ASSET PURCHASE AGREEMENT
 
dated October 19, 2006
 
by and between
 
CONSOLIDATED SMART BROADBAND SYSTEMS, LLC
 
and
 
MULTIBAND CORPORATION
 

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ASSET PURCHASE AGREEMENT
 
THIS ASSET PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of
October 19, 2006, by and between Multiband Corporation, a Minnesota corporation
(“Multiband”), and Rainbow Satellite Group, LLC, a Connecticut limited liability
company and wholly owned subsidiary of Multiband (“Rainbow” and together with
Multiband, the “Sellers” and individually, a “Seller”), and Consolidated Smart
Broadband Systems, LLC, a California limited liability company (“Purchaser”).
 
WHEREAS, Sellers provide voice, data, and video services, including cable
television and Internet services, to multiple dwelling unit customers in the
United States (the “Private Cable Operator Business”).
 
WHEREAS, Sellers wish to sell to Purchaser, and Purchaser wishes to buy from
Sellers, certain assets used by Sellers in the conduct of each Seller’s Private
Cable Operator Business in California (collectively, the “Business”) on the
terms and for the consideration hereinafter provided.
 
NOW THEREFORE, in consideration of the respective representations, warranties,
covenants and agreements contained herein, and subject to the terms and
conditions set forth herein, the parties hereto agree as follows:
 
ARTICLE 1
DEFINITIONS
 
1.1  Specific Definitions.As used in this Agreement, the following terms shall
have the meanings set forth or referenced below:
 
(a)  “Affiliate” of a specified Person means a Person that directly or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the person specified. “Control” shall mean
ownership of more than 50% of the shares of stock entitled to vote for the
election of directors in the case of a corporation, and more than 50% of the
voting power in the case of a business entity other than a corporation.
 
(b)  “Annualized Average Normalized PPC” means, with respect to each ROE
Property, the average of the prepaid programming commissions normalized to
reflect a prepaid programming commission rate of $175.00 per DTH Subscriber
activation for the eight month period ending on August 31, 2006 with respect to
the calculation of the Purchase Price, annualized to convert the normalized
8-month prepaid programming commissions to an annual amount, and (ii) for the
six month period ending on November 30, 2007 with respect to the calculation of
the Earnout Amount, annualized to convert the normalized 6-month prepaid
programming commissions to an annual amount.
 
(c)  “Assets” means (i) all of the ROE Agreements, (ii) all inventory and
equipment owned by Sellers related to the Business and the Assets, including,
without limitation, all the equipment listed on Schedule 1.1(b), the
distribution Systems, including, SMATV head-end distribution systems, L-Band
distribution systems and master antenna television distribution systems used for
central distribution of the signals to the Sellers’ existing subscribers, all
customer premise equipment and System Equipment and all uninterrupted power
supply devices and all inventory of or relating to the Business, (iii) all of
the RandM Assets, (iv) all fixed assets, including, without limitation, all
tools, supplies and the two (2) Astro Vans leased by Sellers and the 2 Ford Vans
owned by Sellers as set forth on Schedule 3.6, but specifically excluding all
furniture, phone and computer equipment, (v) all goodwill associated with the
Business and relating to any of the assets described in this Section 1.1(b),
(vi) all accounts receivable distributed pursuant to Section 5.7 below,
including, without limitation, Bulk Service fees, SMATV Non-Bulk Service fees,
receiver fees and other amounts with respect to any ROE Agreement for any ROE
Property identified on Schedule 3.8(a) and any residuals, prepaid programming
commissions or other amounts due to Sellers from DirecTV and outstanding as of
the Closing Date, (vii) all books, records (including, without limitation,
customer records as otherwise set forth in this Agreement) and data relating to
any Asset, (viii) all subscriber agreements between each Seller and a customers
at each ROE Property and (ix) any permits and licenses used or necessary for the
Business.
 
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(d)  “Assumed Liabilities” means the liabilities described in Section 2.2(a).
 
(e)  “Authorizations” has the meaning set forth in Section 3.11.
 
(f)  “Business” means the Private Cable Operator Business of Sellers conducted
by Sellers in California prior to the Closing.
 
(g)  “Bulk Digital Service” means digital television service delivered to all of
the units at an ROE Property for a prescribed monthly fee.
 
(h)  “Bulk EBU Subscribers” means, as of the month ended August 31, 2006 with
respect to the calculation of the Purchase Price and as of the month ended
November 30, 2007 with respect to the calculation of the Earnout Amount, the
number of subscribers at an ROE Property that has Bulk Service computed by
taking (A) the total number of units at an ROE Property times (B) fifty percent
(50%).
 
(i)  “Bulk Service” means Bulk Digital Service or Bulk SMATV Service.
 
(j)  “Bulk SMATV Service” means television service delivered through a SMATV
System to all of the units at an ROE Property for a prescribed monthly fee.
 
(k)  “COBRA” has the meaning set forth in Section 3.35(c).
 
(l)  “Code” means the Internal Revenue Code of 1986, as amended.
 
(m)  “Closing” and “Closing Date” have the meanings set forth in Section 2.7.
 
(n)  “Closing Date Direct Costs” means the direct costs of Seller as of the
Closing Date as set forth on Schedule 3.5(c).
 
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(o)  “Closing Date Free Cash Flow” means the free cash flow of Purchaser
calculated for each year in the number of Whole Years in the Weighted Average
Remaining ROE Agreement Term as of the Closing Date and calculated by taking
Closing Date Gross Revenue in the amount set forth on Schedule 3.5(d) for the
first year of the total number of Whole Years in the Weighted Average Remaining
ROE Agreement Term as of the Closing Date, less Closing Date Direct Costs in the
amount set forth on Schedule 3.5(c) for the first year in the Closing Date Free
Cash Flow calculation, less Closing Date Operating Expenses for the first year
in the Closing Date Free Cash Flow Calculation, less Maintenance CapEx, and then
applying the Closing Date Free Cash Flow Adjustments to calculate the Closing
Date Free Cash Flow for each of the subsequent Whole Years remaining in the
Weighted Average Remaining ROE Agreement Term as of the Closing Date, as set
forth in Schedule 2.3(a). The calculation of the Closing Date Free Cash Flow
shall not include any amounts with respect to the RandM Assets.
 
(p)  “Closing Date Free Cash Flow Adjustments” means the Closing Date Free Cash
Flow of Purchaser calculated as of the Closing Date for the number of Whole
Years in the Weighted Average Remaining ROE Agreement Term as of the Closing
Date (i) based on the number of Subscribers as of the Closing Date for the first
year increased by an annual twenty percent (20%) increase in the number of DTH
Subscribers as of the Closing Date for each subsequent Whole Year up to a
maximum of 8,000 DTH Subscribers and is fixed at 8,000 DTH Subscribers for each
remaining Whole Year thereafter, (ii) assuming the average term of a new
Subscriber for the first year of subscription at 6 months and for each Whole
Year thereafter, at 12 months, (iii) assuming the gross revenue for each new
Subscriber is $35 for each month of subscription, (iv) assuming that the direct
cost for each new Subscriber is $5.00 for each month of subscription; (v)
assuming call center and billing costs at the rate of $3.00 per month for each
Subscriber, (vi) assuming fixed on-site marketing costs at the rate of
$60,000.00 for each year in the calculation, (vii) assuming fixed office,
telephone, postage and similar costs at the rate of $18,000.00 for each year in
the calculation, (viii) assuming that each of payroll and related benefit
expenses and vehicle and vehicle-related expenses for the first year increase at
the rate of 2.5% for each subsequent year in the calculation, and (xiv) assuming
that Maintenance CapEx is fixed in the amount of $100,000.00 for each year in
the calculation.
 
(q)  “Closing Date Gross Margin” means the gross margin of Seller as of the
Closing Date as set forth on Schedule 3.5(d).
 
(r)  “Closing Date Gross Revenue” means the gross revenue as of the Closing Date
set forth on Schedule 3.5(b).
 
(s)  “Closing Date Operating Expenses” means the incremental variable expenses
incurred to operate the Assets and includes the following as of the Closing
Date: (i) call center and billing expenses at an assumed monthly rate of three
dollars ($3.00) per Subscriber as of the Closing Date multiplied by twelve (12)
months, (ii) onsite marketing expenses estimated at an annual cost of
$60,000.00, (iii) office, telephone, postage and similar expenses estimated at
an annual cost of $18,000.00, (iv) payroll and related benefit expenses in the
amount of $571,356.00 for the first year, and (v) vehicle and vehicle-related
expenses in the amount of $122,892.00 for the first year.
 
(t)  “Closing Extension Option” has the meaning sets forth in Section 2.7.
 
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(u)  “Confidential Information” includes all information disclosed by any party
to this Agreement to another party, including, without limitation, the
existence, terms and conditions of this Agreement, any information about the ROE
Properties or ROE Agreements, the existence and terms of any arrangements
between Purchaser and its suppliers or Purchaser and Sellers, and any
information in Sellers’ possession with respect to the Assets.
 
(v)  “Consents” has the meaning set forth in Section 3.19.
 
(w)  “Contract” means any contract, purchase or sale order, lease, license,
commitment and other agreement, whether written or oral, relating to the
Business to which either Seller is a party or an assignee or other beneficiary
thereof, including, without limitation, the ROE Agreements.
 
(x)  “DirecTV” means DirecTV, Inc., a California corporation.
 
(y)  “DirecTV Residual Report” means that certain monthly DirecTV Residual
Report, which sets forth the number and type of Subscribers on which DirecTV
pays commissions to Sellers for the particular month indicated in the report.
 
(z)  “Disclosure Schedules” means all of the Schedules delivered by Sellers to
Purchaser under this Agreement.
 
(aa)  “DTH Subscriber” means a direct-to-home subscriber at an ROE Property
listed on the DirecTV Residual Report with a paid residual to the Sellers per
the DirecTV Residual Report for the month ended June 30, 2006 with respect to
the calculation of the Purchase Price and per the DirecTV Residual Report for
the month ended November 30, 2007 with respect to the calculation of the Earnout
Amount.
 
(bb)  “Earnout Amount” means the greater of (i) four hundred thousand dollars
($400,000.00) or (ii) the amount derived from the Earnout Date Free Cash Flow
over the Weighted Average Remaining ROE Agreement Term as of the Earnout Date,
which results in the Purchaser Minimum IRR as of the Earnout Date, minus the
cash portion of the Purchase Price paid on the Closing Date.
 
(cc)  “Earnout Date” means the first anniversary date of the Closing or nine (9)
months after the Closing Date if the Closing Extension Option is exercised.
 
(dd)  “Earnout Date Direct Costs” means, with respect to all ROE Properties
other than the RandM Assets, the sum of each of the following paid by the
Sellers for the month ended November 30, 2007, annualized to convert such
1-month costs into an annual cost: (i) all Owner Commissions, plus (ii) the fees
for Bulk Digital Service paid to DIRECTV, plus (iii) the fees for Bulk SMATV
Service paid to DIRECTV, plus (iv) the transport fees paid to 4COM, plus (v) the
fees paid for SMATV Non-Bulk Service to DIRECTV.
 
(ee)  “Earnout Date Free Cash Flow” means the free cash flow of Purchaser
calculated for each year in the number of Whole Years in the Weighted Average
Remaining ROE Agreement Term as of the Earnout Date and calculated by taking the
Earnout Date Gross Revenue for the first year of the total number of Whole Years
remaining in the Weighted Average Remaining ROE Agreement Term as of the Earnout
Date, less Earnout Date Direct Costs for the first year in the Earnout Date Free
Cash Flow calculation, less Earnout Date Operating Expenses for the first year
in the Earnout Date Free Cash Flow Calculation, less Maintenance CapEx, and then
applying the Earnout Date Free Cash Flow Adjustments to calculate the Earnout
Date Free Cash Flow for each of the subsequent Whole Years remaining in the
Weighted Average Remaining ROE Agreement Term as of the Earnout Date. For
purposes of this definition, Earnout Date Free Cash Flow will include the
annualized Internet Gross Margin based upon the Purchaser’s actual Internet
Gross Margin for the three (3)-month period ended November 30, 2007. The
calculation of the Earnout Date Free Cash Flow shall not include any amounts
with respect to the RandM Assets.
 
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(ff)  “Earnout Date Free Cash Flow Adjustments” means the Earnout Date Free Cash
Flow of Purchaser calculated as of the Earnout Date for the number of Whole
Years in the Weighted Average Remaining ROE Agreement Term as of the Earnout
Date (i) based on the number of Subscribers as of the Earnout Date for the first
year increased by an annual twenty percent (20%) increase in the number of DTH
Subscribers as of the Earnout Date for each subsequent year up to a maximum of
8,000 DTH Subscribers and is fixed at 8,000 DTH Subscribers for each Whole Year
thereafter, (ii) assuming the average term of a new Subscriber for the first
year of subscription at 6 months and for each Whole Year thereafter at 12
months, (iii) assuming the gross revenue for each new Subscriber is $35 for each
month of subscription, (iv) assuming that the direct cost for each new
Subscriber is $5.00 for each month of subscription; (v) assuming call center and
billing costs at the rate of $3.00 per month for each Subscriber, (vi) assuming
fixed on-site marketing costs at the rate of $60,000.00 for each year in the
calculation, (vii) assuming fixed office, telephone, postage and similar costs
at the rate of $18,000.00 for each year in the calculation, (viii) assuming that
each of payroll and related benefit expenses and vehicle and vehicle-related
expenses for the first year increase at the rate of 2.5% for each subsequent
year in the calculation, and (xiv) assuming that Maintenance CapEx is fixed in
the amount of $100,000.00 for each year in the calculation.
 
(gg)  “Earnout Date Gross Revenue” means, with respect to all ROE Properties
(other than the RandM Assets), the sum of (i) the DirecTV residuals paid to
Sellers pursuant to the DTV Residual Report for the month ended November 30,
2007, annualized to convert the 1-month total to an annual total, plus (ii) the
DIRECTV annualized Average Normalized PPC, plus (iii) the normalized receiver
fees at the normalized monthly rate of $6.99 per DTH Subscriber, calculated for
a 12-month period, plus (iv) the fees for Bulk Digital Service billed to such
ROE Property for the month ended November 30, 2007, annualized to convert the
1-month fees to an annual total, plus (v) the fees for Bulk SMATV Service billed
to such ROE Property for the month ended November 30, 2007, annualized to
convert the 1-month fees to an annual total, plus (vi) the fees for SMATV
Non-Bulk Service billed to each subscriber at such ROE Property for the month
ended November 30, 2007, annualized to convert the 1-month fees to an annual
total.
 
(hh)  “Earnout Date Operating Expenses” means the incremental variable expenses
incurred by Purchaser to operate the Assets and includes the following as of the
Earnout Date: (i) call center and billing expenses at an assumed monthly rate of
three dollars ($3.00) per Subscriber as of the Earnout Date multiplied by twelve
(12) months, (ii) onsite marketing expenses estimated at an annual cost of
$60,000.00, (iii) office, telephone, postage and similar expenses estimated at
an annual cost of $18,000.00, (iv) payroll and related benefit expenses in the
amount of $585,640.00 for the first year, and (v) vehicle and vehicle-related
expenses in the amount of $125,965.00 for the first year.
 
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(ii)  “Employee Plans” has the meaning set forth in Section 3.35(a).
 
(jj)  “Environmental Laws or Regulations” means and includes any one or more of
the following: the Comprehensive Environmental Response Compensation and
Liability Act (“CERCLA”), as amended by the Superfund Amendments and
Reauthorization Act of 1986 (“SARA”), 42 U.S.C. § 9601 et seq.; the Federal
Resource Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. § 6921 et
seq.; the Clean Water Act, 33 U.S.C. § 1321 et seq.; the Clean Air Act, 42
U.S.C. § 7401 et seq.; any other federal, state, county, municipal, local or
other statute, law, ordinance or regulation that relates to or deals with
Hazardous Substances, human health or the environment; and all regulations and
regulatory policies promulgated by a regulatory body pursuant to any of the
foregoing statutes, laws, regulations or ordinances.
 
(kk)  “ERISA” means the Employee Retirement Income Security Act of 1974.
 
(ll)  “ERISA Affiliate” has the meaning set forth in Section 3.35(a).
 
(mm)  “Event” means any event, act, omission, circumstance, occurrence,
condition or situation.
 
(nn)  “FCC”means the Federal Communications Commission.
 
(oo)  “GAAP” means generally accepted accounting principles for financial
reporting in the United States, applied on a basis consistent with the basis on
which the financial statements referred to in Section 3.5 were prepared.
 
(pp)  “Gross Margin” means, with respect to each ROE Property, the difference
between the Gross Revenue and the Total Direct Cost for such ROE Property.
 
(qq)  “Gross Margin Percentages” means twenty-six percent (26%) for Multiband
and seventy-four percent (74%) for Rainbow.
 
(rr)  “Hazardous Substance” means asbestos, urea formaldehyde, polychlorinated
biphenyls, nuclear fuel or materials, chemical waste, radioactive materials,
explosives, known carcinogens, petroleum products, pesticides, fertilizers, or
any other substance that is dangerous, toxic, or hazardous, or that is a
pollutant, contaminant, chemical, material or substance defined as hazardous or
as a pollutant or contaminant in, or the use, transportation, storage, release
or disposal of which is regulated by, any Environmental Laws or Regulations.
 
(ss)  “Initial Closing” and “Initial Closing Date” has the meaning set forth in
Section 2.7.
 
(tt)  “IRS” means the United States Internal Revenue Service.
 
(uu)  “Knowledge of Sellers” means actual knowledge of each of the officers and
employees of the Sellers, or the knowledge that any of such persons would
reasonably be expected to have assuming reasonable inquiry of any facts or
circumstances actually known to and recognized by such person to create
significant doubt concerning the accuracy of any representation, warranty or
statement without regard to such “knowledge” qualifier.
 
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(vv)  “Legal Requirement” means any federal, state, local, municipal, foreign,
or other constitution, law, ordinance, principle of common law, code,
regulation, statute or treaty.
 
(ww)  Liens” means liens, mortgages, charges, security interests, pledges,
encumbrances, assessments, obligations, restrictions or other third-party claims
of any nature other than statutory liens for Taxes and other governmental
charges and assessments which are not yet due and payable as of the Closing.
 
(xx)  “Maintenance CapEx” means $100,000.00 per year representing the estimated
fixed cost to repair or replace any of the Systems or System Equipment included
in the Assets, including, without limitation, costs to repair or replace wiring
and parts and the related labor costs to repair or replace such wiring and
parts.
 
(yy)  “Material Adverse Effect” means an effect that, individually or in the
aggregate with other related effects, is or could reasonably be expected to be
materially adverse to the business, results of operation or condition (financial
or otherwise) of the Assets or the Business, considered as a whole.
 
(zz)  “Missing ROE Agreement” has the meaning set forth in Section 3.8.
 
(aaa)  “Multiband Assets” means all of the Assets that are owned or held by
Multiband, including, without limitation, the RandM Assets.
 
(bbb)  “Multiband ROE Agreements” means each of the access and use agreements
set forth on Schedule 3.8(a) hereto identified as originating from “MBND” or
“Dinamo” under the column entitled “Origin”.
 
(ccc)  “Multiemployer Plan” has the meaning set forth in Section 3.35(a).
 
(ddd)  “New ROEs” has the meaning set forth in Section 6.6 of this Agreement.
 
(eee)  “Owner” means the owner of any ROE Property.
 
(fff)  “Owner Advances” means any lump sum advance payments made to any Owner
with respect to any ROE Agreement.
 
(ggg)  “Owner Commissions” means any commissions, owner participation fees,
Owner Advances, revenue sharing arrangements, access fees, licensing fees, bonus
payments, or other similar fees or payments due to any Owner or any other Person
with respect to any ROE Agreement or the transactions contemplated in this
Agreement.
 
(hhh)  “Person” means an individual, partnership, corporation, business trust,
limited liability company, limited liability partnership, join stock company,
trust, unincorporated association, joint venture or other entity or a
governmental body
 
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(iii)  “Pre-Closing Owner Commissions” means all Owner Commissions that are
required to have been paid by Sellers on or prior to the Closing Date.
 
(jjj)  “Purchase Price” has the meaning set forth in Section 2.3.
 
(kkk)  “Purchaser Minimum IRR” means (i) as of the Closing, an internal rate of
return to Purchaser of twenty percent (20%) and (ii) as of the Earnout Date, an
internal rate of return to Purchaser of twenty-five percent (25%). For purposes
of the calculation of the Earnout Amount, the investment amount used in
calculating the Purchaser Minimum IRR as of the Earnout Date will include the
Purchase Price (but excluding the RandM Assets Purchase Price and the Assumed
Liabilities) plus the Earnout Amount.
 
(lll)  “Rainbow Assets” means all of the Assets that are owned or held by
Rainbow.
 
(mmm)  “Rainbow ROE Agreements” means each of the California access and use
agreements set forth on Schedule 3.8(a) hereto identified as originating from
“RAIN” under the column entitled “Origin”.
 
(nnn)  “RandM Assets” means all of the Assets that are owned or held by
Multiband and which were acquired by Multiband from Rand’M, a California
corporation, pursuant to that certain Cable Systems Acquisition Agreement
entered into effective September 13, 2006.
 
(ooo)  “RandM Assets Purchase Price” means $200,000.00.
 
(ppp)  “RandM ROE Agreements” means the ROE Agreements included in the RandM
Assets.
 
(qqq)  “Retained Liabilities” has the meaning set forth in Section 2.2.
 
(rrr)  “ROE Agreement” means each of the access and use agreements or service
and installation agreements set forth on Schedule 3.8(a) hereto which includes
all the Multiband ROE Agreements and the Rainbow ROE Agreements, and each RandM
ROE Agreement and each Missing ROE Agreement.
 
(sss)  “ROE Property” means each property subject to an ROE Agreement.
 
(ttt)  “Sales Commission” means with respect to each New ROE, the amount of
commission payable by Sellers to the respective marketing representatives of
Purchaser calculated by multiplying (i) two dollars and fifty cents ($2.50)
times (ii) the number of units at each ROE Property covered by a New ROE times
(iii) the number of years in the term of such New ROE, including any renewal
terms under the sole control of either of the Sellers on or prior to the Closing
Date, up to a maximum of ten (10) years in the aggregate, provided, however,
that any such New ROE has a minimum initial term of five (5) years.
 
(uuu)  “Schedule” means a part of the Disclosure Schedules unless expressly
identified as a Purchaser’s Schedule.
 
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(vvv)  “Schedule 2.4 Payment” has the meaning set forth in Section 2.4.
 
(www)  “SMATV Non-Bulk Service” means SMATV services delivered to individual
residents at an ROE Property using a System that encompasses a headend installed
at such ROE Property and which is not a form of Bulk Service.
 
(xxx)  “SMATV Non-Bulk Subscriber” means a subscriber at an ROE Property that
was billed for SMATV Non-Bulk Service as of August 31, 2006 for the calculation
of the Purchaser Price and as of November 30, 2007 for the calculation of the
Earnout Amount.
 
(yyy)  “Subscriber” means any DTH Subscriber, SMATV Non-Bulk Subscriber or Bulk
EBS Subscriber. 
 
(zzz)  “System” means the cable, direct satellite system, SMATV system, mater
antenna television or other television system built, acquired and/or operated by
Sellers at the ROE Property, including all System Equipment and any and all
other related wiring installed at the ROE Property as of the Closing Date in
connection with the provision of cable, direct satellite television services and
SMATV at the ROE Property.
 
(aaaa)  “System Equipment” means all equipment used in, or necessary for, the
safe and proper operation of the System, including, but not limited to,
satellite dishes, antennas, parabolic receiver antennas, leads, cables, conduit,
terminals, location markers, amplifiers, down converters, wiring, descrambling
equipment, head end equipment (including all racks, security and air
conditioning units, power inserters, modulators, receivers and access cards),
pedestals, junction boxes, vaults, splitters, interdiction devices, power
supplies, receivers, destackers, amplifiers, decoders and other electronic
devices used to distribute broadband communication signals. 
 
(bbbb)  “Taxes” means all taxes, additions to tax, penalties, interest, fines,
duties, withholdings, assessments, and charges assessed or imposed by any
governmental authority, including but not limited to all federal, state, county,
local and foreign income, profits, gross receipts, import, ad valorem, real and
personal property, franchise, license, sales, use, value added, stamp, transfer,
withholding, payroll, employment, excise, custom, duty, and any other taxes,
obligations and assessments of any kind whatsoever; the foregoing shall include,
but not be limited to, any liability arising as a result of being (or ceasing to
be) a member of any affiliated, consolidated, combined, or unitary group as well
as any liability under any tax allocation, tax sharing, tax indemnity or similar
agreement.
 
(cccc)  “WARN Act” has the meaning set forth in Section 3.35(c).
 
(dddd)  “Weighted Average Remaining ROE Agreement Term” means as of any date,
the average remaining term of the ROE Agreements including any automatic renewal
terms under the sole control of either of the Sellers on or prior to the Closing
Date, or the sole control of Purchaser after the Closing Date until the Earnout
Date, weighted based on the applicable Gross Margin for such date. For purposes
of calculating the Weighted Average Remaining ROE Agreement Term as of the date
of this Agreement, any ROE Agreement that is expired is deemed to have a
remaining term (including automatic renewals) of one (1) month and the remaining
term (including automatic renewals) of all other ROE Agreements is based on the
actual term (including automatic renewals) remaining as of such date. For
purposes of calculating the Weighted Average Remaining ROE Agreement Term as of
the Closing Date and as of the Earnout Date, any ROE Agreement that is expired
or has a remaining term (including any automatic renewals) of less than twelve
(12) months will be deemed to have a remaining term (including automatic
renewals) of twelve (12) months and the remaining term (including automatic
renewals) of all other ROE Agreements will be based on the actual term
(including automatic renewals) remaining as of such date.
 
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(eeee)  “Whole Years” means at any date, the number calculated by dividing the
Weighted Average Remaining ROE Agreement Term at such date, by 12 and rounding
the quotient up to the nearest whole number for each fractional year that is
greater than or equal to one-half (0.50).
 
1.2  Other Terms. Other terms may be defined elsewhere in the text of this
Agreement and shall have the meaning indicated throughout this Agreement.
 
1.3  Other Definitional Provisions.
 
(i)  The words “hereof,” “herein,” and “hereunder” and words of similar import,
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provisions of this Agreement.
 
(ii)  The terms defined in the singular shall have a comparable meaning when
used in the plural, and vice versa.
 
(iii)  References to an “Exhibit”, “Annex” or to a “Schedule” are, unless
otherwise specified, to one of the Exhibits, Annexes or Schedules attached to or
referenced in this Agreement, and references to an “Article” or a “Section” are,
unless otherwise specified, to one of the Articles or Sections of this
Agreement.
 
(iv)  The term “Dollars” or “$” shall refer to the currency of the United States
of America.
 
(v)  All references to time shall refer to Los Angeles, California time.
 
(vi)  The term “including” is by way of example and not limitation, whether or
not followed by the words “without limitation” or any similar phrase.
 
ARTICLE 2
PURCHASE AND SALE OF ASSETS
 
2.1  Purchased Assets. Upon the terms and subject to the conditions set forth in
this Agreement, effective as of the Closing, (a) Multiband hereby sells,
transfers, assigns and conveys to Purchaser, and Purchaser hereby purchases, the
Multiband Assets free and clear of all Liens and encumbrances and (b) Rainbow
hereby sells, transfers, assigns and conveys to Purchaser, and Purchaser hereby
purchases, the Rainbow Assets free and clear of all Liens and encumbrances. The
Multiband Assets and the Rainbow Assets are intended to include all the Assets.
 
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2.2  Assumed Liabilities; Retained Liabilities. Purchaser shall assume no
liabilities of Sellers other than the post-closing obligations under the ROE
Agreements following the Closing, which liabilities are expressly assigned to
and assumed by Purchaser hereunder (the “Assumed Liabilities”). It is expressly
agreed and understood that, except for the Assumed Liabilities, Purchaser does
not assume any obligations or liabilities of Sellers, including, without
limitation, any liabilities arising out of or relating in any way to the
build-out or operation of a System or the System Equipment prior to Closing at
each ROE Property by Sellers or others or with respect to any Pre-Closing Owner
Commissions (the “Retained Liabilities”).
 
2.3  Purchase Price; Payment. The total consideration for the Assets (the
“Purchase Price”) shall be equal to (i) the RandM Assets Purchase Price, plus
(ii) three million, four hundred and thirty thousand dollars ($3,430,000.00) for
the other Multiband Assets and the Rainbow Assets, which portion of the purchase
price is calculated based on the Closing Date Free Cash Flow and the Purchaser’s
Minimum IRR and the assumption that at the Closing, the Closing Date Weighted
Average Remaining ROE Agreement Term will be at least eighty-four (84) months,
plus (iii) the Assumed Liabilities; provided, however, that the portion of the
Purchase Price described in subsection (ii) above shall be adjusted up or down
as set forth on Schedule 2.3(a) to reflect the actual Closing Date Weighted
Average Remaining ROE Agreement Term. Schedule 2.3(b) sets forth the calculation
of the Purchase Price excluding the Assumed Liabilities and the RandM Assets
Purchase Price and details the calculations for Free Cash Flow and the
Purchaser’s Minimum IRR. The cash portion of the Purchase Price attributable to
the Schedule 2.4 ROE Assets will be paid by Purchaser to Rainbow at the Initial
Closing as described in Section 2.4 below. The balance of the Purchase Price
shall be paid to the Sellers at the Closing as follows: (i) eighty percent (80%)
of the cash portion of the Purchase Price will be paid to Sellers based on their
respective Gross Margin Percentages and (ii) twenty percent (20%) of the cash
portion of the Purchase Price shall be held by Purchaser as an indemnity
holdback to cover claims by Purchaser under Article 9 hereof (the “Indemnity
Holdback Amount”). The Holdback shall be released to Sellers pursuant to the
terms of Section 2.6 below.
 
2.4  Initial Closing. At the Initial Closing, Purchaser shall pay to Rainbow
three hundred and eighty-six thousand dollars ($386,000.00) (the “Schedule 2.4
Payment”) with respect to the ROE Agreements and the related Assets for the five
(5) ROE Properties identified on Schedule 2.4 hereto (the “Schedule 2.4 ROE
Assets”) if (a) such ROE Agreement provides Rainbow with the exclusive right to
provide and market its private cable operator services at each such property,
(b) the Weighted Average Remaining ROE Agreement Term of the ROE Agreements with
respect to each of the Schedule 2.4 ROE Assets including any automatic renewal
terms under the sole control of either of the Sellers on or prior to the Closing
Date is at least sixty (60) months, and (c) the aggregate Gross Margin with
respect to the ROE Agreements included in the Schedule 2.4 ROE Assets is at
least fifteen thousand dollars ($15,000.00) per month. The Schedule 2.4 Payment
shall be considered complete payment to Rainbow for the Assets relating to the
Schedule 2.4 ROE Assets such that title to all such Assets will transfer to
Purchaser as of the Schedule 2.4 Assets Effective Date. At the Closing Date, the
Schedule 2.4 Payment shall be deducted from the Purchase Price due to Rainbow
with respect to the balance of the Assets at the Closing Date and the Schedule
2.4 Payment shall be included as part of the Purchase Price with respect to
calculation of the Earnout Amount and the Assets shall be included with all the
other Assets for all other purposes under this Agreement.
 
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2.5  Earnout. In addition to the Purchase Price, Sellers shall be entitled to
the Earnout Amount on the Earnout Date. The Earnout Amount shall be paid to
Sellers based on their respective Gross Margin Percentages.
 
2.6  Indemnity Holdback Amount. The Indemnity Holdback Amount shall be released
as set forth below to Sellers in accordance with the Gross Margin Percentage:
(a) to the extent that on the third (3rd) month anniversary of the Closing Date
any claims by Purchaser under Article 9 hereof are less than seventeen and a
half percent (17.5%) of the cash portion of the Purchase Price paid by Purchaser
as of the Closing Date, then two and a half percent (2.5%) of the Indemnity
Holdback Amount shall be released to Sellers on such third (3rd) month
anniversary; (b) to the extent that on the sixth (6th) month anniversary of the
Closing Date any claims by Purchaser under Article 9 hereof are less than
fifteen percent (15.0%) of the cash portion of the Purchase Price paid by
Purchaser as of the Closing Date, then two and a half percent (2.5%) of the
Indemnity Holdback Amount shall be released to Sellers on such sixth (6th) month
anniversary; (c) to the extent that on the nine (9) month anniversary of the
Closing Date any claims by Purchaser under Article 9 hereof are less than twelve
and a half percent (12.5%) of the cash portion of the Purchase Price paid by
Purchaser as of the Closing Date, then two and a half percent (2.5%) of the
Indemnity Holdback Amount shall be released to Sellers on such nine (9) month
anniversary; and (d) to the extent that on the first (1st) year anniversary of
the Closing Date, there are no claims by Purchaser under Article 9 hereof or
such claims are less than twelve and a half percent (12.5%) of the cash portion
of the Purchase Price paid by Purchaser as of the Closing Date, then the total
remaining balance of the Indemnity Holdback Amount shall be released to Sellers
on such first (1st) year anniversary of the Closing Date; provided, however,
that if any claim by Purchaser under Article 9 is pending dispute as of the time
of any release of any portion of the Indemnity Holdback Amount, then, unless the
balance of the Indemnity Holdback Amount at such time (excluding the amount
required to be distributed at such time) is sufficient to cover the amount of
such disputed claim, then an amount equal to such claim shall continue to be
held by Purchaser until such time as the disputed claim is finally resolved
among the parties and such amount distributed according to such resolution or,
as necessary, retained to insure that the appropriate Indemnity Holdback Amount
at such time continues to be held by Purchaser.
 
2.7  Initial Closing Date; Closing Date.
 
(a)  Initial Closing. The consummation of the purchase and sale of the Schedule
2.4 ROE Assets provided for in Section 2.4 hereof (the “Initial Closing”) shall
take place at 10:00 a.m. (Pacific Standard time) on October 19, 2006, or at such
other date and time as is mutually agreed to by the parties (the “Initial
Closing Date”), but shall be deemed effective as of 12:01 a.m. (Pacific Standard
time) on September 29, 2006 (the “Schedule 2.4 Assets Effective Date”). The
Initial Closing shall take place by delivery to each of Purchaser’s and
Multiband’s principal office via facsimile transmission or email transmission in
PDF file format (with originals sent via overnight courier service) of the
signed Agreement and delivery of (a) the Initial Closing Purchase Price to be
made in accordance with Section 2.4, (b) a fully executed assignment for each
ROE Agreement listed on Schedule 2.4, other than with respect to the ROE
Agreement for the ROE Property known as the Promenade which ROE Agreement was
executed in the name of Purchaser and therefore does not require further
assignment to Purchaser, (c) a fully executed bill of sale with respect to the
Schedule 2.4 ROE Assets, (d) a fully executed Secretary’s Certificate of Rainbow
providing the information required by Section 6.28 with respect to the sale of
the Schedule 2.4 ROE Assets, and (e) evidence of compliance with the actions
required by Sections 6.23 (Transfer of Chain Numbers), Section 6.24 (Transfer of
Accounts) and Section 6.25 (DirecTV’s Waiver of Right of First Refusal) with
respect to the Schedule 2.4 ROE Assets, or at such other place or in such other
manner as the parties hereto may agree. In addition, (x) execution of this
Agreement is evidence that (1) none of the conditions contemplated in Section
6.3 (Legislation) or Section 6.4 (Proceedings) are present with respect to the
Schedule 2.4 ROE Assets, and (2) there are no consents or other approvals
required with respect to the Schedule 2.4 ROE Assets, (y) the information
required pursuant to Section 6.17 (ROE Agreement and Subscriber Information)
shall be delivered to Purchaser within two (2) days after the Initial Closing
Date, and (z) the information required by Section 6.11 (Technical
Specifications), Section 6.12 (Owner Contact Information), Section 6.13
(Deposits), Section 6.14 (Free (“Comp”) Accounts and Service), Section 6.15
(Deposits), and Section 6.16 (Channel Lineups and Serial Numbers) shall be
delivered to Purchaser within five (5) days after the Initial Closing Date. All
Disclosure Schedules or other deliverables prepared by Sellers and delivered to
Purchaser under the terms of this Agreement with respect to the Schedule 2.4 ROE
Assets shall reflect information as of 12:01 a.m. (Pacific Standard time) on the
Schedule 2.4 ROE Assets Effective Date.
 
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(b)  Closing. The consummation of the purchase and sale of all of the other
Assets (other than the Schedule 2.4 ROE Assets) provided for herein (the
“Closing”) shall take place at 10:00 a.m. (Pacific Standard time) ninety (90)
days after the date of this Agreement (the “Closing Date”); provided, however,
that if at such time Sellers are in the process of continuing to negotiate New
ROEs pursuant to Section 6.6 hereof, then upon written notice to Purchaser,
Multiband shall have the option to extend the Closing for an additional ninety
(90) days (the “Closing Extension Option”) in which case, the date that is one
hundred and eighty (180) days after the date of this Agreement shall be the
“Closing Date.” The Closing shall take place by delivery to each of Purchaser’s
and Multiband’s principal office via facsimile transmission or email
transmission in PDF file format (with originals sent via overnight courier
service) of the documents to be delivered at the Closing and deliveries of the
Purchase Price to be made in accordance with Section 2.3, or at such other place
or in such other manner as the parties hereto may agree. All Disclosure
Schedules or other deliverables prepared by Sellers and delivered to Purchaser
under the terms of this Agreement with respect to the Assets (other than the
Schedule 2.4 ROE Assets) shall reflect information as of 12:01 a.m. (Pacific
Standard time) on the Closing Date, unless otherwise indicated in this
Agreement.
 
2.8  Proceedings. All proceedings taken and all documents executed and delivered
by the parties hereto at the Initial Closing with respect to the Schedule 2.4
ROE Assets shall be deemed to have been taken and executed simultaneously and no
proceedings shall be deemed taken nor any documents executed or delivered until
all have been taken, executed and delivered. All proceedings taken and all
documents executed and delivered by the parties hereto at the Closing with
respect to the Assets (other than the Schedule 2.4 ROE Assets) shall be deemed
to have been taken and executed simultaneously and no proceedings shall be
deemed taken nor any documents executed or delivered until all have been taken,
executed and delivered. 
 
2.9  Purchase Price Allocation. The consideration payable by Purchaser under
this Agreement shall be allocated among the Assets (the “Allocation”) first to
accounts receivable and inventory and equipment-vehicles and the balance shall
be allocated 10% to tangible personal property and equipment and 90% to the ROE
Agreements. Purchaser and each of the Sellers agree to (a) be bound by the
Allocation and not to take any position inconsistent with such Allocation and
(b) file all returns and reports with respect to the transactions contemplated
in this Agreement, including all federal, state and local tax returns on the
basis of such Allocation, including without limitation, IRS Form 8594.
 
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ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
 
Unless otherwise indicated, as of the date hereof and as of the Closing Date,
each of the Sellers represents and warrants to Purchaser, jointly and severally,
as follows:
 
3.1  Organization. Multiband is a corporation duly organized, validly existing
and in good standing under the laws of the State of Minnesota with full power
and authority to conduct its business as it is now being conducted and to own or
use the Multiband Assets. Rainbow is a limited liability company duly organized,
validly existing and in good standing under the laws of the State of Connecticut
with full power and authority to conduct its business as it is now being
conducted and to own or use the Rainbow Assets.
 
3.2  No Subsidiaries. The Assets do not contain any interest, direct or
indirect, in any business, corporation, joint venture, partnership,
proprietorship or other entity. Multiband is the owner of and holds all rights
with respect to the Multiband Assets and Rainbow is the owner of and holds all
rights with respect to the Rainbow Assets. Except as set forth in Schedule 3.2,
none of the Business is conducted through, and none of the Assets are owned by
or through, any direct or indirect subsidiary or Affiliate of Sellers.
 
3.3  Authority. This Agreement constitutes the legal, valid and binding
obligation of each of the Sellers enforceable against each of them in accordance
with its terms. Upon the execution and delivery by the Sellers of the New ROEs,
Noncompetition Agreements, the Call Center and Billing Agreement and the
Internet Agreement and each other agreement to be executed or delivered by each
such party at the Closing (collectively, the Sellers’ Closing Documents”), each
of Sellers’ Closing Documents will constitute the legal, valid and binding
obligation of each of the Sellers, enforceable against each of them in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors’ rights and to general equity principles.
Each of the Sellers has the absolute and unrestricted right, power and authority
to execute and deliver this Agreement and each of the Sellers’ Closing Documents
to which it is a party and to perform its obligations under this Agreement and
each of the Sellers’ Closing Documents to which it is a party, and such action
has been duly authorized by all necessary action by such Seller’s shareholders
or members and board of directors or managers. No further proceeding on the part
of any of the Sellers or their respective shareholders, members, managers or
board of directors is necessary to authorize this Agreement, each of the
Sellers’ Closing Documents to which it is a party and the transactions
contemplated hereby. Neither the execution and delivery of this Agreement nor
compliance by any of the Sellers with its terms and provisions will violate (i)
any provision of the Articles of Incorporation, Articles of Organization, Bylaws
or Operating Agreement, as applicable, of such Seller, (ii) any Contract
transferred to Purchaser or any permit or license of Sellers relating to the
Business, or (iii) any law, statute, regulation, injunction, order or decree of
any government agency or authority or court to which Sellers, the Business or
any of the Assets is subject, except to the extent that any such violation would
not be material with respect to the Assets individually or in the aggregate.
 
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3.4  Capitalization. Multiband is and will be on the Closing Date the sole
record and beneficial owner and holder of the issued and outstanding shares of
Rainbow and such shares are and will be owned by Multiband, free and clear of
all Liens. There are no Contracts relating to the issuance, sale or transfer of
any equity securities or other securities of Rainbow. 
 
3.5  Financial Information Reports.
 
(a)  Each Seller has delivered to Purchaser the following financial information,
(collectively, with any updates thereof, the “Financial Information Reports”):
(a) an unaudited balance sheet as of June 30, 2006 (including the notes thereto,
the “Balance Sheet”), and (b) the related monthly statements of income for the
months of January through June 2006. Each of the Financial Information Reports
delivered to Purchaser hereunder and pursuant to Section 5.8 below is and will
be complete and correct and was and will be prepared from and is and will be in
accordance with the accounting records of the Sellers which have been maintained
in accordance with sound business practices and based on Sellers’ financial
statements which have been prepared in accordance with GAAP consistently
applied. 
 
(b)  Schedule 3.5(b) sets forth a correct and complete schedule of the
calculation of the Closing Date Gross Revenue for each of the ROE Properties.
 
(c)  Schedule 3.5(c) sets forth a correct and complete schedule of the
calculation of the Closing Date Direct Costs for each of the ROE Properties.
 
(d)  Schedule 3.5(d) sets forth a correct and complete schedule of the
calculation of the Closing Date Gross Margin for each of the ROE Properties.
 
3.6  Sufficiency of Assets; Title.
 
(a)  The Assets (a) constitute all of the assets, tangible and intangible, of
any nature whatsoever, necessary to operate Sellers’ Business in the manner
presently operated by Sellers, and (b) include all of the California operating
assets of the Sellers used in the Business. The Assets are suitable for the uses
for which they are currently used by Sellers in the Business.
 
(b)  Schedule 3.6 contains a true and complete listing of each vehicle that is
used in the Business, each driver that is assigned to such vehicle, whether the
vehicle is owned or leased by the Sellers and an indication as to whether the
vehicle belongs to an employee of the Sellers and if employee-owned, the
applicable mileage reimbursement rate. Sellers will pay and satisfy any and all
obligations with respect to the leased vehicles reflected on Schedule 3.6 on or
prior to the Closing and at the Closing will deliver to Purchaser title to such
leased vehicles and the Sellers’ owned vehicles, free and clear of all Liens.
 
(c)  Each Seller has or will have, and, upon consummation of the transactions
contemplated hereby, will convey to Purchaser, full right, title and interest,
and good and marketable title, to their respective Assets, free and clear of all
Liens. To the Knowledge of Sellers, there are no claims, objections or bases for
objections which any Owner of any ROE Property or any predecessor to either of
the Sellers may raise in connection with any ROE Agreement or the other Assets
and the transactions contemplated by this Agreement.
 
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3.7  Contracts. Each Contract required to be listed on a Schedule hereto is
valid and subsisting and is in full force and effect in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors’ rights and to general equity principles, and there have been no
amendments, creditors modifications, or supplements to any such Contract. There
is no default by either Seller or claim of default by either Seller, or, to the
Knowledge of Sellers, any other party thereto, under any such Contracts and no
Event has occurred that, with the passage of time or the giving of notice or
both, could reasonably be expected to constitute a default by either Seller or,
to the Knowledge of Sellers, any other party thereto under any such Contract, or
could reasonably be expected to permit modification, acceleration, or
termination of any such Contract, or result in the creation of any Lien on any
of the Assets. No party to any Contract has notified any Seller of its intention
to terminate any Contract and to the Knowledge of Sellers, no party to any
Contract has indicated its intent to do so, whether by exercising any
termination or buy-out rights under any Contract or otherwise.
 
3.8  ROE Agreements.
 
(a)  Attached hereto as Schedule 3.8(a) is a complete and correct list of each
Multiband ROE Agreement and each Rainbow ROE Agreement that is included in the
Assets, including, without limitation, the correct and complete: (i) name and
address of each ROE Property, (ii) the number of units at each ROE Properties,
(iii) the type of service provided at each ROE Property, and (iv) the expiration
date of the term of each ROE Agreement, provided, however, that the failure to
set forth the exact correct number of units and property name of each Property
will not have or be reasonably expected to have a Material Adverse Effect.
Except as set forth on Schedule 3.8(a) and Schedule 3.8(b) below, there are no
other Contracts (whether oral or written) entered into between either of the
Sellers and any of the Owners of the ROE Properties that affect any of the
Assets other than the RandM Assets.
 
(b)  Schedule 3.8(b) sets forth a true and correct list of each ROE Agreement
with respect to which neither of the Sellers is paying any Owner Commissions or
any programming fees to DirecTV, 4COM or any other programming services
provider. There are no revenues or expenses associated with such ROE Properties
because there are no subscribers at such ROE Properties and although Sellers
have the right to provide television service and programming to such ROE
Properties, no such service is currently provided by the Sellers. The failure to
provide such service is not a breach of the ROE Agreements for such ROE
Properties.
 
(c)  As of the Closing, Schedule 3.8(c) includes (i) a complete and correct list
of each RandM ROE Agreement that is included in the Assets, including, without
limitation, the correct and complete: (1) name and address of each ROE Property,
(2) the number of units and the number and type of Subscribers at each ROE
Property, (3) the type of service provided at each ROE Property, and (4) the
expiration date of the term of each ROE Agreement, and (ii) a complete and
correct list of each ROE Agreement that is included in the Assets but for which
Sellers do not have copies of the respective ROE Agreements (each, a “Missing
ROE Agreement”), including, without limitation, the correct and complete: (1)
name and address of each such ROE Property, (2) the number of units and the
number and type of Subscribers at each such ROE Property, (3) the type of
service provided at each such ROE Property, (4) to the extent available, the
expiration date of the term of each Missing ROE Agreement and (5) name of the
Seller that provides the services pursuant to such Missing ROE Agreement. Except
as set forth on Schedule 3.8(c), there are no other Contracts (whether oral or
written) entered into between either of the Sellers and any of the Owners of the
ROE Properties that affect any of the RandM Assets. Sellers represent that they
have all right, title and interest in and to each Missing ROE Agreement and that
the applicable Seller indicated has the right to provide the Services at such
ROE Properties.
 
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(d)  The Weighted Average Remaining ROE Agreement Term of the ROE Agreements is
ten (10) months as of September 30, 2006. As of the Closing, the Weighted
Average Remaining ROE Agreement Term of the ROE Agreements will be at least
sixty (60) months.
 
(e)  Prior to the Closing, Sellers have delivered to Purchaser, true and
complete files for each ROE Agreement, including, without limitation, the fully
executed ROE Agreement, any schedules, exhibits, annexes, memoranda, assignments
and amendments thereto, all correspondence with respect to each ROE Agreement
since the acquisition date of each applicable ROE Agreement, and all instruments
of transfer, assignment, conveyance and other instruments evidencing the
applicable Seller’s chain of title with respect to each ROE Agreement, and
hereby represents that each such transfer, assignment or other conveyance was in
all respects legally effected and sufficient to convey, transfer and assign to
the applicable Seller all right, title and interest in each ROE Agreement and
the Assets (collectively, the “ROE Files”). Each ROE Agreement (i) represents
the valid, binding and legal obligation of the respective Seller and each other
party thereto, enforceable against such party in accordance with its terms; (ii)
contains the expiration date of the term of such ROE Agreement and the exact
number of apartment, dwelling or similar units at such ROE Property; and (iii)
is in full force and effect according to the terms set forth in the ROE
Agreement and has not been modified, supplemented or amended in any way.
 
3.9  SMATV Non-Bulk Properties. Schedule 3.9 sets forth a correct and complete
list by ROE Property of each ROE Property that has SMATV Non-Bulk Service, the
number of SMATV units, the number of channels available at each such ROE
Property, which channels include local and transport stations delivered by 4COM,
the monthly rate charged per subscriber for the SMATV Non-Bulk Service, the
total monthly revenues at such ROE Property for the SMATV Non-Bulk Service, the
number of SMATV Non-Bulk Service subscribers, the total monthly transport fees
payable by Sellers to 4COM for the transport stations at such ROE Property and
the total monthly fees payable by Sellers to DirecTV for the SMATV Non-Bulk
Service.  
 
3.10  HDTV Properties. Schedule 3.10 sets forth a correct and complete list of
each ROE Property that is HDTV ready, together with the applicable HDTV platform
installed at such ROE Property and a list of ROE Properties that have requested
an HDTV upgrade.
 
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3.11  Exclusivity.
 
(a)  Except as set forth on Schedule 3.8(a), each of the ROE Properties is
exclusive to the respective Seller represented as holding the rights to such ROE
Property with respect to the System and System Equipment (the “Exclusive
Agreements”).
 
(b)  Except as set forth on Schedule 3.8(a) with respect to the Exclusive
Agreements, (a) there is currently no franchise cable operator (“FCO”) connected
to any minimum point of entry at any of the ROE Properties and no FCO has over
built any of the Sellers’ Systems at any of the ROE Properties; (b) no unit at
any ROE Property is serviced by the FCO; and (c) Sellers have sole and exclusive
access to each of the ROE Properties in connection with (1) the provision of
television service and programming delivered to each of the units on such ROE
Properties using the cable distribution system and inside wiring at each such
ROE Property and (2) the solicitation of residents residing at each ROE
Property. 
 
3.12  Access to ROE Properties. Pursuant to each ROE Agreement, each Seller has
the right of ingress, egress, access and right of way across, through, in or on
each part and all of the ROE Property covered by such ROE Agreement, to each
unit within such ROE Property and to all Systems and System Equipment located on
such ROE Property and used in the operation of the cable television or other
similar system on such ROE Property, sufficient to provide the services that are
required to be provided pursuant to each ROE Agreement. Neither Seller has been
notified by any Owner of any ROE Property about any limitations or restrictions
on such Owner’s ability to grant such rights to such Seller.
 
3.13  Ownership of Assets. Except as set forth on Schedule 3.13, Multiband owns
all the Systems, the Systems Equipment used to provide the services to each of
the ROE Properties under the Multiband ROE Agreements and all the other
Multiband Assets and Rainbow owns all the Systems, the Systems Equipment used to
provide the services to each of the ROE Properties under the Rainbow ROE
Agreements and all the other Rainbow Assets. Neither Seller has previously
assigned or transferred any of its right, title or interest in, to or under the
Assets, and each Seller holds such right, title and interest free and clear of
any and all Liens. Neither Seller has removed any of the Systems, Systems
Equipment or other Assets that were located on any ROE Property at the time that
Purchaser surveyed each of the ROE Properties during the period from September
20-22, 2006 (the “Inspection”). All of the Assets are materially in the same
condition and functioning in the same manner as during the Inspection.
 
3.14  Accounts Receivable. Schedule 3.14 sets forth a correct and complete
summary of all of the accounts receivable with respect to each ROE Property
included in the Assets, including the aging of each account receivable
segregated by Performing Subscriber and Non-performing Subscriber (the “Aging
A/R Summary Report”), with supporting details to be electronically delivered to
Purchaser at the Closing. All accounts receivable reflected on Schedule 3.14
represent or will represent valid obligations arising from sales actually made,
services actually performed or services actually billed by Sellers.
 
3.15  Absence of Undisclosed Liabilities. Except as set forth on Schedule 3.15,
other than obligations under the ROE Agreements with respect to the applicable
ROE Property to which such ROE Agreement relates, there are no Liens, debts,
liabilities or obligations, of any nature, affecting the Assets.  Each Seller
shall pay, discharge and perform promptly, when due, any and all Retained
Liabilities of the Sellers that directly or indirectly affect the Assets.
 
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3.16  Absence of Certain Changes and Events.
 
(a)  Since June 30, 2006, there has not been any change or occurrence that
reasonably indicates there may be any change, in the management, business,
prospects, results of operations or condition (financial or otherwise) of the
Assets or the Business that has or could reasonably be expected to have a
Material Adverse Effect.
 
(b)  Since June 30, 2006, neither Seller has (i) transferred or otherwise
disposed of any of the Assets; (ii) entered into any compromise or settlement of
or suffered any judgment in any litigation, proceeding, or governmental
investigation relating to the Assets; (iii) suffered any material damage or
destruction to, or loss of, any of the Assets whether or not covered by
insurance; (iv) entered into any Contract, including, without limitation, with
respect to Owner Commissions or other side Contract requiring any payments to be
made with respect to the Assets; (v) except as set forth on Schedule 3.16,
entered into any Contract to purchase or otherwise acquire control of any access
and use agreements or service and installation agreements similar in nature to
the ROE Agreements, either directly or indirectly, in the States of California
and Arizona, including, without limitation, acquiring the assets of any system
operator or other Person that engages in the Private Cable Operator Business in
California or Arizona or (vi) entered into any written or oral Contract, other
than this Agreement, to do any of the things enumerated in (i) through (v) of
this Section 3.16.
 
3.17  Litigation.
 
(a)  Set forth on Schedule 3.17 is a true and complete list of all actions,
suits, proceedings, audits and investigations instituted against or by any
Seller affecting the Business or the Assets, since the acquisition of each ROE
Agreement by the respective Seller, and a brief description of the nature and
status thereof. There are no actions, suits or proceedings served and pending
or, to the Knowledge of Sellers, threatened against or by either Seller relating
to or affecting the Assets, at law, in equity or otherwise, in, before or by any
court, arbitrator or governmental agency or authority. There are no unsatisfied
judgments or outstanding orders, injunctions, decrees, stipulations or awards
(whether rendered by a court or administrative agency or by arbitration) against
or affecting any of the Assets or the Business. Prior to the date of this
Agreement, each Seller has delivered to Purchaser for review all Owner complaint
files maintained by such Seller relating to the Assets for the past two (2)
years.
 
(b)  As of the Closing, to the Knowledge of Sellers, (i) there are no claims,
rights or actions that have accrued or could be asserted by either Seller
against the Owner of any ROE Property specifically identified in this Agreement
or any Schedule, Annex or Exhibit hereto or any of its affiliates (collectively,
the “Owner Parties”) for any default, breach or violation by any Owner Parties
under the applicable ROE Agreement; and (ii) neither Seller has any offsets or
defenses that could be asserted in any action against any Owner Parties for
payments or other obligations due under the applicable ROE Agreement.
 
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3.18  Compliance with Law. Neither Seller is in violation of any applicable law,
ordinance or regulation of any governmental entity which would affect the Assets
or the Business. All governmental approvals, registrations, notifications,
permits, licenses and other permissions or authorizations (collectively,
“Authorizations”) required in connection with the conduct of the Business have
been obtained and are in full force and effect and are being complied with by
each Seller. Except as set forth on Schedule 3.18, since the acquisition by the
respective Seller of each ROE Agreement, neither Seller has received any written
notification of any asserted past or present violation in connection with the
conduct of the Business of any applicable law, ordinance or regulation, or any
written complaint, inquiry or request for information from any governmental
entity relating thereto. Neither of the Sellers nor any of the Assets is the
subject of any federal, state or local enforcement action or, to the Knowledge
of Sellers, other investigation, including but not limited to those relating to
Environmental Laws and Regulations.
 
3.19  Consents. Schedule 3.19 lists each consent, approval, waiver or
authorization (collectively, the “Consents”) that is legally or contractually
required on the part of any Seller to duly and validly transfer or assign each
of the Assets as contemplated hereby.
 
3.20  Programming Services Fees. Schedules 3.9, 3.30 and 3.31 set forth all the
fees for programming services paid to 4Com and DirecTV in connection with the
Assets. Except as set forth on Schedules 3.9, 3.30 and 3.31, neither Seller pay
fees to any other programming aggregator or supplier with respect to the ROE
Properties. Neither Seller is providing any foreign programming pursuant to the
terms of any cross license or other similar agreement with any third party
providers.
 
3.21  Subscriber Information.
 
(a)  Schedule 3.21 sets forth a correct and complete list of the residual
payments that DirecTV has paid to Sellers for the month ended June 30, 2006 and
the total number of DTH Subscribers of Sellers with respect to the ROE
Properties as of June 30, 2006. The information contained in Schedule 3.21 is
consistent with the information provided to Sellers by DirecTV for the month
ended June 30, 2006.
 
(b)  On or prior to the Closing Date, each Seller has delivered to Purchaser
correct and complete copies of all of each Seller’s subscriber records for all
of such Seller’s subscribers. Such copies contain all the terms of the
Contracts, agreements, understandings and arrangements between the parties
thereto with respect to the subject matter thereof.
 
3.22  Utility Payments. Except for the ROE Agreement with respect to the Mira
Verde ROE Property that provides for reimbursement to certain homeowners at the
rate of $5.51 per year for utility services, there are no other utility payments
payable by either Seller to any Owner or resident of an ROE Property.
 
3.23  Control Room and Head End Rental Payments. There are no lease rental or
similar fees payable by any Seller for use of any space required in connection
with any System or component thereof at any ROE Property, including, without
limitation, any rooftop lease or similar arrangements.
 
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3.24  Retransmission Fees. There are no retransmission fees or similar payments
or compensation payable to any Owner in connection with retransmission of
signals from any ROE Property to other properties serviced by any Seller.
 
3.25  Owner Commissions. Schedule 3.25 sets forth a correct and complete list
for each ROE Property of the amount of Owner Commissions payable to each Owner
for the month ended August 31, 2006 and will be updated to reflect such Owner
Commissions through the Closing Date, the type of revenue on which any such
Owner Commissions are calculated, the frequency of payment and the due date for
each such payment.
 
3.26  Owner Advances. There are no Owner Advances required to be paid under the
terms of any of the ROE Agreements.
 
3.27  Free Off-Air Channels. Neither Seller is required to provide free access
to any off-air channels or similar local programming or SMATV Non-Bulk Service
under the terms of any ROE Agreement.
 
3.28  UCCs. Neither of the Sellers nor, to the Knowledge of Sellers, any
predecessor of Sellers has filed any UCC-1 National Financing Statement with
respect to the Assets.
 
3.29  Memorandums of Agreement. Neither Seller has recorded or is aware of any
predecessor having recorded any memorandum of agreement or similar instrument in
the public records in the county in which any ROE Property subject to an ROE
Agreement is located.
 
3.30  Bulk SMATV Service. Except as set forth on Schedule 3.30, neither Seller
is required to provide Bulk SMATV Service to any ROE Property. For each ROE
Property at which any Seller is required to provide Bulk SMATV Service, Schedule
3.30 sets forth the type of Bulk SMATV Service provided at such ROE Property
(whether analog or SMATV with a digital overlay for providing DirecTV), the
number of units at such ROE Property, the number of channels available on each
System for such ROE Property, the current rate charged to each Owner for such
Bulk SMATV Service, the additional fees charged to each Owner by Multiband, the
fees charged by DirecTV to Multiband for the SMATV Bulk Service programming
cost, the transport fees charged by 4COM to Multiband for such ROE Property and
an indication of whether such ROE Property is invoiced directly by Sellers for
all costs or by DirecTV for programming costs and by Sellers for the additional
fees. For the ROE Properties invoiced by Sellers, the rates that the Sellers
charge Owners for Bulk SMATV Service are at least the same as those rates which
DirecTV charges the Sellers for such Bulk SMATV Service.
 
3.31  Bulk Digital Service. Except as set forth on Schedule 3.31, neither Seller
is required to provide Bulk Digital Service to any ROE Property. For each ROE
Property at which a Seller is required to provide Bulk Digital Service, Schedule
3.31 sets forth the type of Bulk Digital Service provided at such ROE Property
(whether digital or BCA), the number of units at such ROE Property, the current
rate charged to each Owner for such Bulk Digital Service, the additional fees
charged to each Owner by Sellers, the fees charged by DirecTV to Sellers for the
Bulk Digital Service programming cost and an indication of whether such ROE
Property is invoiced directly by Sellers for all costs or by DirecTV for
programming costs and by Sellers for the additional fees. For the ROE Properties
invoiced by Sellers, the rates that the Sellers charge Owners for Bulk Digital
Service are at least the same as those rates which DirecTV charges the Sellers
for such Bulk Digital Service.
 
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3.32  Other Commissions. At the Closing, there will be no commission payments
due from Sellers to any Person with respect to the Assets except for the
December 2006 Owner Commissions which will be paid by Purchaser after the
Closing.
 
3.33  DirecTV Registration and Charges. Neither Seller has registered any of the
ROE Properties with any direct broadcast satellite provider other than
DirecTV. Schedule 3.33 sets forth a correct and complete list of the DirecTV
prepaid programming commissions paid to Sellers for the months of January
through August 2006.
 
3.34  Employees.
 
(a)  Except for Morris Eiseman, Schedule 3.34 sets forth a correct and complete
list of the following information for each employee, independent contractor,
consultant and agent of the Sellers employed in the Business, including each
employee on leave of absence or layoff status, employer, name, job title, date
of hire, date of commencement of employment, current compensation paid, each
individual that is employed by the Sellers in connection with the Business,
their title and rate of pay.
 
(b)  Neither Seller has violated the Worker Adjustment and Retraining
Notification Act (the “WARN Act”) or any similar state or local Legal
Requirement and neither the Closing nor the transactions contemplated under this
Agreement will cause or result in any such violation.
 
(c)  No former or current employee of either Seller is a party to or is
otherwise bound by, any Contract that in any way adversely affected, affects or
will affect the ability of such Seller or Purchaser to conduct the business as
heretofore carried on by such Seller.
 
(d)  No present or former employee of any Seller or of any Subsidiary has
advanced any material claim (whether under any applicable law, through any
governmental agency, under an employment agreement, collective bargaining
agreement, personal service or independent contractor agreement or otherwise)
that is currently pending, or to the Knowledge of Sellers, threatened for (i)
overtime pay, wages, salaries or profit sharing, vacation pay, paid time off
(including, without limitation, potential sick leave) or pay in lieu of vacation
or time off, (ii) any violation of any law relating to minimum wages or maximum
hours of work, (iii) discrimination against employees on any basis, (iv)
unlawful employment or termination practices, (v) unfair labor practices, (vi)
any violation of occupational safety and/or health standards, (vii) benefits
under any employee plans or compensation arrangement, or (viii) breach of any
employment, personal service or independent contractor agreement. Neither of the
Sellers nor any Subsidiary is a party to any collective bargaining agreement or
is the subject of any labor dispute or activity involving the proposed
organization of a union for any group or class of employees, and there has not
been any strike or work stoppage of any kind called or, to the Knowledge of
Sellers, threatened, against either of the Sellers or any Subsidiary.
 
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3.35  ERISA.
 
(a)  Schedule 3.35 sets forth a correct and complete list of all “employee
benefit plans” as defined by Section 3(3) of ERISA, all specified fringe benefit
plans as defined in Section 6039D of the Code, and all other bonus, incentive
compensation, deferred compensation, profit sharing, stock option, stock
appreciation right, stock bonus, stock purchase, employee stock ownership,
savings, severance, change-in-control, supplemental unemployment, layoff, salary
continuation, retirement, pension, health, life insurance, disability, accident,
group insurance, vacation, holiday, sick leave, fringe benefit or welfare plan,
and any other employee compensation or benefit plan, agreement, policy,
practice, commitment, Contract or understanding (whether qualified or
nonqualified, currently effective or terminated, written or unwritten) and any
trust, escrow or other agreement related thereto that (i) is maintained or
contributed to by any Seller or any other corporation or trade or business
controlled by, controlling or under common control with such Seller (within the
meaning of Section 414 of the Code or Section 4001(a)(14) or 4001(b) of ERISA)
(“ERISA Affiliate”) or has been maintained or contributed to in the last six (6)
years by any Seller or any such Seller’s ERISA Affiliate, or with respect to
which any Seller or any ERISA Affiliate has or may have any liability, and (ii)
provides benefits, or describes policies or procedures applicable to any current
or former director, officer, employee or service provider of any Seller or any
such Seller’s ERISA Affiliate, or the dependents of any thereof, regardless of
how (or whether) liabilities for the provision of benefits are accrued or assets
are acquired or dedicated with respect to the funding thereof (collectively the
“Employee Plans”). Schedule 3.35 identifies as such any Employee Plan that is
(i) a “Defined Benefit Plan” (as defined in Section 414(l) of the Code); (ii) a
plan intended to meet the requirements of Section 401(a) of the Code; (iii) a
“Multiemployer Plan” (as defined in Section 3(37) of ERISA); or (iv) a plan
subject to Title IV of ERISA, other than a Multiemployer Plan. Also set forth on
Schedule 3.35 is a complete and correct list of all ERISA Affiliates of Sellers
during the last six (6) years.
 
(b)  Sellers have delivered to Purchaser true, accurate and complete copies of
(i) the documents comprising each Employee Plan (or, with respect to any
Employee Plan which is unwritten, a detailed written description of eligibility,
participation, benefits, funding arrangements, assets and any other matters
which relate to the obligations of Seller or any ERISA Affiliate) and all
material documents, reports or filings related to each such Employee Plan.
 
(c)  Seller has, at all times, complied, and currently complies, in all material
respects with the applicable continuation requirements for its welfare benefit
plans, including (1) Section 4980B of the Code (as well as its predecessor
provision, Section 162(k) of the Code) and Sections 601 through 608, inclusive,
of ERISA, which provisions are hereinafter referred to collectively as "COBRA"
and (2) any applicable state statutes mandating health insurance continuation
coverage for employees. Except for the continuation coverage requirements of
COBRA, neither Seller has any obligations or potential liability for benefits to
employees, former employees or their respective dependents following termination
of employment or retirement under any of the Employee Plans that are Employee
Welfare Benefit Plans.
 
(d)  The form of all Employee Plans is in compliance with the applicable terms
of ERISA, the Code, and any other applicable laws, and such plans have been
operated in compliance with such laws and the written Employee Plan documents.
All required reports and descriptions of the Employee Plans (including Internal
Revenue Service Form 5500 Annual Reports, Summary Annual Reports and Summary
Plan Descriptions and Summaries of Material Modifications) have been (when
required) timely filed with the IRS, the U.S. Department of Labor or other
governmental body and distributed as required, and all notices required by ERISA
or the Code or any other Legal Requirement with respect to the Employee Plans
have been appropriately given.
 
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(e)  Each Seller has maintained workers' compensation coverage as required by
applicable state law through purchase of insurance and not by self-insurance or
otherwise.
 
(f)  None of the transactions contemplated by this Agreement will result in an
amendment, modification or termination of any of the Employee Plans. No written
or oral representations have been made to any employee or former employee of any
Seller promising or guaranteeing any employer payment or funding for the
continuation of medical, dental, life or disability coverage for any period of
time beyond the end of the current plan year (except to the extent of coverage
required under COBRA). No written or oral representations have been made to any
employee or former employee of any Seller concerning the employee benefits of
Purchaser.
 
(g)  No accumulated funding deficiency (as defined in section 302 of ERISA and
section 412 of the Code), whether or not waived, exists with respect to any
Plan. No liability to the Pension Benefit Guaranty Corporation has been or is
expected by any Seller or any ERISA Affiliate to be incurred with respect to any
Plan by any Seller or any ERISA Affiliate that could reasonably be expected to
have a material adverse effect on the Business or the Assets. Neither Seller
participates in or contributes, or has participated in or contributed, to any
Multiemployer Plan.
 
3.36  Taxes. Each Seller has filed and paid, or has made provision for the
payment of, and will pay all Taxes that affect the Assets. On or prior to the
Closing Date, each Seller will deliver to Purchaser a copy of the Business
Property Statements filed on or before April 1, 2006 for the calendar year 2006
and City Tax returns filed in January 2006 for each city in which an ROE
Property is located.
 
3.37  Maintenance of Insurance. Each Seller maintains with financially sound and
reputable insurers, insurance in such amounts and against such liabilities and
hazards as is customarily maintained by other companies operating similar
businesses as the Business and necessary to preserve the value of the Assets
(the “Insurance”).
 
3.38  Rooftop Rights. Schedule 3.38 attached hereto sets forth a correct and
complete list of all rooftop right or similar Contracts entered into by any
Seller with respect to sending or receiving internet or other services via a
rooftop microwave system. Each of the Sellers has secured all rights, licenses
and permits necessary to exercise such rooftop rights and to use a rooftop
microwave system.
 
3.39  System Operators. Schedule 3.39 sets forth a true and complete list of all
system operators affiliated with each Seller in California or Arizona and the
number of subscribers each system operator has as of the date of this Agreement
and as of the Closing Date. Purchaser agrees that it shall not disclose the
information set forth in Schedule 3.39 to anyone other than its employees and
representatives who have a need to know such information and solely in
connection with the purposes of this Agreement.
 
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3.40  Free “Comp” Accounts. Except for the free or complimentary accounts
provided to Owners of the ROE Properties to be disclosed to Purchaser on or
prior to the Closing pursuant to Section 6.14, neither Seller is required to
provide any other form of free service, including, without limitation, free
introductory service to new Subscribers, under the terms of any of the ROE
Agreements. Neither Seller is required to pay any Owner Commissions under any
ROE Agreement with respect to any free “comp” accounts or service at any of the
ROE Properties.
 
3.41  Acquisitions. Since January 1, 2006, neither of the Sellers nor any of
their direct or indirect subsidiaries have entered into, or are contemplating
entering into, and there is not pending any Contract, whether written or oral,
including, without limitation, any letter of intent, regarding any acquisitions,
mergers, joint ventures, divestitures or other material company events that
would affect the Assets or the Business.
 
3.42  Transport Subscribers. Each Seller has accurately and completely reported
the number of transport subscribers at all of the ROE Properties to 4COM.
 
3.43  No Brokers or Finders. Neither of the Sellers nor any of their Affiliates,
employees or agents have incurred any obligation or liability, contingent or
otherwise, for brokerage or finders’ fees or agents’ commissions or other
similar payments in connection with the sale of either Sellers’ Business or the
Assets or the transactions contemplated by this Agreement.
 
3.44  Disclosure. To the Knowledge of Sellers, no representation or warranty by
any Seller in this Agreement, and no information disclosed in the Schedules or
Exhibits supplied by Sellers, contains any untrue statement of a material fact
or, taken as a whole, omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
 
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
 
As of the Closing, Purchaser represents and warrants to the Sellers as follows:
 
4.1  Organization of Purchaser. Purchaser is a limited liability company duly
formed, existing and in good standing under the laws of the State of California.
 
4.2  Authority. Purchaser has all requisite company power and authority to enter
into this Agreement and to perform its obligations hereunder. This Agreement has
been duly authorized, executed, and delivered by Purchaser and constitutes a
legal, valid and binding agreement of Purchaser, enforceable against Purchaser
in accordance with its terms. No further proceeding on the part of Purchaser is
necessary to authorize this Agreement and the transactions contemplated hereby.
Neither the execution and delivery of this Agreement nor compliance by Purchaser
with its terms and provisions will violate (i) any provision of the articles of
organization or operating agreement of Purchaser, (ii) any contract, permit or
license of Purchaser, or (iii) any law, statute, regulation, injunction, order
or decree of any government agency or authority or court to which Purchaser or
any of Purchaser’s assets is subject.
 
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4.3  Consents. Except as set forth on Purchaser’s Schedule 4.3, there is no
consent, approval, waiver or authorization that is legally or contractually
required on the part of Purchaser to duly and validly purchase or acquire each
of the Assets as contemplated hereby.
 
4.4  No Brokers or Finders. Except for Purchaser’s obligation to pay Paradigm
Marketing Group, Inc. a brokers fee or commission for the services of Mr. Donald
Johnson in connection with the transactions contemplated by the Agreement,
neither Purchaser nor any of its affiliates, employees or agents have incurred
any obligation or liability, contingent or otherwise, for brokerage or finders’
fees or agents’ commissions or other similar payments in connection with the
transactions contemplated by this Agreement.
 
4.5  Disclosure. To the Knowledge of Purchaser, no representation or warranty by
Purchaser in this Agreement contains any untrue statement of a material fact or,
taken as a whole, omits to state a material fact necessary to make the
statements contained herein or therein not misleading.
 
ARTICLE 5
CERTAIN COVENANTS AND AGREEMENTS
 
5.1  Confidentiality. All Confidential Information in connection with the
transactions contemplated by this Agreement shall be kept confidential by each
Seller and such Seller’s respective members, managers, officers, directors,
employees, agents and representatives, Purchaser and its respective officers,
directors, employees, agents and representatives (the “Purchaser’s Agents”), and
shall not be disclosed by any of the parties hereto to anyone (other than their
respective affiliates, members, shareholders, representatives and agents
(including, without limitation, accountants, bankers, financial advisors and
attorneys) with a reasonable need to know such information) at anytime for any
purpose, without the prior written consent of the other party, provided that
following the Closing, the Purchaser may disclose or permit the Purchaser’s
Agents to disclose such information to third parties as reasonably necessary in
connection with Purchaser’s acquisition and operation of the Assets.
 
5.2  Access to Information and Records. In connection with the transactions
contemplated by this Agreement, during the period from the signing of this
Agreement through the Closing Date, each Seller shall (a) give Purchaser the
same full and free access as such Seller has to the Assets, including, without
limitation, the ROE Properties, the Systems or any part thereof at the ROE
Properties, the Owners, the property management team and the subscribers at each
ROE Property and the such Seller’s personnel, Contracts, books and records and
other documents and data relating to the Assets or the Business; (b) furnish
Purchaser with copies of all such Contracts, books and records and other
existing documents and data as Purchaser may reasonably request; (c) furnish
Purchaser with such additional financial, operating and other relevant data and
information as Purchaser may reasonably request; and (d) otherwise cooperate and
assist, to the extent reasonably requested by Purchaser, with Purchaser’s
investigation of the ROE Properties, Assets and financial condition related to
each Seller.
 
5.3  Operation of the Business of Sellers. Between the date of this Agreement
and the Closing, each Seller shall:
 
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(a)  Conduct its business only in the ordinary course and consistent with past
practice;
 
(b)  Except as otherwise directed by Purchaser in writing, and without making
any commitment on Purchaser’s behalf, use its best efforts to preserve intact
its current business organization, keep available the services of its officers,
employees and agents and maintain its relations and goodwill with subscribers,
Owners, employees, agents and others having business relationships with any
Seller;
 
(c)  Confer with Purchaser prior to implementing operational decisions of a
material nature with respect to the Business or the Assets;
 
(d)  Otherwise report periodically to Purchaser concerning the status of the
Business and each Seller’s operations and finances with respect thereto;
 
(e)  Make no material changes in management personnel involved in the Business
without prior consultation with Purchaser;
 
(f)  Maintain the Assets in a state of repair and condition that complies with
Legal Requirements and is consistent with the requirements and normal conduct of
the Business, including, without limitation, the requirements under the ROE
Agreements;
 
(g)  Keep in full force and effect, without amendment, all material rights
relating to each Sellers’ Business;
 
(h)  Comply with all Legal Requirements and contractual obligations applicable
to the operations of each Seller’s Business;
 
(i)  Continue in full force and effect the Insurance;
 
(j)  Except as required to comply with ERISA or to maintain qualification under
Section 401(a) of the Code, not amend, modify or terminate any Employee Plan
without the express written consent of Purchaser, and except as required under
the provisions of any Employee Plan, not make any contributions to or with
respect to any Employee Plan without the express written consent of Purchaser,
provided that the Sellers shall contribute that amount of cash to each Employee
Plan necessary to fully fund all of the benefit liabilities of such Employee
Plan on a plan termination basis as of the Closing Date;
 
(k)  Maintain all books and records of each Seller relating to the Business in
the ordinary course of business;
 
(l)  Notify Purchaser within seventy-two (72) hours after receiving or becoming
aware of any indication of interest, solicitation or discussions between any
Seller and any system operator in California or Arizona with respect to any
acquisition, sale or joint venture of such system operator’s assets in whole or
in part; and
 
(m)  Cease negotiating or discussing any new, or renewal of any, right of entry
or service and installation or similar agreement with any owner or manager of a
real property desiring to secure the services of any Seller in connection with
its Private Cable Operator Business and provide Purchaser with notice of any
such requests or expressions of interest for such negotiations or discussions
within seventy-two (72) hours of any Seller becoming aware of same.
 
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5.4  Negative Covenant. Except as otherwise expressly permitted herein, between
the date of this Agreement and the Closing Date, neither Seller shall (a) take
any affirmative action, or fail to take any reasonable action within its
control, as a result of which any of the changes or events listed in Section
3.16 would be likely to occur; (b) make any modification to any material
Contract; (c) fail to take any action to maintain the Systems at any of the ROE
Properties in working order; (d) fail to respond to any service calls from
subscribers at any of the ROE Properties or otherwise permit the service level
of performance by any Seller with respect to the Assets to decline below the
standard level of service provided by such Seller and consistent with past
practice; or (d) enter into any compromise or settlement of any litigation,
proceeding or governmental investigation relating to the Assets, the Business or
the Assumed Liabilities.
 
5.5  Consents. Each Seller shall cooperate with Purchaser and its
representatives in obtaining all the Consents required to effect the
transactions contemplated by this Agreement.
 
5.6  Notification. Between the date of this Agreement and the Closing, each
Seller shall promptly notify Purchaser in writing if it becomes aware of (a) any
fact or condition that causes or constitutes a breach of any of the Sellers’
representations and warranties made as of the date of this Agreement or (b) the
occurrence after the date of this Agreement of any fact or condition that would
or would be reasonably likely to (except as expressly contemplated by this
Agreement) cause or constitute a breach of any such representation or warranty
had the representation or warranty been made as of the time of the occurrence
of, or either Seller’s discovery of, such fact or condition. Should any such
fact or condition require any change to the Disclosure Schedules specifying such
change, such delivery shall not affect any rights of Purchaser under Section 8.2
and Article 9. During the same period, each Seller shall promptly notify
Purchaser of the occurrence of any breach of any covenant of the Sellers in this
Article 5 or of the occurrence of any event that may make the satisfaction of
the conditions in Article 6 impossible of unlikely.
 
5.7  No Negotiation. Until such time as this Agreement shall be terminated
pursuant to Section 8.1 with respect to all the Assets, neither Seller shall
directly or indirectly solicit, initiate, encourage or entertain any inquiries
or proposals from, discuss or negotiate with, provide any nonpublic information
to or consider the merits of any inquiries or proposals from any Person (other
than Purchaser) relating to any business combination transaction involving any
Seller or the sale of such Seller’s Business or any of the Assets. The Sellers
shall notify Purchaser of any such inquiry or proposal with twenty-four (24)
hours of receipt or awareness of the same by either Seller.
 
5.8  Updated Financial Information Reports. Until the Closing Date, each Seller
shall deliver to Purchaser within twenty (20) days after the end of each month a
copy of the balance sheet and income statements for such month prepared in a
manner containing information consistent with such Seller’s current practices
and certified by such Seller’s chief financial officer as to compliance with
Section 3.5. In addition, within five (5) days after the end of each month the
Sellers shall deliver to Purchaser each of the following in the same form as
presented in the Disclosure Schedules: the DirecTV Residual Report (Schedule
3.21), the Bulk SMATV Gross Revenues and Direct Costs (Schedule 3.30), the Bulk
Digital Gross Revenues and Direct Costs (Schedule 3.31), Owner Commissions
(Schedule 3.25), DirecTV PPC Reports (Schedule 3.33), Payroll (Schedule 3.34)
and SMATV Non-Bulk Service and DTH Non-Bulk Gross Revenues and Direct Costs
(Schedule 3.9).
 
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5.9  Payment of Liabilities. Each Seller shall pay, make adequate provision for
the payment of, or otherwise satisfy in the ordinary course of business all of
its liabilities and obligations, including, without limitation, all Retained
Liabilities. If any such liabilities or obligations are not so paid, provided
for or otherwise satisfied, or if Purchaser reasonably determines that the
failure to make any payments will impair Purchaser’s use or enjoyment of the
Assets or the conduct of the Business with the Assets, Purchaser may, at any
time after the Closing Date, elect to make all such payments directly (but shall
have no obligation to do so) and deduct the full amount of all such payments
from the Indemnity Holdback Amount.
 
5.10  Employees and Employee Benefits. For the purpose of this Agreement, the
term “Active Employees” shall mean all employees listed on Schedule 3.34 who are
employed on the Closing Date by any Seller, including employees on temporary
leave of absence, including family medial leave, military leave, temporary
disability or sick leave, but excluding employees on long-term disability leave.
 
(a)  Purchaser is not obligated to hire any Active Employee but may interview
all Active Employees. Purchaser will provide Sellers with a list of Active
Employees to whom Purchaser has made an offer of employment that has been
accepted to be effective on the Closing Date (the “Hired Active Employees”).
Subject to Legal Requirements, Purchaser will have reasonable access to the
facilities and personnel records (including performance appraisals, disciplinary
actions, grievances and medical records) of each Seller for the purpose of
preparing for and conducting employment interviews with all active Employees and
will conduct the interviews as expeditiously as possible prior to the Closing
Date. Each Seller will provide access upon reasonable prior notice during normal
business hours. Effective immediately before the Closing, each Seller will
terminate the employment of all of its Hired Active Employees.
 
(b)  Neither of the Sellers nor their Affiliates or related shareholders,
members, managers, directors, officers or others in a similar capacity
affiliated with the Sellers or any of their Affiliates (collectively, “Related
Persons”) shall solicit the continued employment of any Active Employee (unless
and until Purchaser has informed Sellers in writing that the particular Active
Employee will not receive any employment offer from Purchaser) or the employment
of any Hired Active Employee after the Closing. Purchaser shall inform Sellers
promptly of the identities of those Active Employees to whom it will not make
employment offers.
 
(c)  It is understood and agreed that (i) Purchaser’s expressed intention to
extend offers of employment as set forth in this Section 5.10 shall not
constitute any commitment, Contract or understanding (express or implied) of any
obligation on the part of Purchaser to a post-Closing employment relationship of
any fixed term or duration or upon any terms or conditions other than those that
Purchaser may establish pursuant to individual offers of employment, and (ii)
employment offered by Purchaser is “at will” and may be terminated by Purchaser
or by an employee at any time for any reason (subject to any written commitments
to the contrary made by Purchaser or an employee and Legal Requirements).
Nothing in this Agreement shall be deemed to prevent or restrict in any way the
right of Purchaser to terminate, reassign, promote or demote any of the Hired
Active Employees after the Closing or to change adversely or favorably the
title, powers, duties, responsibilities, functions, locations, salaries, other
compensation or terms or conditions of employment of such employees.
 
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(d)  Each Seller shall be responsible for (i) the payment of all wages and other
remuneration due to Active Employees with respect to their services as employees
of such Seller through the Closing Date, including pro rata bonus payments and
all vacation pay earned prior to the Closing Date; (ii) the payment of any
termination or severance payments and the provision of health plan continuation
coverage in accordance with the requirements of COBRA and Sections 601 through
608, inclusive, of ERISA; and (iii) any and all payments to employees required
under the WARN Act.
 
(e)  Sellers shall be liable for any claims made or incurred by Active Employees
and their beneficiaries through the Closing Date under the Employee Plans. For
purposes of the immediately preceding sentence, a charge will be deemed
incurred, in the case of hospital, medical or dental benefits, when the services
that are the subject of the charge are performed and, in the case of other
benefits (such as disability or life insurance), when an event has occurred or
when a condition has been diagnosed that entitles the employee to the benefit.
 
(f)  All Hired Active Employees who are participants in Sellers’ retirement
plans shall retain their accrued benefits under Sellers’ retirement plans as of
the Closing Date, and Sellers (or Sellers’ retirement plans) shall retain sole
liability for the payment of such benefits as and when such Hired Active
Employees become eligible therefore under such plans. All Hired Active Employees
shall become fully vested in their accrued benefits under Sellers’ retirement
plans as of the Closing Date, and Sellers will so amend such plans if necessary
to achieve this result. Sellers shall cause the assets of each Employee Plan to
equal or exceed the benefit liabilities of such Employee Plan on a
plan-termination basis as of the close of business on the Closing Date.
 
(g)  Sellers will cause their savings plan to be amended in order to provide
that the Hired Active Employees shall be fully vested in their accounts under
such plan as of the Closing Date and all payments thereafter shall be made from
such plan as provided in the plan.
 
(h)  Neither of the Sellers nor their respective Related Persons will make any
transfer of pension or other employee benefit plan assets to Purchaser.
Purchaser shall not have any responsibility, liability or obligation, whether to
Active Employees, former employees, their beneficiaries or to any other Person,
with respect to any employee benefit plans, practices, programs or arrangements
(including the establishment, operation or termination thereof and the
notification and provision of COBRA coverage extension) maintained by Sellers.
Each Seller shall be solely liable for any severance payment required to be made
to its employees due to the transactions contemplated under this Agreement.
 
(i)  Purchaser will set its own initial terms and conditions of employment for
the Hired Active Employees and others it may hire, including, work rules,
benefits and salary and wage structure, all as permitted by law. Each Seller, as
applicable, shall provide Purchaser with completed I-9 forms and attachments
with respect to all Hired Active Employees.
 
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(j)  Each of the Sellers and Purchaser shall give any notices required by Legal
Requirements, shall provide each other with such plan documents and summary plan
descriptions, employee data or other information and shall take whatever other
actions with respect to the plans, programs and policies described in this
Section 5.10, as, in each case, may be reasonably required to carry out the
arrangements described in this Section 5.10.
 
(k)  If any of the arrangements described in this Section 5.10 are determined by
the IRS or other governmental body to be prohibited by law, each of the Sellers
and Purchaser shall modify such arrangements to as closely as possible reflect
their expressed intent and retain the allocation of economic benefits and
burdens to the parties contemplated herein in a manner that is not prohibited by
law.
 
5.11  System Operators. Sellers shall notify Purchaser within seventy-two (72)
hours after being entitled to acquire any system operator’s assets located in
California or Arizona either upon a system operator’s default or otherwise or
after becoming aware of any expression of interest from a system operator
regarding such operator’s desire to sell or otherwise dispose of all or part its
assets to either Seller (each, a “SO Offer”). For a period of three (3) years
following the Closing, each Seller agrees to provide Purchaser with a right of
first refusal regarding any SO Offer in California or Arizona. Purchaser shall
have a period of ninety (90) days after receipt of notice regarding any SO Offer
to attempt to negotiate the acquisition of such system operator’s assets,
provided, however, that if such Seller is unable to assign such SO Offer
directly to Purchaser, such Seller shall undertake such negotiations directly on
behalf of Purchaser in order to acquire the assets in such SO Offer to be resold
or otherwise assigned to Purchaser. If a Seller undertakes such negotiations, it
shall proceed based on terms and conditions acceptable to Purchaser in
Purchaser’s sole discretion. Upon concluding any such acquisition, such Seller
shall take all actions necessary to assign such assets to Purchaser on the same
terms and conditions as acquired by Seller and approved by Purchaser. If
Purchaser decides not to pursue any SO Offer or if Purchaser’s discussions
regarding any potential acquisition from a Seller’s system operator cease
completely, then following receipt of notice of same from Purchaser, such Seller
shall have the opportunity to acquire such assets for a period of sixty days
(60) days following the date of such notice. Thereafter, any potential
acquisition of the assets of such system operator shall be subject to the right
of first refusal with respect to each SO Offer described in this Section 5.11.
 
5.12  Further Assurances; Sellers Access to Records. At such time and from time
to time on and after the Closing Date upon request by Purchaser, each Sellers
shall do, execute, acknowledge and deliver, or cause to be done, executed,
acknowledged and delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney, and assurances that may reasonably
be required for the better conveying, transferring, assigning, delivering and
confirming ownership to, or reducing to the possession of, Purchaser all of the
Assets and to otherwise carry out the purposes of this Agreement. Each Seller
agrees to promptly deliver, remit or return to Purchaser all Assets and amounts
received by it after the Closing that, pursuant to the terms hereof, are owned
by or are due to Purchaser. Purchaser shall permit each of the Sellers and their
authorized representatives to have reasonable access to, on a confidential
basis, and to copy, at such Seller’s expense, during regular business hours and
upon reasonable advance notice to Purchaser and in a manner nondisruptive to
Purchaser’s conduct of its business, such books, records and documents related
to the Assets that are reasonably necessary for such Seller to comply with any
applicable law or regulation or to respond to any legal or administrative claim
or investigation.
 
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5.13  Taxes, Reports and Returns. Each Seller shall pay any and all Taxes,
including, without limitation, sales or transfer taxes in connection with the
sale of its Assets, through the Closing Date. Each Seller shall promptly prepare
and file all reports and returns required by Legal Requirements relating to the
Business and its Assets as of the Closing Date.
 
5.14  Maintenance of Property Relations. Up to and including the Closing Date,
each Seller shall take all actions necessary to preserve the goodwill and
relationship with the Owner, the property management team and the tenants at
each ROE Property for the benefit of Purchaser. 
 
5.15  Compliance with Conditions. Each Seller shall use its commercially
reasonable best efforts to bring about the satisfaction of the conditions to the
obligations of Purchaser specified in Article 6 below.
 
5.16  Use of Tradename. From the Closing through March 31, 2007, each Seller
agrees to permit Purchaser to use the name “Multiband Corporation” and “Rainbow
Satellite Group, LLC”, as applicable, solely as necessary to effect the
completion of the transition of the Assets from such Seller to Purchaser,
provided that Purchaser shall not hold itself out as conducting business under
either the “Multiband Corporation” or “Rainbow Satellite Group, LLC” names. 
 
5.17  Accounts Receivable. Each Seller and Purchaser agree that all accounts
receivable collections shall be allocated to either the respective Seller or the
Purchaser based on the period to which such accounts receivable relate and
prorated as necessary to reflect any amounts attributable to periods prior to
the Closing Date and to periods on and after the Closing Date. All accounts
receivable for periods ending prior to the Closing Date, including, prepaid
programming commissions and commissions payable to Sellers pursuant to the
DirecTV Residual Report for periods ending prior to the Closing Date and all
fees with respect to Bulk Service, SMATV Non-Bulk Service and receivers invoiced
prior to the Closing Date for periods prior to the Closing Date (the
“Pre-Closing A/R”), shall be for the account of Sellers. All accounts receivable
with respect to the Assets for periods ending on or after the Closing Date,
including, without limitation, prepaid programming commissions and commissions
payable to Sellers pursuant to the DirecTV Residual Report for periods ending on
or after the Closing Date and all fees with respect to Bulk Service, SMATV
Non-Bulk Service and receivers invoiced prior to the Closing Date for periods on
or after the Closing Date (the “Post-Closing A/R”), shall be for the account of
Purchaser. Each of the Sellers agree to remit to Purchaser any Post-Closing A/R
and Purchaser agrees to remit to Multiband, as agent for the Sellers, any
Pre-Closing A/R. All such remittances of accounts receivable shall be made by
the applicable party to the other party within five (5) days of receipt;
provided, however, that Sellers shall provide Purchaser with daily email update
of any Post-Closing A/R collections. For purposes of this Section 5.17, Rainbow
hereby appoints Multiband as its agent for purposes of receiving any Pre-Closing
A/R remitted by Purchaser to Rainbow. Notwithstanding the foregoing, any
accounts receivable with respect to the Schedule 2.4 ROE Assets for periods
arising on or after the Schedule 2.4 Assets Effective Date shall be for the
account of Purchaser and any accounts receivable with respect to the Schedule
2.4 ROE Assets for periods arising on or prior to the Schedule 2.4 Assets
Effective Date shall be for the account of Rainbow. All such accounts receivable
with respect to the Schedule 2.4 ROE Assets shall be handled in accordance with
the terms described above for the Post-Closing A/R and the Pre-Closing A/R but
taking into account the Schedule 2.4 Assets Effective Date.
 
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5.18  Noncompetition Agreements. Sellers shall bear all costs necessary to
secure each of the Noncompetition Agreements described in Section 6.18 below.
 
5.19  Mutual Cooperation. Purchaser and each Seller agree to mutually cooperate
in good faith with each other in connection with Sellers’ efforts to obtain each
New ROE in the name of the respective Seller as required pursuant to Section 6.6
below. In connection with such good faith cooperation, Purchaser shall use its
marketing representatives to assist in negotiating and securing the New ROEs,
provided, however, that the wages (excluding Sales Commissions due with respect
to the New ROEs) payable to Purchaser’s marketing representatives (the “Wages”)
shall be the only cost incurred by Purchaser in connection with Sellers’
obligations under Section 6.6 below.
 
5.20  Right of First Refusal to Sell New ROEs. In the event that for any reason
the Closing does not occur, both Sellers agree that for a period of one year
following the date of termination of this Agreement with respect to the Assets
(other than the Assets relating to the Schedule 2.4 ROE Assets) Purchaser shall
have a right of first refusal to purchase any New ROE at a purchase price that
yields the Minimum Purchaser IRR as of the Closing based on the Closing Date
Cash Flow and the Weighted Average Remaining ROE Agreement Term of the New ROEs
to be purchased. Such right of first refusal may be exercised with respect to
any or all New ROEs upon written notice by Purchaser to Sellers identifying the
New ROEs to be purchased and specifying the calculation of the purchase price to
be paid for the New ROEs to be purchased. Sellers agree to sell to Purchaser the
New ROEs specified in the notice delivered by Purchaser at the purchase price
specified therein. The closing of any such purchase shall occur within thirty
(30) days after the date of the notice delivered by Purchaser.
 
ARTICLE 6
CONDITIONS TO PURCHASER’S OBLIGATIONS
 
The obligations of Purchaser under this Agreement (except with respect to the
Initial Closing pursuant to Section 2.7 hereof) shall, at its option, be subject
to the satisfaction, prior to the Closing Date, of all of the following
conditions:  
 
6.1  Representations, Warranties, Covenants and Agreements. Each of the Sellers’
representations and warranties in this Agreement (considered collectively), and
each of these representations and warranties (considered individually), shall
have been accurate in all material respects as of the date of this Agreement,
and shall be accurate in all material respects as of the time of the Closing as
if then made, without giving effect to any supplement to the Disclosure
Schedules. Each Seller’s representations and warranties in Sections 3.3 and 3.5,
and each of the representations and warranties in this Agreement that contains
an express materiality qualification, shall have been accurate in all respects
as of the time of the Closing as if then made, without giving effect to any
supplement to the Disclosure Schedules. Sellers shall have delivered to
Purchaser a certificate dated as of the Closing Date to all such effects.
 
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6.2  Sellers Performance. All of the covenants and obligations that the Sellers
are required to perform or to comply with pursuant to this Agreement at or prior
to the Closing (considered collectively), and each of these covenants and
obligations (considered individually), shall have been duly performed and
complied with by the Closing Date. Sellers shall have delivered to Purchaser a
certificate dated as of the Closing Date to all such effects.
 
6.3  Legislation. No statute, rule, regulation, order or interpretation shall
have been enacted, entered or deemed applicable by any domestic government or
governmental or administrative agency or court that would make the transactions
contemplated by this Agreement illegal or that would cause Purchaser or any
Affiliate or Related Person of Purchaser to suffer any adverse consequence.
 
6.4  Proceedings. There shall not have been commenced or threatened against any
Seller, or to the Knowledge of Sellers, commenced or threatened against
Purchaser or any Owner any proceeding (i) involving any challenge to, or seeking
damages or other relief in connection with, any of the transactions contemplated
by this Agreement or (ii) that may have the effect of preventing, delaying,
making illegal, imposing limitations or conditions on or otherwise interfering
with the transactions contemplated by this Agreement.
 
6.5  Employees. All requisite notice periods under the WARN Act and California’s
equivalent provision shall have expired. Purchaser shall have entered into an
employment agreement with David Nelson on terms and conditions reasonably
acceptable to Purchaser. Substantially all Active Employees of Sellers shall be
available for hiring by Purchaser, in its sole discretion, on and as of the
Closing Date.
 
6.6  New Exclusive ROE Agreements. Receipt by Purchaser of new fully executed
Right of Entry Agreements for each ROE Property on Schedule 3.5(d) with a
Closing Date Gross Margin over one thousand dollars ($1,000) per month (and
which is highlighted in bold black typeface on Schedule 3.5(d)) (the “New ROEs”)
on form agreements provided by Purchaser, but in the name of the appropriate
Seller, and which provide for terms and conditions that are acceptable to
Purchaser, including, without limitation, a minimum term of ten (10) years and
an exclusive right to provide digital satellite, SMATV and broadband services
and to market such services at such property, with all costs (including any
Sales Commissions payable to Purchaser’s marketing representatives, but
excluding the Wages) incurred in connection with securing such New ROEs paid by
Sellers on or prior to the Closing.
 
6.7  Intentionally Omitted.
 
6.8  Consents. Receipt by Purchaser of each of the Consents set forth on
Schedule 3.19 on forms reasonably acceptable to Purchaser, but excluding any
Consent with respect to an ROE Property for which a New ROE is required pursuant
to Section 6.6 above.
 
6.9  Call Center and Billing Services. Each Seller and Purchaser agree to enter
into that certain Call Center and Billing Services Agreement on terms and
conditions mutually agreeable to Purchaser and Multiband (the “Call Center and
Billing Agreement”), which Call Center and Billing Agreement will provide, inter
alia, that (a) Sellers shall provide Purchaser with customer center call service
and billing services, (b) such services shall be billed to Purchaser at the rate
of three dollars ($3.00) for each Subscriber, (c) Purchaser may add or remove
any ROE Property or any other property specified by Purchaser upon ten (10) days
prior written notice to Sellers, (d) minimum performance standards that equal or
exceed those of Purchaser’s call center or the requirements set forth in
Purchaser’s DirecTV MDU Key Account Operator Agreement, dated March 31, 2006,
and (e) all payments received or collected by Seller’s on behalf of Purchaser
pursuant to the billing services arrangement shall be received and deposited
into a lockbox account established by Purchaser.
 
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6.10  Internet Services Agreement. Multiband and Purchaser agree to enter into
that center Internet Services Agreement on terms and conditions mutually
agreeable to Purchaser and Multiband (the “Internet Agreement”), which Internet
Agreement will provide, inter alia, that (a) within thirty (30) days after the
Closing, Purchaser shall provide to Multiband a list of twenty properties at
which Purchaser has the right to provide Internet services pursuant to right of
entry agreements and Purchaser shall commit to use Multiband’s Internet service
solution to launch the Internet service required to be delivered by Purchaser at
such properties at such time as Purchaser is prepared to launch such properties,
(b) Multiband agrees that the Internet service it provides to Purchaser will
consist of a minimum of 10 megabits/second of bandwidth, (c) such services shall
be billed to Purchaser at Multiband’s then current cost which is represented as
of the Closing to comprise a $2500.00 one-time installation fee for each
property at which Purchaser requests 10 megabits/second of bandwidth or a
$3500.00 one-time installation fee for each property at which Purchaser requests
45 megabits/second of bandwidth, in each case, including installation of all
wireless devices and repair and maintenance of such wireless devices for the
duration of the term of the Internet Agreement, a $300.00 monthly circuit fee
for each property receiving the services, and a $4.00 monthly fee for each
internet subscriber using such service at each property, subject to mutually
agreed to changes should Multiband’s cost structure change, (d) the initial term
of the Internet Agreement will be three (3) years, (e) upon Purchaser’s request,
Multiband shall provide Purchaser with Internet connectivity service to
residents at any property that is serviced by Purchaser during the term of the
Internet Agreement, (f) Multiband agrees to comply with performance standards
that are at least comparable to, if not better than, the performance standards
of Purchaser’s existing Internet service solution providers, and (g) Purchaser
may request or cancel Internet service with respect to any property at anytime
upon ten (10) days prior written notice to Multiband.
 
6.11  Technical Specifications. Receipt by Purchaser at least ten (10) days
prior to the Closing, of a correct and complete list of the technical
specifications for each ROE Property, including, without limitation, the type of
delivery system (SMATV, L-Band, HDTV, MFH1, etc), whether it has digital
service, whether it has Internet service, the bandwidth, the applicable Seller’s
Property Number, headend name and repeater name.
 
6.12  Owner Contact Information. Receipt by Purchaser on or before October 27,
2006, of the most currently available name, address, telephone number and email
address for each Owner of an ROE Property, Owner’s management company, Owner’s
onsite managers and asset portfolio or equivalent managers that work for the
Owner or the Owner’s management company. Receipt by Purchaser at least ten (10)
days prior to the Closing, of a correct and complete electronic list of the most
currently available name, address, telephone number and email address for each
Owner of an ROE Property, Owner’s management company, Owner’s onsite managers
and asset portfolio or equivalent managers that work for the Owner or the
Owner’s management company and detailed supporting calculations for the Owner
Commissions paid or to be paid consistent with past practice by each Seller for
the period from October through December 31, 2006 for ROE Agreements with
quarterly payment terms and for the month ended December 31, 2006 for ROE
Agreements with monthly payment terms.
 
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6.13  Deposits. Receipt by Purchaser of a correct and complete report as of the
Closing, identifying the name and address (including unit number) of each
Subscriber at an ROE Property who has provided a credit card to Sellers as
security for each of such subscriber’s deposit obligations, and a correct and
complete report as of the Closing identifying the name and address (including
unit number) of each Subscriber at an ROE Property who pays Sellers for their
services by other than a paper check.
 
6.14  Free (“Comp”) Accounts and Service. Receipt by Purchaser of a correct and
complete list by ROE Property of the number and type of free “comp” accounts
provided by each Seller to each ROE Property under the terms of each ROE
Agreement or otherwise, to what locations on the ROE Property such free accounts
are provided and the type of service and any specific customer premise equipment
provided.
 
6.15  Deposits. Receipt by Purchaser of a correct and complete summary of all
deposits due and owing to Subscribers or Owners that are held by each Seller as
of the Closing, including, without limitation, deposits with respect to any
customer premise equipment, deposits with respect to the provision of Bulk SMATV
Service or Bulk Digital Service and the terms under which such deposits are
refundable (the “Cash Deposits”). 
 
6.16  Channel Lineups and Serial Numbers. Receipt by Purchaser of a correct and
complete listing of the channel lineups and the receiver serial number/access
and number for each channel in the lineup at each ROE Property, together with
prices relative to each programming package at each ROE Property, as in effect
on the Closing Date, a notation as to whether or not the Systems are delivering
the channel lineups as set forth in the information delivered to Purchaser
hereunder and as to whether such channel lineups are in fact available and fully
functional at each ROE Property. 
 
6.17  ROE Agreement and Subscriber Information. Receipt by Purchaser of (a) the
ROE Files; (b) correct and complete files of each Seller’s Subscriber records
for the Subscribers included in the Assets, including, without limitation, the
address, unit number, type of services subscribed to and amounts and
descriptions of any deposits held by each Seller with respect to each
subscriber; and (c) a correct and complete electronic listing of all unit
labeling information for each ROE Property; provided, however, that the general
Subscriber information and unit labeling information shall each be provided in
an electronic format suitable for uploading into Purchaser’s customer database
system.
 
6.18  Noncompetition Agreements. Receipt by Purchaser of a fully executed
Noncompetition, Nonsolicitation and Nondisclosure Agreement on terms and
conditions mutually agreed to by Purchaser, and each of the Sellers and the
following principals of Multiband, respectively: (a) James Mandel, Chief
Executive Officer, (b) Steve Bell, Chief Financial Officer, (c) Kent Whitney,
Chief Operating Officer, and (d) David Ekman, Chief Information Officer
(collectively, the “Noncompetition Agreements”), including, without limitation,
a minimum term of five (5) years from the Closing for each Seller and a minimum
term of two (2) years from the Closing for each individual listed in subsections
(a) through (d) above, and in each case extending the benefits of the
noncompetition provisions to Purchaser and its Affiliates in the states of
California and Arizona. In addition, the Noncompetition Agreements with respect
to the Sellers will exclude from the prohibition against competition, the
Sellers existing system operators as of the date of this Agreement and will
specifically provide that Sellers’ provision of call center and billing services
to third parties and their provision of internet services to their system
operator network and Purchaser shall not be deemed to be competition with
Purchaser provided, however, that Sellers do not provide internet services
directly to residents at any ROE Property within the territory of California or
Arizona.
 
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6.19  Enforcement of Existing Covenants. Each of the Sellers agree to reasonably
cooperate with Purchaser to enforce the existing covenants not to compete that
affect the Assets and upon request from Purchaser will assist in taking all
action reasonably necessary to try to prevent James Zaphirou from soliciting any
of the ROE Properties included in the Assets, including, without limitation, by
providing written communications necessary to remind Mr. Zaphirou of his
obligations regarding the Assets.
 
6.20  Payoff Letters. A statement from each of (a) Dinamo Entertainment, Inc.
(“Dinamo”) as holder of that certain Promissory Note dated as of August 26, 2005
executed by Multiband in the principal amount of six hundred thousand dollars
($600,000.00) in connection with that certain Cable System Acquisition Agreement
by and between Multiband and Dinamo executed on or about August 31, 2005, and
(b) Rand’M, a California corporation, as holder of that certain Promissory Note
dated as of September 13, 2006 executed by Multiband in the principal amount of
one hundred forty-six thousand, five hundred dollars ($146,500.00) in connection
with that certain Cable Systems Acquisition Agreement by and between Multiband
and Rand’M effective September 13, 2006, dated the Closing Date, setting forth
the principal amount then outstanding on the indebtedness represented by each
note, the interest rate thereon and a statement to the effect that Multiband, as
obligor under such note, is not in default under any of the provisions thereof.
 
6.21  Instruments of Transfer. Receipt by Purchaser of such instruments of
transfer, assignment, conveyance and other instruments sufficient to convey,
transfer and assign to Purchaser all right, title and interest in the Assets,
together with possession of such Assets, all in form and substance reasonably
satisfactory to Purchaser and its counsel, including, but not limited to, (a) an
assignment for each ROE Agreement and (b) a bill of sale, each in a form
mutually agreed to among the parties.
 
6.22  Lien Release. Receipt by Purchaser of evidence satisfactory to Purchaser
and its counsel of the termination or nonexistence of any Liens with respect to
the Assets.
 
6.23  Transfer of Chain Numbers. Each Seller will sign and approve and secure
DirecTV’s approval to transfer each ROE Agreement registered with DirecTV under
a “PID” number listed on Schedule 3.8(a) from such Seller’s chain number with
DirecTV to Purchaser’s chain number with DirecTV.
 
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6.24  Transfer of Accounts. Receipt of evidence satisfactory to Purchaser that
each Seller’s account for services provided by 4COM and the Bulk Service and
SMATV Non-Bulk Service accounts for services provided by DirecTV shall be
transferred to Purchaser’s account as of the Closing.
 
6.25  DirecTV’s Waiver of Right of First Refusal. Receipt by Purchaser of a
waiver from DirecTV in connection with DirecTV’s waiver of its right of first
refusal that Multiband granted to DirecTV pursuant to its agreement with
DirecTV.
 
6.26  Board and Lender Approvals. Receipt by Purchaser of all approvals required
by Purchaser’s Board of Managers and its financial institutions lenders and of
all approvals required by each Seller’s Board of Directors or Board of Managers,
as applicable.
 
6.27  Updated Disclosures. Receipt by Purchaser of each of the updated schedules
and electronic lists and files required to be delivered to Purchaser pursuant to
the terms of this Agreement, which updated schedules and electronic lists and
files shall reflect information consistent with that previously presented to
Purchaser and which does not result in a Material Adverse Effect with respect to
the Assets considered as a whole.
 
6.28  Secretary’s Certificate. Receipt by Purchaser of a certificate of the
Secretary of each Seller (a) attaching true, correct and complete copies of all
resolutions duly adopted by the Board of Directors or Managers of such Seller
authorizing such Seller’s execution, delivery and performance of its obligations
under this Agreement (and naming specific persons who are authorized to sign
those documents on behalf of Seller), such Seller’s execution, delivery and
performance of its obligations under all other agreements and documents, and the
taking by such Seller of all other actions, in furtherance of the foregoing,
which resolutions shall not have been altered, amended, modified or rescinded
and shall remain in full force and effect on the Closing Date; (b) attaching
true and complete copies of the charter documents (Articles of Incorporation and
Bylaws or Articles of Organization and Operating Agreement, as applicable) of
such Seller, which charter documents shall not have been altered, amended,
modified or rescinded and shall remain in full force and effect on the Closing
Date and (c) certifying as to the incumbency and signatures of the officers of
such Seller that sign the Agreement and any other document delivered or to be
delivered by such Seller pursuant to any of the foregoing.
 
ARTICLE 7
CONDITIONS TO SELLERS’ OBLIGATIONS
 
The obligations of the Sellers under this Agreement (except with respect to the
Initial Closing pursuant to Section 2.7 hereof) shall, at their option, be
subject to the satisfaction, on or prior to the Closing Date, of all of the
following conditions:
 
7.1  Representations, Warranties, Covenants and Agreements. Each of the
Purchaser’s representations and warranties in this Agreement (considered
collectively), and each of these representations and warranties (considered
individually), shall have been accurate in all material respects as of the date
of this Agreement, and shall be accurate in all material respects as of the time
of the Closing as if then made. Each of the Purchaser’s representations and
warranties in Section 4.2, and each of the Purchaser’s representations and
warranties in this Agreement that contains an express materiality qualification,
shall have been accurate in all respects as of the time of the Closing as if
then made. Purchaser shall have delivered to Sellers a certificate dated as of
the Closing Date to all such effects.
 
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7.2  Legislation. No statute, rule, regulation, order or interpretation shall
have been enacted, entered or deemed applicable by any domestic government or
governmental or administrative agency or court that would make the transactions
contemplated by this Agreement illegal or that would cause Sellers or any
Affiliate or Related Person of Sellers to suffer any adverse consequence.
 
7.3  Proceedings. There shall not have been commenced or threatened against
Purchaser, or to the Knowledge of Purchaser, commenced or threatened against any
Seller or any Owner any proceeding (i) involving any challenge to, or seeking
damages or other relief in connection with, any of the transactions contemplated
by this Agreement or (ii) that may have the effect of preventing, delaying,
making illegal, imposing limitations or conditions on or otherwise interfering
with the transactions contemplated by this Agreement.
 
7.4  Secretary’s Certificate. Receipt by Sellers of a certificate of the
Secretary of Purchaser (a) attaching true, correct and complete copies of all
resolutions duly adopted by the Board of Directors of Purchaser authorizing
Purchaser’s execution, delivery and performance of its obligations under this
Agreement (and naming specific persons who are authorized to sign those
documents on behalf of Purchaser), Purchaser’s execution, delivery and
performance of its obligations under all other agreements and documents, and the
taking by Purchaser of all other actions, in furtherance of the foregoing, which
resolutions shall not have been altered, amended, modified or rescinded and
shall remain in full force and effect on the Closing Date; and (b) certifying as
to the incumbency and signatures of the officers of Purchaser that sign the
Agreement and any other document delivered or to be delivered by Purchaser
pursuant to any of the foregoing.
 
ARTICLE 8
TERMINATION
 
8.1  Termination. By notice given prior to or at the Closing, subject to Section
8.2, this Agreement may be terminated as follows:
 
(a)  By Purchaser if a material breach of any provision of this Agreement has
been committed by either Seller and such breach has not been waived by
Purchaser;
 
(b)  By Multiband if a material breach of any provision of this Agreement has
been committed by Purchaser and such breach has not been waived by Multiband;
 
(c)  By Purchaser if any condition in Article 6 has not been satisfied as of the
date specified for the Closing in Section 2.7 or if satisfaction of such a
condition by such date is or becomes impossible (other than through the failure
of Purchaser to comply with its obligations under this Agreement), and Purchaser
has not waived such condition on or before such date;
 
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(d)  By Multiband if any condition in Article 7 has not been satisfied as of the
date specified for the Closing in Section 2.7 or if satisfaction of such a
condition by such date is or becomes impossible (other than through the failure
of either Multiband or Rainbow to comply with its obligations under this
Agreement), and Multiband has not waived such condition on or before such date;
 
(e)  By mutual consent of Purchaser and Multiband; and
 
(f)  By Purchaser if the Closing has not occurred on or before April 30, 2007,
or such later date as the parties may agree upon, unless Purchaser is in
material breach of this Agreement.
 
8.2  Effect of Termination. Each party’s right of termination under Section 8.1
is in addition to any other rights it may have under this Agreement or
otherwise, and the exercise of such right of termination will not be an election
of remedies. Unless the Initial Closing described in Section 2.4 hereof has not
occurred, if this Agreement is terminated pursuant to Section 8.1, all
obligations of the parties under this Agreement will terminate, except that the
obligations of the parties in this Section 8.2 and Section 5.1 and Article 10
(except for those in Section 10.7) will survive, provided, however, that if this
Agreement is terminated because of a breach of this Agreement by the
nonterminating party or because one or more of the conditions to the terminating
party’s obligations under this Agreement is not satisfied as a result of the
party’s failure to comply with its obligations under this Agreement, the
terminating party’s right to pursue all legal remedies will survive such
termination unimpaired. If the Initial Closing described in Section 2.4 hereof
has occurred, then this Agreement may only be terminated with respect to the
balance of the Assets, and this Agreement shall remain in full force and effect
with respect to the Schedule 2.4 ROE Assets.
 
ARTICLE 9
INDEMNIFICATION
 
9.1  Indemnification. The Sellers, jointly and severally, will indemnify and
hold harmless Purchaser, and its members, managers, officers, employees, agents,
consultants, advisors, accountants, financial advisors, legal counsel and
representatives and Affiliates (collectively, the “Purchaser Indemnitees”), and
will reimburse the Purchaser Indemnitees for any loss, liability, claim, damage,
interest and penalties, expense (including costs of investigation and defense
and reasonable attorneys’ fees and expenses) or diminution of value, whether or
not involving a Third-Party Claim (collectively, “Damages”) arising from or in
connection with (a) any breach of any representation or warranty made by Sellers
in (i) this Agreement (without giving effect to any update to the Disclosure
Schedules required to be delivered by Sellers after the time of signing this
Agreement), (ii) the Disclosure Schedules required to be delivered by Sellers,
(iii) the updates to the Disclosure Schedules required to be delivered by
Sellers, (iv) the certificate delivered pursuant to Section 6.1, (v) any
transfer instrument or (vi) any other certificate, document, writing or
instrument delivered by Sellers pursuant to this Agreement; (b) any breach of
any covenant or obligation of any Seller in this Agreement or in any other
certificate, document, writing or instrument delivered by any of the Sellers
pursuant to this Agreement; (c) any liability arising out of the ownership or
operation of the Assets prior to the Closing Date other than the Assumed
Liabilities; (d) any claim by any Person for brokerage or finder’s fees or
commissions or similar payments based upon any agreement or understanding made,
or alleged to have been made, by any Person with any Seller in connection with
the transactions contemplated by this Agreement; (e) any liability under the
WARN Act or any similar state or local Legal Requirement that may result from an
“Employer Loss”, as defined by 29 U.S.C. § 2101(a)(6), caused by any action of
the Sellers prior to the Closing or by Purchaser’s decision not to hire previous
employees of any Seller; (f) any Employee Plan established or maintained by any
Seller; (g) any obligation to share any of the proceeds received by any Seller
under this Agreement pursuant to the term of any of the ROE Agreements; (g) any
costs incurred in connection with enforcing any noncompetition provision to
which Morris Eiseman or the prior owners of the Rainbow Assets is bound (the
“Prior Noncompetes”); (h) any costs incurred in connection with securing any New
ROE or other new Right of Entry Agreement if such costs are incurred as a result
of a breach of the Prior Noncompetes; (i) the costs to upgrade any ROE Property
required to be covered by a New ROE pursuant to Section 6.6 hereof to MFH1
technology pursuant to Purchaser’s specifications from the Closing Date to the
Earnout Date and (j) the Retained Liabilities.
 
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9.2  Indemnification of Sellers. Purchaser will indemnify and hold harmless the
Sellers and each of their shareholders, members, managers, directors, officers,
employees, agents, consultants, advisors, accountants, financial advisors, legal
counsel, representatives and Affiliates (collectively, the “Sellers’
Indemnitees”), and will reimburse the Seller’s Indemnitees for any Damages
arising from or in connection with (a) any breach of any representation or
warranty made by Purchaser in (i) this Agreement or in any certificate,
document, writing or instrument delivered by Purchaser pursuant to this
Agreement; (b) any breach of any covenant or obligation of Purchaser in this
Agreement or in any certificate, document, writing or instrument delivered by
Purchaser pursuant to this Agreement; (c) any claim by any Person for brokerage
or finder’s fees or commissions or similar payments based upon any agreement or
understanding made, or alleged to have been made, by any Person with Purchaser
in connection with the transactions contemplated by this Agreement and (d) any
Assumed Liabilities.
 
9.3   Third-Party Claims. If a claim by a third party is made against any
indemnified party, and if the indemnified party intends to seek indemnity with
respect thereto under this Article 9, such indemnified party shall promptly
notify the indemnifying party of such claim; provided, however, that failure to
give timely notice shall not affect the rights of the indemnified party except
to the extent the indemnifying party has been prejudiced by such failure.
 
(a)  The indemnifying party shall be entitled to contest, settle or assume the
defense of such claim, including the employment of counsel satisfactory to the
indemnified party, as provided below. If the indemnifying party elects to
contest, settle or defend such claim, it shall notify the indemnified party
within 10 days of receipt of such claim (but in no event less than 15 days
before any pleading, filing or response on behalf of the indemnified party is
due) of its intent to do so. If the indemnifying party elects not to settle or
defend such claim or fails to notify the indemnified party of its election
within 10 days (or such shorter period provided above) after receipt of the
indemnified party’s notice of a claim of indemnity hereunder, the indemnified
party shall have the right to contest, settle or compromise the claim without
prejudice to any rights to indemnification hereunder. Regardless of which party
is controlling the settlement or defense of any claim, (i) both the indemnified
party and indemnifying party shall act in good faith, (ii) the indemnifying
party shall not thereby permit to exist any Lien upon any asset of any
indemnified party or of its Affiliates or subsidiaries without the consent of
the indemnified party, (iii) the indemnifying party shall permit the indemnified
party to participate in such settlement or defense through counsel chosen by the
indemnified party, provided that all fees, costs and expenses of such counsel in
an action controlled by the indemnifying party shall be borne by the indemnified
party, unless the indemnifying party and indemnified party have conflicting
available defenses to such third-party claim, in which case such fees, costs and
expenses shall be borne by the indemnifying party, (iv) no entry of judgment or
settlement of a claim (a “Final Claim”) may be agreed to without the written
consent of both the indemnified party and the indemnifying party, which consents
shall not be unreasonably withheld, and (v) the indemnifying party shall agree
promptly to reimburse the indemnified party for the full amount of such Final
Claim pursuant to this Article 9, subject to the following sentence. So long as
the indemnifying party is reasonably contesting any such claim in good faith as
permitted herein, the indemnified party shall not pay or settle any such claim.
The controlling party shall deliver, or cause to be delivered, to the other
party copies of all correspondence, pleadings, motions, briefs, appeals or other
written statements relating to or submitted in connection with the settlement or
defense of any such claim, and timely notices of, and the right to participate
pursuant to (iii) above in any hearing or other court proceeding relating to
such claim.
 
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(b)  Notwithstanding the foregoing, if the indemnified party determines in good
faith that there is a reasonable probability that a third-party claim may
adversely affect it or its Affiliates other than as a result of monetary damages
for which it would be entitled to indemnification under this Agreement, the
indemnified party may, by notice to the indemnifying party, assume the exclusive
right to defend, compromise or settle such third-party claim at the indemnifying
party’s sole expense, but the indemnifying party will not be bound by any
determination of any third party claim so defended for the purposes of this
Agreement or any compromise or settlement without its consent (which consent may
not be unreasonably withheld).
 
9.4  Other Claims. A claim for indemnification for any matter not involving a
Third-Party Claim may be asserted by notice to the party from whom
indemnification is sought and shall be paid promptly after notice.
 
9.5  Cooperation as to Indemnified Liability. Each party hereto shall cooperate
fully with the other party with respect to access to books, records or other
documentation within such party’s control, if deemed reasonably necessary or
appropriate by either party in the defense of any claim that may give rise to
indemnification hereunder, but in no event shall any party be required to waive
any privilege to which it is entitled.
 
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9.6  Limitations.
 
(a)  Survival. The representations, warranties and indemnifications for breaches
contained herein, and the covenants, agreements and indemnifications contained
herein that are to have been fully performed prior to the Closing, shall survive
the Closing, and remain in full force and effect until the first anniversary of
the Closing and a party may not first raise a claim for Damages after such date
not directly related to or arising out of a claim asserted by such party prior
to the first anniversary of the Closing. No independent investigation made by a
party hereto, or by its counsel or any of its agents or employees, shall in any
way limit or restrict the scope of the representations, warranties, covenants or
agreements made by another party in this Agreement.
 
(b)  Exceptions. The first anniversary of the Closing limitation of Section
9.6(a) above shall not apply to Damages resulting from, arising out of, or based
upon (i) any fraud or intentional misrepresentation by any Seller or Purchaser;
(ii) any failure by any Seller to deliver to Purchaser all Assets necessary or
used in the conduct of the Business; (iii) any failure by any Seller to satisfy,
perform or pay the liabilities of such Seller not included within the Assumed
Liabilities; or (iv) a breach by either of the Sellers or Purchaser of any
covenant or agreement to be performed by it after the Closing (collectively,
subsections (i) through (iv) are referred to herein as the “Intentional
Damages”). The Intentional Damages shall survive the Closing, and remain in full
force and effect until the second anniversary of the Closing and a party may not
first raise a claim for Intentional Damages after such date not directly related
to or arising out of a claim asserted by such party prior to the second
anniversary of the Closing; provided, however, that any limitation with respect
to a covenant or agreement under subsection (iv) above whose performance extends
beyond such second anniversary of the Closing shall survive until the expiration
or termination of such covenant or agreement.
 
9.7  Right of Setoff. Upon notice to Sellers specifying in reasonable detail the
basis therefore, Purchaser may set off any amount to which it may be entitled
under this Article 9 against amounts otherwise payable to Sellers. Neither the
exercise of nor the failure to exercise such right of setoff will constitute an
election of remedies or limit Purchaser in any manner in the enforcement of any
other remedies that may be available to it.
 
ARTICLE 10
MISCELLANEOUS
 
10.1  Complete Agreement. The Schedules, Annexes and Exhibits to this Agreement
shall be construed as an integral part of this Agreement to the same extent as
if they had been set forth verbatim herein. This Agreement, the Schedules,
Annexes and Exhibits hereto and other documents delivered pursuant to this
Agreement constitute the entire agreement between the parties hereto with
respect to the subject matter hereof and supersede all prior proposals,
discussions, or agreements, whether written or oral, relating hereto. Any
disclosure contained in any Schedule hereto shall be deemed included in each
other applicable Schedule hereto but only to the extent the disclosure in such
first Schedule is on its face clear, without the need of additional information
or explanation, as to which, if any, other Schedule such disclosure should be
deemed to be included and for what reason.
 
10.2  Disclosure Schedules. The information in the Disclosure Schedules
constitutes (i) exceptions to particular representations, warranties, covenant
and obligations of Sellers as set forth in this Agreement or (ii) descriptions
or lists of assets and liabilities and other items referred to in this
Agreement. If there is any inconsistency between the statements in this
Agreement and those in the Disclosure Schedules (other than exceptions expressly
set forth as such in the Disclosure Schedules with respect to a specifically
identified representation or warranty), the statements in this Agreement will
control. The statements in the Disclosure Schedules and those in any supplement
thereto, relate only to the provisions in the Section of this Agreement to which
they expressly relate and not to any other provision in this Agreement.
 
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10.3  Waiver, Discharge, Amendment, Etc. The failure of any party hereto to
enforce at any time any of the provisions of this Agreement, including the
election of such party to proceed with the Closing despite a failure of any
condition to such party’s closing obligations to occur, shall in no way be
construed to be a waiver of any such provision, nor in any way to affect the
validity of this Agreement or any part thereof or the right of the party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement shall be held to be a waiver of any other or subsequent breach.
Any amendment to this Agreement shall be in writing and signed by the parties
hereto.
 
10.4  Fees and Expenses. Each of the parties hereto shall pay all fees and
expenses incurred by it, including the fees of its respective counsel, brokers,
attorneys, accountants, investment bankers and other experts incident to the
negotiation and preparation of this Agreement and the consummation of the
transactions contemplated by this Agreement. If this Agreement is terminated the
obligation of each party to pay its own fees and expenses will be subject to any
rights of such party arising from a breach of this Agreement by another party.
 
10.5  Notices. All notices or other communications to a party required or
permitted hereunder shall be in writing and shall be given by hand delivery,
courier service (with acknowledgement of receipt), telecopy (with confirmation
of transmission), by reputable overnight carrier for next morning delivery
provided recipient must sign for receipt, or by certified mail, postage prepaid
with return receipt requested, addressed to the parties at the following
addresses:
 

  if to Sellers, to:                
Multiband Corporation
9449 Science Center Drive
New Hope Minnesota 55428
Attention: Jim Mandel, Chief Executive Officer
Facsimile: 763-504-3060
            With a copy to:        
Multiband Corporation
9449 Science Center Drive
New Hope Minnesota 55428
Attention: Steven Bell, Chief Financial Officer
Facsimile: 763-504-3060
            and if to Purchaser, to:              
Consolidated Smart Broadband Systems, LLC
620 W. 135th Street
Gardena, CA 90248
Attention: Glenn S. Corey, Chief Financial Officer
Facsimile: (310) 715-6371
 

 
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  With a copy to:        
Consolidated Smart Broadband Systems, LLC
620 W. 135th Street
Gardena, CA 90248
Attention: Rose B. Sorensen, General Counsel
Facsimile: (310) 715-6371
 

 
Any party may change the above-specified recipient and/or mailing address by
notice to all other parties given in the manner herein prescribed. All notices
shall be deemed given on the day when actually delivered as provided above (if
delivered personally, by courier or by telecopy) or on the day shown on the
return receipt (if delivered by mail or overnight courier).
 
10.6  Public Announcement. Except as may be required to comply with the
requirements of applicable law, no press release or similar public announcement
or communication will be made or caused to be made concerning the execution or
performance of this Agreement unless specifically approved in advance by
Purchaser. The foregoing shall not restrict Purchaser’s and Sellers’
communications with shareholders, members, employees, suppliers, Subscribers or
customers. Notwithstanding anything to the contrary in Section 5.1 hereof, the
parties shall be permitted to disclose such information as is necessary to
perform their obligations as set forth in or contemplated by this Agreement.
 
10.7  Enforcement. Each Seller acknowledges and agrees that Purchaser would be
irreparably damaged if any of the provisions of this Agreement are not performed
in accordance with their specific terms and that any breach of this Agreement by
either Seller could not be adequately compensated in all cases by monetary
damages alone. Accordingly, in addition to any other right or remedy to which
Purchaser may be entitled, at law or in equity, it shall be entitled to enforce
any provision of this Agreement by a decree of specific performance and to
temporary, preliminary and permanent injunctive relief to prevent breaches or
threatened breaches of any of the provisions of this Agreement, without posting
any bond or other undertaking.
 
10.8  Governing Law. The legality, validity, enforceability and interpretation
of this Agreement shall be governed by the internal laws of the State of
California, without giving effect to the principles of conflict of laws.
 
10.9  Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and the successors or assigns of the parties
hereto.
 
10.10  Titles and Headings; Construction. The titles and headings to sections
herein are inserted for the convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of this Agreement.
This Agreement shall be construed without regard to any presumption or other
rule requiring construction hereof against the party causing this Agreement to
be drafted.
 
10.11  Severability. If any provision of this Agreement is held invalid,
unenforceable or void by a court of competent jurisdiction, the remaining
provisions shall nonetheless be enforceable according to their terms. In such
case, the parties agree to use their best efforts to achieve the purpose of the
invalid provision. Further, if any provision is held to be overbroad as written,
such provision shall be deemed amended to narrow its application to the extent
necessary to make the provision enforceable according to applicable law and
shall be enforced as amended.
 
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10.12  No Third Party Benefit. Nothing in this Agreement or the agreements
referred to herein, expressed or implied, other than indemnification rights
under Article 9 hereof, shall confer on any Person other than the parties hereto
or thereto, or their respective permitted successors or assigns, any rights
remedies, obligations or liabilities under or by reason of this Agreement, the
agreements referred to herein, or the transactions contemplated herein or
therein.
 
10.13  Arbitration. Any action to enforce or interpret this Agreement or to
resolve disputes between the parties shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association except to the extent otherwise expressly provided for herein (the
“Arbitration”). The parties agree that the Arbitration shall be before a retired
Superior Court or Appellate Court Judge in the State of California, or a
California licensed attorney, with at least 15 years of relevant commercial
business legal experience, and shall take place in Los Angeles County,
California, unless the parties mutually agree otherwise. Any party may commence
the Arbitration by sending a written demand for Arbitration to the other party
setting forth the nature of the matter to be resolved by Arbitration. Within
fifteen (15) days of the demand for Arbitration, an arbitrator shall be chosen
by mutual agreement of the parties to the Arbitration. If the parties cannot
agree on an arbitrator within such fifteen (15) day period, then each party will
choose an arbitrator, and those arbitrators will have fifteen (15) days to
choose a third arbitrator who shall individually preside over the Arbitration.
The parties shall share equally all initial costs of Arbitration; provided,
however, that the prevailing party shall be entitled to reimbursement of
reasonable attorneys’ fees, costs and expenses incurred in connection with the
Arbitration. All decisions of the arbitrator shall be final, binding and
conclusive on all parties. Judgment may be entered upon any such decision in
accordance with applicable law in any court having jurisdiction. 
 
10.14  Time of Essence. With regard to all dates and time periods set forth or
referred to in this Agreement, time is of the essence.
 
10.15  Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and shall be enforceable
against the parties actually executing such counterparts, and all of which
together shall constitute one instrument.
 
(signature page follows)
 
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed, in the manner appropriate for each, as of the date first above
written.
 
 

  CONSOLIDATED SMART BROADBAND SYSTEMS, LLC       By: __________________________
  Glenn S. Corey, Chief Financial Officer           MULTIBAND CORPORATION      
By: __________________________    James Mandel, Chief Executive Officer        
  RAINBOW SATELLITE GROUP, LLC       By: _________________________       Name:
_______________________         Title: ________________________    

 
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Schedule 1.1(b)
Assets

All equipment related to the provision of services with respect to each of the
ROE Agreements listed in Schedule 3.8(a), such as all customer premise
equipment, all components typically found in an L-Band, master antenna
television, MFH1 and satellite master antenna television distribution system,
including, without limitation, the following: "500" distribution cabling,
couplers and fittings, RG 59, RG 11 and RG 6 home run and home wiring, couplers,
splitters and fittings, C-BAND satellite receivers and mounting hardware, signal
distribution amplifiers lock boxes and home run wiring terminus components,
including signal taps, splitters and traps, in-residence junction boxes and wall
plates and all other electronic and passive devices used to distribute broadband
communications signals with respect to each ROE Property covered by this
Agreement.
 

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