MDU COMMUNICATIONS INTERNATIONAL INC, 10SB12G, 1999-05-12

MDU COMMUNICATIONS INTERNATIONAL INC
10SB12G, 1999-05-12

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<PAGE>

U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-SB

GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

MDU COMMUNICATIONS INTERNATIONAL, INC.
-------------------------------------
(Name of small business issuer in its charter)

Delaware 84-1342898
- ------------------------------- --------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) I. D. Number)

108 - 11951 Hammersmith Way, Richmond, B.C., Canada V7A 5H9
- ---------------------------------------------------- -------
(Address of principal executive offices) (Zip Code)

(604) 277-8150
---------------------------------------
(Registrant's telephone number, including area code)

Securities to be registered pursuant to Section 12(b) of the Act:

None

Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $0.001 Per Share
----------------------------------------
(Title of Class)

<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS

MDU Communications International, Inc., formerly known as Alpha Beta Holdings,
Ltd., was incorporated on July 14, 1995 as a Colorado corporation to engage in
the business of establishing and operating brew pubs. Through September 30,
1998, it had incurred net operating losses of approximately $26,500 and was no
longer conducting business activities. In November 1998, Alpha Beta Holdings,
Ltd. acquired all of the outstanding capital stock of MDU Communications Inc.
and changed its name to MDU Communications International, Inc. On May 11, 1999,
the state of incorporation was changed to Delaware. It now operates as a holding
company with MDU Communications Inc. as its sole subsidiary.

MDU Communications Inc. is a Canadian corporation incorporated on March 26,
1998. MDU Communications International, Inc. and MDU Communications Inc. are
jointly referred to as the "Company." The Company's principal executive offices
are located at 108 - 11951 Hammersmith Way, Richmond, British Columbia, Canada
V7A 5H9.

BUSINESS DEVELOPMENT. MDU Communications Inc. commenced operations in August
1998 and is in a start-up phase. It provides home entertainment and information
technology to the residents of multi-dwelling units (MDUs) such as apartment
buildings, condominiums, gated communities, hotels and motels. The Company
establishes mutually beneficial relationships with owners and managers of MDUs
to facilitate delivery of these services. It has entered into a strategic
alliance with Star Choice Communications, Inc. ("Star Choice") to market Star
Choice programming to the Canadian MDU market.

The Company offers complete building wiring infrastructures, systems and
hardware and digital set-top receivers to MDU owners. It utilizes state of the
art wireless digital satellite equipment to receive scrambled broadcast signals
transmitted from satellites and decode them for viewing. Broadcast signals are
captured through a single master dish at the property and the signals are
distributed throughout the building to each unit using fiber or coaxial cable.
Each subscriber is equipped with a TV set-top box which decodes the signals.
Initially, the Company expects to realize revenues by sharing in the Star Choice
monthly fees charged to MDU residents for satellite TV service. Once a building
has been wired or the existing wiring has been upgraded, the infrastructure is
in place to provide other services such as home security, local telephone
services and high-speed Internet access for MDU residents which could be the
source of additional revenues.

The Company also designs and supplies satellite master antenna television
(SMATV) systems for multi-dwelling unit properties. An SMATV system is capable
of receiving and distributing satellite and local television programming to the
residents of multi-dwelling unit properties, thereby eliminating the need for a
cable television provider.

The Company is seeking US$4,000,000 in equity financing through private
placements in order to execute its business plan through the twelve-month period
ending April 30, 2000. Approximately one-half of that amount will be used to
defray subscriber acquisition costs which

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are primarily the purchase of television set-top boxes, MDU rooftop equipment
and wiring costs. Approximately CDN$500,000 will be used to grow through the
acquisition of small satellite master antenna television (SMATV) systems
whose subscribers represent potential additions to the Company's Star Choice
subscriber base. The balance of the financing proceeds will be used to
finance operating costs and working capital needs. The success of the Company
is dependent upon its success in obtaining this financing.

Currently, there are only two satellite broadcasters licensed to operate in
Canada: Star Choice and ExpressVu. Star Choice is publicly traded on the
Vancouver Stock Exchange and is 43% owned by Shaw Communications, Inc. ExpressVu
is a wholly-owned subsidiary of BCE Inc. In the last few years, these two
companies have built a subscriber base of over 400,000 households, or
approximately 4% of the 11,000,000 Canadian households with television sets.
These two companies are focusing on single family dwellings and their marketing
and distribution efforts are primarily through retail and commercial stores. The
Company believes that the two companies have focused on the single family market
because of the favorable demographics, minimal technical challenges and
difficulty in effectively marketing services to MDU property owners, managers
and residents. By limiting their focus, the Company believes the two companies
have left a sizeable niche in the marketplace for distribution of direct-to-home
(DTH) systems to MDU residents. While the Company does not believe any other
companies are currently attempting to market satellite services to MDUs, it
recognizes that this window of opportunity may not remain open indefinitely.

STAR CHOICE STRATEGIC ALLIANCE. In August 1998, the Company entered into a
ten-year System Operation Agreement (with 5-year renewal options) with Star
Choice under which the Company will establish and maintain distribution systems
in MDUs throughout Canada and act as a commissioned sales representative for
Star Choice to market Star Choice programming to the residents of MDUs in which
the Company has installed systems. Residents that choose to subscribe to the
service pay a monthly access fee in addition to the program fees charged by Star
Choice for programming ordered by the customer. Star Choice programming
subscribers are billed monthly by Star Choice, and the Company is entitled to
100% of the access fee (which is billed by Star Choice) and to a 30% share of
Star Choice's subscriber revenues. Star Choice retains responsibility for
marketing its broadcasting packages, while the Company is responsible for
marketing its services to the MDU market. The Company will incur only the cost
associated with implementation of its services, and will not share any of Star
Choice's programming or broadcasting costs. Under the agreement, the Company may
not maintain distribution systems or market direct-to-home satellite broadcast
services for others. Consequently, the Company is totally dependent on Star
Choice for programming and events at Star Choice that the Company cannot control
could adversely affect the Company.

MARKET. The Company is attempting to build a Canadian national infrastructure,
first focusing on major markets such as the Lower Mainland of British Columbia
and the greater Toronto metropolitan area, which together account for more than
50% of Canada's MDUs. Marketing efforts are directed at property owners,
building managers and real estate developers. As of April 30, 1999, Company had
installed its systems in 26 buildings in Western Canada and, as the result of an
acquisition of over 8,500 satellite master antenna television (SMATV)
subscribers in approximately 55 buildings, currently serves over 10,000
subscribers. Since January 1998, the

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Company has entered into additional access agreements that will allow it to
wire and market to tenants in approximately 200 buildings, providing an
additional potential customer base of over 25,000 subscribers.

COMPETITION. The Company is not aware of any other companies currently focusing
on the Canadian MDU market. However, the Company faces competition from others
who are competing for a share of the Canadian subscriber base. These competitors
include cable companies, off-air broadcasters, gray market products and MMDS and
LMDS.

CABLE COMPANIES. Traditional cable companies such as Rogers Communications,
Inc., Shaw Communications, Inc. and Le Groupe Videotron Ltee. currently
dominate the broadcasting market, serving an estimated 40% of the 11,000,000
Canadian households with television sets.

OFF-AIR BROADCASTERS. Off-air broadcasters send signals over the air which are
received by traditional television antennas in a local broadcast area. Signals
are accessible to anyone in the local area with an antenna. Given the limited
range of off-air broadcasting, it is suitable only for a local audience.

GRAY MARKET PRODUCTS. These are products and programming services that are not
licensed to be sold in Canada. Prior to the launch of the Canadian
direct-to-home digital satellite television services, some Canadians, including
MDU owners, purchased U.S. based systems and operated them in Canada. Canadian
digital satellite services offer much of the same programming, better reception,
warranty service and support, and do not operate in violation of Canadian law.
Also, many retailers of the U.S. based equipment have been subjected to legal
actions aimed at eliminating the sale of unauthorized equipment and reception of
unauthorized television programming. In the Company's opinion, these factors
have and will continue reduce the use of U.S based systems in Canada.

MMDS AND LMDS. MMDS and LMDS microwave technology is a hybrid of off-air
broadcasting and satellite broadcasting. Digital audio, video and, in some
cases, data are transmitted over the air in scrambled form. Subscribers receive
these signals through an antenna and decode the signal using a set-top box
analogous to those used by satellite broadcasters. Their drawback is that they
require a direct line of site from the transmission site to the customer which
limits their range.

GOVERNMENTAL REGULATION. MDU Communications Inc. is not regulated by the
Canadian Radio- television and Telecommunications Commission (CRTC) or any other
governmental regulatory agency. Star Choice and ExpressVu are the only two
licensees that have been approved by the CRTC to distribute television and
information services by direct-to-home digital satellite transmissions in
Canada. Both must operate in accordance with CRTC imposed "conditions of
license" to maintain their licenses. Also, they must comply with the Canadian
Broadcasting Act. Since the Company is totally dependent upon Star Choice for
programming, it could be adversely affected if Star Choice encountered
regulatory problems.

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EMPLOYEES. The Company currently has 36 employees, of which 24 are full time
employees. None of the Company's employees are represented by a labor union. The
Company has experienced no work stoppages and believes that its employee
relations are good.

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

MDU Communications International, Inc., formerly known as Alpha Beta
Holdings, Ltd., was incorporated in July 1995 as a Colorado corporation to
engage in the business of establishing and operating brew pubs. Through
September 1998, it had incurred net operating losses of approximately
US$26,500 and was no longer conducting business activities. In November 1998,
Alpha Beta Holdings, Ltd. acquired all of the outstanding capital stock of
MDU Communications Inc., a Canadian corporation, and changed its name to MDU
Communications International, Inc. On May 11, 1999, the state of
incorporation was changed to Delaware. It now operates as a holding company
with MDU Communications Inc. as its sole subsidiary.

MDU Communications Inc. is an authorized Star Choice System Operator,
providing home entertainment and information technology throughout Canada to
the residents of multi-dwelling units (MDUs) such as apartment buildings,
condominiums, gated communities, hotels and motels. The Company establishes
mutually beneficial relationships with owners and managers of MDUs to
facilitate delivery of these services. The Company offers complete building
wiring infrastructures, systems and hardware and digital set-top receivers
required to bring digital satellite viewing to the residents and
owners/managers of multiple dwelling units. Initially, the Company expects to
realize revenues by sharing in the monthly Star Choice fees charged to the
MDU residents for satellite TV service. Once a building has been wired or the
existing wiring has been upgraded, the infrastructure is in place to provide
other services such as home security, local telephone services and high-speed
Internet access which will provide additional revenues to the Company. The
Company also designs and supplies satellite master antenna television (SMATV)
systems for multi-dwelling properties. A SMATV system is capable of receiving
and distributing satellite and local television programming to the residents
of MDUs, thereby eliminating the need for a cable TV provider.

BASIS OF PRESENTATION. The Consolidated Financial Statements for the first
quarter of Fiscal Year 1999 have been stated in Canadian dollars as the
functional currency. The Company's principal business is in Canadian dollars
and the Company will be reporting in Canadian dollars on a going forward
basis. The predecessor Company's (Alpha Beta Holdings Ltd.) financial
statements are stated in US dollars. Since it did not have any significant
assets or operations, restating any comparative figures would not provide any
meaningful information. Management's Discussion and Analysis is centered
around the Canadian operations as it is the most meaningful to the current
and future plans for the Company.

OPERATIONS. Although the Canadian Company was incorporated in March 1998, the
first six months were spent as a planning period and the Company sustained an
operating loss of $97,845. Advertising, professional/management fees
accounted for 73% of the total expenses. Initial funding for the Company was
through private loans (promissory notes) and these monies were spent
supporting the operating loss and purchasing office furniture and equipment.
A short year end to September 1998 was declared to facilitate the combination
with an OTC/BB company (Alpha Beta Holdings Ltd.). Management wanted to take
the opportunity to raise additional capital for the Company by combining with
an existing OTC/BB company, thus creating a reverse takeover with control of
Alpha Beta Holdings Ltd. passing to the founding shareholders of MDU
Communications Inc. US$1,000,000 (approximately CDN$1,500,000) was raised in
November 1998 by the exercise of warrants and private placements to allow the
combined Company to commence operations to generate revenue. For the first
quarter of Fiscal Year 1999, the Company invested $247,003 in digital
satellite receiving equipment, $60,264 in digital satellite inventory and
$157,689 for goodwill in the acquisition of contracts for 8,500 SMATV
subscribers in over 50 buildings. While the Company will continue to look for
other opportunities to acquire existing satellite subscribers, it will
concentrate on providing the infrastructure necessary to provide the Star
Choice digital satellite signal to multiple dwelling units across Canada. The
operating loss for the first quarter of $143,023 was primarily due to sales
expenses ($32,491 for advertising/marketing and $23,250 for sales wages) to
set up the Company's marketing program and overhead wages (totaling $41,700).
These two costs accounted for over 73% of the total loss for the quarter.
Revenues from the first quarter are from the first two building installations
performed.

LIQUIDITY AND CAPITAL RESOURCES. It is anticipated the initial funding
completed in November 1998 will be used for the first six months of operating
losses and the purchase of digital satellite equipment. The Company is
seeking US$4,000,000 in equity financing through private placements in order
to execute its business plan for an additional 12 months. Approximately one
half of that amount will be used to defray subscriber acquisition costs
(building infrastructure and digital set-top boxes). Approximately
CDN$500,000 will be used to grow through the acquisition of small SMATV
systems whose subscribers represent potential additions to the Company's Star
Choice subscriber base. The balance of the equity issue will be used to
finance operating costs and working capital needs. The Company is also
seeking US$4,000,000 as a loan facility to finance the purchase of the
set-top receivers. The success of the Company to execute its business plan is
dependent upon the success in obtaining this financing.

ITEM 3. DESCRIPTION OF PROPERTY

The Company's principal executive offices are located at 108 - 11951
Hammersmith Way, Richmond, British Columbia, Canada. The premises consist of
1,215 square feet leased for a three-year lease term ending May 31, 2001.
Monthly lease and occupancy costs are approximately CDN$1,435. In addition, the
Company intends to lease five sales offices across Canada with aggregate monthly
lease and occupancy costs of approximately CDN$3,500.

ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information as of April 30, 1999 as to the number
of shares of the Company's Common Stock, which is the only outstanding class of
voting securities, beneficially owned by (i) each person (including any "group")
known to own more than 5% of the outstanding Common Stock, (ii) each Director,
(iii) the executive officers named in the Summary Compensation Table, and (iv)
all Directors and executive officers as a group. Except as otherwise specified,
each named beneficial owner has sole voting and investment power with respect to
the shares set forth opposite his or its name.

NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP OF CLASS
------------------- -------------------- --------
<S> <C> <C>
Sheldon Nelson, President, Chief Executive 869,640(1) 9.26%
Officer and Director
1504 - 170 Hargrave Street
Winnipeg, Manitoba R3C 3H4

Douglas J. Irving, Treasurer, Chief Financial 819,640(2) 8.77%
Officer, Secretary and Director
4331 Candlewood Drive
Richmond, British Columbia V7C 4V9

Paul Andreola 694,640(3) 7.53%
2590 Trinity Street
Vancouver, British Columbia V5K 1E2

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Pat Gleeson 694,640(4) 7.53%
214 - 6280 Willingdon
Burnaby, British Columbia V5H 2E3

Gary Monaghan 694,640(5) 7.53%
913 Purcell Court
Kelowna, British Columbia V1V 1N6

Anthony I. Tanti 694,640(6) 7.53%
1709 - 24th Street
West Vancouver, British Columbia V7V 4H7

Wistaria Trust 694,640 7.53%
Moore Stephens International
Services (BVI) Limited,
in trust for the Wistaria Trust
Abbot Building, P.O. Box 3186
Road Town Tortola,
British Virgin Islands

All officers and directors as a group 1,689,280 17.74%

</TABLE>
- ----------------------
(1) Includes 694,600 shares held of record by 567780 BC Ltd., a British
Columbia corporation wholly owned by The Sheldon Nelson Family Trust
whose trustees are Sheldon Nelson and his sister, Nicole Nelson, and
175,000 shares subject to options exercisable within 60 days.

(2) Includes 694,600 shares held of record by 571321 BC Ltd., a British
Columbia corporation wholly owned by Mr. Irving, his spouse and minor
children, and 125,000 shares subject to options exercisable within 60 days.

(3) Held of record by Andreola Holdings Ltd., a British Columbia corporation
wholly owned by Mr. Andreola.

(4) Held of record by Gleeson Enterprises, a British Columbia corporation
wholly owned by Mr. Gleeson.

(5) Held of record by 565423 BC Ltd., a British Columbia corporation wholly
owned by Mr. Monaghan, his spouse and trusts for minor children.

(6) Held of record by 571324 BC Ltd., a British Columbia corporation wholly
owned by Mr. Tanti, his spouse and trusts for minor children.

Management is not aware of any current arrangements which could result in a
change of control of the Company.

ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

SHELDON NELSON, age 37, has been the President, Chief Executive Officer and a
Director since November 1998. Before joining the Company in 1998, Mr. Nelson
held various positions with 4-12 Electronics Corporation and became its
President in 1996. 4-12 Electronics Corporation is a provider of products and
services to the Canadian satellite, cable, broadcasting and SMATV industries.

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DOUGLAS J. IRVING, age 48, has been the Treasurer, Chief Financial Officer,
Secretary and a Director since November 1998. Mr. Irving was a partner in
Vistawest Capital Group, a venture capital company, from 1997 to 1998, and from
1989 to 1996 was Operations Controller of The Loewen Group Inc., the second
largest funeral home operator in North America.

ITEM 6. EXECUTIVE COMPENSATION

The following table sets forth information regarding compensation paid during
the fiscal year ended September 30, 1998, which was the Company's last completed
fiscal year, to the Company's chief executive officer. None of the Company's
other most highly compensated executive officers had annual salaries and bonuses
exceeding $100,000.

SUMMARY COMPENSATION TABLE

LONG TERM
COMPENSATION
AWARDS
------------
ANNUAL COMPENSATION SECURITIES
------------------- UNDERLYING
NAME AND FISCAL SALARY BONUS OPTIONS ALL OTHER
PRINCIPAL POSITION YEAR (CDN$) ($) (IN SHARES) COMPENSATION
------------------ ------ ------ ------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Sheldon Nelson 1998 $48,000 -0- -0- -0-
President and Chief Executive
Officer

</TABLE>

ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

4-12 Electronics Corporation is a Manitoba corporation owned by Chris Nelson who
is Sheldon Nelson's brother. Sheldon Nelson served as president of 4-12
Electronics Corporation until December 31, 1998.

In December 1998, the Company purchased from 4-12 Electronics Corporation for
CDN$200,000 certain contracts to supply monthly satellite television services to
multi-dwelling unit properties. The purchase included the related equipment
leases, licenses and satellite reception equipment located at the SMATV
properties. The Company believes that the amount paid represented the fair
market value of the acquired assets.

In December 1998, the Company granted Chris Nelson a five-year option to
purchase 100,000 shares of the Company's common stock at a purchase price of
US$1.50 per share in consideration for consulting services.

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ITEM 8. DESCRIPTION OF SECURITIES

The Company's authorized capital stock consists of (i) 50,000,000 shares of
common stock, $0.001 par value per share, and (ii) 5,000,000 shares of preferred
stock, $0.001 par value per share. As of May 12, 1999, 9,221,335 shares of
common stock were outstanding and no shares of preferred stock were outstanding.
The following summary is qualified in its entirety by reference to the
Certificate of Incorporation, which is filed as an exhibit hereto.

COMMON STOCK. Under the Delaware General Corporation Law and the Company's
Certificate of Incorporation, holders of common stock are entitled to one vote
per share on all matters submitted to a vote of the stockholders, including the
election of directors. The common stock carries no preemptive rights and is not
convertible, redeemable or assessable. The holders of common stock are entitled
to dividends in such amounts and at such times as may be declared by the Board
of Directors out of funds legally available therefor. Upon the Company's
liquidation, dissolution or winding up, the holders of common stock are entitled
to ratably receive the Company's net assets available after payment or provision
for payment of all debts and other liabilities subject to prior rights of
holders of preferred stock then outstanding, if any. All outstanding shares of
common stock are fully paid and nonassessable.

PREFERRED STOCK. The Certificate of Incorporation authorizes the issuance of
5,000,000 shares of preferred stock, none of which were issued and outstanding
as of May 12, 1999. The preferred stock may be issued from time to time in one
or more series, and the Board of Directors, without further approval of the
stockholders, is authorized to fix the dividend rights and terms, conversion
rights, voting rights, redemption rights and terms, liquidation preferences,
sinking funds and any other rights, preferences, privileges and restrictions
applicable to each such series of preferred stock. The issuance of shares of
preferred stock, while providing flexibility in connection with possible
acquisitions and other corporate purposes, could, among other things, adversely
affect the voting power of the holders of common stock and, under certain
circumstances, make it more difficult for a third party to gain control of the
Company, discourage bids for the common stock at a premium, or otherwise
adversely affect the market price of the common stock.

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PART II

ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS

The Company's Common Stock is not traded on a national securities exchange or
the Nasdaq Stock Market; however, the Common Stock has been quoted on the OTC
Bulletin Board under the symbol "MDTV" since December 2, 1998. The range of high
and low bid prices as quoted on the OTC Bulletin Board during each fiscal
quarter since December 2, 1998 is as follows:

<TABLE>
<CAPTION>
FISCAL YEAR 1999
----------------
QUARTER ENDED HIGH LOW
------------- ---- ---
<S> <C> <C>
December 31 $1.870 $1.313
March 31 $3.000 $1.500
</TABLE>

These quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commission, and may not represent actual transactions.

As of April 30, 1999, the Company had approximately 68 holders of record of its
shares of Common Stock.

The Company has not paid any cash dividends and does not anticipate that it will
pay cash dividends on its Common Stock in the foreseeable future. Payment of
cash dividends is within the discretion of the Company's Board of Directors and
will depend, among other factors, upon the Company's earnings, financial
condition and capital requirements.

ITEM 2. LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings which could have a material
adverse effect on its business.

ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

None.

ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES

Sales of securities within the past three years without registration under the
Securities Act of 1933 ("1933 Act") were as follows:

A. PREFERRED STOCK

1. May 1996: 100,000 shares of preferred stock were sold for cash in the
aggregate amount of $10,000 without an underwriter to the following three
purchasers: Tudor Trading Limited, Denver, Colorado; Casa Bella Holdings,
Inc., Incline Village, Nevada; and EDR Financial, Inc., Denver Colorado.

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<PAGE>

2. May 1997: 15,000 shares of additional preferred stock were sold for cash in
the aggregate amount of $15,000 without an underwriter to the holders of
the preferred stock identified in item A-1 above.

3. October 1998: All of the preferred stock then outstanding, consisting of
115,000 shares described in items A-1 and A-2 above, were cancelled and
returned to the Company.

4. The sales of the preferred stock were made in reliance on the exemption
from registration afforded to private placements by Section 4(2) of the
1933 Act.

B. COMMON STOCK (shares adjusted to reflect a 1-for-10 reverse stock split
which occurred in October 1998).

1. June 1996: 170,100 shares of common stock were sold for cash in the
aggregate amount of $851 without underwriters to 25 purchasers, most of
whom were individuals. The sales were made in reliance upon the exemption
from registration afforded by Section 4(2) of the 1933 Act and Rule 504 of
Regulation D thereunder.

2. October 1998: 2,997,400 shares of common stock were sold for cash in the
aggregate amount of $29,974 without an underwriter to 10 offshore
investors. The sales were made in reliance upon the exemption from
registration afforded by Section 4(2) of the 1933 Act and Rule 504 of
Regulation D thereunder.

3. November 1998: 200,000 shares of common stock were sold for cash in the
aggregate amount of $2,000 without underwriters to 7 investors. The sales
were made in reliance upon the exemption from registration afforded by
Section 4(2) of the 1933 Act and Rule 504 of Regulation D thereunder.

4. November 1998: 5,213,835 shares of common stock were exchanged for all of
the outstanding capital stock of MDU Communications Inc., a Canadian
corporation, which is now a wholly owned subsidiary of the Company. The
former MDU Communications Inc. stockholders are the holders of those
shares. No underwriter was involved in the transaction. The sales were made
in reliance upon the exemption from registration afforded by Section 4(2)
of the 1933 Act.

5. December 1998: 640,000 shares of common stock were issued for cash in the
aggregate amount of $960,000 upon exercise of options held by two
investors. The options and the common stock issued upon exercise of the
options involved no underwriters and were done in reliance upon the
exemption from registration afforded by Section 4(2) of the 1933 Act and
Rule 504 of Regulation D thereunder.

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C. OPTIONS

1. November 1998: Five-year options to purchase 175,000 shares of common
stock at $1.00 per share were granted to Sheldon Nelson pursuant to the
Company's 1998 Directors'/Officers' Non-Qualified Stock Option Plan.

2. November 1998: Five-year options to purchase 125,000 shares of common
stock at $1.00 per share were granted to Douglas Irving pursuant to the
Company's 1998 Directors'/Officers' Non-Qualified Stock Option Plan.

3. December 1998: Five-year options to purchase 100,000 shares of common stock
at $1.50 per share were issued as consideration for consulting services. No
underwriter was involved and the Company relied upon the exemption from
registration afforded by Section 4(2) of the 1933 Act.

ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS

The Certificate of Incorporation includes provisions that limit the personal
liability of the Company's directors for monetary damages for breach of their
fiduciary duty of directors. The Certificate of Incorporation provides that, to
the fullest extent provided by the Delaware General Corporation Law ("DGCL"),
the Company's directors will not be personally liable for monetary damages for
breach of their fiduciary duty as directors. The DGCL does not permit a
provision in a corporation's certificate of incorporation that would eliminate
such liability (i) for any breach of a director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law, (iii) for any
unlawful payment of a dividend or unlawful stock repurchase or redemption, as
provided in Section 174 of the DGCL, or (iv) for any transaction from which a
director derived an improper personal benefit.

While these provisions provide directors with protection from awards for
monetary damages for breaches of their duty of care, they do not eliminate such
duty. Accordingly, these provisions will have no effect on the availability of
equitable remedies such as an injunction or rescission based on a director's
breach of his or her duty of care. The provisions described above apply to an
officer of the Company only if he or she is a director of the Company and is
acting in his or her capacity as director, and do not apply to the officers of
the Company who are not directors.

The Bylaws provide that, to the fullest extent permitted by the DGCL, the
Company shall indemnify the Company's directors and officers, and may indemnify
its employees and agents. Such indemnification may be made only if the person to
be indemnified acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Company, and with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful. The Bylaws further provide that the Company
may enter into an indemnification agreement pursuant to which the Company will
indemnify a director, officer, employee or agent to the fullest extent permitted
by the DGCL. At present, there is no pending litigation or proceeding involving
any of the Company's directors, officers, employees or agents in which
indemnification is required or permitted, and the Company is not aware of any
threatened litigation or proceeding that may result in a claim for such
indemnification.

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PART F/S

FINANCIAL STATEMENTS

1. Unaudited Interim Statements for Three Months Ended December 31, 1998

- Consolidated Balance Sheet - December 31, 1998

- Consolidated Statement of Loss and Deficit

- Consolidated Statement of Changes in Financial Position

- Notes to Consolidated Financial Statements

2. Audited Financial Statements for Fiscal Year Ended September 30, 1998 --
Alpha Beta Holdings, Ltd.

- Report of Independent Auditor

- Balance Sheet - September 30, 1998

- Statement of Operations for Twelve Months Ending September 30, 1998

- Statement of Cash Flow for Twelve Months Ending September 30, 1998

- Notes to Financial Statements

3. Audited Financial Statements for Fiscal Year Ended September 30, 1998 --
MDU Communications, Inc.

- Report of Independent Auditor

- Balance Sheet -- September 30, 1998

- Statement of Loss and Deficit for the Six Months Ended September 30,
1998

- Statement of Changes in Financial Position for the Six Months Ended
September 30, 1998

- Notes to Financial Statements

4. Audited Financial Statements for Fiscal Years Ended September 30, 1997 and
1996 and for the period July 14, 1995 (inception) through September 30,
1997 -- Alpha Beta Holdings, Ltd.

- Report of Independent Auditor

- Balance Sheet - September 30, 1997

- Statement of Operations for Fiscal Years Ended September 30, 1997 and
1996 and July 14, 1995 (inception) through September 30, 1997

- Statement of Cash Flow for Fiscal Years Ended September 30, 1997 and
1996 and July 14, 1995 (inception) through September 30, 1997

- Unaudited Statement of Shareholders' Equity

- Notes to Financial Statements

11
<PAGE>

MDU COMMUNICATIONS INTERNATIONAL INC.
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998
(UNAUDITED)

<TABLE>
<CAPTION>
1998
-----------
<S> <C>
ASSETS
CURRENT ASSETS:
Cash $ 829,292
Accounts receivable 32,764
Inventory 60,264
Deposits 6,010
Prepaid expenses 48,092
-----------
Total current assets 976,422

CAPITAL ASSETS (Note 3)
Building equipment 247,003
Computer equipment 18,014
Furniture and fixtures 35,786
-----------
300,803
Less accumulated amortization 5,610
-----------
Total capital assets 295,193
GOODWILL 157,689
-----------

$ 1,429,304
-----------
-----------

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 74,514

SHAREHOLDERS' EQUITY:
Share capital (Note 4) 1,595,658
Deficit, per the accompanying statement (240,868)
-----------
Total shareholders' equity 1,354,790
-----------
$ 1,429,304
-----------
-----------

</TABLE>

See accompanying notes to financial statements

<PAGE>

MDU COMMUNICATIONS INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF LOSS AND DEFICIT
FOR THE THREE MONTH PERIOD ENDING DECEMBER 31, 1998
(UNAUDITED)

<TABLE>
<CAPTION>
1998
-----------
<S> <C>
REVENUE $ 1,944

DIRECT COSTS 1,855
-----------
GROSS PROFIT 89

SALES EXPENSES 65,789

GENERAL AND ADMINISTRATIVE EXPENDITURES:
Advertising 7,850
Amortization 5,610
Automotive 2,378
Interest and bank charges 1,461
Office 7,368
Professional fees (1,875)
Rent 3,563
Repair 322
Telephone 2,106
Travel 6,840
Wages 41,700
-----------
77,323
-----------
NET LOSS (143,023)

DEFICIT, beginning of period (97,845)
-----------
DEFICIT, end of period $ (240,868)
-----------
-----------

</TABLE>

See accompanying notes to financial statements

<PAGE>

MDU COMMUNICATIONS INTERNATIONAL INC.
CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE THREE MONTH PERIOD ENDED DECEMBER 31, 1998
(UNAUDITED)

<TABLE>
<CAPTION>
1998
-----------
<S> <C>
OPERATING ACTIVITIES:
Net loss $ (143,023)
Items not involving cash
Amortization 5,610
Net changes in non-cash working balances (232,649)
-----------
CASH REQUIRED BY OPERATING ACTIVITIES (370,062)
-----------
FINANCING ACTIVITIES:
Issuance of capital stock 1,595,498
-----------
CASH PROVIDED BY FINANCING ACTIVITIES 1,595,498
-----------
INVESTING ACTIVITIES:
Purchase of capital assets (257,961)
Purchase of goodwill (157,689)
-----------
CASH PROVIDED BY INVESTING ACTIVITIES (415,650)
-----------
INCREASE IN CASH DURING THE PERIOD 809,786

CASH, beginning of period 19,506
-----------
CASH, end of period $ 829,292
-----------
-----------

</TABLE>

See accompanying notes to financial statements

<PAGE>

MDU COMMUNICATIONS INTERNATIONAL INC.
CONSOLIDATED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
(UNAUDITED)

1. GROUP REORGANIZATION:

A. The Company

The reorganization of the company's affairs has included:

i. The change of the company's name to MDU Communications
International Inc.

ii. On October 21, 1998, the company authorized the cancellation of
preferred stock. This stock was returned to the treasury as
authorized but unissued shares.

iii. On October 21, 1998, the company authorized a reverse split on a
1 share for 10 share basis, effective October 29, 1998. As a
result, each 10 shares of common stock outstanding prior the
reverse split became a share after the reverse split with
fractional shares rounded up to the nearest whole share.

iv. Acquiring the whole issued share capital of MDU Communications
Ltd. - The consideration being the issuing of 5,213,835 common
shares to the founding shareholders of MDU Communications Ltd.

v. On October 27, 1998, The company authorized the issuance of
200,000 post reverse split shares of its common stock pursuant to
Rule 504 promulgated under the Securities Act of 1933, as
amended, at a price of $.01 per share for a total consideration
of $29.974.

vi. On November 3, 1998, the company authorized the issuance of
200,000 post reverse split shares its common stock pursuant to
Rule 504 promulgated under the Securities Act of 1933, as
amended, at a price of $.01 per share for a total consideration
$2,000.

B. Business Combination:

i. The acquisition by the company of MDU Communications Ltd. was
done with the issuance of 5,213,835 common shares of the company,
representing 60.60% of the expanded issued share capital. This
resulted in:

- control of the company passing to MDU Communications Ltd.
founding shareholders.

- the resultant business combination being accounted for as a
reverse takeover.

ii. The purchase method was applied with MDU Communications Ltd.
being the accounting parent. These consolidated financial
statements include the operation of the company, being the
accounting subsidiary, from the date of acquisition. The net
assets of the company are nil.

<PAGE>

2. SIGNIFICANT ACCOUNTING POLICIES:

A. Principles of consolidation:

The consolidated financial statements are issued under the name of the
company, but are considered a continuation of the financial statements
of MDU Communications Ltd. All inter-company balances and transactions
are eliminated. The operating results of new subsidiaries are
consolidated from the date of acquisition.

The consolidation of the subsidiary has been prepared using the
purchase method of accounting.

B. Capital assets

Capital assets are recorded at cost and amortization is provided using
the declining balance method at the following rates:

<TABLE>
<S> <C>
Building equipment 4%
Computer equipment 20%
Furniture and fixtures 20%
</TABLE>

C. Currency:

The financial statements are stated in Canadian dollars.

D. Comparative figures:

The comparative audited figures of the predecessor company (Alpha Beta
Holdings) have not been restated into Canadian dollars as the results
of operations were not significant and would not provide more
meaningful information.

E. GAAP:

The financial statements are prepared under Canadian GAAP.

F. Revenue recognition:

The company recognizes revenue on provision of satellite programming
to customers when their related services are provided.

3. CAPITAL ASSETS:

<TABLE>
<CAPTION>
Accumulated Net Book
Cost Amortization Value
-------- ------------ ---------
<S> <C> <C> <C>
Building equipment $247,003 $ 2,470 $244,533
Computer equipment 18,014 1,351 16,663
Furniture and fixture 35,786 1,789 33,997
-------- ------- --------
$300,803 $ 5,610 $295,193
-------- ------- --------
-------- ------- --------

</TABLE>

<PAGE>

4. SHARE CAPITAL:

Particulars relating to the share capital of the company are detailed
below.

A. Authorized 50,000,000 common shares without par value.

B. Issued:

<TABLE>
<CAPTION>
No. of shares Value
------------- ----------
<S> <C> <C>
Past shares consolidated 170,100 $ 36,986
Share for debt 3,197,400 49,879
Issued exercised options 640,000 1,510,121
--------- ----------
4,007,500 1,596,986
Less elimination of deficit - 1,328
--------- ----------
4,007,500 1,595,658
Issued to effect the acquisition of MDU Communications Ltd. 5,213,835 -
--------- ----------
9,221,335 $1,595,658
--------- ----------
--------- ----------

</TABLE>

C. Share Options:

<TABLE>
<CAPTION>
No. Of Shares Price Expiry date
------------- ---------- -----------------
<S> <C> <C>
300,000 $1.00 U.S. November 24, 2003
100,000 $1.50 U.S. December 31, 2003

</TABLE>

5. RELATED PARTIES:

The company purchased equipment and satellite subscribers for $200,000
from a relative of the president.

<PAGE>

[LOGO]

NELSON, MAYOKA & COMPANY, P.C.

CERTIFIED PUBLIC ACCOUNTANTS

551 5TH AVENUE
NEW YORK, NEW YORK
10176-0001

----------

TEL (212) 697-7979
FAX (212) 697-8997
DIRECT LINE

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Shareholders of
Alpha Beta Holdings, Ltd. (A development Stage Company)

We have audited the accompanying balance sheet of Alpha Beta Holdings, Ltd.
(A development Stage Company), as of September 30, 1998, and the related
statements of operations, stockholders' equity and cash flows for the year
ended September 30, 1998. 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 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 misstatements. 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 financial position of Alpha Beta Holdings, Ltd. (A
development Stage Company), as of September 30, 1998, and the results of its
operations for the period then ended in conformity with generally accepted
accounting principles.

The accompanying financial statements have been prepared assuming the company
will continue as a going concern. The Company is a development stage
enterprise. The lack of sufficient working capital to operate as of September
30, 1998 raises substantial doubt about its ability to continue as a going
concern. Management's plans concerning these matters are described in Note 4.
The financial statements do not include any adjustments that might result
from the outcome of these uncertainties.

November 25, 1998
New York, New York

/s/ NELSON, MAYOKA AND COMPANY
CERTIFIED PUBLIC ACCOUNTANTS

<PAGE>

ALPHA BETA HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
SEPTEMBER 30, 1998

<TABLE>
<S> <C>
CURRENT ASSETS
Cash $ --
---------
TOTAL ASSETS $ --
---------
---------
LIABILITIES AND SHAREHOLDERS EQUITY

Liabilities $ --
---------

SHAREHOLDERS' EQUITY

Common Stock, No Par Value
Authorized 50,000,000 shares;
Issued and Outstanding
1,701,000 Shares 851
---------
Preferred Stock, No Par Value
Non Voting Authorized 5,000,000 shares;
Issued and Outstanding 115,000 Shares 25,050
---------
Deficit Accumulated During
The Development Stage (25,901)
---------
Total Shareholders' Equity

Total Liabilities and Shareholders Equity $ --
---------
---------
</TABLE>

The Accompanying Notes Are An Integral Part Of These Financial Statements.

<PAGE>

ALPHA BETA HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDING SEPTEMBER 30, 1998

<TABLE>
<S> <C>
REVENUE $ --
---------
EXPENSE
Reimbursed Expenses $ 14,164
Bank Charges 100
---------
Total Expenses $ 14,264
---------
NET (LOSS) $ (14,264)
---------
---------
NET (LOSS) PER COMMON SHARE $ (0.01)
---------
COMMON SHARES OUTSTANDING 1,701,000
---------

</TABLE>

The Accompanying Notes Are An Integral Part Of These Financial Statements.
<PAGE>

ALPHA BETA HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOW
FOR THE TWELVE MONTHS ENDING SEPTEMBER 30, 1998

<TABLE>
<S> <C>
Net (Loss) $(14,264)

Plus Items Not Affecting Cash Flow;
Increase (Decrease) in Accounts Payable (500)
--------

Cash Flows From Operations (14,764)
--------

Cash Flows From Investing Activities:

Cash Flows From Investing -
--------

Cash Flows From Investing Activities: -
--------

Cash Flows From Financing Activities:

Common Stock For Cash -
Preferred Stock Issued For Cash -
--------

Cash Flows From Financing

Net (Decrease) in Cash (14,764)
Cash At Beginning of Period 14,764
--------

Cash At End of Period $ -
--------
--------
</TABLE>

The Accompanying Notes Are An Integral Part Of These Financial Statements.

<PAGE>

ALPHA BETA HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998

NOTE 1 -- ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

ORGANIZATIONS:

On July 14, 1995, Alpha Beta Holdings, Inc. ("the Company") was incorporated
under the laws of Colorado, to engage in the business of developing and
establishing brew pubs on selected locations and to provide management
services to corporations engaged in developing restaurant and brew pub
operations. The company may also engage in any business, which is permitted
by the Colorado Business Corporation Act.

DEVELOPMENT STAGES:

The Company is currently in the development stage and has no significant
operations to date.

INCOME TAXES:

Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes
related primarily to differences between the recorded book basis and tax
basis of assets and liabilities for financial and income tax reporting. The
deferred tax assets and liabilities represent the future tax return
consequences of those differences, which will either be taxable or deductible
when the assets and liabilities are recovered or settled. Deferred taxes are
also recognized for operating losses that are available to offset future
taxable income and tax credits that are available to offset federal income
taxes.

Due to the Company's net operating losses in the fiscal years ended September
30, 1998, 1997 and 1996 of $14,764, $8,517 and $3,120 respectively, there are
no income taxes currently due. As of September 30, 1998 the Company has a
deferred tax asset of $ 0. Due to recurring losses the company has a zero
valuation allowance.

STATEMENT OF CASH FLOWS:

For purposes of the statement of cash flows, the Company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of
three months or less to be cash equivalents.

Cash paid for interest and taxes in the period ended September 30, 1998 was
$ -0-.

NET (LOSS) PER COMMON SHARE:

The net (loss) per common share is computed by dividing the net (Loss) for
the period by the weighted average number of shares outstanding at September
30, 1998, 1997 and 1996.

<PAGE>

ALPHA BETA HOLDINGS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998

NOTE 2 -- CAPITAL STOCK

COMMON STOCK (SEE NOTE 4):

The Company initially authorized 50,000,000 shares of no par value,
non-voting preferred stock, the rights and preferences of which to be
determined by the Board of Directors at the time of issuance.

PREFERRED STOCK (SEE NOTE 4):

On May 24, 1996 the Company issued 100,000 shares of its preferred stock at
$.10 per share. In May of 1997 the Company issued of 15,000 shares of
preferred stock for $15,000 or $1.00 per share. The directors have assigned
the following preferences to the issued and outstanding shares of Preferred
Stock: (i) the Preferred Stock shall be non-voting, (ii) the holders of the
stock as a group have the right to receive, prorata, a mandatory dividend of
10% of the Company's adjusted gross filing thereof, and (iii) upon
dissolution or winding up of the Company, 10% of the assets of the and
distribution of assets to the holders of the Company's Common Stock; Further,
the holder of the preferred shares shall sell to the Company the preferred
shares for a price equal to the price paid by the preferred shareholder for
the shares, plus 50% of the Company's net profit as of the end of six months
from the issuance in the event there is any change in the Company's net
profit as of the end of the six months from the issuance in the event there
is any change in the Company's management (officers and directors) in the six
months following issuance, but subject to the Company's obligation to pay the
same amount to purchase and retire the shares if at the end of the six months
form the issuance there is no change in management. The Preferences may be
changed at any time with written unanimous approval by and between the
Company and all holders of the preferred shares.

The company has declared no dividends through September 30, 1998.

NOTE 3 -- RELATED PARTY EVENTS

The Company presently maintains its principal offices at 645 Fifth Avenue New
York, NY 10023.

NOTE 4 -- SUBSEQUENT EVENTS

On October 21, 1998 the Company authorized the cancellation of its Preferred
Stock. The preferred stock was canceled and returned to the treasury as
authorized but unissued shares.

On October 21, 1998, the Company pursuant to written consent of the holders
of a majority of outstanding shares as authorized by the Company's by-laws,
authorized a reverse split on a 1 share for 10 share basis, effective October
29, 1998. As a result, each 10 shares of Common Stock outstanding prior to
the reverse split became 1 share after the reverse split with fractional
shares rounded up to the nearest whole share.

On October 27, 1998, the Company by unanimous written consent of the
Directors, authorized the issuance of 2,997,400 post reverse split shares of
its common stock no par value, under and pursuant to Rule 504 promulgated
under the Securities Act of 1933, as amended, at a price of $.01 per share
for a total consideration of $29,974.

On November 3, 1998, the Company by unanimous written consent of the
Directors, authorized the issuance of 200,000 post reverse split shares of
its common stock no par value, under and pursuant to Rule 504 promulgated
under the Securities Act of 1933, as amended, at a price of $.01 per share
for a total consideration of $2,000.

<PAGE>

ALPHA BETA HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998

On November 3, 1998, the Company by unanimous written consent of the
Directors, authorized the issuance of 640,000 shares of common stock no par
value per share to consultants in consideration for consulting services
rendered at an option exercise price of $1.50 per share, which option shall
be exercisable for one year. This period began November 5, 1998.

The Company is also constantly seeking business opportunities and other means
of financing to enable it to complete its business plan.

<PAGE>

ALPHA BETA HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF SHAREHOLDERS EQUITY
FOR THE TWELVE MONTHS ENDING SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
Deficit
Accumulated
Numbers Number During The
Of Shares Of Shares Common Preferred Development
Common Preferred Stock Stock Stage Total
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT OCTOBER 1, 1997 1,701,000 115,000 $ 851 $ 25,050 $ (11,637) $ 14,264
-----------------------------------------------------------------------------

NET (LOSS) (14,264) (14,264)
-----------------------------------------------------------------------------
BALANCE AT SEPTEMBER 30, 1998 1,701,000 115,000 851 25,050 (25,901) --
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------

</TABLE>

The Accompanying Notes Are An Integral Part Of These Financial Statements.

<PAGE>

[LOGO]

CAWLEY & ASSOCIATES

To the shareholders of MDU Communication Inc.:

We have audited the balance sheets of MDU Communication Inc, as at
September 30, 1998 and the statements of loss and deficit and changes in
financial position for the six months 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 audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform an audit to
obtain reasonable assurance whether the financial statements are free of
material misstatements. 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.

In our opinion, these financial statements referred to above present
fairly, in all material respects, the financial position of the Company, as
at September 30, 1998, and the results of its operation and the changes in
financial position for the six months then ended in accordance with generally
accepted accounting principles.

Vancouver, British Columbia /s/ Cawley & Associates
November 3, 1998 ------------------------
Cawley & Associates
<PAGE>

MDU COMMUNICATION INC.
BALANCE SHEET
SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
1998
----
<S> <C>
ASSETS
------
CURRENT ASSETS:

Cash $ 19,506
Prepaid expenses 7,593
G.S.T. receivable 4,191
--------

Total current assets 31,290

CAPITAL ASSETS (Note 1)

Computers 11,308
Communications equipment 4,117
Furniture and fixtures 27,417
--------

Less accumulated amortization 42,842
0
--------

42,842
--------

$ 74,132
--------
--------

LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES:

Accounts payable $ 21,817
Notes payable 150,000
--------
Total current liabilities 171,817

SHAREHOLDERS' DEFICIT

Share capital (Note 3) 160
Deficit, per the accompanying statement (97,845)
--------
Total shareholders' deficit (97,685)
--------
$ 74,132
--------
--------
</TABLE>

On behalf of the board:

Director /s/ D. Irving
- ------------------------------------

Director /s/ S. Nelson
- ------------------------------------

See accompanying notes to financial statements.

<PAGE>

MDU COMMUNICATION INC.
STATEMENT OF LOSS AND DEFICIT
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998

<TABLE>
<S> <C>
REVENUE $ -

GENERAL AND ADMINISTRATIVE EXPENDITURES:

Advertising & promotion 31,158
Insurance 190
Interest 2,028
Office 3,065
Professional fees 13,393
Rent 5,400
Management fees 26,500
Telephone 2,712
Travel 10,825
Vehicle 2,574
--------

Total general and administrative expenditures 97,845
--------

NET LOSS AND DEFICIT $(97,845)
--------
--------
</TABLE>

See accompanying notes to financial statements.

<PAGE>

MDU COMMUNICATION INC.
STATEMENT OF CHANGES IN FINANCIAL POSITION
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998

<TABLE>
<CAPTION>
1998
----
<S> <C>
OPERATING ACTIVITIES:

Net Loss $(97,845)
Net change in Non-cash working capital balance 160,033
--------
FINANCING ACTIVITIES: 62,188

Capital stock 160
--------

INVESTING ACTIVITIES:

Purchase of Capital Assets 42,842
--------

CASH, end of period $ 19,506
--------
--------
</TABLE>

See accompanying notes to financial statements.

<PAGE>

MDU COMMUNICATION INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED SEPTEMBER 30, 1998

1. SIGNIFICANT ACCOUNTING POLICIES:

Amortization

Amortization of capital assets in calculated using the declining balance
method at the following rates:

<TABLE>
<S> <C>
Communication 20%
Computer 30%
Furniture 20%
</TABLE>

No amortization in the year the asset is purchased.

2. RELATED PARTY TRANSACTIONS:

The company had the following transactions with related parties:

Paid management and consulting fees of $48,750 to shareholders of the
company.

These transactions are in normal course of business and are measured at
an exchange amount.

3. SHARE CAPITAL:

A) Authorized

i) Unlimited number of common voting shares
ii) Unlimited number of first preference shares

Details of share issued are as follows:

<TABLE>
<CAPTION>
Number Amount
------ ------
<S> <C> <C>
Common voting shares 160 $160
----
----
</TABLE>

<PAGE>

KISH - LEAKE & ASSOCIATES, P.C.

CERTIFIED PUBLIC ACCOUNTANTS

J.D. Kish, C.P.A, M.B.A. 7901 E. Belleview Ave., Suite 220
James D. Leake, C.P.A., M.T. Englewood, Colorado 80111
------------------- Telephone (303) 779-5006
Arleen R. Brogan, C.P.A. Facsimile (303) 779-5724

INDEPENDENT AUDITOR'S REPORT

We have audited the accompanying balance sheet of Alpha Beta Holdings, Ltd.
(a Developmental Stage Company), at September 30, 1997, and the related
statements of operations, cash flows and stockholders' equity for the years
ended September 30, 1997 and 1996 and the period July 14, 1995 (Inception)
through September 30, 1997. 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 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 misstatements. 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 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 financial position of Alpha Beta Holdings, Ltd. at
September 30, 1997, and the results of its operations and its cash flows for
the fiscal years ended September 30, 1997 and 1996 and the period July 14,
1995 (Inception) through September 30, 1997 in conformity with generally
accepted accounting principles.

The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. The Company is a development stage
enterprise. The lack of sufficient working capital to operate as of September
30, 1997 raises substantial doubt about its ability to continue as a going
concern. Management's plans concerning these matters are described in Note 4.
The financial statements do not include any adjustments that might result
from the outcome of these uncertainties.

/s/ Kish, Leake & Associates, P.C.
Kish, Leake & Associates, P.C.
Certified Public Accountants
Englewood, Colorado
November 25, 1997

<PAGE>

ALPHA BETA HOLDINGS, LTD.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30,
1997
-------------
<S> <C>
ASSETS

Current Assets - Cash $ 14,764
--------
--------

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES - Accounts Payable $ 500
--------
SHAREHOLDERS' EQUITY

Common Stock, No Par Value
Authorized 50,000,000 shares;
Issued and Outstanding
1,701,000 Shares 851

Preferred Stock, No Par Value,
Non Voting Authorized 5,000,000 shares;
Issued and Outstanding 115,000 Shares 25,050

Deficit Accumulated During
The Development Stage (11,637)
--------
TOTAL SHAREHOLDERS' EQUITY 14,264
--------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 14,764
--------
--------

</TABLE>

The Accompanying Notes Are An Integral Part Of These Financial Statements.

-2-
<PAGE>

Alpha Beta Holdings, Ltd.
(A Development Stage Company)
Statement of Operations
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
July 14, 1995
Fiscal Year Fiscal Year (Inception)
Ended Ended Through
September September September
30, 1997 30, 1996 30, 1997
-------- -------- --------
<S> <C> <C> <C>
Revenue $0 $0 $0
--------- --------- ---------
Expenses:
Accounting 1,625 1,000 2,625
Bank Charges 42 18 60
Legal 800 1,500 2,300
Licenses & Fees 10 202 212
Office Rent & Expenses 5,240 400 5,640
Stock Transfer Fees 800 0 800
--------- --------- ---------

Total Expenses 8,517 3,120 11,637
--------- --------- ---------

Net (Loss) ($8,517) ($3,120) ($11,637)
--------- --------- ---------
--------- --------- ---------
Net (Loss) Per Common Share ($0.01) ($0.00) ($0.01)
--------- --------- ---------
--------- --------- ---------
Common Shares Outstanding 1,701,000 1,701,000 1,701,000
--------- --------- ---------
--------- --------- ---------
</TABLE>

The Accompanying Notes Are An Integral Part Of These Financial Statements.

-3-

<PAGE>

Alpha Beta Holdings, Ltd.
(A Development Stage Company)
Statement of Cash Flow
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
July 14, 1995
Fiscal Year Fiscal Year (Inception)
Ended Ended Through
September September September
30, 1997 30, 1996 30, 1997
-------- -------- --------
<S> <C> <C> <C>
Net (Loss) ($8,517) ($3,120) ($11,637)

Plus Items Not Affecting Cash Flow: 0 0 0
Increase (Decrease) in Accounts Payable 100 400 500

Cash Flows From Operations (8,417) (2,720) (11,137)
------- ------ -------

Cash Flows From Investing Activities:

Cash Flows From Investing 0 0 0
------- ------ -------

Cash Flows From Investing Activities: 0 0 0
------- ------ -------

Cash Flows From Financing Activities:

Common Stock For Cash 0 851 851
Preferred Stock Issued For Cash 15,000 10,050 25,050
------- ------ -------

Cash Flows From Financing 15,000 10,901 25,901
------- ------ -------

Net (Decrease) In Cash 6,583 8,181 14,764
Cash At Beginning of Period 8,181 0 0
------- ------ -------

Cash At End of Period $14,764 $8,181 $14,764
------- ------ -------
------- ------ -------

Summary Of Non-Cash Investing And Financing Activities:
$0
-------
</TABLE>

The Accompanying Notes Are An Integral Part Of These Financial Statements.

-4-
<PAGE>

Alpha Beta Holdings, Ltd.
(A Development Stage Company)
Unaudited Statement of Shareholders' Equity
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Deficit
Accumulated
Number Of Number Of During The
Shares Shares Common Preferred Development
Common Preferred Stock Stock Stage Total
------ --------- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
Balance At July 14, 1995 0 0 $0 $0 $0 $0

May 24, 1996 issued 100,000
shares of preferred stock for
cash at $.10 per share 100,000 0 10,050 10,050

June 18, 1996 issued 1,701,000
shares of common stock for
cash at $.0005 per share 1,701,000 851 851

Net (Loss) (3,120) (3,120)
--------- ------- ---- -------- -------- -------

Balance At September 30, 1996 1,701,000 100,000 $851 $10,050 ($3,120) $7,781
--------- ------- ---- -------- -------- -------

May 13, 1997 issued 15,000
shares of preferred stock for
cash at $1.00 per share 15,000 15,000 15,000

Net (Loss) (8,517) (8,517)
--------- ------- ---- -------- -------- -------

Balance At September 30, 1997 1,701,000 115,000 $851 $25,050 ($11,637) $14,264
--------- ------- ---- -------- -------- -------
--------- ------- ---- -------- -------- -------
</TABLE>

The Accompanying Notes Are An Integral Part Of These Financial Statements.

-5-
<PAGE>

Alpha Beta Holdings, Ltd.
(A Development Stage Company)
Notes to Financial Statements
AT SEPTEMBER 30, 1996

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization:

On July 14, 1995, Alpha Beta Holdings, Ltd. ("the Company") was incorporated
under the laws of Colorado, to engage in the business of developing and
establishing brew pubs on selected locations and to provide management services
to corporations engaged in developing restaurant and brew pub operations. The
Company may also engage in any business which is permitted by the Colorado
Business Corporation Act.

Developmental Stage:

The Company is currently in the developmental stage and has no significant
operations to date.

Income Taxes:

Due to the Company's net operating loss of $3,120, there are no income taxes
currently due. As of September 30, 1996 the Company has a deferred tax asset
of $624 primarily for its net operating loss carry forward which has been
fully reserved through a valuation allowance.

Statement of Cash Flows:

For purposes of the statement of cash flows, the Company considers demand
deposits and highly liquid-debt instruments purchased with a maturity of
three months or less to be cash equivalents.

Cash paid for interest and taxes in the period ended September 30, 1996 was
$-0-.

-6-

<PAGE>

Alpha Beta Holdings, Ltd.
(A Development Stage Company)
Notes to Financial Statements
AT SEPTEMBER 30, 1997 AND 1996

Net (Loss) Per Common Share:

The net (loss) per common share is computed by dividing the net (Loss) for
the period by the weighted average number of shares outstanding at September
30, 1997 and 1996.

NOTE 2 - CAPITAL STOCK

Common Stock:

The Company initially authorized 50,000,000 shares of no par value common
stock. In June 1996 the company completed a private offering issuing
1,701,000 shares of stock for $851 in cash or $.0005 per share

Preferred Stock

The Company initially authorized 5,000,000 shares of no par value, non-voting
preferred stock, the rights and preferences of which to be determined by the
Board of Directors at the time of issuance.

On May 24, 1996, the Company issued 100,000 shares of its preferred stock at
$.10 per share. In May of 1997 the Company issued 15,000 shares of preferred
stock for $15,000 or $1.00 per share. The Directors have assigned the
following preferences to the issued and outstanding shares of Preferred
Stock: (i) the Preferred Stock shall be non-voting, (ii) the holders of the
stock as a group have the right to receive, prorata, a mandatory dividend of
10% of the Company's adjusted gross profit as reflected on its annual
corporate income tax return and to be paid within ten days of the filing
thereof, and (iii) upon dissolution or winding up of the Company, 10% of the
assets of the Company shall be distributed on a prorata basis to the holders
of the Preferred Stock prior to division and distribution of assets to the
holders of the Company's Common Stock; Further, the holder of the preferred
shares shall sell to the Company the preferred shares for a price equal to
the price paid by the preferred shareholder for the shares, plus 50% of the
Company's net profit as of the end of six months from the issuance in the
event there is any change in the Company's management (officers and
directors) in the six months following issuance, but subject to the Company's
obligation to pay the same amount to purchase and retire the shares if at the
end of six months from the issuance there is no change in management. The
preferences may be changed at any time with written unanimous approval by and
between the Company and all holders of the preferred shares.

The Company has declared no dividends through September 30, 1997 and 1996.

-7-

<PAGE>

Alpha Beta Holdings, Ltd.
(A Development Stage Company)
Notes to Financial Statements
AT SEPTEMBER 30, 1997 AND 1996

NOTE 3 - RELATED PARTY EVENTS

The Company presently maintains its principal offices at an address provided
by a related party at a minimum monthly rental of $100 per month, plus any
expenses of telephone, fax, and secretarial services, commencing June 1,
1996. The office is located at 2382 Glencoe Street, Denver, Colorado 80207.

NOTE 4 - SUBSEQUENT EVENTS

The Company is also constantly seeking business opportunities and other means
of financing to enable it to complete its business plan.

-8-
<PAGE>

PART III

ITEM 1. INDEX TO EXHIBITS
<TABLE>
<CAPTION>
DESCRIPTION OF EXHIBITS EXHIBIT NO.
----------------------- -----------
<S> <C>
Certificate of Incorporation 2.1

Bylaws 2.2

See Article IV of Certificate of Incorporation 3.1
filed as Exhibit 2.1

Acquisition Agreement dated November 2, 1998 6.1
between Alpha Beta Holdings, Ltd. and
MDU Communications Inc.

System Operator Agreement dated August 27, 1998 6.2
between Star Choice Communications
Inc. and MDU Communications Inc.

Agreement dated December 31, 1998 between 4-12 6.3
Electronics Corporation and MDU Communications Inc.

Sheldon Nelson Stock Option Agreement dated 6.4
November 24, 1998

Douglas Irving Stock Option Agreement dated
November 24, 1998 6.5

Chris Nelson Stock Option Agreement dated
December 31, 1998 6.6
</TABLE>

ITEM 2. DESCRIPTION OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
---------- -----------
<C> <S>

2.1 Certificate of Incorporation

2.2 Bylaws

3.1 See Article IV of Certificate of
Incorporation filed as Exhibit 2.1

6.1 Acquisition Agreement dated November 2,
1998 between Alpha Beta Holdings, Ltd.
and MDU Communications Inc.

6.2 System Operator Agreement dated August 27,
1998 between Star Choice Communications Inc.
and MDU Communications Inc.

6.3 Agreement dated December 31, 1998 between 4-12
Electronics Corporation and MDU Communications Inc.

6.4 Sheldon Nelson Stock Option Agreement dated
November 24, 1998

6.5 Douglas Irving Stock Option Agreement dated
November 24, 1998

6.6 Chris Nelson Stock Option Agreement dated
December 31, 1998
</TABLE>

12
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized.

MDU Communications International, Inc.

By: /s/ Sheldon Nelson
----------------------------------
Sheldon Nelson
President

Dated: May 12, 1999

<PAGE>

EXHIBIT 2.1

CERTIFICATE OF INCORPORATION

NEW MDU COMMUNICATIONS INTERNATIONAL, INC.

ARTICLE I - NAME

The name of the corporation is New MDU Communications International,
Inc. (the "Corporation").

ARTICLE II - REGISTERED OFFICE AND AGENT

The address of the Corporation's registered office in the State of
Delaware is 1013 Centre Road, Wilmington, Delaware 19805, in the county of New
Castle. The name of the Corporation's registered agent at such address is
Corporation Service Company.

ARTICLE III - PURPOSE

The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the Delaware General
Corporation Law.

ARTICLE IV - SHARES

4.1 AUTHORIZED CAPITAL. The Corporation shall have authority to issue
(a) fifty million (50,000,000) shares of Common Stock, and (b) five million
(5,000,000) shares of Preferred Stock. Each share of Common Stock and Preferred
Stock shall have a par value of one-tenth of one cent ($.001).

4.2 AUTHORITY OF BOARD OF DIRECTORS. The Board of Directors is
authorized, subject to limitations prescribed by law and the provisions of this
Article IV, to provide for the issuance of the shares of Preferred Stock in
series, and by filing a certificate pursuant to the Delaware General Corporation
Law (the "DGCL"), to establish from time to time the number of shares to be
included in each such series and the voting powers thereof, full or limited, and
to fix the designation, powers, preferences and rights of the shares of each
such series and the qualifications, limitations or restrictions thereof. The
authority of the Board of Directors with respect to each such series shall
include, but not be limited to, determination of the following:

(a) The number of shares constituting that series and the
distinctive designation of that series;

<PAGE>

(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which date or dates, and the
relative rights of priority, if any, of payment of dividends on shares of that
series;

(c) Whether that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of such voting
rights;

(d) Whether that series shall have conversion privileges, and,
if so, the terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of Directors shall
determine;

(e) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such redemption,
including the date or date upon or after which they shall be redeemable, and
the amount per share payable in case of redemption, which amount may vary
under different conditions and at different redemption dates;

(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the terms and
amount of such sinking fund;

(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights of priority, if any, of payment of
shares of that series; and

(h) Any other relative rights, preferences and limitations of
that series.

4.3 DIVIDENDS. Subject to the rights of any series of Preferred
Stock that may from time to time come into existence, the holders of the
Common Stock and the Class B Common Stock shall be entitled to such dividends
or other distributions in cash, securities or other property of the
Corporation as may be declared by the Board of Directors from time to time in
accordance with the DGCL.

4.4 VOTING RIGHTS. On all matters upon which stockholders are
entitled or permitted to vote, every holder of Common Stock shall be entitled
to one vote in person or by proxy for each share of Common Stock standing in
such holder's name on the transfer books of the Corporation.

ARTICLE V - INCORPORATOR

The name and address of the incorporator is William G. Pusch, 2600
Century Square, 1501 Fourth Avenue, Seattle, Washington 98101-1688. The powers
of the incorporator shall terminate upon the filing of this Certificate of
Incorporation and the names and mailing addresses of the persons who are to
serve as directors until the first annual meeting of stockholders or until their
successors are elected and qualify are as follows:

Sheldon Nelson Douglas J. Irving
108 - 11951 Hammersmith Way 108 - 11951 Hammersmith Way
Richmond, British Columbia, Canada Richmond, British Columbia, Canada

2
<PAGE>

ARTICLE VI - BOARD OF DIRECTORS

The number of directors constituting the entire Board shall be not
less than two nor more than twelve as fixed from time to time by vote of a
majority of the entire Board, provided, however, that the number of directors
shall not be reduced so as to shorten the term of any director at the time in
office. Upon the next succeeding election of directors, the directors shall
be divided into three (3) classes, the first class to serve a term of one (l)
year, the second to serve a term of two (2) years, and the third to serve a
term of three (3) years thereafter. Each such director shall hold office for
the term for which he or she is elected and until his or her successor shall
have been elected and qualified. The term of office of a class of director
after those initially elected shall be three (3) years.

ARTICLE VII - BYLAWS

The Board of Directors of the Corporation is expressly authorized to
adopt, amend or repeal bylaws of the Corporation, but the stockholders may
make additional bylaws and may amend or repeal any bylaw whether adopted by
them or otherwise.

ARTICLE VIII - LIMITATION OF LIABILITY

To the fullest extent permitted by the General Corporation Law of
the State of Delaware as the same now exists or may hereafter be amended in a
manner more favorable to directors, a director of the Corporation shall not
be personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director.

THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law
of the State of Delaware, do make this Certificate, hereby declaring and
certifying that this is my act and deed and the facts herein stated are true,
and accordingly have hereunto set my hand this 20th day of April, 1999.

/s/ William G. Pusch
----------------------------------
William G. Pusch, Incorporator

<PAGE>

EXHIBIT 2.2

BYLAWS

NEW MDU COMMUNICATIONS INTERNATIONAL, INC.

These Bylaws are intended to conform to the mandatory requirements of
the General Corporation Law of Delaware (the "Act"). Any ambiguity arising
between these Bylaws and the discretionary provisions of the Act shall be
resolved in favor of the application of the Act.

ARTICLE I

STOCKHOLDERS

SECTION 1. PLACE.

Stockholders meetings shall be held at the registered office of New MDU
Communications International, Inc. (the "Corporation") unless a different place
shall be designated by the Board of Directors.

SECTION 2. ANNUAL MEETING.

The annual meeting of the Stockholders shall be held on the date and
time designated by the Board of Directors. The meeting shall be held for the
purpose of electing Directors and for the transaction of such other business as
may come before the meeting, whether stated in the notice of meeting or not,
except as otherwise expressly stated in the Certificate of Incorporation. If the
election of Directors shall not be held on the day designated herein, the Board
of Directors shall cause the election to be held at a special meeting of the
Stockholders on the next convenient day.

SECTION 3. SPECIAL MEETINGS.

Special meetings of the Stockholders may be called by the President or
the Board of Directors for any purpose at any time, and shall be called by the
President at the request of the holders of shares entitled to cast at least
twenty-five percent (25%) of votes eligible to be cast. Special meetings shall
be held at such place or places within or without the state of Delaware as shall
be designated by the Board of Directors and stated in the notice of such
meeting. At a special meeting no business shall be transacted and no corporate
action shall be taken other than that stated in the notice of the meeting.

SECTION 4. NOTICE.

Written or printed notice stating the place, hour and day of the
meeting and, in case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less

BYLAWS - Page 1
<PAGE>

than ten (10) days nor more than sixty (60) days before the date of the
meeting, either personally or by mail, by or at the direction of the
President, the Secretary, or the officer or persons calling the meeting to
each Stockholder of record entitled to vote at such meeting, or for such
other notice period as may be required by the Act. Such notice and the
effective date thereof shall be determined as provided in the Act.

SECTION 5. QUORUM.

A majority of votes entitled to be cast by the shares issued,
outstanding and entitled to vote upon the subject matter at the time of the
meeting, represented in person or by proxy, shall constitute a quorum for the
transaction of business at any meeting of the Stockholders.

SECTION 6. ADJOURNED MEETINGS.

If there is no quorum present at any annual or special meeting the
Stockholders present may adjourn to such time and place as may be decided
upon by the holders of the majority of the shares present, in person or by
proxy, and notice of such adjournment shall be given in accordance with
Section 4 of this Article, but if a quorum is present, adjournment may be
taken from day to day or to such time and place as may be decided and
announced by a majority of the Stockholders present, and subject to the
requirements of the Act, no notice of such adjournment need be given. At any
such adjourned meeting at which a quorum is present, any business may be
transacted which could have been transacted at the meeting originally called.

SECTION 7. VOTING.

Each Stockholder entitled to vote on the subject matter shall be
entitled to that number of votes provided in the Certificate of Incorporation
for each share of stock standing in the name of the Stockholder on the books
of the Corporation at the time of the closing of the Transfer Books for said
meeting, whether represented and present in person or by proxy. The
affirmative vote of the holders of a majority of the shares of each class
represented at the meeting and entitled to vote on the subject matter shall
be the act of the Stockholders. The Stockholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding
the withdrawal of enough Stockholders to leave less than a quorum.

The secretary shall prepare and make, at least ten days before every
election of directors, a complete list of the Stockholders entitled to vote,
arranged in alphabetical order and showing the address of each Stockholder
and the number of shares of each Stockholder. Such list shall be open at the
offices of the Corporation for said ten days, to the examination of any
Stockholder, and shall be produced and kept at the time and place of election
during the whole time thereof, and subject to the inspection of any
Stockholder who may be present.

SECTION 8. PROXIES.

At all meetings of Stockholders, a Stockholder may vote in person or
by proxy executed in writing by the Stockholder or by his duly authorized
attorney in fact. No proxy shall be valid after three (3) years from the date
of its execution, unless otherwise provided in the proxy.

BYLAWS - Page 2
<PAGE>

SECTION 9. RECORD DATE.

The Board of Directors is authorized to fix in advance a date not
exceeding sixty days nor less than ten days preceding the date of any meeting
of the Stockholders, or the date for the payment of any dividend, or the date
for the allotment of rights, or the date when any change or conversion or
exchange of capital stock shall go into effect, or a date in connection with
obtaining the consent Stockholders for any purposes, as a record date for the
determination of the Stockholders entitled to notice of, and to vote at, any
such meeting, and any adjournment thereof, or entitled to receive payment of
any such dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of capital
stock, or to give such consent, and, in such case, such Stockholders and only
such Stockholders as shall be Stockholders of record on the date so fixed
shall be entitled to such notice of, and to vote at, such meeting, and any
adjournment thereof, or to receive payment of such dividend, or to receive
such allotment of rights, or to exercise such rights, or to give such
consent, as the case may be, notwithstanding any transfer of any stock on the
books of the Corporation, after such record date fixed pursuant to this
Section.

SECTION 10. CONDUCT OF MEETINGS.

The Chairman of the Board of Directors or, in his absence the Chief
Executive Officer, President, or the Vice-President designated by the
Chairman of the Board, shall preside at all regular or special meetings of
Stockholders. To the maximum extent permitted by law, such presiding person
shall have the power to set procedural rules, including but not limited to
rules respecting the time allotted to Stockholders to speak, governing all
aspects of the conduct of such meetings.

ARTICLE II

DIRECTORS

SECTION 1. IN GENERAL.

The business and affairs of the Corporation shall be managed by a
Board of Directors initially consisting of two (2) directors, and thereafter,
subject to the provisions of Article VI of the Corporation's Certificate of
Incorporation, shall consist of such number as may be fixed from time to time
by resolution of the Board of Directors. The members of the first Board of
Directors shall hold office until the first annual meeting of the
Stockholders and until their successor(s) shall have been elected and
qualified. Thereafter, the term of the Directors shall begin upon each
Director's election by the Stockholders as provided in Article I, Section 7
above, and shall continue until his successor shall have been elected and
qualified.

SECTION 2. POWERS.

The corporate powers, business, property and interests of the
Corporation shall be exercised, conducted and controlled by the Board of
Directors, which shall have all power

BYLAWS - Page 3
<PAGE>

necessary to conduct, manage and control its affairs, and to make such rules
and regulations as it may deem necessary as provided by the Act; to appoint
and remove all officers, agents and employees; to prescribe their duties and
fix their compensation; to call special meetings of Stockholders whenever it
is deemed necessary by the Board, to incur indebtedness and to give
securities, notes and mortgages for same. It shall be the duty of the Board
to cause a complete record to be kept of all the minutes, acts, and
proceedings of its meetings.

SECTION 3. VACANCIES.

Vacancies in the Board of Directors may be temporarily filled by the
affirmative vote of a majority of the remaining Directors even though less than
a quorum of the Board of Directors. Such temporary Director or Directors shall
hold office until the first meeting of the Stockholders held thereafter, at
which time such vacancy or vacancies shall be permanently filled by election
according to the procedure specified in Section 1 of this Article II.

SECTION 4. ANNUAL MEETING.

There shall be an annual meeting of the Board of Directors which shall
be held immediately after the annual meeting of the Stockholders and at the same
place.

SECTION 5. SPECIAL MEETING.

Special meetings may be called from time to time by the President or
any one of the Directors. Any business may be transacted at any special meeting.

SECTION 6. QUORUM.

A majority of the Directors shall constitute a quorum. The act of a
majority of the Directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors. If less than a quorum is present at
a meeting, a majority of the Directors present may adjourn the meeting from time
to time without further notice, other than announcement at the meeting, until a
quorum shall be present. Interested Directors may be counted for quorum
purposes.

SECTION 7. NOTICE AND PLACE OF MEETINGS.

Notice of all Directors' meetings shall be given in accordance with the
Act. No notice need be given of any annual meeting of the Board of Directors.
One day prior notice shall be given for all special meetings of the Board, but
the purpose of special meetings need not be stated in the notice.

Meetings of the Board of Directors may be held at the principal office
of the Corporation, or at such other place as shall be stated in the notice of
such meeting. Members of the Board of Directors, or any committee designated by
the board of directors, shall, except as otherwise provided by law, the
Certificate of Incorporation or these Bylaws, have the power to participate in a
meeting of the board of Director, or any committee, by means of a conference
telephone or similar

BYLAWS - Page 4
<PAGE>

communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence
in person at this meeting.

SECTION 8. COMPENSATION.

By resolution of the Board of Directors, each Director may either be
reimbursed for his expenses, if any, for attending each meeting of the Board
of Directors or may be paid a fixed fee for attending each meeting of the
Board of Directors, or both. No such payment shall preclude any Director from
serving the Corporation in any other capacity and receiving compensation
therefor.

SECTION 9. REMOVAL OR RESIGNATION OF DIRECTORS.

Any Director may resign by delivering written notice of the
resignation to the Board of Directors or an officer of the Corporation. All
or any number of the Directors may be removed, with or without cause, at a
meeting expressly called for that purpose by a vote of the holders of the
majority of the shares then entitled to vote at an election of Directors.

SECTION 10. PRESUMPTION OF ASSENT.

A Director of the Corporation who is present at a meeting of the
Board of Directors at which action on any corporate matter is taken shall be
presumed to have assented to the action taken, unless his dissent shall be
manifested in the manner required by the Act. Such right to dissent shall not
apply to a Director who voted in favor of such action.

SECTION 11. COMMITTEES.

The Board of Directors may, by resolution passed by a majority of
the whole Board, designate two or more of their number to constitute an
Executive Committee to hold office at the pleasure of the board, which
committee shall, during the intervals between meetings of the Board of
Directors, have and exercise all of the powers of the Board of Directors in
the management of the business and affairs of the Corporation, subject only
to such restrictions or limitations as the Board of Directors may from time
to time specify, or as limited by the Act. Any member of the Executive
Committee may be removed at any time, with or without cause, by a resolution
of a majority of the whole Board of Directors. Any vacancy in the Executive
Committee may be filled from among the directors by a resolution of a
majority of the whole Board of Directors. Other committees of two or more
Directors, may be appointed by the Board of Directors or the Executive
Committee, which committees shall hold office for such time and have such
powers and perform such duties as may from time to time be assigned to them
by the Board of Directors or the Executive Committee.
BYLAWS - Page 5
<PAGE>

ARTICLE III

OFFICERS AND AGENTS - GENERAL PROVISIONS

SECTION 1. NUMBER, ELECTION AND TERM.

Officers of the Corporation shall be a President, Secretary, and
Treasurer. Officers shall be elected by the Board of Directors at its first
meeting, and at each regular annual meeting of the Board of Directors
thereafter. Each officer shall hold office until the next succeeding annual
meeting of the Directors and until his successor shall be elected and
qualified. Any one person may hold more than one office if it is deemed
advisable by the Board of Directors.

SECTION 2. ADDITIONAL OFFICERS AND AGENTS.

The Board of Directors may appoint and create such other officers
and agents as may be deemed advisable and prescribe their duties.

SECTION 3. RESIGNATION OR REMOVAL.

Any officer or agent of the Corporation may resign from such
position by delivering written notice of the resignation to the Board of
Directors, but such resignation shall be without prejudice to the contract
rights, if any, of the Corporation. Any officer or agent elected or appointed
by the Board of Directors may be removed by the Board of Directors whenever
in its judgment the best interests of the Corporation would be served
thereby, but such removal shall be without prejudice to the contract rights,
if any, of the person so removed. Election or appointment of an officer or
agent shall not of itself create contract rights.

SECTION 4. VACANCIES.

Vacancies in any office caused by any reason shall be filled by the
Board of Directors at any meeting by selecting a suitable and qualified
person to act during the unexpired term.

SECTION 5. SALARIES.

The salaries of all the officers, agents and other employees of the
Corporation shall be fixed by the Board of Directors and may be changed from
time to time by the Board, and no officer shall be prevented from receiving
such salary by reason of the fact that he or she is also a Director of the
Corporation. All Directors, including interested Directors, are specifically
authorized to participate in the voting of such compensation irrespective of
their interest.

BYLAWS - Page 6
<PAGE>

ARTICLE IV

DUTIES OF THE OFFICERS

SECTION 1. CHAIRMAN OF THE BOARD.

The Chairman of the Board, if any, shall be a member of the Board of
Directors and, subject to Sections 2 and 3 of this Article IV, shall preside
at all meetings of the Stockholders and Directors; perform all duties
required by the Bylaws of the Corporation, and as may be assigned from time
to time by the Board of Directors; and shall make such reports to the Board
of Directors and Stockholders as may be required.

SECTION 2. CHIEF EXECUTIVE OFFICER.

The Chief Executive Officer, if any, shall have general charge and
control of the affairs of the Corporation subject to the direction of the
Board of Directors; sign as President all Certificates of Stock of the
Corporation; perform all duties required by the Bylaws of the Corporation,
and as may be assigned from time to time by the Board of Directors; and shall
make such reports to the Board of Directors and Stockholders as may be
required. In addition, if no Chairman of the Board is elected by the Board or
if the Chairman is unavailable, the Chief Executive Officer shall perform all
the duties required of such officer by these Bylaws.

SECTION 3. PRESIDENT.

The President shall, if no Chief Executive Officer shall have been
appointed or if the Chief Executive Officer is unavailable, perform all of
the duties of the Chief Executive Officer. If a Chief Executive Officer shall
have been appointed, the President shall perform such duties as shall be
assigned by the Board of Directors, and in the case of absence, death or
disability of the Chief Executive Officer, shall perform and be vested with
all of the duties and powers of the Chief Executive Officer, until the Chief
Executive Officer shall have resumed such duties or the Chief Executive
Officer's successor shall have been appointed.

SECTION 4. VICE PRESIDENT.

The Vice President, or any of them, shall perform such duties as
shall be assigned by the Board of Directors, and in the case of absence,
disability or death of the President, the Vice President shall perform and be
vested with all the duties and powers of the President, until the President
shall have resumed such duties or the President's successor is elected. In
the event there is more than one Vice President, the Board of Directors may
designate one or more of the Vice Presidents as Executive Vice Presidents,
who, in the event of the absence, disability or death of the President shall
perform such duties as shall be assigned by the Board of Directors.

SECTION 5. SECRETARY.

The Secretary shall keep a record of the proceedings at the meetings of
the Stockholders and the Board of Directors and shall give notice as required in
these Bylaws of all such meetings;

BYLAWS - Page 7
<PAGE>

have custody of all the books, records and papers of the Corporation, except
such as shall be in charge of the Treasurer or some other person authorized
to have custody or possession thereof by the Board of Directors; sign all
Certificates of Stock of the Corporation; from time to time make such reports
to the officers, Board of Directors and Stockholders as may be required and
shall perform such other duties as the Board of Directors may from time to
time delegate. In addition, if no Treasurer is elected by the Board, the
Secretary shall perform all the duties required of the office of Treasurer by
the Act and these Bylaws.

SECTION 6. TREASURER.

The Treasurer shall keep accounts of all monies of the Corporation
received or disbursed; from time to time make such reports to the officers,
Board of Directors and Stockholders as may be required, perform such other
duties as the Board of Directors may from time to time delegate.

SECTION 7. ASSISTANT SECRETARY.

The Assistant Secretary, if any, shall assist the Secretary in all
duties of the office of Secretary. In the case of absence, disability or
death of the Secretary, the Assistant Secretary shall perform and be vested
with all the duties and powers of the Secretary, until the Secretary shall
have resumed such duties or the Secretary's successor is elected.

ARTICLE V

STOCK

SECTION 1. CERTIFICATES.

The shares of stock of the Corporation shall be evidenced by an
entry in stock transfer records of the Corporation, and may be represented by
stock certificates in a form adopted by the Board of Directors and every
person who shall become a Stockholder shall be entitled, upon request, to a
certificate of stock. All certificates shall be consecutively numbered by
class. Certificates, if any, shall be signed by the Chairman of the Board of
Directors, the President or one of the Vice Presidents, and the Secretary or
an Assistant Secretary or the Treasurer or an Assistant Treasurer, provided,
however, that where such certificates are signed by a transfer agent or an
assistant transfer agent or by a transfer clerk acting on behalf of the
Corporation and a registrar, the signature of any such officer may be
facsimile.

SECTION 2. TRANSFER OF CERTIFICATES.

Any certificates of stock transferred by endorsement shall be
surrendered, canceled and new certificates issued to the purchaser or
assignee.

SECTION 3. TRANSFER OF SHARES.

Shares of stock shall be transferred only on the books of the
Corporation by the holder thereof, in person or by his attorney, and no
transfers of certificates of stock shall be binding upon

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<PAGE>

the Corporation until this Section and, with respect to certificated shares,
Section 2 of this Article are met to the satisfaction of the Secretary of the
Corporation.

The Board of Directors may make other and further rules and
regulations concerning the transfer and registration of shares of the
Corporation, and may appoint a transfer agent or registrar or both and may
require all certificates of stock to bear the signature of either or both.

The stock ledgers of the Corporation, containing the names and
addresses of the stockholders and the number of shares held by them
respectively, shall be kept at the principal offices of the Corporation or at
the offices of the transfer agent of the Corporation.

SECTION 4. LOST CERTIFICATES.

In the case of loss, mutilation or destruction of a certificate of
stock, a duplicate certificate may be issued upon such terms as the Board of
Directors shall prescribe.

SECTION 5. DIVIDENDS.

The Board of Directors may from time to time declare, and the
Corporation may then pay, dividends on its outstanding shares in the manner
and upon the terms and conditions provided by the Act and in its Certificate
of Incorporation.

SECTION 6. WORKING CAPITAL.

Before the payment of any dividends or the making of any
distributions of the net profits, the Board of Directors may set aside out of
the net profits of the Corporation such sum or sums as in their discretion
they think proper, as a working capital or as a reserve fund to meet
contingencies. The Board of Directors may increase, diminish or vary the
capital of such reserve fund in their discretion.

ARTICLE VI

SEAL

There shall be no corporate seal.

ARTICLE VII

WAIVER OF NOTICE

Whenever any notice is required to be given to any Stockholder or
Director of the Corporation, a waiver signed by the person or persons
entitled to such notice, whether before or after the time stated therein,
shall be equivalent to the giving of such notice.
BYLAWS - Page 9
<PAGE>

ARTICLE VIII

ACTION BY STOCKHOLDERS OR DIRECTORS WITHOUT A MEETING

Any action required to be taken at a meeting of the Stockholders of
the Corporation, or any other action which may be taken at a meeting of the
Stockholders, may be taken without a meeting, if a consent in writing setting
forth the actions so taken shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted with respect to the subject
matter thereof. Such consent shall have the same effect and force as a vote
of said Stockholders.

Any action required to be taken at a meeting of the Board of
Directors of the Corporation, or any other action which may be taken at a
meeting of the Board of Directors, or any committee thereof, may be taken
without a meeting if a consent in writing setting forth the actions so taken
shall be signed by all of the members of the Board of Directors or committee,
as the case may be. Such consent shall have the same effect and force as a
unanimous vote of said Directors or committee.

ARTICLE IX

BORROWING

Notwithstanding any other provision in these Bylaws, no officer of
the Corporation shall have authority to obligate the Corporation to borrow
any funds or to hypothecate any assets thereof, for corporate purposes or
otherwise, except as expressly stated in a resolution approved by a majority
of Directors. Such resolution may be general or specific.

ARTICLE X

INDEMNIFICATION

The Corporation shall, to the fullest extent permitted by law,
indemnify its directors and officers, and may indemnify its employees and
agents. The Corporation may enter into indemnification agreements pursuant to
which the Corporation agrees to indemnify any officer, director, employee or
agent to the fullest extent permitted by law.

ARTICLE XI

MISCELLANEOUS

SECTION 1. FISCAL YEAR.

The fiscal year of the Corporation shall be fixed, and may be
changed, by resolution of the Board of Directors.

BYLAWS - Page 10
<PAGE>

SECTION 2. NOTICES.

Except as otherwise expressly provided, any notice required by these
Bylaws to be given shall be sufficient if given as provided in the General
Corporation Law of Delaware.

SECTION 3. WAIVER OF NOTICE.

Any Stockholder or director may at any time, by writing or by fax,
waive any notice required to be given under these Bylaws, and if any
Stockholder or director shall be present at any meeting his presence shall
constitute a waiver of such notice.

SECTION 4. VOTING STOCK OF OTHER CORPORATIONS.

Except as otherwise ordered by the Board of Directors, the Chairman
of the Board, Chief Executive Officer, President or Treasurer shall have full
power and authority on behalf of the Corporation to attend and to act and to
vote at any meeting of the stockholders of any corporation of which the
Corporation is a stockholder and to execute a proxy to any other person to
represent the Corporation at any such meeting, and at any such meeting such
person shall possess and may exercise any and all rights and powers incident
to ownership of such stock and which, as owner thereof, the Corporation might
have possessed and exercised if present.

ARTICLE XII

AMENDMENTS

Any and all of these Bylaws may be altered, amended, repealed or
suspended by the affirmative vote of a majority of the Directors at any
meeting of the Directors. New Bylaws may be adopted in like manner.

BYLAWS - Page 11

<PAGE>

EXHIBIT 6.1

ACQUISITION AGREEMENT

AGREEMENT dated November 2,1998, by, between and among ALPHA BETA HOLDINGS,
LTD., a company incorporated under the laws of the state of Colorado
(hereinafter referred to as "Alpha"), MDU COMMUNICATIONS INC., a company
incorporated under the laws of Canada (hereinafter referred to as "MDU") and
those certain parties listed on Exhibit "A" attached hereto, each of whom is a
stockholder of MDU (individually referred to as a "Seller" and collectively
referred to as the "Sellers'),

WHEREAS, the Sellers own a total of 5,213,835 common shares with no par value of
MDU (the "MDU Shares") which constitute ONE HUNDRED (100%) percent of the issued
and outstanding common shares of MDU; and

WHEREAS, the Sellers desire to sell and Alpha desires to purchase ONE HUNDRED
(100%) percent of such MDU Shares;

NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:

1. PURCHASE AND SALE

Each Seller hereby agrees to sell, transfer, assign and convey to Alpha and
Alpha hereby agrees to purchase and acquire from the Sellers, ONE HUNDRED (100%)
percent of MDU Shares, solely in exchange for voting common stock of Alpha as
set forth in Section 2 hereof, in a transaction intended to qualify as a
reorganization pursuant to Section 368(a)(1)(B) of the INTERNAL REVENUE CODE OF
1986, as amended (the "Code").

2. PURCHASE PRICE

The aggregate purchase price to be paid by Alpha to the Sellers for the MDU
Shares shall be 5,213,835 shares of voting common shares with no par value of
Alpha (the "Alpha Shares"), based on an exchange ratio of one share of MDU
Shares for one share of Alpha Shares at a deemed value of US$0.01 per Alpha
Share.

3. CLOSING

(a) The Closing for the acquisition of the stock purchase contemplated
hereunder pursuant to this Agreement (the "Closing") shall be held at the
office of Maitland & Company on November 9, 1998 at Suite 700, 625 Howe
Street, Vancouver, British Columbia, Canada V6C 2T6, or at such other date
and time agreed to by the parties in writing on two days written notice.

(b) At the Closing, Alpha will notify its transfer agent to deliver to each
of the Sellers a certificate of the Alpha Shares evidencing his ownership
thereof, in accordance with the amounts specified in Exhibit "A" attached
hereto, free and clear of any liens or encumbrances of any kind, which
certificate shall contain the restrictive legend specified in Section 12
hereof, and each of the Sellers will deliver to Alpha a certificate
evidencing all of the MDU Shares owned by him, together with a stock
power, endorsed in blank.

<PAGE>

4. WARRANTIES AND REPRESENTATIONS OF MDU AND SELLERS

In order to induce Alpha to enter into the Agreement and to complete the
transaction contemplated hereby, MDU and each of the Sellers warrants and
represents to Alpha as of the date hereof and as of the Closing that:

(a) ORGANIZATION AND STANDING. MDU is a corporation duly organized, validly
existing and in good standing under the Laws of Canada, is qualified to
do business as a foreign corporation in every province, state or
jurisdiction in which it operates, as set forth in Exhibit "B-1" attached
hereto, to the extent required by the laws of such states and
jurisdictions, and has full power and authority to carry on its business
as now conducted, and to own and operate its assets, properties and
business. Attached hereto as Exhibit "B-2" is a true and correct copies
of MDU's Certificate of Incorporation and Articles and all amendments
thereto. No changes thereto will be made in any of the documents
described in Exhibit "B-2" before Closing.

(b) CAPITALIZATION. As of the date hereof, MDU's entire authorized equity
capital consists of an unlimited number of common shares with no par
value, of which 5,213,835 common shares are issued and outstanding and an
unlimited number of first preference shares with no par value, of which
none are issued and authorized. As of the Closing, there will be no other
voting or equity securities authorized or issued, nor any authorized or
issued securities convertible into voting stock, and no outstanding
subscriptions, warrants, calls, options, rights, commitments or
agreements by which MDU or each Seller is bound, calling for the issuance
of any additional common shares or any other voting or equity security of
MDU. All of such MDU Shares have been duly authorized, are validly
issued and are fully paid and non-assessable, have no pre-emptive rights,
and were issued in conformity with any applicable Federal and Provincial
securities laws. The 5,213,835 issued and outstanding MDU Shares
constitute ONE HUNDRED (100%) percent of the equity capital of MDU, which
includes ONE HUNDRED (100%) percent of voting power, right to receive
dividends, when and if declared and paid, and the right to receive the
proceeds of liquidation attributable to common stock, if any.

(c) OWNERSHIP OF MDU SHARES. As of the date hereof, the Sellers are the sole
owners of the MDU Shares, free and clear of all liens, encumbrances, and
restrictions whatsoever, except that the MDU Shares have not been
registered under the SECURITIES ACT OF 1993, as amended (the "1933 Act"),
or any applicable state or provincial securities laws. By the transfer of
the MDU Shares pursuant to this Agreement, Alpha will thereby acquire
good and marketable title to all of the capital stock of MDU, free and
clear of all liens, encumbrances and restrictions of any nature
whatsoever, except by reason of the fact that the MDU Shares will not
have been registered under the 1933 Act, or any applicable state or
provincial securities laws.

(d) TAXES. MDU has filed all Federal, provincial and local income or other
tax returns and reports that it is required to file with all governmental
agencies, wherever situate, and has paid or accrued for payment all taxes
as shown on such returns, such that a failure to file, pay

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<PAGE>

or accrue will not have a Material Adverse Effect on MDU. Such returns
have been prepared in accordance with the applicable material tax laws,
rules and regulations thereunder to which MDU is subject and MDU has
delivered a true and complete copy of all such tax returns to Alpha.

(e) NO PENDING ACTIONS. There are no material legal actions, lawsuits,
proceedings or investigations, either administrative or judicial, pending
or threatened, against or affecting MDU, or against MDU Officers or
Directors or the Sellers arising out of the operations of MDU that are
reasonably likely to have a Material Adverse Effect on MDU, except as
described in Exhibit "C" attached hereto. MDU is not knowingly in
violation of any law, material ordinance or regulation of any kind
whatever, including, but not limited to laws, rules and regulations
governing the sale of its services. Neither MDU nor any Seller is subject
to any order, writ, judgment, injunction, decree, determination or award
of any court, arbitrator or administrative, governmental or regulatory
authority or body.

(f) GOVERNMENTAL REGULATION. No approval of any trade or professional
association or agency of government other than as set forth on Exhibit
"D" attached hereto, is required for any of the transaction effected by
this Agreement.

(g) OWNERSHIP OF ASSETS. Except as set forth in Exhibit "E", Alpha has good,
marketable title, without any liens or encumbrances of any nature
whatever, to all of the following, if any: its assets, properties and
rights of every type and description, including, without limitation, all
cash on hand and in banks, certificates of deposit, stocks, bonds, and
other securities, good will, customer lists, its corporate name and all
variants thereof, trademarks and trade names, copyrights and interests
thereunder, licenses and registrations, pending licenses and permits and
applications therefor, inventions, processes, know-how, trade secrets,
real estate and interests therein and improvements thereto, machinery,
equipment, vehicles, notes and accounts receivable, fixtures, rights
under agreements and leases, franchises, all rights and claims under
insurance policies and other contracts of whatever nature, rights in
receivables, books and records and all other property and rights of every
kind and nature owned or held by MDU as of this date, and will continue
to hold such title on and after the completion of the transactions
contemplated by the Agreement; nor, except in the ordinary course of its
business, has MDU disposed of any such asset since the date of the most
recent balance sheet described in Section 4(o) of this Agreement.

(h) NO INTEREST IN SUPPLIERS, CUSTOMERS, LANDLORDS OR COMPETITORS. Neither
any Seller nor any member of his family have any interest of any nature
whatever in any supplier, customer, landlord or competitor of MDU.

(i) NO DEBT OWED BY MDU TO SELLERS. Except as set forth in Exhibit "F", MDU
does not owe any money, securities, or property to any Seller or any
member of his family or to any company controlled by such a person,
directly or indirectly.

(j) CORPORATE RECORDS. All of MDU's books and records, including, without
limitation, its books of account, corporate records, minute book, stock
certificate books and other records of MDU are up-to-date, complete and
reflect accurately and fairly the conduct of its business

3
<PAGE>

in all material respects since its date of incorporation. All material
reports, returns and statements currently required to be filed by MDU,
with respect to the business and operations of MDU, with any governmental
agency have been filed or valid extensions have been obtained in
accordance with normal procedures, and all governmental reporting
requirements have been complied with.

(k) NO MISLEADING STATEMENTS OR OMISSIONS. Neither this Agreement nor any
financial statement, exhibit, schedule or document attached hereto or
presented to MDU in connection herewith, contain any materially
misleading statement, or omit any fact or statement necessary to make the
other statements or facts therein set forth not materially misleading.

(l) Validity of the Agreement. All corporate and other proceedings required
to be taken by the Seller and by MDU in order to enter into and to carry
out this Agreement have been duly and properly taken. This Agreement has
been duly executed by each Seller and by MDU, and constitutes the valid
and binding obligation of each of them, except to the extent limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other
laws relating to or effecting generally the enforcement of creditors
rights. The execution and delivery of the Agreement will not result, or
with the passage of time or notice, will not result, in the breach of any
of the terms or conditions of, or constitute a default under or violate
MDU's Certificate of Incorporation or Articles, or any material
agreement, lease, mortgage, bond, indenture, license or other material
document or undertaking, oral or written, to which MDU or the Sellers are
a party or are bound, nor will such execution and delivery violate any
order, writ, injunction, decree, law, rule or regulation of any court,
regulatory agency or other governmental body to which MDU or any Seller
is a party or is bound; and there are no restrictions which would prevent
MDU from conducting its business after the Closing as a wholly-owned
subsidiary of MDU.

(a) ENFORCEABILITY OF THE AGREEMENT. This Agreement and the Exhibits hereto
which are incorporated herein and made a part hereof, when duly executed
and delivered, will be the legal, valid and binding obligations of MDU
enforceable according to their terms, except to the extent limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other
laws relating to or effecting generally the enforcement of creditors
rights, and that at the Closing, Alpha will have acquired title in and to
the MDU Shares free and clear of all claims, liens and encumbrances.

(n) ACCESS TO BOOKS AND RECORDS. Alpha will have full and free access to
MDU's books during the course of this transaction prior to Closing,
during regular business hours.

(o) COMPLIANCE WITH LAWS; ENVIRONMENTAL OR OTHER RELATED MATTERS. MDU
operations have been conducted in all material respects in accordance
with all applicable statutes, laws, rules and regulations. MDU is not
knowingly in violation of any Federal, Provincial, local or foreign law,
ordinance or regulation or any governmental order applicable to MDU, or
by which any of its properties is subject, bound or affected, other than
those violations the existence of which will not have any Material
Adverse Effect on MDU. There is no governmental order outstanding against
MDU (nor, to the best knowledge of MDU, threatened to be issued) that
will or would have a Material Adverse Effect on MDU. Except

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<PAGE>

as disclosed herein, MDU currently holds (and at the Closing will hold)
all the environmental, health and safety and other permits, licenses,
authorizations, certificates and approvals of governmental authorities,
whether Federal, provincial, local or foreign (collectively, "Permits"),
necessary or proper for the current use, occupancy or operation of the
business, and all of the Permits are now and at the Closing will be in
full force and effect. Exhibit "G", annexed hereto and made a part
hereof, contains a list of all material Permits and all material
applications for Permits relating to MDU and its business. MDU has not
received and has no reason to believe it will receive any notice that any
governmental authority is considering revoking, cancelling, rescinding,
materially modifying or refusing to renew any of the Permits. Except as
otherwise disclosed herein, there is no existing practice, action or plan
of MDU and no existing condition of the assets of MDU that may give rise
to any civil or criminal liability under, or violate or prevent
compliance with, any environmental health or occupational safety or other
applicable statute, regulation, ordinance, decree or Permit other than
those practices, actions, plans and conditions the existence of which
will not have a Material Adverse Effect. Exhibit "H" identifies all
Permits that require consent, notification or other action to remain in
full force and effect following the consummation of the transaction
contemplated hereby.

5. WARRANTIES AND REPRESENTATIONS OF ALPHA

In order to induce the Sellers and MDU to enter into this Agreement and to
complete the transaction contemplated hereby, Alpha warrants and represents to
MDU and each Seller that:

(a) ORGANIZATION AND STANDING. Alpha is a corporation duly organized, validly
existing and in good standing under the laws of the State of Colorado is
qualified to do business as a foreign corporation in every other state in
which it operates as set forth in Exhibit "I-1" attached hereto, to the
extent required by the laws of such states, and has full power and
authority to carry on its business as now conducted and to own and
operate its assets, properties and business. Attached hereto as Exhibit
"I-2" is a true and correct copy of Alpha Certificate of Incorporation,
By-Laws and all amendments thereof. No changes thereto will be made in
any of the documents described in Exhibit "I-2" at or before the Closing,
except as provided in subsection 5(b)(ii) hereof.

(b) CAPITALIZATION.

(i) As of the date hereof, Alpha's entire authorized equity capital
consists of 50,000,000 shares of common stock with no par value
(the "Alpha Shares") and 5,000,000 shares of non-voting preferred
stock with no par value (the "Alpha Preferred Shares"), of which
4,007,500 Alpha Shares and no Alpha Preferred Shares are
currently issued and outstanding. All of such Alpha's Common and
Preferred Shares issued and outstanding at the Closing have been
duly authorized, validly issued and are fully paid and
non-assessable, have no preemptive rights and were issued in
compliance with all Federal and state securities laws. The
relative rights and preferences of Alpha's equity securities are
set forth in Alpha's Certificate of Incorporation and Alpha's
By-Laws and any amendments thereto. There are no other voting or
equity securities convertible into voting stock, and no
outstanding subscriptions, warrants,

5
<PAGE>

calls, options, rights, commitments or agreements by which Alpha
is bound, calling for the issuance of any additional shares of
common stock or any other voting or equity security, including,
without limitation, those described in Section 5(b)(ii) hereof.

(ii) The By-Laws of Alpha provide that a simple majority of the shares
voting at a stockholders' meeting at which a quorum is present
may elect all of the directors of Alpha. Cumulative voting is not
provided for by the By-Laws or Certificate of Incorporation of
Alpha.

(c) OWNERSHIP OF SHARES. By Alpha's issuance of the Alpha Shares to the
Sellers pursuant to this Agreement, each Seller will at the Closing
thereby acquire good, absolute marketable title thereto, free and clear
of all liens, encumbrances and restrictions of any nature whatsoever,
except that such Alpha Shares will not have been registered under the
1933 Act and accordingly certain hold periods may be applicable in the
United States and for any Seller who is a resident of British Columbia
there exists a restriction on the resale of the Alpha Shares in British
Columbia for a period of 12 months from the date Alpha becomes a
"reporting issuer" in British Columbia within the meaning of the BRITISH
COLUMBIA SECURITIES ACT (the "B.C. Act"). As of the Closing Alpha will
not be a "reporting issuer" in British Columbia.

(d) SIGNIFICANT AGREEMENTS. Alpha is not and will not at Closing be bound by
any of the following, other than where already disclosed in any other
exhibit, unless specifically listed in Exhibit "J" hereto:

(i) employment, advisory or consulting contract and has no employees;

(ii) any plan providing for employee benefits of any nature;

(iii) any lease with respect to any property or equipment;

(iv) any contract or commitment for any future expenditure in excess
of $1,000;

(v) any contract or commitment pursuant to which it has assumed,
guaranteed, endorsed, or otherwise become liable for any
obligation of any other person, firm or organization;

(vi) any contract, agreement, understanding, commitment or
arrangement, other than in the normal course of business, not
fully disclosed or set forth in the Agreement or in Alpha's
Financial Statements; or

(vii) any agreement with any person relating to the dividend, purchase
or sale of securities, that has not been settled by the delivery
or payment of securities when due, and which remains unsettled
upon the date of the execution and delivery of this Agreement.

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<PAGE>

(e) TAXES. Alpha has filed all federal, state and local income or other tax
returns and reports that it is required to file with all governmental
agencies, wherever situate, and has paid all taxes as shown on such
returns. All of such returns have been prepared in accordance with the
applicable tax laws and rules and regulations thereunder to which Alpha
is subject. To Alpha's knowledge, there is no audit or threat of any
audit of any tax return for any period, and Alpha knows of no basis for
the assertion of any additional taxes of any kind.

(f) ABSENCE OF LIABILITIES. At and as of the Closing Date, Alpha will have no
liabilities of any kind or nature, fixed or contingent, except for (i)
the costs, including legal and accounting fees and other expenses, in
connection with this transaction, for which Alpha agrees to be solely
responsible and to pay in full at or before the Closing, and (ii) the
transactions described in subsections 5(b)(ii) and 8(c) hereof.

(g) NO PENDING ACTIONS; SECURITIES ISSUANCE. There are no material legal
actions, lawsuits, proceedings or investigations, either administrative
or judicial, pending or threatened, against or affecting Alpha, or
against any of Alpha's officers or directors and arising out of their
operation of Alpha that are reasonably likely to have a Material Adverse
Effect on Alpha and Alpha has not violated any law, ordinance or
regulation of any kind whatever, including, but not limited to the 1933
Act, the 1934 Act, the rules and regulations of the SEC, or the
securities laws and regulations of any state or province. Alpha is not
subject to any order, writ, judgement, injunction, decree, determination
or aware of any court, arbitration or administrative, governmental or
regulatory authority or body. All of Alpha's common stock issued and
outstanding at the Closing will have been issued in compliance with all
Federal and state securities laws. Alpha is not an investment company as
defined in the securities laws. Alpha is not required to file reports
pursuant to either Section 13 or 15(d) of the 1934 Act.

(h) CORPORATE RECORDS. All of Alpha's books and records, including without
limitation, its books of account, corporate records, minute book, stock
certificate books and other records are up-to-date, complete and reflect
accurately and fairly the conduct of its business in all material
respects since its date of incorporation. All of said books and records
will be delivered to Alpha's new directors at the Closing.

(i) NO MISLEADING STATEMENTS OR OMISSIONS. Neither this Agreement nor any
financial statement, exhibit, schedule or document attached hereto or
presented to MDU or the Sellers in connection herewith contains any
materially misleading statement, or omits any fact or statement necessary
to make the other statements or facts herein set forth not materially
misleading.

(j) VALIDITY OF THE AGREEMENT. All corporate and other proceedings required
to be taken by Alpha in order to enter into and to carry out this
Agreement have been duly and properly taken. This Agreement has been
duly executed by Alpha and constitutes a valid, binding and enforceable
obligation of Alpha, except to the extent limited by applicable
bankruptcy reorganization, insolvency, moratorium or other laws relating
to or effecting generally the enforcement of creditors rights. The
execution and delivery of this Agreement will not result, or, with the
passage of time or notice, will not result, in the breach of any of the
terms

7
<PAGE>

or conditions of, or constitute a default under or violate Alpha's
Certificate of Incorporation or By-Laws, or any agreement, lease,
mortgage, bond, indenture, license or other document or undertaking, oral
or written, to which Alpha is a party or is bound or may be affected, nor
will such execution, delivery and carrying out violate any order, writ,
injunction, decree, law, rule or regulation of any court, regulatory
agency or other governmental body.

(k) ENFORCEABILITY OF THE AGREEMENT. When duly executed and delivered, this
Agreement and the Exhibits hereto which are incorporated herein and made
a part hereof are legal, valid, and enforceable obligations of Alpha
according to its terms, except to the extent limited by applicable
bankruptcy reorganization, insolvency, moratorium or other laws relating
to or effecting generally the enforcement of creditors rights, and that
at the time of such execution and delivery, the Sellers will have
acquired good marketable title in and to the Alpha Shares acquired
pursuant hereto, free and clear of all liens and encumbrances, other than
the restrictions applicable under the 1933 Act and the B.C. Act.

(l) ACCESS TO BOOKS AND RECORDS. MDU and the Sellers will have full and free
access during regular business hours and on reasonable prior notice to
Alpha's books and records during the course of this transaction prior to
and at the Closing.

(m) ALPHA'S FINANCIAL STATEMENTS. At or before the Closing, Alpha will
provide MDU and the Sellers with its audited financial statements as of
September 30, 1996, September 30, 1997 and September 30, 1998 (the "Alpha
Financial Statements"). The Alpha Financial Statements and the notes
thereto are true, complete and accurate and fairly present the
consolidated assets, liabilities and financial condition of Alpha as at
the dates thereof, in accordance with generally accepted accounting
principles consistently applied throughout the periods involved. Alpha
does not have any liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) which were not fully reflected in the
Alpha Financial Statements.

(n) ALPHA'S FINANCIAL CONDITION. At the Closing, and after consummation of
all of the transactions contemplated hereby, Alpha will have no material
assets or liabilities.

(o) DIRECTORS' AND STOCKHOLDER APPROVAL. Promptly upon the execution and
delivery of this Agreement, but in any event, on or before the Closing,
Alpha's Board of Directors, and its shareholders, if required, by meeting
or consent, will have approved this Agreement, and all matters set forth
herein as conditions precedent to the consummation by the Sellers of the
Closing hereunder.

(p) CONSENTS. Except as described in Section 8 hereof, no consent of any
person is necessary to the consummation of the transaction contemplated
hereby, including, without limitation, consents from parties to loans,
contracts, leases, other agreements, or any governmental agency.

(q) NO BROKERS. Except as set forth in paragraph 12, no broker, finder or
investment broker is entitled to any brokerage, finder's or other fee or
commission in connection with any of the transactions contemplated by
this Agreement.

8
<PAGE>

(r) COMPLIANCE WITH LAWS; ENVIRONMENTAL OR OTHER RELATED MATTERS. Alpha's
operations have been conducted in all material respects in accordance
with all applicable statutes, laws, rules and regulations. Alpha is not
in violation of any Federal, state, local or foreign law, ordinance or
regulation or any governmental order applicable to Alpha, or by which any
of its properties is subject, bound or affected, other than those
violations the existence of which will not have any Material Adverse
Effect on Alpha. There is no governmental order outstanding against Alpha
(nor, to the best knowledge of Alpha, threatened to be issued) that will
or would have a Material Adverse Effect on Alpha. Except as otherwise
disclosed herein, to the best of the knowledge of Alpha there is no
existing practice, action or plan of Alpha and no existing condition of
the assets of Alpha that may give rise to any material civil or criminal
liability under, or violate or prevent compliance with, any environmental
health or occupational safety or other applicable statute, regulation,
ordinance or decree other than those practices, actions, plans and
conditions the existence of which will not have a Material Adverse Effect
on Alpha.

6. SURVIVAL OF TERMS

All of the terms and condition of this Agreement, together with the warranties,
representations and covenants contained herein or in any instrument or document
delivered to or to be delivered pursuant to this Agreement, shall survive the
execution of this Agreement and the Closing, notwithstanding any investigation
heretofore or hereafter made by or on behalf of any party hereto; provided,
however, that (a) the agreements and covenants set forth in this Agreement shall
survive and continue until all obligations set forth therein shall have been
performed and satisfied; and (b) all representations and warranties shall
survive and continue for, and all claims with respect thereto shall be made
prior to the end of 12 months from the Closing.

7. THE ALPHA SHARES AND THE MDU SHARES

All of the Alpha Shares and the MDU Shares shall be validly issued, fully paid
and non-assessable shares of Alpha's and MDU's respective Common Stock, with
full voting rights, dividend rights, and right to receive the proceeds of
liquidation, if any, as set forth in the respective Certificates of
Incorporation.

8. CONDITIONS PRECEDENT TO CLOSING BY THE SELLERS

Each and every obligation of Alpha under this Agreement to be performed on or
before the Closing shall be subject to the satisfaction, on or before the
Closing, of each of the following conditions, unless waived in writing by the
Sellers:

(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and warranties
of Alpha contained in this Agreement and in all certificates and other
documents delivered and to be delivered by Alpha to the Sellers pursuant
hereto or in connection with the transactions contemplated hereby shall
be in all material respects true and accurate as of the date when made
and at and as of the Closing as though such representations and
warranties were made at and as of such date;

9
<PAGE>

(b) PERFORMANCE. Alpha shall have performed and complied with all agreements,
obligations and conditions required by this Agreement to be performed or
complied with by it on or prior to the Closing;

(c) BOARD OF DIRECTOR AND SHAREHOLDER APPROVAL. Alpha's Board of Directors
and, if required by law, its shareholders shall have approved the
transactions contemplated by this Agreement, including the
Reorganization, in the manner required by applicable state law and the
signing officers have executed and delivered this Agreement;

(d) NO GOVERNMENTAL PROCEEDING OR LITIGATION. No suit, action, investigation,
inquiry or other proceeding by any governmental body or other person or
legal or administrative proceeding shall have been instituted or
threatened which challenges the validity or legality of the transactions
contemplated hereby;

(e) PROCEEDINGS. All proceedings to be taken in connection with the
transactions contemplated by this Agreement by Alpha, and all documents
incident thereto, shall be reasonably satisfactory to the Sellers and
their counsel, and the Sellers shall have received a true, correct and
complete copy of all such documents as the Sellers or their counsel may
reasonably request in order to establish the consummation of such
transactions and the taking of all proceedings in connection therewith;

(f) LEGAL OPINION. Alpha shall have delivered to the Sellers an opinion of
counsel for Alpha, in form and substance reasonably satisfactory to each
of them and their counsel (a) stating that all of the shares of Alpha's
common stock issued prior to or as of the Closing, including the Alpha
Shares, were issued in compliance with the applicable provisions of all
Federal and state securities law and reflecting the basis for the
exemption from registration of the shares of Alpha's common stock issued
pursuant to Section 5(b)(ii) hereof, and (b) stating that counsel for
Alpha has no knowledge of any violation of any Federal and state
securities laws by Alpha and neither has any knowledge of the basis for
the assertion of any claim relating thereto;

(g) CERTIFICATES. Alpha shall have furnished the Sellers with such
certificates of its officers to evidence the compliance with the
conditions set forth in this Agreement as may be reasonably requested by
the Sellers.

9. CONDITIONS PRECEDENT TO CLOSING BY THE ALPHA

Each and every obligation of the Sellers and MDU under this Agreement to be
performed on or before the Closing shall be subject to the satisfaction, on or
before the Closing, of each of the following conditions, unless waived in
writing by Alpha:

(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and warranties
of Sellers and MDU contained in this Agreement and in all certificates
and other documents delivered and to be delivered by the Sellers and MDU
to Alpha pursuant hereto or in connection with the transactions
contemplated hereby shall be in all material respects true, complete and
accurate

10
<PAGE>

as of the date when made and at and as of the Closing as though such
representations and warranties were made at and as of such date;

(b) PERFORMANCE. The Sellers and MDU shall have performed and complied with
all agreements, obligations and conditions required by this Agreement to
be performed or complied with by them on or prior to the Closing;

(e) PROCEEDINGS. All proceedings to be taken in connection with the
transactions contemplated by this Agreement by the Sellers and MDU, and
all documents incident thereto, shall be reasonably satisfactory to Alpha
and its counsel, and Alpha shall have received a true, correct and
complete copy of all such documents as Alpha or its counsel may
reasonably request in order to establish the consummation of such
transactions and the taking of all proceedings in connection therewith;

(f) CERTIFICATES. The Sellers shall have furnished Alpha with such
certificates to evidence the compliance with the conditions set forth in
this Section 9 as may be reasonably requested by Alpha;

(g) LEGAL OPINION. The Sellers and MDU shall have delivered to Alpha an
opinion of counsel for MDU, in form and substance reasonably satisfactory
to Alpha and its counsel stating that (a) MDU is duly organized and
validly existing under the laws of Canada and is in good standing with
the Office of the Director of Companies of Canada; (b) all necessary
steps and corporate proceedings have been taken to permit the MDU Shares
to be duly and validly transferred to and registered in the name of Alpha
or its nominees; (c) the number of authorized and issued shares in the
capital of MDU are as warranted by the Sellers and all issued shares are
duly authorized, validly issued and outstanding as fully paid and
nonassessable; and (d) that counsel for MDU has no knowledge of any
violation of any provincial securities laws by MDU and neither has any
knowledge of the basis for the assertion of any claim relating thereto;
and

(h) NO MATERIAL ADVERSE EFFECT. There shall have been no Material Adverse
Effect with respect to MDU and Alpha shall have received a certificate of
MDU and the Sellers to such an effect, signed by a duly authorized
officer of MDU and by the Sellers.

10. TERMINATION

This Agreement may be terminated at any time before or at Closing by:

(a) The mutual agreement of the parties;

11
<PAGE>

(b) Any party if:

(i) any provision of this Agreement applicable to a party shall be
materially untrue or fail to be accomplished;

(ii) any legal proceeding shall have been instituted or shall be
imminently threatening to delay, restrain or prevent the
consummation of this Agreement or any material component thereof.

Upon the termination of this Agreement for any reason, in accordance with the
terms and conditions set forth in this Section, each said party shall bear all
of its own costs and expenses and no party shall be liable to the other.

11. POST CLOSING ITEMS

(a) Following the Closing, Alpha will change its name to "MDU Communications
International Inc.". The parties agree to take all steps as are necessary
or appropriate to effectuate such change of name.

(b) Within 10 days after the Closing, Alpha shall file with the Securities
and Exchange Commission and any state security regulatory authority such
forms as are required under applicable Federal and state securities laws
in connection with the transactions contemplated under this Agreement.

12. ENTIRE AGREEMENT; WAIVER OF BREACH

This Agreement constitutes the entire agreement between the parties and
supersedes any prior agreement or understanding among them in respect of the
subject matter hereof, and there are no other agreements, written or oral, nor
may the Agreement be modified except in writing and executed by all of the
parties hereto; and no waiver of any breach or condition of this Agreement shall
be deemed to have occurred unless such waiver is in writing, signed by the party
against whom enforcement is sought, and no waiver shall be claimed to be a
waiver of an subsequent breach or condition of a like or different nature.

13. NO THIRD PARTY BENEFICIARIES

The provisions of this Agreement are for the exclusive benefit of the parties
who are signatories hereto and their permitted successors and assigns, and no
third party shall be a beneficiary or, or have any rights by virtue of this
Agreement.

14. ASSIGNMENT; BINDING EFFECT

This Agreement, including both its obligations and benefits, shall inure to the
benefit of, and be binding on the respective permitted assigns, transferees,
successors and heirs of the parties. This Agreement may not be assigned or
transferred in whole or in part by any party without the prior written consent
of all other parties.

12
<PAGE>

15. MATERIAL ADVERSE EFFECT

As used in this Agreement, "Material Adverse Effect" with respect to a party
means any change in, or effect on, the business conducted by such party that is,
or is reasonably likely to be, materially adverse to (i) the business result of
operations, prospects or condition (financial or otherwise) of such party and
its subsidiaries, taken as a whole, or (ii) the assets and properties used or
useful in the conduct of the business of such party and its Subsidiaries, taken
as a whole.

16. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Colorado, determined without regard to its
conflicts of law principles. All parties hereto (i) agree that any legal suit,
action or proceeding arising out of or relating to this Agreement shall be
instituted only in a federal or state court in Colorado, (ii) waive any
objection which they may now or hereafter have to the laying of the venue of any
such suit, action or proceeding, and (iii) irrevocably submit to the exclusive
jurisdiction of such federal or state court in Colorado in any such suit, action
or proceeding, but such consent shall not constitute a general appearance or be
available to any other person who is not a party to this Agreement.

17. COUNTERPARTS

This Agreement may be executed in duplicate facsimile counterparts, each of
which shall be deemed an original and together shall constitute one and the same
binding Agreement, with one counterpart being delivered to each party hereto.

18. SEVERABILITY

If any provision of this Agreement shall be held invalid or unenforceable, such
invalidity or unenforceability shall attach only to such provision and shall not
in any manner affect or render invalid or unenforceable any other severable
provision of this Agreement, and this Agreement shall be carried out as if any
such invalid or unenforceable provision were not contained herein.

19. RESTRICTIVE LEGEND

Each certificate representing shares of Alpha Common Stock being issued to the
Sellers shall bear the following legend in addition to such other restrictive
legends as may be required by law or as mutually agreed by all parties hereto:

"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), or any state
securities laws, and no sale or transfer thereof may be effected without
an effective registration statement or an opinion of counsel for the
holder, satisfactory to the company, that such registration is not
required under the Act and any applicable state securities laws."

13
<PAGE>

20. NUMBER AND GENDER

Wherever from the context it appears appropriate, each term stated in either the
singular or the plural shall include the singular and the plural, and pronouns
stated in either the masculine, the feminine or the neuter gender shall include
the masculine, feminine and neuter.

21. EXPENSES; TRANSFER TAXES, ETC.

Whether or not the transaction contemplated by this Agreement shall be
consummated, each party agrees that all fees and expenses incurred by each of
them in connection with this Agreement shall be borne by each of them
respectively, and no party shall be liable for the expenses of any other party
hereunder.

IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the
date and year above first written.

ALPHA BETA HOLDINGS LTD.,
by its Authorized Signatory:

/s/ Joe Cheung
- ----------------------------------
Signature
Print Name: JOE CHEUNG
----------------------

MDU COMMUNICATIONS LTD.,
by its Authorized Signatory:

/s/ Douglas J. Irving
- ----------------------------------
Signature
Print Name: DOUGLAS J. IRVING
----------------------

SELLERS:

567780 B.C. LTD.,
by its Authorized Signatory:

/s/ Douglas J. Irving
- ----------------------------------
Signature
Print Name: DOUGLAS J. IRVING
----------------------

14
<PAGE>

571324 B.C. LTD.,
by its Authorized Signatory:

/s/ Tony Tanti
- ----------------------------------
Signature
Print Name: TONY TANTI
----------------------

504322 B.C. LTD.,
by its Authorized Signatory:

/s/ Douglas J. Irving
- ----------------------------------
Signature
Print Name: DOUGLAS J. IRVING
----------------------

565423 B.C. LTD.,
by its Authorized Signatory:

/s/ Gary Monaghan
- ----------------------------------
Signature
Print Name: GARY MONAGHAN
----------------------

ANDREOLA HOLDINGS LTD.,
by its Authorized Signatory:

/s/ Paul Andreola
- ----------------------------------
Signature
Print Name: PAUL ANDREOLA
----------------------

GLEESON ENTERPRISES LTD.,
by its Authorized Signatory:

/s/ Patrick J. Gleeson
- ----------------------------------
Signature
Print Name: PATRICK J. GLEESON
----------------------

571321 B.C. LTD.,
by its Authorized Signatory:

/s/ Douglas J. Irving
- ----------------------------------
Signatory:
Print Name: DOUGLAS J. IRVING
----------------------

15
<PAGE>

EXECUTED ON BEHALF OF
GOLDEN CAPITAL SECURITIES LTD.,
by Attorney, in fact and in law, Douglas Irving:

/s/ Douglas J. Irving
- ----------------------------------
Signature DOUGLAS J. IRVING

EXECUTED ON BEHALF OF
WISTARIA TRUST by Moore Stephens
International Services (BVI) Limited

/s/ Douglas J. Irving
- ----------------------------------
Signature
Print Name: DOUGLAS J. IRVING
----------------------

EXECUTED ON BEHALF OF
Scott Lesage, Peter Hewlett, Andrew
Fitzpatrick, Bruno Benedet, John Dekam,
Les Porter, Robert Overland, Mario Dalla Zanna,
Arni Johannson I, Robert Philips, Vera Deane,
Arthur Griffiths and Arni Johannson, by Attorney,
in fact and in law, Douglas Irving:

/s/ Douglas Irving
- ----------------------------------
Signature DOUGLAS IRVING
----------------------

16
<PAGE>

EXHIBIT "A"

SHAREHOLDERS OF MDU

<TABLE>
<CAPTION>
NUMBER OF NUMBER OF
NAME AND ADDRESS MDU SHARES ALPHA SHARES
- ---------------- ---------- ------------
<S> <C> <C>
567780 B.C. Ltd. 694,640 694,640
571321 B.C. Ltd. 694,640 694,640
504322 B.C. Ltd. 50,020 50,020
565423 B.C. Ltd. 694,640 694,640
Andreola Holdings Ltd. 694,640 694,640
Gleeson Enterprises Ltd. 694,640 694,640
571324 B.C. Ltd. 694,640 694,640
Moore Stephens International
Services (BVI) Limited,
ITF Wistaria Trust 694,640 694,640
Golden Capital Securities Ltd. 50,000 50,000
Scott Lesage 6,667 6,667
Peter Hewlett 13,333 13,333
Andrew Fitzpatrick 16,667 16,667
Bruno Benedet 16,667 16,667
John Dekam 6,667 6,667
Les Porter 6,667 6,667
Robert Overland 6,667 6,667
Mario Dalla Zanna 16,667 16,667
Arni Johannson I 16,667 16,667
Arthur Griffiths 60,000 60,000
Arni Johannson 70,000 70,000
Robert Phillips 7,333 7,333
Vera Deane 7,333 7,333

TOTAL: 5,213,835 5,213,835
</TABLE>

ALL C/O THE FOLLOWING ADDRESS:

Wilson Danderfer Banno & Mitchell
Barristers & Solicitors
1450 - 1075 West Georgia Street
Vancouver, B.C.
V6E 3C9

Attention: Miles Alperstein

<PAGE>

EXHIBIT "B-1"

CORPORATE REGISTRATIONS

British Columbia

<PAGE>

EXHIBIT "B-2"

CERTIFICATE OF INCORPORATION AND ARTICLES OF MDU

<PAGE>

SCHEDULE "B-2"

[LOGO]

CERTIFICATE
OF INCORPORATION

CANADA BUSINESS
CORPORATIONS ACT

MDU COMMUNICATIONS INC.

- ----------------------------------------------
NAME OF CORPORATION - DENOMINATION DE LA SOCIETE

I hereby certify that the above-named corporation, the articles of incorporation
of which are attached, was incorporated under the CANADA BUSINESS CORPORATIONS
ACT.

/s/ [ILLEGIBLE]

DIRECTOR - DIRECTEUR

CERTIFICAT
DE CONSTITUTION

LOI CANADIENNE SUR
LES SOCIETES PAR ACTIONS

342357-3

- ----------------------------------------------
CORPORATION NUMBER - NUMERO DE LA SOCIETE

Je certifie que la societe susmentionnee, dont les statuts constitutifs sont
joints, a ete constituee en societe en vertu de la LOI CANADIENNE SUR LES
SOCIETES PAR ACTIONS.

MARCH 26, 1998/LE 26 MARS 1998

DATE OF INCORPORATION - DATE DE CONSTITUTION

[LOGO]

<PAGE>

Industry and Science Canada
Canada Business FORM 1
Corporations Act ARTICLES OF INCORPORATION
(SECTIONS 6)

- --------------------------------------------------------------------------------
1 Name of Corporation

MDU COMMUNICATIONS INC.
- --------------------------------------------------------------------------------
2 The place in Canada where the registered office is to be situated

Regional municipality of Vancouver in the Province of British
Columbia

- --------------------------------------------------------------------------------
3 The classes and any maximum number of shares that the Corporation is
authorized to issue

The annexed SCHEDULE I is incorporated in this form
- --------------------------------------------------------------------------------
4 Restrictions, if any, on share transfers

The annexed SCHEDULE II is incorporated in this form
- --------------------------------------------------------------------------------
5 Number (or minimum and maximum number) of directors

Minimum of 1 and Maximum of 7

- --------------------------------------------------------------------------------
6 Restrictions, if any, on business the corporation may carry on

None
- --------------------------------------------------------------------------------
7 Other provisions, if any

The annexed SCHEDULE III is incorporated in this form
- --------------------------------------------------------------------------------
8 INCORPORATORS
- --------------------------------------------------------------------------------
NAME(S) ADDRESS (INCLUDE POSTAL CODE) SIGNATURE
- --------------------------------------------------------------------------------

Miles Alperstein 4700 Camlann Court /s/ Miles Alperstein
Richmond, BC V7C 4S1
- --------------------------------------------------------------------------------
FOR DEPARTMENTAL USE ONLY Filed
Corporation No.

342357-3 MAR 26 1998
- --------------------------------------------------------------------------------

<PAGE>

SCHEDULE I

3. The classes and any maximum number of shares that the Corporation is
authorized to issue:

(1) an unlimited number of common shares, the holders of which are entitled
to vote at all meetings of shareholders, to receive dividends and to receive the
remaining property of the corporation upon dissolution; and

(2) an unlimited number of First Preference Shares, issuable in series, to
which are attached, as a class, the following rights, restrictions, conditions
and limitations:

1. The First Preference Shares may at any time and from time to time be
issued in one or more series, to consist of such numbers of shares as may,
before issuance of such series, be fixed by the directors by Articles of
Amendments in accordance with the procedure set forth in the Canada Business
Corporations Act (the "Act") respecting the issuance of shares in series;

2. The directors of the Corporation may (subject to the limitations set
forth herein and in the Act) fix by Articles of Amendment in accordance with the
procedure set forth in the Act respecting the issuance of shares in series and,
prior to the issuance of any shares of a particular series of First Preference
Shares authorized to be issued, the designation, rights, privileges,
restrictions and conditions to attach to the First Preference Shares of that
particular series, including, without limiting the generality of the foregoing,
the rate of preferential dividends and whether or not the same shall be
cumulative, the dates of payment thereof, the rights, if any, to participate in
further dividends and other distributions made by the Corporation, the
redemption price and terms and conditions of redemption, including the rights,
if any, of the holders of the First Preference Shares of such series to require
the redemption thereof, the voting rights and conversion rights, if any, and any
redemption fund, purchase fund or other provisions to be attached to the First
Preference Shares of such series;

3. If any amount:

(a) of cumulative dividends, whether or not declared, or declared non-
cumulative dividends; or

(b) payable on return of capital in the event of the liquidation,
dissolution or winding-up of the Corporation or other distribution
of assets of the Corporation among its shareholders for the
purposes of winding-up its affairs;

in respect of shares of a series of First Preference Shares is not paid in full,
the shares of such series shall participate rateably with the shares of all
other series of the First Preference Shares in respect of:

(d) all amounts payable on return of capital in the event of the
liquidation, dissolution or winding-up of the Corporation or other
distribution of assets

-1-
<PAGE>

of the Corporation among its shareholders for the purposes of
winding-up its affairs;

as the case may be.

4. The First Preference Shares of any series may be given such preferences
over, or rights to participate with, any other shares of the Corporation ranking
junior to the First Preference Shares (including in respect of, but not in any
way limited to, payment of dividends, repayment of capital and distribution of
assets in the event of liquidation, dissolution or winding-up of the
Corporation, or other distribution of assets of the Corporation among its
shareholders for the purposes of winding-up its affairs, (whether voluntary or
involuntary), as may be fixed by the directors of the Corporation in the
preferences, rights, conditions, restrictions, limitations and prohibitions
attached to such series;

5. No preferences, rights, conditions, restrictions, limitations or
prohibitions attached to a series of First Preference Shares shall confer upon
the shares of that or another series of the First Preference Shares a priority
in respect of:

(a) dividends; or

(b) return of capital in the event of liquidation, dissolution or
winding-up of the Corporation or other distribution of assets of
the Corporation among its shareholders for the purposes on
winding-up its affairs;

over the shares of any other series of the First Preference Shares.

6. Subject to the provisions of the Act and the provisions attached to any
particular series of First Preference Shares, First Preference Shares of any
series, if so provided in the rights, privileges, restrictions and conditions
attached to such series, may be purchased for cancellation or made subject to
redemption at the option of the Corporation or the holder thereof at such time
and at such price and upon such other terms and conditions as may be specified
in the rights, privileges, restrictions and conditions attaching to the First
Preference Shares of such series;

7. No holder of First Preference Shares shall be entitled, as such, to any
preemptive right to subscribe for the purchase or to receive any part of any
issue of shares, or of bonds, debentures or other securities of the Corporation,
whether now or hereafter authorized or issued; provided, however, that,
notwithstanding the foregoing, if so specified in the rights, privileges,
restrictions and conditions attached to a particular series of First Preference
Shares authorized to be issued, the holders of such series of First Preference
Shares may be given a pre-emptive rights subscribe for the purchase of or to
receive all or a part of any issue of shares or of bonds, debentures or other
securities of the Corporation, whether now or hereafter authorized or issued,
upon such terms and conditions as may be specified in such rights, privileges,
restrictions and conditions.

8. The holders of the First Preference Shares shall not, as such, have any
right to vote separately as a class or series upon any proposal to amend the
articles of the Corporation to:

-2-
<PAGE>

(a) increase any maximum number of authorized shares of any class of
shares of the Corporation having rights or privileges ranking in
priority to or equal with the First Preference Shares; or

(b) effect an exchange, reclassification or cancellation of all or part
of the First Preference Shares; or

provided that, notwithstanding the foregoing, if so specified in the provisions
attached to a particular series of First Preference Shares authorized to be
issued and subject to such limitations as may be specified therein, the
Corporation shall be required to obtain the approval by special resolution or in
such other manner as may be provided in such rights, privileges, restrictions or
conditions, of the holders of such series of First Preference Shares to any
proposal to amend the articles of the Corporation in any of the aforesaid
respects.

SCHEDULE II

4. Restrictions, if any, on share transfers

No shares of the capital of the Corporation shall be transferred without
either (a) the sanction of the directors of the Corporation expressed either by
a resolution or by an instrument or instruments in writing signed by a majority
of the directors or alternatively (b) the sanction of the shareholders of the
Corporation expressed either by a resolution or by an instrument or instruments
in writing signed by the holders of a majority of the outstanding shares in the
capital of the Corporation.

SCHEDULE III

7. Other provisions, if any

(a) The board of directors may from time to time, without authorization of
the shareholders:

(i) borrow money upon the credit of the Corporation;

(ii) issue, reissue, sell or pledge debt obligations of the
Corporation;

(iii) subject to the Canada Business Corporations Act, give a guarantee
on behalf of the Corporation to secure performance of an
obligation of any person; and

(iv) mortgage, hypothecate, pledge or otherwise create a security
interest in all or any property of the Corporation, owned or
subsequently acquired, to secure any obligation of the
Corporation.

Nothing in this subparagraph (a) limits or restricts the borrowing of
money by the Corporation on bills of exchange or promissory notes made, drawn,
accepted or endorsed by or on behalf of the Corporation.

-3-
<PAGE>

The board of directors may from time to time by resolution delegate any
or all of the powers referred to above to a director, a committee of directors
or an officer.

For greater certainty, but without in any way limiting the powers
conferred on the board of directors hereunder, for the purpose of clause (iv) of
this subparagraph (a), "property" shall include and be deemed to include,
without limitation, both movable and immovable property.

The foregoing powers conferred on the directors shall be deemed to
include the powers conferred on a company by Division VII of the Special
Corporate Powers Act, being Chapter P-16 of the Revised Statutes of Quebec,
1977, and every statutory provision that may be substituted therefor or for any
provision therein.

(b) The number of shareholders, exclusive of persons who are in the
employment of the Corporation and exclusive of persons who, having been formerly
in the employment of the Corporation, were, while in that employment, and have
continued after termination of that employment to be, shareholders of the
Corporation, is limited to not more than fifty, two or more persons who are the
joint registered owners of one or more shares being counted as one shareholder.

-4-
<PAGE>

EXHIBIT "C"

PENDING ACTIONS

NONE

<PAGE>

EXHIBIT "D"

GOVERNMENTAL REGULATION

NONE

<PAGE>

EXHIBIT "E"

OWNERSHIP OF ASSETS

NIL

<PAGE>

EXHIBIT "F"

INDEBTEDNESS TO SELLERS

NIL

<PAGE>

EXHIBIT "G"

PERMITS AND APPLICATIONS FOR PERMITS

NIL

<PAGE>

EXHIBIT "H"

PERMITS THAT REQUIRE CONSENT TO THIS AGREEMENT

<PAGE>

EXHIBIT "I-1"

CORPORATE REGISTRATIONS

Colorado
<PAGE>

EXHIBIT "I-2"

CERTIFICATE OF INCORPORATION OF ALPHA

<PAGE>

EXHIBIT "J"

MATERIAL CONTRACTS

NONE

<PAGE>

EXHIBIT 6.2

STAR CHOICE MDU SYSTEM OPERATOR AGREEMENT

This System Operator Agreement ("Agreement") is made and entered into as of this
27th day of August, 1998 ("Execution Date") between Star Choice, a Canadian
corporation, and MDU Communications Inc. ("System Operator").

RECITALS

A. Star Choice operates a direct to Home satellite ("DTH") service
through which subscribers are able to receive video, audio, data and
other commercial programming distributed by Star Choice via a direct
to home satellite system.

B. System Operator distributes television programming and services to
residential multiple dwelling units ("MDU's").

C. Star Choice and System Operator desire to establish a
business relationship whereby System Operator will

(i) establish and maintain in certain MDU Properties Signal
Distribution Systems, to enable MDU residents to receive
Star Choice Programming via such systems, and

(ii) act as a commissioned sales representative for Star
Choice to solicit and take orders for Star Choice
Commissionable Programming Packages from residents of MDU
within Canada (the "Territory"), according to this
Agreement and the Terms and Conditions attached hereto as
Exhibit A.

ARTICLE I
DEFINITIONS

1. The following capitalized terms shall have the meanings assigned them.
Certain other capitalized terms shall have the meanings given them
elsewhere in this Agreement.

"COMMISSION" shall have the meaning assigned such term in Section 2.4(a)
hereof.

"COMMISSIONABLE PROGRAMMING PACKAGES" shall mean the Star Choice
Programming on Exhibit B hereto, for which System Operator is authorized to
solicit orders on behalf of Star Choice and is entitled to a Commission
thereon.

"COMPONENTS" shall mean such equipment, whether pre-existing or newly
installed within the MDU Property which is used to create the Signal
Distribution System, including, but not limited to, a satellite receiving
dish, integrated receiver

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<PAGE>

decoders, cables, splitters, taps, connectors, filters, amplifiers,
switches, wiring and any other materials or equipment.

"INDEPENDENT SO SUBSCRIBER" shall mean a Star Choice subscriber who
currently resides in a SO Property whose original Star Choice Programming
order was submitted directly by the subscriber to Star Choice or by an
entity other than System Operator.

"MDU PROPERTY" shall mean a condominium complex, apartment building
(including both rental and cooperative apartments), or townhouse community,
located in the Territory, comprised of multiple dwelling units, which units
in each case are occupied by single family households and are not generally
accessible to the public or otherwise a common area to which there is
unrestricted access by two or more persons, and which units may receive
Star Choice Programming from a common dish and separate Receivers in each
individual subscriber's dwelling unit, to a maximum number of IRD's in any
given MDU Property not to exceed the number of channels contained in Star
Choice Programming where a headend based system is employed in the
Property.

"NET RECEIPTS" shall mean gross receipts actually received by Star Choice
from the sale of Commissionable Programming Packages during the Term, net
of any discounts, refunds, fees, credits, taxes or applicable governmental
charges (other than income or franchise taxes) related to the sale or the
order or use of such Star Choice Programming.

"PREVIOUS SO SUBSCRIBER" shall mean a Star Choice subscriber who was
previously a SO Subscriber and who no longer resides in a SO Property.

"RECEIVER" shall mean the integrated receiver and decoder unit (IRD) sold
by Star Choice and necessary to receive Star Choice Programming which is
manufactured by Star Choice or a Star Choice authorized manufacturer.

"RIGHT OF ENTRY" shall mean that certain written agreements between System
Operator and the owner or manager of an MDU Property or, in the case of a
cooperative apartment complex, the homeowners' association, which
authorizes System Operator to install and maintain the Signal Distribution
in such MDU Property and solicit orders for Commissionable Programming
Packages therein.

"SIGNAL DISTRIBUTION SYSTEM" shall mean the integrated signal delivery
system including the Star Choice dish and Receiver and any necessary
Components by which Star Choice Programming is distributed throughout a SO
Property, which may also include off-air and/or cable distribution systems.

"SO PROPERTY" shall mean any of the MDU Properties for which System
Operator has obtained and continues to maintain throughout the term of this
Agreement a valid Right of Entry and

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<PAGE>

(i) in which System Operator has installed a Signal
Distribution System,

(ii) the initial orders from residents of such property for Star
Choice Programming are submitted by System Operator and
transmitted to Star Choice by System Operator in accordance
with the terms of this Agreement, and

(iii) all units in such property are capable of receiving Star
Choice Programming within ten (10) business days of
ordering such programming.

"SO SUBSCRIBER" shall mean a Star Choice subscriber residing in a SO
Property, who receives one of the Star Choice Commissionable Programming
Packages, the initial order for which was submitted by the System Operator,
and who was not a Star Choice subscriber prior to becoming a SO Subscriber.

"STAR CHOICE PROGRAMMING" shall mean those programming services distributed
by Star Choice, including, but not limited to Commissionable Programming
Packages, which services and the prices therefor shall be provided to
System Operator by Star Choice, from time to time.

"TECHNICAL SPECIFICATIONS" shall mean the requirements in Exhibit C hereto
or any other document(s) mutually agreed by Star Choice and System Operator
during the Term, which specify the minimum parameters any and all Signal
Distribution Systems must meet under this Agreement.

"TERM" shall have the meaning assigned in Section 3.1 hereof.

ARTICLE II
GENERAL RIGHTS AND OBLIGATIONS

2.1 SOLICITATION OF STAR CHOICE PROGRAMMING SERVICES.

(a) Subject to the Terms and Conditions attached hereto as Exhibit A, Star
Choice hereby grants to System Operator the right to:

(i) market Star Choice Programming to SO Properties; and
(ii) solicit and take orders for Star Choice Programming from
residents of SO Properties.

(b) Nothing in this Agreement shall prevent Star Choice (or those Star
Choice's agents that are not system operators) from marketing,
soliciting and taking orders from residents of MDU Properties.

3
<PAGE>

(c) System Operator understands that it shall not have any right, unless
specifically provided by Star Choice under separate written agreement,
to:

(i) solicit or take orders for Star Choice Programming from any
person or entity that is not a resident of and MDU Property,
including, without limitation, commercial establishments, as such
may be defined by Star Choice in its reasonable discretion; or

(ii) use any person or entity other than its employees or the
employees of its affiliates in soliciting or taking orders for
Star Choice Programming without the prior written consent of Star
Choice.

(d) Star Choice reserves the right to modify the contents of the Star
Choice Programming and Commissionable Programming Packages and prices
thereof from time to time, effective upon written notice to System
Operator. All orders for Star Choice Programming shall be taken on the
terms and conditions, including pricing, specified to System Operator
in advance and in writing by Star Choice. As of the date hereof, the
prices for Commissionable Programming Packages shall be as set forth
in Exhibit B and the prices for other Star Choice Programming shall be
as provided by Star Choice to System Operator upon request.

(e) System Operator shall not charge any residents or subscribers of an
SO Property any commercially unreasonable connection fee for obtaining
the Star Choice Programming or any fee which is based upon such
resident or subscriber's receipt of any Star Choice Programming, it
being understood that the Commissions set forth in Section 2.4 are the
sole compensation that System Operator is to receive from Star Choice
or an SO Property (or residents thereof) for distribution of Star
Choice Programming. Notwithstanding the foregoing, nothing in this
Agreement is intended to limit any agreement between System Operator
and any owner of a SO Property with respect to the installation and
maintenance of the Signal Distribution System. Further and as agreed
to by Star Choice and the SO, Star Choice may collect from the
subscribers and pay to the SO, a one time fee and/or a monthly fee
representing the installation and/or the maintenance of the Signal
Distribution System. As specified in the letter of agreement between
Star Choice and System Operator dated August 27, 1998. A copy of which
is attached hereto as Exhibit B.

(f) Only after receiving, approving and accepting an order from System
Operator shall Star Choice be obligated to establish a customer
account for the subscriber and arrange for activation of Star Choice
Programming. Star Choice shall promptly notify System Operator of any
deficiencies with respect to particular subscriber information.
"Subscriber Information" shall mean that customer identification,
location, and billing information which Star Choice requires as
described in the Star Choice Policy Manual.

4
<PAGE>

2.2 SO PROPERTIES; RIGHT OF ENTRY. Prior to any solicitation of orders for Star
Choice Programming by System Operator, System Operator shall submit to Star
Choice the complete address (including postal code) of any MDU Property for
which System Operator has or is seeking a Right of Entry, in order to
confirm that such MDU Property is not already being serviced by another
system operator authorized by Star Choice. System Operator shall obtain and
continuously maintain a valid Right of Entry for such property during the
Term, granting System Operator access to the MDU, authorizing System
Operator to install and maintain the Signal Distribution System and
Components, and granting System Operator permission to solicit orders for
Star Choice Programming from MDU residents. System Operator shall promptly
forward to Star Choice a fully executed Right of Entry for all SO
Properties in the Territory. In no event shall System Operator install a
Signal Distribution System in any MDU for which System Operator does not
have a valid Right of Entry. System Operator shall provide written notice
to Star Choice within thirty (30) days of any loss, suspension, or
expiration of a Right of Entry.

2.3 IMPLEMENTATION OF SIGNAL DISTRIBUTION SYSTEM.

(a) INSTALLATION OF SIGNAL DISTRIBUTION SYSTEM AND COMPONENTS.

(i) System Operator shall design, develop, install and maintain a
Signal Distribution System for each SO Property which must
comply with the Technical Specifications as agreed by Star
Choice and System Operator, acting reasonably, (the current
version of which is set forth in Exhibit C hereto). Star Choice
reserves the right, in its sole discretion, to amend or revise
and reissue the Technical Specifications, which amendments or
revisions shall be promptly communicated by Star Choice to
System Operator. Upon any such amendment or revision by Star
Choice to the Technical Specifications, Star Choice and System
Operator shall discuss in good faith the extent to which
existing Signal Distribution Systems in SO Properties shall
comply with such amended or revised Technical Specifications, it
being understood and agreed by the parties that any and all
uncompleted Signal Distribution Systems in SO Properties must
comply with such revised or amended Technical Specifications.

(ii) System Operator shall provide to Star Choice a design for the
installation and integration of each Signal Distribution System
("Design") for each SO Property subject to this Agreement,
together with a time schedule for installation. If a SO Property
utilizes an identical previous design, the SO may request that
the previous design be used to satisfy this requirement. In
creating, installing and maintaining any Signal Distribution
System, System Operator shall comply with all equipment
manufacturers' or

5
<PAGE>

Component manufacturers' policies as may be in effect from time
to time. Star Choice shall provide to System Operator written
notice as soon as commercially practicable after receipt and
review of Design(s) if Star Choice reasonably believes than any
Design will not produce a Signal Distribution System meeting the
Technical Specifications. System Operator shall provide
installation progress reports to Star Choice periodically or as
Star Choice may reasonably request, and shall promptly notify
Star Choice of any material changes to the installation schedule
or Design.

(iii) Upon completion of installation, System Operator shall promptly
forward to Star Choice an updated copy of the Design and
completed Technical Registration Form included in the Technical
Specifications attached hereto as Exhibit C, which shall
include, among other things, various measurements of the signal
from the Signal Distribution System. Star Choice shall provide
to System Operator written notice as soon as commercially
practicable after receipt and review of the Technical
Registration Form if Star Choice reasonably believes that such
Technical Registration Form indicates that the Signal
distribution System does not meet the Technical Specifications,
and where possible, Star Choice shall recommend corrective
actions.

Unless and until the Signal Distribution System complies with the Technical
Specifications, such MDU Property shall not be considered a SO Property.

(b) TECHNICAL COMPLIANCE. System Operator shall, at its own cost and
expense,

(i) acquire directly from Star Choice the satellite IRDs and
integrate same with other necessary components to create the
Signal Distribution System, (the purchase contracts for the
satellite IRDs are to be agreed by the parties, acting
reasonably.

(ii) evaluate and test the Signal Distribution System to insure
compliance with the Technical Specifications for each unit in
the SO Property,

(iii) select Components that will ensure that the Signal Distribution
System meets the Star Choice Technical Specifications in the MDU
Property environment and will allow System Operator to fulfill
its obligations under this Agreement.

(iv) develop such additional hardware or other elements as are
necessary for the Signal Distribution System to meet the
Technical Specifications and allow System Operator to fulfill
its obligations under this Agreement,

6
<PAGE>

(v) provide such technical demonstrations of the Signal Distribution
System in any SO Property as Star Choice may require in its
reasonable discretion upon advance written notice to System
Operator, at such times mutually agreed upon by the parties, to
provide assurance that the Signal Distribution System will meet
the Star Choice Technical Specifications ("Technical Test"), and
provide Star Choice the opportunity to participate and provide
input in advance of completion of the Signal Distribution System
or distribution of Star Choice Programming via the Signal
Distribution System; provided, however, that if the technical
demonstrations are for other than bona fide Technical Test
purposes (e.g. for Star Choice Marketing purposes or to test new
Star Choice products or equipment), such demonstrations shall be
limited to the test site of the System Operator, and otherwise
be in conformity with the balance of this provision, mutatis
mutandis;

(vi) in connection with such Technical Test, make such changes to the
initial Signal Distribution System as are necessary in order for
the system to meet the Star Choice Technical Specifications, and

(vii) take all commercially reasonable actions necessary to ensure
that the Signal Distribution System continues to meet the
technical Specifications for the Term of this Agreement. If at
any time during the Term of this Agreement, Star Choice
determines in good faith that a Signal Distribution System is
not in material compliance with all or any portion of the
Technical Specifications, and such noncompliance interferes with
SO Subscribers' ability to receive Star Choice Programming of a
quality substantially received by other Star Choice subscribers
(i.e., the signal does not meet the measurement standards),
System Operator shall cure such noncompliance within ten (10)
days of Star Choice's notice of noncompliance (the "Cure
Period"), and provide Star Choice evidence of correction of such
noncompliance, which evidence may, at Star Choice's request,
include a Technical Demonstration. In the event such evidence is
not approved by Star Choice within the Cure Period, Star Choice
shall have the right to cease paying Commissions due to System
Operator with respect to SO Subscribers in the noncomplying SO
Property until compliance is achieved.

(i) acquire and supply Signal Distribution Systems and individual
IRD's (if applicable) to SO Properties at commercially
reasonable prices (unless otherwise agreed to between System
Operator and Star Choice);

7
<PAGE>

(ii) install at a commercially reasonable price and in a timely
manner the Signal Distribution System and any necessary
Components which System Operator supplies to any SO Property;

(iii) maintain at commercially reasonable prices the Signal
Distribution System for any SO Properties; and

(iv) provide, at a commercially reasonable price and in a manner
satisfactory to Star Choice, acting reasonably, customer service
to all SO Properties, subscribers and potential subscribers
related to the supply, installation and maintenance of the
Signal Distribution System. System Operator agrees to allow all
authorized Star Choice equipment to be used by the SO
Subscribers and the Independent SO Subscribers and agrees to
provide the same level of Signal Distribution System
installation and maintenance, and customer service support, for
the Independent SO Subscribers as System Operator does for the
SO Subscribers.

(d) DISCLAIMER OF WARRANTIES. SYSTEM OPERATOR UNDERSTANDS AND AGREES THAT
STAR CHOICE SHALL HAVE NO RESPONSIBILITY WHATSOEVER FOR ANY SIGNAL
DISTRIBUTION SYSTEM, INCLUDING THE RECEIVER AND COMPONENTS CONTAINED
THEREIN. STAR CHOICE HEREBY DISCLAIMS ALL WARRANTIES, EXPRESS AND
IMPLIES, IN CONNECTION WITH ANY SIGNAL DISTRIBUTION SYSTEM , INCLUDING
THE RECEIVER AND COMPONENTS CONTAINED THEREIN, THE INSTALLATION AND
FUNCTIONING OF SUCH SYSTEM IN ANY MDU PROPERTY, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTIES OTHERWISE IMPLIED IN LAW.

(e) NEW TECHNOLOGY; END-USE TESTING. System Operator understands and
acknowledges that the technology (including some or all of the
Components) for providing Star Choice Programming to multiple-dwelling
units is currently being developed and has not been tested in the MDU
environment by Star Choice. Star Choice makes no representation or
warranty as to how any commercially available Components will perform
with the system in any particular MDU Property or how the system
itself will perform in certain MDU environments. System Operator shall
be responsible for procuring and testing any and all Components in the
end-use environment prior to the design, development and installation
of the Signal Distribution System and for maintenance of any such
Components that fail to perform adequately in the end-use environment
in order that the Signal Distribution System will, at all times during
the Term of this Agreement, meet or exceed the Technical
Specifications.

Star Choice understands and acknowledges that the System Operator is
itself providing certain new transport technology to MDU's, and System

8
<PAGE>

Operator makes no representation or warranty as to how the transport
technology will perform in certain MDU environments.

2.4 COMMISSION AND PAYMENT STRUCTURE. The following sets forth all payments and
commissions to be made to System Operator as full consideration for its
fulfilling its obligations hereunder.

(a) PAYMENT OF COMMISSIONS. Star Choice will pay System Operator a
commission ("Commission") equal to 30% of all Net Receipts received by
Star Choice from each active SO Subscriber for each SO Property, per
month for Commissionable Programming Packages (excluding Pay per View,
to be negotiated at a later date), solely with respect to those Net
Receipts received by Star Choice while this Agreement is in effect.
Commissions will be paid within forty-five (45) days after the
accounting month in which Star Choice receives the Net Receipts.

(b) COMMISSION EXCLUSION. Notwithstanding anything to the contrary in this
Agreement, Star Choice shall not be obligated to pay, and System
Operator shall not earn, or be entitled to receive, any Commissions or
payment of any other type from Star Choice which are:

(i) for orders, sales, renewals or continuations of Commissionable
Programming Packages taken, made or received after the last day
of the Term;

(ii) based on revenues, and any applicable taxes or fees of any type,
received in connection with any programming other than the
Commissionable Programming Packages set forth on Exhibit B
hereto;

(iii) for any Star Choice order from a commercial establishment as
such may be defined by Star Choice, acting reasonably regardless
of whether such order is accepted by Star Choice;

(iv) for any Star Choice order that is not accepted for any reason by
Star Choice, provided that Star Choice informs System Operator
of the reason for such nonacceptance; and

(v) for any Star Choice order from a SO Subscriber who does not
purchase a Commissionable Programming Package. System Operator
acknowledges and agrees that Star Choice shall have the right to
offset any money due to Star Choice from System Operator for any
reason (including, without limitation, to reimburse Star Choice
for any Commissions previously paid to System Operator by Star
Choice on account of subscription fees paid by a subscriber in
an SO Property that Star Choice subsequently refunded or
credited to such subscriber) against any Commission or other

9
<PAGE>

money otherwise due to System Operator from Star Choice, upon
reasonable written notice of any such offset.

2.5 STAR CHOICE PROGRAMMING.

(a) As between System Operator and Star Choice, Star Choice shall have the
sole right to edit, select, schedule, package and price all Star
Choice Programming and all other Star Choice services, but in so doing
Star Choice shall be attentive to the advice of the System Operator
who better understands the needs and demographics and pricing
sensitivities of the relevant MDU Properties. System Operator agrees
that all Star Choice programming (including any commercial insertion)
shall be exhibited in its entirety, in original form, as provided by
Star Choice, without any modifications, additions or deletions. In no
event shall System Operator combine, package or repackage any other
programming or services with the Star Choice Programming unless Star
Choice's prior written consent is obtained. In addition to the Star
Choice Programming packages Star Choice currently offers, Star Choice
may create packages of programming specially targeted for MDU
subscribers. System Operator shall promote Star Choice Programming
equally favorably and jointly in any and all communications with MDU
residents as System Operator promotes any other programming services
System Operator distributes to such residents.

(b) System Operator shall not, and shall ensure that an SO Subscriber or
resident or agent of an SO Property does not,

(i) resell, retransmit or rebroadcast or otherwise redistribute in
any manner of form whatsoever any Star Choice Programming, or

(ii) make any modification, addition, or deletion to any of the Star
Choice Programming (including any commercial insertions) or
alter or change in any way whatsoever the packages or tiers of
programming services delivered to the System Operator by Star
Choice and that comprise the Star Choice Programming from time
to time.

2.6 EXCLUSIVITY. System Operator hereby agrees that for the period commencing
upon the Execution Date and ending ________ and subject to law or
regulation or administrative fiat or judicial or administrative decision
(whether or not final) which either

(i) impedes or is materially reductive of the Star Choice
Programming offer, or

(ii) requires or determines to be desirable equal or equivalent
access for other direct to home broadcast services within the
MDU Properties,

10
<PAGE>

neither System Operator nor any affiliate of System Operator,
shall directly or indirectly within the Territory offer, sell
or solicit sales of, take orders for, or provide or install
equipment for, any direct-to-home satellite broadcast services
other than Star Choice services for delivery and receipt at MDU
Properties. (For greater certainty, an affiliate of the System
Operator may provide a traditional cable offering to the MDU
Properties, either directly or as a MATV agent to the MDU
Property building owners, which offering is not restricted
hereby.)

2.7 CUSTOMER SERVICE. System Operator shall undertake certain customer service
functions as described herein and in the Star Choice Policy Manual or a
mutually agreed by the parties from time to time to all SO Subscribers and
Independent SO Subscribers with respect to the installation and maintenance
of the Signal Distribution System and acceptance and transmission of orders
for Star Choice Programming. System Operator agrees to provide the same
level of installation and maintenance support for the Independent SO
Subscribers as it does for the SO Subscribers.

2.8 POLICIES AND PROCEDURES. Attached hereto in Exhibit D is a copy of Star
Choice's System Operator Policies and Procedures Manual, which may be
amended, from time to time upon thirty (30) days prior written notice from
Star Choice (such Manual, as amended from time to time, the "Star Choice
Policy Manual"). As Star Choice's commissioned sales representative, System
Operator hereby agrees that it will follow and abide by the policies and
procedures related to soliciting and transmitting subscription orders for
and the promotion of Star Choice Programming as specified in the Star
Choice Policy Manual. The Star Choice Policy Manual includes, among other
things, customer authorization procedures, Star Choice receivables payment,
and various requirements related to taking subscription orders.

2.9 DELIVERY OF INFORMATION. During the Term and provided that the delivery of
such information is not otherwise precluded by law or private contract, as
Star Choice becomes aware of MDU Properties interested in receiving the
Star Choice Programming where such MDU Properties are not at the time being
serviced by System Operator or other system operators, Star Choice may,
Privately and Confidentially, provide such information ("leads") to System
Operator. System Operator may thereafter approach such MDU Properties to
attempt to negotiate Rights of Entry which shall include the joint delivery
and servicing of the Star Choice Programming in such MDU Properties.

2.10 AUDIT RIGHTS. The System Operator shall have the right to examine the books
and accounts of Star Choice relating to the provision of Star Choice
Programming to the MDU Properties to determine the accuracy of the
Commissions paid, and to the extent that inaccuracies are uncovered, an
adjusting payment shall forthwith be made. The System Operator may exercise
this right at most once a year during regular business hours and upon at
least three (3) days prior written notice. Such examination shall be
undertaken by a qualified person and the cost of the examination will be
for the account of the System Operator. In the event that the

11
<PAGE>

examination reveals that the Commissions paid show a negative variance to
the detriment of the System Operator in excess of 5% from the Commissions
payable, the cost of the examination will be for the account of Star
Choice, the System Operator shall have the right to re-examine such books
and accounts within 6 months from the date of completion of said
examination, and as liquidated damages and in lieu of any other remedies
available to the System Operator, Star Choice shall pay to the System
Operator an amount equal to 10% of the negative variance.

ARTICLE III
TERMS AND TERMINATION

3.1 TERM AND TERMINATION. The term of this Agreement ("Term") shall commence on
the Execution Date and continue until the earlier of

(i) the tenth anniversary of the Execution Date; provided, however,
that unless either party advise the other in writing at least
sixty (60) days prior to the end of the initial or any renewal
term to the contrary, the Agreement shall be extended for
further five (5) year periods on the same terms and conditions,
MUTATIS MUTANDI., and

(ii) termination by either party pursuant to the terms of this
Agreement. Either party may terminate this Agreement, effective
immediately.

(x) upon sixty (60) days written notice to the other party
following a material breach of this Agreement by the other
party, where the nature of the breach is described in
sufficient detail in the notice to enable the breaching
party to take action to cure such breach and provided that
such breach is not cured within such sixty (60) day period;
PROVIDED HOWEVER, for greater certainty, Star Choice shall
not cease providing programming or customer service to SO
Subscribers during such notice period;

(y) upon the filing of a petition in bankruptcy or for
reorganization by or against the other party for the
benefit of its creditors, or the appointment of a receiver,
trustee, liquidation or custodian for all or a substantial
part of the other party's property, if such order of
appointment is not vacated within sixty (60) days; or

(z) upon the assignment by the other party of this Agreement
contrary to the terms hereof.

Star Choice may terminate this agreement effective immediately
if:

12
<PAGE>

a) the terms of Star Choice's licence prohibit or
otherwise materially affect Star Choice's ability to
provide the Star Choice Programming to the System
Operator as provided for hereunder; or

b) a determination is made by any court or regulatory
agency, including the CRTC, that the System Operator
does not have the legal authority to perform its
obligations hereunder.

3.2 OBLIGATIONS OF THE PARTIES UPON TERMINATION OR EXPIRATION.

(a) SYSTEM OPERATOR'S OBLIGATIONS WITH RESPECT TO INSTALLATIONS AND
ACTIVATIONS. System Operator shall cooperate with Star Choice to
enable Star Choice or a substitute system operator to promptly perform
and complete all Receiver installations and activations ordered by SO
Subscribers and Independent SO Subscribers prior to the termination of
this Agreement according to the regular installation and activation
schedule System Operator used during the Term of this Agreement.
System Operator shall direct all customer inquiries it receives after
the termination of this Agreement to Star Choice (or such other party
as specified by Star Choice).

(b) STAR CHOICE'S AND SYSTEM OPERATOR'S OBLIGATIONS WITH RESPECT TO SO
PROPERTIES.

Following the termination of this Agreement,

(i) Star Choice may continue to deliver Star Choice Programming and
related services to all SO Properties in accordance with Star
Choice's then-existing customer service procedures; and

(ii) Star Choice shall notify the owner, manager or homeowners'
association of the MDU, as appropriate, of termination of System
Operator as Star Choice's agent and recommend a substitute
system operator to provide service to SO Property with respect
to delivery of Star Choice Programming and services. Subsequent
to any termination or expiration of this Agreement, for a
reasonable transition period, not to exceed sixty (60) days,
System Operator shall not impair the ability of any subscribers
and residents of SO Properties to continue to receive Star
Choice Programming nor shall System Operator impede in any
manner whatsoever Star Choice's continued access (via the Signal
Distribution System) to deliver Star Choice Programming to the
subscribers and residents in all units of the SO Property. Star
Choice shall continue to pay Commissions during any such
transition period.

ARTICLE IV

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<PAGE>

MISCELLANEOUS

4.1 APPLICABLE LAW, ENTIRE AGREEMENT: MODIFICATION. This Agreement shall be
construed in accordance with and be governed by the laws of the Province of
Alberta and the federal laws of Canada applicable therein. This Agreement,
together will all Exhibits hereto constitutes the entire agreement between
the parties, and supersedes all previous understandings, commitments or
representations concerning the subject matter. Each party acknowledges that
the other party has not made any representations other than those that are
contained herein. This Agreement may not be amended or modified, and none
of its provisions may be waived, except by a writing signed by an
authorized officer of the party against whom the amendment, modification or
waiver is sought to be enforced.

4.2 INTERPRETATION. The provisions of this Agreement shall be interpreted in a
reasonable manner to effect the intent of the parties.

4.3 COUNTERPARTS. This Agreement may be executed by the parties in
counterparts, each of which shall be deemed an original and all such
counterparts together shall constitute but one and the same instrument.

4.4 TIME. Time shall be of the essence.

4.5 SUCCESSOR AND ASSIGNS. This agreement shall enure to the benefit of and be
binding upon the successors and permitted assigns of the parties.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.

STAR CHOICE COMMUNICATIONS INC. MDU COMMUNICATIONS INC.
-----------------------------------

By: /s/ David Lewis By: /s/ Sheldon Nelson
--------------------------- ---------------------------

Name: David Lewis Name: Sheldon Nelson

Title: President, Business Network Services Title: President

By: By: /s/ Doug Irving
----------------------------- --------------------------------

Name: Name: Doug Irving

Title: Title: Secretary - CFO

14
<PAGE>

EXHIBIT A
MDU SYSTEM OPERATOR AGREEMENT
TERMS AND CONDITIONS

These Terms and Conditions refer to, and form additional terms of, the Star
Choice MDU System Operator Agreement. The Agreement, all exhibits thereto,
including these Terms and Conditions, are hereinafter referred to as (the
"Agreement"). All capitalized terms used herein and not defined herein shall
have the meanings described such terms in the Agreement.

1. LOGO AND TRADEMARK USAGE. System Operator shall not use any Star Choice
trademark, service name or logo without receiving Star Choice's prior
written consent, which may be granted or withheld in System Operator's sole
discretion.

2. SYSTEM OPERATOR REPRESENTATIONS AND WARRANTIES. System Operator hereby
represents, warrants and covenants that it:

(a) shall, throughout the Term, comply with and abide by

(i) any and all applicable federal, provincial and local laws,
rules, regulations and ordinances, including, without
limitation, those set forth in Section 6 hereof; and

(ii) upon notice thereof, any and all agreements and/or requirements
as may be requested by providers of programming services to Star
Choice, each as applicable to System Operator and its employees
and agents in connection with the performance of its obligations
pursuant to the Agreement;

(b) shall, at its sole expense, provide and maintain all facilities,
vehicles, tools and equipment ("System Operator Equipment") as may be
necessary and

15
<PAGE>

proper for performing its obligations pursuant to the Agreement, and
keep all System Operator equipment in good working order and repair at
all times;

(c) shall, at its sole expense, obtain all permits and licenses which may
be required under any applicable federal, provincial or local law,
rule, regulation or ordinance to perform its obligations pursuant to
the Agreement, including, without limitation, installing and
maintaining the Signal Distribution System in an SO Property;

(d) shall pay and discharge all license fees and business, use, sales,
gross receipts, income, property or other taxes or which may be
charged or levied upon the System Operator by reason of the
performance of its obligations pursuant to the Agreement;

(e) shall, at all times throughout the Term, present a professional
business appearance and attitude;

(f) shall not engage in activity or business transaction which could be
considered unethical or damaging to the image, goodwill or business of
Star Choice;

(g) shall maintain throughout the Term, at System Operator's sole expense,
any and all insurance and/or bonds that may be required under the
laws, ordinances and regulations of any governmental authority with
respect to System Operator's performance of its obligations hereunder,
including installation of the Signal Distribution System and
Components in MDU Properties and sale or solicitation of orders for
Star Choice Programming. Such insurance coverage shall include, but
not be limited to commercial general liability insurance, including
contractual liability and personal injury liability with limits of not
less than $1,000,000 combined single limit per occurrence to provide
protection against claims and or liabilities including, but not
limited to, claims for bodily injury or property damage, which may
arise or result from performance of System Operator's obligations
under the Agreement, whether the services performed by System Operator
or System Operator's subcontractors or by an agent and/or by anyone
directly or indirectly employed by System Operator or System
Operator's subcontractors or agents. Simultaneous with the execution
of the Agreement, System Operator shall deposit with Star Choice
evidence of the required insurance protection in the form of
certificates of insurance for the insurance coverage described above.
The amounts shall not be less than the amounts specified above, or
such amounts as specified in advance in writing by Star Choice's
insurance office. These certificates must include Star Choice as an
additional insured;

(h) Has the requisite legal authority to perform its obligations
hereunder.

3. STAR CHOICE REPRESENTATIONS AND WARRANTIES. Star Choice hereby represents,
warrants and covenants that it shall;

16
<PAGE>

(a) comply with any and all applicable federal, provincial and local law
rules, regulations and ordinances applicable to Star Choice, its
employees and agents relating to Star Choice's obligations pursuant to
the Agreement;

(b) at its sole expense, obtain all permits and licenses, which may be
required under any applicable federal, provincial or local law, rule,
regulation or ordinance to perform its obligations pursuant to the
Agreement; and

(c) shall maintain throughout the Term, at Star Choice's sole expense, any
and all insurance and/or bonds that may be required under the laws,
ordinances and regulations of any governmental authority or which a
prudent company engaged in Star Choice's business would maintain with
respect to Star Choice performance of its obligations hereunder.

4. PROPRIETARY INFORMATION; CONFIDENTIALITY.

(a) Except as otherwise provided for in the Agreement, without the express
written consent of a party (the "Providing Party"), which may be
granted or withheld in the Providing Party's Sole Discretion, the
other party (the "Receiving Party") shall not use, other than as
necessary to comply with the terms of the Agreement, and shall not
provide or sell to any third party, any Confidential Information,
other than as set forth in Section 4(b) below. "Confidential
Information" shall mean any information, in whatever form (paper,
computer files, oral statements, etc.) of the Providing Party's
intellectual property, customer information, or any other
information obtained by the Receiving Party in connection with the
Agreement or the actions contemplated thereby, whether provided by the
Providing Party, or derived independently or otherwise, including,
without limitation;

(i) all customer lists and other information related to customer's
ordering any Star Choice services;

(ii) all market information and studies and marketing information;

(iii) all information pertaining to purchasers, renters or lessees of
Signal Distribution Systems from System Operator; and

(iv) all of the written data summaries, reports, other proprietary
information, trade secrets and information of all kinds,
acquired, devised or developed in any manner from the other
party's personnel of files or pursuant to the Agreement.

Immediately upon the Providing Party's written request (which the
Providing Party may make, as a specific or general request, in its
sole discretion at any time up to one year after the last date of the
Term), the Receiving Party shall provide to the Providing Party (or
destroy if the

17
<PAGE>

Providing Party so requests) all requested Confidential Information.
Notwithstanding the foregoing, Star Choice shall be entitled to use
for any purpose and shall not be required to provide to System
Operator, or destroy, any records or information pertaining to SO
Properties, SO Subscribers or potential SO Subscribers.

(b) In addition, the parties agree that, except as otherwise provided for
in the Agreement, they and their employees have and will maintain in
confidence the provisions of the Agreement, as well as all of the
Confidential Information of the other Party except:

(i) at the written direction of the other party;

(ii) to the extent necessary to comply with the law of valid order of
a court of competent jurisdiction, in which event the disclosing
party shall so notify the other party as promptly as possible
(and if possible, prior to making any disclosure) and shall seek
confidential treatment of such information, or in connection
with any arbitration proceeding;

(iii) as part of its normal reporting or review procedure to its
parent company, its auditors and its attorney, and such parent
company, auditors and attorneys agree to be bound by the
provisions of this section 4;

(iv) in order to enforce any of its right pursuant to the Agreement;

(v) to current or potential investors, insurers or financing
entities, provided, however, that such person described above
agrees to be bound by the provisions of this Section 4;

(vi) if, prior to the time of disclosure the Confidential Information
becomes part of the public domain by written publication through
no fault of the party revealing such Confidential Information.

5. PRESS RELEASE. During the term of the Agreement, neither party shall issue
an independent press release or public notice with respect to the Agreement
or the transactions contemplated hereby without the prior written consent
of the other party.

6. COMPLIANCE WITH LAW. Each party shall comply with all applicable
governmental statutes, laws, rules, regulations, ordinances, codes,
directives, and orders and is solely responsible for the compliance with
all such laws arising out of or relating to its obligations under the
Agreement.

7. POWER AND AUTHORITY; NO BREACH. Each of the parties represents and warrants
that it has full power and authority to enter into the Agreement and
perform its obligations hereunder and that is execution of the Agreement
and performance of its obligations hereunder does not and will not violate
any law or result in a breach of or default under the terms of any
contract/or agreement by which the party is bound.

18
<PAGE>

8. INDEMNIFICATION. System Operator shall indemnify Star Choice, and its
employees, officers and directors from and against any and all losses,
damages, claims, demand, suits, liabilities or expenses (collectively
"Claims") arising out of System Operator's construction, installation
and/or maintenance of the Signal Distribution System or any other equipment
utilized in connection with the provision of Star Choice services to SO
Properties, including without limitation, any Claims that arise out of or
result from any infringement, suit, claim or allegation of infringement of
any patent, trademark, copyright, trade secret or other proprietary
interest based on the Signal Distribution System, or any Claims with
respect to the Signal Distribution System or any Component thereof being
defective or not suitable for the purpose intended or used.

9. NO UNAUTHORIZED WARRANTIES OR REPRESENTATIONS. System Operator shall not
make any warranty or representation inconsistent with or in addition to any
warranty or representation stated in writing by Star Choice or a
manufacturer of Signal Distribution Systems or Components. If System
Operator makes any such inconsistent or additional warranty or
representation, System Operator shall at is own expense, indemnify, defend
and hold Star Choice harmless from any claim relating thereto.

10. LIMITATION OF LIABILITY. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
IN THE AGREEMENT, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
INCIDENTAL OR CONSEQUENTIAL DAMAGES OF THE OTHER PARTY OR ANY THIRD PARTY,
WHETHER FORSEEABLE OR NOT AND REGARDLESS OF THE FORM, LEGAL THEORY OR BASIS
OF RECOVERY OF ANY SUCH CLAIM.

11. ASSIGNMENT. System Operator shall not transfer any of its rights or
obligations under the Agreement without the prior written consent of Star
Choice, which consent shall not be unreasonably withheld; provided,
however, that the assignment, for specific MDU properties, of the rights
and obligations of System Operator to its wholly owned subsidiaries from
time to time upon prior notice and without relieving System Operator of its
obligations hereunder shall be allowed, mutatis mutandis. Star Choice may
assign the Agreement to a successor of all or substantially all of its
assets, and to any sales management agent appointed by Star Choice in its
sole discretion and who is responsible for managing a defined territory of
dealers of Star Choice Programming, upon written notice to System Operator.

12. TAXES. Any taxes (including, without limitation, any property, employee,
service, franchise, customs, import/export duties, excise and any other
related taxes) asserted again System Operator or Star Choice by any local,
provincial, national or international entity as a result of or arising
under the performance of its obligations under the Agreement shall be the
responsibility of the party against

19
<PAGE>

which such taxes are asserted. Each party shall be responsible for any
taxes related to its income hereunder.

13. ARBITRATION. Any dispute or disagreement arising between Star Choice and
System Operator shall be resolved according to binding arbitration
conducted in Toronto, Ontario in accordance with the Arbitrations Act
(Ontario) as then in effect, provided, however, that the parties may seek
injunctive relief in any court of competent jurisdiction and may enforce
the provisions of any arbitration award in any court of competent
jurisdiction. Arbitration shall be by a single arbitrator chosen by the
parties, provided that, if the parties fail to agree and to appoint a
single arbitrator within thirty (30) calendar days from the date a party
has made a demand for arbitration, then the arbitrator shall be chosen in
accordance with the rules of the Arbitrations Act (Ontario). The decision
of the arbitrator shall be final and binding on the parties and any award
of the arbitrator may be entered in any court of competent jurisdiction.
Notwithstanding the foregoing, the arbitrator shall not be authorized to
award punitive damages with respect to any such controversy, claim or
dispute, nor shall any party seek punitive damages relating to any matter
arising out of, or relating to, the Agreement in any other forum. The cost
of any arbitration hereunder, including the cost of the record or
transcripts thereof, if any, administrative fees, attorneys' fees and all
other fees involved, shall be paid by the party determined by the
arbitrator to not be the prevailing party, or otherwise allocated in an
equitable manner as determined by the arbitrator. All rights and remedies
of either party are cumulative of each other and of every other right or
remedy such party may otherwise have at law or in equity, and the exercise
of one or more rights or remedies shall not prejudice or impair the
concurrent or subsequent exercise of other rights or remedies.

14. INDEPENDENT CONTRACTOR, NO AGENTS; RELATIONSHIP; NO THIRD PARTY
BENEFICIARIES.
The parties agree that System Operator is an independent contractor in
performing the construction and installation of Signal Distribution
Systems, the marketing of Star Choice Programming and other services
described in the Agreement. No party (nor any of its officers, directors,
agents or employees) shall act or hold itself out as an agent of the other
party hereto. The parties do not intend the Agreement or the relationship
hereunder to constitute a joint venture, partnership or franchise of any
type. The provisions of the Agreement are for the benefit only of the
parties hereto, and no third party may seek to enforce, or benefit from,
these provisions.

15. AUDIT RIGHTS. Star Choice and/or its representatives shall have the right,
exercisable no more than once per year (and once following termination of
the Term), at its sole cost and expense (unless a discrepancy of five
percent [5%] or more is revealed, in which case System Operator shall bear
all such costs and expenses), to audit System Operator's books and other
records relating to its obligations under the Agreement. In addition, Star
Choice shall have reasonable access to System Operator's personnel, the SO
Properties and System Operator's

20
<PAGE>

facilities, but only upon reasonable notice and during regular business
hours at System Operator's place of business and without unreasonable
disruption to System Operator's business.

16. FORCE MAJEURE. Notwithstanding any other provision in the Agreement,
neither System Operator nor Star Choice shall have any liability to the
other or any other person or entity with respect to any failure of System
Operator or Star Choice to perform its obligation under the terms of the
Agreement if such failure is due to a Force Majeure. "Force Majeure" shall
mean any labour dispute; fire; flood; earthquake; riot; legal enactment;
government regulation; Act of God; any problem associated with the
construction, use and/or operation of Star Choice's satellite(s) or related
systems; or any cause beyond the reasonable control of both parties.

17. NOTICES. All notices and other communications from either party to the
hereunder shall be in writing and shall be deemed received upon actual
receipt when personally delivered, upon acknowledgement of receipt if sent
by facsimile, or upon the expiration of the 5th business day after being
deposited in the Canadian mails, postage prepaid, certified or registered
mail, addressed to the other party at a location specified in writing by
such party. Until notice in accordance is given to the contrary, the
addresses, phone numbers and facsimile number for purposes of giving notice
are as follows:

If to Star Choice:
630-3rd Avenue S.W.
Calgary, Alberta T2P 4L4
Attention: Senior Legal Counsel
Fax: 403-234-6239

18. SEVERABILITY. Nothing contained in this Agreement shall be construed to
require commission of any act contrary to law and whenever there is any
conflict between any provision of the Agreement and any law, such law shall
prevail; provided, however, that in such event, the affected provisions of
the Agreement shall be modified to the minimum extent necessary to permit
such compliance with such law and all other provisions shall continue in
full force and effect.

END

21
<PAGE>

DRAFT

EXHIBIT B

COMMISSIONABLE PROGRAMMING PACKAGES

(Effective Sept. 28/98 until replaced by Star Choice)

1.0 ENGLISH PROGRAMMING PACKAGES

TOTAL CHOICE BRONZE PACKAGE (containing those video, audio and data programming
services selected by Star Choice)

$14.99 per month per subscriber

TOTAL CHOICE SILVER PACKAGE (containing those video, audio and data programming
services selected by Star Choice) - includes Total Choice Bronze PLUS any two
Your Choice Bundles PLUS (30) DMX Music Channels

$24.99 per month per subscriber

TOTAL CHOICE GOLD PACKAGE (containing those video, audio and data programming
services selected by Star Choice) - includes Total Choice Bronze PLUS all four
Your Choice Bundles PLUS (30) DMX Music Channels

$34.99 per month per subscriber

TOTAL CHOICE PLATINUM PACKAGE (containing those video, audio and data
programming services selected by Star Choice) - includes Total Choice Bronze
PLUS all four Your Choice Bundles PLUS (30) DMX Music Channels PLUS TMN 1,2,3,4
(East) or SuperChannel (West) PLUS WGN / KTLA / WPIX

$44.99 per month per subscriber

Your Choice Bundles

YOUR CHOICE FAMILY BUNDLE PACKAGE (containing those video, audio and data
programming services selected by Star Choice)

$5.99 per month per subscriber

YOUR CHOICE SPORTS BUNDLE PACKAGE (containing those video, audio and data
programming services selected by Star Choice)

$5.99 per month per subscriber

September 10, 1998

<PAGE>

DRAFT

YOUR CHOICE CLASSIC BUNDLE PACKAGE (containing those video, audio and data
programming services selected by Star Choice)

$5.99 per month per subscriber

YOUR CHOICE TUNES, LAUGHS, & KLINGONS BUNDLE PACKAGE (containing those video,
audio and data programming services selected by Star Choice)

$5.99 per month per subscriber

YOUR CHOICE DMX MUSIC BUNDLE PACKAGE (containing those video, audio and data
programming services selected by Star Choice)

$4.99 per month per subscriber

2.0 FRENCH PROGRAMMING PACKAGES

TOTAL CHOICE BRONZE PACKAGE (containing those video, audio and data programming
services selected by Star Choice)

$8.99 per month per subscriber

TOTAL CHOICE ARGENT PACKAGE (containing those video, audio and data programming
services selected by Star Choice) - includes Total Choice Bronze PLUS any two
Your Choice Bundles PLUS (30) DMX Music Channels

$19.99 per month per subscriber

TOTAL CHOICE OR PACKAGE (containing those video, audio and data programming
services selected by Star Choice) - includes Total Choice Bronze PLUS all three
Your Choice Bundles PLUS (30) DMX Music Channels

$24.99 per month per subscriber

TOTAL CHOICE PLATINE PACKAGE (containing those video, audio and data programming
services selected by Star Choice) - includes Total Choice Bronze PLUS all three
Your Choice Bundles PLUS (30) DMX Music Channels PLUS Super Ecran 1&2

$34.99 per month per subscriber

Your Choice Bundles

YOUR CHOICE RESEAUX BUNDLE PACKAGE (containing those video, audio and data
programming services selected by Star Choice)

$5.99 per month per subscriber

September 10, 1998

<PAGE>

DRAFT

YOUR CHOICE FAMILLE BUNDLE PACKAGE (containing those video, audio and data
programming services selected by Star Choice)

$5.99 per month per subscriber

YOUR CHOICE ACTIF BUNDLE PACKAGE (containing those video, audio and data
programming services selected by Star Choice)

$5.99 per month per subscriber

YOUR CHOICE DMX MUSIC BUNDLE PACKAGE (containing those video, audio and data
programming services selected by Star Choice)

$4.99 per month per subscriber

3.0 A LA CARTE SUBSCRIPTION SERVICES

Orders must not be taken as stand alone services -- orders for a la carte
services must be taken in conjunction with specified programming packages (to be
defined).

<TABLE>
<S> <C> <C> <C>
TMN 1,2,3,4(East) $14.95 SuperChannel $14.95
Super Ecran 1&2 (East) $14.95 Movie Pix (East) $9.95
w/Platinum $4.95
Movie Max (West) $9.95 TMN/Movie Pix (East) $19.95
w/Platinum $4.95
SuperChannel/Movie Max (West) $19.95 The Family Channel $9.99
WTBS $1.99 TNN $2.99
Telelatino $14.99 DMX Music (30) $4.99
Fairchild $19.95 Playboy $15.95
KTLA $0.99 WGN $0.99
WPIX $0.99 Galaxie (coming soon) $4.99

</TABLE>

September 10, 1998
<PAGE>

EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

NOTICE

Use of the technologies described in this specification may infringe
patents, copyrights or other intellectual property rights. Nothing in this
specification should be construed as granting permission to use any of the
technologies described. Anyone planning to make use of technology covered
by the intellectual property rights of others should first obtain
permission from the holder(s) of the rights. Star Choice Communications
Inc. strongly encourages anyone implementing any part of this specification
to determine first whether the part(s) sought to be implemented are covered
by the intellectual property of others, and, if so, to obtain appropriate
licenses or other permission from the holder(s) of such intellectual
property prior to implementation. No representation or warranty is made
that compliance with these specifications and minimum requirements and/or
use of the designs and information provided by Star Choice will result in
an operative system in any particular MDU environment. Additional design,
installation and maintenance assistance may be required. This specification
is subject to change without notice. Star Choice Communications Inc. does
not accept any responsibility whatsoever for damages or liability, direct
or consequential, which may result from use of this specification or any
information provided by Star Choice.

SO Technical Specification 9/4/98 1

<PAGE>

EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

TABLE OF CONTENTS
<TABLE>
<S> <C>
1. Scope . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2. General Requirements . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1 Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Completeness . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.3 Regulations, Ordinances and Codes. . . . . . . . . . . . . . . . . 4
2.4 Minimum Installation . . . . . . . . . . . . . . . . . . . . . . . 4
2.5 Outdoor Unit (ODU) . . . . . . . . . . . . . . . . . . . . . . . . 4
2.5.1. Grounding Block . . . . . . . . . . . . . . . . . . . . . 4
2.5.2 Ground Fault Detector (GFD) . . . . . . . . . . . . . . . 4
2.5.3 Heating Elements. . . . . . . . . . . . . . . . . . . . . 4
2.5.4 Mounting. . . . . . . . . . . . . . . . . . . . . . . . . 5
2.6 Signal Distribution System Critical Parameters . . . . . . . . . . 5
2.7 Analog Service Channels. . . . . . . . . . . . . . . . . . . . . . 5
2.8 Test Point Requirements. . . . . . . . . . . . . . . . . . . . . . 6
3. Environmental Performance Requirements. . . . . . . . . . . . . . . . . 6
4. Maintenance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 Restoration of Service Outage. . . . . . . . . . . . . . . . . . . 7
4.2 Redundancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 Documentation and Record Keeping . . . . . . . . . . . . . . . . . 7
5. Test Equipment Recommendations. . . . . . . . . . . . . . . . . . . . . 7
6. The Dual 500 Signal Distribution System . . . . . . . . . . . . . . . . 8
6.1 MDU Dual 500 Model Example . . . . . . . . . . . . . . . . . . . . 9
6.2 Design Requirements. . . . . . . . . . . . . . . . . . . . . . . . 9
7. Single 1000 Signal Distribution System. . . . . . . . . . . . . . . . .10
7.1 MDU Signal 1000 Model Example. . . . . . . . . . . . . . . . . . .10
7.2 Design Requirements. . . . . . . . . . . . . . . . . . . . . . . .11
STAR CHOICE MDU Technical Registration Form. . . . . . . . . . . . . . . . .12
MDU Measured Parameters . . . . . . . . . . . . . . . . . . . . . . . . . .13

</TABLE>

SO Technical Specification 9/4/98 2

<PAGE>

EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

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

1. SCOPE

This document provides requirements to System Operators to use in design,
construction, and maintenance of MDU Signal Distribution System.

2. GENERAL REQUIREMENTS

The System Operator (SO) shall install and maintain MDU systems that at a
minimum meet the technical requirements as defined in this section. The SO shall
establish and implement design, installation, and maintenance procedures,
including record keeping, that adhere to the requirements specified in this
section. For an example, the SO shall develop and document each MDU System
design including schematics that precisely represent the MDU installation. The
SO shall use a Star Choice approved MDU Signal Distribution System installer.

The MDU Signal Distribution System must contain devices to perform two basic
functions: (1) powering the LNB and (2) distribution and interface of the DTH
signal to each IRD in the MDU.

The SO shall employ one of the two Signal Distribution System models outlined in
Sections 5 or 6. These sections also contain typical examples of the models for
SO's consideration. The example for the SO selected Signal Distribution System
model may be used as a reference to assist in generating designs that meet the
requirements of specific MDU's.

2.1 AVAILABILITY

The SO shall maintain the Signal Distribution System in such a manner that the
service availability to the subscribers, excluding rain and broadcast outages,
is no less than 99.90%.

2.2 COMPLETENESS

This system shall provide the entire DTH signal (presently 32 RF channels,
subject to change) to every IRD connected to the Signal Distribution System.

SO Technical Specification 9/4/98
3
<PAGE>

EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

2.3 REGULATIONS, ORDINANCES AND CODES

The Signal Distribution System shall be installed and maintained in accordance
with all applicable local, provincial and federal regulations, ordinances, codes
and other requirements, including, but not limited to, building codes and other
safety codes.

2.4 MINIMUM INSTALLATION

The SO shall adhere to the minimum installation requirements: installation of an
antenna and 100% of all backbone wiring. This minimum installation must be
sufficient to support rapid connection of service to any unit (up to 100%
penetration) in the MDU within 48 hours of such service request by
subscriber(s). The SO shall maintain ready to access inventory of all required
signal distribution components to ensure the 48 hour service requirement.

2.5 OUTDOOR UNIT (ODU)

Each MDU installation shall include an ODU. The ODU for MDU installations
includes an antenna reflector, a feed horn, a Dual LNB, mounts and cable
connections. The antenna diameter (dish size) shall be 120 cm minimum.

2.5.1. Grounding Block

A grounding block shall be installed with the antenna in accordance with the
Canadian Electrical Code (CEC) regulations, which specify that cable grounding
be implemented when IF signals from an outside satellite antenna are routed to
an indoor location. This grounding block installation shall be performed in
compliance with the CEC codes.

2.5.2 Ground Fault Detector (GFD)

to be defined

2.5.3 Heating Elements

Use of a heated dish and/or LNB may be required to achieve the required signal
quality (see Table 2.6) in cold weather environments.

SO Technical Specification 9/4/98 4

<PAGE>

EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

2.5.4 MOUNTING

The ODU shall operate in any wind speed up to 80 km per hour and shall not
incur permanent damage for wind speeds up to 160 km per hour.

2.6 SIGNAL DISTRIBUTION SYSTEM CRITICAL PARAMETERS

The SO shall design, install and maintain the Signal Distribution System in
compliance with the Critical Parameters as indicated below in Table 2.6 at each
subscriber drop.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CRITICAL PARAMETER SPECIFICATION
- ------------------ -------------
- --------------------------------------------------------------------------------
<S> <C>
Variation across a single 27 MHz RF Channel < 1.0 (+ 0.5) dB
peak-to-peak) - -
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Variation across all RF Channels (500 MHz band, < 5.0 (+ 2.5) dB
peak-to-peak) - -
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
IRD Signal Meter reading, all VP RF Channels Eb/No > 5.2 dB
(Specified values are minimum). -
- --------------------------------------------------------------------------------
IRD Signal Meter reading, all HP RF Channels Eb/No > 5.2 dB
(Specified values are minimum). -
- --------------------------------------------------------------------------------
IRD input total power (across 500 MHz) -50 to -30 dBm
- --------------------------------------------------------------------------------
</TABLE>

Table 1.6 Critical Parameters

2.7 ANALOG SERVICE CHANNELS

For each instance where the SO provides Master Antenna or headend based analog
TV service, the SO shall provide a complete, high quality distribution
infrastructure for those modulated analog channels in the VHF/UHF broadcast
spectrum.

Each drop within an MDU shall meet the signal quality requirements as defined in
Table 2.7.

SO Technical Specification 9/4/98 5

<PAGE>

EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PARAMETER MINIMUM BELOW CARRIER
- --------- ---------------------
- --------------------------------------------------------------------------------
<S> <C>
Carrier to Noise Ratio 52 dB
- --------------------------------------------------------------------------------
Carrier to Cross Modulation and/or Intermodulation 48 dBc
- --------------------------------------------------------------------------------
Composite Triple Beat 52 dBc
- --------------------------------------------------------------------------------
Second Order Beat 52 dBc
- --------------------------------------------------------------------------------
Carrier to low frequency Disturbances (hum) 40 dBc
- --------------------------------------------------------------------------------
</TABLE>

Table 2.7 Consumer Drop Analog Service Quality Requirements

2.8 TEST POINT REQUIREMENTS

As a minimum, the SO shall provide one test point per floor by using unallocated
tap ports as test points, or by an equivalent method. These test points shall be
properly labeled and terminated and identified on the schematic with expected
measurement values.

3. ENVIRONMENTAL PERFORMANCE REQUIREMENTS

All devices that are located within the MDU building shall meet the same
environmental and product design requirements that are required of Indoor Units.
All Outdoor Units (ODU) shall meet the Outdoor Unit requirements. These
requirements are stipulated in Table 3 below.

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
PARAMETERS OUTDOOR UNITS INDOOR UNITS
- ---------- ------------- ------------
- --------------------------------------------------------------------------------
<S> <C> <C>
Operating Temperature -30 to +60DEG. C 0 to +50DEG. C
(-22 to 140DEG. F) (32 to 122DEG. F)
- --------------------------------------------------------------------------------
Storage Temperature -50 to +60DEG. C -50 to +60DEG. C
(-58 to 140DEG. F) (-58 to 140DEG. F)
- --------------------------------------------------------------------------------
Humidity 0 to 100%, condensing 0 to 99%, non-condensing
- --------------------------------------------------------------------------------
Power (Voltage) 115 VAC, 60 Hz 115 VAC, 60 Hz
- --------------------------------------------------------------------------------
Life 10 years minimum 10 years minimum
- --------------------------------------------------------------------------------
</TABLE>

Table 3. Environmental Requirements for the Components

4. MAINTENANCE

The SO shall maintain parameters as defined in this specification at all times
throughout the MDU system lifetime. The SO shall maintain sufficiently trained
staff to perform periodic monitoring of the performance of the Signal
Distribution System, timely resolution of service outages and initiation of new
subscribers as outlined herein.

SO Technical Specification 9/4/98 6

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EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

4.1 RESTORATION OF SERVICE OUTAGE

Rapid restoration of service outages is required. Therefore, support personnel
and a sufficient inventory of components must be maintained to achieve service
restoration with a mean time of repair of 8 hours or less and not exceeding 16
hours in the worst case outages.

4.2 REDUNDANCY

For each instance where the SO provides a headend based analog TV service, the
SO shall provide for a minimum of 12% hot standby IRDs up to a maximum of 3
IRDs. For systems with less than eight (8) IRDs, one(l) standby IRD shall be
provided.

4.3 DOCUMENTATION AND RECORD KEEPING

The SO shall maintain a service log of all periodic maintenance and service
calls. The service log, as a minimum, must include a service date, performer
identification and a record of problems and corrective actions. In addition, a
detailed update of all design documentation must be maintained when a new
subscriber service initiation requires a modification to the Signal Distribution
System.

The documentation set is intended to ensure that the implementation reflects the
actual design. This set, as a minimum, includes schematics, component
specification, test point locations and estimated signal values, installation
planning and procedures. The SO shall revise all documents required to reflect
any changes to the Signal Distribution System to allow easy future maintenance
when required.

The SO shall provide Star Choice with copies of the up-to-date design
documentation set within two business days of Star Choice's request, if such
request is made.

5. TEST EQUIPMENT RECOMMENDATIONS

Proper test equipment is required to install, service and maintain an MDU cable
plant system. As a minimum, SO must allocate one IRD and one spectrum analyzer
to verify the system performance. The spectrum analyzer shall be capable of
monitoring the parameters listed in Table 2.6. The SO shall determine all
equipment required to meet requirements stipulated in this specification.

SO Technical Specification 9/4/98 7

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EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

6. THE DUAL 500 SIGNAL DISTRIBUTION SYSTEM

The Dual 500 MHz distribution system (Figure 6) uses dual trunk lines that each
carry a 500 MHz bandwidth signal. The signal is positioned in the L-band,
between 950 MHz and 1450 MHz, so that it may be combined onto a cable with an
806 MHz (or up to 860 MHz) bandwidth CATV signal or with a VHF/UHF (off-air)
signal.

The Dual 500 solution distributes each of the 500 MHz Intermediate Frequency
(IF) signals on a separate cable trunk line. Optionally, CATV and/or off-air can
be added onto each of the two trunk lines or alternatively onto a third trunk
line. These two or three cable lines are distributed to localized clusters of
voltage controlled switches. The switches are typically grouped together into
multi-switches. The multi-switch provides for selection of one of the two
signals present on the dual hunk line and combines the CATV signals onto the
selected L-band signal. This selected signal is then routed to wall jack(s) in
the MDU units. One diplexer per IRD is used to separate the off-air antenna
and/or cable feed and a selected (VP or HP) LNB feed. In addition, all signal
distribution components used in this model must be rated for the Dual 500
frequency range.

[GRAPHIC]

Figure 6. DTH Frequency Assignment on Cable Distribution Systems

SO TECHNICAL SPECIFICATION 9/4/98 8

<PAGE>

EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

6.1 MDU DUAL 500 MODEL EXAMPLE

An example of a Dual 500 model system is depicted in Figure 6.1. This dual
cable Signal Distribution System uses two cables requiring all components be
rated to operate up to 1450 MHz.

[GRAPHIC]

Figure 6.1 Dual 500 Reference Model

6.2 DESIGN REQUIREMENTS

The Design for the Dual 500 Signal Distribution System model shall include the
following as a minimum:

- - Schematic of MDU Signal Distribution System

SO Technical Specification 9/4/98 9

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EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

- The design analysis and architecture schematic shall represent 100%
subscriber penetration

- The schematic shall identify initial build out plan that indicates
initial design implementation

- All test points (minimum one per floor) must be indicated with design
power levels indicated (dBm, each 27 MHz signal)

- All Components must be labeled with make and model number

7. SINGLE 1000 SIGNAL DISTRIBUTION SYSTEM

The Single 1000 Signal Distribution System uses a single trunk line to carry the
1000 MHz aggregate (Figure 6) DTH signal. To do this, the Single 1000 solution
takes the two 500 MHz Intermediate Frequency (IF) signals (VP and HP) and stacks
them in frequency onto a single cable. This signal can then be routed to every
wall jack in the MDU using a traditional single line architecture that is
upgraded to support the frequencies of this system.

The Single 1000 model uses a wide band Dual LNB (or, alternatively, an
Up-Converter) capable of relocating one of the two frequency bands to a higher
range so that they can be aggregated on a single cable for distribution. This
approach requires a subscriber module that provides voltage controlled frequency
band selection and frequency down conversion (when the selected frequency band
is the up-converted band). The subscriber module or Down-Converter is located at
each IRD.

7.1 MDU SIGNAL 1000 MODEL EXAMPLE

An example of a Single 1000 model system is depicted in Figure 7.1. This Signal
Distribution System uses one cable requiring all components be rated to operate
up to 2025 MHz.

SO TECHNICAL SPECIFICATION 9/4/98 10

<PAGE>

EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

[GRAPHIC]

Figure 7.1 Single 1000 Reference Model

7.2 DESIGN REQUIREMENTS

The Design for the MDU Signal Distribution System model shall include the
following as a minimum:

- - Schematic of MDU Signal Distribution System

- The design analysis and architecture schematic shall represent
100% subscriber penetration

- The schematic shall identify initial build out plan that
indicates actual initial design implementation

- All test points (minimum one per floor) must be indicated with
design power levels indicated (dBm each 27 MHz signal)

- All Components must be labeled with make and model number

So Technical Specification 9/4/98 11

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EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

STAR CHOICE MDU TECHNICAL REGISTRATION FORM

System Operator shall measure the digital signal quality for each transponder
using a DTH IRD at the worst case drop for this MDU Signal Distribution System.

By completing Table Z-1 and Z-2, System Operator is hereby warranting that no
subscriber within this MDU (100% penetration) shall exhibit worse performance
than that recorded for the Term of this Agreement. PLEASE COMPLETE AND RETURN
VIA FAX TO 416-977-4542.

- --------------------------------------------------------------------------------
Property Location & Information
- --------------------------------------------------------------------------------
Installation Date: STAR CHOICE MDU Property ID No.
- --------------------------------------------------------------------------------
Property Address:

- --------------------------------------------------------------------------------
Property Description
- --------------------------------------------------------------------------------
Number of Floors No. of Units per Floor: Total No. of Units:
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
System Operator Information
- --------------------------------------------------------------------------------
Business Name: SO#:
- --------------------------------------------------------------------------------
Business Mailing Address:

- --------------------------------------------------------------------------------
Telephone #: Facsimile #:
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
Actual Measurements Records
- --------------------------------------------------------------------------------
Measurements Taken at Test Point, Floor Unit
(Check One)
- --------------------------------------------------------------------------------
Floor Number & Test Point ID:
- --------------------------------------------------------------------------------
IRD Located in a Unit No. IRD Serial No.
- --------------------------------------------------------------------------------
IRD Brand: IRD Model:
- --------------------------------------------------------------------------------

STAR CHOICE Technician: _____________________________ Date: ____________________

System Operator Technical Manager: __________________ Date: ____________________

Property Address: __________________________________

__________________________________

SO Technical Specification 9/4/98 12

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EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

MDU MEASURED PARAMETERS

- --------------------------------------------------------------------------------
Measure signal strength using an IRD and record measured numeric value for each
transponder in the following table.
- --------------------------------------------------------------------------------
RF Channel No. Measured Value RF Channel No. Measured Value
- --------------------------------------------------------------------------------

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

Table Z-1 Digital Signal Quality Measurements

SO Technical Specification 9/4/98 13

<PAGE>

EXHIBIT C STAR CHOICE MDU TECHNICAL SPECIFICATION AND
TECHNICAL REGISTRATION FORM

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Critical Parameter Specification Measurements
- --------------------------------------------------------------------------------
<S> <C> <C>
Variation across a single 24 MHz < 1.0 (+ 0.5) dB ___ dB
RF Channel (peak-to-peak) - RF Channel ___
- --------------------------------------------------------------------------------
Difference between total power in < 1.0 dB ___ dB
any two adjacent co-polarized - RF Channel ___
24 MHz RF Channel and ____
- --------------------------------------------------------------------------------
Variation across all RF Channels < 5.0 (+ 2.5) dB ___ dB
(500 MHz band, peak-to-peak) - -
- --------------------------------------------------------------------------------
Difference between the total power < 10.0 dB ___ dB
levels in two adjacent cross- - RIF Channel ___
polarized 24 MHz VP and HP RIF and
Channels
- --------------------------------------------------------------------------------
IRD input total power -50 to -30 dBm ___ dBm
(across 500 MHz)
- --------------------------------------------------------------------------------
Carrier to Noise Ratio > 49 dB ___ dB
-
- --------------------------------------------------------------------------------
Carrier to Cross Modulation > 48 dBc ___ dB
and/or Intermodulation -
- --------------------------------------------------------------------------------
Composite Triple Beat > 52 dBc ___ dB
-
- --------------------------------------------------------------------------------
Second Order Beat > 52 dBc ___ dB
-
- --------------------------------------------------------------------------------
Carrier to low frequency > 40 dBc ___ dB
Disturbances (hum) -
- --------------------------------------------------------------------------------
</TABLE>

Table Z-2 Signal Levels for Critical Parameters

SO Technical Specification 9/14/98 14

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

September 10, 1998 1

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

Table of Contents
<S> <C>
1 INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2 STAR CHOICE MDU SYSTEM OPERATOR . . . . . . . . . . . . . . . . . . . . 3
2.1 Application . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1.1 Application Criteria . . . . . . . . . . . . . . . . . . . 4
2.1.2 Application Review Process . . . . . . . . . . . . . . . . 4
2.1.3 Approval and Notification . . . . . . . . . . . . . . . . . 4
2.2 Training . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2.1 MDU Sales Training . . . . . . . . . . . . . . . . . . . . 5
2.2.2 MDU Technical Training . . . . . . . . . . . . . . . . . . 7
2.3 Execution of MDU System Operator Agreement . . . . . . . . . . . . 9
2.3.1 Assignment of MDU System Operator Number . . . . . . . . . 9
3 SYSTEM OPERATOR PROCEDURES. . . . . . . . . . . . . . . . . . . . . . . 9
3.1 Right of Entry . . . . . . . . . . . . . . . . . . . . . . . . . .10
3.2 Building Design Process . . . . . . . . . . . . . . . . . . . . .11
3.3 Technical Registration Process . . . . . . . . . . . . . . . . . .13
3.4 Subscriber Orders and Service . . . . . . . . . . . . . . . . . .14
3.4.1 Order Processing . . . . . . . . . . . . . . . . . . . . .14
3.4.2 Subscriber Set-up . . . . . . . . . . . . . . . . . . . . .14
3.4.3 Subscriber Billing and Collections . . . . . . . . . . . .15
3.4.4 Subscriber Billing and Collections . . . . . . . . . . . .16
3.4.5 Customer Service . . . . . . . . . . . . . . . . . . . . .16
4 MARKETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
4.1 Advertising. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
4.2 Fulfillment of Sales Materials . . . . . . . . . . . . . . . . . .17
5 POLICIES AND PROCEDURES MANUAL UPDATES. . . . . . . . . . . . . . . . .17
6 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18

</TABLE>

September 10, 1998 2

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EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

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

1 INTRODUCTION

This Policies and Procedures Manual describes certain obligations of MDU
System Operators and STAR CHOICE and the manner and method in which those
obligations shall be fulfilled. Unless otherwise defined, capitalized terms
shall have the meanings set forth in the STAR CHOICE MDU System Operator
Agreement between STAR CHOICE and System Operator (the "System Operator
Agreement"). In the event that any provisions of this Policies and
Procedures Manual conflict with the System Operator Agreement or any
provisions thereof, then the System Operator Agreement shall govern.

2 STAR CHOICE MDU SYSTEM OPERATOR

STAR CHOICE MDU System Operators have established a business relationship
with STAR CHOICE whereby a System Operator will (i) establish and maintain
Signal Distribution Systems in MDU Properties to enable MDU residents to
receive STAR CHOICE Programming, and (ii) act as commissioned sales
representatives for STAR CHOICE to solicit and take orders for STAR CHOICE
Programming from such MDU residents.

The process for becoming a STAR CHOICE MDU System Operator involves four
key steps: (1) submission of a STAR CHOICE MDU System Operator Application,
(2) approval of the application by STAR CHOICE, (3) completion of Approved
Applicant training, (4) execution and delivery to STAR CHOICE of the STAR
CHOICE MDU System Operator Agreement. Only upon the completion of all four
steps, as contemplated by this Policies and Procedures Manual, does an
individual or entity become a STAR CHOICE MDU System Operator.

2.1 APPLICATION

Individuals or businesses interested in becoming a STAR CHOICE MDU System
Operator must complete a STAR CHOICE MDU System Operator Application and
return the completed application to STAR CHOICE (each such individual or
entity, an "Applicant").

September 10, 1998 3

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EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

2.1.1 Application Criteria

STAR CHOICE may consider an Applicant for MDU System Operator if
the Applicant meets certain criteria, including, but not limited
to:

a) The Applicant must have experience (i) marketing and selling
television programming and (ii) fulfilling and installing
satellite equipment in the MDU environment.

b) The Applicant must have an effective business and marketing
plan regarding the Applicant's plans for promoting,
marketing, and soliciting orders from MDU residents for STAR
CHOICE Programming.

c) The Applicant must be a reputable, service-oriented
business, with verifiable trade and financial references.

STAR CHOICE retains the right to modify and make exceptions
to the above criteria, and consider additional criteria and
qualifications in determining whether and Applicant shall
become an Approved Applicant.

2.1.2 Application Review Process

STAR CHOICE may solicit input from credible trade and financial
sources regarding Applicants.

2.1.3 Approval and Notification

Upon STAR CHOICE's review of the STAR CHOICE MDU System Operator
Application and the additional requirements and related criteria
set forth herein, and STAR CHOICE's approval of the application,
and Applicant may become an Approved Applicant eligible for STAR
CHOICE MDU training (hereafter "Approved Applicants"). STAR
CHOICE will notify each Approved Applicant of its approved status
through a written letter. NO APPLICANT SHALL BE CONSIDERED AN
APPROVED APPLICANT UNLESS AND UNTIL SUCH APPLICANT

September 10, 1998 4

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

RECEIVES A WRITTEN NOTIFICATION THEREOF FROM STAR CHOICE.

2.2 TRAINING

STAR CHOICE Sales and Technical Training Seminars for existing MDU
System Operators and Approved Applicants are of paramount importance.
The goals of such training seminars are (i) to promote a complete
understanding and knowledge of STAR CHOICE Programming, special
packages and events, and customer service, (ii) to provide System
Operator the information and procedures with respect to soliciting and
transmitting Orders for STAR CHOICE Programming, and (iii) provide
technical and installation guidelines for all Signal Distribution
Systems in order to provide quality STAR CHOICE service. Only Approved
Applicants are eligible for STAR CHOICE MDU Training Seminars, and
SUCH TRAINING SEMINARS ARE REQUIRED FOR AN APPROVED APPLICANT TO
BECOME A SYSTEM OPERATOR.

2.2.1 MDU Sales Training

a) INITIAL TRAINING

(i) STAR CHOICE TRAINING OF APPROVED APPLICANT

Key employees and managers of all Approved Applicants shall
attend and participate in an initial STAR CHOICE MDU Sales
Training Seminar prior to applicant becoming a MDU System
Operator, and such additional training thereafter as STAR
CHOICE shall reasonably require. STAR CHOICE shall provide
the initial MDU Sales Training to System Operator's key
employees and managers at no cost. Transportation and
housing at the designated training location shall be System
Operator's responsibility and at System Operator's expense.
Upon completion of the MDU Sales Training, Approved
Applicants shall receive a certificate of completion from
STAR CHOICE.

September 10, 1998 5

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EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

(ii) TRAINING OF SYSTEM OPERATOR'S SALES PERSONNEL

All System Operator sales personnel must receive the STAR
CHOICE MDU Sales Training before they are authorized to
market, solicit, take or transmit (collectively, "Sell" or
"Selling") any orders for STAR CHOICE Programming. System
Operator sales personnel who do not complete training shall
not be eligible to Sell Orders for STAR CHOICE Programming.

System Operator shall be responsible for providing such
training to its employees. System Operator shall arrange for
its sales personnel to receive the training seminar and
associated training materials. STAR CHOICE shall have the
right, in its reasonable discretion, to approve the agenda,
length and content of any STAR CHOICE Sales training
conducted by System Operator for its sales personnel.

One set of STAR CHOICE Sales Training materials, and
periodic revisions of such training materials, shall be made
available by STAR CHOICE to System Operator for use in its
employee training. System Operator may be required to
purchase additional quantities of training materials for use
in training seminars.

All STAR CHOICE MDU sales training materials shall be
treated as confidential by System Operator and its
employees. STAR CHOICE may notify System Operator that
certain STAR CHOICE materials and information are
confidential and System Operator shall thereafter notify all
employees of the confidentiality of such materials and
information, and the confidentiality provisions of the
System Operator Agreement shall apply to such materials.
System Operator shall have its employees sign
confidentiality agreements, if requested to do so by STAR
CHOICE.

b) ADDITIONAL TRAINING

System Operator shall provide refresher training courses to
its sales personnel at least once per calendar year, or on
an as needed basis, regarding

September 10, 1998 6

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EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

new STAR CHOICE Programming, promotions and special events.
All additional training of System Operator employees shall
follow the same guidelines used for the STAR CHOICE MDU
Sales Training and shall include any materials or
instruction as STAR CHOICE may reasonably request.

2.2.2 MDU Technical Training

Each Approved Applicant shall elect one of the following
technical training options relative to constructing an MDU Signal
Distribution System: (i) Approved Applicant or its technical
personnel shall be trained and receive technical qualification by
STAR CHOICE authorized trainers; (ii) Approved Applicant shall
use only STAR CHOICE approved installers to design, construct,
install and maintain the Signal Distribution System and connect
individual subscribers to the Signal Distribution System.

a) TECHNICAL TRAINING

(i) STAR CHOICE TRAINING OF APPROVED APPLICANT

Approved Applicant or Approved Applicant technical personnel
shall attend and participate in an initial STAR CHOICE MDU
Technical Training Seminar prior to Applicant's designation
as an MDU System Operator, and such additional training
thereafter as STAR CHOICE may reasonably require. STAR
CHOICE, or a STAR CHOICE approved trainer, shall provide the
initial STAR CHOICE MDU Technical Training Seminar at no
cost to System Operator for the training seminar itself.
Transportation and housing at the designated training
location shall be System Operator's responsibility at System
Operator's expense. Upon completion of the Technical
Training Seminar, an Approved Applicant's technical
personnel shall receive a certificate of completion and an
identifying number ("Approved Installer Number") from STAR
CHOICE.

(ii) TRAINING OF SYSTEM OPERATOR TECHNICAL PERSONNEL

STAR CHOICE, or its designee, may train certain individuals
from SO's technical personnel and issue an

SEPTEMBER 10, 1998 7

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

"Authorized Trainer Number" upon successful completion of a
trainer training program. The qualified individual, as a
minimum, shall possess an "Approved Installer Number" issued
by STAR CHOICE or its designee. Authorized Trainers are
qualified to train installers and issue an "Approved
Installer Number" to each installer upon successful
completion of the installer training program.

(iii) ADDITIONAL TRAINING

All approved installers and approved trainers must receive
refresher training at least once per calendar year, or as
reasonably required by STAR CHOICE, to address new technical
developments in the DTH system or design and construction of
Signal Distribution Systems.

One set of technical training materials, and periodic
revisions of such training materials, shall be made
available by STAR CHOICE to approved trainers for use in
providing STAR CHOICE MDU technical training to other System
Operator personnel. System Operator may be required to
purchase additional quantities of training materials for use
in technical training seminars.

(iv) TRAINING MATERIAL CONFIDENTIALITY

Some STAR CHOICE MDU Technical Training seminar materials
may be marked with a confidential clause. SO shall notify
all staff to maintain strict adherence to the
confidentiality clause in handling and use of such
materials.

b) USE OF STAR CHOICE APPROVED MDU INSTALLERS

System Operators may choose to forego STAR CHOICE technical
training and elect to use existing STAR CHOICE approved MDU
installers to complete service installation and maintenance
on Signal Distribution Systems in SO Properties. If this
option is selected, an approved MDU Installer's signature
and ID number must be included on all technical paperwork
required from System Operator under the System Operator
Agreement, including, without limitation, the Signal
Distribution System Design and Technical Registration Form.
STAR CHOICE shall provide

September 10, 1998 8

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

to System Operator, upon its request, the names and contact
information of STAR CHOICE approved MDU installers.

2.3 EXECUTION OF MDU SYSTEM OPERATOR AGREEMENT

Only after completion of the application and training requirements set
forth above shall an Approved Applicant be eligible to become an MDU
System Operator. The satisfactory completion of the following four
setps is required before STAR CHOICE shall authorize a System Operator
and assign a STAR CHOICE MDU System Operator number: (1) submission of
a STAR CHOICE MDU System Operator Application, (2) approval of the
application by STAR CHOICE, (3) completion of Approved Applicant Sales
and Technical Training, (4) execution of STAR CHOICE's MDU System
Operator Agreement. STAR CHOICE reserves the right to accept or reject
an Approved Applicant for any reason.

2.3.1 Assignment of MDU System Operator Number

Authorization of an MD. System Operator shall be granted upon
completion of the aforementioned four steps, at which time an
MDU System Operator Number will be assigned by STAR CHOICE. The
System Operator Number is the identification number STAR CHOICE
uses to recognize SO Subscriber Orders, calculate STAR CHOICE
Commissions payable to System Operator, and otherwise identify
and track information pertaining to System Operator, SO
Properties, and SO Subscribers.

3 SYSTEM OPERATOR PROCEDURES

Under the MDU System Operator Agreement, System Operator must obtain and
maintain throughout the Term of the System Operator Agreement a valid Right
of Entry for each SO Property, granting System Operator access to an MDU
Property for purposes of constructing the Signal Distribution System and
soliciting orders for STAR CHOICE Programming. Set forth below are certain
procedures with which System Operators must comply in order (i) properly to
obtain Rights of Entry for MDU Properties, (ii) to receive STAR CHOICE
approval of Signal Distribution System Designs, Technical Registration
Forms, Subscriber orders and (iii) to provide adequate customer service for
SO Subscribers and Independent SO Subscribers.

September 10, 1998 9

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

3.1 RIGHT OF ENTRY

System Operator shall follow the process outlined below in obtaining
Right of Entry Agreements (ROE) for MDU Properties. The ROE is a
written agreement between the System Operator and the owner or manager
of an MDU Property which authorizes the System Operator to install and
maintain the Signal Distribution System in the MDU Property and
solicit orders for STAR CHOICE Programming.

a) System Operator shall contact multiple-dwelling property owners
and management companies and market the STAR CHOICE multiunit
service concept.

b) Upon verifying that the selected property represents strong
potential, the System Operator shall transmit to STAR CHOICE via
facsimile the property information to determine if the property
has been previously allocated to another System Operator. System
Operator will be notified by STAR CHOICE if another System
Operator has submitted a request with respect to that property.

c) System Operator shall proceed to secure owner/property management
signatures on an ROE.

d) System Operator shall forward all relevant information concerning
the MDU Property and a copy of the fully executed ROE to STAR
CHOICE at the address provided in Section 6 hereof.

No Commissions or other monies shall be paid by STAR CHOICE to
System Operator with respect to an MDU Property unless and until
STAR CHOICE has received a copy of the executed ROE and required
property information. PROPERTY INFORMATION SHALL INCLUDE: MDU
Property name; owner and management company name, name of contact
person, address and telephone number; total number of units; main
property address; listing of property unit addresses; and
property description (i.e. apartment, condo, townhouse complex,
etc.) and size (i.e. number of units).

e) Upon receipt of the fully executed ROE and the required property
information, STAR CHOICE will notify System Operator that the ROE
and MDU Property have been accepted. The acceptance communication
will include an assigned Property Billing Number (unique to each
MDU property) which is used to identify the building by STAR
CHOICE for purposes of calculating Commissions, identifying SO
Subscribers and reviewing the corresponding Design and Technical
Registration Form.

SEPTEMBER 10, 1998 10

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

3.2 BUILDING DESIGN PROCESS

Prior to the installation of a signal distribution system in an SO
Property, the SO shall provide to STAR CHOICE for review an MDU design
and installation document package as required by the System Operator
Agreement. During such initial phase, STAR CHOICE may review each
submitted MDU design package and STAR CHOICE may require
modifications. Installation may not commence until the updated,
resubmitted MDU design package has received written acceptance from
STAR CHOICE. The length of such MDU review period shall be determined
by STAR CHOICE.

The signal distribution system design shall adhere to the MDU
Technical Specifications including, but not limited to, the following
procedures:

a) System Operator shall prepare the Signal Distribution System
Design and installation schedule. The Design shall include a
schematic of the MDU Signal Distribution System which indicates
the planned signal distribution infrastructure, all test points
(minimum one per floor) with design power levels (dBm), and the
manufacturer and model of any Components (signal distribution
components) to be used. Design requirements, as noted in STAR
CHOICE's MDU Technical Specifications, Exhibit C to the System
Operator Agreement, may be periodically revised by STAR CHOICE to
reflect changes in the MDU delivery systems technology and new
developments in Components. System Operator shall receive from
STAR CHOICE revised Design requirements and will have thirty (30)
days to incorporate such revisions as are commercially and
technically feasible to enable each Signal Distribution System to
meet the Technical Specifications.

b) System Operator shall submit Design and material plans (according
to MDU Technical Specifications) to STAR CHOICE at the address
specified in Section 6 hereof.

c) STAR CHOICE's engineering staff will review submitted Designs for
compliance with the Technical Specifications. STAR CHOICE will
notify System Operator in writing as to the status of submitted
Designs. If STAR CHOICE believes, in good faith, that a Design
does not comply with the Technical Specifications or is otherwise
not feasible, STAR CHOICE shall notify System Operator and may,
if possible, suggest changes to bring the Design into compliance.

September 10, 1998 11

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

d) Upon receipt of STAR CHOICE's letter indicating its acceptance of
a submitted Design, System Operator may commence Signal
Distribution System construction. As required by the System
Operator Agreement, System Operator shall use only STAR CHOICE
approved MDU installers to construct and maintain the Signal
Distribution System (including the DTH Receivers, DTH Dishes and
any Components) in a MDU Property.

e) System Operator shall provide installation progress reports
to STAR CHOICE periodically or as STAR CHOICE may reasonably
request. System Operator shall also promptly notify STAR CHOICE
of any material changes to the installation schedule or the
Design.

f) STAR CHOICE plans to continuously evaluate, recommend, authorize
signal distribution components and make such information
obtainable to SO. Three STAR CHOICE component approval levels are
planned: Available Components, Recommended Components, Authorized
Components. Components that vendors claim (to STAR CHOICE in
writing) as compliant to applicable STAR CHOICE specifications
may be designated, at STAR CHOICE's sole discretion, as
"Available Components" to the SO. STAR CHOICE may conduct vendor-
independent testings of selected "Available Components". Such
tested and passed components may be designated, at STAR CHOICE's
sole discretion, as "Recommended Components" to the SO. Certain
key signal distribution components in the "Recommended
Components" category, such as multi-switches, distribution
amplifiers etc. may be authorized by STAR CHOICE, at STAR
CHOICE's sole discretion, to carry STAR CHOICE's approved logo.
Such authorized components shall be designated as "Authorized
Components" to the SO.

g) The review and approval requirements by STAR CHOICE or it
authorized personnel, set forth herein are intended to identify
potential problems that could cause non-compliance with the MDU
Technical Specification. However, neither the review or approval
may be construed to mean, explicitly or implicitly, that the
system will function properly or that it will meet electrical,
fire, or any other system function and compliance and for safety
requirements. SO shall bear the sole responsibility for system
function and compliance, and for obtaining all necessary MDU
installation inspection and approvals from local authorities per
applicable local and national electrical and fire codes.

September 10, 1998 12

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

h) Upon receipt of STAR CHOICE's letter indicating end of the
initial review and approval period, no MDU design package needs
to be submitted for review or approval. However, for each MDU
installation, an MDU design package shall be retained and filed
by the SO. STAR CHOICE reserves the right to request design
documentation of specific MDU(s) for review. SO shall provide to
STAR CHOICE copies of the MDU design documentation within two (2)
business days of receipt of a written request from STAR CHOICE.

i) STAR CHOICE reserves the right to inspect MDU site(s) to verify
full compliance to STAR CHOICE's satisfaction. The SO shall grant
access to the requested MDU site(s) and assist STAR CHOICE or its
designee with a technical review, inspection and measurements of
the system's performance. Access shall be granted within two (2)
business days of receipt of a written request from STAR CHOICE.

3.3 TECHNICAL REGISTRATION PROCESS

Upon completion of construction of the Signal Distribution System,
System Operator shall promptly for-ward to STAR CHOICE a completed
Technical Registration Form, in the form of Exhibit C to the System
Operator Agreement, and comply with the following procedures:

a) System Operators shall measure the digital signal quality for
each Star Choice RF channel in the Signal Distribution System
using a DTH IRD at the worst case drop point.

b) The System Operator shall complete the Technical Registration
Form in its entirety and according to the instructions described
therein.

c) System Operator shall return the Technical Registration Form to
the address set forth in Section 6 of these Policies and
Procedures.

d) Upon receipt and review of the Technical Registration Form, STAR
CHOICE shall notify System Operator of STAR CHOICE's
determination whether the Technical Registration Form
demonstrates that the Signal Distribution System meets the
minimum reporting requirements of the Technical Specifications.
If at any time STAR CHOICE determines in good faith that a Signal
Distribution System is not in compliance with the Technical
Specifications, because it does not meet the measurement

September 10, 1998 13

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

standards or otherwise, the System Operator shall cure such
noncompliance within thirty (30) days of STAR CHOICE's
notification thereof. Following such a notification, System
Operator shall submit a new Technical Registration Form
reflecting the corrective action taken. After the 30-day cure
period has elapsed, and prior to STAR CHOICE receiving evidence
of corrective action and a new Technical Registration Form, STAR
CHOICE may suspend payment of any Commissions or other payments
otherwise due System Operator until such corrective action is
taken and a new Technical Registration Form is received and
approved.

3.4 SUBSCRIBER ORDERS AND SERVICE

The following procedures shall be followed by System Operators before
STAR CHOICE will accept subscriber orders and establish SO Subscriber
accounts.

3.4.1 ORDER PROCESSING

a) System Operators shall permit only employees, and not any
independent contractors, agents or other persons or
entities, to solicit, take or transmit any orders for STAR
CHOICE Programming, unless otherwise agreed to between
System Operators and STAR CHOICE in writing.

b) Promptly after System Operator receives an order for STAR
CHOICE Programming from a resident of a SO Property, System
Operator shall forward to STAR CHOICE within two (2)
business days of receipt of such order all of the Subscriber
Information pertaining to such order set forth in Subscriber
Set-up (below).

3.4.2 SUBSCRIBER SET-UP

a) System Operator shall complete each section of the DTH
Subscriber Activation Form, attached hereto as Schedule
3.4.2, and immediately deliver such form to STAR CHOICE.

b) When completing the DTH Subscriber Activation Form, System
Operators shall:

September 10, 1998 14

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

1. Ensure that each blank on the form is completed and
the information supplied is legible.

2. Include the System Operator Number assigned at the
time of System Operator approval. If you do not know
that number, call STAR CHOICE Trade Relations as set
forth in Section 6.

3. Include the subscriber's physical address where the
DTH Receiver is located. A subscriber account cannot
be established with a P.O. box or other
non-residential address. If the customer has different
billing address, please specify. Provide the Property
Billing Number for the corresponding SO Property that
was assigned at the time the Right of Entry was
submitted to STAR CHOICE.

4. Always specify at the bottom of the Subscriber
Activation Form whether the services will be billed to
service operator or to the customer.

5. If you have any questions about the information
required by the Subscriber Activation Form, contact
STAR CHOICE.

c) Following completion of the DTH Subscriber Activation Form,
the System Operator shall transmit the form to STAR CHOICE
Trade Relations. Only after receiving, approving and
accepting an order from System Operator shall STAR CHOICE be
obligated to establish a customer account for the subscriber
and arrange for activation of STAR CHOICE Programming.

3.4.3 Subscriber Billing and Collections

a) For each SO Subscriber, System Operators shall install the
DTH Receiver, connect it to the Signal Distribution System
and request activation by STAR CHOICE within five (5)
business days from the order date by contacting STAR CHOICE
Customer Service.

b) System Operator shall provide new customers with
instructions to forward all system repair and service
inquiries to System Operator and forward all other customer
service, programming, and billing inquiries to STAR CHOICE
Customer Service as set forth in Section 6 hereof.

September 10, 1998 15

<PAGE>

EXHIBIT D CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

3.4.4 Subscriber Billing and Collections

a) After receiving a STAR CHOICE Programming order for an SO
Subscriber and the corresponding Subscriber Activation Form,
System Operator shall cooperate with STAR CHOICE in its
efforts to collect STAR CHOICE Programming fees from SO
Subscribers.

b) System Operator shall not collect any monies due to STAR
CHOICE from any STAR CHOICE Subscriber or potential
subscriber. If System Operator should receive any
subscription fees or other money due to STAR CHOICE, then
System Operator shall promptly notify STAR CHOICE of such
payments and perform such actions in connection therewith as
reasonably requested by STAR CHOICE including, without
limitation, remitting to STAR CHOICE such fees, money and
applicable taxes. Any subscription fees remitted to System
Operator and not immediately forwarded to STAR CHOICE shall
be deducted from System Operator's future Commissions,
including interest and penalties thereon.

3.4.5 Customer Service

a) System Operator shall provide necessary and appropriate
customer service functions to all SO Subscribers and
Independent SO Subscribers, which service shall include a 24
hours a day, 7 days a week reporting mechanism or procedure
enabling residents of SO Properties to leave messages
regarding service with System Operator.

b) System Operator shall respond to all customer service
messages promptly and shall contact any customer reporting a
problem or concern with a DTH Receiver or Signal
Distribution System within 24 hours of such customer report.

c) System Operator shall be primarily responsible for
resolution of all customer inquiries from residents of SO
Properties. After a good faith effort to address such
inquiries in a satisfactory manner, System Operator may

September 10, 1998 16

<PAGE>

EXHIBIT D STAR CHOICE MDU SYSTEM OPERATOR POLICIES AND
PROCEDURES

notify STAR CHOICE regarding any inquiries that System
Operator is unable to resolve.

d) STAR CHOICE shall be solely responsible for billing STAR
CHOICE Subscribers for STAR CHOICE Programming, responding
to STAR CHOICE billing and programming inquiries, collecting
of subscription fees, and performing any other customer
service functions not specifically designated to System
Operator herein.

4 MARKETING

4.1 ADVERTISING

System Operators must adhere to the Advertising Guidelines established
by STAR CHOICE and outlined in the "Advertising Guidelines For STAR
CHOICE Programming and the DTH System" attached hereto as Schedule
X[?], and comply with STAR CHOICE trademark and logo usage guidelines
contained therein. STAR CHOICE may send approved advertising copy to
System Operator for use over a specified time period. System Operator
shall not distribute photocopies of STAR CHOICE sales and advertising
materials without the prior written approval of STAR CHOICE.

4.2 FULFILLMENT OF SALES MATERIALS

STAR CHOICE may institute a fulfillment program whereby various sales
materials may be purchased by STAR CHOICE MDU System Operators.

System Operators availing themselves of such program should contact
STAR CHOICE Trade Relations as set forth in Section 6.

5 POLICIES AND PROCEDURES MANUAL UPDATES

STAR CHOICE may, in its sole discretion, amend this Policies and Procedures
Manual at any time and System Operator shall be provided copies of any such
amendments. System Operator shall have thirty (30) days from the date of
receipt of such amendments to come to compliance with any material changes
therein.

September 10, 1998 17

<PAGE>

EXHIBIT 6.3

THIS AGREEMENT made effective the 31st day of December 1998.

BETWEEN:

4-12 Electronics Corporation a corporation incorporated under the laws
of Manitoba and having its business offices at # 17 - 1421 St. James
St., Winnipeg, Manitoba, R3H OY9 (hereinafter called the "Vendor")

OF THE FIRST PART
AND:

MDU COMMUNICATIONS INC., a corporation incorporated under the laws of
Canada and having its business offices at #108 - 11951 Hammersmith
Way, Richmond, BC, V7A 5H9 (hereinafter called the "Purchaser")

OF THE SECOND PART
WHEREAS:

A. The Vendor carries on a business of satellite television distribution to
multiple dwelling units (the "Business") and in connection therewith has
verbal and written contractual arrangements (the "Contracts") with
suppliers and a number of owners and managers of multiple dwelling units
("MDU's) to supply monthly satellite television services to their buildings
which Contracts are listed and described in Schedule A hereto;

B. The Vendor owns, leases and licenses certain equipment and satellite
reception facilities (collectively referred to herein as the "Equipment")
all as listed and described in Schedule B to this Agreement which Equipment
is located on or about the MDU's with which it has contractual
arrangements;

C. The Equipment, together with the equipment owned or operated by customers
constitutes all the necessary equipment for the proper and effective
delivery of monthly satellite television services to customers of the
Vendor; and

D. The Vendor has agreed to sell the Assets (as hereinafter defined),
including the goodwill of the Business and the Purchaser has agreed to buy
the same on the terms and conditions hereinafter set forth.

NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the promises,
covenants and agreements hereinafter set forth, the parties hereto covenant and
agree, represent and promise as follows:

PURCHASE AND SALE

1. Subject to the terms and conditions of this Agreement and based on the
warranties and representations herein contained, the Vendor agrees to sell
and the Purchaser agrees to

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<PAGE>

purchase the assets constituting the Business including, but without limiting
the foregoing:

(a) The goodwill of the Business, together with the exclusive right to the
Purchaser to represent itself as being the successor to the Business
in continuation of and in succession to the Vendor.

(b) The Contracts with "Full Cable Service" subscribers and "Discretionary
Cable Service" subscribers more particularly described in Schedule A
attached hereto and all income and other monies flowing therefrom.

(the assets referred to above are collectively referred to herein as the
"Assets").

PURCHASE PRICE

2. The purchase price of the Assets shall be the sum of Two Hundred Thousand
Dollars ($200,000) (the "Purchase Price") allocated as follows:

<TABLE>
<S> <C>
Contracts $157,085
Equipment $42,915
Other 0
</TABLE>

3. The Purchaser will pay the Purchase Price as follows:

(a) The sum of One Hundred Seventy Five Thousand Dollars ($175,000) shall
be paid by negotiable cheque at the Closing of this Agreement or by
wire transfer to counsel for the Vendor, Aikins MacAulay &
Thorvaldson, in trust for the Vendor.

(b) The balance of Twenty Five Thousand ($25,000) shall be paid sixty (60)
days after Closing provided that the Vendor has complied in all
respects with this Agreement and the Vendor has not breached any of
the Vendor's representations or warranties. If the Vendor has not
complied in all respects with this Agreement or the Vendor has
breached any of its covenants, representations or warranties
hereunder, the Purchaser may, at its discretion and in addition to any
other remedies it may have against the Vendor, set off the amount of
damages arising from such non-compliance or breach against the balance
of the Purchase Price.

REPRESENTATIONS AND WARRANTIES OF THE VENDOR

4. The Vendor hereby represents and warrants to the Purchaser as follows, with
the intent that the Purchaser shall rely thereon in entering into this
Agreement, and concluding the purchase and sale contemplated herein:

(a) The Vendor is a corporation duly organized and validly existing in
good standing under the laws of the Province of Manitoba, and has the
power, authority and

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<PAGE>

capacity to enter into this Agreement and to carry out the
transactions contemplated hereby, all of which have been validly
authorized by all corporate proceedings;

(b) The completion of the transactions contemplated hereby will not
constitute a breach by the Vendor of any statute, by-law, or
regulation of its Memorandum, Articles, or By-laws, or of any contract
or agreement to which it is a party, or by which it is bound, or which
would result in the creation of any lien, encumbrance or other charge
on any of the Assets;

(c) The Vendor has good and marketable title to the Assets, free and clear
of all liens, mortgages, encumbrances, equities or claims of every
kind and nature whatsoever and can assign such Contracts or licenses
or leases of Equipment as are required to be assigned to the Purchaser
without any consent or approval or where such consent or approval is
required it will be obtained on or before Closing;

(d) All Equipment comprised in the Assets are in normal operating
condition and in a state of reasonable maintenance and repair;

(e) The financial information contained in Schedule C attached hereto is
the Full Cable & Excel Billing Report (the "Report") which describes
the income generated from subscribers and expenses associated
therewith and constitutes a full, complete and true financial report
of the Business and the income and expenses incurred in connection
therewith. The Report has been prepared in a manner consistent with
previous reports;

(f) The Vendor is not aware of any facts or circumstances, which would
cause the Report to be untrue in any way or which would adversely
effect or impact on the financial affairs or net revenue of the
Business or otherwise diminish the value of the Assets to the
Purchaser;

(g) The Vendor is not in default of any term, condition or provision of
any of the leases or licenses of the Equipment and the Contracts and
all such leases or licenses of the Equipment and the Contracts are in
good standing;

(h) The Vendor is not aware of any programmers with which it has business
relationships which are considering terminating, reviewing or changing
its relationship with the Vendor or their pricing to the Vendor;

(i) The Vendor is not aware of any customers with which it has business
relationships which are considering terminating, reviewing or changing
its relationship with the Vendor or contesting the pricing of services
provided by the Vendor;

(j) The Vendor is not a party to any collective bargaining agreement or
other agreement with a trade union by which the Purchaser will be
bound by virtue of the purchase of the Assets;

-3-
<PAGE>

(k) Neither the execution and delivery of this Agreement, nor the
completion of the purchase and sale contemplated herein will:

(i) violate any of the terms and provisions of any order, statute,
by-law, regulation, covenant or restriction applicable to the
Vendor, the Business or any of the Assets;

(ii) give any person the right to terminate, cancel or remove any of
the Assets; or

(iii) result in any fees, duties, taxes (other than Provincial Sales
Tax), assessments or other amounts relating to any of the Assets
becoming due or payable by the Purchaser;

(l) The Vendor owns and possesses and has a good and marketable title to
the Assets free and clear of all mortgages, liens, charges, pledges,
security interests, encumbrances and other claims whatsoever and the
Vendor has good and sufficient right, power and authority to transfer
to the Purchaser the legal beneficial title to and ownership of all
the Assets, free and clear of all mortgages, liens, charges, pledges,
security interest, encumbrances, or claims of every nature and kind
whatsoever;

(m) All governmental licenses and permits required for the conduct of the
Vendor's Business and the uses to which the Assets have been put, have
been obtained and are in good standing and such conduct and uses are
not in breach of any statute, by-law, regulation, covenant,
restriction, plan or permit;

(n) The Vendor is not a "non-resident person" within the meaning of that
phrase in Section 116 of the INCOME TAX ACT (Canada);

(o) The Vendor has no indebtedness to any person, firm or corporation
which by operation of law or otherwise might now or hereafter
constitute a lien, charge or encumbrance upon any of the purchased
Assets;

(p) The Vendor has paid all excise, sales, business and property taxes and
all other rates, charges, assessments, levies and duties of whatsoever
nature and kind to be required by law insofar as they are due and
payable insofar as they affect the Assets;

(q) The Vendor is not a party to or threatened by any proceedings,
litigation or investigations which involve the possibility of
materially or adversely affecting the financial condition of the
Business, the Assets or the ability of the Vendor to complete the
transaction contemplated by this Agreement; and

(r) No representation or warranty by the Vendor in this Agreement nor any
statement or certificate furnished or to be furnished pursuant to this
Agreement or in

-4-
<PAGE>

connection with the transactions herein contemplated knowingly
contains or will knowingly contain any untrue statement of fact or
knowingly omits to state or will knowingly omit to state any fact
necessary in order to make the statements herein and therein not
misleading.

5. The Vendor covenants and agrees:

(a) To use its best efforts in assisting the Purchaser in an orderly
transition of the Business and the transfer of the Assets to the
Purchaser including but not limited to:

(i) Reviewing and informing the Purchaser with respect to the
financial affairs; record keeping; status of contracts and
maintenance thereof and the billing of and cut-off procedures
and timelines regarding billing periods of customers and
provision of services to the customers of the Business all of
which are necessary to maintain the Business and the income
generated therefrom;

(ii) Carryover of existing rates from the programmers which provide
services to the Vendor; and

(iii) Notifying all customers of the Vendor of this purchase and sale.

(b) To take or cause to be taken all proper steps, actions and corporate
proceedings on its part (including the approval of the sale by the
shareholders of the Vendor if required) to enable it to vest a good
and marketable title in the Purchaser to the Assets, free and clear of
all liens, mortgages, encumbrances, equities or claims of every nature
and kind whatsoever, and shall deliver on the Closing Date such deeds
of conveyance, bills of sale, transfers, assignments and consents
(including consents by creditors of the Vendor, if required) and
consents to the transfers of licenses, leases, leasehold properties,
contracts and rights as the solicitor for the Purchaser may reasonably
require;

(d) Both before and after the Closing Date, the Vendor will, execute and
do all such further deeds, acts, things and assurances as may be
requisite in the opinion of the solicitors for the Purchaser for more
perfectly and absolutely assigning, transferring and assuring to and
vesting in the Purchaser title to the Assets free and clear of all
liens, mortgages and encumbrances, equities or claims of every nature
and kind whatsoever, save as aforesaid;

(e) At the Closing, to deliver to the Purchaser:

(i) all books, records, contracts, memoranda and documents relating
to the Assets;

(ii) all business leads;

-5-
<PAGE>

(iii) full and complete itemization of all specifications and
information in the possession or control of the Purchaser
relating to the Assets.

INDEMNIFICATION

6. The Vendor shall indemnify and hold harmless the Purchaser and all of its
servants, employees and agents, from any and all actions, causes of
actions, suits, proceedings, demands, assessments, judgments, damages,
deficiencies, costs and legal and other expenses resulting from any breach
of warranty, misrepresentation or non-fulfilment of any covenant on the
part of the Vendor under this Agreement and from any misrepresentation in
or omission from any certificate or other instrument furnished or to be
furnished to the Purchaser hereunder.

7. The Purchaser shall indemnify and hold harmless the Vendor and all of its
servants, employees and agents, from any and all actions, causes of
actions, suits, proceedings, demands, assessments, judgments, damages,
deficiencies, costs and legal and other expenses resulting from the
purchase of the Assets under this Agreement and the operation of the
business following the closing of this Agreement.

PURCHASER'S CONDITIONS

8. Notwithstanding anything herein contained, the obligation of the Purchaser
to complete the purchase hereunder shall be subject to the following
conditions:

(a) The representations and warranties of the Vendor contained in this
Agreement shall be true on and as of Closing;

(b) All of the covenants and agreements of the Vendor to be performed on
or before Closing pursuant to the terms of this Agreement shall have
been duly performed;

(d) The Vendor shall deliver to the Purchaser on or before Closing
certified copies of Resolutions of the Directors and Shareholders of
the Vendor, if required, authorizing the sale of the Assets in form
and substance satisfactory to the solicitor for the Purchaser;

(e) The Purchaser shall have received from its solicitor an opinion to the
effect that a good and valid title to the assets is vested in the
Purchaser free and clear of all liens, encumbrances, equities or
claims of every nature or kind, (such solicitor may for the purpose of
such opinion rely on a certificate of an officer or officers of the
Vendor to any fact relevant to title); and

(f) That on or before the Closing Date no federal, provincial, regional or
municipal government or any agency thereof shall have enacted any
statute or regulation or

-6-
<PAGE>

announce any policy that will materially or adversely effect the
Business, Assets or the right of the Purchaser to the full enjoyment
of the Assets.

The foregoing conditions are for the sole and exclusive benefit of the
Purchaser and may be waived in whole or in part by the Purchaser.

GENERAL PROVISIONS

9. The parties agree to complete and file the required elections under the
provisions of the GOODS AND SERVICES TAX ACT of Canada (GST) in the
prescribed form and time and take such steps necessary to make this
transaction exempt from the payment of GST.

10. The Assets shall be at the risk of the Vendor up to Closing and shall be at
the risk of the Purchaser on and after Closing.

11. All the representations, warranties, covenants and agreements of the Vendor
contained in this Agreement shall survive the Closing Date and the payment
of the Purchase Price.

12. Time shall be of the essence of this Agreement.

13. It is understood and agreed that the purchase shall be deemed to have taken
effect after the close of business on December 31, 1998 and all purchases
and sales as of and from that date shall be deemed to have been conducted
for and on behalf of the Purchaser. The closing shall take place at the
offices of the Purchaser's solicitors, Wilson Danderfer Banno & Mitchell,
Vancouver, British Columbia at 2:00pm (Vancouver time) on December 31, 1998
(referred to as "Closing" or the "Closing Date").

14. Any monies collected by the Purchaser with respect to accounts owing to the
Vendor after Closing shall be endorsed over to the Purchaser or deposited
by the Vendor to an account at the banking institution in favour of the
Vendor in accordance with the directions of the Purchaser.

15. Any notice required or permitted to be given hereunder may be effectively
given by prepaid registered post addressed as follows:

If to the Vendor:

4-12 Electronics Corporation
#17 - 1421 St. James St.,
Winnipeg, Manitoba, R3H OY9
Attention: Chris Nelson, CEO
Fax: 204 Tel: 204

If to the Purchaser:

MDU COMMUNICATIONS INC:
#108 - 11951 Hammersmith Way,

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<PAGE>

Richmond, BC, V7A 5H9
Attention: Doug Irving, Secretary
Fax: 604 277-8301 Tel: 604 277-8150

or at such other address as may from time to time be notified in writing by
any of the foregoing. Any such notice, request, demand or other
communication shall be deemed to have been given and received, if delivered
by hand, on the day delivered and, if mailed, on the second day (excluding
holidays) after it has been posted as aforesaid at any postal station in
British Columbia provided that if mailed, should there be at the time of
mailing or between the time of mailing and the actual receipt of notice, a
mail strike, slowdown or other dispute which might affect the delivery of
such notice by the mails, then such notice shall only be effective when
actually delivered. For the purpose of this paragraph the term "holiday"
shall have the same meaning as set out in the Interpretation Act (B.C.).

16. This Agreement shall enure to the benefit of and be binding upon the
parties hereto, their respective heirs, executors, administrators,
successors and assigns.

17. This Agreement once signed may be delivered and received in facsimile form,
which shall be deemed an original together with any counterparts, which may
also be delivered and received, in facsimile form.

IN WITNESS WHEREOF the parties hereto have hereunto affixed their respective
corporate seals in the presence of their duly authorized signing officers and
have affixed their respective hands and seal the day and year first above
written.

4-12 Electronics Corporation:

Per: /s/ Chris Nelson
-----------------------------
Authorised Signatory

MDU COMMUNICATIONS INC:

Per: /s/ Sheldon Nelson
-----------------------------
Authorised Signatory

-8-

<PAGE>

EXHIBIT 6.4

MDU COMMUNICATIONS INTERNATIONAL INC.
DIRECTORS'/OFFICERS' NON-QUALIFIED STOCK OPTION AGREEMENT

MDU Communications International Inc., a Colorado corporation (the "Company")
does hereby grant to Sheldon Nelson (the "Optionee") an option (the "Option") to
purchase an aggregate of 175,000 shares (the "Shares") of the common stock
without par value (the "Common Stock"), of the Company at (US) $1.00 per share
(the "Option Price").

This Option is granted pursuant to and is subject in all respects to the terms
and provisions of the Company's 1998 Directors'/Officers' Stock Option Plan,
dated November 24, 1998 (the "Plan"), which is incorporated herein by reference.
This Option is being granted to the Optionee as additional compensation for
services rendered by him or it to the Company.

1. TERM. This Option shall expire at 5:00 p.m., local time in Vancouver,
British Columbia, on November 24, 2003 except as otherwise provided in the
Plan.

2. TIME OF EXERCISE. This Option may be exercised, in the manner
hereinafter provided, as to all or part of the Shares at any time and from
time to time prior to the expiration hereof; provided, that no exercise of
this Option shall be for an aggregate exercise price of less than $1,000 U.S.

3. MANNER OF EXERCISE. This Option may only be exercised by written notice
(the "Exercise Notice") to the Company at its principal executive offices, to
the attention of its Secretary, no less than three business days in advance
of the effective date of the proposed exercise. The Exercise Notice, a form
of which is provided at the end of this Option for the convenience of the
Optionee, shall:

(i) specify the number of Shares with respect to which the Option is being
exercised;

(ii) specify the effective date of the proposed exercise;

(iii) contain the express confirmation by the Optionee of his
representations, warranties and covenants contained in Section 6
hereof;

(iv) be signed by the Optionee;

(v) be accompanied by full payment of the Option Price for the number of
Shares specified in the Exercise Notice; and

(vi) be accompanied by a copy of the executed Option agreement.

<PAGE>
2

The Company shall deliver to the Optionee a certificate representing such
Shares registered in the name of the Optionee as soon as practicable
following the effective date on which this Option is exercised; provided,
however, that the Company shall not be obligated to cause to be issued or
delivered any certificates evidencing Shares unless and until the Company is
advised by its counsel that the issuance of such Shares and the delivery of
such certificates is in compliance with all applicable laws, rules and
regulations of all governmental authorities and the requirements of any
securities exchange or any securities association on which, or on the
facilities of which, shares of the Common Stock are then listed or traded.
Such delivery shall be deemed to have been made on the effective date of the
exercise as specified in the Exercise Notice so that the Optionee shall be
treated for all purposes as having become the record holder of the Shares
specified in the Exercise Notice at such time and such exercise shall be at
the Option Price in effect at such time; provided, however, that:

(a) the Company may defer the effective date of the exercise in order to
allow the issuance of the Shares to be made pursuant to registration or
an exemption from registration or other methods for compliance
available under federal or state securities laws; and

(b) no Exercise Notice received by the Company on a date when the stock
transfer books of the Company are closed for any reason shall be
effective to constitute the Optionee as the record holder of the Shares
specified in the Exercise Notice on the effective date specified
therein, but such Exercise Notice shall be effective to constitute the
Optionee as the record holder of such shares on the next succeeding day
on which such stock transfer books are open.

4. PAYMENT. Payment of the Option Price may be made, at the election of
the Optionee:

(i) in cash;

(ii) by certified or bank cashier's check payable to the Company's order;

(iii) by wire transfer; and

(iv) by delivery of certificates, duly endorsed or accompanied by duly
executed stock powers with all transfer tax stamps, if any, required
affixed, representing shares of the Common Stock, with a Fair Market
Value (as defined in the Plan) on the effective date of exercise of
this Option equal to the Option Price or by any combination of the
foregoing.

5. NON-TRANSFERABILITY OF OPTION. Neither this Option nor any interest
herein may be transferred, sold, assigned, alienated, pledged or otherwise
encumbered, in whole or in part, otherwise than by will or by the laws of
descent and distribution or pursuant to a qualified domestic relations order
(as defined in the Internal Revenue Code of 1986, as amended). The terms of
this Option shall be binding upon the executors, administrators, heirs,
successors and

<PAGE>
3

assigns of the Optionee. This Option, during the lifetime of the Optionee,
may be exercised only by the Optionee.

6. NON-TRANSFERABILITY OF SHARES. The Optionee, by acceptance hereof,
hereby represents, warrants and agrees that, upon exercise of this Option,
unless the Shares are then covered by an effective registration statement
under the SECURITIES ACT OF 1933, as amended (the "Act"):

(i) the Shares are being acquired for investment and not with a view
towards the public distribution or resale thereof;

(ii) the Optionee will not sell, transfer or assign any Shares except in
compliance with the Act and the Rules and Regulations thereunder;

(iii) the certificate representing the Shares may bear an appropriate
restrictive legend; and

(iv) the transfer agent of the Company may place a stop transfer notation
with respect to the Shares in the stock transfer books of the Company.
The Optionee further acknowledges that the Company is not required to
file and cause to become effective any registration or qualification of
the Shares under the Act or any state securities laws.

7. OPTION SUBJECT TO PLAN. This Option agreement is in all respects
subject to the terms of the Plan. If and to the extent that the terms of this
Option conflict with the terms of the Plan, the terms of the Plan shall
supersede any conflicting terms of this Option.

8. ACCEPTANCE BY OPTIONEE. Acceptance of this Option by the Optionee
shall be deemed the agreement of the Optionee to all of the terms hereof and
of the Plan, and the agreement of the Optionee to accept as binding,
conclusive, and final all decisions and interpretations of the Committee (as
defined in the Plan) or the Board of Directors upon any questions arising
under the Plan. As a condition to the issuance of shares of Common Stock of
the Company under this Option, arrangements must be made with the Company
pursuant to the Plan to satisfy any taxes required to be withheld by the
Company under U.S. and Canadian Federal, state or local law as a result of
the exercise of this Option prior to the delivery of any certificate or
certificates for shares of Common Stock.

IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
officer thereunto duly authorized this 24th day of November, 1998.

MDU COMMUNICATIONS INTERNATIONAL INC.

By: /s/ Douglas Irving
---------------------------------------
Corporate Secretary

/s/ Sheldon Nelson
---------------------------------------
SHELDON NELSON - OPTIONEE

<PAGE>

EXHIBIT 6.5

MDU COMMUNICATIONS INTERNATIONAL INC.
DIRECTORS'/OFFICERS' NON-QUALIFIED STOCK OPTION AGREEMENT

MDU Communications International Inc., a Colorado corporation (the "Company")
does hereby grant to Douglas Irving (the "Optionee") an option (the "Option") to
purchase an aggregate of 125,000 shares (the "Shares") of the common stock
without par value (the "Common Stock"), of the Company at (US) $1.00 per share
(the "Option Price").

1. TERM. This Option shall expire at 5:00 p.m., local time in
Vancouver, British Columbia, on November 24, 2003 except as otherwise
provided in the Plan.

3. MANNER OF EXERCISE. This Option may only be exercised by written
notice (the "Exercise Notice") to the Company at its principal executive
offices, to the attention of its Secretary, no less than three business days
in advance of the effective date of the proposed exercise. The Exercise
Notice, a form of which is provided at the end of this Option for the
convenience of the Optionee, shall:

(i) specify the number of Shares with respect to which the Option is
being exercised;

(ii) specify the effective date of the proposed exercise;

(iii) contain the express confirmation by the Optionee of his
representations, warranties and covenants contained in Section 6
hereof;

(iv) be signed by the Optionee;

(v) be accompanied by full payment of the Option Price for the number of
Shares specified in the Exercise Notice; and

(vi) be accompanied by a copy of the executed Option agreement.

<PAGE>
2

4. PAYMENT. Payment of the Option Price may be made, at the election of
the Optionee:

(i) in cash;

(ii) by certified or bank cashier's check payable to the Company's order;

(iii) by wire transfer; and

<PAGE>
3

assigns of the Optionee. This Option, during the lifetime of the Optionee,
may be exercised only by the Optionee.

(i) the Shares are being acquired for investment and not with a view
towards the public distribution or resale thereof;

(ii) the Optionee will not sell, transfer or assign any Shares except in
compliance with the Act and the Rules and Regulations thereunder;

(iii) the certificate representing the Shares may bear an appropriate
restrictive legend; and

IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
officer thereunto duly authorized this 24th day of November, 1998.

MDU COMMUNICATIONS INTERNATIONAL INC.

By: /s/ Sheldon Nelson
----------------------------------
President

/s/ Douglas Irving
- -------------------------------------
DOUGLAS IRVING - OPTIONEE

<PAGE>

EXHIBIT 6.6

MDU COMMUNICATIONS INTERNATIONAL INC.
SUPPLIERS' NON-QUALIFIED STOCK OPTION

MDU Communications International Inc., a Colorado corporation (the "Company")
does hereby grant to CHRIS NELSON (the "Optionee"), an option (the "Option")
to purchase an aggregate of 100,000 shares (the "Shares") of the common stock
without par value (the "Common Stock"), of the Company at (US) $ 1.50 per
share (the "Option Price").

This Option is granted pursuant to and is subject in all respects to the
terms and provisions of the Company's 1998 Suppliers' Stock Option Plan,
dated December 31, 1998 (the "Plan"). This Option is being granted to the
Optionee as additional compensation for discounted services rendered by him
or it to the Company.

1. TERM. This Option shall expire at 5:00 p.m., local time in Vancouver,
British Columbia, on December 31, 2003, except as otherwise provided in the
Plan.

(i) specify the number of Shares with respect to which the Option is being
exercised;

(ii) specify the effective date of the proposed exercise;

(iii) contain the express confirmation by the Optionee of his representations,
warranties and covenants contained in Section 6 hereof;

(iv) be signed by the Optionee;

(v) be accompanied by full payment of the Option Price for the number of
Shares specified in the Exercise Notice; and

(vi) be accompanied by a copy of the executed Option agreement.

The Company shall deliver to the Optionee a certificate representing such
Shares registered in the name of the Optionee as soon as practicable
following the effective date on which this Option

<PAGE>
2

is exercised; provided, however, that the Company shall not be obligated to
cause to be issued or delivered any certificates evidencing Shares unless and
until the Company is advised by its counsel that the issuance of such Shares
and the delivery of such certificates is in compliance with all applicable
laws, rules and regulations of all governmental authorities and the
requirements of any securities exchange or any securities association on
which, or on the facilities of which, shares of the Common Stock are then
listed or traded. Such delivery shall be deemed to have been made on the
effective date of the exercise as specified in the Exercise Notice so that
the Optionee shall be treated for all purposes as having become the record
holder of the Shares specified in the Exercise Notice at such time and such
exercise shall be at the Option Price in effect at such time; provided,
however, that:

(a) the Company may defer the effective date of the exercise in order to allow
the issuance of the Shares to be made pursuant to registration or an
exemption from registration or other methods for compliance available
under federal or state securities laws; and

(b) no Exercise Notice received by the Company on a date when the stock
transfer books of the Company are closed for any reason shall be effective
to constitute the Optionee as the record holder of the Shares specified in
the Exercise Notice on the effective date specified therein, but such
Exercise Notice shall be effective to constitute the Optionee as the
record holder of such shares on the next succeeding day on which such
stock transfer books are open.

4. PAYMENT. Payment of the Option Price may be made, at the election of the
Optionee:

(i) in cash;

(ii) by certified or bank cashier's check payable to the Company's order;

(iii) by wire transfer; and

(iv) by delivery of certificates, duly endorsed or accompanied by duly executed
stock powers with all transfer tax stamps, if any, required affixed,
representing shares of the Common Stock, with a Fair Market Value (as
defined in the Plan) on the effective date of exercise of this Option
equal to the Option Price or by any combination of the foregoing.

<PAGE>
3

(i) the Shares are being acquired for investment and not with a view towards
the public distribution or resale thereof;

(ii) the Optionee will not sell, transfer or assign any Shares except in
compliance with the Act and the Rules and Regulations thereunder;

(iii) the certificate representing the Shares may bear an appropriate
restrictive legend; and

(iv) the transfer agent of the Company may place a stop transfer notation with
respect to the Shares in the stock transfer books of the Company. The
Optionee further acknowledges that the Company is not required to file and
cause to become effective any registration or qualification of the Shares
under the Act or any state securities laws.

7. OPTION SUBJECT TO PLAN. This Option is in all respects subject to the
terms of the Plan. If and to the extent that the terms of this Option
conflict with the terms of the Plan, the terms of the Plan shall supersede
any conflicting terms of this Option.

8. ACCEPTANCE BY OPTIONEE. Acceptance of this Option by the Optionee shall
be deemed the agreement of the Optionee to all of the terms hereof and of the
Plan, and the agreement of the Optionee to accept as binding, conclusive, and
final all decisions and interpretations of the Committee (as defined in the
Plan) or the Board of Directors upon any questions arising under the Plan. As
a condition to the issuance of shares of Common Stock of the Company under
this Option, arrangements must be made with the Company pursuant to the Plan
to satisfy any taxes required to be withheld by the Company under U.S. and
Canadian Federal, state or local law as a result of the exercise of this
Option prior to the delivery of any certificate or certificates for shares of
Common Stock.

IN WITNESS WHEREOF, the Company has caused this Option to be executed by its
officer thereunto duly authorized this 31st day of December, 1998.

MDU COMMUNICATIONS INTERNATIONAL INC.

By: /s/ Sheldon Nelson
--------------------------------------
President

/s/ Chris Nelson
- -----------------------------------------
CHRIS NELSON - OPTIONEE