to Common Stock on January 1,
1995, thereby eliminating the preferred stock dividend requirement, and assuming
the Company issued 712,621 shares of Class A Common Stock on January 1, 1995 in
the conversion of the accrued dividend through October 31, 1996, the Company's
pro forma net loss per share of Common Stock for the six months ended June 30,
1996 would have been $(3,907,000) or $(0.43) per share.

This pro forma consolidated statement of operations should be read in
conjunction with the Consolidated Financial Statements of the Company and Notes
thereto, as well as the financial statements of Boise Cable Limited Partnership
and Northwest Cable Network included elsewhere in this Prospectus. The pro forma
adjustments, as described in the accompanying notes, are based upon currently
available information and upon certain assumptions that management believes are
reasonable under current circumstances. The pro forma information does not
purport to be indicative of the results which would have been achieved had the
events described above been consummated for the periods indicated and do not
purport to indicate the results of operations for any future period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1995
--------------------------------------------------------------------------------
UNAUDITED UNAUDITED UNAUDITED
WBSA BOISE YAKIMA COMBINED PRO FORMA PRO FORMA
HISTORICAL HISTORICAL(A) HISTORICAL(A) TOTAL ADJUSTMENTS COMBINED
---------- ------------- ------------- --------- ----------- ---------
(UNAUDITED, IN THOUSANDS EXCEPT SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C>
Revenues............................. $ 16,874 $ 551 $ 1,006 $18,431 -- $18,431
Expenses:
System operations.................. 8,913 228 344 9,485 -- 9,485
Selling, general and
administrative................... 4,792 100 276 5,168 -- 5,168
Depreciation and amortization...... 10,349 93 197 10,639 509(b) 11,148
------- ---- ---- ------- ------ -------
Total operating expenses......... 24,054 421 817 25,292 509 25,801
------- ---- ---- ------- ------ -------
Income (loss) from operations........ (7,180) 130 189 (6,861) (509) (7,370)
Interest income...................... 25 -- -- 25 -- 25
Interest expense..................... (472) (32) (146) (650) 456(c) (194)
------- ---- ---- ------- ------ -------
Net income (loss).................... (7,627) 98 43 (7,486) (53) (7,539)
Preferred stock dividend
requirement........................ (2,414) -- -- (2,414) 2,414(d) --
------- ---- ---- ------- ------ -------
Net income (loss) applicable to
common stock....................... $(10,041) $ 98 $ 43 $(9,900) $ 2,361 $(7,539)
======= ==== ==== ======= ====== =======
Net loss per common share............ $ (2.40) $ (2.37) $ (0.83)
======= ======= =======
Weighted average number of common
shares and common equivalent shares
outstanding........................ 4,181 4,181 4,893 9,074
======= ======= ====== =======
</TABLE>

- -------------------------
(a) Historical results of operations are for the period from January 1, 1995 to
March 15, 1995 for the Boise System and for the period from January 1, 1995
to April 30, 1995 for the Yakima System.

(b) Adjusted to reflect additional depreciation and amortization expense
relating to the acquisitions of the Boise and Yakima Systems under the
purchase method of accounting for business combinations.

(c) Adjusted to exclude interest expense relating to seller debt not assumed in
the purchase of the Boise and Yakima Systems and to reduce interest expense
to reflect the repayment of indebtedness with a portion of the proceeds of
the Convertible Preferred Stock.

(d) Reflects elimination of the dividend requirements of the Convertible
Preferred Stock.

19
<PAGE> 21

SELECTED CONSOLIDATED FINANCIAL DATA

The summary selected consolidated financial data as of and for each year in
the three year period ended December 31, 1995 have been derived from the audited
Consolidated Financial Statements of the Company and its subsidiaries. The
following summary selected consolidated financial data for the six month periods
ended June 30, 1995 and June 30, 1996 have been derived from unaudited
consolidated financial statements that in the opinion of the Company reflect all
adjustments (consisting of normal recurring adjustments) necessary to present
fairly the financial data for such periods.

These data should be read in conjunction with the Consolidated Financial
Statements of the Company and Notes thereto and "Management's Discussion and
Analysis of Financial Condition and Results of Operations," each of which is
included elsewhere in this Prospectus. The Company's acquisition and development
of systems during the periods reflected in the Selected Consolidated Financial
Data materially affect the comparability of that data from one period to
another. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31, JUNE 30,
-------------------------------------- -----------------
1992 1993 1994 1995 1995 1996
------- ------- ------- -------- ------- -------
(IN THOUSANDS, EXCEPT PER SHARE, SYSTEM AND SUBSCRIBER
DATA)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:(A)
Revenues......................................... $ 361 $ 2,669 $ 9,591 $ 16,874 $ 7,480 $10,190
Expenses:
System operations.............................. 533 2,818 5,531 8,913 4,017 5,301
Selling, general and administrative............ 897 2,340 3,818 4,792 1,986 2,918
Depreciation and amortization.................. 374 1,600 4,649 10,349 4,556 5,385
------- ------- ------- -------- ------- -------
Total operating expenses.................. 1,804 6,758 13,998 24,054 10,559 13,604
------- ------- ------- -------- ------- -------
Loss from operations............................. (1,443) (4,089) (4,407) (7,180) (3,079) (3,414)
Interest income.................................. 94 62 12 25 13 1
Interest expense................................. -- (23) (551) (472) (287) (494)
Minority interest................................ 12 35 8 -- -- --
------- ------- ------- -------- ------- -------
Net loss......................................... (1,337) (4,015) (4,938) (7,627) (3,353) (3,907)
Preferred stock dividend requirement............. -- -- -- (2,414) (611) (1,894)
------- ------- ------- -------- ------- -------
Net loss applicable to common stock.............. $(1,337) $(4,015) $(4,938) $(10,041) $(3,964) $(5,801)
======= ======= ======= ======== ======= =======
Net loss per common share(b)..................... $ (1.17) $ (2.10) $ (1.31) $ (2.40) $ (0.95) $ (1.39)
======= ======= ======= ======== ======= =======
Weighted average common and common equivalent
shares outstanding(b).......................... 1,144 1,913 3,762 4,181 4,181 4,181
======= ======= ======= ======== ======= =======
BALANCE SHEET DATA AT END OF PERIOD:
Cash and cash equivalents........................ $ 2,004 $ 410 $ 384 $ 584 $ 1,002 $ 217
Investment in wireless cable systems, net........ 3,663 8,611 26,317 48,104 49,150 54,755
Total assets..................................... 7,067 10,751 30,533 52,216 52,965 58,271
Long-term debt, including current portion........ -- 3,000 11,750 5,096 2,567 12,545
Convertible preferred stock...................... -- -- -- 37,414 35,611 39,308
Stockholders' equity(c).......................... 6,330 6,648 17,386 6,839 12,893 1,080
TOTAL OPERATING AND OTHER DATA:
EBITDA(d)........................................ $(1,069) $(2,489) $ 242 $ 3,169 $ 1,477 $ 1,971
Systems in operation at end of period............ 1 2 3 5 5 5
Total subscribers at end of period............... 3,500 11,500 34,600 57,000 52,700 63,100
</TABLE>

- -------------------------

(b) Excludes the common stock equivalents of employee stock options as the
effect on all periods presented is anti-dilutive. The pro forma computation
of weighted average common and common equivalent shares outstanding and net
loss per common share for years prior to 1995 assumes common shares issued
to the partners in exchange for their partnership interests were issued at
the time of, and in proportion to, partner capital contributions to the
Predecessor Partnership.

(c) Prior to March 1994, the Company was a partnership. Total stockholders'
equity for periods prior to the Company's formation represents total
partners' equity with respect to the Predecessor Partnership.

(d) "EBITDA" means net income (loss) before interest income, interest expense,
income taxes, depreciation and amortization expenses. EBITDA is commonly
used as a measure of performance in the subscription television industry;
however, EBITDA does not purport to represent cash provided by or used in
operating activities and should not be considered in isolation or as a
substitute for measures of performance in accordance with generally accepted
accounting principles. EBITDA is a primary factor in determining the
effective interest rate and maximum borrowings under the Revolving Credit
Facility. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Liquidity and Capital Resources."

20
<PAGE> 22

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

OVERVIEW

The Company acquires, develops, owns and operates wireless cable television
systems. The Company currently has systems in operation in Fort Pierce,
Melbourne, Boise, Sacramento and Yakima. The Company also holds wireless cable
channel rights in West Palm Beach, Coos Bay, Eureka, Helena, Klamath Falls and
Roseburg, and has a pending acquisition of channel rights and equipment in
Kennewick.

The Company's goal when launching a new operating system is to achieve
positive EBITDA before the allocation of corporate overhead ("System EBITDA") at
relatively low penetration rates and subscriber levels, within 18 months after
the launch of service. To achieve this goal, the Company launches wireless cable
systems only when it is able to offer a sufficient number of available wireless
cable channels from a transmission site with adequate power to deliver quality
service. The Melbourne System, which is the Company's most recently launched
system, achieved positive System EBITDA after approximately 12 months of service
at a subscriber level of 6,000. Each of the Operating Systems currently
generates positive System EBITDA. The Company, on a consolidated basis and
including corporate overhead expenses, also generates positive EBITDA. The
Company intends to expand into markets that are geographically contiguous or in
close proximity to the Operating or Planned Systems as part of a regional
clustering strategy. Management believes this clustering strategy will create
opportunities to develop economies of scale in marketing, subscriber service,
installation and administrative management, thereby reducing the time necessary
for new system launches to achieve positive System EBITDA. The Company does,
however, consider acquisitions which are not geographically contiguous or in
close proximity to its Operating or Planned Systems but which otherwise meet its
selection criteria.

Historically, the Company has generated net losses and can be expected to
do so for the foreseeable future as it continues to develop additional operating
systems. Such losses may increase as additional systems are commenced or
acquired. As the Company continues to develop systems, positive System EBITDA
from the Operating Systems is expected to be partially or completely offset by
development costs and start-up losses from the Planned Systems.

The Company believes EBITDA is a meaningful measure of performance because
it is commonly used in the subscription television industry to analyze and
compare subscription television companies on the basis of operating performance,
leverage and liquidity. EBITDA is not intended to be a performance measure that
should be regarded as an alternative either to operating income or net income as
an indicator of operating performance or to cash flows as a measure of
liquidity, as determined in accordance with generally accepted accounting
principles.

Revenues consist of television subscription revenues and other revenues,
primarily installation fees and advertising sales. Television subscription
revenues consist of monthly fees paid for basic, expanded basic, premium and
pay-per-view programming and rental charges for additional outlets. Installation
fees are charged in connection with, and recognized as revenue upon, the
initiation of service. Revenues from advertising sales are largely dependent
upon the size of the subscriber base and demand from local advertisers. The
Company currently sells advertising in its Melbourne, Fort Pierce and Sacramento
Systems.

System operating expenses consist principally of programming, channel lease
fees, customer service and technical labor costs related to the servicing of
subscribers and the maintenance of head-end distribution facilities. Programming
costs and channel lease fees (with the exception of certain fixed and minimum
payments) are variable expenses which fluctuate with changes in the number of
subscribers. In particular, the Company's programming expenses depend primarily
upon the number and type of channels offered and are generally based on a
contractual per-subscriber cost. Channel lease costs for each system vary with
the number of channel rights subject to lease agreements and are also generally
based on a contractual per-subscriber cost. The Company believes that owning,
rather than leasing, channel rights provides certain economic and strategic
benefits to the Company. License ownership eliminates the recurring monthly cost
of leasing channels, thereby increasing the Company's EBITDA, and provides the
Company with greater

21
<PAGE> 23

opportunities to offer additional services in connection with the deployment of
new technologies. Other operating expenses, such as head-end rent and utilities,
remain relatively constant, while subscriber billing, copyright fees, bad debt
expenses and other costs fluctuate, but not directly proportionately to
subscriber growth.

Selling, general and administrative expenses ("SG&A") consist of sales and
marketing costs, including advertising and sales commissions, personnel salaries
and related benefit costs and office operations expenses. As the Company
launches additional wireless cable systems, it expects SG&A expenses to increase
as a direct result of hiring additional personnel, establishing new office and
operational centers and incurring pre-operational expenses associated with each
new market launch.

The Company capitalizes costs associated with the installation of
subscriber services, including equipment, installation labor and direct
installation overhead expenses. Such capitalized installation costs are
depreciated over three to five years. Costs incurred to acquire wireless cable
channel licenses are capitalized and amortized generally over the life of the
license, usually not more than ten years. The Company recognizes additional
depreciation expense for any undepreciated cost associated with subscriber
equipment that is not physically recovered upon discontinuance of service to
subscribers. All selling and marketing costs are expensed as incurred.

RESULTS OF OPERATIONS

While the period to period changes described below may be of significant
magnitude in certain cases, the Company believes that the limited operating
history, start-up nature and rapid growth of the Company are pervasive factors
which limit the comparability of operating results between such periods.

Six Months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995

Revenues. Revenues increased $2.7 million, or 36.0%, from $7.5 million for
the six months ended June 30, 1995 to $10.2 million for the six months ended
June 30, 1996. The increase was primarily due to an increase in subscribers in
the Operating Systems. In addition, the acquisition of the Boise and Yakima
Systems in March 1995 and April 1995, respectively, contributed revenues for
only a portion of the prior period as compared to six months of revenues for
1996.

System Operating Expenses. System operating expenses increased $1.3
million, or 32.5%, from $4.0 million for the six months ended June 30, 1995 to
$5.3 million for the six months ended June 30, 1996. System operating expenses
are primarily variable costs and therefore increased correspondingly with the
increase in revenue and subscribers. System operating expenses as a percentage
of revenues decreased from 53.7% in 1995 to 52.0% in 1996 primarily due to lower
operating cost structures for the Boise and Yakima Systems relative to the
Company's other Operating Systems.

Selling, General and Administrative Expenses. SG&A increased approximately
$900,000, or 45.0%, from $2.0 million for the six months ended June 30, 1995 to
$2.9 million for the six months ended June 30, 1996. The increase was primarily
due to incremental costs from the acquisition and integration of the Boise and
Yakima Systems and increased marketing costs relating to the implementation of a
marketing program designed to increase market awareness of the Company and its
services.

Depreciation and Amortization Expense. Depreciation and amortization
expense increased approximately $800,000, from $4.6 million for the six months
ended June 30, 1995 to $5.4 million for the six months ended June 30, 1996. The
increase was due to an increase in depreciable assets resulting from the
acquisition of the Boise and Yakima Systems and installation of new subscriber
equipment in the Operating Systems.

Interest Expense. Interest expense increased $207,000, from $287,000, for
the six months ended June 30, 1995 to $494,000 for the six months ended June 30,
1996. The increase was due to higher average borrowings under the Revolving
Credit Facility in 1996.

22
<PAGE> 24

Net Loss. Net loss increased approximately $500,000, from $3.4 million for
the six months ended June 30, 1995 to $3.9 million for the six months ended June
30, 1996 due to the various factors mentioned above.

Preferred Stock Dividend Requirement. The preferred stock dividend
requirement increased $1.3 million, from approximately $611,000 for the six
months ended June 30, 1995 to $1.9 million for the six months ended June 30,
1996. The increase was due to the fact that the Convertible Preferred Stock was
outstanding for only a portion of 1995 and the compounding of the accrued
dividend in 1996.

Net Loss Applicable to Common Stock. Net loss applicable to common stock
increased $1.8 million, from $4.0 million for the six months ended June 30, 1995
to $5.8 million for the six months ended June 30, 1996 primarily due to the
higher preferred stock dividend requirement in 1996 and other factors mentioned
above.

Year Ended December 31, 1995 Compared to Year Ended December 31, 1994

Revenues. Revenues increased $7.3 million, or 76.0%, from $9.6 million for
the year ended December 31, 1994 to $16.9 million for the year ended December
31, 1995. The increase was primarily due to the addition of new subscribers from
the acquisition of the Boise and Yakima Systems and subscriber growth in the
other Operating Systems. In addition, the acquisition of the Sacramento System
in March 1994 contributed only nine months of revenues in 1994 compared to a
full 12 months of revenues in 1995.

System Operating Expenses. System operating expenses increased $3.4
million, or 61.8%, from $5.5 million for the year ended December 31, 1994 to
$8.9 million for the year ended December 31, 1995. System operating expenses
increased correspondingly with the increases in revenues and subscribers. System
operating expenses as a percentage of revenues declined from 57.7% in 1994 to
52.8% in 1995 primarily due to lower operating cost structures for the Boise and
Yakima Systems relative to the Company's other Operating Systems.

Selling, General and Administrative Expenses. SG&A increased $1.0 million,
or 26.3%, from $3.8 million for the year ended December 31, 1994 to $4.8 million
for the year ended December 31, 1995. The increase was primarily due to: (i) the
incremental costs from the acquisition and integration of the Boise and Yakima
Systems; (ii) increased personnel costs resulting from the addition of several
corporate officers during the second half of 1994; and (iii) a full year of
operations for the Sacramento System in 1995 compared to nine months of
operations in 1994. These increases were partially offset by lower legal
expenses and personnel-related costs in the Fort Pierce System. SG&A as a
percentage of revenue decreased from 39.8% in 1994 to 28.4% in 1995 due to
further realization of economies of scale and the absence of certain
non-recurring costs in 1995.

Depreciation and Amortization Expense. Depreciation and amortization
expense increased $5.7 million, from $4.6 million for the year ended December
31, 1994 to $10.3 million for the year ended December 31, 1995. The increase was
primarily due to: (i) the acquisition of the Boise and Yakima Systems ($2.6
million); (ii) installation of new subscriber equipment ($2.3 million); and
(iii) accelerated depreciation of certain subscriber equipment in the Sacramento
System resulting from a change in the estimated useful life of such equipment
($713,000). The Company revised its estimate of the useful life of certain
subscriber equipment in the Sacramento System as it accelerated its plans to
replace such equipment with more technologically advanced equipment.

Interest Expense. Interest expense decreased $79,000, from $551,000 for the
year ended December 31, 1994 to $472,000 for the year ended December 31, 1995.
The decrease was due to lower average borrowings under the $14.0 million
revolving credit facility which has since been retired (the "Previous Credit
Facility") partially offset by higher average borrowing rates.

Minority Interest in Net Loss of Consolidated Entities. A minority interest
in certain operations of the Predecessor Partnership was acquired by the Company
in March 1994, in connection with the exchange of the partners' interests for
common stock.

23
<PAGE> 25

Net Loss. Net loss increased $2.7 million, from $4.9 million for the year
ended December 31, 1994 to $7.6 million for the year ended December 31, 1995 due
to the various factors mentioned above.

Preferred Stock Dividend Requirement. In March and April 1995, the Company
issued Convertible Preferred Stock resulting in a cumulative preferred dividend
of $2.4 million as of December 31, 1995.

Net Loss Applicable to Common Stock. Net loss applicable to common stock
increased $5.1 million, from $4.9 million for the year ended December 31, 1994
to $10.0 million for the year ended December 31, 1995 due primarily to the
introduction of the preferred stock dividend requirement in 1995 and other
factors mentioned above.

Year Ended December 31, 1994 Compared to Year Ended December 31, 1993

Revenues. Revenues increased $6.9 million, or 255.6%, from $2.7 million for
the year ended December 31, 1993 to $9.6 million for the year ended December 31,
1994. The increase in revenues was due to: (i) the Melbourne System being in
operation for only two months in 1993 as compared to twelve months in 1994; (ii)
the acquisition of the Sacramento System in March 1994; and (iii) the increase
in subscribers in each of the three systems operated by the Company.

System Operating Expenses. System operating expenses increased $2.7
million, or 96.4%, from $2.8 million for the year ended December 31, 1993 to
$5.5 million for the year ended December 31, 1994. The increase was due to
additional operational expenses associated with the Melbourne System and
incremental costs associated with the acquisition and integration of the
Sacramento System.

Selling, General and Administrative Expenses. SG&A increased $1.5 million,
or 65.2%, from $2.3 million for the year ended December 31, 1993 to $3.8 million
for the year ended December 31, 1994. The increase in SG&A consisted of
incremental costs associated with the acquisition and integration of the
Sacramento System and the addition of personnel in a newly established corporate
office near Denver, Colorado.

Depreciation and Amortization Expense. Depreciation and amortization
expense increased $3.0 million, from $1.6 million for the year ended December
31, 1993 to $4.6 million for the year ended December 31, 1994. The increase was
primarily due to the increase in depreciable assets resulting from the
acquisition of the Sacramento System and installation of new subscriber
equipment.

Interest Expense. Interest expense increased by $528,000, from $23,000 for
the year ended December 31, 1993 to $551,000 for the year ended December 31,
1994. The increase in interest expense was due to higher average borrowings
under the Previous Credit Facility.

Net Loss. Net loss increased $900,000, from $4.0 million for the year ended
December 31, 1993 to $4.9 million for the year ended December 31, 1994. The
increase was due to the various factors mentioned above.

LIQUIDITY AND CAPITAL RESOURCES

The business of the Company requires substantial capital investment on a
continuing basis and the availability of sufficient financing is essential to
the Company's continued expansion. The Company's operations will require
substantial amounts of capital for the acquisition of additional wireless cable
channel rights and systems, the construction of additional transmission and
head-end facilities, the installation of equipment at subscriber locations, the
development of administrative and field offices, the funding of start-up losses
in new markets and for other working capital requirements.

The Company estimates that the launch of a new wireless cable system
utilizing analog technology requires the expenditure of approximately $1.0
million to $1.5 million, consisting of head-end construction costs, acquisition
of transmission equipment and expenses associated with pre-launch administrative
and marketing activities. In comparison, the Company estimates the launch and
initial development costs associated with a new wireless cable system utilizing
digital technology will be approximately $2.8 million to $3.5 million.
Subsequent to the launch of a new wireless cable system, the Company will incur
additional capital expenditures associated with the installation of equipment at
subscriber locations. Incremental

24
<PAGE> 26

installation cost per subscriber location in the Company's analog systems are
approximately $350 to $450 for equipment, labor and other installation overhead
costs, depending on whether set-top converters or lower cost whole-house
decoders are used. Based on the Company's current estimates, incremental
installation costs per subscriber location in a digital system are approximately
$550 to $650 for equipment, labor and other installation overhead costs.

Since inception, the Company has expended funds to acquire or lease channel
licenses in various markets, to construct or acquire Operating Systems and to
finance initial operating losses. In 1993, the Company's capital expenditures
were approximately $6.4 million, including subscriber installation costs in the
Fort Pierce System, construction costs for head-end facilities in the Melbourne
System and acquisition costs for various channel licenses. Such expenditures
were financed with contributions and loans made to the Predecessor Partnership
by its limited partners.

In 1994, the Company's capital expenditures were approximately $23.8
million, including the purchase of the Sacramento System, construction costs for
a new head-end facility in the Sacramento System, subscriber installation costs
associated with the expansion of the Fort Pierce, Melbourne and Sacramento
Systems, and escrow deposits made in connection with the purchase of the Boise
and Yakima Systems. Such capital expenditures were financed with net proceeds
from the sale of common stock to partners of the Predecessor Partnership and
borrowings under the Company's Previous Credit Facility.

In 1995, the Company's capital expenditures were approximately $31.1
million, including the purchase of the Boise and Yakima Systems and subscriber
installation costs associated with the expansion of the Operating Systems. Such
capital expenditures were financed with the net proceeds from the issuance of
the Convertible Preferred Stock and borrowings under the Previous Credit
Facility and Revolving Credit Facility.

For the six months ended June 30, 1996, capital expenditures were
approximately $11.5 million, principally composed of new subscriber installation
costs and approximately $3.5 million paid or accrued with respect to the
Company's successful BTA Auction bids.

The Company estimates that through 1998 approximately $70.0 million of
capital expenditures will be required to launch and initially develop the
Planned Systems and to fund further subscriber growth in the Operating Systems.
There can be no assurance, however, that the Company will not alter its current
development plans to respond to specific market opportunities, channel
availability, competitive factors or other industry developments or that its
capital requirements will not increase as a result of future acquisitions, if
any.

Historically, the Company's ability to generate positive System EBITDA has
enabled it to fund partially the expansion of its Operating Systems and to
obtain bank financing to fund additional subscriber growth. New system launches
are expected to generate negative System EBITDA for approximately 12 to 18
months after the launch of service. As the Company continues to develop its
Planned Systems, positive EBITDA from its Operating Systems is expected to
continue to offset partially start-up losses and development costs associated
with new system launches. To the extent that EBITDA is insufficient to meet
future capital and operating requirements of the Company, the Company will be
required to utilize its Revolving Credit Facility and the proceeds of the
Offering or external sources of funding to satisfy its capital needs.

In November 1995, the Company entered into the $40.0 million secured
Revolving Credit Facility. The interest rate on borrowings under the Revolving
Credit Facility is based on the lender's base rate or the rate offered in the
interbank Eurodollar market, plus a spread which varies based upon the Company's
ratio of debt to EBITDA. The facility becomes a term loan on December 31, 1998
at which time outstanding borrowings are amortized on a quarterly basis through
December 31, 2002. The Revolving Credit Facility contains a financial covenant
which limits borrowings based upon a ratio of total debt to EBITDA not to exceed
5.0x. In addition, the Revolving Credit Facility contains other financial
covenants which require the Company to meet certain subscriber levels and other
financial ratios, and prohibit the Company from paying dividends other than in
stock for the term of the facility. As of the most recent covenant testing date,
June 30, 1996, the Company was in compliance with all financial covenants under
the Revolving Credit Facility. As of September 30, 1996, the Company had $17.0
million outstanding under the Revolving Credit Facility.

25
<PAGE> 27

The Company intends to repay in full its outstanding indebtedness under the
Revolving Credit Facility from the net proceeds of the Offering. The remainder
of the net proceeds are expected to be used to finance further expansion and
development of the Operating Systems, capital expenditures and operating
expenses in connection with the launch and development of the Planned Systems,
possible acquisition of additional wireless cable systems, assets or channel
licenses and for general working capital purposes.

The Company anticipates it will have a continuing need for additional
financing to fund the development and subscriber growth anticipated for both the
Planned and Operating Systems. Based on its current business plan, the Company
expects that the net proceeds from the Offering and the available financing
under the Revolving Credit Facility should be sufficient to meet its financing
needs for the next 12 to 18 months. The Company may, however, elect to alter its
market expansion plans which could change the timing of funding for capital and
operational expenditures. The Company intends to supplement its existing sources
of funds through additional borrowings, the sale of additional debt or equity
securities, joint ventures or other arrangements. There can be no assurance,
however, that the Company will obtain the financing to complete its current
business plan or that the Company will be able to obtain such equity capital or
debt on satisfactory terms, or at all, to meet its future financing needs. See
"Risk Factors -- Capital Requirements for Growth; Need for Additional
Financing."

The Company has arranged for an extension of the lenders' commitments under
the Revolving Credit Facility following this Offering, and is in the process of
arranging an amendment thereto which, among other things, will extend its term
and modify certain financial covenants therein.

INCOME TAX MATTERS

Prior to March 16, 1994, the Predecessor Partnership accumulated taxable
losses of approximately $6.2 million which were allocated to its partners and
are not available to offset future taxable income of the Company. Because of
recurring operating losses, the provision for income taxes for all periods since
that date has also been zero, and no income taxes were payable by the Company as
of June 30, 1996. Through December 31, 1995, the Company had accumulated tax net
operating loss ("NOL") carryovers as a Subchapter C corporation of approximately
$10.9 million, expiring in 2009 and 2010. However, because the Company has not
yet earned taxable income, management has recorded a valuation allowance equal
to the full amount of the Company's net deferred tax assets related to its NOL
and temporary differences.

NEW ACCOUNTING PRINCIPLES

In March 1995 and October 1995, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of"
("SFAS No. 121"), and Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-Based Compensation" ("SFAS No. 123"), respectively. Both
statements are effective for fiscal years beginning after December 15, 1995. The
Company believes these statements will not have a material effect on its
consolidated financial position or results of operations.

INFLATION

The Company does not believe that inflation has had or is likely to have
any significant impact on the Company's operations. The Company believes that it
will be able to increase subscriber rates, if necessary, to keep pace with
inflationary increases in costs.

26
<PAGE> 28

BUSINESS

OVERVIEW

Wireless Broadcasting Systems of America, Inc. acquires, owns, develops and
operates wireless cable systems in two regions of the United States. The Company
currently provides subscription television services in its Florida region
through wireless cable systems located in Fort Pierce and Melbourne and in its
Northwest region through wireless cable systems located in Boise, Idaho;
Sacramento, California; and Yakima, Washington. In the 12 month period ended
June 30, 1996, the Operating Systems experienced substantial subscriber growth
from approximately 52,700 to 63,100, an increase of approximately 19.7%, which
represents a penetration rate of 4.8%. As of August 31, 1996, the Company's
subscriber base had grown to 65,400. In addition to the Operating Systems, the
Company plans to launch new systems in West Palm Beach, Florida; Coos Bay,
Oregon; Eureka, California; Helena, Montana; Kennewick, Washington; Klamath
Falls, Oregon; and Roseburg, Oregon. The Company's markets encompass over 2.5
million LOS households.

The Company strives to develop its markets in a manner that produces
sustainable subscriber growth and positive System EBITDA at low subscriber
penetration levels. The Company's benchmarks in each of its markets for the
necessary subscriber penetration to achieve positive System EBITDA vary on the
basis of market-specific factors. By maintaining control over operating expenses
and targeting its marketing efforts, the Company has been able to achieve
positive System EBITDA in its Melbourne System, the Company's most recently
launched system, at a subscription level of 6,000 subscribers within 12 months
of launch. In the 12 month period ended June 30, 1996, the Company generated
$19.6 million of revenues and $3.7 million of EBITDA.

The Company has assembled a management team that has one of the most
extensive subscription television operating backgrounds in the wireless cable
industry. Leading the management team is William W. Kingery, Jr., President and
Chief Executive Officer, who has over two decades of cable system management,
financial and operating experience in the subscription television industry. Mr.
Kingery served as chief financial officer of United Cable Television
Corporation, president of Daniels & Associates, Inc., and most recently as
executive vice president of United Artists Cable Systems Corporation, where he
had responsibility for 90 cable systems serving 1.3 million subscribers. See
"Management."

HISTORY

The Company, as the Predecessor Partnership, was formed in October 1991. In
April 1992, the Company acquired certain wireless broadcasting assets in Fort
Pierce and subsequently launched the Fort Pierce System in May 1992. The Company
expanded its presence in Florida with the launch of the Melbourne System in
November 1993. In March 1994, the Predecessor Partnership was effectively merged
into Wireless Broadcasting Systems of America, Inc. and the Company
simultaneously entered the Northwest region of the United States with the
acquisition of the Sacramento System. In March and April 1995, Boston Ventures,
a private investment firm, invested $35.0 million in the Company through the
purchase of shares of Convertible Preferred Stock in connection with which the
Company acquired the Boise and Yakima Systems. Immediately prior to closing of
the Offering, Boston Ventures will convert its Convertible Preferred Stock into
Class B Common Stock and the accrued dividend into Class A Common Stock. In
March 1996, the Company acquired the exclusive right to apply for currently and
subsequently available commercial channels for five new markets. As a result of
the BTA Auctions conducted by the FCC and completed in March 1996, the Company
won the BTA Authorizations for the following five new markets: Coos Bay, Eureka,
Helena, Klamath Falls and Roseburg. In addition, the Company acquired licensing
rights in four of its five Operating Systems and the West Palm Beach market. The
Company is currently negotiating to acquire channel rights which will enable it
to develop a wireless cable system in Kennewick, Washington (the "Kennewick
Acquisition"), in close proximity to the Yakima System.

27
<PAGE> 29

BUSINESS STRATEGY

The Company employs the following strategies to achieve its objective of
developing wireless cable systems with sustainable growth and attaining positive
System EBITDA at low penetration levels.

Focus on Regional Clusters with Strong Growth Potential. The Company
focuses on markets which it believes exhibit demographic and topographic
characteristics conducive to the transmission of wireless cable services. The
Company operates in and targets markets which it expects to achieve household
growth rates in excess of the national average. Based upon estimates of
household growth by CACI and the Company's LOS household engineering studies,
the Company estimates the LOS households in its markets will increase by 9.8%
from 1995 to 2000, as compared to CACI's 5.3% projected U.S. mean household
growth rate for the same period. The Company strives to cluster its Systems to
achieve economies of scale in management, marketing, training, customer service
and billing. The Company also believes that regional clustering enhances the
Company's strategic position and enhances opportunities for additional revenues,
including advertising and other telecommunications services.

Differentiate Service Offering. The Company seeks to differentiate its
service offering from other subscription television providers by:

- Offering Attractive Channel Line-Ups. The Company focuses on markets in
which it can utilize virtually all the wireless cable channels available,
and therefore is able to offer the programs which it believes are
attractive to the greatest number of subscribers. The Company currently
offers from 29 to 36 channels in each of its markets. "See
"-- Programming;"

- Pricing its Service Competitively. As wireless cable systems typically
incur lower initial capital costs and fewer maintenance costs than
hard-wire cable operators, the Company generally offers its services below
the price of comparable services offered by competing hard-wire cable
operators; and

- Providing Superior Customer Satisfaction. The Company believes it creates
high levels of subscriber satisfaction by providing 24-hour-a-day,
7-day-a-week subscriber telephone support; prompt customer service and
installation; as well as follow-up calls and on-site inspections to verify
subscriber satisfaction. The Company also believes that its subscribers
enjoy a higher level of signal quality and reliability because its signal
is not adversely affected by weather or by the signal degradation and
interruptions inherent in the extensive coaxial cable networks and signal
boosters ("Cable Plant") required by its hard-wire competitors.

Own Wireless Cable Channel Licenses. The Company seeks to own, rather than
lease, the majority of available licenses for wireless cable channels in its
markets. Benefits of ownership include: (i) increased EBITDA by eliminating the
increase in variable channel leasing costs resulting from increased penetration;
(ii) enhanced flexibility in deploying digital compression and other
technological innovations and (iii) reduced dependence on third party channel
lessors. With the exception of the Sacramento System, the Company owns between
approximately 67.0% and 100.0% of the available commercial channel licenses in
each of its markets.

Maintain Disciplined Approach to New Technologies. The Company evaluates
the implementation of new technologies on a market-by-market basis as dictated
by subscriber demands and competitive conditions. The Company deploys
cost-efficient technologies in order to maximize its return on investment.
Specifically, installation of whole-house decoders, which are fully addressable,
is targeted for the Company's smaller markets where digital technology is not
expected to be cost-effective in the near term. Digital technology,

28
<PAGE> 30

which the Company expects to be commercially viable in 1997, will be
incorporated into the Company's larger, more competitive markets. Because the
Company's wireless cable systems do not utilize an extensive network of fixed
plant and equipment, new technologies can be incorporated into a system with
less effort and expense than would be required in a hard-wire cable system. As a
result, the Company believes that it has the flexibility to deploy new
technologies at a significantly lower per subscriber cost than hard-wire cable
operators.

MARKETING AND SUBSCRIBER RETENTION STRATEGY

The Company's marketing and subscriber retention strategy is aimed at: (i)
identifying and attracting loyal, profitable subscribers; (ii) minimizing
subscriber turnover; and (iii) maintaining superior customer service in order to
achieve continued, consistent subscriber growth.

The Company targets customer segments the Company's marketing research
indicates could be long-term subscribers likely to increase their services over
time. The Company sorts its existing subscriber data into groupings and then
merges that data with general market household data using a sophisticated
relational database. The Company continuously tracks the subscription television
buying patterns of its subscribers and utilizes focus groups and subscriber
surveys to further refine the profiles of the Company's subscribers. The
information derived by the Company from its marketing data also guides the
Company in prudently and selectively implementing additional services in its
various markets.

In each of its markets, the Company's marketing staff uses a targeted plan
that typically employs direct mailings, telemarketing follow-up calls and
selective door-to-door sales to single family homes. In certain markets, the
Company uses print and television advertising. The Company avoids non-targeted
marketing techniques, such as free installation and service promotions. While
such promotions may provide short-term subscriber growth, the Company believes
that subscribers lured by promotions which require no financial commitment are
more likely to disconnect.

In addition to targeting single family home subscribers, the Company
actively markets to MDUs where it can provide programming on a bulk basis. The
Company enters into contractual arrangements with building owners which allow
the Company to provide services to an entire MDU at a fixed rate for terms
typically ranging from three to five years. By servicing an entire MDU, the
Company is not affected by the high turnover normally associated with apartment
dwelling subscribers. MDU contracts generally produce higher margins for the
Company than single family residential subscribers because subscriber turnover,
installation and maintenance costs are lower. To a lesser extent, the Company
also markets its services to several commercial enterprises, including doctors'
offices, restaurants and bars.

The Company also uses a number of techniques designed to minimize
subscriber turnover, including: (i) requesting subscribers to make an up-front
financial commitment by paying an installation charge and one month's service
charge prior to receiving service; (ii) utilizing credit checks to evaluate the
creditworthiness of new subscribers and, where appropriate, collecting deposits
from applicants with poor credit histories before instituting service; (iii)
maintaining collection procedures to mitigate the risk of subscribers falling
behind in their payments; (iv) employing a specialized team of subscriber
retention personnel who work with subscribers in order to maintain their
subscriptions; and (v) developing rates and programs designed to reduce the
number of Florida subscribers prone to canceling service during the off-season.

The Company believes the most effective means of retaining its subscribers
is providing high quality subscriber service, including: (i) 24-hour-a-day,
7-day-a-week subscriber telephone support; (ii) computerized tracking of all
incoming calls to minimize waiting times; (iii) service calls generally made the
same day the subscriber indicates a service problem; (iv) flexible, 6-day-a-week
installation and service appointments; (v) follow-up calls and on-site
inspections to verify subscriber satisfaction; and (vi) installation within
three days of receiving the initial installation request. The Company also uses
focus groups and subscriber surveys to monitor subscriber satisfaction.

The Company's experience has shown that subscribers are highly sensitive to
responsive and efficient subscriber service. The Company's standards of
subscriber service and satisfaction meet or exceed the

29
<PAGE> 31

published standards of the National Cable Television Association. In order to
encourage all employees to focus on subscriber growth and retention, the Company
has instituted an incentive compensation program. Incentive compensation is paid
quarterly based upon each System's EBITDA and subscriber turnover ratio as well
as the System's performance rating on the following ten key measures of
subscriber service and satisfaction:

- Percentage of phone calls answered within 18 seconds;

- In-home visits as a percentage of average monthly subscribers;

- Percentage of service requests satisfied by telephone;

- Installation appointments met as a percentage of scheduled appointments;

- Percentage of service requests satisfied on same day;

- Percentage of installations requiring in-home service within 30 days;

- Installation backlog (number of days);

- Installations completed as a percentage of scheduled installations;

- Service requests completed as a percentage of service requests; and

- New subscriber initial rating of quality of service.

ACQUISITION STRATEGY

The Company intends to complement its Operating and Planned Systems by
acquiring additional wireless cable systems in markets that meet its selection
criteria, including: (i) demographic profile of the market, including size of
potential subscriber base and projected household growth rates; (ii) proximity
to existing markets; (iii) topography of the transmission area; (iv)
availability of wireless cable channel rights and licenses; and (v) the
competitive environment. The Company seeks to take advantage of economies of
scale and operating efficiencies, particularly where it can add to existing
regional clusters or develop new regional clusters of Operating Systems. The
Company utilizes the experience of its management in evaluating, acquiring and
operating potential systems.

Management believes that there are significant advantages in increasing the
size and scope of its operations, including improved economies of scale in
management, marketing, training, customer service and billing. Furthermore, the
Company believes that increasing the size and scope of its operations will
result in ancillary revenue opportunities, greater access to capital and
opportunities for strategic partnering.

30
<PAGE> 32

THE COMPANY'S MARKETS

The following table outlines the characteristics of the markets in which
the Company operates or where it anticipates launching systems.

- -------------------------

(1) LOS is defined as the number of households in the market that can receive an
unobstructed signal through a receiving antenna that is elevated 30 feet
above ground level. Estimated LOS Households are based upon engineering
studies performed for the Company.

(2) Number of Subscribers includes single family homes, the number of units in
each MDU and commercial subscribers.

(4) Based upon estimates of household growth by CACI and the Company's LOS
household engineering studies, the Company estimates the LOS households in
its markets will increase by 9.8% from 1995 to 2000. CACI projects a U.S.
mean household growth rate of 5.3% for the same period.

(5) Spectrum is measured in MHz with each wireless cable channel containing 6
MHz of bandwidth except for channel 2A which contains 4 MHz. The Sacramento
System includes channel 2, which is a full 6 MHz of bandwidth, but all of
the remaining systems include channel 2A. The Number of Channels Controlled
and Amount of Spectrum Controlled figures include one 6 MHz LPTV channel in
Fort Pierce and three 6MHz LPTV channels in Melbourne.

(6) Percentage of channels for which Commercial Licenses Owned is calculated by
dividing the number of commercial channels for which licenses owned by the
Company by the total number of commercial channels for which licenses are
available in each market, in each case exclusive of LPTV channels. The
Company owns the licenses for the following number of commercial channels in
each market: Fort Pierce, 13; Melbourne, 13; West Palm Beach, 11; Boise, 18;
Sacramento, 2; Yakima, 14; Coos Bay, 20; Eureka, 10; Helena, 21; Kennewick,
9; Klamath Falls, 21; and Roseburg, 21. The total number of commercial
channels available for license ownership in Fort Pierce, Melbourne, West
Palm Beach, Sacramento, Eureka and Kennewick is 13 and the total number of
commercial channels available for license ownership in Boise, Yakima, Coos
Bay, Helena, Klamath Falls and Roseburg is 21, of which 8 are commercially
available ITFS channel licenses. See "-- Licenses and Channel Leases." In
the markets where ITFS channel licenses are commercially available, the
Company, as the BTA Authorization winner, has the exclusive right to file
license applications under FCC rules and regulations, subject only to
applications of educational and non-profit institutions and restrictions
resulting therefrom. See "Risk Factors -- Uncertainty of Ability to Obtain
FCC Authorizations."

31
<PAGE> 33

OPERATING SYSTEMS

The following is an overview of each of the Company's Operating and Planned
Systems. Market household growth rate projections are based on estimates of
household growth by CACI.

Fort Pierce. The Fort Pierce System, consisting of operations in Indian
River, St. Lucie and Martin Counties in Florida, was launched by the Company in
May 1992. While the Company controls 34 channels, it currently offers a 32
channel service, comprised of 30 wireless channels and two local off-air
channels. Of the 34 channels (33 wireless and one LPTV) controlled, the Company
owns licenses for 14 channels. The Company also won the BTA Authorization for
Fort Pierce in the recently concluded BTA Auction, made the initial down payment
and timely filed the requisite applications with the FCC. Of the four remaining
channels on which the Company does not currently offer programming, the Company
intends to add one channel to its programming line-up in the third quarter of
1997 and it intends to file new station applications with the FCC for two
others. The last remaining channel, channel 2A, will be utilized by the Company
if and when digital technology is activated in the market. The Fort Pierce
System is an analog system with addressable equipment.

At June 30, 1996, the Company provided wireless service to approximately
12,800 subscribers which represents an increase of 1.6% from the prior year and
a penetration rate of 5.2% of estimated LOS households. CACI projects that the
number of households in the Fort Pierce market will increase by 10.0% for the
period 1995 to 2000. The Company's principal competitors in the Fort Pierce
market are Adelphia Communications, Inc. ("Adelphia") and Tele-Communications
Inc. ("TCI").

Melbourne. The Melbourne System, which operates in Brevard County, Florida,
was launched by the Company in November 1993. While the Company controls 36
channels (33 wireless and three LPTV), it currently offers a 33 channel service,
comprised of 30 wireless and three local off-air channels. Of the 36 channels
controlled, the Company owns licenses for 16 channels. The Company also won the
BTA Authorization for Melbourne in the recently concluded BTA Auction, made the
initial down payment and timely filed the requisite applications with the FCC.
Of the six remaining channels on which the Company does not currently offer
programming, the Company intends to add one channel to its programming line-up
in the third quarter of 1997. One of the other channels, channel 2A, will be
utilized by the Company if and when digital technology is activated in the
market. The Melbourne System is an analog system with addressable equipment.

At June 30, 1996, the Company provided wireless service to approximately
14,600 subscribers which represents an increase of 41.8% from the prior year and
a penetration rate of 6.7% of estimated LOS households. CACI projects that the
number of households in the Melbourne market will increase by 11.2% for the
period 1995 to 2000. The Company's principal competitors in the market are Time
Warner Inc. ("Time Warner"), Falcon and TCI.

Boise. The Boise System, which was acquired in March 1995, serves the
Treasure Valley communities of Boise, Nampa and Caldwell, Idaho. While the
Company controls 33 wireless channels, it currently offers a 36 channel service,
comprised of 30 wireless and six local off-air channels. Of the 33 wireless
channels controlled, the Company owns licenses for 18 channels. The Company also
won the BTA Authorization for Boise in the recently concluded BTA Auction, made
the initial down payment and timely filed the requisite applications with the
FCC. Of the three remaining wireless channels on which the Company does not
currently offer programming, the Company intends to add two channels to its
programming line-up in the third quarter of 1997 and it has filed new station
applications with the FCC for these channels and channel 2A. Channel 2A will be
utilized by the Company if and when digital technology is activated in the
market. The Boise System is an analog system which the Company anticipates
retrofitting with whole-house decoders in the first quarter 1997.

At June 30, 1996, the Company provided wireless service to approximately
12,300 subscribers which represents an increase of 32.3% from the prior year and
a penetration rate of 9.5% of estimated LOS households. CACI projects that the
number of households in the Boise market will increase by 15.4% for the period
1995 to 2000. The Company's principal competitor in the Boise market is TCI.

32
<PAGE> 34

Sacramento. The Sacramento System was acquired in March 1994. The 32
channel service currently offered is comprised of 26 wireless channels and six
local off-air channels. The Company controls a total of 29 wireless channels, of
which it owns licenses for two channels. The Company intends to add two of the
remaining wireless channels on which it does not currently offer programming to
its programming line-up in the fourth quarter of 1996 and anticipates adding the
last channel in the second quarter of 1997. The Company did not win the BTA
Authorization for this market. The Sacramento System is an analog system which
was retrofitted with addressable set-top converters which are compatible with
digital compression technology.

At June 30, 1996, the Company provided wireless service to approximately
16,000 subscribers which represents an increase of 22.1% from the prior year and
a penetration rate of 2.4% of estimated LOS households. CACI projects that the
number of households in the Sacramento market will increase by 7.0% for the
period 1995 to 2000. The Company's principal competitors in the market are
Scripps Howard, Inc. ("Scripps Howard"), Jones Intercable, Inc. ("Jones") and
Sonic Cable, Inc.

Yakima. The Yakima System was acquired in April 1995 and serves the Yakima
Valley. While the Company controls 33 wireless channels, it currently offers a
29 channel service, comprised of 24 wireless channels and five local off-air
channels. Of the 33 wireless channels controlled, the Company owns licenses for
14 channels. The Company also won the BTA Authorization for Yakima in the
recently concluded BTA Auction. The FCC has already approved the Yakima BTA
Authorization for grant and the Company timely paid the requisite purchase
price. Of the nine remaining wireless channels on which the Company does not
currently offer programming, the Company intends to add eight channels to its
programming line-up in the second quarter of 1997. Two of the Company's ITFS
lessors in Yakima have filed new station applications with the FCC with respect
to these eight channels. The Company has filed a new station application for the
last remaining channel, channel 2A, and intends to use this channel if and when
digital technology is activated in the market. The Yakima System is an analog
system which the Company anticipates retrofitting with whole-house decoders in
the first quarter 1997.

At June 30, 1996, the Company provided wireless service to approximately
7,400 subscribers which represents an increase of 1.4% from the prior year and a
penetration rate of 11.6%. CACI projects that the number of households in the
Yakima market will increase by 10.5% for the period 1995 to 2000. The Company's
principal competitor in the Yakima market is TCI.

PLANNED SYSTEMS

West Palm Beach. The Company controls 31 channels, of which it will own 11
channel licenses. Seven of these channels are dependent upon FCC approval of
license assignment applications. The Company has the exclusive right to apply
for the remaining four channels pursuant to its BTA Authorization received in
the recently concluded BTA Auction. The Company timely paid the requisite
purchase price and the FCC has granted the Company the West Palm Beach BTA
Authorization. The Company intends to develop West Palm Beach as a digital
system.

CACI projects that the number of households in the West Palm Beach market
will increase by 10.8% for the period 1995 to 2000. In the Company's intended
service area, its competitors are Adelphia, Comcast Corporation and Telemedia
Cable, Inc.

Coos Bay. The Company won the BTA Authorization for Coos Bay in the
recently concluded BTA Auction. As a result, the Company has the exclusive right
to apply for 20 commercial wireless cable channels, eight of which are subject
to commercial ITFS application restrictions. The Company intends to lease 13
additional channels in the market from other spectrum owners and applicants. The
requisite down payment for the Coos Bay BTA Authorization was filed with the FCC
along with the necessary applications which are pending. A new station
application for four channels is also pending. The Company intends to develop
Coos Bay as an analog system with whole-house decoders.

CACI projects that the number of households in the Coos Bay market will
increase by 5.4% for the period 1995 to 2000. The Company's principal competitor
in the market is Falcon.

33
<PAGE> 35

Eureka. The Company won the BTA Authorization for Eureka in the recently
concluded BTA Auction. As a result, the Company has the exclusive right to apply
for ten commercial wireless cable channels. The Company intends to lease 23
additional channels in the market from other spectrum owners and applicants. The
FCC has approved the Eureka BTA Authorization for grant and the Company timely
paid the requisite purchase price, but the official authorization has not been
released by the FCC pending consideration of the Company's cross-ownership
waiver. A new station application for one channel is currently pending, and the
channel should be issued in tandem with the BTA Authorization. The Company
intends to develop Eureka as an analog system with whole-house decoders.

CACI projects that the number of households in the Eureka market will
increase by 4.1% for the period 1995 to 2000. The Company's principal competitor
in the market is Cox Cable Television.

Helena. The Company won the BTA Authorization for Helena in the recently
concluded BTA Auction. As a result, the Company has the exclusive right to apply
for 21 commercial wireless cable channels, eight of which are subject to ITFS
application restrictions. The Company intends to lease 12 additional channels in
the market from other spectrum owners and applicants. The Company timely paid
the requisite purchase price and the FCC has granted the Company the Helena BTA
Authorization along with the license to four channels. The Company intends to
develop Helena as an analog system with whole-house decoders.

CACI projects that the number of households in the Helena market will
increase by 9.7% for the period 1995 to 2000. The Company's principal competitor
in the market is TCI.

Kennewick. Assuming consummation of the Kennewick Acquisition, the Company
expects to control 33 channels. The Company will have the ability to own
licenses for nine channels and intends to lease 24 additional channels in the
market from other spectrum owners and applicants. Part of the Kennewick
Acquisition will include assignment of the BTA Authorization for the market. The
Company intends to develop Kennewick as an analog system with whole-house
decoders. There can be no assurance that the Kennewick Acquisition will be
consummated.

CACI projects that the number of households in the Kennewick market will
increase by 14.4% for the period 1995 to 2000. The Company's principal
competitor in the market is TCI.

Klamath Falls. The Company won the BTA Authorization for Klamath Falls in
the recently concluded BTA Auction. As a result, the Company has the exclusive
right to apply for 21 commercial wireless cable channels, eight of which are
subject to commercial ITFS application restrictions. The Company intends to
lease 12 additional channels in the market from other spectrum owners and
applicants. The Company timely paid the requisite purchase price and the FCC has
granted the Company the Klamath Falls BTA Authorization along with the license
to four channels. The Company intends to develop Klamath Falls as an analog
system with whole-house decoders.

CACI projects that the number of households in the Klamath Falls market
will increase by 4.4% for the period 1995 to 2000. The Company's principal
competitor in the market is TCI.

Roseburg. The Company won the BTA Authorization for Roseburg in the
recently concluded BTA Auction. As a result, the Company has the exclusive right
to apply for 21 commercial wireless cable channels, eight of which are subject
to commercial ITFS application restrictions. The Company intends to lease 12
additional channels in the market from other spectrum owners and applicants. The
requisite down payment for the Roseburg BTA Authorization was filed with the FCC
along with the necessary applications. A new station application for four
channels is currently pending. The Company intends to develop Roseburg as an
analog system with whole-house decoders.

CACI projects that the number of households in the Roseburg market will
increase by 4.3% for the period 1995 to 2000. The Company's principal
competitors in the market are Falcon and Jones.

PROGRAMMING

The Company seeks to offer popular programming at affordable prices.
Typically, the Company offers between 29 and 36 channels in a market which
includes 25 to 32 basic channels, three premium channels

34
<PAGE> 36

(e.g., HBO, Cinemax and The Disney Channel), one event pay-per-view (which may
share spectrum with another channel), and, in certain cases, one full-time
pay-per-view channel. The Company selects its basic programming channels to
appeal to a broad subscriber base and does not offer programming which appeals
only to small, specialized market segments. The following chart depicts the
Company's current programming line-up in the Melbourne market. Channel line-ups
in other markets are substantially similar.

CHANNEL OFFERINGS

<TABLE>
<S> <C>
BASIC CHANNELS TBS-Atlanta (sports, movies)
ABC (local network affiliate) TNN (music)
A&E (arts and entertainment programming) TNT (sports, movies)
AMC (classic movies) USA (general interest)
CBS (local network affiliate) The Weather Channel (weather)
CMT (country music) WGN-Chicago (sports, movies, news superstation)
CNN (news) WBSF-independent
CNBC (news and financial) WIRB-independent
CSPAN I (public affairs) WMFE-independent
CSPAN II (public affairs) WTGL-independent
The Discovery Channel (science)
ESPN (sports) PREMIUM CHANNELS
Fox (local network affiliate) Cinemax
Lifetime (interests) The Disney Channel*
MTV (music television) Home Box Office
NBC (local network affiliate)
Nickelodeon (children's) PAY PER VIEW
Sunshine Sports Network (regional sports) Pay Per View
Sci-Fi Channel (special interest) Selected events
</TABLE>

- -------------------------
* The Disney Channel is included in the Melbourne basic programming line-up.

The basic programming package offered by the Operating Systems is
comparable to that offered by the local hard-wire cable operators with respect
to the most widely watched channels. Specific programming packages vary
according to particular market demand. The Company's programming is supplied by
numerous distributors and thus the Company is not dependent upon any one program
supplier. In addition, only a few of the major cable television programming
services carried by the Company are not currently directly or indirectly owned
by MSOs and the Company historically has not had difficulty in arranging
satisfactory contracts for these services. The Company believes that it will
have access to sufficient programming material to enable it to provide widely
demanded channel line-ups in its markets for the foreseeable future.

In markets where the Company retransmits local VHF/UHF channels, it must
obtain the consent of local off-air broadcasters. Although there can be no
assurance that the Company will be able to obtain the requisite broadcaster
consents, the Company believes in most cases it will be able to do so for little
or no additional cost. Wireless cable systems, unlike hard-wire cable systems,
are not required under the FCC's "must carry" rules to retransmit a specified
amount of local commercial television or qualified LPTV channels.

EQUIPMENT AND TECHNOLOGY

Wireless subscriber equipment components used in the Company's systems are
generally similar to those used in hard-wire cable systems. Subscriber equipment
includes a receive antenna, down converter, home wiring and an addressable
set-top converter with a handheld wireless remote control unit or an addressable
whole-house decoder. Some systems also include an off-air receive antenna to
improve the picture quality of the local off-air channels. The Company is not
dependent upon any one supplier for its equipment needs and believes such
equipment is readily available from a number of suppliers. The following
represents the technologies the Company intends to implement in the near term:

Whole-House Decoders. Whole-house decoders obviate the need for set-top
converters and are generally installed on the exterior of the home. The
whole-house decoder provides the same addressable features as

35
<PAGE> 37

today's set-top converters. Because whole-house decoders are compatible with
digital systems, they will require only supplementation should the Company begin
implementing digital video technology in its markets. The Company anticipates
installing whole-house decoders in its Boise and Yakima Systems in 1997.

The Company believes that use of whole-house decoders will substantially
reduce capital expenditures per subscriber installation. In addition to this
initial cost advantage, the use of whole-house decoders has aesthetic advantages
(the need for set-top converters is eliminated) and, because the technology
makes it unnecessary to enter the subscriber's home to remove the home
equipment, significantly reduces costs associated with termination of service
and recovery of the equipment.

Digital Video Compression Technology. Currently, wireless cable companies
can provide up to 33 analog channels. DVC technology is expected to increase
channel capacity by four to ten times. Increased channel capacity would enable
the Company to offer additional programming alternatives and increase
pay-per-view programming. Management believes that DVC technology will provide
wireless cable subscribers better signal coverage, digital quality video and
audio signals and incremental digital products and services. The Company intends
to launch its West Palm Beach System as a digital system and is exploring
providing hybrid (analog and digital) service in its Sacramento System.

The Company intends to implement digital video technology and offer
interactive services when management believes that the reliability of the
equipment for DVC has been sufficiently proven and the Company can economically
justify its widespread implementation. Although management believes that DVC
will enable the Company to offer additional programming and increase the homes
that the Company can service from a head-end, before making an investment in DVC
equipment, the Company intends to evaluate subscriber demand for the incremental
programming and services that would be available. The Company believes the
experiences of other wireless cable operators who have announced or commenced
test deployments of these technologies will enable the Company to further
evaluate the benefits of implementing DVC in its own systems. The Company also
believes that evaluating the costs and benefits of DVC and interactivity before
implementing the service is consistent with its marketing strategy. Due to the
limited number of physical components of the wireless transmission system, the
Company believes that it can more easily adapt to technological changes than can
hard-wire cable operators. Nonetheless, the cost of such adaptation by the
Company could be substantial and negatively impact the cost differential between
wireless and other systems. See "Risk Factors -- Capital Requirements for
Growth; Need for Additional Financing" and "Management's Discussion of Financial
Condition and Results of Operations -- Liquidity and Capital Resources."

FACILITIES

The principal physical assets of a wireless cable system consist of
satellite signal reception equipment, radio transmitters, transmission antennae,
as well as office space and head-end space. The Company leases office space for
its corporate headquarters near Denver, Colorado, and office and warehouse space
for each of its Operating Systems. The Company expects to purchase or lease
additional office space for each of its Planned Systems in connection with the
launch of those systems.

In addition to office space, the Company also leases or intends to lease
head-end space in the markets where it operates, or intends to operate, its
wireless cable systems. The Company's head-end lease agreements provide for
locating transmitters, antennae and other equipment to broadcast wireless cable
signals. The agreements generally cover a period of five to ten years and are
subject to renewal upon expiration. To date, the Company has been able to obtain
suitable head-end space on satisfactory terms for each of its Operating Systems.
In the event that any one or more of these leases is terminated or not renewed
upon expiration, the Company will be required to obtain alternative head-end
space in order to broadcast its programming.

LICENSES AND CHANNEL LEASES

The Company believes it is unique in its industry in terms of ownership of
substantially all of the commercially available licenses in most of its markets.
The balance of the channels the Company uses in each market to transmit
programming are utilized through long-term, exclusive lease agreements with
unaffiliated third parties. The term of the Company's typical channel leases is
ten years. Benefits of ownership include:

36
<PAGE> 38

(i) increased EBITDA by eliminating the variable channel leasing costs resulting
from increased penetration; (ii) enhanced flexibility in deploying digital
compression and other technological innovations; and (iii) reduced dependence on
third party channel lessors. With the exception of the Sacramento System, the
Company owns between approximately 67.0% and 100.0% of the available commercial
channel licenses in each of its markets.

The following table indicates, for each of the Company's markets, the total
channels controlled, the number of channels leased, the number of channels owned
through licenses and the percentage of commercial licenses owned by the Company.

CHANNEL RIGHTS

<TABLE>
<CAPTION>
NUMBER OF
CHANNELS OWNED PERCENTAGE OF
TOTAL CHANNELS CHANNELS THROUGH COMMERCIAL LICENSES
CONTROLLED(1) LEASED(2) LICENSES(1)(2) OWNED (3)
-------------- --------- -------------- -------------------
<S> <C> <C> <C> <C>
FLORIDA MARKETS:
Ft. Pierce(4)....................... 34 20 14 100.0%
Melbourne(4)........................ 36 20 16 100.0
West Palm Beach(5).................. 31 20 11 84.6
NORTHWEST MARKETS:
Boise(6)............................ 33 15 18 85.7
Sacramento.......................... 29 27 2 15.4
Yakima(7)........................... 33 19 14 66.7
Coos Bay............................ 20 -- 20 95.2
Eureka.............................. 10 -- 10 76.9
Helena.............................. 21 -- 21 100.0
Kennewick(8)........................ 33 24 9 69.2
Klamath Falls....................... 21 -- 21 100.0
Roseburg............................ 21 -- 21 100.0
</TABLE>

- -------------------------
(1) The Total Channels Controlled and Number of Channels Owned through Licenses
Owned figures include channels that are not yet issued but for which the
Company received the exclusive right to file applications as the winner of
certain BTA Authorizations. In Boise and Yakima, the Company owns eight
commercial ITFS channel licenses in each market which the FCC previously
granted to commercial entities. The FCC will now grant commercial ITFS
channels to BTA Authorization holders only, under certain circumstances. As
the BTA Authorization winner, the Company has the exclusive right to apply
for and anticipates owning eight commercial ITFS channel licenses in four of
its new markets as follows: Coos Bay, Helena, Klamath Falls and Roseburg.
The Company's rights are subject only to possible applications of
educational institutions and non-profit organizations and restrictions
resulting therefrom.

(2) In Coos Bay, Eureka, Helena, Klamath Falls and Roseburg, the Company is in
the process of securing lease agreements with educational institutions and
non-profit organizations and others who are either licensed on the
frequencies in the market, or who have applied for or will apply for
frequencies in the market. The channels associated with such efforts have
not been included in the data presented.

(3) Percentage of Commercial Licenses Owned is calculated by dividing the number
of commercial channels for which licenses are owned by the Company by the
total number of commercial channels for which licenses are available in each
market, in each case exclusive of LPTV channels. The Company owns the
licenses for the following number of commercial channels in each market:
Fort Pierce, 13; Melbourne, 13; West Palm Beach, 11; Boise, 18; Sacramento,
2; Yakima, 14; Coos Bay, 20; Eureka, 10; Helena, 21; Kennewick, 9; Klamath
Falls, 21; and Roseburg, 21. The total number of commercial channels
available for license ownership in Fort Pierce, Melbourne, West Palm Beach,
Sacramento, Eureka and Kennewick is 13 and the total number of commercial
channels available for license ownership in Boise, Yakima, Coos Bay, Helena,
Klamath Falls and Roseburg is 21, of which 8 are commercially available ITFS

37
<PAGE> 39

channel licenses. In the markets where ITFS channel licenses are
commercially available, the Company, pursuant to its BTA
Authorization has the exclusive right to file license applications under
FCC rules and regulations, subject only to applications of educational and
non-profit institutions and restrictions resulting therefrom. See "Risk
Factors -- Uncertainty of Ability to Obtain FCC Authorizations."

(4) The Channels Controlled and Licenses Owned figures include one 6MHz LPTV in
Fort Pierce and three LPTV channels in Melbourne.

(5) The Company will acquire the licenses to seven channels in the West Palm
Beach market upon FCC approval of license assignment applications. A
marketwide settlement agreement, encompassing 27 channels in the West Palm
Beach market was filed with the FCC on May 25, 1995 and provides for
reallocation of the 27 frequencies between and among all parties to the
settlement and includes modification applications to collocate all 27
channels to the Company's West Palm Beach tower site. There can be no
guarantee that the Company will receive the requisite governmental approvals
or third party interference agreements that may be necessary for this
market. Any delays or failures in obtaining governmental approvals or
interference agreements may delay the Company from launching the West Palm
Beach market and/or transmitting the maximum number of channels it controls
in the market. See "Risk Factors -- Interference Issues." The Company
acquired an additional four channels for West Palm Beach in conjunction with
winning the BTA Authorization for the market.

(6) Two channels on which the Company will lease excess capacity in Boise and
one channel the Company will own through license are awaiting grant by the
FCC of a new station application.

(7) Nine of the channels the Company controls in Yakima are awaiting grant by
the FCC of their new station applications.

(8) The Kennewick acquisition is pending and there can be no assurance that it
will be consummated. Twelve of the ITFS channels the Company will lease in
Kennewick are subject to receiving FCC approval of the new station
applications that have been filed by the channel lessors. These applications
are mutually exclusive with other applications that were filed for the
market. However, based upon the selection criteria the FCC utilizes in
choosing between and among mutually exclusive applicants, the Company
believes these applicants will be awarded the licenses for these 12
channels. One channel the Company will own through license in Kennewick is
also awaiting grant by the FCC. See "-- History."

The holder of a license issued by the FCC has the right to apply to renew
such license at its expiration date provided that the license holder has
complied with the terms of the license and files an appropriate renewal
applications in a timely manner. While the Company expects grants of its pending
applications and BTA Authorizations, there can be no assurance that the Company
will receive the requisite governmental approvals. See "Risk
Factors -- Uncertainty of Ability to Obtain FCC Authorization" and
"-- Interference Issues."

LEGAL PROCEEDINGS

The Company purchased certain assets from Wireless Cable of Florida, Inc.
("Wireless") in furtherance of the wireless cable television system it developed
in Fort Pierce, Florida. The purchase agreement provided for a post-closing
adjustment to the purchase price paid to the three shareholders of Wireless for
its assets. In connection with a dispute over such adjustment, the Company
reached a settlement with two of the shareholders, whose combined interests in
Wireless were 62.0%, for approximately $900,000. While the third shareholder,
whose interest in Wireless was 38.0%, has threatened litigation with respect to
such adjustment, no suit has yet been filed. There can be no assurance that
there will be a favorable resolution with the third shareholder or that any
resolution will be reached comparable to that with the other two shareholders of
Wireless.

In the ordinary course of its business, the Company is involved in certain
other pending or threatened legal proceedings. In the opinion of management,
none of such legal proceedings will have a material effect on the financial
position or results of operations of the Company.

38
<PAGE> 40

EMPLOYEES

At September 30, 1996, the Company had a total of 218 employees. None of
the Company's employees is subject to a collective bargaining agreement. The
Company has experienced no work stoppages and believes that it has good
relations with its employees.

INDUSTRY OVERVIEW

SUBSCRIPTION TELEVISION INDUSTRY

The subscription television industry began in the late 1940s to serve the
needs of residents in predominantly rural areas with limited access to local
off-air VHF/UHF broadcasts. The subscription television industry, consisting
primarily of hard-wire cable systems, expanded to metropolitan areas because,
among other reasons, it could offer better reception and more programming than
local off-air channels. Currently, subscription television systems offer a
variety of programming, which generally include basic, enhanced basic, premium
and, in some instances, pay-per-view service.

A subscription television subscriber typically pays an initial connection
charge and a fixed monthly fee for basic service. The monthly basic service fee
varies from one area to another and is a function, in part, of the number of
channels and services included in the basic service package, the operating and
capital costs of the subscription television system operator and competition
within the market. In most instances, subscribers are charged a separate monthly
fee for each premium service and certain other specific programming, with
discounts generally available to subscribers receiving multiple premium
services. Monthly service fees for basic, enhanced basic and premium services
constitute the major source of revenue for subscription television systems.
Subscribers normally are free to discontinue service at any time. Converter
rentals, remote control rentals, installation charges and reconnect charges for
subscribers who were previously disconnected as well as advertising revenue are
also included in a subscription television system's revenues, but generally are
not major components of such revenues. The 1996 Act (and implementing
regulations) imposed regulation of cable prices for programming and equipment.
See "-- Regulatory Environment."

TRADITIONAL HARD-WIRE CABLE TECHNOLOGY

Most subscription television systems are hard-wire cable systems which
currently use coaxial cable to transmit television signals, although many have
upgraded or are considering upgrading to fiber optic cable which has greater
channel capacity than coaxial cable. Traditional hard-wire cable operators
receive, at a head-end, signals for programming services, such as CBS, NBC, ABC,
Fox, HBO, Cinemax, CNN, etc., which have been transmitted to them by broadcast
or satellite transmissions. A head-end consists of signal reception, decryption,
retransmission, encoding and related equipment. The operator then delivers the
signal from the head-end to subscribers via Cable Plant. As a direct result of
the use of Cable Plant to deliver signals, hard-wire cable systems are
susceptible to signal problems. Signals can be transmitted via coaxial cable
only a relatively short distance without amplification. Each time a television
signal passes through an amplifier some measure of noise is added. A series of
amplifiers between the head-end and the viewing subscriber leads to
progressively greater noise and, accordingly, for some viewers, a grainier
picture. Also, an amplifier must be properly balanced or the signal may be
improperly amplified. Failure of any one amplifier in the chain of a Cable Plant
will black out the transmission signal from that point to the end of the series.
Regular system maintenance is required due to water ingress, temperature changes
and other equipment problems, all of which may affect the quality of signals
delivered to subscribers. Some hard-wire cable companies have begun installing
fiber optic networks which will substantially reduce the transmission and
reception problems currently experienced by hard-wire cable systems and will
expand the channel capacity of their systems. The installation of such networks
will require a substantial investment by hard-wire cable operators.

WIRELESS CABLE INDUSTRY

The wireless cable industry was made commercially possible in 1983 when the
FCC reallocated a portion of the electromagnetic radio spectrum located between
2500 and 2700 MHz for commercial use. Nevertheless,

39
<PAGE> 41

regulatory and other obstacles impeded the growth of the wireless cable industry
through the remainder of the 1980s. In addition, before the 1992 Cable Act
became effective, a continued supply of programming from cable-controlled
programmers was not assured. The factors contributing to the increasing growth
of wireless cable systems since that time include: (i) regulatory reforms by the
FCC to facilitate competition with hard-wire cable; (ii) Congressional scrutiny
of the rates and practices of the hard-wire cable industry; (iii) increasing
availability of programming for wireless cable systems; (iv) subscriber demand
for alternatives to hard-wire cable service; (v) increasing accumulation by
wireless cable operators of a sufficient number of channels in each market to
create a competitive product; and (vi) increased availability of capital to
wireless cable operators in the public and private markets. According to the
1995 Cable TV Financial Data Book published by Paul Kagan Associates, Inc.
("Kagan"), approximately 150 wireless cable systems presently operate in the
United States serving approximately 400,000 subscribers at the end of 1993 and
approximately 600,000 subscribers at the end of 1994. In addition, the 1995
Wireless Cable Databook also published by Kagan, estimated that wireless cable
would be serving 950,000 subscribers at the end of 1995.

Wireless cable can provide subscribers with the same or superior video
television signal as that of hard-wire cable. Like a hard-wire cable system,
wireless cable receives programming at a head-end. Unlike hard-wire cable
systems, however, the programming is then retransmitted by microwave
transmitters operating in the 2150-2162 MHz and 2500-2686 MHz portions of the
electromagnetic radio spectrum from an antenna typically located on a tower or
building to a small receiving antenna located at a subscriber's premises. At the
subscriber's location, the signals are descrambled, converted to frequencies
that can be viewed on a television set and relayed to a subscriber's television
set by coaxial cable. Wireless cable requires a clear LOS, because the microwave
frequencies used will not pass through dense foliage, hills, buildings or other
obstructions. Some of these obstructions can be overcome with the use of signal
repeaters which retransmit an otherwise blocked signal over a limited area.
Since wireless cable systems do not require an extensive Cable Plant, wireless
cable operators can provide subscribers with a high quality picture resulting in
a reliable signal with few transmission disruptions at a significantly lower
system capital cost per installed subscriber than hard-wire cable systems.

SUBSCRIPTION TELEVISION INDUSTRY TRENDS

Wireless cable operators will be affected by subscription television
industry trends as well as trends which are particular to the wireless cable
industry. In order to maintain and increase subscribers in the years ahead,
wireless cable operators will need to adapt rapidly to industry trends and may
need to modify practices to remain competitive.

Digital Compression. Several suppliers of wireless cable equipment are
currently in the process of developing the digital equipment necessary to
process and deliver digital programming. The DVC technology is expected to
increase the channel capacity of each wireless cable channel by four to ten
times. This will create between 132 and 330 channels for a system with 33 analog
channels today. Currently, several wireless operators have begun testing of DVC
systems with several systems' head-ends constructed (PacBell Corp. in Los
Angeles; and CAI Wireless Systems, Inc. ("CAI") in Virginia and Massachusetts).
Digital converters are now starting to be manufactured with market availability
targeted for late 1996 or early 1997. However, FCC approval is required before a
company can convert to or offer digital programming. See "-- Regulatory
Environment."

Interactive Services. Wireless cable systems are currently technically
capable of offering selected interactive services by transmitting data from the
subscriber's location back to the head-end facility using response channels
licensed to wireless operators by the FCC. The introduction of digital
technology and wireless cable modems is expected to broaden the services that
can be offered. Several manufacturers of wireless cable equipment are currently
developing the equipment and technology that will allow for more services than
are available today using response channels.

Two-way digital equipment, which may be available within the next several
years, will allow for interactive services such as impulse pay-per-view, home
shopping, video games and interactive two-way data exchange. A potentially
significant service being developed today is Internet access. Modems are being

40
<PAGE> 42

developed and tested that will allow for asymmetrical operations (data rates
different in each direction) using either the telephone company lines for the
return path to the head-end facility ("telco return") or radio frequencies
already licensed and used by wireless operators ("RF return").

For Internet and Internet-like services utilizing a telco return, the modem
uses the telephone line to request information from the head-end. The head-end
communicates to the Internet through dedicated high speed telephone lines. The
information from the Internet is sent to the head-end where it is then sent out
on one of the MDS channels which has been dedicated to two-way data services.
With the RF return setup, the request is sent from the modem to a transceiver
located on the roof of the subscriber's home. The transceiver not only processes
the standard video channels to the television, it also transmits a signal
through the air which is received at the head-end or cell site. From there, it
proceeds the same as the telco return described above.

Advertising. Local and national advertising through various interconnects
continues to grow as a source of revenue for hard-wire and wireless cable
operators. The Company currently sells advertising in its Fort Pierce, Melbourne
and Sacramento Systems and expects to eventually have such capability in all of
its markets. The Company believes its regional clustering facilitates its
ability to deliver advertising throughout an entire region and not just isolated
markets.

REGULATORY ENVIRONMENT

General. The wireless cable industry is subject to regulation by the FCC
pursuant to the Communications Act of 1934, as amended (the "Communications
Act"). The Communications Act empowers the FCC, among other things, to issue,
revoke, modify and renew licenses within the spectrum available to wireless
cable; to approve the assignment or transfer of control of such licenses; to
approve the location of wireless cable systems; to regulate the kind,
configuration and operation of equipment used by wireless cable systems; and to
impose certain equal employment opportunity and other reporting requirements on
wireless cable operators.

The FCC has determined that wireless cable systems are not "cable systems"
for purposes of the Communications Act. Accordingly, a wireless cable system
does not require a local franchise and is subject to fewer local regulations
than a hard-wire cable system. Moreover, all transmission and reception
equipment for a wireless cable system can be located on private property; hence,
there is no need to make use of utility poles or dedicated easements or other
public rights-of-way. Unlike hard-wire cable operators, wireless cable operators
do not have to pay local franchise fees. Legislation has been introduced in some
states, including Illinois, Maryland and Florida, which would authorize state
and local authorities to impose on all video program distributors (including
wireless cable distributors) a tax on each distributor's gross receipts,
comparable to the franchise fees paid by hard-wire cable operators. While the
proposals vary among states, the bills would require, if passed, as much as 5.0%
of gross receipts to be paid by wireless distributors to local authorities.
Efforts are underway by the Wireless Cable Association International, Inc., an
industry trade association, to preempt and thereby prevent such state taxes
through federal legislation. In addition, the industry is opposing the state
bills as they are introduced, and in Pennsylvania and Virginia, it has succeeded
in being exempted from the video tax that was enacted into law. The City of
Yakima also has adopted a tax on gross receipts of subscription television
providers from within its city limits. Similar legislation could be introduced
in other states and municipalities where the Company does business. It is not
possible to predict whether or not new state or municipal laws will be enacted
which impose new taxes on wireless operators. Hearings by the Judiciary
Subcommittee of the Commercial and Administrative Law Committee of the United
States House of Representatives were held on July 25, 1996 to hear presentations
supporting the exemption of wireless cable operators from local franchise taxes
through federal preemption.

Licensing Procedures. The FCC awards MDS and ITFS licenses based upon
applications demonstrating that the applicant is legally and technically
qualified, and certifying that it is otherwise qualified to hold the license and
that the operation of the proposed station will not cause impermissible
interference to other stations or proposed stations entitled to interference
protection.

The FCC accepts applications for new ITFS stations or major modifications
to authorized ITFS stations during designated filing "windows." When two or more
ITFS applicants file for the same channels and the

41
<PAGE> 43

proposed facilities cannot be operated without impermissible interference, the
FCC employs a set of comparative criteria to select from among the competing
applicants.

Recently, the FCC adopted a competitive bidding mechanism under which
initial MDS licenses for 493 designated BTAs were auctioned to the highest
bidder. The BTA Auction concluded on March 28, 1996 after 181 rounds of bidding.
High bidders were required to submit specified down payments to the FCC by April
5, 1996. BTA Auction winners have the exclusive right to apply for MDS and
commercial ITFS channels within their BTAs, subject to compliance with
interference protection, construction of the channels and other rules.

Generally, once a commercial license application is approved by the FCC and
the applicant resolves any deficiencies identified by the FCC, a conditional
license is issued, allowing construction of the station to commence.
Construction of ITFS stations generally must be completed within 18 months of
the date of grant of the authorization. Construction of MDS stations licensed
pursuant to initial applications filed before the implementation of the BTA
Auction rules generally must be completed within 12 months. If construction of
MDS or ITFS stations is not completed within the authorized construction period,
the licensee must file an application with the FCC seeking additional time to
construct the station and demonstrate therein compliance with certain FCC
standards. If the extension application is not filed or is not granted, the
license will be deemed forfeited. The construction requirements applicable to
MDS stations licensed pursuant to the BTA Auction are substantially different.
The licensee must build stations capable of reaching two-thirds of the
population of the area within its control in the BTA within five years.

FCC rules prohibit the sale for profit of a conditional commercial license
or of a controlling interest in the conditional license holder prior to
construction of the station or, in certain instances, prior to the completion of
one year of operations. However, the FCC does permit the leasing of 100.0% of a
commercial license holder's spectrum capacity to a wireless cable operator and
the granting of options to purchase a controlling interest in a license even
before such holding period has lapsed.

License Renewals. Applications for renewal of MDS and ITFS licenses must be
filed within a certain period prior to expiration of the license term, and
petitions to deny applications for renewal may be filed during certain periods
following the public notice of the filing of such applications. Licenses are
subject to revocation or cancellation for violation of the Communications Act or
the FCC's rules and policies. Conviction for certain criminal offenses also may
render a licensee or applicant unqualified to hold a license.

Channels Available for Wireless Cable. The right to transmit video
programming, entertainment services and other information on wireless cable
frequencies is regulated by the FCC. In each metropolitan market, the FCC has
allocated 33 channels for the primary purpose of wireless cable transmissions of
video programming. The spectrum bandwidth associated with these channels varies
between 196 and 198 MHz depending upon whether channel 2 or 2A is included. In
the largest 50 markets channel 2 is available and consists of a full 6 MHz of
bandwidth; the remainder of the markets include channel 2A which consists of 4
MHz of bandwidth and, in an analog format, is not capable of full audio and
video transmissions. The 33 channels consist of 13 MDS channels, which can be
used exclusively for commercial purposes, and 20 ITFS channels. The FCC does not
impose any restrictions on the terms of MDS channel leases, other than the
requirement that the licensee maintain effective control of its MDS station. The
same FCC control requirement applies to ITFS licensees.

Except in limited circumstances, 20 ITFS channels in a service area are
licensed to qualified educational institutions and non-profit organizations.
Each of these channels must be used a minimum of 20 hours per week for
instructional programming (12 hours per week in the first two years). The
remaining "excess air time" on an ITFS channel may be leased to wireless cable
operators for commercial use, without further restrictions (other than the right
of the ITFS license holder, at its option, to recapture up to an additional 20
hours of air time per week for educational programming). Certain programs (e.g.,
C-SPAN and Discovery Channel) qualify as educational programming and thereby
facilitate greater usage by the Company of an ITFS channel. ITFS excess capacity
leases cannot exceed terms of ten years.

A technique known as "channel mapping" also permits ITFS licensees to meet
their minimum educational programming requirements by transmitting educational
programming over several ITFS channels

42
<PAGE> 44

at different times, but in a manner which appears to the viewer as one channel.
Lessees of ITFS's "excess air time" generally have the right to transmit to
their subscribers the educational programming provided by the lessor at no
incremental cost. The FCC amended its rules to permit "channel loading" in 1994.
Channel loading permits ITFS license holders to consolidate their educational
programming on one or more of their ITFS channels thereby providing wireless
cable operators leasing such channels, including the Company, with greater
flexibility in their use of ITFS channels. Under certain circumstances, the FCC
will issue commercial ITFS licenses to wireless cable operators. However,
henceforth only BTA Authorization holders may apply for initial commercial ITFS
licenses.

LPTV Licensing. In each television market, the FCC makes available for
licensing 66 LPTV channels: 12 standard VHF channels (2-13) and 54 UHF channels
(14-36, 38-69). The FCC uses a window-filing procedure to process LPTV
applications, and each applicant can apply for a total of five LPTV channels per
window-filing period. There is no limit on the number of LPTV channels an entity
may own and LPTV licenses are not subject to FCC auctions or competitive bidding
procedures. The FCC considers potential interference and availability of
spectrum when granting LPTV licenses.

Like wireless cable channels, LPTV channels are a full six MHz of spectrum,
and the 30-mile reach of an LPTV channel is compatible with the 35-mile
protected service area of a wireless cable system. LPTV channels are received at
the subscriber's home through either an off-air antenna or a UHF loop antenna.

Tower Location and Signal Strength. The FCC also regulates transmitter
locations and signal strength. The operation of a wireless cable television
system requires the co-location of a commercially viable number of transmitting
antennae with common power levels.

Protected Service Areas. Under the current FCC regulations, a wireless
cable operator generally may serve any location within the LOS of its
transmission facility, provided that it complies with the FCC's interference
protection standards. An incumbent MDS station generally is automatically
entitled to interference protection within a 35-mile radius around its
transmitter site. Usually an ITFS facility is, upon request, entitled to the
same 35-mile protected service area during excess capacity use by a wireless
cable operator, and during non-excess capacity use times, interference
protection for all of its FCC-registered receive-sites located within 35 miles
of its transmitter.

The 1992 Cable Act. The 1992 Cable Act imposed additional regulation on
hard-wire cable operators and permits regulation of hard-wire cable rates in
markets in which there is no "effective competition." The 1992 Cable Act, among
other things, directed the FCC to adopt comprehensive new federal standards for
local regulation of certain rates charged by hard-wire cable operators. The 1992
Cable Act also deregulated hard-wire cable rates in a given market once other
subscription television providers offer comparable video programming to at least
50.0% of the households in a franchise area and serve, in the aggregate, at
least 15.0% of the cable franchise area. Rates charged by wireless cable
operators, already typically lower than hard-wire cable rates, are not subject
to regulation under the 1992 Cable Act. Pursuant to the 1992 Cable Act, the FCC
has required hard-wire cable operators to implement rate reductions.

The 1996 Act. A principal focus of the 1996 Act is freeing local telephone
companies and long distance telephone companies from barriers to competing in
each other's lines of business and preempting state restrictions on competition
in the provision of local telephone service. In addition, the 1996 Act contains
provisions which amend the 1992 Cable Act and which affect wireless cable
operators.

A significant potential effect on wireless cable operators of the 1996 Act
may result from its provisions exempting hard-wire cable systems from rate
regulation. In particular, the 1996 Act will end rate regulation of all but
basic cable service by 1999 and immediately removes virtually all rate
regulation of "small cable operators" -- those cable operators that, directly or
through an affiliate, serve in the aggregate fewer than 1.0% of all U.S. cable
subscribers, and are unaffiliated with any entity whose gross revenue in the
aggregate exceeds $250.0 million -- in those franchise areas in which it serves
50,000 or fewer subscribers. In the wake of the lifting of rate caps, some of
such cable systems may raise their rates which would improve the existing price
advantages of wireless cable operators over competing traditional hard-wire
cable service providers.

43
<PAGE> 45

The 1996 Act also contains provisions allowing local exchange telephone
companies to offer cable service within their telephone service areas. Under the
1992 Cable Act, exchange telephone companies were free to offer wireless cable
service anywhere, but could offer wired cable service only outside of their
exchange telephone areas or solely as common carriers, subject to FCC
authorization. The 1996 Act allows exchange telephone companies to offer video
programming services via radio communications (such as wireless cable) without
regulation of rates or services, to offer hard-wire or fiber cable service
channels for hire by video programmers, to offer their own hard-wire or fiber
optic service over networks with channels also available for use by other video
program services providers under a modified regulatory scheme and to provide
traditional cable service subject to local franchising requirements. However,
the FCC has recently implemented those provisions of the 1996 Act and,
accordingly, it is too early to predict the impact, if any, that such FCC
regulations will have on wireless cable operators.

The 1996 Act offers wireless cable operators and satellite programmers
relief from private and local government-imposed restrictions on the placement
of receive-site antennae. In some instances, wireless cable operators have been
unable to serve areas due to laws, zoning ordinances, homeowner association
rules or restrictive property covenants banning the erection of antennae on or
near homes. The FCC recently promulgated rules designed to implement Congress'
intent by prohibiting any restriction, including zoning, land use, or building
regulation, or any private covenant, homeowners' association rule, or similar
restriction on property within the exclusive use or control of the antenna user
where the user has a direct or indirect ownership interest in the property, to
the extent it impairs the installation, maintenance or use of an MDS or ITFS
receiving antenna that is one meter or less in diameter or diagonal measurement,
except where such restriction is necessary to accomplish a clearly defined
safety objective or to preserve a recognized historic district. Local
governments and associations may apply to the FCC for a waiver of this rule
based on local concerns of a highly specialized or unusual nature. The FCC also
issued a further notice of proposed rulemaking seeking comment on whether the
1996 Act applies to restrictions on property not within the exclusive use or
control of the viewer and in which the viewer has a direct or indirect property
interest.

Finally, the 1996 Cable Act requires wireless cable companies and hard-wire
cable companies to "scramble" or encrypt channels which ordinarily carry
indecent or sexually explicit programming. A United States District Court has
recently issued a temporary restraining order which has led the FCC to announce
that it will not enforce or implement these provisions.

Other Regulations. Wireless cable license holders are subject to regulation
by the FAA with respect to the construction, marking and lighting of
transmission towers and to certain local zoning regulations affecting
construction of head-ends, receive-site antennae and other facilities. There
also may be restrictions imposed by local authorities and private covenants.
Compliance with such regulations and rules can increase the cost of operating a
wireless cable system.

Due to the regulated nature of the subscription television industry, the
Company's growth and operations may be adversely impacted by the adoption of
new, or changes to existing, laws or regulations or the interpretations thereof.

AVAILABILITY OF PROGRAMMING

Once a wireless cable operator has obtained the right to transmit
programming over specified frequencies, the operator must then obtain the right
to use the programming to be transmitted.

General. Currently, with the exception of the retransmission of local
off-air VHF/UHF broadcast signals, programming is made available in accordance
with contracts with program suppliers under which the system operator generally
pays a royalty based on the number of subscribers receiving service each month.
Individual program pricing varies from supplier to supplier; however, more
favorable pricing for programming is generally afforded to operators with larger
subscriber bases. The likelihood that program material will be unavailable to
wireless cable operators has been significantly mitigated by the 1992 Cable Act
and various FCC regulations issued thereunder which, among other things, impose
limits on exclusive programming contracts and prohibit MSOs from discriminating
against cable competitors with respect to the price, terms and conditions of
programming. It is important to note that current fair access to programming
rules imposed

44
<PAGE> 46

by the 1992 Cable Act apply only to programming owned or controlled by a cable
company and which is delivered by satellite. Consequently, unless changed, any
programming developed for transmission to cable operators over telephone lines,
or any programming developed by an entity divested from a cable company, is not
subject to fair access rules at this time.

Copyright. Under the federal copyright laws, permission from the copyright
holder generally must be secured before a video program may be retransmitted.
Under Section 111 of the Copyright Act, certain "cable systems" are entitled to
engage in the secondary transmission of television broadcast signals without the
prior permission of the holders of copyrights in the programming. In order to do
so, a cable system must secure a compulsory copyright license. Such a license
may be obtained upon the filing of certain reports with and the payment of
certain fees to the U.S. Copyright Office. In 1994, Congress enacted the
Satellite Home Viewer Act of 1994 which enables operators of wireless cable
television systems to rely on the cable compulsory license under Section 111 of
the Copyright Act.

Retransmission Consent. Under the retransmission consent provisions of the
1992 Cable Act, wireless and hard-wire cable operators seeking to retransmit
certain commercial television broadcast signals must first obtain the permission
of the broadcast station. The FCC has exempted wireless cable operators from the
retransmission consent rules in cases where such signals are received off-air in
conjunction with the wireless cable operator's service, provided that the
reception is without charge to the subscriber and where the receive-site antenna
is either owned by the subscriber or within the subscriber's control and
available for purchase by the subscriber upon termination of service. In all
other cases, wireless cable operators must obtain consent to retransmit local
broadcast signals.

COMPETITION

The cable television industry is highly competitive. Wireless cable
operators compete primarily with hard-wire cable companies that own local
franchises in which they have the exclusive right to offer their services.
Generally, hard-wire cable operators do not compete with one another because
their respective service areas do not overlap. In most instances, the hard-wire
cable operators with which the wireless cable operators compete serve more
subscribers on both a local and national level and typically offer a larger
selection of programming.

In addition to competition from hard-wire cable television systems,
wireless cable television operators face competition from a number of other
sources, including potential competition from as yet unidentified sources
engendered by the emerging trends and technologies in the subscription
television industry, some of which are described below.

Direct-to-Home ("DTH"). DTH satellite television services originally were
available via satellite receivers which generally were seven to 12 foot dishes
mounted in the yards of homes to receive television signals from orbiting
satellites. Until the implementation of encryption, these dishes enabled
reception of any and all signals without payment of fees. The advent of DBS has
reduced the popularity of DTH, although the Company will to some degree compete
with these systems in marketing its services. More recently, certain programming
providers have begun offering up to 150 channels via DTH and DBS.

DBS. DBS involves the transmission of an encoded signal directly from a
satellite to the subscriber's premises. Because the signal is at a higher power
level than DTH signals, its reception can be accomplished with a relatively
small (18 inch to three foot) dish mounted on a rooftop or in the yard. Three
DBS services currently are available nationwide, and one more is expected to be
launched later in 1996. DBS currently has approximately 2.3 million subscribers
nationwide. AT&T Corp. has announced plans to invest $137.5 million in DirecTV,
Inc., a leading provider of DBS service, in exchange for a 2.5% equity interest
and options to acquire up to a total of a 30.0% equity interest. MCI
Communications Corp. ("MCI") has announced that it has entered into a DBS joint
venture arrangement with News Corp., using a license that MCI recently won in an
FCC auction for which MCI will pay $682.5 million. DBS currently cannot, for
technical and legal reasons, provide local VHF/UHF broadcast channels as part of
its service, although many subscribers receive such channels from standard
off-air antennae. If a subscriber is unable to receive local network signals
off-air, due to such subscriber's geographic location, the subscriber would be
able to receive the network signals through DBS transmissions, but such
transmissions would be limited to distant, rather than local, network signals.
The cost to the subscriber of a DBS system to service one television set is
approximately $200 to $700, which may

45
<PAGE> 47

or may not include the cost of installation. DBS subscribers also pay monthly
subscription fees analogous to those paid by hard-wire cable system subscribers.

Private Cable. Private cable is a multi-channel subscription television
service where the programming is received by a common satellite receiver and
then transmitted via coaxial cable throughout private property, often MDUs,
without crossing public rights of way. Private cable operates under an agreement
with a private landowner to service a specific MDU, commercial establishment or
hotel. The FCC amended its rules to provide point-to-point delivery of video
programming by private cable operators and other video delivery systems in the
18 gigahertz ("GHz") band. Private cable operators compete with wireless cable
systems for exclusive rights of entry into larger MDUs.

Telephone Companies. The 1996 Act permits local exchange carriers ("LECs")
to provide video programming directly to customers in their respective telephone
service areas. Under recently adopted FCC rules, LECs may operate as open video
service providers subject to streamlined regulations as long as the LECs permit
carriage of unaffiliated video programming providers on a just, reasonable and
nondiscriminatory basis which will permit end users to access video program
services provided by others. Several large telephone companies have announced
plans to acquire or merge with existing hard-wire cable systems outside of the
telephone company's service area.

Two LECs, Bell Atlantic Corp. ("Bell Atlantic") and NYNEX, Inc. ("NYNEX"),
have invested, in the aggregate, $100.0 million in CAI, which operates wireless
cable systems in large urban markets that are primarily located in Bell
Atlantic's and NYNEX's areas of operations. Bell Atlantic and NYNEX announced
that their investment will allow them to enter the market for subscriber video
services more quickly than by constructing a coaxial fiber optic network. Bell
Atlantic and NYNEX are presently seeking approval for a proposed merger that
would result in a Bell Atlantic takeover of NYNEX. In April 1995, Pacific
Telesis Group ("PacTel"), a LEC based in California, acquired Cross Country
Wireless, Inc. ("Cross Country"), which operates a wireless cable system and
holds channel rights in southern California, for approximately $175.0 million.
Similar to Bell Atlantic and NYNEX, PacTel announced that its acquisition of
Cross Country will allow PacTel to enter the market for subscriber video
services on an expedited basis. In November 1995, PacTel announced it would
acquire Wireless Holdings, Inc., which operates wireless cable systems and holds
channel rights in California, Washington, Florida and South Carolina, for
approximately $170.0 million. Bell Atlantic and NYNEX own a 10.0% equity
interest in CS Wireless Systems, Inc., which operates and is developing wireless
cable systems primarily in the midwestern United States. In May 1996, BellSouth
Corp. announced it had secured rights to serve the New Orleans, Louisiana market
by successfully bidding $12.0 million for the wireless cable system there. On
September 18, 1996, BellSouth Corporation announced that it entered into a
non-binding letter of intent for the purchase of wireless cable assets in Miami,
Florida from National Wireless Holdings, Inc. for $48.0 million. The competitive
effect of the entry of telephone companies into the subscription television
business, including wireless cable, is uncertain at this time.

Local Off-Air VHF/UHF Broadcasts. Local off-air VHF/UHF broadcasts (such as
ABC, NBC, CBS and Fox) provide free programming to the public. Pursuant to the
1992 Cable Act, local broadcasters may require that subscription television
operators obtain their consent before retransmitting local off-air VHF/UHF
broadcasts. See "Risk Factors -- Government Regulation" and "-- Dependence Upon
Program Material and Channel Lease Agreements." The FCC also has recently
permitted broadcast networks to acquire, subject to certain restrictions,
ownership interests in hard-wire cable systems.

LMDS. In 1993, the FCC proposed to redesignate the 28 GHz band to create a
new video programming delivery service referred to as LMDS. The FCC proposed to
allow at least two new wireless video program distributors with access to more
than 49 channels each. After a Second and Third Further Notice of Proposed Rule
Making ("NPRM") setting forth various spectrum-sharing proposals, the FCC in its
First Report and Order allocated 1,000 MHz of spectrum in the 28 GHz band to
LMDS despite opposition from both fixed and mobile satellite operators who also
will share portions of the band. In addition, the FCC issued a Fourth NPRM to
allocate additional spectrum in the 31 GHz band to permit LMDS operators to
offer two-way services. Consideration of an earlier proposal to move LMDS to
spectrum above 40 GHz has been rejected by the FCC. The Fourth NPRM also
indicates the FCC will consider competitive issues raised by the 1996 Act,
including the eligibility of LECs and cable operators for LMDS licenses. Service
Rules are expected soon and the FCC has announced its intention to begin
auctioning LMDS spectrum in late 1996 or early 1997.

46
<PAGE> 48

MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Certain information concerning the directors and executive officers of the
Company is set forth below.

<TABLE>
<CAPTION>
NAME AGE POSITION WITH THE COMPANY
- --------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Dean L. Buntrock(1)(2)........... 65 Chairman of the Board
William W. Kingery, Jr........... 50 President, Chief Executive Officer and Director
Sharan L. Wilson................. 45 Chief Operating Officer
Jeb Dickey....................... 41 Chief Financial Officer, Treasurer and Assistant
Secretary
Jennifer L. Richter.............. 30 Vice President and General Counsel
Christopher Scurto............... 34 Vice President of Marketing
Kenneth Gores.................... 48 Vice President of Engineering
Peer Pedersen(1)................. 71 Director and Secretary
Roy F. Coppedge III(3)........... 48 Director
Barbara M. Ginader(3)............ 40 Director
George D. Johnson, Jr.(1)(2)..... 54 Director
</TABLE>

- -------------------------
(1) Member of Compensation Committee. See "Certain Transactions" regarding
transactions between the Company and certain members of the Compensation
Committee as promoters.

(2) Nominee of the Designated Original Investors (as defined below) pursuant to
the Stockholders Agreement.

(3) Nominee of Boston Ventures pursuant to the Stockholders Agreement.

All directors of the Company hold office until the next annual meeting of
stockholders of the Company and until their successors have been elected and
qualified. All officers of the Company serve at the discretion of the Board of
Directors.

The Company and substantially all of its current stockholders and Boston
Ventures are parties to the Stockholders Agreement, which establishes, among
other things, the obligation of all such stockholders to vote their shares at
all elections of directors in favor of two individuals designated by Boston
Ventures and two individuals designated by a group of investors comprised of
Canal Investment Society, L.P., George D. Johnson, Jr., and the interests
controlled by the Buntrock family (collectively, the "Designated Original
Investors"). See "Principal Stockholders -- Stockholders Agreement."

The present principal occupation and employment background of each of the
executive officers and directors is as follows:

Dean L. Buntrock. Mr. Buntrock has been Chairman of the Board of Directors
of the Company since its incorporation in 1994. Mr. Buntrock has been Chairman
of the Board and until June 1996 was Chief Executive Officer of WMX
Technologies, Inc. (formerly Waste Management, Inc.) since 1968. From May 1993
to January 1995, Mr. Buntrock served as Chairman of the Board and Chief
Executive Officer of Chemical Waste Management, Inc., a subsidiary of WMX
Technologies, Inc. In addition, Mr. Buntrock serves as a director of Waste
Management International, PLC, Wheelabrator Technologies, Inc., Boston Chicken,
Inc. and First Chicago Corporation.

William W. Kingery, Jr. Mr. Kingery has served as the President, Chief
Executive Officer, and a Director of the Company since 1994. Mr. Kingery has
over two decades of experience in the development of successful cable television
systems in the United States. Mr. Kingery began his career with Scientific
Atlanta, Inc., where he was responsible for providing financing services to
potential purchasers of cable television equipment and helped in acquiring both
debt and equity financing for the company. From 1976 to 1981, he was Vice
President of Finance and Corporate Development and Chief Financial Officer for
United

47
<PAGE> 49

Cable Television, a New York Stock Exchange ("NYSE") listed company. Mr. Kingery
joined Daniels & Associates, Inc., where he spent six years as President. In
1988, Daniels & Associates was sold to United Artists Cable Systems. As part of
that sale, Mr. Kingery became Executive Vice President of United Artists Cable
Systems with responsibility for 90 cable systems serving approximately 1,300,000
subscribers. From 1989 until joining WBSA in 1994, Mr. Kingery provided
consulting services to the communications industry. Mr. Kingery also serves as a
Director of the Wireless Cable Association International.

Sharan L. Wilson. Ms. Wilson joined the Company as Chief Operating Officer
in July 1996. From 1992 to July 1996, Ms. Wilson served as a Vice President of
Operations and Corporate Development for TCI. Ms. Wilson also was the President
of Netlink, a C-BAND programming concern in 1992. From 1989 to 1991, Ms. Wilson
served as the senior vice president for United Artists Cable Systems where she
was responsible for strategic planning and day-to-day operations for the
Company's western division which included 25 cable systems serving approximately
725,000 subscribers.

Jeb Dickey. Mr. Dickey has served as the Chief Financial Officer, Treasurer
and Assistant Secretary of the Company since its incorporation in 1994. From
1990 to 1993, Mr. Dickey was the Chief Financial Officer of Prime Racing
Ventures, a sports promotion and television programming company located in
Denver, Colorado. Mr. Dickey's financial career includes previous tax and audit
experience with Price Waterhouse LLP and Coopers & Lybrand L.L.P.

Jennifer L. Richter. Ms. Richter has served as Vice President and General
Counsel of the Company since July, 1994. From April 1992 to July 1994, Ms.
Richter was an associate with the law firm of Pepper & Corazzini, L.L.P. where
she specialized in the representation of wireless cable, private cable and
private telephone companies. Prior to that position, Ms. Richter served as a
federal judicial clerk for the United States Sentencing Commission from August
1991 through April 1992. She graduated from Drake University School of Law in
May 1991 with a J.D. and an M.A. in Mass Communications, and is licensed to
practice in Illinois and the District of Columbia.

Christopher Scurto. Mr. Scurto has served as Vice President of Marketing of
the Company since July 1994. Prior to joining the Company, Mr. Scurto was
Manager of Marketing and Business Development at US WEST Enhanced Services from
1992 to 1994 and Director of Marketing for United Artists Cable Systems from
1989 to 1991.

Kenneth Gores. Mr. Gores has served as the Vice President of Engineering of
the Company since November 1995. From October 1990 to July 1996, Mr. Gores was
the Vice President of Engineering for Paragon Cable, a hard-wire cable operator
in Portland, Oregon.

Peer Pedersen. Mr. Pedersen has been a Director of the Company since its
incorporation in 1994. He is founder and Chairman of Pedersen & Houpt, a Chicago
law firm. Mr. Pedersen has been a Director of the Company since 1994 and serves
on the Board of Directors of a number of companies, including Aon Corporation,
Boston Chicken, Inc., Extended Stay America, Inc., H(2)O Plus, Inc., Latin
America Growth Fund, Inc., Tempel Steel Company and WMX Technologies, Inc.

Roy F. Coppedge III. Mr. Coppedge has been a Director of the Company since
1995. He has served as a general partner and director of Boston Ventures since
August 1983. Prior to that date he had been a First Vice President of The First
National Bank of Boston and had headed the bank's U.S. Merchant Banking Group.
Mr. Coppedge is currently a director of American Media Group, Inc., Falcon
Holding Group, L.P. and Continental Cablevision, Inc.

Barbara M. Ginader. Ms. Ginader has been a Director of the Company since
1995. She has served as a general partner and director of Boston Ventures since
January 1993. Prior to January 1993, Ms. Ginader had been a managing director at
Bear, Stearns, & Co., Inc. from 1985 through 1992 with a year (1991) as a
managing director at Chemical Bank. She is currently a member of the board of
advisors of Motown Cafe, L.L.C. and a member of the board of representatives of
Brew House, L.L.C.

George D. Johnson, Jr. Mr. Johnson has been a Director of the Company since
its incorporation in 1994. He is currently Chairman and President of Extended
Stay America, Inc. From July 1987 through August

48
<PAGE> 50

1993, Mr. Johnson served as general partner, President and Chief Executive
Officer of WJB Video, which developed over 200 Blockbuster Video stores prior to
merging into Blockbuster Entertainment Corporation in 1993. Mr. Johnson is also
a director of Duke Power Company, Republic Industries, Inc. and Viacom, Inc.

EXECUTIVE COMPENSATION

The following table sets forth the annual and long-term compensation for
services in all capacities to the Company for the fiscal years ended December
31, 1994 and 1995 of the Chief Executive Officer of the Company ("Named
Officer"). No other executive officer of the Company received more than $100,000
in compensation during 1995.

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION -----------------
------------------- SHARES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS STOCK OPTIONS(1)
- --------------------------------------------------- ---- -------- ------- -----------------
<S> <C> <C> <C> <C>
William W. Kingery, Jr............................. 1994 $131,542 $50,000 62,576
President, Chief Executive Officer and
Director(2) 1995 $150,000 $75,000 111,246
</TABLE>

- -------------------------

(1) After the Offering, the options shall be exercisable for shares of Class B
Common Stock.

(2) Mr. Kingery was first employed and compensated by the Company in February
1994.

The following table sets forth information on grants of stock options to
the Named Officer pursuant to the Company's Stock Option Plan (as defined
herein) during the fiscal year ended December 31, 1995.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------------------------------ VALUE
NUMBER OF PERCENTAGE OF AT ASSUMED ANNUAL RATES
SECURITIES TOTAL OPTIONS OF STOCK APPRECIATION
UNDERLYING GRANTED TO EXERCISE FOR OPTION TERM
OPTIONS EMPLOYEES IN PRICE GRANT EXPIRATION -----------------------
NAME GRANTED(1) 1995 (PER SHARE) DATE DATE 5% 10%
- ------------------------ --------- ------------- ----------- ----- ---------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
William W. Kingery,
Jr.................... 111,246 45.7% $8.37 March March $585,600 $1,484,100
1995 2005
</TABLE>

- -------------------------

(1) After the Offering, the options shall be exercisable for shares of Class B
Common Stock.

The following table sets forth information with respect to the unexercised
options to purchase the Class B Common Stock granted in 1995 under the Stock
Option Plan (as defined herein). The Named Officer did not exercise any stock
options during the 12 month period ended December 31, 1995.

FISCAL YEAR-END OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS AT
HELD AT DECEMBER 31, 1995(1) DECEMBER 31, 1995(2)
------------------------------ ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
William W. Kingery, Jr.................. 15,644 158,178 $ 103,700 $ 1,048,600
</TABLE>

- -------------------------

(1) After the Offering, the options shall be exercisable for shares of Class B
Common Stock.

(2) Market value of the underlying securities is the midpoint of the range of
the anticipated initial public offering price of the Class A Common Stock of
$15.00 per share less the exercise price of "in-the-money" options.

EMPLOYMENT AGREEMENTS

The Company entered into an employment agreement with Mr. Kingery in
February 1994 (the "Kingery Employment Agreement"). Pursuant to the Kingery
Employment Agreement, Mr. Kingery serves as Chief

49
<PAGE> 51

Executive Officer of the Company. The initial term of the employment agreement
was for two years; however, it automatically renews for successive one-year
periods unless either party to the agreement gives the other notice of its
intent to terminate the agreement at least 60 days prior to the expiration of
the current term or any succeeding one year period. Mr. Kingery's minimum annual
base salary is $150,000 and he also is entitled to a productivity bonus under
which he may earn a bonus of up to 50.0% of his base salary as determined by the
Company's Compensation Committee in its sole discretion.

Pursuant to the Kingery Employment Agreement, Mr. Kingery was granted
options to purchase 62,576 shares of the Class B Common Stock under the Stock
Option Plan. Mr. Kingery is entitled to receive such other benefits, pension or
health plans as are received by other officers of the Company. The Kingery
Employment Agreement contains a non-competition provision which extends for two
years after termination of the agreement. The Kingery Employment Agreement may
be terminated by the Company upon Mr. Kingery's death or disability or for
"Cause," as defined in the Kingery Employment Agreement. If Mr. Kingery is
terminated other than upon his death or disability or for Cause, Mr. Kingery or
his representatives will continue to be paid under the agreement for the balance
of the then current term.

The Company entered into an employment agreement with Ms. Wilson in July
1996 (the "Wilson Employment Agreement"). Pursuant to the Wilson Employment
Agreement, Ms. Wilson serves as Chief Operating Officer of the Company. The
initial term of the employment agreement is for one year; however, it renews for
successive one-year periods unless either party to the agreement gives the other
notice of intent to terminate the agreement at least 60 days prior to the
expiration of any current one-year period. Ms. Wilson's minimum annual base
salary is $125,000 and she may earn a productivity bonus in an amount determined
annually by the Company's Compensation Committee in its sole discretion.

Pursuant to the Wilson Employment Agreement, Ms. Wilson was granted options
to purchase 52,147 shares of the Class B Common Stock under the Stock Option
Plan (as herein defined) at the initial public offering price per share. Ms.
Wilson is entitled to receive such other benefits, pension or health plans as
are received by other officers of the Company. The Wilson Employment Agreement
contains a non-competition provision which extends for two years after
termination of the agreement. The Wilson Employment Agreement may be terminated
by the Company upon Ms. Wilson's death or disability or for "Cause," as defined
in the Wilson Employment Agreement. If Ms. Wilson is terminated other than upon
her death or disability or for Cause, Ms. Wilson or her representatives will
continue to be paid under the agreement for the balance of the then current
term.

STOCK OPTION PLAN

On March 15, 1995, the Board of Directors and stockholders of the Company
unanimously adopted a Restated Stock Option Plan (the "Stock Option Plan"),
pursuant to which 539,371 shares of the then existing class of the common stock
were reserved for issuance. As of October 31, 1996, pursuant to the Stock Option
Plan, the Company has outstanding options to purchase an aggregate of 407,475
shares of Class B Common Stock to employees of the Company of which options to
purchase 355,328 shares have an exercise price of $8.37 per share and options to
purchase 52,147 shares have an exercise price of the initial public offering
price per share.

The purpose of the Stock Option Plan is to encourage key employees of the
Company to acquire a proprietary interest in the Company and to generate an
increased incentive to contribute to the Company's future success and
prosperity. All options granted under the Stock Option Plan will be nonqualified
stock options. The Compensation Committee of the Board of Directors of the
Company is the Plan Administrator and has the power to select employees for
participation, determine the number of shares of Class B Common Stock subject to
each grant and the vesting, option price and terms of exercise; provided,
however that no options under the Stock Option Plan may be granted until first
approved by Boston Ventures. The Compensation Committee also may adjust the
number of shares of Class B Common Stock subject to option grants in order to
prevent dilution or enlargement of the benefits or potential benefits of the
option grant. Options may not be assigned or transferred except by will or
operation of the laws of descent and distribution. Subject to vesting
requirements, options granted under the Stock Option Plan may be exercised only
by the participant, with certain exceptions in the event of death during his or
her employment and for certain periods

50
<PAGE> 52

thereafter. No individual may receive options on more than 260,734 shares of
Class B Common Stock under the Stock Option Plan and no options under the Stock
Option Plan may be granted after May 10, 2005. No option may be exercised
earlier than one year from the date of grant.

NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

In October 1996, the Stockholders and the Board of Directors of the Company
adopted a 1996 Stock Option Plan for Non-Employee Directors (the "Directors
Plan"). Under the Directors Plan, 200,000 shares of Class B Common Stock were
reserved for issuance. Holders of Common Stock prior to the Offering and their
affiliates are not eligible participants under the Directors Plan. At this time,
no members of the Board of Directors are eligible participants in the Directors
Plan.

The Directors Plan is intended to assist the Company in attracting and
retaining directors of outstanding ability and to promote the identification of
their interests with those of the stockholders of the Company. The Directors
Plan will provide for automatic grants of non-qualified stock options covering
that number of shares of Class B Common Stock which at the time of grant will
have a fair market value of $50,000, subject to adjustment to reflect events
such as stock dividends, stock splits, recapitalizations, mergers or
reorganizations of or by the Company. The Directors Plan will be administered by
the Board of Directors of the Company and is intended to satisfy the
requirements of Rule 16b-3 under the Exchange Act.

DIRECTORS' FEES

Following consummation of the Offering, non-employee directors of the
Company will receive a fee of $500 per meeting and options to acquire Class B
Common Stock for their services as directors of the Company. Directors who are
also employees of the Company receive no additional compensation for serving as
directors. The Company reimburses all directors for travel and out-of-pocket
expenses in connection with their attendance at meetings of the Board of
Directors.

401(K) PLAN

Effective January 1, 1996, the Company instituted a 401(k) plan for its
eligible employees. All employees of the Company who have been employed for
three months are eligible to participate in the plan beginning on the first day
of the first fiscal quarter following the completion of three months of service.
Participants in the 401(k) plan may contribute up to 15.0% of their total base
compensation to the plan. The Company reserves the right to make matching
contributions in an amount not to exceed 5.0% of any participant's total base
compensation. Each employee's interest in contributions of the Company vests
25.0% per year for the first two years of service and 50.0% in the third year of
service with the Company. Service before January 1, 1996, with the exception of
employees covered by the 401(k) plan previously in place at the Sacramento
System, is not counted toward the vesting. Contributions of the Company may be
made without regard to the profitability of the Company. The trustees of the
401(k) plan are Jeb Dickey and Jennifer L. Richter.

CERTAIN TRANSACTIONS

Dean L. Buntrock, George D. Johnson, Jr. and E. Craig Wall founded the
Predecessor Partnership, selling $12.0 million in limited partnership interests
to investors in 1992 and 1993. Messrs. Buntrock, Johnson and Wall, either
individually or through affiliates contributed $2,167,000, $917,000 and
$1,167,000, respectively to the Predecessor Partnership in return for which they
received limited partnership interests representing 18.1%, 7.6% and 9.7% of the
total limited partnership interests respectively. In 1993 and 1994, the
Predecessor Partnership incurred management fee expenses, payable to its general
partner, an affiliate of Mr. Johnson, of approximately $106,000 per year. In
March 1994, the Company was formed and the common stock was exchanged for the
limited partnership interests in the Predecessor Partnership. In connection with
the aforementioned exchange, the accrued management fees, net of unfunded
general partner contributions, were contributed to the Company as additional
capital. In addition, the Company raised an additional $15.7 million in equity
from its initial stockholders. Messrs. Buntrock, Johnson and Wall, either
individually or through affiliates, contributed their limited partnership
interests in the Predecessor Partnership plus

51
<PAGE> 53

$2,889,000, $1,857,000 and $1,555,000, respectively to the Company in return for
which they received 762,006, 322,788 and 410,742 shares of Common Stock,
respectively. In March and April 1995, the Company granted warrants to its
existing stockholders on a pro rata basis in conjunction with the sale of
Convertible Preferred Stock to Boston Ventures. Messrs. Buntrock, Johnson and
Wall, either individually or through affiliates received warrants to purchase
428,124, 181,123 and 230,488 shares of Class B Common Stock, respectively. Peer
Pedersen, one of the Company's directors and a beneficial owner of shares, is a
shareholder of Pedersen & Houpt, P.C., counsel to the Company. The Company paid
or accrued fees for legal services rendered by Pedersen & Houpt, P.C., for the
years ended December 31, 1993, 1994 and 1995, of approximately $208,000,
$208,000 and $361,000, respectively. In connection with the Offering, the
Company has agreed to release the Original Investors (as defined in the
Stockholders Agreement), including Messrs. Buntrock, Johnson and Wall, from
their indemnity obligations under the Stockholders Agreement in consideration
for them agreeing to permit the Company to cancel the warrants. Messrs. Buntrock
and Johnson, along with Mr. Pedersen, guaranteed the $14.0 million Previous
Credit Facility for the Company for which they received no compensation. The
Previous Credit Facility was repaid in November 1995 and the guarantees have
been released. See "Principal Stockholders -- Stockholders Agreement."

52
<PAGE> 54

PRINCIPAL STOCKHOLDERS

The following table below sets forth certain information with respect to
the beneficial ownership as of October 31, 1996 of the Common Stock of the
Company with respect to: (i) each person or entity known to the Company who
beneficially owns 5.0% or more of the outstanding shares of such Common Stock;
(ii) each of the Company's directors; and (iii) all executive officers and
directors of the Company as a group. Unless otherwise indicated, the persons
listed in the table have sole voting and investment power with respect to all
shares of Common Stock shown as beneficially owned by them. The table below
assumes that the Conversion occurred as of October 31, 1996.

<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
DIRECTORS AND EXECUTIVE
OFFICERS
Dean L. Buntrock(4)........... -- -- 792,287 9.3% 792,287 6.9% 9.0%
3003 Butterfield Road
Oak Brook, Illinois 60521
William W. Kingery, Jr.(5).... -- -- 59,100 * 59,100 * *
312 Quito Place
Castle Rock, Colorado
Jeb Dickey(6)................. -- -- 11,950 * 11,950 * *
3323 South Salida Way
Aurora, Colorado 80013
Kenneth Gores(7).............. -- -- 6,518 * 6,518 * *
9411 Southern Hill Circle
Littleton, Colorado 80123
Jennifer L. Richter(6)........ -- -- 11,950 * 11,950 * *
1011 S. Valentia Street
Villa #137
Denver, Colorado 80231
Christopher Scurto(6)......... -- -- 11,950 * 11,950 * *
3320 Dinero Place
Castle Rock, Colorado
Roy F. Coppedge III(8)........ 712,621 100.0% 4,180,824 49.2 4,893,445 42.4 48.3
21 Custom House Street
Boston, Massachusetts 02110
Barbara M. Ginader(9)......... 712,621 100.0 4,180,824 49.2 4,893,445 42.4 48.3
21 Custom House Street
Boston, Massachusetts 02110
George Dean Johnson, Jr. ..... -- -- 352,160 4.2 352,160 3.1 4.0
909 Poinoina Drive
Ft. Lauderdale, Florida
Peer Pedersen(10)............. -- -- 352,102 4.2 352,102 3.1 4.0
------- ------- --------- ------- --------- ------- ---
161 N. Clark Street,
Suite 3100
Chicago, Illinois 60601
Total for Directors and....... 712,621 100.0 5,778,841 68.1 6,491,462 56.4 66.5
Executive Officers(11)
OTHER BENEFICIAL OWNERS
Canal Investment Society,
L.P......................... -- -- 440,185 5.2 440,185 3.8 5.0
2431 Highway 501
P.O. Box 260001
Conway, SC 29526
</TABLE>

53
<PAGE> 55

<TABLE>
<CAPTION>
BENEFICIAL BENEFICIAL BENEFICIAL
OWNERSHIP OWNERSHIP OWNERSHIP
OF CLASS A OF CLASS B OF COMMON STOCK
COMMON STOCK(1) COMMON STOCK(1) AFTER OFFERING(2) PERCENT OF TOTAL
------------------- -------------------- -------------------- VOTING POWER
NAME OF BENEFICIAL OWNER NUMBER PERCENT NUMBER PERCENT NUMBER PERCENT AFTER OFFERING(3)
- ------------------------------ ------- ------- --------- ------- --------- ------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
Boston Ventures(12)........... 712,621 100.0% 4,180,824 49.2% 4,893,445 42.4% 48.3%
21 Custom House Street
Boston, Massachusetts 02110
Total for all Beneficial
Owners(11)(12).............. 712,621 100.0% 6,219,026 73.3% 6,931,647 60.2% 71.5%
</TABLE>

- -------------------------
* Less than one percent.

(1) Beneficial Ownership represents the beneficial ownership of the Common
Stock of the Company as of October 31, 1996 on a fully diluted basis,
giving effect to the exercise of all vested options and the Conversion. The
Percentage of Beneficial Ownership of Common Stock prior to the Offering is
calculated based on 4,185,691 shares issued and outstanding, 4,893,445
shares issuable upon Conversion and 123,275 shares issuable upon the
exercise of vested options under the Stock Option Plan for a total of
9,202,411 shares on a fully diluted basis.

(2) Percentage Beneficial Ownership of Common Stock After Offering is based
upon the number of shares of Common Stock owned by each beneficial owner
divided by 9,202,411 shares of Common Stock on a fully diluted basis plus
2,350,000 shares of Class A Common Stock issued in the Offering.

(3) Percent of Total Voting Power After Offering is based on ten votes per
share of Class B Common Stock and one vote per share of Class A Common
Stock.

(4) Includes: (i) 440,127 shares of Class B Common Stock held of record by Dean
L. Buntrock; and (ii) 352,160 shares of Class B Common Stock held of record
by the Buntrock Family Partnership I Limited Partnership, the general
partner of which is Dean L. Buntrock. Does not include 176,051 shares of
Class B Common Stock held by Buntrock/Nuzzo Limited Partnership, the
general partner of which is Rosemarie Buntrock, Dean L. Buntrock's wife, of
which Mr. Buntrock has disclaimed beneficial ownership.

(5) Options to purchase 173,822 shares of Class B Common Stock have been
granted to Mr. Kingery pursuant to the Stock Option Plan of which 59,100
are presently exercisable.

(6) Options to purchase 30,419 shares of Class B Common Stock have been granted
to each of Mr. Dickey, Ms. Richter and Mr. Scurto pursuant to the Stock
Option Plan, of which each may presently exercise 11,950.

(7) Options to purchase 26,073 shares of Class B Common Stock have been granted
to Mr. Gores pursuant to the Stock Option Plan, of which 6,518 are
presently exercisable.

(8) These shares are beneficially owned by Boston Ventures, of which Mr.
Coppedge is a general partner and as to which he shares voting and
investment power. See Notes (9) and (12).

(9) These shares are beneficially owned by Boston Ventures, of which Ms.
Ginader is a general partner and as to which she shares voting and
investment power. See Notes (8) and (12).

(10) These shares of Class B Common Stock are beneficially owned by Pedersen
Family Partnership I Limited Partnership, of which Mr. Pedersen, a Director
of the Company, is the general partner.

(11) Totals for all Beneficial Owners and Directors and Executive Officers do
not include double counting of the shares of Common Stock held of record by
the Pedersen Family Partnership I Limited Partnership and Boston Ventures
which are also beneficially owned by Peer Pedersen and Roy F. Coppedge III
and Barbara M. Ginader, respectively.

(12) Boston Ventures Limited Partnership IV ("Fund IV") is the beneficial owner
of 425,924 shares of Class A Common Stock and 2,498,824 shares of Class B
Common Stock. Boston Ventures Limited Partnership IVA ("Fund IVA") is the
beneficial owner of 286,697 shares of Class A Common Stock and 1,682,000
shares of Class B Common Stock. Boston Venture Company Limited Partnership
IV is the general partner of both Fund IV and Fund IVA and has sole power
to vote and dispose of all of the shares of Common Stock owned by the
funds. The general partners of Boston Venture Company

54
<PAGE> 56

Limited Partnership IV are Barbara M. Ginader, a Director of the Company, Roy F.
Coppedge III, a Director of the Company, Anthony J. Bolland, Martha H.W.
Crowninshield, William F. Thompson, Richard L. Wallace and James M. Wilson. See
Notes (8) and (9).

STOCKHOLDERS AGREEMENT

The Company and all but one of its stockholders prior to this Offering are
parties to a Stockholders Agreement. The Stockholders Agreement requires each
party thereto to vote its shares at all elections of directors in favor of two
directors designated by Boston Ventures and two directors designated by the
Designated Original Investors (as defined in the Stockholders Agreement).

The Stockholders Agreement also provides that the Company will not (except
in certain circumstances such as a public offering like this Offering), sell any
of its equity securities without first offering each stockholder the right to
purchase its proportionate percentage of such securities.

The Stockholders Agreement places limitations on the transfer of shares by
each stockholder and also provides Boston Ventures and the Designated Original
Investors with the right, upon a vote of two-thirds of the shares held by Boston
Ventures and the Designated Original Investors to sell their shares of the
Company's stock to a third party, to cause the Other Original Investors (as
defined in the Stockholders Agreement) to sell a percentage of their shares
equal to the percentage sold by Boston Ventures and the Designated Original
Investors ("take along" rights).

The Stockholders Agreement grants Boston Ventures and the Designated
Original Investors certain registration rights with respect to Common Stock held
by them. Each of these stockholder groups possesses an unlimited right to
request registration of the Common Stock provided that at least 20.0% of the
Common Stock then held by them is being requested to be registered or such
lesser amount as long as: (i) the aggregate offering price is expected to be at
least $10.0 million or (ii) the lesser amount represents all of the Common Stock
held by the stockholders. Boston Ventures and the Designated Original Investors
also have an unlimited right to request "piggyback" registration in offerings
initiated by the Company. Boston Ventures and the Designated Original Investors
have, however, waived their "piggyback" rights with respect to the Offering.

Pursuant to the Stockholders Agreement, the Original Investors (as defined
in the Stockholders Agreement) indemnified the Company (the "Indemnity
Obligation") for any amounts which the Company or a subsidiary may be liable to
pay to Charles J. Mauszycki and/or Family Entertainment Network or Wireless
Cable of Florida, Inc. based on equity or profit sharing arrangements entered
into with such persons and the Company pursuant to a final judgment entered
against the Company or a subsidiary, or pursuant to a settlement if the Company
and the Original Investors holding 66.7% of all Original Investors' holdings of
Common Stock decide to settle with such persons. Immediately prior to the
closing of the Offering, the Original Investors will be released by the Company
from their Indemnity Obligation as consideration for cancellation of the
warrants. See "Certain Transactions" and "Description of Capital Stock --
Warrants." The Company has settled with two of the three shareholders and is
negotiating with the third for settlement. See "Business -- Legal Proceedings."

PREFERRED STOCK PURCHASE AGREEMENT

Certain provisions of the Preferred Stock Purchase Agreement survive the
Conversion and terminate on the date on which Boston Ventures no longer holds at
least 20.0% of the shares of Common Stock. Pursuant to such agreement, the
Company must obtain the consent of Boston Ventures for material transactions
that include: mergers, consolidations, acquisitions and sales of systems;
incurrence of debt in excess of $500,000; issuance of equity securities; or
amending its Certificate or Bylaws. Boston Ventures has consented to the sale of
equity securities in the Offering.

55
<PAGE> 57

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 10,000,000 shares
of Class A Common Stock, $.01 par value per share, 15,000,000 shares of Class B
Common Stock, $.01 par value per share and 10,000,000 shares of preferred stock.
As of October 31, 1996 and giving effect to the Conversion, there were issued
and outstanding 712,621 shares of Class A Common Stock and 8,366,515 shares of
Class B Common Stock.

The following summary of the terms of the Company's capital stock does not
purport to be complete and is qualified in its entirety by reference to the
applicable provisions of Delaware law and the Certificate.

COMMON STOCK

Each holder of Class A Common Stock is entitled to one vote for each share
held of record on matters coming before the stockholders for a vote. Each holder
of Class B Common Stock is entitled to ten votes for each share held of record
on matters coming before the stockholders for a vote. At the election of the
holder of shares of Class B Common Stock, such shares are convertible on a
one-for-one basis into shares of Class A Common Stock. In addition, shares of
Class B Common Stock automatically convert to shares of Class A Common Stock
upon the sale of such shares to a person who is not then currently a Class B
stockholder or an affiliate thereof. The issued and outstanding shares of Class
B Common Stock shall be reduced by the number of shares of Class B Common Stock
converted to shares of Class A Common Stock. Holders of both classes of Common
Stock have no cumulative voting rights with respect to the election of directors
and have no preemptive or other rights to purchase additional securities of the
Company.

Subject to the prior rights of the holders of any preferred stock issued
hereafter, the holders of the Common Stock of the Company are entitled to
receive, pro rata, such dividends as may be declared by the Board of Directors
out of funds legally available therefor, and are entitled to share, pro rata, in
any other distribution to stockholders. Dividends may not be paid on the Common
Stock as long as the Revolving Credit Facility remains in place.

Except as otherwise described above, the rights and preferences of each
class of Common Stock are identical in all respects one with the other,
including dividend rights and rights upon liquidation or dissolution.

CONVERTIBLE PREFERRED STOCK

In March and April of 1995, Boston Ventures purchased 35,000 shares of
Convertible Preferred Stock for $35.0 million which shares will be converted
into Class B Common Stock and the accrued dividend thereon into Class A Common
Stock immediately prior to the Offering.

PREFERRED STOCK

The Company's Board of Directors has the authority to issue up to
10,000,000 shares of preferred stock and to determine the price, rights,
preferences and privileges of those shares without any further vote or action by
the Company's stockholders. In addition, the rights of the holders of Common
Stock will be subject to, and may be adversely affected by, the rights of the
holders of any shares of preferred stock which may be issued in the future.
While the Company has no present intention to issue shares of preferred stock,
such issuance, while providing desirable flexibility in connection with possible
acquisitions and other corporate purposes, could have the effect of making it
more difficult for a third party to acquire a majority of the outstanding voting
stock of the Company. In addition, such preferred stock may have other rights,
including economic rights senior to the Common Stock, and, as a result, the
issuance thereof could have a material adverse effect on the market value of the
Common Stock.

WARRANTS

In March and April 1995, the Company issued warrants to all of its then
existing shareholders. Immediately prior to the closing of the Offering, these
warrants will be cancelled, with the consent of the warrant holders, in
consideration for the Company's releasing the holders from the Indemnity
Obligation. See "Principal Stockholders -- Stockholders Agreement" and "Certain
Transactions."

56
<PAGE> 58

BUSINESS COMBINATION PROVISION

The Company is subject to Section 203 of the Delaware Act. In general,
Section 203 prevents an "interested stockholder" from engaging in a "business
combination" with a Delaware corporation for three years following the date such
person became an interested stockholder, unless: (i) prior to the date such
person became an interested stockholder, the board of directors of the
corporation approved the transaction in which the interested stockholder became
an interested stockholder or approved the business combination; (ii) upon
consummation of the transaction that resulted in the interested stockholder
becoming an interested stockholder, the interested stockholder owns at least
85.0% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding stock held by directors who are also officers
of the corporation and stock held by certain employee stock plans; or (iii) on
or subsequent to the date of the transaction in which such person became an
interested stockholder, the business combination is approved by the board of
directors of the corporation and authorized at a meeting of stockholders by the
affirmative vote of the holders of at least two-thirds of the outstanding voting
stock of the corporation not owned by the interested stockholder.

Section 203 defines a "business combination" to include: (i) any merger or
consolidation involving the corporation or any direct or indirect majority-owned
subsidiary of the corporation with an interested stockholder or any corporation,
partnership, unincorporated association or other entity if caused by an
interested stockholder; (ii) any sale, lease, transfer, pledge or other
disposition involving an interested stockholder of assets of the corporation or
a majority-owned subsidiary of the corporation which assets have an aggregate
market value equal to 10.0% or more of the consolidated assets of the
corporation; (iii) subject to certain exceptions, any transaction which results
in the issuance or transfer by the corporation or any majority-owned subsidiary
of any stock of the corporation or such subsidiary to an interested stockholder;
(iv) any transaction involving the corporation or any majority-owned subsidiary
which has the effect of increasing the proportionate share of any class or
series of stock of the corporation or any majority-owned subsidiary,
beneficially owned by the interested stockholder; or (v) the receipt by an
interested stockholder of the benefit of any loans, guarantees, pledges or other
financial benefits provided by or through the corporation or any majority-owned
subsidiary. In addition, Section 203 generally defines an interested stockholder
as any entity or person beneficially owning 15.0% or more of the outstanding
voting stock of the corporation and any entity or person affiliated with or
controlling or controlled by such entity or person.

LIMITATION ON LIABILITY

As permitted by the provisions of the Delaware Act, the Certificate
eliminates, in certain circumstances, the monetary liability of directors of the
Company for a breach of their fiduciary duty as directors. These provisions do
not eliminate the liability of a director: (i) for a breach of the director's
duty of loyalty to the Company or its stockholders; (ii) for acts or omissions
by a director not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) for liability arising under Section 174 of the
Delaware Act (relating to the declaration of dividends and purchase or
redemption of shares in violation of the Delaware Act); or (iv) for any
transaction from which the director derived an improper personal benefit. In
addition, these provisions do not eliminate the liability of a director for
violations of federal securities laws, nor do they limit the rights of the
Company or its stockholders, in appropriate circumstances, to seek equitable
remedies such as injunctive or other forms of non-monetary relief. Such remedies
may not be effective in all cases.

If the Delaware Act is amended to authorize a further limitation or
elimination of the liability of directors or officers, then the liability of a
director or officer of the Company shall, in addition to the limitation of
personal liability provided in the Certificate be limited or eliminated to the
fullest extent permitted by the Delaware Act, as from time to time amended.

INDEMNIFICATION

Under Section 145 of the Delaware Act, the Company has broad powers to
indemnify its directors and officers against liabilities they may incur in such
capacities, including liabilities under the Securities Act. The

57
<PAGE> 59

Certificate provides that the Company will indemnify its directors and officers
to the fullest extent permitted by law. Under the provisions of the Certificate,
any director or officer who, in his or her capacity as such, is made or
threatened to be made a party to any suit or proceeding shall be indemnified if
the Board of Directors determines such director or officer acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the Company or, with respect to any criminal action or
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
Indemnification under the Certificate includes payment by the Company of
expenses in defending an action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
the indemnified party to repay such advance if it is ultimately determined that
such person is not entitled to indemnification under the Certificate, which
undertaking may be accepted without reference to the financial ability of such
person that makes such repayments. The Company is not responsible for the
indemnification of any person seeking indemnification in connection with a
proceeding initiated by such person unless the initiation was approved by the
Board of Directors of the Company. The Certificate and the Delaware Act further
provide that such indemnification is not exclusive of any other rights to which
such individuals may be entitled under the Certificate, the Bylaws, any
agreement, any vote of stockholders or disinterested directors, or otherwise.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Class A Common Stock is American
Securities Transfer & Trust, Inc.

58
<PAGE> 60

SHARES ELIGIBLE FOR FUTURE SALE

Upon completion of the Offering and based on the shares of Common Stock
outstanding as of October 31, 1996, the Company will have a total of 11,429,136
shares of Common Stock outstanding, assuming no exercise of vested options after
October 31, 1996. Of these shares, the 2,350,000 shares of Class A Common Stock
offered hereby (2,702,500 shares if the Underwriters' over-allotment option is
exercised in full) will be freely tradable without restriction or registration
under the Securities Act by persons other than "affiliates" of the Company, as
defined under the Securities Act. The 712,621 shares of Class A Common Stock
issued in connection with the Conversion, the 8,366,515 shares of Class B Common
Stock outstanding and any shares purchased in this Offering by an affiliate are
Restricted Shares. Because Class B Common Stock is convertible into Class A
Common Stock, however, sales of Restricted Shares in the public market, or the
availability of such shares for sale, could adversely affect the market price of
the Class A Common Stock. Of the 9,079,136 shares of Common Stock held by the
Company's stockholders, agreements with respect to 9,074,269 of such shares have
been entered into providing that holders of such shares will not directly or
indirectly, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise sell or dispose (or announce any offer, sale,
offer of sale, contract of sale, pledge, grant of any option to purchase or
other sale or disposition) of any shares of Common Stock or other capital stock,
or any securities convertible into, or exercisable or exchangeable for, any
shares of Common Stock or other capital stock of the Company, for a period of
180 days after the date of this Prospectus, without the prior written consent of
Prudential Securities Incorporated, on behalf of the Underwriters. The number of
shares of such Common Stock available for sale in the public market is further
limited by restrictions under the Securities Act.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares must be aggregated) who has beneficially owned "restricted shares"
for at least two years, including any person who may be deemed an "affiliate" of
the Company, would be entitled to sell, within any three-month period, that
number of shares that does not exceed the greater of 1.0% of the number of
shares of Class A Common Stock then outstanding (approximately 3,062,621 shares
immediately after this Offering, assuming no exercise of the Underwriters'
over-allotment option) or the average weekly trading volume of the Class A
Common Stock as reported through the Nasdaq National Market during the four
calendar weeks preceding the filing of a Form 144 with respect to such sale.
Sales under Rule 144 are also subject to certain manner of sale restrictions and
notice requirements and to the availability of current public information about
the Company. In addition, a person who is not deemed to have been an affiliate
of the Company during the 90 days preceding a sale, and who has beneficially
owned for at least three years the shares proposed to be sold, would be entitled
to sell such shares under Rule 144(k) without regard to the requirements set
forth above. Because of the restrictions noted above, beginning 180 days after
the effective date of this Offering, 9,079,136 shares of Common Stock and any
shares of Class A Common Stock purchased by an affiliate pursuant to this
Offering will be eligible for sale in the public market subject to Rule 144.

In addition, holders of 712,621 shares of Class A Common Stock and
8,366,515 shares of Class B Common Stock may require the Company to register
such shares under the Securities Act, which would permit such holders to resell
a certain amount of their shares without complying with Rule 144. Such holders
have, however, waived their registration rights with respect to the Offering and
have agreed to a similar 180-day lock-up with respect to their shares of Common
Stock. See "Principal Stockholders -- Stockholders Agreement" and
"Underwriting."

The Company has reserved for issuance 200,000 shares of Class B Common
Stock under the Directors Plan and 539,371 shares of Class B Common Stock under
the Stock Option Plan. As of October 31, 1996, options to purchase a total of
407,475 shares of Class B Common Stock pursuant to the Stock Option Plan were
outstanding, of which options to purchase 355,328 shares have an exercise price
of $8.37 per share and options to purchase 52,147 shares have an exercise price
at the initial public offering price per share. As of October 31, 1996, options
to purchase 123,275 shares are exercisable. Of the shares issuable upon exercise
of outstanding options, 399,792 are subject to a similar lock-up period with
respect to such shares. See "Management -- Stock Option Plan" and
"Underwriting."

Rule 701 under the Securities Act provides that, beginning 90 days after
the date of this Prospectus, shares of Common Stock acquired on the exercise of
outstanding options may be resold by persons other than

59
<PAGE> 61

affiliates subject only to the manner of sale provisions of Rule 144, and by
affiliates subject to all provisions of Rule 144 except its two-year minimum
holding period. The Company intends to file one or more registration statements
on Form S-8 under the Securities Act to register shares of Common Stock subject
to stock options. See "Management -- Non-Employee Director Stock Option Plan."

Prior to this Offering, there has been no public market for the Common
Stock and no predictions can be made of the effect, if any, that the sale or
availability for shares of additional Common Stock will have on the trading
price of the Common Stock. Nevertheless, sales of substantial amounts of such
shares in the public market, or the perception that such sales could occur,
could adversely affect the trading price of the Common Stock and could impair
the Company's future ability to raise capital through an offering of its equity
securities. See "Risk Factors -- Shares Eligible for Future Sale" and
"Description of Capital Stock."

60
<PAGE> 62

UNDERWRITING

The underwriters named below (the "Underwriters"), for whom Prudential
Securities Incorporated and Lehman Brothers Inc. are acting as the
representatives (the "Representatives"), have severally agreed, subject to the
terms and conditions contained in the Underwriting Agreement, to purchase from
the Company the numbers of shares of Class A Common Stock set forth below
opposite their respective names:

<TABLE>
<CAPTION>
NUMBER
UNDERWRITER OF SHARES
------------------------------------------------------------------- ---------
<S> <C>
Prudential Securities Incorporated.................................
Lehman Brothers Inc................................................

---------
Total....................................................... 2,350,000
=========
</TABLE>

The Company is obligated to sell, and the Underwriters are obligated to
purchase, all of the shares of Class A Common Stock offered hereby if any are
purchased.

The Underwriters, through their Representatives, have advised the Company
that they propose to offer the Class A Common Stock initially at the initial
public offering price set forth on the cover page of this Prospectus; that the
Underwriters may allow selected dealers a concession of $ per share; and such
dealers may reallow a concession of $ per share to certain other dealers.
After the initial public offering, the initial offering price and the concession
may be changed by the Representatives.

The Company has granted the Underwriters an over-allotment option,
exercisable for 30 days from the date of this Prospectus, to purchase up to
352,500 additional shares of Class A Common Stock at the initial public offering
price, less underwriting discounts and commissions, as set forth on the cover
page of this Prospectus. The Underwriters may exercise such option solely for
the purpose of covering over-allotments incurred in the sale of the shares of
Class A Common Stock offered hereby. To the extent such option to purchase is
exercised, each Underwriter will become obligated, subject to certain
conditions, to purchase approximately the same percentage of such additional
shares as the number set forth next to such Underwriter's name in the preceding
table bears to 2,350,000.

Of the 9,079,136 shares of Common Stock held by the Company's stockholders,
agreements with respect to 9,074,269 of such shares have been entered into
providing that holders of such shares will not directly or indirectly, offer,
sell, offer to sell, contract to sell, pledge, grant any option to purchase or
otherwise sell or dispose (or announce any offer, sale, offer of sale, contract
of sale, pledge, grant of any option to purchase or other sale or disposition)
of any shares of Common Stock or other capital stock, or any securities
convertible into, or exercisable or exchangeable for, any shares of Common Stock
or other capital stock of the Company, for a period of 180 days after the date
of this Prospectus, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters.

The Representatives have advised the Company that the Underwriters do not
intend to confirm sales to any accounts over which they exercise discretionary
authority.

Prior to the Offering, there has been no public market for the Common Stock
of the Company. Consequently, the initial public offering price for the Class A
Common Stock will be determined by negotiations between the Company and the
Representatives. Among the factors to be considered in such negotiations are
prevailing market conditions, the results of operations of the Company in recent
periods, the market capitalizations and states of development of other companies
which the Company and the Representatives believe to be comparable to the
Company, estimates of the business potential of the Company, the present state
of the Company's development and other factors deemed relevant.

61
<PAGE> 63

LEGAL MATTERS

Certain legal matters will be passed upon for the Company by Pedersen &
Houpt, P.C., Chicago, Illinois, and by its regulatory counsel, Pepper &
Corazzini, L.L.P., Washington, D.C. Peer Pedersen, a Director of the Company and
beneficial owner of 352,102 shares of the Company's Class B Common Stock, is a
shareholder of Pedersen & Houpt. Certain legal matters will be passed upon for
the Underwriters by their counsel, Cahill Gordon & Reindel, a partnership
including professional corporations, New York, New York.

EXPERTS

The consolidated financial statements of Wireless Broadcasting Systems of
America, Inc. included in this Prospectus and elsewhere in the Registration
Statement for the years ended December 31, 1994 and December 31, 1995 have been
audited by Arthur Andersen LLP, independent public accountants, as indicated in
their report with respect thereto and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing.

The consolidated financial statements of WJB-TV Limited Partnership
(predecessor to Wireless Broadcasting Systems of America, Inc.) included in this
Prospectus and Registration Statement for the year ended December 31, 1993 have
been audited by Ernst & Young LLP, independent certified public accountants, as
set forth in their report thereon appearing elsewhere herein, and are included
in reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.

The financial statements of Northwest Cable Network included in this
Prospectus and elsewhere in this Registration Statement, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of such firm as experts in accounting and auditing.

The financial statements of Boise Cable Limited Partnership included in
this Prospectus and elsewhere in this Registration Statement, have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto, and are included herein in reliance upon the
authority of such firm as experts in accounting and auditing.

The financial statements of Pacific West Cable Television included in this
Prospectus and elsewhere in this Registration Statement, have been audited by
Arthur Andersen LLP, independent public accountants, as indicated in their
report with respect thereto and are included herein in reliance upon the
authority of such firm as experts in accounting and auditing.

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission a
Registration Statement (together with all amendments, exhibits and schedules
thereto, the "Registration Statement") under the Securities Act with respect to
the Class A Common Stock being offered hereby. This Prospectus, which
constitutes part of the Registration Statement, does not contain all of the
information set forth in the Registration Statement. Statements made in this
Prospectus concerning the contents of any contract, agreement or other document
referred to herein are not necessarily complete. With respect to each such
contract, agreement or other document filed with the Commission as an exhibit to
the Registration Statement, reference is hereby made to such exhibits for a more
complete description of the matter involved, and each such statement shall be
deemed qualified in its entirety by such reference. The Registration Statement
and the exhibits and schedules thereto may be inspected at the public reference
room maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, and is available for inspection and copying at its
regional offices located at Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661 and 7 World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can be obtained from the public
reference section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. The Commission also maintains a site on the World
Wide Web (http://www. sec.gov) that contains information filed electronically by
the Company.

62
<PAGE> 64

GLOSSARY

ADDRESSABILITY................ The ability of a wireless cable operator or
cable operator to directly control the delivery
of programming and other information to
individual subscribers from a central delivery
center. A wireless cable system employing fully
addressable decoders will be able to send and
receive messages from its subscribers and turn
on and off programs by sending signals from the
head-end facility to the individual subscriber.

ANALOG........................ The process of transmitting electronic signals
through a continuous signal in which the
content is varied based on the varying power of
the signal.

BASIC PROGRAMMING............. Programming offered by a cable operator to its
subscribers for the base monthly subscription
rate, without any additional payments.

BASIC TRADING AREA (BTA)...... Four hundred eighty-seven predetermined
geographic areas defined by Rand McNally which,
combined with six BTA-like areas defined by the
FCC, create 493 protected service areas
purchased by auction winners for MDS
operations.

BTA AUCTIONS.................. Auctions held by the FCC to allocate BTA
Authorizations which commenced November 13,
1995 and concluded March 28, 1996.

BTA AUTHORIZATION............. An authorization granted by the FCC to the
highest bidder in the BTA Auctions to have the
exclusive right to apply for certain available
wireless cable licenses in the BTA.

CABLE PLANT................... The equipment, including satellite signal
reception antenna, encryption devices, coaxial
or fiber optic cable, amplifiers, set top
converters or whole-house decoders, employed by
a hard-wire cable operator in the delivery of
programming to its subscribers.

CHANNEL....................... A segment of bandwidth used for one complete
communication link. Wireless cable systems
utilizing analog technology require 6 MHz of
bandwidth to transmit full audio and video
programming, but many systems include channel
2A which is 4MHz.

CHANNELS CONTROLLED........... The number of channels on which a wireless
cable operator can transmit video programming
for which the operator is either the lessee or
holder of an FCC broadcast license.

CHANNEL LEASE................. A lease agreement between the holder of a
Channel license and a wireless cable operator
providing for the lease of channel capacity.

CHANNEL LICENSE............... A license granted by the FCC to transmit
signals over a set bandwidth of the
electromagnetic spectrum.

CHANNELS OWNED................ Channels for which a wireless operator is the
FCC licensee.

COAXIAL CABLE................. A transmission line consisting of a tube of
electrical conductive material surrounded by
insulating material.

COMMERCIAL CHANNELS........... Channels for which licenses may be held by
commercial entities and which include certain
MDS and certain ITFS frequencies.

DIGITAL VIDEO COMPRESSION
(DVC OR DIGITAL
COMPRESSION).................. The use of transmission and reception equipment
which transmits and receives digitally
programmed signals. The use of Digital

63
<PAGE> 65

Video Compression allows for an increased
number of channels to be programmed on each
frequency due to the smaller amounts of
bandwidth required to transmit digital signals.

DIRECT TO HOME (DTH).......... The use of a satellite receiver or "dish"
antenna by a subscriber to directly obtain
video programming from satellite transmitters.
Because DTH utilizes normal satellite signals
which are weaker than those used in DBS
systems, the subscriber must utilize a larger
reception dish.

DIRECT BROADCAST SATELLITE
SERVICES (DBS).............. Subscription television service through which
satellite signals are beamed directly from the
satellite to small satellite receiving antenna
at each subscriber's home. DBS signals are more
powerful than conventional satellite signals
received on DTH systems and therefore the
subscriber may utilize a smaller reception
dish.

EBITDA........................ Net income (loss) before interest income,
interest expense, income taxes, depreciation
and amortization expenses. EBITDA is commonly
used as a measure of performance in the
subscription television industry; however,
EBITDA does not purport to represent cash
provided by or used in operating activities and
should not be considered in isolation or as a
substitute for measures of performance in
accordance with generally accepted accounting
principles.

FIBER-OPTIC CABLE............. Cable consisting of thin fibers of plastic or
glass which are used for the transmission of
television and telecommunication signals. The
use of fiber optics improves the quality of the
signal while reducing the bulk of the
transmission lines in a coaxial cable network.

GHZ........................... Gigahertz or one thousand megahertz (MHz).

HARD-WIRE CABLE............... Subscription television systems which transmit
their programming to subscribers through a
network of cables as opposed to the
transmission through the use of frequencies on
the electromagnetic spectrum used by wireless
cable and off-air operators.

HEAD-END...................... A facility where a wireless cable operator
receives programming signals from satellites
and retransmits such programming to receive-end
antenna at the subscribers locations.

INSTRUCTIONAL TELEVISION FIXED
SERVICE (ITFS)................ A block of frequencies encompassing 20
microwave channels set aside by the FCC for the
transmission of signals by educational and
non-profit institutions. FCC regulations
require that ITFS channels be used a minimum of
20 hours per week for educational programming
(12 hours per week during the first two years).

INTERACTIVE SERVICE........... Wireless cable service which allows the
subscriber to send signals back to the operator
through the wireless cable frequencies or
telephone lines.

INTERFERENCE.................. Video or audio distortion caused by the
distortion of the wireless cable signal due to
a collision with other signals broadcast on
similar frequencies. Interference may occur
when signals transmitters are located too close
to each other or if the direction or power of
signal transmission causes the signal to
overlap with another signal.

64
<PAGE> 66

LINE-OF-SIGHT (LOS)
HOUSEHOLD..................... A household or other structure which is within
an unobstructed path from a head-end
transmission facility. LOS Household figures
are determined by analyzing signal strength,
topography and population of a market served by
a wireless cable operator and are used to
estimate the number of potential subscribers
for a wireless cable system.

LOW POWER TELEVISION
("LPTV")...................... A portion of the electromagnetic spectrum
containing 66 6MHz channels. Transmissions on
LPTV channels may reach up to 30 miles and are
received by the subscriber with a standard VHF
or UHF antenna.

LOCAL MULTIPOINT DISTRIBUTION
SERVICE ("LMDS").............. A fixed microwave service able to provide video
as well as telephony and data transmission
using a cellular design in the 28 GHz portion
of the spectrum.

MHZ........................... Megahertz or one million cycles per second.

MICROWAVE FREQUENCIES......... The frequencies ranging from approximately
1,000MHz to 30,000MHz of which the wireless
cable frequencies (from 2100MHz to 2700MHz) are
a part.

MSOS.......................... Multiple system operators.

MULTIPLE DWELLING UNIT
("MDU")....................... An apartment or condominium building or complex
or other facility where multiple subscribers
may be located and where wireless cable service
is provided by transmitting the signal to a
single receive-site antenna at the MDU from
which it is transmitted through wiring located
in the MDU to each individual subscriber.

MULTIPOINT DISTRIBUTION
SERVICE ("MDS")............... Channels on the wireless spectrum which are
licensed by the FCC for commercial programming.

PENETRATION RATE.............. The number of subscribers in a market divided
by the estimated LOS Households in that market.

PROTECTED SERVICE AREA........ The area defined by the FCC, in which a MDS or
ITFS station is protected from harmful
interference from any other stations pursuant
to formulas set forth by the FCC.

RECEIVE-SITE ANTENNA.......... An antenna placed at the location of a wireless
cable subscriber to receive the wireless cable
signal transmitted from the head-end facility.

REGIONAL CLUSTERING........... The practice of acquiring or developing and
operating wireless cable systems in close
proximity to each other which enables the
wireless cable operator to achieve certain
economies of scale.

RETRANSMISSION................ The practice of receiving a programming signal
and relaying such programming over the wireless
cable spectrum.

SATELLITE DELIVERY SYSTEMS.... Subscription television systems whereby the
programming is beamed directly from a satellite
to the subscriber's receive-end antenna or
"dish." DTH and DBS are satellite delivery
systems.

65
<PAGE> 67

SET-TOP CONVERTERS............ Devices placed upon the top of a television set
which process the wireless cable signal
received through the receive-end antenna for
viewing. Set-top converters, as opposed to
whole-house decoders, must be placed on each
television set.

SIGNAL BOOSTERS............... Low power relays or repeaters that are remote
from the main head-end of a wireless cable
system which are intended to enable the
operator to provide service to areas that
cannot otherwise be reached by the main
head-end.

SUBSCRIPTION TELEVISION....... The provision of television programming for
which the viewers pay a direct fee to the
service provider.

SYSTEM EBITDA................. EBITDA calculated on a system basis before the
allocation of corporate overhead.

WHOLE-HOUSE DECODERS.......... Devices placed outside a subscriber's home or
building which process the wireless cable
signal received through the receive-end antenna
for viewing. Whole-house decoders, as opposed
to set-top converters, provide unscrambled
wireless signals to all television sets located
within the structure which are connected to the
whole-house decoder by coaxial cable.

WIRELESS SPECTRUM............. The frequencies ranging from approximately 2100
MHz to 2700 MHz containing 33 channels
designated by the FCC for the transmission of
wireless television signals.

66
<PAGE> 68

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES
Report of Independent Public Accountants -- Arthur Andersen LLP...................... F-2
Report of Independent Certified Public Accountants -- Ernst & Young LLP.............. F-3
Consolidated Balance Sheets as of December 31, 1994 and 1995, and (unaudited)
as of June 30, 1996................................................................ F-4
Consolidated Statements of Operations for the Years Ended December 31, 1993, 1994 and
1995, and (unaudited) for the Six Months Ended June 30, 1995 and 1996.............. F-5
Consolidated Statements of Stockholders' and Partners' Equity for the Years Ended
December 31, 1993, 1994 and 1995, and (unaudited) for the Six Months Ended June 30,
1996............................................................................... F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 1993, 1994 and
1995, and (unaudited) for the Six Months Ended June 30, 1995 and 1996.............. F-7
Notes to Consolidated Financial Statements........................................... F-8
BOISE CABLE LIMITED PARTNERSHIP
Report of Independent Public Accountants............................................. F-18
Balance Sheets as of December 31, 1993 and 1994...................................... F-19
Statements of Operations for the Years Ended December 31, 1993 and 1994.............. F-20
Statements of Changes in Partners' Capital for the Years Ended December 31, 1993 and
1994............................................................................... F-21
Statements of Cash Flows for the Years Ended December 31, 1993 and 1994.............. F-22
Notes to Financial Statements........................................................ F-23
NORTHWEST CABLE NETWORK
Report of Independent Public Accountants............................................. F-27
Balance Sheets as of December 31, 1993 and 1994...................................... F-28
Statements of Operations for the Years Ended December 31, 1993 and 1994.............. F-29
Statements of Changes in Partners' Capital for the Years Ended December 31, 1993 and
1994............................................................................... F-30
Statements of Cash Flows for the Years Ended December 31, 1993 and 1994.............. F-31
Notes to Financial Statements........................................................ F-32
PACIFIC WEST CABLE TELEVISION
Report of Independent Public Accountants............................................. F-36
Balance Sheet as of December 31, 1993................................................ F-37
Statement of Operations and Changes in Partners' Deficit for the Year Ended December
31, 1993........................................................................... F-38
Statement of Cash Flows For the Year Ended December 31, 1993......................... F-39
Notes to Financial Statements........................................................ F-40
</TABLE>

F-1
<PAGE> 69

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wireless Broadcasting Systems of America, Inc.:

We have audited the accompanying consolidated balance sheets of WIRELESS
BROADCASTING SYSTEMS OF AMERICA, INC. (a Delaware corporation) and subsidiaries
as of December 31, 1994 and 1995, and the related consolidated statements of
operations, stockholders' and partners' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Wireless Broadcasting
Systems of America, Inc. and subsidiaries as of December 31, 1994 and 1995, and
the results of their operations and their cash flows for the years then ended in
conformity with generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Denver, Colorado,
March 29, 1996.

F-2
<PAGE> 70

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

Board of Directors
Wireless Broadcasting Systems of
America, Inc.:

We have audited the consolidated statements of operations, partners' equity
(deficit) and cash flows of WJB-TV Limited Partnership (predecessor to Wireless
Broadcasting Systems of America, Inc.) for the year ended December 31, 1993.
These consolidated financial statements are the responsibility of the
Partnership's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated results of operations, partners'
equity (deficit) and cash flows of WJB-TV Limited Partnership for the year ended
December 31, 1993 in conformity with generally accepted accounting principles.

ERNST & YOUNG LLP

West Palm Beach, Florida,
April 21, 1994.

F-3
<PAGE> 71

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------- JUNE 30,
1994 1995 1996
------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........................ $ 383,610 $ 583,568 $ 216,717
Subscriber receivables, net of allowance for
doubtful accounts of $56,000, $61,500, and
$61,500, respectively......................... 233,035 529,513 659,627
Other receivables................................ 73,481 156,327 100,825
Prepaid expenses and other current assets........ 99,304 129,965 223,117
Inventories...................................... 1,703,770 1,125,623 1,312,812
------------ ------------ ------------
Total current assets........................ 2,493,200 2,524,996 2,513,098
------------ ------------ ------------
WIRELESS CABLE TELEVISION SYSTEMS (Note 2):
Property and equipment........................... 21,172,216 30,804,430 37,034,774
License acquisition costs........................ 7,356,141 26,438,265 30,530,630
Purchased intangibles............................ 3,144,936 6,075,614 6,188,241
Less accumulated depreciation and amortization... (5,356,233) (15,214,525) (18,998,086)
------------ ------------ ------------
Total wireless cable television systems,
net...................................... 26,317,060 48,103,784 54,755,559
------------ ------------ ------------
OTHER ASSETS:
Deferred acquisition costs....................... 1,558,951 505,988 15,029
Other assets, net................................ 163,314 1,080,846 987,223
------------ ------------ ------------
Total other assets.......................... 1,722,265 1,586,834 1,002,252
------------ ------------ ------------
Total assets................................ $ 30,532,525 $ 52,215,614 $ 58,270,909
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt................ $ 11,750,000 $ 96,203 $ 44,563
Accounts payable................................. 829,987 1,793,626 1,505,961
Accrued liabilities.............................. 566,377 1,073,055 3,832,935
------------ ------------ ------------
Total current liabilities................... 13,146,364 2,962,884 5,383,459
------------ ------------ ------------
LONG-TERM DEBT (Note 5)............................ -- 5,000,000 12,500,000
COMMITMENTS AND CONTINGENCIES (Note 7)
CONVERTIBLE PREFERRED STOCK, $.01 par value, 35,000
shares authorized, issued and outstanding in 1995
and June 30, 1996, stated at liquidation value,
including cumulative dividends of $2,413,763 and
$4,307,835, respectively (Note 4)................ -- 37,413,763 39,307,835
STOCKHOLDERS' EQUITY (Note 4):
Preferred Stock, $.01 par value, 10,000,000
shares authorized, no shares issued and
outstanding................................... -- -- --
Class A Common Stock, $.01 par value, 10,000,000
shares authorized, no shares issued and
outstanding................................... -- -- --
Class B Common stock, $.01 par value, 15,000,000
shares authorized, 4,180,824, 4,180,824 and
4,185,691 shares issued and outstanding,
respectively.................................. 41,808 41,808 41,857
Additional paid in capital....................... 27,634,474 27,127,704 27,169,655
Accumulated deficit.............................. (10,290,121) (20,330,545) (26,131,897)
------------ ------------ ------------
Total stockholders' equity.................. 17,386,161 6,838,967 1,079,615
------------ ------------ ------------
Total liabilities and stockholders'
equity............................ $ 30,532,525 $ 52,215,614 $ 58,270,909
============ ============ ============
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these consolidated balance sheets.

F-4
<PAGE> 72

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

- -------------------------
* Pro forma for 1993 and 1994 (Note 1)

The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.

F-5
<PAGE> 73

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' AND PARTNERS' EQUITY

<TABLE>
<CAPTION>
CLASS B
COMMON STOCK PARTNERS' CAPITAL ADDITIONAL
---------------------- ------------------------ PAID-IN
SHARES PAR VALUE GENERAL LIMITED CAPITAL
--------- --------- -------- ------------ -----------
<S> <C> <C> <C> <C> <C>
BALANCES, January 1, 1993................................. -- $ -- $ -- $ 7,666,734 $ --
Capital contributions................................... -- -- -- 4,333,329 --
Net loss................................................ -- -- -- -- --
--------- ------- -------- ------------
BALANCES, December 31, 1993............................... -- -- -- 12,000,063 --
Capital contribution of net amount due to general
partner............................................... -- -- 65,665 -- --
Shares issued to general partner in exchange for
partnership interest.................................. 174 2 (65,665) -- 66,963
Shares issued to limited partners in exchange for
partnership interests................................. 2,085,868 20,858 -- (12,000,063) 11,979,205
Shares issued in private offering, net of offering costs
of $57,412............................................ 2,094,782 20,948 -- -- 15,588,306
Net loss................................................ -- -- -- -- --
--------- ------- -------- ------------ ------------
BALANCES, December 31, 1994............................... 4,180,824 41,808 -- -- 27,634,474
Convertible preferred stock offering costs.............. -- -- -- -- (506,770)
Cumulative dividends on convertible preferred stock..... -- -- -- -- --
Net loss................................................ -- -- -- -- --
--------- ------- -------- ------------ ------------
BALANCES, December 31, 1995............................... 4,180,824 41,808 -- -- 27,127,704
Cumulative dividends on convertible preferred stock
(unaudited)........................................... -- -- -- -- --
Exercise of stock options (unaudited)................... 4,867 49 -- -- 41,951
Net loss (unaudited).................................... -- -- -- -- --
--------- ------- -------- ------------ ------------
BALANCES, June 30, 1996 (unaudited)....................... 4,185,691 $41,857 $ -- $ -- $27,169,655
========= ======= ======== ============ ============

<CAPTION>
DEFICIT TOTAL
------------ -----------
<S> <C> <C>
BALANCES, January 1, 1993................................. $ (1,336,678) $ 6,330,056
Capital contributions................................... -- 4,333,329
Net loss................................................ (4,014,967) (4,014,967)
---------- ----------
BALANCES, December 31, 1993............................... (5,351,645) 6,648,418
Capital contribution of net amount due to general
partner............................................... -- 65,665
Shares issued to general partner in exchange for
partnership interest.................................. -- 1,300
Shares issued to limited partners in exchange for
partnership interests................................. -- --
Shares issued in private offering, net of offering costs
of
$57,412............................................... -- 15,609,254
Net loss................................................ (4,938,476) (4,938,476)
---------- ----------
BALANCES, December 31, 1994............................... (10,290,121) 17,386,161
Convertible preferred stock offering costs.............. -- (506,770)
Cumulative dividends on convertible preferred stock..... (2,413,763) (2,413,763)
Net loss................................................ (7,626,661) (7,626,661)
---------- ----------
BALANCES, December 31, 1995............................... (20,330,545) 6,838,967
Cumulative dividends on convertible preferred stock
(unaudited)........................................... (1,894,072) (1,894,072)
Exercise of stock options (unaudited)................... -- 42,000
Net loss (unaudited).................................... (3,907,280) (3,907,280)
---------- ----------
BALANCES, June 30, 1996 (unaudited)....................... $(26,131,897) $ 1,079,615
========== ==========
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.

F-6
<PAGE> 74

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ENDED DECEMBER 31 JUNE 30
--------------------------------------- --------------------------
1993 1994 1995 1995 1996
----------- ------------ ------------ ------------ ------------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES:
Net loss................................. $(4,014,967) $ (4,938,476) $ (7,626,661) $ (3,353,380) $ (3,907,280)
Adjustments to reconcile net loss to net
cash (used in) provided by operating
activities-
Depreciation and amortization.......... 1,600,330 4,648,793 10,349,202 4,556,469 5,385,830
Amortization of loan origination
costs................................ -- 90,556 43,341 24,616 72,826
Minority interest...................... (35,329) (7,647) -- -- --
Changes in current assets and
liabilities-
Subscriber receivables............... (75,273) (30,819) (296,478) (34,834) (130,114)
Other receivables.................... 206,264 (73,481) (82,846) (187,207) 55,502
Prepaid expenses and other current
assets............................ (153,639) 184,777 (30,661) (31,228) (70,849)
Inventories.......................... (314,297) (803,889) 685,890 171,114 (187,189)
Advance to affiliates................ (148,181) 400,930 -- -- --
Accounts payable and accrued
liabilities....................... 312,707 84,335 1,465,007 513,596 2,472,215
----------- ------------ ------------ ------------ ------------
Net cash (used in) provided by
operating activities............ (2,622,385) (444,921) 4,506,794 1,659,146 3,690,941
----------- ------------ ------------ ------------ ------------
INVESTING ACTIVITIES:
Acquisition of net assets of wireless
cable systems.......................... -- (13,777,742) (24,065,284) (23,545,004) --
Payments for property and equipment...... (5,755,418) (7,599,832) (6,475,093) (2,458,604) (7,825,597)
Payments for license acquisition costs... (680,471) (835,667) (291,124) (167,282) (3,711,862)
Payments of deferred acquisition costs... -- (1,586,137) (228,556) (9,289) (6,549)
Cash received from certificate of
deposit................................ -- 115,790 -- -- --
Cash received (paid) for other assets.... -- (147,395) 50,822 -- --
----------- ------------ ------------ ------------ ------------
Net cash used in investing
activities...................... (6,435,889) (23,830,983) (31,009,235) (26,180,179) (11,544,008)
----------- ------------ ------------ ------------ ------------
FINANCING ACTIVITIES:
Net proceeds from sale of preferred
stock.................................. $ -- $ -- $ 34,493,230 $ 34,449,856 $ --
Net proceeds from sale of common stock... -- 14,054,997 -- -- --
Contributions from limited partners...... 4,333,329 -- -- -- --
Contributions from minority interest..... 88,180 -- -- -- --
Proceeds from exercise of stock
options................................ -- -- -- -- 42,000
Borrowing under revolving credit
facilities............................. -- 12,750,000 7,250,000 1,250,000 7,500,000
Principal payments under revolving
credit facilities...................... -- (1,000,000) (14,000,000) (10,500,000) --
Principal payments under vehicle notes... -- -- (24,220) (8,134) (51,640)
Proceeds from notes payable -- related
parties................................ 3,000,000 2,000,000 -- -- --
Payments on notes payable -- related
parties................................ -- (3,444,443) -- -- --
Cash paid for loan origination fees...... -- (110,557) (1,016,611) (52,670) (4,144)
Advances received from affiliate......... 224,646 -- -- -- --
Advances repaid to affiliate............. (182,188) -- -- -- --
----------- ------------ ------------ ------------ ------------
Net cash provided by financing
activities...................... 7,463,967 24,249,997 26,702,399 25,139,052 7,486,216
----------- ------------ ------------ ------------ ------------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.............................. (1,594,307) (25,907) 199,958 618,019 (366,851)
CASH AND CASH EQUIVALENTS, at beginning of
year..................................... 2,003,824 409,517 383,610 383,610 583,568
----------- ------------ ------------ ------------ ------------
CASH AND CASH EQUIVALENTS, at end
of year.................................. $ 409,517 $ 383,610 $ 583,568 $ 1,001,629 $ 216,717
=========== ============ ============ ============ ============
SUPPLEMENTAL SCHEDULE OF NONCASH
ACTIVITIES:
Cash paid for interest................... $ -- $ 443,790 $ 342,661 $ 248,862 $ 387,775
=========== ============ ============ ============ ============
Common stock issued in payment of notes
payable -- related parties............. $ -- $ 1,555,557 $ -- $ -- $ --
=========== ============ ============ ============ ============
</TABLE>

The accompanying notes to consolidated financial statements
are an integral part of these consolidated statements.

F-7
<PAGE> 75

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(INCLUDING NOTES APPLICABLE TO UNAUDITED PERIODS ENDED JUNE 30, 1995 AND 1996)

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Business

Wireless Broadcasting Systems of America, Inc. (the "Company") was formed
to own and operate wireless cable television systems. These systems utilize
microwave frequencies to provide multi-channel television programming to
subscribers. Licenses for the microwave frequencies are owned or leased from
third parties and are regulated by the Federal Communications Commission
("FCC").

The Company is a Delaware corporation and is the successor to WJB-TV
Limited Partnership (the "Partnership"). The Partnership was formed in 1991 and
commenced operations in 1992. The general partner of the Partnership was
WJB-Television Limited Partnership, a Delaware limited partnership, and the
limited partnership interests were held by 18 individuals and business entities.
On March 16, 1994, the Company, a newly formed corporation, exchanged 2,085,868
shares of the Company's Class B Common Stock for the 12 million outstanding
limited partnership units. In addition, the Company offered to sell its Class B
Common Stock to the limited partners in the Partnership. The limited partner
investors collectively purchased 2,094,782 shares of Class B Common Stock for
$14,111,109 cash and the conversion of $1,555,557 of notes payable to certain
limited partners (see Note 5).

The general partner, who held a minority interest in a Partnership system,
contributed $119,314 of management fees due to the general partner plus $1,300
cash to the Company in exchange for 174 shares of Class B Common Stock and
settlement of other amounts due to the Company from the general partner for
unfunded capital contributions, for a net recapitalization of $66,965.

As part of the exchange offer, WJB-TV Ft. Pierce Limited Partnership and
WJB-TV Melbourne Limited Partnership (subsidiaries of the Partnership)
contributed all of their assets and liabilities to newly formed corporations
which are subsidiaries of the Company.

Basis of Consolidation

The consolidated financial statements include the accounts of the
Partnership through March 16, 1994, and the accounts of the Company and its
wholly owned subsidiaries thereafter. Assets and liabilities of the Partnership
were initially recorded by the Company at their historical cost basis as of
March 16, 1994. The Company's subsidiaries (and the location of the
subsidiaries' principal operations) at December 31, 1995 are as follows:

Wireless Broadcasting Systems of Ft. Pierce, Inc. -- Ft. Pierce, Florida

Wireless Broadcasting Systems of Melbourne, Inc. -- Melbourne, Florida

Wireless Broadcasting Systems of Sacramento, Inc. -- Sacramento, California

Wireless Broadcasting Systems of West Palm, Inc. -- West Palm Beach,
Florida*

Wireless Broadcasting Systems of Boise, Inc. -- Boise, Idaho

Wireless Broadcasting Systems of Yakima, Inc. -- Yakima, Washington
- -------------------------

* System under development.

All intercompany balances and transactions have been eliminated in
consolidation.

F-8
<PAGE> 76

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of the statements of cash flows, the Company considers all
highly liquid investments with an original maturity of three months or less to
be cash equivalents.

Inventories

Inventories, consisting primarily of equipment purchased for installation
at subscribers' homes, are stated at the lower of cost (first-in, first-out) or
market.

Wireless Cable Television Systems

Property and Equipment -- Property and equipment are stated at cost.
Depreciation is recorded on a straight-line basis for financial reporting
purposes over the estimated useful lives of the assets (Note 2). An additional
depreciation charge is recognized for the net book value of any equipment not
recovered upon discontinuance of service to subscribers. Repair and maintenance
costs are charged to expense when incurred. Renewals and betterments are
capitalized. Subscriber installation costs, including direct salaries, equipment
and other direct related costs, are capitalized and amortized over three to five
years. Marketing costs and sales commissions are expensed as incurred.
Depreciation expense was approximately $1,428,000, $3,593,000, and $7,223,000
for the years ended December 31, 1993, 1994, and 1995, respectively.
Depreciation expense was approximately $3,622,000 and $3,508,000 for the six
months ended June 30, 1995 and 1996, respectively.

License Acquisition Costs -- Costs incurred to acquire or lease microwave
frequency licenses issued by the Federal Communications Commission are deferred
and are amortized over ten years. This asset category also includes licenses
purchased as part of the business acquisitions described in Note 3. Amortization
expense was approximately $154,000, $618,000 and $2,134,000 for the years ended
December 31, 1993, 1994, and 1995, respectively. Amortization expense was
approximately $514,000 and $1,356,000 for the six months ended June 30, 1995 and
1996, respectively.

Purchased Intangibles -- The excess of the purchase price of operating
wireless cable systems over net tangible assets acquired represents other
purchased intangibles, including subscriber lists and goodwill. These
intangibles are amortized over estimated useful lives of 3 to 20 years.
Amortization expense was approximately $0, $373,000 and $987,000 for 1993, 1994
and 1995, respectively. Amortization expense was approximately $418,000 and
$519,000 for the six months ended June 30, 1995 and 1996, respectively.

Deferred Acquisition Costs

The Company defers certain direct third party costs related to potential
acquisitions. If and when it becomes apparent that a particular acquisition will
not be consummated, the related costs are charged to expense. As of December 31,
1994, the Company had placed in escrow deposits of $1.2 million related to two
acquisitions which were completed in March 1995 and April 1995 (see Note 3).

F-9
<PAGE> 77

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Other Assets

Other assets are comprised primarily of loan origination fees and also
include organizational costs and the long-term portion of prepaid expenses. Loan
origination fees are amortized over the life of the loan. The unamortized
balance of loan origination fees was approximately $20,000, $988,000 and
$919,000 as of December 31, 1994, December 31, 1995, and June 30, 1996,
respectively. Organizational costs are amortized using the straight-line method
over five years.

Revenue Recognition

Monthly service fees are recognized as earned. Installation revenue is
recognized upon initiation of service to a subscriber. All marketing costs and
commissions related to new subscribers are expensed as incurred.

Net Loss per Share

For purposes of determining net loss per share for periods prior to
formation of the corporation in March 1994, the pro forma computations of
weighted average shares outstanding assume common shares issued to the partners
in exchange for their partnership interests were issued at the time of, and in
proportion to, partner capital contributions to the Partnership. Potential
dilutive effects of common stock equivalents for outstanding options and
warrants, determined using the treasury stock method, were ignored because the
effect on all periods presented was anti-dilutive.

As described in Note 4, in October 1996, the Company changed its authorized
capital and effected a reverse split of its common stock by exchanging all
common shares outstanding for new shares of Class B Common Stock in the ratio of
5.753 common shares for each share of Class B Common Stock issued. All share and
per share amounts have been adjusted throughout these financial statements to
retroactively reflect the exchange of common stock for Class B Common Stock and
the resulting reverse split.

As further discussed in Note 9, in connection with the Company's initial
public offering of Class A Common Stock, the holders of the Convertible
Preferred Stock have agreed to convert the preferred shares to 4,180,824 shares
of Class B Common Stock immediately prior to the closing of the offering, and
convert the accrued dividend on the preferred shares in shares of Class A Common
Stock. The accrued dividend through October 31, 1996, will be approximately
$5,965,729 which will be paid in approximately 712,621 Class A Common Shares.
Assuming these additional common shares had been outstanding from January 1,
1995, unaudited pro forma net loss per share for the year ended December 31,
1995 and the six months ended June 30, 1995 and 1996 would have been $(0.83),
$(0.36) and $(0.43), respectively.

New Accounting Principles

In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of," ("SFAS No.
121"). SFAS No. 121 requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. SFAS No. 121 is effective for financial statements for
fiscal years beginning after December 15, 1995. Management believes the adoption
of SFAS No. 121 will not have a significant impact on the Company's consolidated
financial position and results of operations.

Statement of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" ("SFAS No. 123"), issued by the FASB in October 1995
and effective for fiscal years beginning after December 15, 1995, encourages,
but does not require, a fair value based method of accounting for employee

F-10
<PAGE> 78

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

stock options or similar equity instruments. It also allows an entity to elect
to continue to measure compensation cost under Accounting Principles Board
Opinion No. 25 "Accounting for Stock Issued to Employees" ("APB No. 25"), but
requires pro forma disclosures of net income and earnings per share as if the
fair value based method of accounting had been applied. The Company expects to
adopt SFAS No. 123 in 1996. While the Company is still evaluating SFAS No. 123,
it currently expects to elect to measure compensation cost under APB No. 25 and
comply with the pro forma disclosure requirements. If the Company makes this
election, this statement will have no impact on the Company's consolidated
results of operations.

Interim Financial Statements

The financial statements as of June 30, 1996 and for the six months ended
June 30, 1995 and 1996 are unaudited. In management's opinion, the unaudited
financial statements include all adjustments necessary for a fair presentation
of financial position and results of operations for the unaudited periods. All
such adjustments were of a normal, recurring nature.

(2) WIRELESS CABLE TELEVISION SYSTEMS

At December 31, 1994 and 1995, components of wireless cable television
system assets are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------- JUNE 30,
1994 1995 1996 LIFE
----------- ------------ ------------ ----------
(UNAUDITED)
<S> <C> <C> <C> <C>
Subscriber equipment..................... $10,792,284 $ 15,598,480 $ 19,261,440 2-10 Years
Transmission equipment................... 5,020,108 5,794,475 6,010,136 5-10 Years
Subscriber installations................. 3,417,531 6,258,272 8,155,378 3-5 Years
Furniture and equipment.................. 883,439 1,531,444 1,683,497 5-7 Years
Vehicles................................. 771,705 1,294,049 1,575,457 3 Years
Leasehold improvements................... 154,901 191,688 205,423 3-5 Years
Buildings................................ 132,248 136,022 143,443 30 Years
----------- ------------ ------------
21,172,216 30,804,430 37,034,774
Less -- accumulated depreciation and
amortization........................... (4,141,523) (10,878,162) (12,786,521)
----------- ------------ ------------
Property and equipment, net............ $17,030,693 $ 19,926,268 $ 24,248,253
=========== ============ ============
License acquisition costs................ $ 7,356,141 $ 26,438,265 $ 30,530,630 10 Years
Less -- accumulated amortization....... (841,613) (2,975,778) (4,331,734)
----------- ------------ ------------
License acquisition costs, net......... $ 6,514,528 $ 23,462,487 $ 26,198,896
=========== ============ ============
Purchased intangibles.................... $ 3,144,936 $ 6,075,614 $ 6,188,241 3-20 Years
Less -- accumulated amortization....... (373,097) (1,360,585) (1,879,831)
----------- ------------ ------------
Purchased intangibles, net............. $ 2,771,839 $ 4,715,029 $ 4,308,410
=========== ============ ============
</TABLE>

(3) ACQUISITIONS

In March 1994, the Company acquired the principal operating assets of
Pacific West Cable Television, a wireless cable television operator in
Sacramento, California, for approximately $13.8 million (the "Sacramento
acquisition"). The acquisition was accounted for as a purchase with the purchase
price allocated to the assets acquired based on relative fair values.

In March 1995, the Company acquired the principal operating assets of Boise
Cable Limited Partnership, a wireless cable television operator in Boise, Idaho,
for approximately $15.6 million (the "Boise acquisition"). The Company utilized
the proceeds of the sale of 25,000 shares of its Convertible Preferred Stock
(see

F-11
<PAGE> 79

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Note 4) to fund the acquisition. The acquisition was accounted for as a purchase
with the purchase price allocated to the assets acquired based on relative fair
values.

In April 1995, the Company acquired the principal operating assets of
Northwest Cable Network, a wireless cable television operator in Yakima,
Washington, for approximately $9.2 million (the "Yakima acquisition"). The
Company utilized the proceeds of the sale of 10,000 shares of its Convertible
Preferred Stock (see Note 4) to fund the acquisition. The acquisition was
accounted for as a purchase with the purchase price allocated to the assets
acquired based on relative fair values.

<TABLE>
<CAPTION>
1994 1995
----------- --------------------------
SACRAMENTO BOISE YAKIMA
----------- ----------- ----------
<S> <C> <C> <C>
Current assets acquired.............................. $ 250,286 $ 79,956 $ 27,787
Investment in wireless cable television systems --
Property and equipment............................. 5,352,243 1,838,036 1,800,200
License acquisition costs.......................... 5,330,000 11,984,000 6,807,000
Purchased intangibles.............................. 3,144,935 1,825,963 607,553
Less liabilities assumed............................. (299,722) (80,384) (45,349)
----------- ----------- ----------
Cash paid for net assets acquired $13,777,742 $15,647,571 $9,197,191
=========== =========== ==========
</TABLE>

The following pro forma total consolidated revenues, net loss and net loss
per common share for the year ended December 31, 1995 reflects the Boise and
Yakima acquisitions as if each had occurred on January 1, 1995:

<TABLE>
<CAPTION>
(UNAUDITED)
<S> <C>
Revenues......................................................... $18,431,000
===========
Net loss......................................................... $(7,539,000)
===========
Net loss per common share........................................ $ (0.83)
===========
</TABLE>

(4) STOCKHOLDERS' AND PARTNERS' EQUITY

Change in Authorized Capital Stock

In October 1996, the Company changed its authorized capital stock to
include 10,000,000 shares of preferred stock, 10,000,000 shares of $.01 par
value Class A Common Stock, and 15,000,000 shares of $.01 par value Class B
Common Stock. The Class A Common Stock is entitled to one vote per share and the
Class B Common Stock is entitled to ten votes per share. The Class B Common
Stock may be converted on a one-for-one basis to Class A Common Stock and
automatically converts to Class A Common upon the sale of such shares to a
person who is not then currently a Class B Common stockholder or an affiliate
thereof. The rights and preferences of the Class A and Class B Common Stock are
otherwise identical in all respects.

As discussed in Note 1, the Company effected a reverse split of its common
stock by exchanging all common shares outstanding for new shares of Class B
Common Stock in the ratio of 5.753 common shares for each share of Class B
Common Stock issued. The changes to the Company's authorized capital stock and
the reverse stock split have been given retroactive effect in these financial
statements.

Convertible Preferred Stock

Each share of Convertible Preferred Stock is convertible into approximately
119 shares of Class B Common Stock (in the aggregate, 4,180,824 shares of Class
B Common Stock), subject to possible adjustment for certain future issuances of
securities. The Convertible Preferred Stock is convertible at any time at the
option of the holder. Holders of the Convertible Preferred Stock are entitled to
a liquidation preference ("the Liquidation Value") of $1,000 per share plus 2.5%
per quarter, compounded if not paid.

F-12
<PAGE> 80

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Upon conversion to shares of Class B Common Stock, the cumulative Liquidation
Value of the Convertible Preferred Stock, less $1,000 per share, is to be paid
by the Company in cash.

On any date after March 15, 1998, if any class of the Company's common
stock has been publicly traded for one year and certain other restrictions
concerning the trading volume and market price are satisfied, the Company has
the right to require all shares of Convertible Preferred Stock then outstanding
to be converted into Class B Common Stock of the Company. The Company is
required to redeem any remaining Convertible Preferred Stock outstanding at
December 31, 2002, at the then current Liquidation Value.

Dividends may not be paid on any class of common stock as long as any
shares of Convertible Preferred Stock are outstanding, or any amounts payable in
respect of the Convertible Preferred Stock have not been paid in full.

In March 1995, the Company agreed to issue 35,000 shares of Convertible
Preferred Stock for $1,000 per share. In March 1995, the Company sold 25,000
shares of Convertible Preferred Stock. The Company utilized the net proceeds to
acquire the net assets of Boise Cable Limited Partnership (see Note 3) and
reduced the principal amount on its revolving promissory note to $2,250,000 (see
Note 5). The remaining 10,000 shares of Convertible Preferred Stock were issued
to the same purchasers in April 1995, in connection with the Company's
acquisition of the net assets of Northwest Cable Network (see Note 3).

Under the terms of the Convertible Preferred Stock Purchase Agreement, the
Company may request, at any time, that the holders of the Convertible Preferred
Stock exchange such shares for a subordinated convertible promissory note (the
"Note"). The Note shall be in a principal amount equal to the cumulative
Liquidation Value and will accrue interest of 10% per annum, compounded
quarterly. The holders of the Convertible Preferred Stock are required to
consent to such exchange provided they are not subjected to any adverse tax
consequences as a result of the exchange.

The current holders of the Convertible Preferred Stock are entitled to
certain piggyback and demand registration rights in the event of a public
offering.

Stockholders' Agreement

The Company and all its stockholders were parties to a Stockholders'
Agreement dated March 15, 1995, which requires all stockholders to vote in favor
of two (of seven) directors designated by the Convertible Preferred
Stockholders. In the event any stockholder proposes to sell shares, this
agreement also grants first rights of refusal to all other stockholders, and to
the Company, to acquire those shares on the same terms.

So long as the Convertible Preferred Stockholders hold at least 20% of the
shares originally issued to them, their consent is required for certain actions
of the Company, including mergers, sales of systems or major assets, system
acquisitions and major expenditures, issuance of debt in excess of $500,000,
issuance of equity securities, and certain matters related to retention of
executives and consultants.

Common Stock Warrants

In connection with the issuance of the Convertible Preferred Stock, the
Company issued warrants to the common stockholders to purchase 2,346,602 shares
of Class B Common Stock for $17.26 per share. The warrants are exercisable at
any time and expire in March 2000 and April 2000.

Stock Option Plan

In 1995, the Company's stock option plan was amended to authorize the grant
of stock options to officers and employees of the Company to purchase an
aggregate of 539,371 shares of Class B Common Stock. The board of directors may
set the rate at which the options become exercisable and determine when the
options expire, subject to the following limitations. No options shall be
exercisable after the tenth anniversary of the

F-13
<PAGE> 81

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

date of grant, or three months following termination of employment, except in
cases of death or disability, for which exercisability is extended. In the event
of dissolution, liquidation or other corporate reorganization, all stock options
outstanding shall become exercisable in full.

During 1994, the Company granted options to purchase 186,569 shares of
Class B Common Stock. The exercise price with respect to options to purchase
52,147 shares was established at the date of grant to be $8.63 per share, the
estimated fair value on the date of grant. The exercise price with respect to
the remaining options to purchase 134,423 shares of Class B Common Stock was not
established until March 1995, at approximately $8.37 per share, the estimated
fair market value of the Company's Class B Common Stock in March 1995.

In 1995, the Company granted additional options to purchase 243,641 shares
of Class B Common Stock at approximately $8.37 per share, the estimated fair
value of the Class B Common Stock on the date of grant. During 1995, options to
purchase 57,500 shares were forfeited and canceled.

Options to purchase 17,382 shares of Class B Common Stock vest ratably over
a two year period from the date of grant. The remaining options vest ratably
over a four year period. As of December 31, 1995, options for the purchase of
372,710 shares of Class B Common Stock were outstanding, of which 45,020 were
vested. As of June 30, 1996, options for the purchase of 355,328 shares of Class
B Common Stock were outstanding, of which 108,066 were exercisable.

(5) DEBT

In November 1995, the Company entered into a credit agreement with a group
of banks which provides for maximum aggregate borrowings of $40 million.
Outstanding borrowings bear interest based on the bank's base rate or the
Eurodollar rate, plus a spread which depends upon a defined ratio of the
Company's total indebtedness to its operating cash flow. The revolving credit
facility converts to a term loan in December 1998, at which time outstanding
borrowings are to be amortized on a quarterly basis until December 2002. The
facility is secured by essentially all of the assets of the Company. As of
December 31, 1995, and June 30, 1996, outstanding borrowings under the facility
were $5,000,000 and $12,500,000, respectively. As of December 31, 1995, the
interest rate on the Company's borrowings was 7.75%. The Company pays a
commitment fee of 0.375% on the unused portion of its Revolving Credit Facility.

In connection with the purchase of the Boise and Yakima wireless cable
television systems, the Company assumed notes collateralized by vehicles
totaling approximately $120,000. As of December 31, 1995, the outstanding
principal balance due under these notes was approximately $96,000.

In March 1994, the Company obtained a revolving promissory note from a bank
of which $11,750,000 was drawn at December 31, 1994. Interest accrued at certain
spreads over the Eurodollar Rate, the bank's prime rate or the Federal Funds
Rate. Interest was payable monthly (or at maturity for Eurodollar borrowings).
The note was guaranteed by three of the Company's stockholders. In March 1995,
the Company used the proceeds from the sale of Convertible Preferred Stock (see
Note 4) to reduce the outstanding note balance to $2,250,000 and the remainder
of the note was paid in November 1995 from proceeds of the new revolving
facility.

During 1993, two limited partners advanced an aggregate of $3,000,000 to
the Partnership, all of which remained outstanding at December 31, 1993. On
March 16, 1994, $1,555,557 was converted to shares of the Company's common stock
(see Note 1).

F-14
<PAGE> 82

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Annual maturities of the long-term debt described above are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------------------------------------
<S> <C>
1996.......................................... $ 96,203
1997.......................................... --
1998.......................................... --
1999.......................................... 1,000,000
2000.......................................... 1,500,000
Thereafter.................................... 2,500,000
----------
$5,096,203
==========
</TABLE>

(6) INCOME TAXES

The Company accounts for income taxes under the provisions of SFAS No. 109
"Accounting for Income Taxes." Accordingly, the current provision for income
taxes represents actual or estimated amounts payable or refundable on tax
returns filed or to be filed for each year. Deferred tax assets and liabilities
are recorded for the estimated future tax effects of: (a) temporary differences
between the tax basis of assets and liabilities and amounts reported in the
consolidated balance sheets, and (b) operating loss and tax credit
carryforwards. The overall change in deferred tax assets and liabilities for the
period measures the deferred tax expense for the period. Effects of changes in
enacted tax laws on deferred tax assets and liabilities are reflected as
adjustments to tax expense in the period of enactment. The measurement of
deferred tax assets may be reduced by a valuation allowance based on judgmental
assessment of available evidence if deemed more likely than not that some or all
of the deferred tax assets will not be realized.

Prior to incorporation, the Partnership had accumulated losses of
approximately $6.2 million. For income tax purposes, these losses were allocated
to the partners in accordance with the provisions of the Partnership agreement.
Thus, Partnership losses included in the accompanying consolidated financial
statements of the Company are not available to offset future taxable income of
the Company, if any. As required by SFAS No. 109, this change in tax status was
recognized by establishing deferred tax assets and liabilities for temporary
differences between the tax basis and amounts reported in the Company's
consolidated financial statements at March 16, 1994.

As of December 31, 1995, the Company had approximately $10,900,000 of net
operating loss carryover for income tax purposes incurred during the period from
March 16, 1994 through December 31, 1995, available to offset future federal
taxable income, subject to limitations for alternative minimum tax. The net
operating loss is subject to examination by the taxing authorities and expires
in 2009 and 2010. Benefit for this net operating loss carryforward was
recognized in 1994 to the extent of the net deferred tax liability established
to recognize the tax effect of the change in tax status from a partnership to a
C corporation on March 16, 1994.

Because of operating losses, the provision for income taxes for 1994 and
1995 was zero and no income taxes were currently payable.

The components of the deferred income tax assets as of December 31, 1994
and 1995 were as follows:

<TABLE>
<CAPTION>
1994 CHANGE 1995
----------- ----------- -----------
<S> <C> <C> <C>
Net operating loss carryforwards...................... $ 1,167,000 $ 3,084,000 $ 4,251,000
Depreciation expense.................................. 115,800 (192,800) (77,000)
Compensation accruals................................. 30,000 9,000 39,000
Allowance for doubtful accounts....................... 20,500 3,500 24,000
Less valuation allowance.............................. (1,333,300) (2,903,700) (4,237,000)
----------- ----------- -----------
$ -- $ -- $ --
=========== =========== ===========
</TABLE>

F-15
<PAGE> 83

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

The Company has not yet achieved profitable operations. Accordingly,
management believes the net deferred tax assets as of December 31, 1995, do not
satisfy the realization criteria set forth in SFAS No. 109 and has recorded a
valuation allowance for the entire amount.

The current income tax laws and regulations contain provisions that may
limit the net operating loss carryover available in individual future years upon
the occurrence of certain events, including significant changes in ownership. A
change in ownership of greater than 50% within a three year period would result
in an annual limitation on the Company's ability to utilize its net operating
loss carryovers.

(7) COMMITMENTS AND CONTINGENCIES

The Company is committed under various noncancelable lease agreements for
office and warehouse space, as well as tower space. As of December 31, 1995,
approximate future minimum lease payments under these agreements are as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
--------------------------------------------------------
<S> <C>
1996.......................................... $ 413,000
1997.......................................... 287,000
1998.......................................... 271,000
1999.......................................... 113,000
2000.......................................... 73,000
Thereafter.................................... 96,000
----------
$1,253,000
=========
</TABLE>

Rent expense for 1993, 1994 and 1995 totaled approximately $132,000,
$306,000 and $425,000, respectively.

The Company has entered into a series of noncancelable agreements to
purchase entertainment programming for rebroadcast which expire through December
1999. The agreements generally require monthly payments based upon the number of
subscribers to the Company's systems, subject to certain minimums.

The Company is currently involved in certain litigation relating to its
operations. Management of the Company believes none of these actions will have a
material adverse effect on the Company's consolidated financial position or its
results of operations.

The Company, as successor in interest to the Partnership, is a party to a
contractual agreement for the purchase of wireless cable television assets,
including certain channel lease agreements, for one of its operating systems.
The purchase agreement provides for the payment of additional consideration upon
the occurrence of certain mandatory or optional events. The additional payment
obligation becomes due upon the sale or other disposition of a material portion
of the system assets or at the option of the Company at any time after December
1995. The additional payment obligation is based upon 10% of the difference
between the fair market value received or the appraised value of the system at
the time of the event and the amount of liabilities of the Company with respect
to the system, including loans and capital contributions made by the Company's
shareholders. The extent of any additional payment pursuant to this agreement
will, therefore, depend on the actual fair market value of the system which is
either realized or otherwise agreed to by the parties upon the disposition
event.

The FCC recently adopted a competitive bidding mechanism under which
available Multipoint Distribution System ("MDS") licenses for designated Basic
Trading Areas ("BTA's") are auctioned to the highest bidder. Auctions for each
of nearly 500 BTA's commenced on November 13, 1995 and concluded on March 28,
1996. As of March 28, 1996, the Company had submitted bids on various BTA's in
an aggregate

F-16
<PAGE> 84

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

amount of approximately $3.5 million. BTA auction winners will obtain the
exclusive right to apply for available MDS channels within the applicable BTA,
subject to compliance with FCC interference protection, construction and other
rules.

As a result of the BTA auction, the Company acquired the exclusive right to
apply for the licenses for currently and subsequently available commercial
channels ("BTA Authorizations") for five new markets: Coos Bay, Oregon; Eureka,
California; Helena, Montana; Klamath Falls, Oregon; and Roseburg, Oregon. In
addition, the Company acquired the BTA Authorizations for the West Palm Beach
market and for each of its currently operating wireless cable television
systems, except Sacramento. Through June 30, 1996, the Company had paid
approximately $700,000 to the FCC as required deposits for the above BTA
Authorizations and the remaining approximately $2.8 million to be paid was
included in accrued liabilities.

(8) RELATED PARTY TRANSACTIONS

The Partnership agreement provided for the former general partner to
receive a fee equal to 4% of annual gross operating revenues. The Partnership
incurred management fee expense of approximately $106,000 during 1993 and 1994.
In connection with the exchange offer described in Note 1, these unpaid
management fees, net of unfunded general partner contributions, were contributed
as additional capital to the Company.

During 1993, an affiliate of the general partner made noninterest bearing
advances of approximately $225,000 to the Partnership, of which approximately
$42,000 was unpaid at December 31, 1993.

A Company stockholder, who also serves as a director and secretary of the
Company, is the chairman and founder of a law firm that provides legal services
to the Company. Amounts paid or payable to the law firm for the years ended
December 31, 1993, 1994 and 1995, were approximately $208,000, $208,000 and
$361,000, respectively.

(9) EVENTS SUBSEQUENT TO DATE OF AUDITOR'S REPORT (UNAUDITED)

The Company has filed a registration statement for the sale of
approximately 2,350,000 shares of its Class A Common Stock. In connection
therewith, the holders of the Convertible Preferred Stock (Note 4) have agreed
to convert the preferred shares to 4,180,824 shares of Class B Common Stock
immediately prior to closing of the offering, and convert the accrued dividend
on the preferred shares in shares of Class A Common Stock. Accrued dividends
through October 31, 1996, will be approximately $5,966,000 which will be paid in
approximately 712,621 Class A Common Shares. In addition, the holders of
warrants for the purchase of 2,346,602 shares of Class B Common Stock (Note 4)
have agreed to surrender their warrants to the Company for cancellation prior to
closing of the offering.

F-17
<PAGE> 85

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wireless Broadcasting Systems of America, Inc.:

We have audited the accompanying balance sheets of BOISE CABLE LIMITED
PARTNERSHIP as of December 31, 1993 and 1994, and the related statements of
operations, changes in partners' capital, and cash flows for the years ended
December 31, 1993 and 1994. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Boise Cable Limited
Partnership as of December 31, 1993 and 1994, and the results of its operations
and its cash flows for the years then ended, in conformity with generally
accepted accounting principles.

ARTHUR ANDERSEN LLP

Denver, Colorado,
July 31, 1995.

F-18
<PAGE> 86

BOISE CABLE LIMITED PARTNERSHIP

BALANCE SHEETS
AS OF DECEMBER 31, 1993 AND 1994

<TABLE>
<CAPTION>
1993 1994
---------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents......................................... $ -- $ 94,373
Accounts receivable, net of allowance for doubtful accounts of
$2,487 in 1993 and $65,000 in 1994............................. 169,893 233,633
Deposits............................................................ 800 1,300
---------- -----------
Total current assets......................................... 170,693 329,306
---------- -----------
PROPERTY AND EQUIPMENT.............................................. 2,525,174 3,701,035
Less -- Accumulated depreciation.................................. (489,838) (1,042,903)
---------- -----------
Total property and equipment, net............................ 2,035,336 2,658,132
---------- -----------
INTANGIBLE ASSETS................................................... 458,634 468,192
Less -- Accumulated amortization.................................. (112,272) (168,351)
---------- -----------
Total intangible assets, net................................. 346,362 299,841
---------- -----------
Prepaid expenses and other assets................................. 21,744 24,090
---------- -----------
Total assets................................................. $2,574,135 $ 3,311,369
========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable.................................................. $ 116,762 $ 239,074
Accrued interest.................................................. -- 15,582
Unearned income................................................... 162,732 246,694
Customer deposits and prepaids.................................... -- 6,522
Accrued compensation.............................................. 9,353 12,410
Payable to General Partner........................................ 3,183 2,206
Current portion of long-term debt................................. 307,602 938,194
---------- -----------
Total current liabilities.................................... 599,632 1,460,682
---------- -----------
LONG-TERM DEBT, net of current portion.............................. 1,090,848 887,853
---------- -----------
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL:
General Partner................................................... 366,055 405,645
Limited Partners.................................................. 517,600 557,189
---------- -----------
Total partners' capital...................................... 883,655 962,834
---------- -----------
Total liabilities and partners' capital...................... $2,574,135 $ 3,311,369
========== ===========
</TABLE>

The accompanying notes to financial statements
are an integral part of these balance sheets.

F-19
<PAGE> 87

BOISE CABLE LIMITED PARTNERSHIP

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994

<TABLE>
<CAPTION>
1993 1994
---------- ----------
<S> <C> <C>
REVENUES............................................................. $1,551,546 $2,632,806
---------- ----------
EXPENSES:
Operating expenses, net of capitalized costs....................... 223,223 661,748
Selling, general, and administrative expenses...................... 422,852 704,591
Depreciation and amortization...................................... 399,411 609,143
Management fees -- General Partner................................. 77,048 133,858
---------- ----------
Total expenses................................................ 1,122,534 2,109,340
---------- ----------
INCOME FROM OPERATIONS............................................... 429,012 523,466
Interest expense................................................... (81,838) (154,287)
---------- ----------
NET INCOME........................................................... $ 347,174 $ 369,179
========== ==========
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

F-20
<PAGE> 88

BOISE CABLE LIMITED PARTNERSHIP

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994

<TABLE>
<CAPTION>
GENERAL LIMITED
PARTNER PARTNERS TOTAL
--------- --------- ---------
<S> <C> <C> <C>
BALANCES, December 31, 1992................................ $ 279,968 $ 431,513 $ 711,481
Partner distributions.................................... (87,500) (87,500) (175,000)
Net income............................................... 173,587 173,587 347,174
--------- --------- ---------
BALANCES, December 31, 1993................................ 366,055 517,600 883,655
Partner distributions.................................... (145,000) (145,000) (290,000)
Net income............................................... 184,590 184,589 369,179
--------- --------- ---------
BALANCES, December 31, 1994................................ $ 405,645 $ 557,189 $ 962,834
========= ========= =========
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

F-21
<PAGE> 89

BOISE CABLE LIMITED PARTNERSHIP

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994

<TABLE>
<CAPTION>
1993 1994
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income....................................................... $ 347,174 $ 369,179
Adjustments to reconcile net income to net cash provided by
operating activities-
Depreciation and amortization................................. 399,411 609,143
(Increase) in accounts receivable............................. (160,764) (63,740)
Increase in deposits.......................................... -- (500)
Decrease (increase) in prepaid expenses and other assets...... 3,256 (2,346)
Increase in accounts payable.................................. 93,748 122,312
Increase in accrued interest.................................. -- 15,582
Increase in unearned income................................... 162,732 83,962
Increase in customer deposits and prepaids.................... -- 6,522
Increase in accrued compensation.............................. 5,007 3,057
Increase (decrease) in payable to General Partner............. 3,183 (977)
----------- -----------
Net cash provided by operating activities................ 853,747 1,142,194
----------- -----------
INVESTING ACTIVITIES:
Purchases of property and equipment.............................. (1,312,504) (1,175,861)
Increase in intangible assets.................................... (1,001) (9,558)
----------- -----------
Net cash used in investing activities.................... (1,313,505) (1,185,419)
----------- -----------
FINANCING ACTIVITIES:
Principal payments on notes payable.............................. (115,859) (207,302)
Proceeds from bank debt.......................................... 730,312 634,900
Partner distributions............................................ (175,000) (290,000)
----------- -----------
Net cash provided by financing activities................ 439,453 137,598
----------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS............... (20,305) 94,373
CASH AND CASH EQUIVALENTS, beginning of year....................... 20,305 --
----------- -----------
CASH AND CASH EQUIVALENTS, end of year............................. $ -- $ 94,373
=========== ===========
SUPPLEMENTAL INFORMATION:
Cash paid for interest........................................... $ 81,838 $ 138,705
=========== ===========
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

F-22
<PAGE> 90

BOISE CABLE LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS

AS OF DECEMBER 31, 1993 AND 1994

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Partnership Formation

On February 11, 1991, Boise Cable Limited Partnership (the "Partnership"),
a limited partnership under the laws of the State of Washington, was formed for
the purpose of operating a wireless cable system in Boise, Idaho. This system
utilizes microwave radio frequencies to provide multi-channel television
programming to subscribers for a monthly fee. Licenses for the microwave radio
frequencies are owned or leased from third parties and are regulated by the
Federal Communications Commission. The formation of the Partnership was
accomplished in the following manner:

1. Northwest Satellite Network, Inc. ("General Partner"), an S
corporation, contributed the rights to channel licenses for the Boise
area and a Boise market study which were valued at $300,000.

2. In addition, ICTV, Inc. and Positive Images, Inc. ("Limited
Partners"), both S corporations, contributed cash of $400,000 and
$50,000, respectively.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Partnership considers all
highly liquid investments with an original maturity of three months or less to
be cash equivalents.

Revenue Recognition

Monthly service fees are recognized as earned. Installation revenue is
recognized upon initiation of service to a customer. Service is billed in
advance. Billings for service to be rendered in the future are deferred and
reflected as unearned income on the balance sheet.

Capitalization Policy

All costs related to construction and expansion of the system are
capitalized including the direct costs of receiving and transmission equipment.
In addition, costs incurred to install equipment in subscriber homes are
capitalized, including wages, payroll taxes, benefits, vehicle operating costs
and overhead. The Partnership capitalized approximately $389,000 and $448,000 of
operating costs during the years ended December 31, 1993 and 1994, respectively.

Federal Income Taxes

The Partnership is not a taxpaying entity, and thus no tax benefit has been
recorded in the statements. Income or loss from the partnership is taxed to the
partners in their individual returns.

Inventory

Inventory consists mainly of in-home equipment not yet installed and is
recorded at cost and classified in the balance sheet with property and
equipment.

F-23
<PAGE> 91

BOISE CABLE LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(2) PROPERTY AND EQUIPMENT

Property and equipment is stated at cost and is depreciated on a straight
line basis over the estimated useful lives of the assets. Property and equipment
consist of the following at December 31, 1993 and 1994:

<TABLE>
<CAPTION>
1993 1994 LIFE
---------- ----------- ----
<S> <C> <C> <C>
Inventory....................................... $ 44,397 $ 83,934 --
Vehicles........................................ 119,314 121,069 3
Office equipment and furniture.................. 33,810 68,205 5
In home equipment and install costs............. 1,849,084 2,839,891 5
Head-end........................................ 464,750 572,492 10
Leasehold improvements.......................... 13,819 15,444 3
--------- ----------
2,525,174 3,701,035
Less -- accumulated depreciation................ (489,838) (1,042,903)
--------- ----------
Total property and equipment, net............... $2,035,336 $ 2,658,132
========= ==========
</TABLE>

Virtually all of the assets of the Partnership are pledged as collateral on
bank debt and on equipment and vehicle contracts.

(3) INTANGIBLE ASSETS

Intangible assets consist of the following at December 31, 1993 and 1994:

<TABLE>
<CAPTION>
1993 1994 LIFE
--------- --------- ----
<S> <C> <C> <C>
Licenses.......................................... $ 373,199 $ 382,757 10
Organization costs................................ 85,435 85,435 5
-------- --------
458,634 468,192
Less -- accumulated amortization.................. (112,272) (168,351)
-------- --------
Total intangible assets, net...................... $ 346,362 $ 299,841
======== ========
</TABLE>

F-24
<PAGE> 92

BOISE CABLE LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(4) LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1993 and 1994:

<TABLE>
<CAPTION>
1993 1994
---------- ----------
<S> <C> <C>
Leases payable, due in monthly installments of $1,667, including
interest at rates varying from 7.75% to 11.95%, secured by
vehicles, final installments due at various dates from 1995 to
1998............................................................ $ 48,700 $ 33,361
Note payable, First Security Bank, principal payments of $12,000
monthly, interest payable monthly at prime plus 2% (10.5% at
December 31, 1994), maturity date of July 9, 1997............... 1,098,000 954,000
Note payable, First Security Bank, monthly principal and interest
payments of $4,773 with variable interest rate of prime plus
1.75% (10.25% at December 31, 1994), maturity date of December
15, 1996........................................................ 151,500 106,436
Note payable, First Security Bank, monthly interest only payments
with variable interest rate of prime plus 1.75% (10.25% at
December 31, 1994), maturity date extended to February 28,
1995............................................................ 100,250 100,250
Note payable, First Security Bank, monthly interest only payments
with variable interest rate of prime plus 1.75% (10.25% at
December 31, 1994), maturity date of February 28, 1995.......... -- 200,000
Note payable, First Security Bank, monthly interest only payments
with variable interest rate of prime plus 1.5% (10.0% at
December 31, 1994), maturity date of February 28, 1995.......... -- 432,000
---------- ----------
Total debt................................................. 1,398,450 1,826,047
Less: Current portion............................................. (307,602) (938,194)
---------- ----------
Total long-term debt....................................... $1,090,848 $ 887,853
========== ==========
</TABLE>

Principal payments due on long-term debt are as follows as of December 31,
1994:

(5) COMMITMENTS AND CONTINGENCIES

The Partnership's lease for certain non-owned frequency licenses provides
that the lessor is to be paid a percentage of the sales price (as defined) in
the event the system is sold. The amount agreed to by the lessor for the pending
sale (Note 7) is $280,000.

F-25
<PAGE> 93

BOISE CABLE LIMITED PARTNERSHIP

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Leasing Arrangements

The Partnership's business office, head end site, four 1994 Ford trucks and
other office equipment are leased under operating leases with minimum rental
payments due as follows as of December 31, 1994:

<TABLE>
<S> <C>
1995...................................................... $ 39,254
1996...................................................... 32,687
1997...................................................... 18,761
1998...................................................... 11,997
1999...................................................... 7,425
Thereafter................................................ 118,026
--------
$228,150
========
</TABLE>

The office lease term ends July 31, 1996. At December 31, 1994, the minimum
rent is $1,458 per month, increasing to $1,510 per month on August 1, 1995.

The head end site lease began July 1, 1991. The term of the lease is four
(4) five (5) year periods for a total of 20 years. The rent for the first
five-year period is $550 per month. The rent for each succeeding period will be
negotiated between the parties which sum shall be no less than 125% and no more
than 160% of the prior period.

(6) RELATED PARTY TRANSACTIONS

The General Partner, NSN, Inc., receives a monthly payment from the
Partnership for management fees equal to 5% of gross monthly revenues.

(7) SALE OF PARTNERSHIP ASSETS

On September 30, 1994, the Partnership entered into an agreement with
Wireless Broadcasting Systems of America, Inc. (WBSA) to sell the assets (as
defined) of the Partnership for $15,350,000. Closing of the sale occurred in
March 1995.

F-26
<PAGE> 94

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Wireless Broadcasting Systems of America, Inc.:

We have audited the accompanying balance sheets of NORTHWEST CABLE NETWORK
(a partnership) as of December 31, 1993 and 1994 and the related statements of
operations, changes in partners' capital, and cash flows for each of the years
in the period then ended. These financial statements are the responsibility of
the Partnership's management. Our responsibility is to express an opinion on
these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Northwest Cable Network as
of December 31, 1993 and 1994, and the results of its operations and its cash
flows for each of the years in the period then ended in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Denver, Colorado,
July 31, 1995.

F-27
<PAGE> 95

NORTHWEST CABLE NETWORK

BALANCE SHEETS

AS OF DECEMBER 31, 1993 AND 1994

<TABLE>
<CAPTION>
1993 1994
---------- ----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents.......................................... $ -- $ 100
Accounts receivable, net of allowance for doubtful accounts of
$2,000 in 1993 and $5,000 in 1994............................... 153,459 232,397
Other receivables.................................................. 3,485 2,947
Deposits........................................................... -- 35,904
Prepaid expenses and other current assets.......................... 4,882 1,372
---------- ----------
Total current assets.......................................... 161,826 272,720
---------- ----------
PROPERTY, PLANT AND EQUIPMENT........................................ 3,220,288 4,705,875
Less -- Accumulated depreciation................................... (902,834) (1,646,844)
---------- ----------
Total property, plant and equipment, net...................... 2,317,454 3,059,031
---------- ----------
INTANGIBLE ASSETS.................................................... 1,903,848 1,913,042
Less -- Accumulated amortization................................... (515,519) (775,810)
---------- ----------
Total intangible assets, net.................................. 1,388,329 1,137,232
---------- ----------
Total assets.................................................. $3,867,609 $4,468,983
========== ==========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Accounts payable................................................... $ 133,817 $ 514,530
Unearned income.................................................... 144,923 225,394
Accrued compensation and taxes..................................... 35,357 47,656
Accrued interest payable........................................... 20,525 26,620
Current portion of long term debt.................................. 120,898 58,752
---------- ----------
Total current liabilities..................................... 455,520 872,952
---------- ----------
LONG-TERM LIABILITIES:
Long-term leases payable........................................... 3,993 41,721
Notes payable to seller............................................ 32,947 18,800
Notes payable to a bank............................................ 2,000,306 2,703,000
Subordinated notes payable to partners............................. 1,390,814 1,390,814
---------- ----------
Total liabilities............................................. 3,883,580 5,027,287
---------- ----------
COMMITMENTS AND CONTINGENCIES
PARTNERS' CAPITAL:
Northwest Satellite Network, Inc................................... (11,245) (282,411)
Arrow Systems, Inc................................................. (4,726) (275,893)
---------- ----------
Total partners' capital....................................... (15,971) (558,304)
---------- ----------
Total liabilities and partners' capital....................... $3,867,609 $4,468,983
========== ==========
</TABLE>

The accompanying notes to financial statements
are an integral part of these balance sheets.

F-28
<PAGE> 96

NORTHWEST CABLE NETWORK

STATEMENTS OF OPERATIONS

FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994

<TABLE>
<CAPTION>
1993 1994
---------- ----------
<S> <C> <C>
REVENUES............................................................. $1,446,619 $2,407,264
---------- ----------
EXPENSES:
Operating expenses, net of capitalized costs....................... 504,233 814,776
Selling, general, and administrative expenses...................... 481,957 731,034
Depreciation and amortization...................................... 778,547 1,004,301
Management fees paid to partners................................... -- 28,000
---------- ----------
Total expenses................................................ 1,764,737 2,578,111
---------- ----------
LOSS FROM OPERATIONS................................................. (318,118) (170,847)
Interest expense................................................... (133,496) (228,324)
Interest expense to partners....................................... (143,162) (143,162)
---------- ----------
NET LOSS............................................................. $ (594,776) $ (542,333)
========== ==========
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

F-29
<PAGE> 97

NORTHWEST CABLE NETWORK

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994

<TABLE>
<CAPTION>
NORTHWEST
SATELLITE ARROW
NETWORK, INC. SYSTEMS, INC. TOTAL
------------- ------------- ---------
<S> <C> <C> <C>
BALANCES, December 31, 1992............................... $ 288,605 $ 292,662 $ 581,267
Distribution............................................ (2,462) -- (2,462)
Net loss................................................ (297,388) (297,388) (594,776)
--------- --------- ---------
BALANCES, December 31, 1993............................... (11,245) (4,726) (15,971)
Net loss................................................ (271,166) (271,167) (542,333)
--------- --------- ---------
BALANCES, December 31, 1994............................... $(282,411) $(275,893) $(558,304)
========= ========= =========
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

F-30
<PAGE> 98

NORTHWEST CABLE NETWORK

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 1993 AND 1994

<TABLE>
<CAPTION>
1993 1994
--------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss.......................................................... $(594,776) $ (542,333)
Adjustments to reconcile net loss to net cash provided by
operating activities --
Depreciation and amortization.................................. 778,547 1,004,301
Increase in accounts receivable................................ (81,604) (78,400)
(Increase) decrease in prepaid expenses........................ (4,090) 3,510
Increase in deposits........................................... -- (35,904)
Increase in accounts payable................................... 49,599 380,713
Increase in unearned income.................................... 61,169 80,471
Increase in accrued compensation and taxes..................... 31,002 12,299
Increase in accrued interest payable........................... 91 6,095
--------- -----------
Net cash provided by operating activities................. 239,938 830,752
--------- -----------
INVESTING ACTIVITIES:
Purchases of property, plant and equipment........................ (886,275) (1,485,587)
Increase in intangible assets..................................... (49,430) (9,194)
--------- -----------
Net cash used in investing activities..................... (935,705) (1,494,781)
--------- -----------
FINANCING ACTIVITIES:
Principal payments on leases payable.............................. (40,171) (18,886)
Principal payments on notes payable to seller..................... (10,675) (12,775)
Principal payments on note payable to bank........................ -- (90,761)
Proceeds from bank debt........................................... 732,510 786,551
Partner distribution.............................................. (2,462) --
--------- -----------
Net cash provided by financing activities................. 679,202 664,129
--------- -----------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS................ (16,565) 100
CASH AND CASH EQUIVALENTS, beginning of year........................ 16,565 --
--------- -----------
CASH AND CASH EQUIVALENTS, end of year.............................. $ -- $ 100
========= ===========
SUPPLEMENTAL INFORMATION:
Cash paid for interest............................................ $ 276,567 $ 365,391
========= ===========
</TABLE>

The accompanying notes to financial statements
are an integral part of these statements.

F-31
<PAGE> 99

NORTHWEST CABLE NETWORK

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1993 AND 1994

(1) ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Partnership Formation

On February 6, 1992, Northwest Cable Network (the "Partnership") was formed
for the purpose of operating a wireless cable system in Yakima, Washington. This
system utilizes microwave radio frequencies to provide multi-channel television
programming to subscribers for a monthly fee. Licenses for the microwave radio
frequencies are owned or leased from third parties and are regulated by the
Federal Communications Commission. The formation was accomplished in the
following manner:

1. Northwest Satellite Network, Inc. ("NSN"), an S corporation,
contributed all of the assets and liabilities related to the Yakima,
Washington wireless cable operation to the Partnership as its capital
contribution. Simultaneously, Arrow Systems, Inc. ("Arrow"), an S
corporation, purchased a 50% interest in the Partnership for $500,000
from NSN. Concurrent with the Partnership formation, NSN was issued a
$750,000 note payable and Arrow loaned the Partnership $600,000.

2. The Partnership recorded the assets and liabilities at their relative
fair market values.

Revenue Recognition

Monthly service fees are recognized as earned. Installation revenue is
recognized upon initiation of service. Revenues are recognized on the accrual
basis. Service is billed in advance. Billings for service to be rendered in the
future are deferred and reflected as unearned income on the balance sheet.

Capitalization Policy

All costs related to construction and expansion of the system are
capitalized including the direct costs of receiving and transmission equipment.
In addition, costs incurred to install equipment in subscriber homes are
capitalized, including wages, payroll taxes, benefits, vehicle operating costs
and overhead. The Partnership capitalized approximately $53,000 and $181,000 of
operating costs related to construction and installation activities during the
years ended December 31, 1993 and 1994, respectively.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Partnership considers all
highly liquid investments with an original maturity of three months or less to
be cash equivalents.

Federal Income Taxes

The Partnership is not a taxpaying entity, and thus no tax benefit has been
recorded in the statements. Income or loss from the Partnership is taxed to the
Partners in their individual returns.

F-32
<PAGE> 100

NORTHWEST CABLE NETWORK

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(2) PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost and is depreciated on a
straight line basis over the estimated useful lives of the assets. Property and
equipment consist of the following at December 31, 1993 and 1994:

<TABLE>
<CAPTION>
1993 1994 LIFE
---------- ----------- ----
<S> <C> <C> <C>
Vehicles....................................................... $ 133,522 $ 157,206 3
Furniture and fixtures......................................... 28,194 45,131 5
Wireless equipment inventory................................... 50,273 36,800 --
In-home equipment and install costs............................ 2,372,897 3,764,602 5
Shop tools and equipment....................................... 18,345 23,552 5
Head end....................................................... 589,638 609,135 10
Computer equipment............................................. 26,752 60,260 5
Leasehold improvements......................................... 667 9,189 3
---------- -----------
Total property, plant and equipment............................ 3,220,288 4,705,875
Less -- accumulated depreciation............................... (902,834) (1,646,844)
---------- -----------
Total property, plant and equipment, net $2,317,454 $ 3,059,031
========== ===========
</TABLE>

(3) INTANGIBLE ASSETS

Intangible assets consist of the following at December 31, 1993 and 1994:

<TABLE>
<CAPTION>
1993 1994 LIFE
---------- ----------- ----
<S> <C> <C> <C>
Licenses....................................................... $ 205,232 $ 212,926 10
Goodwill....................................................... 904,177 904,177 10
Customer list.................................................. 645,070 645,070 5
Organization costs............................................. 102,869 102,869 5
Loan fees...................................................... 46,500 48,000 5
---------- -----------
Total intangible assets........................................ 1,903,848 1,913,042
Less -- accumulated amortization............................... (515,519) (775,810)
---------- -----------
Total intangible assets, net................................... $1,388,329 $ 1,137,232
========== ===========
</TABLE>

F-33
<PAGE> 101

NORTHWEST CABLE NETWORK

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(4) LONG-TERM DEBT

Long-term debt consists of the following at December 31, 1993 and 1994:

<TABLE>
<CAPTION>
1993 1994
---------- ----------
<S> <C> <C>
Leases payable, due in monthly installments of $1,690, including
interest at rates varying from 9.25% to 13%, secured by vehicles,
paid in full in April 1995......................................... $ 22,939 $ 56,324
Notes payable to sellers, due in monthly installments of $1,402
including interest at 10%, unsecured, paid in full in April
1995............................................................... 45,722 32,949
Note payable to a bank, principal payments of $7,500, scheduled to
commence September 1995, interest payable periodically depending on
a leverage ratio defined in the loan agreement, paid in full in
April 1995......................................................... 2,089,483 2,733,000
Subordinated note payable to NSN, interest payable monthly at 10%, no
principal payments allowed until the note payable to bank is paid
in full............................................................ 770,407 770,407
Subordinated note payable to Arrow, interest payable monthly at 10%,
no principal payments allowed until the note payable to bank is
paid in full....................................................... 620,407 620,407
---------- ----------
Total debt.................................................... 3,548,958 4,213,087
Less -- due in one year.............................................. (120,898) (58,752)
---------- ----------
Total long-term debt.......................................... $3,428,060 $4,154,335
========== ==========
</TABLE>

The note payable to a bank is a secured revolving line of credit with
maximum availability of $3,000,000. The outstanding line of credit converts to a
four year term loan beginning in September 1995.

Principal payments due on long-term debt are as follows as of December 31,
1994 (exclusive of subordinated debt):

<TABLE>
<CAPTION>
TOTAL
----------
<S> <C>
1995.................................................... $ 58,752
1996.................................................... 242,792
1997.................................................... 456,441
1998.................................................... 596,292
1999.................................................... 1,468,000
Thereafter.............................................. --
----------
$2,822,277
==========
</TABLE>

(5) COMMITMENTS AND CONTINGENCIES

Leases

The Partnership entered into a lease for the business office commencing
March 1994. The lease term is five years and includes a renewal option for two
additional five-year periods. The head end site lease commenced July 1, 1988
with an initial lease term of ten years and a five year renewal option. The
business

F-34
<PAGE> 102

NORTHWEST CABLE NETWORK

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

office and head end site leases are operating leases with minimum rental
payments due as follows at December 31, 1994:

<TABLE>
<CAPTION>
TOTAL
--------
<S> <C>
1995...................................................... $ 33,960
1996...................................................... 38,960
1997...................................................... 39,960
1998...................................................... 38,124
1999...................................................... 6,048
--------
$157,052
========
</TABLE>

The Partnership leases the rights to certain frequencies. Such lease
payments are calculated based upon the number of subscribers within the system.

(6) RELATED PARTY TRANSACTIONS

NSN and Arrow each received $14,000 in management fees in 1994.

During 1994, Arrow provided $184,000 in short-term loans which were paid
back when bank loan funds were available.

(7) SUBSEQUENT EVENT

On April 28, 1995, pursuant to an agreement with Wireless Broadcasting
Systems of America, Inc. ("WBSA"), the Partnership sold the assets (as defined)
of the Partnership for $9,200,000. Under the terms of the agreement, all of the
leases payable, notes to sellers, note payable to a bank and the subordinated
notes payable to Partners were repaid in full.

F-35
<PAGE> 103

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Pacific West Cable Television:

We have audited the accompanying balance sheet of PACIFIC WEST CABLE
TELEVISION (a California joint venture) as of December 31, 1993, and the related
statements of operations and changes in partners' capital and cash flows for the
year then ended. These financial statements are the responsibility of the Joint
Venture's management. Our responsibility is to express an opinion on these
financial statements based on our audit.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Pacific West Cable
Television as of December 31, 1993, and the results of its operations and its
cash flows for the year then ended in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

Sacramento, California
March 19, 1994.

F-36
<PAGE> 104

PACIFIC WEST CABLE TELEVISION

BALANCE SHEET AS OF DECEMBER 31, 1993

<TABLE>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash......................................................................... $ 11,126
Accounts receivable, net of allowance for doubtful accounts of $33,732....... 385,645
Other receivables............................................................ 37,556
Inventory.................................................................... 190,303
Prepaid and other assets..................................................... 42,760
-----------
Total current assets.................................................... 667,390
PROPERTY AND EQUIPMENT, net of accumulated depreciation and
amortization of $5,438,726................................................... 3,877,462
INTANGIBLE ASSETS, net of accumulated amortization of $312,419................. 246,565
-----------
$ 4,791,417
===========
LIABILITIES AND PARTNERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued expenses........................................ $ 1,190,807
Unearned revenue and customer deposits....................................... 325,217
Notes payable to related parties............................................. 3,600,000
Notes payables to third parties.............................................. 3,775,366
Accrual for contract default (Note 6)........................................ 5,000,000
-----------
Total current liabilities............................................... 13,891,390
CAPITAL LEASE OBLIGATIONS...................................................... 13,276
COMMITMENTS AND CONTINGENCIES (Note 6)
PARTNERS' DEFICIT.............................................................. (9,113,249)
-----------
$ 4,791,417
===========
</TABLE>

The accompanying notes are an integral part of this balance sheet.

F-37
<PAGE> 105

PACIFIC WEST CABLE TELEVISION

STATEMENT OF OPERATIONS AND CHANGES IN PARTNERS' DEFICIT

FOR THE YEAR ENDED DECEMBER 31, 1993

<TABLE>
<S> <C>
SERVICE REVENUES............................................................... $ 4,027,216
OPERATING EXPENSES:
Cost of service.............................................................. 1,666,820
General and administrative................................................... 1,571,476
Marketing.................................................................... 42,511
Depreciation and amortization................................................ 1,821,445
-----------
Total operating expenses................................................ 5,102,252
-----------
OPERATING LOSS................................................................. (1,075,036)
INTEREST EXPENSE............................................................... 765,984
-----------
NET LOSS....................................................................... (1,841,020)
PARTNERS' DEFICIT, beginning of year........................................... (8,031,093)
PARTNERS' CONTRIBUTIONS........................................................ 758,864
-----------
PARTNERS' DEFICIT, end of year................................................. $(9,113,249)
===========
</TABLE>

The accompanying notes are an integral part of this statement.

F-38
<PAGE> 106

PACIFIC WEST CABLE TELEVISION

STATEMENT OF CASH FLOWS

YEAR ENDED DECEMBER 31, 1993

<TABLE>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss..................................................................... $(1,841,020)
Adjustments to reconcile net loss to net cash used in operating activities --
Depreciation and amortization............................................. 1,821,445
Changes in current assets and liabilities --
Accounts receivable, net................................................ (19,974)
Inventory............................................................... 15,907
Other assets............................................................ (26,164)
Accounts payable and accrued expenses................................... 230,636
Unearned revenue and customer deposits.................................. 19,076
-----------
Net cash provided by operating activities............................ 199,906
-----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........................................... (537,313)
-----------
Net cash used in investing activities................................ (537,313)
-----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Partners' contributions...................................................... 758,864
Principal repayments of long-term debt....................................... (398,853)
-----------
Net cash provided by financing activities............................ 360,011
-----------
Net change in cash................................................... 22,604
CASH, beginning of year........................................................ (11,478)
-----------
CASH, end of year.............................................................. $ 11,126
===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during 1993 for interest........................................... $ 759,298
===========
</TABLE>

The accompanying notes are an integral part of this statement.

F-39
<PAGE> 107

PACIFIC WEST CABLE TELEVISION

NOTES TO FINANCIAL STATEMENTS

DECEMBER 31, 1993

(1) ORGANIZATION, PARTNERS' INTERESTS, AND SALE OF ASSETS

Organization and Business

Pacific West Cable Television ( the Joint Venture), a California joint
venture, was formed by People's Choice TV of Sacramento (PCTV) and Pacific West
Cable Company (Pacwest Co.) in 1989 (together, the Partners) to own and operate
a wireless cable television system serving the area of Sacramento, California.
Wireless cable television systems utilize microwave frequencies to provide
multi-channel television programming to subscribers. Licenses for microwave
frequencies are owned or leased from third parties (Note 6) and are regulated by
the Federal Communications Commission.

Partners' Interests

Net profits and losses and distributions are allocated to the Partners in
accordance with their respective percentage interests during the period. The
Partners' percentage interests at December 31, 1993 were as follows:

<TABLE>
<S> <C>
PCTV.................................. 50%
Pacwest Co............................ 50%
</TABLE>

Subject to a majority vote of the Partners, contributions to capital are
made to fund the Partnership's capital expenditures and operating losses. Should
a Partner not make all or a portion of a required contribution, that Partner's
interest is subject to dilution as determined by the Partnership agreement.

Sale of Assets Subsequent to December 31, 1993

On March 18, 1994, Wireless Broadcasting Systems of Sacramento, Inc. (the
Buyer), a Delaware corporation and wholly owned subsidiary of Wireless
Broadcasting of America, Inc., purchased the principal operating rights and
assets of the Joint Venture for approximately $13,150,000. The Buyer did not
acquire the Joint Venture's cash, certain receivables, and certain prepaid
expenses which were refundable to the Joint Venture. The Buyer assumed only
certain liabilities of the Joint Venture in the approximate amount of $300,000,
but did not assume any of the Joint Venture's debt or other liabilities arising
prior to the date of sale. Further, the Buyer did not assume any responsibility
or obligation related to the Sacramento Kings contract described in Note 6, and
has been indemnified by the Joint Venture and its Partners for any obligation or
liability that may arise as a result of that matter.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Revenue Recognition and Accounts Receivable

Fees are billed for monthly service in advance and deferred. Advance
billings are recorded as revenue when service is provided. All other service is
billed and recognized as revenue in the period service is provided. Accounts
receivable represent amounts due from subscribers for which the Joint Venture
provides an allowance for estimated non-collectible amounts. The allowance was
$33,732 at December 31, 1993. Additions to the allowance for 1993 were $88,370
and accounts written off during the year amounted to $75,266.

Inventory

Inventory consists of purchased equipment and components to be installed at
subscriber locations for reception of wireless cable television service and is
stated at the lower of purchased cost or market. Cost is determined using the
first-in, first-out method.

F-40
<PAGE> 108

PACIFIC WEST CABLE TELEVISION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Property and Equipment

Property and equipment is stated at cost. Subscriber installations include
equipment, direct labor costs and other direct costs of the installations.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets which are generally two to five years for wireless
cable equipment and three to five years for other property and equipment. The
components of property and equipment at December 31, 1993, were as follows:

<TABLE>
<S> <C>
Subscriber equipment.............................................. $4,174,516
Other subscriber installation costs............................... 2,182,696
Transmission equipment............................................ 2,546,406
Furniture and office equipment.................................... 165,555
Vehicles.......................................................... 170,140
Leasehold improvements............................................ 76,875
----------
9,316,188
Less -- accumulated depreciation and amortization................. (5,438,726)
----------
Property and equipment, net....................................... $3,877,462
==========
</TABLE>

Intangible Assets

Intangible assets consist primarily of deferred organizational, and
consulting and engineering costs related to the design and development of the
wireless cable broadcasting system. These costs are amortized ratably over
periods not exceeding ten years. At December 31, 1993, intangible assets
consisted of the following:

<TABLE>
<S> <C>
Organizational costs.............................................. $ 110,184
System design and engineering costs............................... 448,800
---------
558,984
Less -- accumulated amortization.................................. (312,419)
---------
Intangible assets, net............................................ $ 246,546
=========
</TABLE>

(3) NOTES PAYABLE

The Joint Venture had several notes payable due on demand or maturing in
1994 with interest rates ranging from 4.80% to 11.75%. The notes payable
(including amounts due to the Joint Venture Partners as described below) are
secured by automobiles or are unsecured borrowings. The notes payable have been
classified as a current liability in the accompanying balance sheet and are
comprised of the following:

<TABLE>
<S> <C>
Commercial notes payable................................ $3,775,366
Notes payable to Partners............................... 3,600,000
----------
$7,375,366
==========
</TABLE>

Notes payable to Partners represents a loan from a bank to the Partners.
The loan proceeds were transferred to the Joint Venture by the Partners and the
Joint Venture has assumed the debt service to the bank. At December 31, 1993,
the loan balance was $3,600,000 with an interest rate of 10% and a maturity date
of March 2, 1994. The bank loan is the direct obligation of the Partners, but
otherwise unsecured.

(4) TRANSACTIONS WITH RELATED PARTIES

Certain expenditures are made on behalf of the Joint Venture by the
Partners. To the extent the Partners are not reimbursed, these expenditures are
treated as capital contributions.

F-41
<PAGE> 109

PACIFIC WEST CABLE TELEVISION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

(5) INCOME TAXES

Income taxes have not been recorded in the accompanying financial
statements because they are obligations of the Partners.

(6) COMMITMENTS AND CONTINGENCIES

Channel Rights

The Joint Venture has entered into frequency leasing arrangements with
certain educational institutions under which the Joint Venture pays for certain
capital improvements for the institutions as well as lease fees. Future
commitments under these arrangements at December 31, 1993 were $488,000 and were
payable through 1996. The Buyer (Note 1) was assigned these leases at closing
and assumed the remaining future commitments.

In addition, the Joint Venture is committed to make frequency lease
payments aggregating $14,786 per month through various dates expiring from
September 1995 through October 2002. The Buyer (Note 1) was assigned these
leases at closing and assumed the remaining future commitments.

The Joint Venture has contractual commitments with pay television
programmers. Two of the programmers have required the Joint Venture to post
either a performance bond or a letter of credit issued by a bank. As of December
31, 1993, neither the performance bond nor the letter of credit had been posted
or issued.

Lease Commitments

The Joint Venture is committed under operating leases and agreements,
principally for facilities, office space and transmission sites, with remaining
terms ranging from four to five years. Certain leases are on a month to month
basis. Certain leases provide for payment by the lessee of taxes, maintenance
and insurance.

Future minimum payments, required under operating leases and agreements
that have an initial or remaining noncancellable lease term in excess of one
year at December 31, 1993, are summarized below:

<TABLE>
<CAPTION>
YEAR ENDING DECEMBER 31,
----------------------------------------------------------
<S> <C>
1994............................................ $ 53,184
1995............................................ 53,184
1996............................................ 53,184
1997............................................ 21,184
1998............................................ 4,928
--------
$185,664
========
</TABLE>

Total rent expense for the year ended December 31, 1993 was approximately
$65,658.

Litigation and Claims

In 1989, the Joint Venture entered into a five-year broadcasting contract
with the Sacramento Kings, a National Basketball Association franchise. A
principal owner of the Sacramento Kings was also a principal owner of Pacwest
Co. at the time the contract was negotiated. The same individual continued to be
a principal owner of the Sacramento Kings and Pacwest Co. at December 31, 1993.
The Joint Venture defaulted on the contract after one year, leaving a balance
due under the contract of $4,572,500. As of March 19, 1994, no legal proceedings
had been filed with respect to the contract. Although management believes the
Joint Venture will not be required to pay any amounts due under the contract,
$5,000,000 was accrued prior to 1993 and is included in the accompanying balance
sheet to reflect the contractual obligation as well as interest and penalties
that may be assessed if performance were required. As described in Note 1, the
Buyer did not

F-42
<PAGE> 110

PACIFIC WEST CABLE TELEVISION

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

purchase this contract and has been indemnified by the Joint Venture and its
Partners against any liability with respect to the contract.

During 1993, a complaint was filed against the Joint Venture by a party
with whom the Joint Venture Partners had entered into a buy-sell agreement for
the assets of the Joint Venture. The claim seeks specific performance and
damages and attorney fees in a sum exceeding $3 million. The Joint Venture filed
a cross-complaint for fraud, breach of contract and damages. The Buyer was
indemnified by the Joint Venture and its Partners in the event of an order for
specific performance.

The Joint Venture is a party to certain other claims and litigation in the
ordinary course of business. If liability is probable and estimable, management
has accrued specific reserves which are included in accounts payable and accrued
liabilities on the accompanying balance sheet. In management's opinion, the
ultimate resolution of litigation and claims not accrued will not have a
material adverse impact on the Joint Venture. The Joint Venture is also a party
to routine filings with the FCC, state regulatory authorities and other
proceedings which management believes are immaterial to the Joint Venture.

F-43
<PAGE> 111

- ------------------------------------------------------
- ------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR ANY OF THE UNDERWRITERS. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY ANY
SECURITY OTHER THAN THE SHARES OF CLASS A COMMON STOCK OFFERED BY THIS
PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF ANY
OFFER TO BUY THE SHARES OF CLASS A COMMON STOCK BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON
MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF.

UNTIL , 1996, ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOR PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary................... 3
Risk Factors......................... 9
Use of Proceeds...................... 16
Dividend Policy...................... 16
Capitalization....................... 17
Dilution............................. 18
Pro Forma Consolidated Financial
Data............................... 19
Selected Consolidated Financial
Data............................... 20
Management's Discussion and Analysis
of Financial Condition and Results
of Operations...................... 21
Business............................. 27
Industry Overview.................... 39
Management........................... 47
Certain Transactions................. 51
Principal Stockholders............... 53
Description of Capital Stock......... 56
Shares Eligible for Future Sale...... 59
Underwriting......................... 61
Legal Matters........................ 62
Experts.............................. 62
Available Information................ 62
Glossary............................. 63
Index to Financial Statements........ F-1
</TABLE>

- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------
- ------------------------------------------------------

2,350,000 Shares

Wireless Logo

Class A Common Stock

-----------------------

PROSPECTUS
-----------------------

PRUDENTIAL SECURITIES INCORPORATED

LEHMAN BROTHERS
October , 1996
- ------------------------------------------------------
- ------------------------------------------------------
<PAGE> 112

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the estimated expenses to be borne by the
Company in connection with the registration, issuance, and distribution of the
securities to be registered hereby, other than underwriting discounts and
commissions. All amounts are estimates except the SEC registration fee, the NASD
filing fee, and the Nasdaq listing fee.

<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.............. $ 17,241.38
NASD filing fee.................................................. $ 5,500.00
Nasdaq listing fee............................................... $ 46,500.00
Transfer agent and registrar's fee and expenses.................. $ 15,000.00
Blue Sky fees and expenses....................................... $ 25,000.00
Printing and engraving expenses.................................. $175,000.00
Legal fees and expenses.......................................... $300,000.00
Accounting fees and expenses..................................... $150,000.00
Miscellaneous.................................................... $ 65,758.62
-----------
Total.......................................................... $800,000.00
===========
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Section 145 of the Delaware General Corporation Law (the "Delaware Act")
authorizes indemnification of directors, officers, employees and agents of the
Company; allows the advancement of costs of defending against litigation; and
permits companies incorporated in Delaware to purchase insurance on behalf of
directors, officers, employees and agents against liabilities whether or not in
the circumstances such companies would have the power to indemnify against such
liabilities under the provisions of the statute.

The Company's Restated Certificate of Incorporation (the "Certificate")
provides for indemnification of the Company's officers and directors to the
fullest extent permitted by Section 145 of the Delaware Act. The Company intends
to obtain directors and officers insurance covering its executive officers and
directors.

The Certificate eliminates, to the fullest extent permitted by Delaware
law, liability of a director to the Company of its stockholders for monetary
damages for a breach of such director's fiduciary duty of care except for
liability where a director: (a) breaches his or her duty of loyalty to the
Company or its stockholders; (b) fails to act in good faith or engages in
intentional misconduct or knowing violation of law; (c) authorizes payment of an
illegal dividend or stock repurchase; or d) obtains an improper personal
benefit. While liability for monetary damages has been eliminated, equitable
remedies such as injunctive relief or rescission remain available. In addition,
a director is not relieved of his or her responsibilities under any other law,
including the federal securities laws.

Insofar as indemnification by the Company for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to
directors, officers and controlling persons of the Company pursuant to the
foregoing provisions, the Company has been advised that in the opinion of the
Securities and Exchange Commission (the "Commission"), such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES

On March 15, 1995 and April 28, 1995, the Company issued to Boston Ventures
Limited Partnership IV and Boston Ventures Limited Partnership IVA an aggregate
of 35,000 shares of Class A Cumulative Convertible Preferred Stock for $35.0
million in cash. Such shares were issued without registration under the

II-1
<PAGE> 113

Securities Act in reliance of Section 4(2) of the Securities Act and Rule 506 of
Regulation D promulgated thereunder.

Since its inception, the Company has granted options for 482,357 shares of
Common Stock pursuant to its Stock Option Plan. As of October 31, 1996, options
to purchase 407,475 shares are outstanding, of which options to purchase 355,328
shares have an exercise price of $8.37 per share and options to purchase 52,147
shares have an exercise price at the initial public offering price per share. As
of October 31, 1996, options to purchase 4,867 shares of the Common Stock have
been exercised and 123,275 are currently exercisable. Such options were issued
without registration under the Securities Act in reliance on Section 4(2) and
Rule 701 promulgated thereunder.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The exhibits to the Registration Statement are listed in the Exhibit Index
which appears elsewhere in this Registration Statement and is hereby
incorporated herein by reference.

All other schedules are omitted because of the absence of the condition
under which they are required or because the information is included in the
consolidated financial statements or notes thereto.

ITEM 17. UNDERTAKINGS

The undersigned registrant hereby undertakes to provide to the
Underwriters, at the closing specified in the Underwriting Agreement,
certificates in such denominations and registered in such names as required by
the Underwriters to permit prompt delivery to each purchaser.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted directors, officers and controlling persons of the Company
pursuant to the provisions described under Item 14 above or otherwise, the
Company has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted against
the Company by such director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted against
the Company by such director, officer, or controlling person in connection with
the securities being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

The undersigned registrant hereby undertakes that:

(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

II-2
<PAGE> 114

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant
has duly caused Amendment No. 1 to this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in Englewood,
Colorado, on October 1, 1996.

WIRELESS BROADCASTING SYSTEMS
OF AMERICA, INC.

By: /s/ WILLIAM W. KINGERY, JR.

------------------------------------
William W. Kingery, Jr.
President and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on October 1, 1996.

<TABLE>
<CAPTION>
SIGNATURE TITLE
- ------------------------------------------ ----------------------------------------------
<C> <S>
/s/ WILLIAM W. KINGERY, JR. President, Chief Executive Officer and
- ------------------------------------------ Director
William W. Kingery, Jr. (Principal Executive Officer)
/s/ JEB DICKEY Treasurer and Chief Financial Officer
- ------------------------------------------ (Principal Financial and Accounting Officer)
Jeb Dickey
/s/ DEAN L. BUNTROCK* Chairman of the Board
- ------------------------------------------
Dean L. Buntrock
/s/ ROY F. COPPEDGE III* Director
- ------------------------------------------
Roy F. Coppedge III
/s/ BARBARA M. GINADER* Director
- ------------------------------------------
Barbara M. Ginader
/s/ GEORGE D. JOHNSON, JR.* Director
- ------------------------------------------
George D. Johnson, Jr.
/s/ PEER PEDERSEN* Director
- ------------------------------------------
Peer Pedersen
</TABLE>

* Pursuant to power of attorney granted to William Kingery and filed on August
8, 1996.

II-3
<PAGE> 115

EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
----------- ----------------------------------------------------------------------------
<C> <S>
1.1 Form of Underwriting Agreement between the Registrant and the Underwriters+
2.1 Organizational Agreement among, inter alia, Registrant, WJB Television
Limited Partnership, WJB-TV Fort Pierce Limited Partnership, WJB-TV
Melbourne Limited Partnership and Investors*
2.2 Form of Asset Purchase Agreement between Wireless Broadcasting Systems of
Yakima, Inc. and Microlink Television of Washington, Inc.
3.1(a) Certificate of Incorporation of the Registrant*
3.1(b) Restated Certificate of Incorporation of the Registrant*
3.1(c) Certificate of Amendment to the Certificate of Incorporation of the
Registrant*
3.1(d) Form of Second Restated Certificate of Incorporation of the Registrant
3.2 Bylaws of the Registrant*
4.1 Restated Stock Option Plan of the Registrant*
4.2 Non-employee Directors Stock Option Plan of Registrant
4.3 Stockholders Agreement among the Registrant, Boston Ventures Limited
Partnership IV, Boston Ventures Limited Partnership IVA and all other
Stockholders of the Registrant*
4.4 Form of certificate for Class A Common Stock of the Registrant+
5.1 Legal Opinion of Pedersen & Houpt, P.C.+
10.1(a) Credit Agreement between Registrant and Chemical Bank as agent for various
Lenders from time to time parties thereto*
10.1(b) Revolving Credit Note by Registrant to CIBC, Inc.*
10.1(c) Revolving Credit Note by Registrant to Norwest Bank Minnesota*
10.1(d) Revolving Credit Note by Registrant to Chemical Bank*
10.1(e) Form of Amendment to Credit Agreement between Registrant and Chemical Bank,
as agent for various Lenders from time to time parties to the Credit
Agreement+
10.2 Standard Form of ITFS Excess Capacity Airtime Lease Agreement of Registrant*
10.3(a) Employment Agreement between Registrant and William W. Kingery, Jr.*
10.3(b) Form of Employment Agreement between Registrant and Sharan L. Wilson*
10.4 Preferred Stock Purchase Agreement among Registrant, Boston Ventures Limited
Partnership IV and Boston Ventures Limited Partnership IVA*
10.5 Asset Purchase and Sale Agreement and Channel Lease between Registrant and
Boise Cable Limited Partnership*
10.6 Asset Purchase and Sale Agreement and Channel Lease between Registrant and
Northwest*
21.1 Subsidiaries of the Registrant*
23.1 Consent of Pedersen & Houpt, P.C.
23.2 Consent of Pepper & Corazzini, L.L.P.
23.3(a) Consent of Arthur Andersen LLP with respect to report on financial
statements of Wireless Broadcasting Systems of America, Inc.
23.3(b) Consent of Arthur Andersen LLP with respect to report on financial
statements of Boise Cable Limited Partnership
23.3(c) Consent of Arthur Andersen LLP with respect to report on financial
statements of Northwest Cable Network
23.3(d) Consent of Arthur Andersen LLP with respect to report on financial
statements of Pacific West Cable Television
23.4 Consent of Ernst & Young LLP
24.1 Power of Attorney*
27.1 Financial Data Schedule*
99.1 Legal Opinion of Pepper & Corazzini, L.L.P.+
</TABLE>

- -------------------------

* Previously filed.

+ To be filed by Amendment.

II-4

<PAGE> 1
EXHIBIT 2.2

ASSET PURCHASE AGREEMENT

BETWEEN

WIRELESS BROADCASTING SYSTEMS OF YAKIMA, INC.

"PURCHASER"

AND

MICROLINK TELEVISION OF WASHINGTON, INC.

"SELLER"

DATED AS OF AUGUST ____, 1996
<PAGE> 2

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered into
as of this ____ day of August, 1996, between WIRELESS BROADCASTING SYSTEMS OF
YAKIMA, INC., a Delaware corporation ("Purchaser") and MICROLINK TELEVISION OF
WASHINGTON, INC., a Nevada corporation ("Seller").

A. Seller owns or leases certain wireless cable channel rights in the
Kennewick-Pasco-Richland area (Tri-Cities), Washington (the "Business").

B. Purchaser desires to purchase from Seller certain of Seller's assets
on and subject to the terms and conditions contained in this Agreement.

C. Seller desires to sell to Purchaser certain of the Seller's assets on
and subject to the terms and conditions contained in this Agreement.

NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

ARTICLE I
PURCHASE AND SALE OF ASSETS

1.1 Purchase and Sale of Assets. At the Closing (as hereinafter
defined), on and subject to the terms and conditions of this Agreement, Seller
shall sell, assign, transfer, convey, and deliver to Purchaser, and Purchaser
shall purchase, acquire, and accept from Seller, all of the right, title, and
interest of Seller in and to the following assets, properties, and rights of
Seller, free and clear of all liens, claims, charges, security interests, and
encumbrances of any kind or nature, other than Permitted Encumbrances (as
hereinafter defined), as the same shall exist at the Closing Date (as
hereinafter defined):

(a) To the extent permitted under applicable law or regulation, the
wireless cable channel rights for the Tri-Cities relating to or to be used in
the Business including: authorizations issued by the Federal Communications
Commission (the "FCC"), applications therefor, and all contracts or leases
giving the Business the right to use wireless cable rights and authorizations
owned by other entities, including the channel rights listed in SCHEDULE 1.1(A)
attached hereto (collectively, the "Channel Rights");

(b) The leases identified on SCHEDULE 1.1(A) attached hereto
that include Seller's transmitter sites and other head-end space, together with
all of Seller's right, title, and interest in the buildings, fixtures and
improvements, including construction-in-progress, and appurtenances thereto,
located on the real property subject to such real estate leases, and any
<PAGE> 3

and all assignable warranties of third parties with respect thereto (the "Site
Leases");

(c) The equipment listed in SCHEDULE 1.1(B) and any and all
assignable warranties of third parties with respect thereto (the "Equipment");
and

(d) All existing data, data bases, books, records, correspondence,
business plans and projections, records of sales, customer and vendor lists,
files, and papers in the possession of Seller and related to the Business;
including without limitation, all manuals and printed instructions of Seller
relating to the Acquired Assets (as hereinafter defined) and to the operation
of the Business (the "Books and Records");

All of the items described in this Section 1.1 to be purchased by
Purchaser are hereinafter collectively referred to as the "Acquired Assets."

For purposes of this Agreement, "Permitted Encumbrances" shall mean liens
for taxes not yet due and payable (other than taxes arising out of the
transactions contemplated by this Agreement).

ARTICLE 2
ASSUMPTION OF LIABILITIES

2.1 Assumption of Liabilities of Seller. Subject to Section 2.2 hereof,
as of the Closing Date, Purchaser shall assume responsibility for the
performance and satisfaction of the obligations and liabilities of Seller
arising from and after the Closing Date, pursuant to the Channel Rights and
Site Leases but excluding any obligations or liabilities arising from or
relating to any breach or violation of the Channel Rights or the Site Leases by
Seller or default under same by Seller. The obligations and liabilities of
Seller specifically assumed pursuant to this Section 2.1 are hereinafter
referred to as the "Assumed Liabilities."

2.2 Excluded Liabilities of Seller. Purchaser shall not assume or become
liable for any obligations, commitments, or liabilities of Seller, whether
known or unknown, accrued or unaccrued, absolute, contingent, or otherwise, and
whether or not related to the Acquired Assets, except for the liabilities
specifically described in Section 2.1 above.

ARTICLE 3
PURCHASE PRICE

3.1 Purchase Price. The aggregate consideration to be paid to Seller for
the sale, transfer, and conveyance of the Acquired Assets and the covenant not
to compete set forth in Section 12.2 hereof (the "Purchase Price") shall be ONE
MILLION SEVENTY-TWO THOUSAND DOLLARS ($1,072,000).

2
<PAGE> 4

3.2 Payment of Purchase Price. On the Closing Date, subject to the
fulfillment of the conditions set forth herein, Purchaser shall pay the
Purchase Price to Seller as follows:

(a) Purchaser shall deposit Fifty Thousand Dollars ($50,000) in an
Escrow Account (the "Escrow Account") to be held by the Escrow Agent as
described in the Escrow Agreement in the form of that attached as EXHIBIT
3.2 hereto (the "Escrow Agreement");

(b) If Seller has not obtained the court order referenced in Section
8.16, then Purchaser shall deposit an additional $250,000 in the Escrow
Account; and

(c) Purchaser shall pay the balance of the Purchase Price, less the
funds placed in the Escrow Account and as increased or decreased by the
net proration amount pursuant to Section 11.2(c), by wire transfer in
immediately available funds to an account designated in writing by Seller.

3.3 Transfer Expenses. Seller shall pay any sales and use, transfer or
recording, documentary, or other taxes or charges levied on the transfer of the
Acquired Assets.

3.4 Allocation of Purchase Price. The consideration paid for the
covenant not to compete set forth in Section 12.2 hereof and for the Acquired
Assets (which shall equal the Purchase Price) shall be allocated among the
Acquired Assets in accordance with the provisions contained in Treasury
Regulation Section 1.1060-1T(d). The parties agree to be bound by such
allocation and to report the transaction contemplated herein for federal income
tax purposes in accordance with such allocation. In furtherance of the
foregoing, the parties hereto agree to execute and deliver Internal Revenue
Service Form 8594 reflecting such allocation.

ARTICLE 4
PROCEDURE FOR CLOSING

4.1 Time and Place of Closing. The closing for the purchase and sale
contemplated by this Agreement (the "Closing") shall be held at Suite 325, 9250
East Costilla Avenue, Englewood, Colorado 80112, commencing at 10:00 a.m.,
local time, on the fifth business day following the date on which the FCC's
unconditional grant of the Assignment Applications has become a Final Order
(or, if later, the satisfaction or waiver of the last of the conditions
precedent to closing set forth in Articles 8 and 9 hereof), but in no event
(except as contemplated by clause (c) of Section 8.15 below) later than nine
months from the date hereof, unless the parties shall otherwise agree in
writing. The date on which the Closing actually occurs is hereinafter referred
to as the "Closing Date."

3
<PAGE> 5

4.2 Transactions at the Closing. At the Closing, each of the following
items shall be delivered:

(a) Seller shall deliver to Purchaser the following:

(i) such bills of sale, assignments, endorsements, and
other good and sufficient instruments and documents of conveyance and
transfer, in form reasonably satisfactory to Purchaser and its
counsel, as shall be necessary and effective to transfer and assign
to, vest in, and purchase all of Seller's right, title, and interests
in and to the Acquired Assets, including without limitation, good and
valid title in and to all of the Acquired Assets owned by Seller
(subject only to Permitted Encumbrances), good and valid leasehold
interests in and to all of the Acquired Assets leased by Seller as
lessee, and all of Seller's rights under all Site Leases and Channel
Rights; including the assignment to Purchaser of the BTA
Authorization for Kennewick/Tri-Cities.

(ii) a certificate of Seller with respect to the matters
described in Sections 8.1, 8.2, 8.5, 8.10, and 8.14 hereof;

(iii) a certificate of the Secretary of Seller with respect
to the matters described in Sections 8.6 and 8.7 hereof;

(iv) copies of the consents and waivers described in
Section 8.5 hereof;

(v) satisfactory evidence of the approvals described in
Section 8.5 hereof;

(vi) certificates of existence or certificates of good
standing of Seller, as of a date within twenty (20) days prior to the
Closing Date, from the States of Nevada and Washington;

(vii) the Escrow Agreement;

(viii) unless the order referred to in Section 8.16 has been
delivered, a surety bond or letter of credit in the amount of One
Million Dollars ($1,000,000) issued by an insurance company, bonding
company or financial institution reasonably satisfactory to
Purchaser, securing Seller's indemnity obligations under Section
14.1(b) in accordance with procedures and upon such terms and
conditions as are acceptable to Purchaser in its sole discretion.

(ix) the written opinions of Seller's legal counsel for
general matters, FCC matters and litigation matters, in form and
substance reasonably

4
<PAGE> 6

satisfactory to Purchaser; and

(x) such other evidence of the performance by Seller of all
covenants and the satisfaction by Seller of all conditions required
by this Agreement to be performed or satisfied by Seller at or prior
to the Closing Date as Purchaser or its counsel may reasonably
require.

The documents and certificates to be delivered hereunder by or on behalf
of Seller on the Closing Date shall be in form and substance reasonably
satisfactory to Purchaser and its counsel.

(b) Purchaser shall deliver to Seller the following:

(i) a wire transfer in the amount equal to the Purchase Price,
less any amounts placed in the Escrow Account at Closing, and as
increased or decreased by the net proration amount pursuant to
Section 11.2(c) in immediately available funds to an account
designated in writing by Seller;

(ii) an instrument or instruments of assumption of the
Assumed Liabilities, duly executed by Purchaser, and reasonably
satisfactory in form and substance to Seller and its counsel;

(iii) a certificate of Purchaser with respect to the
matters described in Sections 9.1, 9.2 and 9.5 hereof;

(iv) a certificate of the Secretary of Purchaser with
respect to the matters described in Sections 9.3 and 9.5 hereof;

(v) certificates of existence or certificates of good standing
of Purchaser, as of a date within twenty (20) days prior to the
Closing Date, from the State of Delaware; and

(vi) such other evidence of the performance by Purchaser of
all covenants and satisfaction by Purchaser of all of the conditions
required by this Agreement to be performed or satisfied by Purchaser
at or before the Closing Date, as Seller or its counsel may
reasonably require.

The documents and certificates to be delivered to Seller hereunder by or
on behalf of the Purchaser on the Closing Date shall be in form and substance
reasonably satisfactory to Seller and its counsel.

4.3 Further Assurances. Seller from time to time after the Closing Date,
at Purchaser's request, shall execute, acknowledge, and deliver to Purchaser
such other

5
<PAGE> 7

instruments of conveyance and transfer and will take such other actions and
execute and deliver such other documents, certifications, and further
assurances as Purchaser may reasonably require in order to vest more
effectively in Purchaser, or to put Purchaser more fully in possession of, any
of the Acquired Assets, or to better enable Purchaser to complete, perform or
discharge any of the Assumed Liabilities. Each of the Parties hereto will
cooperate with the other and execute and deliver to the other parties hereto
such other instruments and documents and take such other actions as may be
reasonably requested from time to time by any other party hereto as necessary
to carry out, evidence, and confirm the intended purposes of this Agreement.

ARTICLE 5
REPRESENTATION AND WARRANTIES OF SELLER

Seller represents and warrants to Purchaser that:

5.1 Organization and Qualification. Seller is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Nevada and duly licensed or authorized to transact business in Washington as
a foreign corporation.

5.2 Authority. Seller has full power and authority to enter into this
Agreement and the agreements contemplated hereby, or respectively executed by
it in connection herewith (collectively, this Agreement and such other
agreements shall be referred to hereinafter as the "Acquisition Documents"),
and to consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Seller of each of the Acquisition
Documents to which Seller is a party is the legal, valid, and binding
obligation of Seller, enforceable against Seller, in accordance with its terms,
except as enforceability may be limited by the Bloch Litigation as defined in
Section 5.6. Neither the execution and delivery by Seller of any of the
Acquisition Documents to which it is a party nor the consummation by Seller of
the transactions contemplated thereby will (i) violate the Articles of
Incorporation or Bylaws of Seller (ii) violate any provisions of law or any
order of any court or any governmental entity to which Seller is subject, or by
which the Acquired Assets may be bound, (iii) conflict with, result in a breach
of, or constitute a default under any indenture mortgage, lease, agreement, or
other instrument to which Seller is a party or by which it or any of the
Acquired Assets may be bound, or (iv) result in the creation of any lien,
charge, or encumbrance upon any of the Acquired Assets.

5.3 Channel Rights and Site Leases.

(a) SCHEDULE 1.1(A) contains a true and correct list of all current
licenses, permits, applications, rights, certificates, authorizations, and
leases used or held for use in the Business. True and correct copies of each
lease listed on SCHEDULE 1.1(A) and any amendments, extensions, and renewals
thereof have been delivered to the Purchaser. Each Channel Right and Site
Lease is in full force and effect and there is no existing default or event

6
<PAGE> 8

of default, real or claimed, or event which with notice or lapse of time or
both would constitute or ripen into a default thereunder by Seller or its
lessors. The assignment of any of the Channel Rights or Site Leases to
Purchaser shall not cause a breach, default, or event of default thereunder
except for those leases requiring consents.

5.4 Equipment.

(a) SCHEDULE 1.1(B) contains a true and correct list of all equipment
used or held for use in the Business.

5.5 Insurance. The Acquired Assets are insured under various policies of
general liability and other forms of insurance, which policies are in adequate
amounts. The type of insurance, carriers, coverage amounts and expiration
dates are set forth in SCHEDULE 5.5. Seller has not been refused any insurance
with respect to the Business by any insurance carrier to which it has applied
for insurance or with which it has carried insurance during the past five (5)
years. Except as set forth in SCHEDULE 5.5, there are no outstanding
requirements or recommendations by any current insurer or underwriter with
respect to the Business or the Acquired Assets which require or recommend
changes in the conduct of Business or the Acquired Assets which require or
recommend changes in the conduct of Business, or require any repairs or other
work to be done with respect to any of the Acquired Assets.

5.6 Litigation. Except as listed and described on SCHEDULE 5.6, there
are no arbitrations, grievances, actions, suits, or other proceedings pending
or to the knowledge of Seller threatened against the Seller or Seller's parent
or any of Seller's affiliates, or adversely affecting the Business or any of
the Acquired Assets purported to be owned or used by Seller, at law or in
equity or admiralty, nor is there any investigation pending or threatened,
before or by any federal, state, municipal, or other governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign
related to the Business; provided, however, that Purchaser and Seller mutually
acknowledge the existence of two civil actions against Cardiff Broadcasting
(which may be consolidated for discovery or other purposes) captioned Lynne
Berke, et al.,; Plaintiffs v. Harry I. "Sonny" Bloch, et al.,Defendants, and
Leslie O'Keefe, et al., Plaintiffs v. Harry I. "Sonny" Bloch, et al.,
Defendants, pending in the United States District Court for the District of New
Jersey, as cases nos. 94-5999 and 95- 6788 respectively, relative to assets
that could include part of the Acquired Assets (collectively, the "Bloch
Litigation"). Neither Seller, nor its parent, nor any of its affiliates is in
default under or in violation of any order, writ, injunction, or decree of any
federal, state, municipal court, or other governmental department, commission,
board, bureau, agency, or instrumentality, domestic or foreign, affecting the
Business or the Acquired Assets purported to be owned or used by Seller.

5.7 Brokers and Finders. Neither the Seller nor any affiliate of Seller
has incurred any obligation or liability to any party for any brokerage fees,
agent's commissions, or finder's fees in connection with the transactions
contemplated by this Agreement.

7
<PAGE> 9

5.8 Governmental Approval and Consents. Except as described on SCHEDULE
5.8, Seller has obtained Permits required for the lawful operation of the
Business as presently conducted. SCHEDULE 5.8 contains a true and correct copy
of each such Permit, including the Channel Rights. All such Permits and
Channel Rights are in full force and effect, and all fees and charges therefor
have been fully paid to date.

5.9 Taxes.

(a) Seller has timely filed, and as of the Closing Date will have
timely filed, all federal and foreign income tax returns, and all state,
county, and local income, franchise, property, sales, use, unemployment, and
other tax returns in each state and jurisdiction where such returns are
required to be filed on or prior to the Closing Date, taking into account any
extensions of the filing deadlines which have been validly granted to Seller,
and such returns are and will be true and correct in all respects. Seller has
paid, or by the Closing Date will have paid, all federal, state, county, and
local income, franchise, property, sales, use and all other taxes and
assessments (including penalties and interest in respect thereof, if any) that
have become or are due with respect to any period ended on or prior to the
Closing Date whether shown as due on such returns or not, or is contesting in
good faith such taxes and assessments, in which event Seller has disclosed the
details of such contests on SCHEDULE 5.9(A).

(b) SCHEDULE 5.9(B) provides a brief description of all pending
federal and state tax disputes in which Seller is alleged to be liable or in
which Seller is claiming a refund, including the nature and amount of the
controversy, the respective positions of the parties as to any amounts claimed
to be due thereunder, and the current status thereof.

(c) No claim or investigations are pending or threatened by any
state, local, or other jurisdiction alleging that Seller has a duty to file tax
returns and pay taxes or is otherwise subject to the taxing authority of any
jurisdiction not included in SCHEDULES 5.9(A) or 5.9(B) with respect to any
taxes covered by Section 11.2 (a) nor has Seller received any notice or
questionnaire form any such jurisdiction which suggests or asserts that Seller
may have a duty to file such returns and pay such taxes, or otherwise is
subject to the taxing authority of such jurisdiction.

5.10 Compliance with Laws. Seller is not engaging in any activity or
omitting to take any action with respect to the Business, or the Acquired
Assets that is or creates a violation of any law, statute, ordinance, or
regulation applicable to the Business, or the Acquired Assets, including
without limitation laws applicable to zoning, environmental matters and
employee benefit plans. Neither Seller nor any of the Acquired Assets is
subject to any judgment, order, writ, injunction, or decree issued by any court
or any governmental or administrative body or agency. Seller possesses all
Permits required for the operation of the Business as presently conducted and
is in compliance with all applicable laws, regulations, and orders issued by
any court or governmental or administrative body or agency. Seller has not

8
<PAGE> 10

at any time during the last five (5) years (i) made any unlawful contribution
to any political candidate, or failed to disclose fully any contribution in
violation of law, or (ii) made any payment to any federal, state or local
governmental, regulatory or administrative officer or official, or other person
charged with similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States or any jurisdiction
thereof.

5.11 Governmental Approval and Consents. Except for consents
contemplated by this Agreement in Section 8.5, no consent, approval, or
authorization of or declaration, filing, or registration with any governmental
or regulatory authority is required in connection with the execution, delivery,
and performance of this Agreement by Seller or the consummation by Seller of
the transactions contemplated hereby.

5.12 Title to Acquired Assets. Seller has, and will have on the
Closing date, good and marketable title to the Acquired Assets free and clear
of all liens, claims, charges, encumbrances and security interests of any kind
or nature other than Permitted Encumbrances. Without limiting the foregoing,
the Acquired Assets are and will at all times thereafter be free and clear of
any liens or encumbrances related to the Bloch Litigation and any judgment or
motion or order that may be entered therein.

5.13 Correctness of Representations. No representation or warranty of
Seller in this Agreement or in any Exhibit, certificate, or Schedule attached
hereto or furnished pursuant hereto, contains, or on the Closing Date will
contain, any untrue statement of fact or omits, or on the Closing Date will
omit, to state any fact necessary in order to make the statements contained
therein not misleading in any respect, and all such statements,
representations, warranties, Exhibits, certificates, and Schedules shall be
true and complete in all respects on and as of the Closing Date as though made
on that date. True copies of all mortgages, indentures, notes, leases,
agreements, plans, contracts, and other instruments listed on the Schedules
delivered or furnished to Purchaser pursuant to this Agreement have been
delivered to Purchaser.

5.14 No Employees or Contractual Arrangements. Seller has no
employees and has never had any. Seller is not party to any contracts that
relate to the Business or the Acquired Assets except the Site Leases.

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Seller as follows:

6.1 Organization and Qualification. Purchaser is a corporation duly
organized, validly existing, and in good standing under the laws of the State
of Delaware and has all corporate power and authority to conduct its business,
to own, lease, or operate its properties in the places where such business is
conducted and such properties are owned, leased, or

9
<PAGE> 11

operated.

6.2 Authority. Purchaser has full power and authority to enter into this
Agreement and each of the other Acquisition Documents to which it is a party
and consummate the transactions contemplated hereby and thereby. The
execution, delivery and performance by Purchaser of this Agreement and each of
the other Acquisition Documents to which Purchaser is a party have been duly
and validly authorized and approved by all necessary action on the part of
Purchaser. This Agreement and each of the other Acquisition Documents to which
Purchaser is a party are the legal, valid, and binding obligations of Purchaser
enforceable against Purchaser in accordance with their terms. Neither the
execution and delivery by Purchaser of this Agreement or any of the other
Acquisition Documents to which Purchaser is a party nor the consummation by
Purchaser of the transactions contemplated hereby or thereby will (i) violate
Purchaser's Certificate of Incorporation or Bylaws, (ii) violate any provisions
of law or any order of any court or any governmental unit to which Purchaser is
subject, or by which its assets are bound, or (iii) conflict with, result in a
breach of, or constitute a default under any indenture, mortgage, lease,
agreement, or other instrument to which Purchaser is a party or by which its
assets or properties are bound.

6.3 Litigation. There is no suit, action, proceeding, claim or
investigation pending, or, to Purchaser's knowledge, threatened, against
Purchaser which would affect the consummation of the transactions contemplated
hereby.

6.4 Correctness of Representations. No representation or warranty of
Purchaser in this Agreement or in any Exhibit, certificate, or Schedule
attached hereto or furnished pursuant hereto contains, or on the Closing Date
will contain, any untrue statement of material fact or omits or, on the Closing
Date, will omit, to state any fact necessary in order to make the statements
contained therein not misleading in any material respect, and all such
statements, representations, Exhibits, and certificates shall be true and
complete on and as of the Closing date as though made on that date.

6.5 Brokers and Finders. Neither Purchaser nor any affiliate of
Purchaser has incurred any obligation or liability to any party for any
brokerage fees, agent's commissions, or finder's fees in connection with the
transactions contemplated by the Acquisition Documents.

6.6 Governmental Approval and Consents. No consent, approval, or
authorization of or declaration, filing, or registration with any governmental
or regulatory authority is required in connection with the execution, delivery,
and performance by Purchaser of this Agreement or the consummation of the
transactions contemplated hereby.

ARTICLE 7
COVENANTS OF SELLER

10
<PAGE> 12

Seller covenants and agrees with Purchaser as follows:

7.1 Conduct of Business Prior to Closing. From the date hereof to the
Closing Date, and except to the extent that Purchaser shall have otherwise
consented in advance in writing, Seller shall:

(a) operate the Business substantially as previously operated;

(b) except for the purchase of WNTJ-460 (H group) not purchase or
acquire any assets or properties, whether real or personal, tangible or
intangible, that if acquired would be an Acquired Asset hereunder, and not sell
or otherwise dispose of any real or personal property or asset that would have
been an Acquired Asset hereunder.

(c) maintain the Acquired Assets in their present order and
condition, reasonable wear and use excepted, and deliver the Acquired Assets to
Purchaser on the closing Date in such condition without encumbrances, waste or
need of repair, and maintain all policies of insurance covering such Acquired
Assets in amounts and on terms substantially equivalent to those in effect on
the date hereof;

(d) take all steps reasonably necessary to maintain the intangible
assets of the Business;

(e) pay all accounts payable of the Business in accordance with past
practice and collect all accounts receivable in accordance with past practice;

(f) comply with all laws applicable to the Acquired Assets and the
conduct of the Business;

(g) maintain the Books and Records of the Business in the usual,
regular, and ordinary manner, on a basis consistent with past practices and
prepare and file all foreign, federal, state, and local tax returns and
amendments thereto required to be filed by Seller after taking into account any
extensions of time granted by such taxing authorities; and

(h) diligently and continuously defend the Bloch Litigations and keep
Seller fully informed of events therein and provide Seller with copies of all
pleadings and correspondence.

7.2 Access and Information. From the date hereof to the Closing Date and
during normal business hours, Seller shall afford to Purchaser, its lenders,
counsel, accountants, and other representatives, reasonable access to the
offices, properties, books, contracts, commitments, records, vendors and
customers of Seller, and shall furnish such persons with all information
(including financial and operating data) concerning the Business and the
Acquired Assets as they reasonably may request. Seller shall use its best
efforts to assist

11
<PAGE> 13

Purchaser, its lenders, counsel, accountants, and other representative in their
examination. Purchaser shall, and shall use its best efforts to cause its
lenders counsel, accountants, and representatives to, hold in strict confidence
all information so obtained from Seller.

7.3 Notification of Changes. Between the date hereof and the Closing
Date, Seller shall promptly notify Purchaser in writing of any adverse change
in the financial condition of the Business, any damage to or loss of any of the
Acquired Assets or the threat of institution of legal, administrative, or other
proceedings against Seller or the occurrence or existence of any unassented
proceedings known to Seller.

7.4 Other Transactions. Seller shall deal exclusively and in good faith
with Purchaser with regard to the sale of the Acquired Assets to Purchaser and
will not, and will direct its officers, directors, financial advisors,
accountants, agents, and counsel not to (i) solicit submission of, or receive
or entertain proposals or offers from any person other than Purchaser relating
to any acquisition of the Acquired Assets, (an "Acquisition Proposal"), (ii)
participate in any discussions or negotiations regarding, or furnish any
non-public information to any other person regarding the Business other than
Purchaser and its representatives or otherwise cooperate in any way or assist,
facilitate, or encourage any Acquisition Proposal by any person other than the
Purchaser or, (iii) enter into any agreement or understanding, whether in
writing or, if legally binding, oral, that would have the effect of preventing
or delaying the consummation of the transactions contemplated by this
Agreement. If, notwithstanding the foregoing, Seller or its respective
representatives or agents should receive any Acquisition Proposal or any
inquiry regarding such proposal from a third party, such persons shall promptly
inform Purchaser and its counsel thereof.

7.5 Consents. Seller shall obtain, at its sole cost and expense, prior
to the Closing all consents, approvals and estoppels which are necessary or
appropriate for the transfer or assignment of the Acquired Assets to Purchaser
and the consummation of the transactions contemplated hereby. All such
consents, approvals and estoppels shall be in writing and in form and substance
reasonably satisfactory to Purchaser, and executed counterparts thereof will be
delivered to Purchaser promptly after receipt thereof but in no event later
than the Closing. Seller shall keep Purchaser informed of the status of
obtaining such consents, approvals and estoppels on a regular basis. All
Consents necessary to consummate the transactions contemplated hereby are
listed on SCHEDULE 8.5.

7.6 Supplemental Disclosure. Seller shall have the continuing obligation
up to and including the Closing Date to supplement promptly or amend the
schedules with respect to any matter hereafter arising or discovered which, if
existing or known at the date of this Agreement, would have been required to be
set forth or listed in the Schedules.

7.7 Conditions Precedent. Seller shall use its best efforts to satisfy
the conditions enumerated in Article 8 hereof in a timely manner.

12
<PAGE> 14

7.8 Discharge of Liens and Encumbrances. All liens, claims, charges,
security interests, pledges, assignments, or encumbrances relating to the
Acquired Assets that are not Permitted Encumbrances shall be satisfied,
terminated, and discharged by Seller on or prior to the Closing Date and
evidence reasonably satisfactory to Purchaser and its counsel of such
satisfaction, termination, and discharge shall be delivered to Purchaser at or
prior to the Closing

ARTICLE 8
CONDITIONS PRECEDENT TO OBLIGATIONS OF PURCHASER

The obligation of Purchaser to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date, of each of the following conditions all or any of which may be waived in
writing, in whole or in part by Purchaser:

8.1 Certificate Regarding Schedules and Representations and Warranties.
All information required to be furnished or delivered by Seller pursuant to
this Agreement shall have been furnished or delivered as of the date hereof and
as of the Closing Date, as required hereunder; the representations and
warranties made by Seller in Article 5 shall be true and correct in all
material respects on and as of the Closing Date with the same force and effect
as though such representations and warranties had been made on and as of the
Closing Date (except that such representations and warranties may be untrue or
incorrect as a result of actions or transactions expressly permitted by this
Agreement or actions or transactions of Seller made with the prior written
consent of Purchaser), and Purchaser shall have received a certificate dated as
of the Closing Date executed by an officer of Seller to such effect.

8.2 Compliance by Seller. Seller shall have duly performed in all
material respects all of the covenants, agreements, and conditions contained in
this Agreement respectively to be performed by it on or prior to the Closing
Date, including the delivery of all items required by Section 4.2(a), and
Purchaser shall have received a certificate, date as of the Closing Date,
executed by an authorized officer of Seller to such effect.

8.3 No Injunction; Etc. No action, proceeding, investigation,
regulation, or legislation shall be pending which seeks to enjoin, restrain, or
prohibit Purchaser or Seller, or to obtain substantial damages from Purchaser,
in respect of the consummation of the transactions contemplated hereby, or
which seeks to enjoin the operation of all or a material portion of the
Acquired Assets.

8.4 Operation in the Ordinary Course. Since the date hereof, Seller
shall have operated the Business in the ordinary course (except as otherwise
permitted by this Agreement or as agreed to by Purchaser as evidenced by
Purchaser's prior written consent).

8.5 Consents; Authorizations; Approval of Legal Matters. Purchaser shall
have

13
<PAGE> 15

received a true and correct copy of each consent and waiver that is required
for the assignment of the Channel Rights, Site Leases, and other agreements and
assets or otherwise required for the execution, delivery, and performance of
this Agreement by Seller, including, without limitation, approval of the
assignment by Seller to Purchaser of all licenses issued to Seller by the
Federal Communications Commission with respect to the Business. All Consents
necessary to consummate the transactions contemplated hereby are listed on
SCHEDULE 8.5. All Authorizations, orders, or approvals of any governmental
commission, board, or other regulatory body, shall have been obtained.
Purchaser shall have received a certificate dated as of the Closing Date,
executed by an authorized officer of Seller to the foregoing effect, and
Purchaser shall be satisfied with the terms, conditions, and restrictions of
and obligations under each such authorization, order, or approval.

8.6 Incumbency. Purchaser shall have received a certificate of
incumbency of the Seller executed by a Secretary or Assistant Secretary thereof
listing the officers authorized to execute this Agreement and certifying the
authority of each such officer to execute the agreements, documents, and
instruments on behalf of Seller in connection with the consummation of the
transactions contemplated herein.

8.7 Certified Resolutions. Purchaser shall have received a certificate
of the Secretary of Seller containing a true and correct copy of the
resolutions duly adopted by the board of directors approving and authorizing
each Acquisition Document and the transactions contemplated hereby and thereby
and certifying that such resolutions have not been rescinded, revoked,
modified, or otherwise affected and remain in full force and effect.

8.8 Release of Liens. Purchaser shall have received Uniform Commercial
Code searches (which searches shall be made or caused to be made by and at the
expense of Purchaser) of filings made pursuant to Article 9 thereof in all
jurisdictions where any of the Acquired Assets are located, in form, scope, and
substance reasonably satisfactory to Purchaser and its counsel, which searches
shall reflect the release or termination of liens, claims, security interest,
or encumbrances against any of the Acquired Assets disclosed thereby that are
not Permitted Encumbrances, and to the extent any such release or termination
is not reflected of record, Purchaser shall have received evidence satisfactory
to it, that all such liens and encumbrances against the Acquired Assets other
than Permitted Encumbrances have been released or terminated prior to or at
Closing.

8.9 Accuracy of Schedules. Examination by Purchaser shall not have
disclosed any material inaccuracy in the representations and warranties of
Seller set forth in this Agreement or in the Schedules delivered to Purchaser
pursuant hereto.

8.10 No Adverse Change. There shall not have been any material
adverse change in the Acquired Assets or the Business since the date hereof and
Purchaser shall have received a certificate dated as of the Closing Date,
executed by an authorized officer of Seller to such effect.

14
<PAGE> 16

8.11 Instrument of Transfer. Seller shall have delivered to Purchaser
such warranty deeds, bills of sale, motor vehicle titles, endorsements,
assignments, licenses, and other good and sufficient instruments of conveyance
and transfer and any of the instruments reasonably deemed appropriate by
counsel to Purchaser, all in form and substance reasonably satisfactory to
counsel to Purchaser, to vest in Purchaser all of Seller's rights, title, and
interest with respect to the Acquired Assets, free and clear of all liens,
charges, encumbrances, pledges, or claims of any nature except for Permitted
Encumbrances.

8.12 Site Lease Certificates. Purchaser shall have received prior to
Closing in form and substance reasonably satisfactory to Purchaser, Agreements
of Estoppel, Consent and Waiver and Landlord's Consent to Lease Assignments for
all the Site Leases.

8.13 Proceedings. The form and substance of all opinions,
certificates, assignments, orders, and other documents and instruments,
hereunder shall be satisfactory in all reasonable respects to Purchaser and its
counsel.

8.14 Condition of Acquired Assets. On the Closing Date, all of the
Acquired Assets shall be in substantially the same condition as at the close of
business on the date hereof, except for ordinary use and wear thereof between
the date hereof and the Closing Date or as expressly permitted by this
Agreement, and Purchaser shall have received a certificate dated as of the
Closing Date, executed by an authorized officer of Seller to such effect,
provided, however, if on or prior to the Closing Date any of the Acquired
Assets shall have suffered loss or damage on account of fire, flood, accident,
act of war, civil commotion, or any other cause or event, including the Bloch
Litigation (whether or not similar to the foregoing) to an extent which, in the
reasonable opinion of Purchaser, materially affects the value of the Acquired
Assets, taken as a whole, Purchaser shall have the right (a) to terminate this
Agreement and all of Purchaser's obligations hereunder without incurring any
liability to Seller as a result of such termination; (b) to consummate the
transactions provided for herein and be paid the full amount of all insurance
proceeds, if any, paid or payable to Seller, in respect of such loss plus an
amount equal to any deductible or co-insurance reserve applicable to such loss;
or (c) to require Seller to replace such lost or damaged assets or to restore
them to their original condition and to extend the Closing Date accordingly.
If under the circumstances described in the foregoing sentence, Purchaser shall
elect to consummate the transactions provided for herein, Seller shall, on
demand, pay to Purchaser the full amount of any insurance proceeds received by
Seller in respect of any such loss, together with any deductible or
co-insurance reserve applicable to such loss.

8.15 Satisfactory Due Diligence. Purchaser shall in all respects be
satisfied in its reasonable discretion with the results of its due diligence
investigation of Seller and the Business.

8.16 Bloch Litigation Order. A court order from the appropriate
United States District Court identical in substance (and in form, to the extent
practical) to the model attached

15
<PAGE> 17

hereto as EXHIBIT 8.16; provided, however, that if such an order has not been
entered and delivered to Purchaser prior to the Closing, then (a) Seller shall
comply with Sections 3.2(b) and 4.2(a)(viii), and (b) Seller shall furnish
Purchaser with a letter from litigation counsel reasonably satisfactory to
Purchaser, stating that such counsel has been paid an appropriate retainer and
has been engaged by Seller to zealously represent Seller, Purchaser and the
Acquired Assets, at Seller's sole cost and expense, with regard to the Bloch
Litigation and any other litigation that may implicate Seller, Purchaser and/or
the Acquired Assets.

8.17 Jump-Off Joe Butte Leases. Seller shall have executed all
agreements necessary or desirable (in Purchaser's reasonable judgment) for the
operation of the wireless cable system at Jump-off Joe Butte, that are
acceptable in form and substance to Purchaser and fully transferable to
Purchaser, including lease agreements with the Department of Natural Resources
and Palouse Paging, Inc. for the head-end site.

8.18 B, D, and G Group ITFS Applications and MDS 2A Application.
Seller shall have resolved to Purchaser's reasonable satisfaction the mutual
exclusivity between ITFS applications that were filed for the Tri-Cities, on
the B-group, D-group and G-group and resolve the Petition to Deny that was
filed against the MDS Channel 2A Application (FCC File No. BMDP 960510JJ).

8.19 Channel Modifications. Seller shall have filed uncontested
modification and/or amendment applications for all Channel Rights, as described
on SCHEDULE 1.1(A), to be used in the Business that are consistent in all
material respects, including coordinates, tower heights, antenna heights,
centerline heights, polarization, and power.

8.20 FCC Approval. The FCC shall have unconditionally granted the
Assignment Applications, and such grants shall have become Final Orders.

8.21 Financial Statements. Prior to Closing, Seller shall furnish
Purchaser with audited financial statements of Seller, Seller's principals, and
Seller's parent.

8.22 Exercise and Consummation of Purchase Option. Prior to Closing
Seller shall have exercised its option to purchase WNTJ-460 (Group H), paid the
necessary purchase price and consummated the transaction. Seller shall also
cause the licenses of WNTJ-460 (Group H) to assign the license for such station
directly to WBSY Licensing Corporation.

ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER

The obligation of Seller to consummate the transactions contemplated by
this Agreement shall be subject to the satisfaction, on or before the Closing
Date hereunder, of each of the following conditions, all or any of which may be
waived, in whole or in part, by Seller.

16
<PAGE> 18

9.1 Certificate Regarding Representations and Warranties. All
information required to be furnished or delivered by Purchaser pursuant to this
Agreement shall have been furnished or delivered as of the date hereof and the
Closing Date as required hereunder; the representations and warranties made by
Purchaser in Article 6 hereof shall be true and correct in all material
respects on and as of the Closing date with the same force and effect as though
such representations and warranties had been made on and as of the Closing
Date; and Seller shall have received a certificate dated the Closing Date,
executed by an authorized officer of Purchaser to such effect.

9.2 Compliance by Purchaser. Purchaser shall have duly performed in all
material respects all of the covenants, agreements, and conditions contained in
this Agreement to be performed by Purchaser on or before the Closing Date,
including the delivery of all items required by Section 4.2(b), and Seller
shall have received a certificate dated the Closing Date, executed by an
authorized officer of Purchaser, to such effect.

9.3 Certified Resolutions. Seller shall have received from Purchaser a
certificate executed by the Secretary of Purchaser containing a true and
correct copy of resolutions duly adopted by Purchaser's Board of Directors
approving and authorizing this Agreement and each of the other Acquisition
Documents to which Purchaser is a party and each of the transactions
contemplated thereby. The Secretary or Assistant Secretary of Purchaser shall
also certify that such resolutions have not been rescinded, revoked, modified,
or otherwise affected and remain in full force and effect.

9.4 No Injunction; Etc. No action, proceeding, investigation,
regulation, or legislation shall be pending which seeks to enjoin, restrain, or
prohibit Seller, or to obtain substantial damages from Seller, in respect of
the consummation of the transactions contemplated hereby, which, in the
reasonable judgment of Seller, would make it inadvisable to consummate such
transactions.

9.5 Incumbency. Seller shall have received a certificate of incumbency
of Purchaser executed by the President and attested by the Secretary or
Assistant Secretary of Purchaser listing the officers of Purchaser authorized
to execute this Agreement and the other Acquisition Documents to which
Purchaser is a party and the instruments of assumption on behalf of Purchaser
and certifying the authority of each such officer to execute the agreements,
documents, and instruments on behalf of Purchaser in connection with the
consummation of the transactions contemplated herein.

9.6 FCC Approval. The FCC shall have granted the Assignment
Applications.

9.7 Proceedings. The form and substance of all opinions, certificates,
assignments, orders and other documents and instruments hereunder shall be
satisfactory in all reasonable respects to Seller and its counsel.

17
<PAGE> 19

ARTICLE 10
FCC APPLICATIONS

10.1 FCC Applications.

(a) Within fourteen (14) days after the date hereof, Seller and
Purchaser will join in and file with the FCC applications for FCC approval of
the assignments of the Channel Rights to Purchaser or Purchaser's affiliate
(the "Assignment Applications"). Both parties will use their best efforts to
prosecute the Assignment Applications to a swift and favorable conclusion and
to obtain any extensions that may be necessary or desirable to permit the
consummation of the transactions hereby contemplated.

(b) "Final Orders" means unconditional FCC Orders consenting to the
assignments of the Channel Rights to Purchaser as to which the time for the
filing of any request for administrative or judicial review, protest, request
for stay, reconsideration by the FCC on its own motion, petition for rehearing
or appeal of such order, shall have expired without any such filings having
been made, or in the event of such filing, shall have been reaffirmed or upheld
and the time for seeking further administrative or judicial review with respect
thereto shall have expired.

(c) If the FCC's unconditional grant of the Assignment Applications
have not become Final Orders within nine months after the date hereof, either
party may terminate this Agreement upon five days' written notice to the other;
provided, however, that if the party desiring to terminate this Agreement is or
has been in default hereunder or has been default in any manner which has
delayed FCC action on the Assignment Applications, then such defaulting party
may not terminate this Agreement under this Section 10.1. In the event of a
termination of this Agreement pursuant to this Section 10.1, each party will be
released from all liability under this Agreement.

ARTICLE 11
MUTUAL COVENANTS

11.1 Further Mutual Covenants. Purchaser, on the one hand, and
Seller, on the other hand, shall each take all actions contemplated by this
Agreement, and , subject to the right of a party to terminate this Agreement
pursuant to Article 13 hereof, do all things reasonably necessary to effect the
consummation of the transactions contemplated by this Agreement. Except as
otherwise provided in this Agreement, Purchaser and Seller shall each refrain
from knowingly taking or failing to take any action which would render any of
the representations or warranties contained in Articles 5 or 6 of this
Agreement in any material respect inaccurate as of the Closing Date. Each
party shall promptly notify the other party of any action, suit, or proceeding
that shall be instituted or threatened against such party to restrain,
prohibit, or otherwise challenge the legality of any transaction contemplated
by this Agreement.

18
<PAGE> 20

11.2 Prorations.

(a) Utility Charges, Rental Charges, Equipment Charges, Personal
Property Taxes and Lease Payments (collectively, the "Proration Items") shall
be prorated directly between Seller and Purchaser as provided in this Section
11.2.

(b) For the purposes of this Section 11.2, the capitalized terms set
forth below shall have the following meanings:

(i) "Utility Charges" shall mean water, sewer, electricity, gas,
and other utility charges, if any, applicable to the Site Leases;

(ii) "Rental Charges" shall mean common area maintenance
charges, merchant association dues, insurance reimbursement and rent
charges payable or receivable and other payments or receipts
applicable to the Site Leases;

(iii) "Equipment Charges" shall mean rental charges payable
or receivable and other payments or receipts applicable to the
equipment of the Business;

(iv) "Personal Property Taxes" shall mean ad valorem taxes
imposed upon the Acquired Assets or the Equipment; and

(vi) "Lease Payments" shall mean payments of rent or
additional rent under the Site Leases and any other lease of real or
personal property to be assigned to Purchaser hereunder.

(c) On the Closing Date, all Proration Items (including amounts owed
pursuant to transferable state licenses applicable to the Assets and
transferred to Purchaser hereunder) which are not included in the Assumed
Liabilities and which can be ascertained or reasonably prorated shall be
apportioned according to generally accepted accounting principles to the
Closing Date. All Proration Items which could not be ascertained or reasonably
prorated on the Closing Date will be so apportioned (as of the Closing Date)
within 45 days thereafter. Representatives of Seller and Purchaser will
examine all relevant books and records as of the Closing Date in order to make
the determination of the apportionments, which determinations shall be
calculated in accordance with past practices. Payments in respect thereof
shall be made to the appropriate party by check within (30) days after such
determination, except that payments for Real Property Taxes and Personal
Property Taxes shall initially be determined based on the previous year's taxes
and shall later be adjusted to reflect the current year's taxes when the tax
bills are finally rendered. The parties shall fully cooperate to avoid, to the
extent legally possible, the payment of duplicate Personal Property Taxes, and
each party shall furnish, at the request of the other, proof of payment of any
Personal Property Taxes or other documentation which is a prerequisite to
avoiding payment

19
<PAGE> 21

of a duplicate tax.

(d) In the event that either party (the "Payor") pays a Proration
Item (other than if and to the extent included in the Assumed Liabilities) for
which the other party (the "Payee") is obligated in whole or in part under this
Section 11.2, the Payor shall present to the Payee evidence of payment and a
statement setting forth Payee's proportionate share of such Proration Item, and
the Payee shall promptly pay such share to the Payor. In the event either
party (the "Recipient") receives payments of a Proration Item to which the
other party (the "Beneficiary") is entitled in whole or in part under this
Agreement, the Recipient shall promptly pay such share to the Beneficiary.

(e) In the event there exists as of the Closing Date any pending
appeals of ad valorem tax assessments with regard to any Acquired Assets, the
continued prosecution and/or settlement of such appeals shall be subject to the
direction and control of Purchaser with respect to assessments for the year
within which the Closing occurs.

11.3 Confidentiality.

Neither Purchaser nor Seller shall make any public release of information
regarding the matters contemplated herein except (i) that a joint press release
in agreed form may be issued by Purchaser and Seller as promptly as is
practicable after the execution of this Agreement, (ii) that Purchaser and
Seller may continue such communications with their attorneys, employees,
customers, suppliers, franchisees, lenders, lessors, shareholders, and other
particular groups as may be legally required or necessary or appropriate and
not inconsistent with the best interests of the other party or the prompt
consummation of the transactions contemplated by this Agreement, and (iii) as
required by Law.

ARTICLE 12
POST CLOSING MATTERS

12.1 Maintenance of Books and Records.

(a) Seller and Purchaser shall preserve until the third anniversary
of the Closing Date all books and records related to the Acquired Assets or the
Business possessed or to be possessed by such party relating to any of the
assets, liabilities or business of Seller prior to the Closing Date. Seller
shall give Purchaser written notice of any such books and records discovered by
Seller that were not transferred to Purchaser. After the Closing Date, where
there is a legitimate purpose, such party shall provide the other parties with
access, upon prior reasonable written request specifying the need therefor,
during regular business hours, to (i) the officers and employees of such party
and (ii) the books of account and records of such party, but, in each case,
only to the extent relating to the Business prior to the Closing Date, and the
other parties and their representatives shall have the right to make copies of
such books and records; provided, however, the foregoing right of access shall
not be exercisable in

20
<PAGE> 22

such a manner as to interfere unreasonably with the normal operations and
business of such party; and further, provided, as to so much of such
information as constitutes trade secrets or confidential business information
of such party, the requesting party, its affiliates, officers, directors and
representatives will use due care to not disclose such information except (i)
as required by law, (ii) with the prior written consent of such party, which
consent shall not be unreasonably withheld, or (iii) where such information
becomes available to the public generally, or becomes generally known to
competitors of such party, through sources other than the requesting party, its
affiliates or its officers, directors or representatives. Such records may
nevertheless be destroyed by a party if such party sends to the other party
written notice of its intent to destroy records, specifying with particularity
the contents of the records to be destroyed. Such records may then be
destroyed after the 30th day after such notice is given unless another party
objects to the destruction in which case the party seeking to destroy the
records shall deliver such records to the objecting party.

(b) Purchaser shall fully cooperate with Seller, at no out-of-pocket
cost to Purchaser, in the preparation and filing of all tax filings relating to
the period ending prior to the Closing Date. Purchaser also shall make
available to Seller such information as may be reasonably required by Seller in
connection with audits or otherwise for the proper payment of taxes for which
Seller is responsible.

12.2 Covenants Not to Compete. Seller and Robert A. Janssen covenant
and agree that, as consideration for the consummation of the transactions
contemplated herein and for the payment to be made pursuant to Section 3
hereof, for a period of three (3) years commencing on the Closing Date within
the Territory (as hereinafter defined), neither will (a) directly or
indirectly, own, manage, operate, join, control, or participate in the
ownership, management, operation or control of, any business, whether in
corporate, proprietorship or partnership form or otherwise, which is engaged at
any place in the Territory in a business substantially the same as the Business
(a "Competing Business"), or (b) solicit or attempt to solicit to or for the
benefit of any Competing Business the business or patronage of a customer of
Purchaser that has been at any time during the three (3) year period prior to
the Closing Date a customer of Seller. As used herein, the term "Territory"
means a 100 mile radius from the transmitter site located at Latitude 460612,
Longitude 1190745. The parties hereto specifically acknowledge and agree that
the remedy at law for any breach of the foregoing will be inadequate and that
the Purchaser, in addition to any other relief available to it, shall be
entitled to temporary and permanent injunctive relief without the necessity of
proving actual damage. In the event that the provisions of this Section 12.2
should ever be deemed to exceed the limitation provided by applicable law, then
the parties hereto agree that such provisions shall be reformed to set forth
the maximum limitations permitted.

ARTICLE 13
TERMINATION

13.1 Termination. This Agreement may be terminated:

21
<PAGE> 23

(a) by the mutual consent of all parties hereto;

(b) by Purchaser if any condition in Article 8 becomes impossible of
performance or has not been satisfied in full or waived by Purchaser in writing
at or prior to the Closing Date;

(c) by Seller if any condition in Article 9 becomes impossible of
performance or has not been satisfied in full or waived by Seller in writing at
or prior to the Closing Date.

13.2 Effect of Termination. In the event of the termination and
abandonment hereof pursuant to the provisions of Section 13.1 hereof, this
Agreement shall become void and have no effect without any liability on the
part of any of the parties hereto or their directors, or officers or
stockholders in respect of this Agreement, except that the parties shall each
have available to them all remedies at law and at equity that they would
otherwise have.

ARTICLE 14
INDEMNIFICATION

14.1 Indemnity by Seller.

(a) All Matters Except Bloch Litigation. Seller, together with its
parent, its affiliates, and its principals (including Robert A. Janssen
personally) will indemnify and hold Purchaser and its directors, officers,
employees, agents and affiliates harmless with respect to any and all claims,
losses, obligations, liabilities, costs and expenses, including reasonable
attorneys' fees, arising out of or resulting from (i) any breach of any of the
covenants, representations and warranties of Seller under this Agreement, (ii)
claims by third parties arising out of the ownership of the Acquired Assets
prior to the Closing, or (iii) any liability or obligation not assumed by
Purchaser pursuant hereto including but not limited to any environmental
remediation.

(b) Bloch Litigation.

(i) In the event that the Bloch Litigation results after Closing
in a final judgment binding against Purchaser which requires the sale
or transfer of all or any of the Acquired Assets to any party other
than Purchaser (an "Adverse Bloch Litigation Decision"), then Seller
will within ten business days of the Adverse Bloch Litigation
Decision pay to Purchaser the greater of the following:

a. $1,500 per subscriber as of the date of the final judgment, or

b. The Purchase Price plus reimbursement of any and all capital
expenditures and ordinary business expenses made by
Purchaser or

22
<PAGE> 24

its designee from the Closing through the final judgment.

(ii) If an Adverse Bloch Litigation Decision, whether or not
binding on Purchaser, occurs prior to Closing, then all money paid by
Purchaser to Seller hereunder, including without limitation all
deposits made into an escrow account or otherwise, shall be returned
to Purchaser by Seller in full as Purchaser's sole and exclusive
remedy and this Agreement shall be null and void.

(iii) Seller agrees to assume full responsibility (financial
and otherwise) for defending itself, its parent, Purchaser, and the
Acquired Assets from and against any claim asserted in the Bloch
Litigation and any claims arising therefrom. Further, Seller will
indemnify and hold Purchaser and its directors, officers, employees,
agent and affiliates harmless with respect to any and all claims,
losses, obligations, liabilities, costs and expenses, including but
not limited to reasonable attorneys' fees and fees to accountants,
expert witnesses, court reporters and consultants, costs to produce
documents or for time for any testimony of Purchaser or its
employees, arising as a result out of or because of the Bloch
Litigation, including any costs associated with dealing with any
impairment to or encumbrances upon Purchaser's good and marketable
title to the Acquired Assets. This indemnity (14.1(b)(iii)) shall be
funded out of the escrowed funds which shall be replenished if need
be pursuant to the Escrow Agreement.

14.2 Indemnity by Purchaser.

14.3 Third Party Claims. In the event of third party claims, the
party seeking indemnification (the "Indemnified Party") will notify the other
party (the "Indemnifying Party") in writing as soon as practicable but in no
event later than fifteen (15) days after receipt of such claims. The
Indemnified Party's failure to do so will not preclude it from seeking
indemnification hereunder unless such failure has materially prejudiced the
Indemnifying Party's ability to defend such claim. The Indemnifying Party will
promptly defend such claim by counsel to be mutually agreed upon by Seller and
Purchaser and the Indemnified Party will cooperate with the Indemnifying Party
in the defense of such claim including the settlement of the matter on the
basis stipulated by the Indemnifying Party (with the Indemnifying Party being
responsible for all costs and expenses of such settlement). If the
Indemnifying Party fails to defend the Indemnified Party, within five (5)
business days of receiving notice, then the Indemnified Party will be entitled
to undertake the defense, compromise or settlement of such claim at the expense
of and for the account and risk of the Indemnifying Party. Upon the assumption
of the defense of such claim, the Indemnifying Party may settle, compromise or
defend as it sees fit, provided, however, that anything in this Section 14.1 to
the contrary notwithstanding:

(a) if there is a reasonable probability that a claim may materially

23
<PAGE> 25

and adversely affect the Indemnified Party, the Indemnified Party
will have the right, at its own cost and expense, to defend,
compromise or settle such claim against it.

(b) if the facts giving rise to indemnification hereunder shall
involve a possible claim by the Indemnified Party against a third
party, the Indemnified Party will have the right, at its own cost and
expense, to undertake the prosecution, compromise and settlement of
such claim.

(c) the Indemnifying Party will not, without the Indemnified
Party's written consent, settle or compromise any claim or consent to
any entry of judgment which does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the
Indemnified Party of a release from all liability in respect to such
claim.

14.4 Survival of Representations. Unless otherwise set forth
herein, all representations and warranties, covenants and agreements of Seller
and Purchaser contained in or made pursuant to this Agreement or in any
certificate furnished pursuant hereto shall survive the Closing Date
indefinitely.

ARTICLE 15
GENERAL PROVISIONS

15.1 Fees and Expenses. Except as otherwise specifically provided in
this Agreement, Seller, on the one hand, and Purchaser, on the other hand,
shall pay their respective fees and expenses in connection with the negotiation
and Closing of this Agreement and the contemplated transactions.

15.2 Notices. All notices, request, demands, and other communications
hereunder shall be in writing and shall be delivered (a) in person or by
courier, (b) mailed by first class registered or certified mail, or (c)
delivered by facsimile transmission, as follows:

(a) If to Seller:

Robert A. Janssen
2101 Jimmy Durante Boulevard
Suite 130
Del Mar, California 92014
Telecopier: 619-481-1642

24
<PAGE> 26

with a copy (which shall not constitute notice) to:

Lance J.M. Steinhart
Attorney at Law
1100 Abernathy Road
Suite 1112
Atlanta, Georgia 30328
Telecopier: 770-698-9202

(b) If to Purchaser:

Wireless Broadcasting Systems of Yakima, Inc.
9250 East Costilla Avenue
Suite 325
Englewood, Colorado 80112
Attention: Jennifer L. Richter
Telecopier: 303-649-1196

with a copy (which shall not constitute notice) to:

James J. Clarke II
Pedersen & Houpt
161 North Clark Street
Suite 3100
Chicago, Illinois 60601
Telecopier: 312-641-6895

or to such other address as the parties hereto may designate in writing to the
other in accordance with this Section 15.2. Any party may change the address
to which notices are to be sent by giving written notice of such change of
address to the other parties in the manner above provided for giving notice.
If delivered personally or by courier, the date on which the notice, request,
instruction, or document is delivered shall be the date on which such delivery
is made and if delivered by facsimile transmission or mail as aforesaid, the
date on which such notice, request, instruction or document is receive d shall
be the date of delivery.

15.3 Assignment; Binding Effect. Except as provided in this Section
15.3, prior to the Closing, this Agreement shall not be assignable by any of
the parties hereto without the written consent of the other; provided, however
that Purchaser may assign any or all of its rights hereunder to any affiliate
of Purchaser, but such assignment shall not relieve Purchaser of its
obligations hereunder in the event such assignee shall fail timely to perform
any of such obligations. From and after any such assignment, the word
"Purchaser shall include assignee. This Agreement shall bind, and inure to the
benefit of, the parties hereto and their permitted assignees.

25
<PAGE> 27

15.4 No Benefit to Others. The representations, warranties,
covenants, and agreements contained in this Agreement are for the sole benefit
of the parties hereto and, in the case of Article 14 hereof, Indemnitee and its
heirs, executors, administrators, legal representatives, successors and
assigns, and they shall not be construed as conferring any rights on any other
persons.

15.5 Headings, Gender, "Person" and "Affiliate". All section headings
contained in this Agreement are for convenience of reference only, do not form
a part of this Agreement and shall not affect in any way the meaning or
interpretation of this Agreement. Words used herein, regardless of the number
and gender specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine, or
neuter, as the context requires. Any reference to a "person" herein shall
include an individual, firm, corporation, partnership, trust, governmental
authority or body, association, unincorporated organization or any other
entity, and any reference to an "affiliate," whether or not such term is
capitalized, with respect to a person shall mean a person or entity that is
controlled by, under common control with or controls such person.

15.6 Counterparts. This Agreement may be executed in two (2) or more
counterparts, all of which shall be considered one and the same agreement, and
shall become effective when one counterpart has been signed by each party and
delivered to the other party hereto.

15.7 Integration of Agreement. This Agreement supersedes all prior
agreements, oral and written, between the parties hereto with respect to the
subject matter hereof. Neither this Agreement, nor any provision hereof, may
be changed, waived, discharged, supplemented, or terminated orally, but only by
an agreement in writing signed by the party against which the enforcement of
such change, waiver, discharge, or termination is sought.

15.8 Time of Essence. Time is of the essence in this Agreement.

15.9 Governing Law. This Agreement shall be construed under the laws
of the State of Washington.

15.10 Partial Invalidity. Whenever possible, each provision hereof
shall be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained herein
shall, for any reason, be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or enforceability shall not affect any
other provisions of this Agreement, and this Agreement shall be construed as if
such invalid, illegal, or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions had never
been contained herein unless the deletion of such provision or provisions would
result in such a material change as to cause completion of the transactions
contemplated hereby to be unreasonable.

26
<PAGE> 28

15.11 Public Announcements. Seller and Purchaser will consult with
each other before issuing any press releases or otherwise making any public
statements or filings with governmental entities with respect to this Agreement
or the transactions contemplated hereby and shall not issue any press releases
or make any public statements or filings with governmental entities prior to
such consultation and shall modify any portion thereof if the other party
reasonably objects thereto, unless the same may be required by applicable law.

15.12 Default by Purchaser. If Purchaser shall default in the
performance of its obligations under this Agreement or if, as a result of
Purchaser's action or failure to act, the conditions precedent to Seller's
obligation to close specified in Article 9 are not satisfied, and for such
reason or reasons this Agreement is not consummated, and provided that Seller
shall not then be in default in the performance of Seller's obligations
hereunder, Seller shall be entitled, by written notice to Purchaser, to
terminate this Agreement and as Seller's sole remedy under this Agreement to
receive as liquidated damages the sum of Fifty Thousand Dollars ($50,000).
Upon such payment Purchaser shall be discharged from all further liability
under this Agreement.

Seller and Purchaser have provided for liquidated damages as a remedy for
Seller after having considered carefully the anticipated and actual harms and
losses that would be incurred if Purchaser defaults and thus fails to perform
its obligations to consummate the transactions contemplated hereunder, the
difficulty of ascertaining at this time the actual amount of damages, special
and general, that Seller will suffer in such event, and the inconvenience or
nonfeasibility of otherwise obtaining an adequate remedy in such event.

15.13 Default by Seller. If Seller shall default in the performance of
Seller's obligations under this Agreement, of if, as a result of Seller's
action or failure to act, the conditions precedent to Purchaser's obligation to
close specified in Article 8 are not satisfied and for such reason or reasons
this Agreement is not consummated, and provided that Purchaser shall not then
be in default in the performance of Purchaser's obligations hereunder,
Purchaser shall be entitled, at Purchaser's sole option (i) to require Seller
to consummate and specifically perform the sale in accordance with the terms of
this Agreement, if necessary through injunction or other court order or
process; or (ii) by written notice to Seller, to terminate this Agreement, to
receive the immediate return of the Deposit, and to pursue any other remedies
Purchaser has at law or in equity or otherwise.

Seller acknowledges that the Acquired Assets are unique and that
Purchaser has no adequate remedy at law if Seller shall fail to perform any of
their obligations hereunder, and Sellers therefore confirm and agree that
Purchaser's right to specific performance is essential to protect the rights
and interests of Purchaser. Accordingly, in addition to any other remedies
which Purchaser may have hereunder or a law or in equity or otherwise, Seller
hereby agrees that Purchaser shall have the right to have all obligations,
undertakings, agreements and other provisions of this Agreement specifically
performed by Seller and that Purchaser shall have the right to obtain an order
or decree of such specific performance in any of the courts of the United
States or of any state or other political subdivision thereof.

27
<PAGE> 29

IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
executed on its behalf by its duly authorized officer, all as of the day and
year first above written.

PURCHASER:

WIRELESS BROADCASTING SYSTEMS OF
YAKIMA, INC.

By:
---------------------------------------------
Jennifer L. Richter,
Vice President and General Counsel

SELLER:

MICROLINK TELEVISION OF WASHINGTON, INC.

By:
---------------------------------------------
Robert A. Janssen, [Title]

UNDERTAKING AND GUARANTY BY ROBERT A. JANSSEN

For good and valuable consideration and to induce Purchaser to enter into
this Agreement, Robert A. Janssen, being the chairman, president and principal
shareholder of Seller hereby:

(a) promises to be personally bound to the obligations set forth in
Section 12.2 above; and

(b) personally guaranties the full and timely performance of all of
Seller's obligations under this Agreement, both monetary and non- monetary.

Mr. Janssen acknowledges that as a major shareholder of Seller he will
receive a substantial benefit from Purchaser's performance of its obligations
hereunder.

---------------------------------------------
Robert A. Janssen

<PAGE> 1
EXHIBIT 3.1(d)

SECOND RESTATED CERTIFICATE OF INCORPORATION
OF
WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC.

The undersigned William W. Kingery and John Muehlstein certify that they
are, respectively, the President and Assistant Secretary of Wireless
Broadcasting Systems of America, Inc., a corporation organized and existing
under the laws of the State of Delaware and do hereby further certify as
follows:

1. The name of the Corporation is Wireless Broadcasting Systems of
America, Inc. The Certificate of Incorporation of Wireless Broadcasting Systems
of America, Inc. was originally filed with the Secretary of State of the State
of Delaware on February 18, 1994 and amended by an Amendment to Certificate
dated as of the same date. The Certificate of Incorporation was restated in
the entirety in a Restated Certificate of Incorporation filed with the
Secretary of State of the State of Delaware on March 15, 1995.

2. This Second Restated Certificate of Incorporation of Wireless
Broadcasting Systems of America, Inc. has been duly adopted in accordance with
the provisions of Sections 228, 242 and 245 of the Delaware General Corporation
Law and written notice of the adoption of this Second Restated Certificate of
Incorporation has been given as provided by Section 228 of the Delaware General
Corporation Law to the stockholders entitled to such notice.

3. The text of the Corporation's Restated Certificate of Incorporation
is hereby amended and restated to read in its entirety as follows:

Article I

The name of the Corporation is Wireless Broadcasting Systems of America,
Inc. (the "Corporation").

Article II

The address of the Corporation's registered office in the State of
Delaware is the Corporation Trust Center, 1209 Orange Street in the City of
Wilmington, County of New Castle. The name of the Corporation's registered
agent at such address is The Corporation Trust Company.

Article III

The purpose of the Corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
the State of Delaware.

<PAGE> 2

Article IV

4.1. Designation. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is 35,000,000 shares
consisting of 10,000,000 shares of Class A Common Stock, par value $.01 per
share ("Class A Common Stock"); 15,000,000 shares of Class B Common Stock, par
value $.01 per share ("Class B Common Stock") (the Class A Common Stock and the
Class B Common Stock are collectively referred to hereafter as the "Common
Stock"); and 10,000,000 shares of Preferred Stock having such powers,
preferences and rights as the Board of Directors may from time to time
authorize in accordance with Section 4.5 (the "Preferred Stock").

The rights, preferences, privileges and restrictions granted to and
imposed upon the classes of stock of the Corporation are set forth below in
this Article IV.

4.2. Voting Power. Each holder of Class A Common Stock shall be entitled
to one vote for each share of Class A Common Stock standing in such holder's
name on the books of the Corporation determined as of the record date for the
determination of shareholders entitled to vote on such matters or, if no such
record date is established, at the date such vote is taken or any written
consent of shareholders is solicited. Each holder of Class B Common Stock
shall be entitled to ten votes for each share of Class B Common Stock standing
in such holder's name on the books of the Corporation determined as of the
record date for the determination of shareholders entitled to vote on such
matters or, if no such record date is established, at the date such vote is
taken or any written consent of shareholders is solicited.

4.3. Notices of Record Date. In the event of a record of :

(i) any taking by the Corporation of record of the holders of any
class of securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution, or any right
to subscribe for purchase or otherwise acquire any shares of stock of any
class or any other securities or property, or to receive any other right;
or

(ii) any capital reorganization of the Corporation, any
reclassification or recapitalization of the capital stock of the
Corporation, any merger or consolidation of the Corporation (other than a
change in par value or from par value to no par value or from no par value
to par value or as a result of a stock dividend or subdivision, split up
or combination of shares), or any transfer of all or substantially all of
the assets of the Corporation to any other corporation, or any other
entity or person; or

(iii) any voluntary or involuntary dissolution, liquidation or
winding up of the Corporation;

-2-

<PAGE> 3

then and in each such event the Corporation shall mail or cause to be mailed to
each holder of Common Stock and holders of any other class of stock of the
Corporation outstanding at such time a notice specifying (a) the date on which
any such record is to be taken for the purpose of such dividend, distribution
or right and a description of such dividend, distribution or right, (b) the
date on which any such reorganization, reclassification, recapitalization,
transfer, consolidation, merger, dissolution, liquidation or winding up is
expected to become effective and (c) the time, if any, that is to be fixed, as
to when the holders of record of Common Stock (or other securities) shall be
entitled to exchange their share of Common Stock (or other securities) for
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, transfer, consolidation, merger,
dissolution, liquidation or winding up. Such notice shall be mailed at least 20
days prior to the date specified in such notice on which such action is to be
taken.

4.4 Conversion of Class B Common Stock to Class A Common Stock. At the
election of the stockholder, shares of Class B Common Stock are convertible on
a one-for-one basis into shares of Class A Common Stock. In addition, shares
of Class B Common Stock automatically convert to shares of Class A Common Stock
upon the transfer, by sale or otherwise, to a person who is not at the time of
such transfer a Class B stockholder or affiliate thereof.

4.5. Existing Common Stock. As of the date hereof, each share of common
stock of the Corporation in existence immediately prior to such date shall be
converted into one share of Class B Common Stock.

4.6. Common Stock. Except as otherwise provided in this Article IV, the
rights and preferences of each class of Common Stock shall be identical in all
respects one with the other, including dividend rights and rights upon
liquidation or dissolution.

4.7. Preferred Stock. The Board of Directors is hereby empowered to
authorize by resolution or resolutions from time to time the issuance of one or
more classes or series of Preferred Stock and to fix the designations, powers,
preferences and relative, participating, optional or other rights, if any, and
the qualifications, limitations or restrictions thereof, if any, with respect
to each such class or series of Preferred Stock and the number of shares
constituting each such class or series, and to increase or decrease the number
of shares of any such class or series to the extent permitted by the General
Corporation Law of the State of Delaware, as amended from time to time. The
Company's previously issued Class A Convertible Preferred Stock shall be
converted into Class B Common Stock immediately following the Existing Common
Stock conversion described in paragraph 4.5 of this Article.

-3-

<PAGE> 4

Article V

The Corporation is to have perpetual existence.

Article VI

Meetings of Stockholders may be held within or without the State of
Delaware, as the Bylaws may provide. The books of the Corporation may be kept
outside the State of Delaware at such place or places as may be designated from
time to time by the Board of Directors or in the Bylaws of the Corporation.
Elections of Directors need not be by written ballot unless the Bylaws of the
Corporation shall so provide.

Article VII

The Corporation shall, to the fullest extent permitted by Section 145 of
the General Corporation Law of the State of Delaware, as amended from time to
time, indemnify each person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was, or has agreed to become, a director or officer of the
Corporation, or is or was serving, or has agreed to serve, at the request of
the Corporation, as a director, officer, employee or agent of, or in a similar
capacity with, another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him or on his
behalf in connection with such action, suit or proceeding and any appeal
therefrom.

Indemnification may include payment by the Corporation of expenses in
defending an action, suit or proceeding in advance of the final disposition of
such action, suit or proceeding upon receipt of any undertaking by the person
indemnified to repay such payment if it is ultimately determined that such
person is not entitled to indemnification under this Article, which undertaking
may be accepted without reference to the financial ability of such person to
make such repayments.

The Corporation shall not indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person unless the initiation thereof was approved by the Board of
Directors of the Corporation.

The indemnification rights provided in this Article VII (i) shall not be
deemed exclusive of any other rights to which those indemnified may be entitled
under any law, agreement or vote of stockholders of disinterested directors or
otherwise, and (ii) shall inure to the benefit of the heirs, executors and
administrators of such persons. The Corporation may, to the extent authorized
from time to time by its Board of Directors, grant indemnification rights to
other employees or agents of the Corporation or other persons serving the
Corporation and such rights may be equivalent to, or greater or less than,
those set forth in this Article.

-4-

<PAGE> 5

Article VIII

No director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding the foregoing sentence, a director
shall be liable to the extent provided by applicable law (i) for breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or
a knowing violation of law, (iii) pursuant to Section 174 of the Delaware
General Corporation Law or (iv) for any transaction from which the director
derived an improper personal benefit. If the Delaware General Corporation Law
is hereafter amended to authorize a further limitation or elimination of the
liability of directors or officers, then the liability of a director or officer
of the Corporation shall, in addition to the limitation on personal liability
provided herein, be limited or eliminated to the fullest extent permitted by
the Delaware General Corporation Law, as from time to time amended. No
amendment to or repeal of this Article shall apply to or have any effect on the
liability of alleged liability of any director or officer of the Corporation
for or with respect to any acts or omissions of such director or officer
occurring prior to such amendment or repeal.

Article IX

Whenever a compromise or arrangement is proposed between this corporation
and its creditors or any class of them and/or between this corporation and its
stockholders or any class of them, any court of equitable jurisdiction within
the State of Delaware may, on the application in a summary way of this
corporation or of any creditor or stockholder thereof or on the application of
any receiver or receivers appointed for this corporation under Section 291 of
the Delaware General Corporation Law or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation
under Section 279 of the Delaware General Corporation Law order a meeting of
the creditors or class of creditors, and/or of the stockholders or class of
stockholders of this corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number representing three
fourths (3/4) in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of this
corporation as a consequence of such compromise of arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.

Article X

For the management of the business and for the conduct of the affairs of
the Corporation, and in further definition, limitation, and regulation of the
powers of the Corporation and of its directors and of its stockholders or any
class thereof, as the case may be, it is further provided:

-5-

<PAGE> 6

10.1. Management By The Board. The management of the business and the
conduct of the affairs of the Corporation shall be vested in its Board of
Directors. The number of directors which shall constitute the whole Board of
Directors shall be fixed by, or in the manner provided in, the Bylaws. The
phrase "whole Board" and the phrase "total number of directors" shall be deemed
to have the same meaning, to wit, the total number of directors which the
Corporation would have if there were no vacancies. No election of directors
need be by written ballot.

10.2. Bylaws. After the original or other bylaws of the Corporation
have been adopted, amended, or repealed, as the case may be, in accordance with
the provisions of Section 109 of the Delaware General Corporation Law, and,
after the Corporation has received any payment for any of its stock, the power
to adopt, amend, or repeal the Bylaws of the Corporation may be exercised by
the affirmative vote of at least two-thirds of the members of the Board of
Directors or the affirmative vote of at least two-thirds of the voting power of
the outstanding shares of the stock of the Corporation; provided, however, that
any provision for the classification of directors of the Corporation for
staggered terms pursuant to the provisions of subsection (d) of Section 141 of
the Delaware General Corporation Law shall be set forth in an initial Bylaw or
in a Bylaw adopted by the stockholders entitled to vote of the Corporation
unless provisions for such classification shall be set forth in this
certificate of incorporation.

10.3. Voting Power. No outstanding share of any class of stock which
is denied voting power under the provisions of this Second Restated Certificate
of Incorporation shall entitle the holder thereof to the right to vote at any
meeting of stockholders except pursuant to the provisions of paragraph (2) of
subsection (b) of Section 242 of the Delaware General Corporation Law;
provided, that no share of any such class which is otherwise denied voting
power shall entitle the holder thereof to vote upon the increase or decrease in
the number of authorized shares of said class.

Article XI

From time to time, any of the provisions of this Certificate of
Incorporation may be amended, altered, or repealed, and other provisions
authorized by the laws of the State of Delaware at the time in force may be
added or inserted in the manner and at the time prescribed by said laws, and
all rights at any time conferred upon the stockholders of the Corporation by
this certificate of incorporation are granted subject to the provisions of this
Article XI.

Signed this ____ day of _______________, 1996.

__________________________________________
President

__________________________________________
Assistant Secretary

-6-

<PAGE> 1
EXHIBIT 4.2

WIRELESS BROADCASTING SYSTEMS OF AMERICA, INC.

STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS

SECTION 1. PURPOSE. The purpose of the Stock Option Plan for
Non-employee Directors (the "Plan") is to attract and retain persons of
exceptional ability to serve as members of the Board of Directors of Wireless
Broadcasting Systems of America, Inc. (the "Company"), and to align the
interests of the Company's non-employee directors with that of the stockholders
in enhancing the value of the Company's capital stock.

SECTION 2. ADMINISTRATION. The Plan shall be administered by the
Board of Directors of the Company (the "Board") or such committee of the Board
that is designated by the Board to administer the Plan (the "Administrator").
Such committee shall be constituted to permit the Plan to comply with Rule
16(b) of the Securities Exchange Act of 1934 (the "Exchange Act") or any
successor rule. The Administrator shall have responsibility finally and
conclusively to interpret the provisions of the Plan and to decide all
questions of fact arising in its application. No member of the Administrator
shall be liable for any action or determination made in good faith with respect
to the Plan. The Administrator may delegate to an officer or officers of the
Company the authorization to execute and deliver on behalf of the Company any
document or instrument required to be delivered under this Plan.

SECTION 3. TYPE OF OPTIONS. Options granted pursuant to the Plan
shall be nonstatutory options which are not intended to meet the requirements
of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

SECTION 4. ELIGIBILITY. Directors of the Company who are not
employees of the Company ("Non-employee Directors") and who are for the first
time appointed or elected to the Board on or after the date this Plan is
approved by a majority of the shareholders of the Company shall be eligible to
participate in the Plan. Each eligible Non-employee Director to whom stock
options are granted shall be a participant ("Participant") under the Plan.

SECTION 5. SHARES AVAILABLE UNDER THE PLAN. Subject to adjustment as
provided in Section 10 below, an aggregate of 200,000 shares of the Company's
Class B Common Stock, par value $.01 (the "Common Stock") shall be available
for issuance pursuant to the provisions of the Plan. Such shares may be
authorized and unissued shares or may be shares issued and thereafter acquired
by the Company. If an option granted under the Plan shall expire or terminate
for any reason without having been exercised in whole or in part, the
unpurchased shares subject to such option shall again be available for
subsequent option grants under the Plan.
<PAGE> 2

SECTION 6. AUTOMATIC GRANT OF OPTIONS.

(a) Each eligible Non-Employee Director shall receive an
option to purchase shares of Common Stock with a grant date as of the date such
person is elected or appointed to the Board. The grant shall provide for an
option for Common Stock having a Fair Market Value of (as defined in Section
7.2 hereof) of $50,000 at the date of grant.

(b) On an annual basis thereafter, each Non-employee
Director in office on the date of the adjournment of the annual meeting of
stockholders of the Company shall be granted as of such date automatically and
without further action by the Board an option to purchase Common Stock having a
Fair Market Value of $50,000 at the date of grant in accordance with the
provisions of Section 7, subject to adjustment as provided in section 10.

SECTION 7. TERMS AND CONDITIONS OF OPTIONS

7.1 Exercise of Options.

(a) Each option granted under the Plan shall be
exercisable at the rate of one-third (1/3) per year commencing on the first
anniversary of the date of grant, subject to the provisions of Section 9
hereof.

(b) Notwithstanding the provisions of paragraph (a)
above, an option granted to any Participant shall become immediately
exercisable in full upon the first to occur of:

(i) the death of the Participant, in
which case the option may be exercised by the Participant's
executor or administrator, or if not so exercised, by the
legatees or distributees of his or her estate or by such other
person or persons to whom the Participant's rights under the
option shall pass by will or by the applicable laws of descent
and distribution;

(ii) such time as the Participant ceases
to be a director of the Company by reason of his or her
permanent disability;

(iii) such time as the Participant ceases
to be a director of the Company as a result of retirement from
the Board of Directors on or after attaining age 65; or

(iv) such time as a Participant ceases to
be eligible to participate in this Plan by reason of his or
her becoming an employee of the Company or any of its
subsidiaries.

- 2 -
<PAGE> 3

(v) In the event that the Participant ceases
to be a director of the Company for any reason other than
those specified in paragraph 7.19b) prior to the time a
Participant's option becomes fully exercisable, the option
will terminate on the date the Participant ceases to be a
director of the Company with respect to the shares as to
which the option is not then exercisable without further
obligation or action on the part of the Company.

(c) Options granted under the Plan shall expire ten years
from the date on which the option is granted, unless terminated earlier in
accordance with the Plan; provided, however, that in the event a Participant
ceases to be a director of the Company by reason of an event described in
Section 7.1(b), any option granted to such Participant hereunder shall expire
eighteen months from the date the Participant ceases to be a director of the
Company, but in no event later than the day preceding the tenth anniversary of
the date of the grant of such option.

(d) In the event that the Participant ceases to be a
director of the Company other than for a reason described in Section 7.1(b) and
after his or her option has become exercisable in whole or in part, such option
shall remain exercisable in whole or in part, as the case may be, in accordance
with the terms hereof for a period of three months from the date the
Participant ceases to be a director, but in no event later than the day
preceding the tenth anniversary of the date of grant of such option.

7.2 Exercise Price. The exercise price of each share of Common
Stock subject to an option shall be the "Fair Market Value" of a share of
Common Stock on the date the option is granted. "Fair Market Value" for
purposes of the Plan shall mean as of any date, (i) the last reported sales
price on the New York Stock Exchange, or, if not reported for the New York
Stock Exchange on the Composite Tape, or, in case no such reported sale takes
place on such day, the average of the reported closing bid and asked quotations
on the New York Stock Exchange; (ii) if the Common Stock is not listed on the
New York Stock Exchange or no such quotations are available, the closing price
of the Common Stock as reported by the National Market System, or similar
organization, or, if no such quotations are available, the average of the high
bid and low asked quotations as quoted in the National Association of
Securities Dealers' Automated Quotation System, or similar organization; or
(iii) in the event that there shall be no public market for the Common Shares,
the fair market value of the Common Stock as determined (which determination
shall be conclusive) in good faith by the Committee, based upon the value of
the Company as a going concern, as if such Common Stock was publicly owned
stock, but without any discount with respect to minority ownership. Under no
circumstances shall Fair Market Value be less than the par value of the Common
Stock.

7.3 Payment of Exercise Price; Tax Withholding.

(a) Subject to the terms and conditions of the Plan and
the documentation of the options pursuant to Section 7.5 hereof, an option
granted hereunder shall, to the extent then

- 3 -
<PAGE> 4

exercisable, be exercisable in whole or in part by giving written notice to the
Company's Secretary stating the number of shares with respect to which the
option is being exercised, accompanied by payment in full for such shares;
provided, however, that there shall be no such exercise at any one time as to
fewer than one hundred (100) shares or all of the remaining shares then
purchasable by the person or person exercising the option, if fewer than one
hundred (100) shares.

(b) Options granted under the Plan may be paid for by
delivery of cash or a check to the order of the Company in an amount equal to
the exercise price of such options, or by delivery to the Company of shares of
Common Stock already owned by the Participant having a Fair Market Value equal
in amount to the exercise price of the option being exercised or by any
combination of such methods of payment.

(c) The Participant shall pay the Company an amount
sufficient to cover withholding required by law for any federal, state, local
or foreign taxes in connection with an exercise of options herewith. A
Participant may elect in lieu of paying cash to deliver shares of Common Stock
or direct the Company that shares of Common Stock be withheld to satisfy
required tax withholding and such shares shall be valued at the Fair Market
Value as of the exercise date and the Board shall determine the timing and
other terms and conditions in which the use of shares of Common Stock to
satisfy tax withholding may take place.

7.4 Rights as a Shareholder. Except as specifically provided by
the Plan, the grant of an option will not give a Participant rights as a
shareholder. The Participant will obtain such rights, subject to any
limitations imposed by the Plan, upon actual receipt of the certificate or
certificates representing the Common Stock.

7.5 Documentation of Option Grants. Option grants shall be
evidenced by written instruments prescribed by the Board from time to time.
The instruments may be in the form of agreements to be executed by both the
Participant and the president or any vice president of the Company or in the
form of certificates, letters or similar instruments, which need not be
executed by the Participant but acceptance of which will evidence agreement to
the terms of the grant.

7.6 Nontransferability of Options. No option granted under the
Plan shall be assignable or transferable by the Participant to whom it is
granted, either voluntarily or by operation of law, except (a) by will or the
laws of descent and distribution or (b) during the lifetime of the Participant,
to the Participant's spouse, lineal ancestors or lineal descendants or to
trusts or family partnerships for the benefit of the foregoing ("Permitted
Transferees"). During the life of the Participant, the option shall be
exercisable only by the Participant or a transferee who is a Permitted
Transferee (or in the event of incapacity, by the person or persons properly
appointed to act on his or her behalf).

- 4 -
<PAGE> 5

7.7 Approvals. The effectiveness of the Plan is subject to the
approval by affirmative vote of a majority of the shares of the Common Stock
present in person or by proxy and entitled to vote at an annual or special
meeting of the stockholders. In the event that the Plan is not approved by the
stockholders, the Plan and any options granted hereunder shall be void as of no
effect.

The Company's obligation to sell and deliver shares of Common Stock
under the Plan is subject to the approval of any governmental authority
required in connection with the authorization, issuance or sale of the Common
Stock.

SECTION 8. REGULATORY COMPLIANCE AND LISTING

(a) The issuance or delivery of any shares of stock
subject to exercisable options hereunder may be postponed by, the Board for
such period as may be required to comply with any applicable requirements under
Federal securities laws, any applicable listing requirements of any national
securities exchange or any requirements under any law or regulation applicable
to the issuance or delivery of such shares. The Company shall not be obligated
to issue or deliver any such shares if the issuance or delivery thereof would
constitute a violation of any provision of any law or of any regulation of any
governmental authority or any rule of any national securities exchange.

(b) No discretion concerning decisions regarding the Plan
shall be afforded to a person who is not a "disinterested person" within the
meaning of Section 16 of, and Rule 16b-3 promulgated under, the Securities
Exchange Act of 1934, as amended (the "1934 Act"). Section 4 and 6 hereof
shall not be amended more than once every six months, other than to comport
with changes in the Code, the Employee Retirement Income Security Act, or the
rules thereunder. Should any provision of this paragraph require modification
or be unnecessary to comply with the requirements of Section 16 of Rule 16b-3
under the 1934 Act, the Board may waive such provision and/or amend this Plan
to add to or modify the provisions hereof accordingly.

SECTION 9. CHANGE IN CONTROL. Notwithstanding anything to the
contrary in the Plan, the following shall apply to all outstanding options
granted under the Plan:

(a) Definitions - The following definitions shall apply
to this Section:

A "Change in Control" shall mean:

(i) The acquisition by any individual entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the 1934
Act) or beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of 50% or more of the

- 5 -
<PAGE> 6

combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Voting Securities"); provided, however, that the
following acquisitions shall not constitute a Change of Control: (A)
any acquisition directly from the Company or any of its subsidiaries,
(B) any acquisition by the Company or any of its subsidiaries, (C) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any of its subsidiaries, (D) any
acquisition by any corporation with respect to which, following such
acquisition, more than 50% of, respectively, the then outstanding
shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by individuals, entities
or groups who were the beneficial owners, respectively, of at least
50% of the Outstanding Voting Securities immediately prior to such
acquisition in substantially the same proportions as their ownership,
immediately prior to such acquisition, of the Outstanding Voting
Securities, or (E) the acquisition by any individual, entity or group
which on the date this Plan was adopted by the Board owned 50% or more
of the Outstanding Voting Securities.

(ii) Approval by the shareholders of the Company
of a reorganization, merger or consolidation, in each case, with
respect to which all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Voting Securities immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly or
indirectly, more than 50% of the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such reorganization, merger or consolidation in
substantially the same proportions as their ownership, immediately
prior to such reorganization, merger or consolidation, of the
Outstanding Voting Securities; or

(iii) Approval by the shareholders of the Company of
(i) a complete liquidation or dissolution of the Company or (ii) the
sale or other disposition of all or substantially all of the assets of
the Company other than to a corporation, with respect to which
following such sale or other disposition, more than 50% of,
respectively, the then outstanding shares of common stock of such
corporation and the combined voting power for the then outstanding
voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Voting Securities immediately prior to such sale or other
disposition in substantially the same proportion as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Voting Securities.

- 6 -
<PAGE> 7

"CIC Price" shall mean the higher of (1) the highest price paid for a share of
Common Stock in the transaction or series of transactions pursuant to which a
Change in Control of the Company shall have occurred, or (2) the highest
reported sales price of a share of Common Stock during the 60 day period
immediately preceding the date upon which the event constituting a Change in
Control shall have occurred.

(b) Acceleration of Vesting and Payment of Stock Options.

(i) Upon the occurrence of an event constituting
a Change in Control, all stock options outstanding on such date shall
become 100% vested and shall be paid in cash to the Participant as
soon as may be practicable. Upon such payment, such stock options
shall be cancelled.

(ii) The amount of cash to be paid shall be
determined by multiplying the number of such options by the difference
between the exercise price per share and the CIC Price, if higher.

(iii) Notwithstanding the foregoing subsections (i)
and (ii), if the exercise price of a stock option exceeds the CIC
Price or the Fair Market Value on the Post-Termination Date, as the
case may be, such stock option shall be 100% vested but shall not be
cancelled.

SECTION 10. ADJUSTMENT IN EVENT OF CHANGES IN CAPITALIZATION. In the
event of a stock dividend, stock split or combination of shares,
recapitalization or other change in the Company's capitalization, or other
distribution with respect to holders of the Common Stock (other than normal
cash dividends), automatic adjustment shall be made in the number and kind of
shares as to which outstanding options or portions thereof then unexercised
shall be exercisable and in the available shares set forth in Section 5 hereof,
to the end that the proportionate interest of the option holder shall be
maintained as before the occurrence of such event. Such adjustment in
outstanding options shall be made without change in the total price applicable
to the unexercised portion of such options and with a corresponding adjustment
in the option price per share. Automatic adjustment shall also be made in the
number and kind of shares subject to options subsequently granted under the
Plan.

SECTION 11. NO RIGHT TO REELECTION. Nothing in the Plan shall be
deemed to create any obligation on the part of the Board to nominate any
Non-employee Director for reelection by the Company's shareholders, nor confer
upon any Non-employee Director the right to remain a member of the Board for
any period of time, or at any particular rate of compensation.

- 7 -
<PAGE> 8

SECTION 12. AMENDMENT AND TERMINATION.

(a) Except as provided in Section 8(b), the Board shall
have the right to amend, modify or terminate the Plan at any time and from time
to time; provided, however, that unless required by law, no such amendment or
modification shall (a) affect any right or obligation with respect to any grant
theretofore made; (b) in any manner affect the requirements set forth in
Section 8(b) hereof, or (c) unless previously approved by the shareholders,
increase the number of shares of Common Stock available for grants as provided
in Section 5 hereof other than an adjustment pursuant to Section 10 hereof. In
addition, no such amendment shall, unless previously approved by the
shareholders (where such approval is necessary to satisfy then applicable
requirements of federal securities laws, the Code or rules of any stock
exchange on which the Company's Common Stock is listed) (i) in any manner
affect the eligibility requirements set forth in Section 4 hereof, (ii)
increase the number of shares of Common Stock subject to any option, (iii)
change the purchase price of the shares of Common Stock subject to any option,
(iv) extend the period during which options may be granted under the Plan, or
(v) materially increase the benefits to Participants under the Plan.

(b) Unless earlier terminated by the Board of Directors,
or the shares reserved under the Plan shall have all been committed for options
granted pursuant to the Plan, the Plan shall terminate on December 31, 2006;
provided, however, that options which are granted on or before this date shall
remain exercisable in accordance with their respective terms after the
termination of the Plan.

SECTION 13. SUCCESSORS AND ASSIGNS. The Plan shall be binding on all
successors and permitted assigns of a Participant, including but not limited
to, the estate of such Participant and the executor, administrator or trustee
of such estate, the guardian or legal representative of the Participant.

SECTION 14. GOVERNING LAW. The validity, construction and effect of
the Plan and any action taken or relating to the Plan shall be determined in
accordance with the laws of the State of Colorado and applicable Federal law.

- 8 -

<PAGE> 1
EXHIBIT 23.1

CONSENT OF PEDERSEN & HOUPT, P.C.

Pedersen & Houpt, P.C. hereby consents to all references made to it in
Amendment No. 1 to the Registration Statement on Form S-1 of Wireless
Broadcasting Systems of America, Inc., as filed with the Securities and
Exchange Commission on October 1, 1996.

Pedersen & Houpt, P.C.

Chicago, Illinois
October 1, 1996

<PAGE> 1
EXHIBIT 23.2

CONSENT OF PEPPER & CORAZZINI, L.L.P.

Pepper & Corazzini, L.L.P. hereby consents to all references made to it
in Amendment No. 1 to the Registration Statement on Form S-1 of Wireless
Broadcasting Systems of America, Inc., as filed with the Securities and
Exchange Commission on October 1, 1996.

Pepper & Corazzini, L.L.P.

By /s/Robert F. Corazzini
--------------------------------
Robert F. Corazzini
General Partner

Washington, D.C.
October 1, 1996

<PAGE> 1
EXHIBIT 23.3(a)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated March 29, 1996 on the financial statements of Wireless Broadcasting
Systems of America, Inc. included in or made part of this Amendment No. 1 to
the Form S-1 registration statement.

ARTHUR ANDERSEN LLP

Denver, Colorado
October 1, 1996

<PAGE> 1
EXHIBIT 23.3(b)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated July 31, 1995 on the financial statements of Boise Cable Limited
Partnership included in or made part of Wireless Broadcasting Systems of
America, Inc.'s Amendment No. 1 to the Form S-1 registration statement.

ARTHUR ANDERSEN LLP

Denver, Colorado
October 1, 1996

<PAGE> 1
EXHIBIT 23.3(c)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated August 6, 1996 on the financial statements of Northwest Cable Network
included in or made part of Wireless Broadcasting Systems of America, Inc.'s
Amendment No. 1 to the Form S-1 registration statement.

ARTHUR ANDERSEN LLP

Denver, Colorado,
October 1, 1996

<PAGE> 1
EXHIBIT 23.3(d)

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our report
dated March 19, 1996 on the financial statements of Pacific West Cable
Television included in or made part of Wireless Broadcasting Systems of
America, Inc.'s Amendment No. 1 to the Form S-1 registration statement.

ARTHUR ANDERSEN LLP

Denver, Colorado
October 1, 1996

<PAGE> 1
EXHIBIT 23.4

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated April 21, 1994 with respect to the consolidated
statements of operations, partners equity (deficit) and cash flows of WJB-TV
Limited Partnership (predecessor to Wireless Broadcasting Systems of America,
Inc.) for the year ended December 31, 1993 included in Amendment No. 1 to the
Registration Statement (Form S-1) and related Prospectus of Wireless
Broadcasting Systems of America, Inc. expected to be filed on or about
October 1, 1996 for the registration of shares of its common stock.

Ernst & Young LLP
West Palm Beach, Florida
October 1, 1996