Document:

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                                 EXHIBIT 10.5

                     MDU COMMUNICATIONS INTERNATIONAL, INC.

                      Series A Convertible Preferred Stock

                             REGISTRATION AGREEMENT

                                                                January 28, 2000
Haywood Securities Inc.
11th Floor Commerce Place
400 Burrard Street
Vancouver, B.C.
Canada V6C 3A6

AS AGENT FOR THE SUBSCRIBERS LISTED ON EXHIBIT A

Ladies and Gentlemen:

         MDU Communications International, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell (such issuance and sale, the "Initial
Placement") to the parties listed on the attached EXHIBIT A (the "Holders") for
whom you are acting as agent (the "Agent") in connection with the purchase and
sale of an aggregate of 3,090,000 shares of the Company's Series A Convertible
Preferred Stock, par value $0.001 ("Series A Shares"). The Series A Shares will
be convertible into shares of the Company's Common Stock pursuant to the
Certificate of Designations (the "Certificate of Designations") with respect to
the Series A Shares attached hereto as EXHIBIT B. As consideration for your
agreement to act as the Agent, the Company has also agreed to issue you Series A
Shares (the "Agent Shares") and warrants (the "Agent Warrants") which are
convertible into the Company's Common Stock. As an inducement to you to purchase
the Series A Shares on behalf of the Holders and to accept the Agent Shares and
the Agent Warrants, the Company agrees with you, (i) for your benefit, and (ii)
for the benefit of the Holders as to the Series A Shares and the Common Stock
issuable upon conversion of the Series A Shares, as follows:

     1. DEFINITIONS. Capitalized terms used herein without definition shall have
the respective meanings set forth in the Purchase Agreement. As used in this
Agreement, the following capitalized terms shall have the following meanings:

     "ACT" means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

     "AFFILIATE" of any specified person means any other person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to any
person, shall mean the possession, directly or indirectly, of the power to
direct or cause the

                                     D-1

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direction of the management or policies of such person, whether through the
ownership of voting securities or by agreement or otherwise.

     "AGENT" has the meaning set forth in the preamble hereto.

     "AGENT SHARES" has the meaning set forth in the preamble hereto.

     "AGENT WARRANTS" has the meaning set forth in the preamble hereto.

     "CERTIFICATE OF DESIGNATIONS" has the meaning set forth in the preamble
hereto.

     "CLOSING DATE" means January 31, 2000.

     "COMMON STOCK" means the Common Stock, par value $0.001 per share, of the
Company, as it exists on the date of this Agreement and any other shares of
capital stock or other securities of the Company into which such Common Stock
may be reclassified or changed, together with any and all other securities which
may from time to time be issuable upon conversion of Series A Shares. Unless the
context otherwise requires, "Common Stock" as used herein refers to the Common
Stock issuable upon conversion of the Series A Shares and the Agent Shares, and
upon exercise of the Agent Warrants.

     "DTC" has the meaning set forth in Section 3(k) hereof.

     "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.

     "HOLDER" means the persons listed on EXHIBIT A, the Agent and their
permitted transferees.

     "MAJORITY HOLDERS" means the Holders of a majority of the then outstanding
aggregate principal amount of Common Stock registered under a Shelf Registration
Statement; provided that Common Stock which has been sold or otherwise
transferred pursuant to the Shelf Registration Statement shall not be included
in the calculation of Majority Holders.

     "NOTICE AND QUESTIONNAIRE" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of EXHIBIT C
hereto.

     "PROSPECTUS" means the prospectus included in any Shelf Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a prospectus filed as part of an effective
registration statement in reliance upon Rule 430A under the Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Common Stock covered by such Shelf Registration
Statement, and all amendments and supplements to such prospectus, including all
documents incorporated or deemed to be incorporated by reference in such
prospectus.

     "RULE 144" means Rule 144 (or any successor provision) under the Act.

     "SEC" means the Securities Exchange Commission.

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     "SERIES A SHARES" has the meaning set forth in the preamble hereto.

     "SHELF REGISTRATION" means a registration effected pursuant to Section 2
hereof.

     "SHELF REGISTRATION PERIOD" has the meaning set forth in Section 2(c)
hereof.

     "SHELF REGISTRATION STATEMENT" means a "shelf" registration statement of
the Company pursuant to the provisions of Section 2 hereof which covers all of
the Common Stock issuable upon conversion of the Series A Shares and the Agent
Shares, and upon exercise of the Agent Warrants, on an appropriate form for an
offering to be made on a delayed or continuous basis pursuant to Rule 415 under
the Act, or any similar rule that may be adopted by the SEC, and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all documents incorporated or deemed to be incorporated by
reference therein.

     "SUSPENSION PERIOD" has the meaning set forth in Section 2(d) hereof.

     All references in this Agreement to financial statements and schedules and
other information which is "contained", "included", or "stated" in the Shelf
Registration Statement, any preliminary Prospectus or Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus or Prospectus shall be deemed to mean and include the
filing of any document under the Exchange Act, after the date of such Shelf
Registration Statement, preliminary Prospectus or Prospectus, as the case may
be, which is incorporated or deemed to be incorporated by reference therein.

     2. CANADIAN REGISTRATION AND U.S. SHELF REGISTRATION STATEMENT. (a) As soon
as practicable following the Closing Date, the Company shall (a) prepare and
file a preliminary prospectus and a (final) prospectus, and use reasonable
commercial efforts to obtain receipts for each such prospectus, in British
Columbia and all other provinces of Canada in which persons purchasing the
Series A Shares on the Closing Date are resident, to qualify for distribution,
and (b) file with the SEC, and thereafter use reasonable commercial efforts to
obtain effectiveness of, the Shelf Registration Statement under the Act covering
resales of the Common Stock. The Company shall supplement or amend the Shelf
Registration Statement if required by the rules, regulations or instructions
applicable to the registration form used by the Company for the Shelf
Registration Statement, if required by the Act, the Exchange Act or the SEC.

          (b) (1) Not less than 30 calendar days prior to the effectiveness of
the Shelf Registration Statement, the Company shall mail the Notice and
Questionnaire to the Holders of Common Stock issuable upon conversion of the
Series A Shares. No Holder shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement, and no Holder shall be
entitled to use the Prospectus forming a part thereof for resales of Common
Stock at any time, unless such Holder has returned a completed and signed Notice
and Questionnaire to the Company by the deadline for responses set forth
therein; PROVIDED, HOWEVER, that Holders shall

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have at least 20 calendar days from the date on which the Notice and
Questionnaire is first mailed to such Holders to return a completed and
signed Notice and Questionnaire to the Company.

               (2) After the Shelf Registration Statement has become effective,
the Company shall, upon the request of any Holder of Common Stock that has not
returned a completed Notice and Questionnaire, promptly send a Notice and
Questionnaire to such Holder. The Company shall not be required to take any
action to name such Holder as a selling securityholder in the Shelf Registration
Statement or to enable such Holder to use the Prospectus forming a part thereof
for resales of Common Stock until such Holder has returned a completed and
signed Notice and Questionnaire to the Company and the Company is otherwise
amending the Shelf Registration Statement. In such case the Company will include
such Holder as a selling shareholder in the amendment to the Shelf Registration
Statement.

          (c) The Company shall keep the Shelf Registration Statement
continuously effective under the Act, in order to permit the Prospectus forming
part thereof to be usable by all Holders until the earliest of (i) one year from
the Qualification Date (as defined in the Certificate of Designations), (ii) the
date on which all the Common Stock issuable upon conversion of the Series A
Shares may be sold by non-affiliates ("affiliates" for such purpose having the
meaning set forth in Rule 144) of the Company pursuant to paragraph (k) of Rule
144 (or any successor provision) promulgated by the SEC under the Act, and (iii)
the date as of which all the Common Stock has been transferred pursuant to Rule
144 under the Securities Act (or any similar provision then in force) or sold
pursuant to the Shelf Registration Statement (in any such case, such period
being called the "Shelf Registration Period"). The Company will, subject to
Section 2(d), prepare and file with the SEC such amendments and post-effective
amendments to the Shelf Registration Statement as may be necessary to keep the
Shelf Registration Statement continuously effective for the Shelf Registration
Period; subject to Section 2(d), cause the related Prospectus to be supplemented
by any required supplement, and as so supplemented to be filed pursuant to Rule
424 (or any similar provisions then in force) under the Act; and, comply in all
material respects with the provisions of the Act with respect to the disposition
of all securities covered by the Shelf Registration Statement during the
applicable period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Shelf Registration Statement as so amended or
such Prospectus as so supplemented.

          (d) The Company may suspend the use of the Prospectus for a period not
to exceed 60 days in any three-month period or for three periods not to exceed
an aggregate of 90 days in any twelve-month period (the "Suspension Period") for
valid business reasons, to be determined by the Company in its sole reasonable
judgment (not including avoidance of the Company's obligations hereunder),
including, without limitation, the acquisition or divestiture of assets, public
filings with the SEC, pending corporate developments and similar events;
provided that the Company promptly thereafter complies with the requirements of
Section 3(j) hereof, if applicable. The Company shall provide notice to the
Holders of a Suspension Period as required under Section 3(c)(1)(iv) hereof.

     3. REGISTRATION PROCEDURES. In connection with any Shelf Registration
Statement, the following provisions shall apply:

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          (a) The Company shall furnish to you, not less than 5 business days
prior to the filing thereof with the SEC, a copy of any Shelf Registration
Statement, and each amendment thereof (including amendments caused by the filing
by the Company with the SEC of a report required by the Exchange Act), a copy of
any Prospectus, and each amendment or supplement, if any, to the Prospectus
included therein and shall use its best efforts to reflect in each such
document, when so filed with the SEC, such comments as you or counsel designated
by you reasonably may propose if such comments are received by the Company not
more than three business days after to your receipt of such Shelf Registration
Statement, Prospectus or amendment or supplement thereto.

          (b) The Company shall ensure that (i) any Shelf Registration Statement
and any amendment thereto and any Prospectus forming part thereof and any
amendment or supplement thereto comply in all material respects with the Act and
the rules and regulations thereunder, (ii) any Shelf Registration Statement and
any amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading and
(iii) any Prospectus forming part of any Shelf Registration Statement, and any
amendment or supplement to such Prospectus, does not include an untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading; provided that the Company makes no representation or
agreement with respect to information with respect to any Holder provided or
required to be included in any Shelf Registration or Prospectus pursuant to the
Act or the rules and regulations thereunder and which information is included
therein in reliance upon and in conformity with information furnished to the
Company in writing by or on behalf of any such Holder.

          (c)  (1) The Company, as promptly as reasonably practicable, shall
advise you, each Holder that has returned a completed and signed Notice and
Questionnaire to the Company and the transfer agent for the Common Stock (the
"Transfer Agent") and, if requested by you or any such Holder, confirm such
advice in writing:

               (i) when a Shelf Registration Statement and any amendment thereto
          has been filed with the SEC and when the Shelf Registration Statement
          or any post-effective amendment thereto has become effective;

               (ii) of any request by the SEC for amendments or supplements to
          the Shelf Registration Statement or the Prospectus or for additional
          information;

               (iii) of the determination by the Company that a post-effective
          amendment to the Shelf Registration Statement would be appropriate;
          and

               (iv) of the commencement or termination of any Suspension Period

     (which advice in the case of clauses 3(c)(ii)-(iv) shall be accompanied by
     an instruction to suspend the use of the Prospectus until the requisite
     changes have been made).

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          (2) The Company shall advise you, each Holder that has returned a
     completed and signed Notice and Questionnaire to the Company and the
     Transfer Agent and, if requested by you or any such Holder, confirm
     such advice in writing:

               (i) of the issuance by the SEC of any stop order suspending the
          effectiveness of the Shelf Registration Statement or the initiation of
          any proceedings for that purpose;

               (ii) of the receipt by the Company of any notification with
          respect to the suspension of the qualification of the Common Stock
          included in any Shelf Registration Statement for sale in any
          jurisdiction or the initiation or threat of any proceeding for such
          purpose; and

               (iii) of the suspension of the use of the Prospectus pursuant to
          Section 2(d) hereof or of the happening of any event that requires the
          making of any changes in the Shelf Registration Statement or the
          Prospectus so that, as of such date, the statements therein are not
          misleading and the Shelf Registration Statement or the Prospectus, as
          the case may be, does not include an untrue statement of a material
          fact or omit to state a material fact required to be stated therein or
          necessary to make the statements therein (in the case of the
          Prospectus, in light of the circumstances under which they were made)
          not misleading

     (which advice shall be accompanied by an instruction to suspend the use of
     the Prospectus until the requisite changes have been made).

          (d) The Company shall use its best efforts to obtain the withdrawal of
any order suspending the effectiveness of any Shelf Registration Statement or
the lifting of any suspension of the qualification (or exemption from
qualification) of the Common Stock for offer or sale in any jurisdiction at the
earliest possible time.

          (e) The Company shall furnish to each Holder of Common Stock included
within the coverage of any Shelf Registration Statement, without charge, at
least one copy of such Shelf Registration Statement and any post-effective
amendment thereto, including financial statements and schedules and all
materials incorporated therein by reference, and, if the Holder so requests in
writing, all exhibits (including those incorporated by reference).

          (f) The Company shall, during the Shelf Registration Period, deliver
to each Holder of Common Stock included within the coverage of any Shelf
Registration Statement, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as such Holder may reasonably
request; and, except during the continuance of any Suspension Period, the
Company consents to the use of the Prospectus or any amendment or supplement
thereto by each of the selling Holders in connection with the offering and sale
of the Common Stock covered by the Prospectus or any amendment or supplement
thereto.

          (g) Prior to any offering of Common Stock pursuant to any Shelf
Registration Statement, the Company shall register or qualify or cooperate with
the Holders of Common

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Stock included therein in connection with the registration or qualification
(or exemption from such registration or qualification) of such Common Stock
for offer and sale, as the case may be, under the securities or blue sky laws
of such jurisdictions as any such Holders reasonably request in writing and
do any and all other acts or things necessary or advisable to enable the
offer and sale in such jurisdictions of the Common Stock covered by such
Shelf Registration Statement; PROVIDED, HOWEVER, that the Company will not be
required to (A) qualify generally to do business in any jurisdiction where it
is not then so qualified or to (B) take any action which would subject it to
general service of process in any such jurisdiction where it is not then so
subject.

          (h) The Company shall, and shall use its best efforts to cause the
Transfer Agent to, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Common Stock to be sold
pursuant to any Shelf Registration Statement to third-party buyers of such
Common Stock, free of any restrictive legends and in such denominations and
registered in such buyers' names as Holders may request prior to sales of Common
Stock pursuant to such Shelf Registration Statement. Prior to any such sale, the
Holders shall deliver to the Transfer Agent for cancellation legended
Certificates representing a number of shares of Common Stock corresponding to
the number of shares of Common Stock to be sold, and shall include in such
delivery a signed Request for Issuance of Unlegended Stock Certificate Upon
Sale, in the form of EXHIBIT D hereto, to the Company and to the Transfer Agent.

          (i) Subject to the exceptions contained in (A) and (B) of paragraph
(g) hereof, the Company shall use its best efforts to cause the Common Stock
covered by the applicable Shelf Registration Statement to be registered with or
approved by such other federal, state and local governmental agencies or
authorities, and self-regulatory organizations in the United States as may be
necessary to enable the Holders to consummate the disposition of such Common
Stock as contemplated by the Shelf Registration Statement; without limitation to
the foregoing, the Company shall make all filings and provide all such
information as may be required by the National Association of Securities
Dealers, Inc. (the "NASD") in connection with the offering under the Shelf
Registration Statement of the Common Stock and shall cooperate with each Holder
in connection with any filings required to be made with the NASD by such Holder
in that regard.

          (j) Upon the occurrence of any event contemplated by Section 3(c)(2)
above and subject to Section 3(a) hereof, the Company shall promptly prepare and
file with the SEC a post-effective amendment to any Shelf Registration Statement
or an amendment or supplement to the related Prospectus or any document
incorporated therein by reference or file a document which is incorporated or
deemed to be incorporated by reference in such Shelf Registration Statement or
Prospectus, as the case may be, so that, as thereafter delivered to purchasers
of the Common Stock included therein, the Shelf Registration Statement and the
Prospectus, in each case as then amended or supplemented, will not include an
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (in
the case of the Prospectus in light of the circumstances under which they were
made) not misleading and in the case of a post-effective amendment, cause it to
become effective as promptly as practicable; provided that the Company's
obligations under this paragraph (j) shall be suspended if the Company has
suspended the use of the Prospectus in

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accordance with Section 2(d) hereof and given notice of such suspension to
the Holders, it being understood that the Company's obligations under this
Subsection (j) shall be automatically reinstated at the end of such
Suspension Period.

          (k) The Company shall use its reasonable best efforts to cause The
Depository Trust Company ("DTC") on the first business day following the
effective date of any Shelf Registration Statement hereunder or as soon as
possible thereafter to remove (i) from any existing CUSIP number assigned to the
Common Stock any designation indicating that the Common Stock are "restricted
securities", which efforts shall include delivery to DTC of a letter executed by
the Company substantially in the form of EXHIBIT E hereto and (ii) any other
stop or restriction on DTC's system with respect to the Common Stock.

          (l) The Company shall use its best efforts to comply with all
applicable rules and regulations of the SEC and shall make generally available
to its security holders as soon as practicable but in any event not later than
15 months after (i) the effective date of the applicable Shelf Registration
Statement, (ii) the effective date of each post-effective amendment to any Shelf
Registration Statement, and (iii) the date of each filing by the Company with
the SEC of an Annual Report on Form 10-K or 10KSB that is incorporated by
reference or deemed to be incorporated by reference in the Shelf Registration
Statement, an earnings statement satisfying the provisions of Section 11(a) of
the Act and Rule 158 promulgated by the SEC thereunder.

          (m) The Company shall cause all Common Stock issued upon conversion of
the Series A Shares to be listed on each quotation system or securities exchange
on which the Common Stock is then listed no later than the date the applicable
Shelf Registration Statement is declared effective and, in connection therewith,
to make such filings as may be required under the Exchange Act and to have such
filings declared effective as and when required thereunder.

          (n) If requested in writing by a Holder and at the Holder's expense,
the Company shall use its best efforts to promptly incorporate in a Prospectus
supplement or post-effective amendment to a Shelf Registration Statement such
information as a Holder may provide from time to time to the Company in writing
for inclusion in a Prospectus or any Shelf Registration Statement concerning
such Holder and the distribution of such Holder's Common Stock and shall make
all required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after being notified in writing of the matters to be
incorporated in such Prospectus supplement or post-effective amendment, provided
that the Company shall not be required to take any action under this Section
3(n) that is not, in the reasonable opinion of counsel for the Company, in
compliance with applicable law.

          (o) Each Holder agrees that, upon receipt of notice of the happening
of an event described in Sections 3(c)(1)(ii) through and including 3(c)(1)(iv)
and Sections 3(c)(2)(i) through and including 3(c)(2)(iii), each Holder shall
forthwith discontinue (and shall cause its agents and representatives to
discontinue) disposition of Common Stock and will not resume disposition of such
Common Stock until such Holder has received copies of an amended or supplemented
Prospectus contemplated by Section 3(j) hereof, or until such Holder is advised
in writing by the Company that the use of the Prospectus may be resumed or that
the relevant Suspension Period has been terminated, as the case may be, provided
that, the foregoing shall not

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prevent the sale, transfer or other disposition of Common Stock by a Holder
in a transaction which is exempt from, or not subject to, the registration
requirements of the Act, so long as such Holder does not and is not required
to deliver the applicable Prospectus or Shelf Registration Statement in
connection with such sale, transfer or other disposition, as the case may be.

     4.   REGISTRATION EXPENSES. The Company shall bear its and the Agent's
legal and other expenses incurred in connection with the negotiation,
preparation and performance of this Agreement. The Holders shall each bear such
legal and other expenses as they shall incur.

     5.   INDEMNIFICATION AND CONTRIBUTION.

          (a) The Company agrees to indemnify and hold harmless each Holder of
Common Stock covered by any Shelf Registration Statement, the directors,
officers, employees and agents of each such Holder and each person who controls
any such Holder within the meaning of either the Act or the Exchange Act against
any and all losses, claims, damages or liabilities, joint or several, to which
they or any of them may become subject under the Act, the Exchange Act or other
Federal or state law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Shelf Registration Statement as originally filed
or in any amendment thereof, or in any preliminary Prospectus or Prospectus, or
in any amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any such Holder specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.

          (b) Each Holder of Common Stock covered by a Shelf Registration
Statement, by execution and delivery of a Notice and Questionnaire, severally
and not jointly agrees to indemnify and hold harmless (i) the Company, (ii) each
of its directors, (iii) each of its officers who signs such Shelf Registration
Statement and (iv) each person who controls the Company within the meaning of
either the Act or the Exchange Act to the same extent as the foregoing indemnity
from the Company to each such Holder, but only with reference to written
information relating to such Holder furnished to the Company by or on behalf of
such Holder specifically for inclusion in the documents referred to in the
foregoing indemnity. This indemnity agreement will be in addition to any
liability which any such Holder may otherwise have.

          (c) Promptly after receipt by an indemnified party under this Section
5 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 5, notify the

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indemnifying party in writing of the commencement thereof; but the failure so
to notify the indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise
learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses; and (ii) will not, in
any event, relieve the indemnifying party from any obligations to any
indemnified party other than the indemnification obligation provided in
paragraph (a) or (b) above. The indemnifying party shall be entitled to
appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees,
costs and expenses of such separate counsel (and local counsel) if (i) the
use of counsel chosen by the indemnifying party to represent the indemnified
party would present such counsel with a conflict of interest; (ii) the actual
or potential defendants in, or targets of, any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have concluded that there may be legal defenses available to it and/or other
indemnified parties which are different from or additional to those available
to the indemnifying party; (iii) the indemnifying party shall not have
employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of the
institution of such action; or (iv) the indemnifying party shall authorize
the indemnified party to employ separate counsel at the expense of the
indemnifying party. An indemnifying party will not, without the prior written
consent of the indemnified party, settle or compromise or consent to the
entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties
are actual or potential parties to such claim or action) unless such
settlement, compromise or consent includes an unconditional release of such
indemnified party from all liability arising out of such claim, action, suit
or proceeding.

          (d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have an obligation to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses"), as incurred, to which such indemnified
party may be subject in such proportion as is appropriate to reflect the
relative benefits received by such indemnifying party, on the one hand, and such
indemnified party, on the other hand, from the Initial Placement and the Shelf
Registration Statement which resulted in such Losses. If the allocation provided
by the immediately preceding sentence is unavailable for any reason, the
indemnifying party and the indemnified party shall contribute in such proportion
as is appropriate to reflect not only such relative benefits but also the
relative fault of such indemnifying party, on the one hand, and such indemnified
party, on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be

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equal to the total net proceeds from the sale of the Series A Shares (before
deducting expenses). Benefits received by the Holders shall be deemed to be
equal to the value of receiving Common Stock registered under the Act. The
parties agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5, each person who
controls a Holder within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of such Holder shall have the
same rights to contribution as such Holder, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Shelf Registration Statement
and each director of the Company shall have the same rights to contribution
as the Company, subject in each case to the applicable terms and conditions
of this paragraph (d).

          (e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, or
the Company or any of the officers, directors or controlling persons referred to
in Section 5 hereof, and will survive the sale by a Holder of shares of Common
Stock covered by a Shelf Registration Statement.

     6.   MISCELLANEOUS.

          (a)  NO INCONSISTENT AGREEMENTS. The Company has not, as of the date
hereof, entered into nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.

          (b)  AMENDMENTS AND WAIVERS. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Majority Holders. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Common Stock are being sold
pursuant to a Shelf Registration Statement and that does not directly or
indirectly affect the rights of other Holders may be given by the Majority
Holders, determined on the basis of Common Stock being sold rather than
registered under such Shelf Registration Statement.

          (c)  NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:

               (1) if to you, initially at the address set forth in the
          Subscription Agreements;

               (2) if to any Holder, at the most current address given by such
          Holder to the Company in accordance with the provisions of this
          Section 6(c), which address

<PAGE>

          initially is, with respect to each Holder, the address of such Holder
          maintained by the registrar of the Common Stock, with a copy in like
          manner to you; and

               (3) if to the Company, initially at its address set forth in the
          Subscription Agreements.

         All such notices and communications shall be deemed to have been duly
given when received, if delivered by hand or air courier, and when sent, if sent
by first-class mail or telecopier with receipt confirmed.

         You, the Holders or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.

          (d)  SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders. The Company hereby agrees to extend the
benefits of this Agreement to any Holder and any such Holder may specifically
enforce the provisions of this Agreement as if an original party hereto. In the
event that any other person shall succeed to the Company by merger,
consolidation or purchase of assets, then such successor shall enter into an
agreement, in form and substance reasonably satisfactory to the Holders, whereby
such successor shall assume all of the Company's obligations under this
Agreement.

               (e) COUNTERPARTS. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

               (f) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.

               (g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF DELAWARE.

               (h) SEVERABILITY. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.

               (i) COMMON STOCK OR SERIES A SHARES HELD BY THE COMPANY, ETC.
Whenever the consent or approval of Holders of a specified percentage of Common
Stock is required hereunder, Common Stock or Series A Shares held by the Company
or its Affiliates shall not be counted in determining whether such consent or
approval was given by the Holders of such required percentage.

<PAGE>

         Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.

                                          Very truly yours,

                                          MDU COMMUNICATIONS INTERNATIONAL, INC.

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

The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

HAYWOOD SECURITIES, INC.,
     As Agent for the Holders

By  /s/ Fabio Banducci
  -------------------------------
    Name:  Fabio Banducci

Title:
       -----------------<PAGE>

                                   EXHIBIT 10.6

                             HAYWOOD SECURITIES INC.
                            11th Floor Commerce Place
                               400 Burrard Street
                             Vancouver, B.C. V6C 3A6

January 28, 2000

MDU Communications International, Inc.
108 - 11951 Hammersmith Way
Richmond, B.C.
V7A 5H9

Dear Sirs:

We understand that MDU Communications International, Inc. (the "Corporation")
wishes Haywood Securities Inc. (the "Agent") to act as its exclusive agent to
offer for sale by way of private placement to investors resident in British
Columbia, Alberta, Manitoba, Ontario and the United States (the "Qualifying
Jurisdictions") up to 3,090,000 shares (the "Investor Preferred Stock") of
Series A Convertible Preferred Stock having a par value per share of $0.001 of
the Corporation (the "Preferred Stock") at a price per share of US$2.50 (the
"Offering Price") for aggregate gross proceeds of up to $7,725,000. The
Preferred Stock will have the rights and restrictions set out in Schedule A. All
references to dollars are to U.S. dollars unless otherwise indicated.

The Agent hereby agrees to act as the Corporation's exclusive agent to offer the
Investor Preferred Stock for sale on a reasonable commercial efforts basis, upon
the terms and subject to the conditions set forth below. In consideration of the
services to be rendered by the Agent in connection with the issuance and sale of
the Investor Preferred Stock and qualification of the Underlying Shares (as
defined below), including, without limitation, acting as financial adviser to
the Corporation, assisting the Corporation in the preparation of relevant
documentation, assisting the Corporation in obtaining duly completed and signed
Subscription Agreements, acting as the Corporation's sponsor in connection with
listing its Common Stock on the Canadian Venture Exchange (the "Exchange"),
assisting the Corporation in obtaining requisite regulatory approvals in
connection with the preparation and finalization of a preliminary prospectus
(the "Preliminary Prospectus") and a final prospectus (the "Prospectus") and any
amendments thereto qualifying, among other things, the issuance of the shares of
Common Stock (the "Underlying Shares") issuable upon conversion of Preferred
Stock, the Corporation shall on the Closing Date (as defined at paragraph 6.1):

         (a) pay to the Agent 8% (the "Commission") of the gross proceeds
arising from the sale of the Investor Preferred Stock, which payment shall be
satisifed by the

<PAGE>

issuance to the Agent of such number of shares of Preferred Stock as is equal
to the quotient of the Commission and $2.50 (the "Commission Shares");

         (b) issue to the Agent 300,000 shares of Preferred Stock (the
"Corporate Finance Shares"); and

         (c) grant to the Agent an option (the "Agent's Warrant") in the form
attached hereto as Schedule B, entitling the Agent to acquire a warrant (the
"Agent's Underlying Warrant"). The Agent's Underlying Warrant will entitle the
Agent to acquire such number of shares of Common Stock of the Corporation as is
equal to 10% of the number of Investor Preferred Stock sold, for a period of one
year following the Closing Date at a price per share equal to the Offering
Price. The issuance of the Agent's Underlying Warrant upon exercise of the
Agent's Warrant shall be qualified by the Preliminary Prospectus and the
Prospectus, and the Agent's Shares (as defined below) issuable upon exercise of
the Underlying Warrant shall be included in the Common Stock of the Company that
will be registered under the United States Securities Act of 1933 (the "1933
Act") pursuant to the Registration Agreement between the Company and the Agent
relating to the Underlying Shares.

The Agent may appoint other registered dealers as its agent (the "Sub-Agent") to
assist in the offering contemplated hereby.

1.       NATURE OF TRANSACTIONS

1.1      Each purchaser (a "Purchaser") of Investor Preferred Stock shall
purchase under one or more of the exemptions (the "Exemptions") from the
prospectus requirements of the securities legislation of the Qualifying
Jurisdictions contemplated by the form of Subscription Agreement (the
"Subscription Agreement") attached as Schedule C.

1.2      The Agent shall conduct its activities in connection with the
distribution of the Investor Preferred Stock in compliance with all
applicable laws and regulatory requirements.

2.       REPRESENTATIONS AND WARRANTIES

2.1      The Corporation covenants, represents and warrants to the Agent and
the Purchasers, and acknowledges that the Purchasers are relying on such
covenants, representations and warranties in purchasing the Investor
Preferred Stock and that they are intended to be contractually enforceable by
the Purchasers or any one or more of them against the Corporation
notwithstanding that the Purchasers are not parties to this agreement, that:

         (a) the books and records of the Corporation fairly and correctly set
out and disclose in all material respects, in accordance with generally accepted
accounting principles, the financial position of the Corporation on a
consolidated basis as of the date hereof, and all material financial
transactions of the Corporation on a consolidated basis have been accurately
recorded in the said books and records. With the exception of forecasts,
projections or estimates referred to below, all information and other data

<PAGE>

(together, the "Information") relating to the Corporation furnished by or on
behalf of the Corporation to the Agent or the Purchaser is, or, in the case
of historical information, was at the date of preparation true, accurate,
complete and correct in all material respects, and does not or did not, as
the case may be, contain any "misrepresentation", as that term is defined in
the Securities Act (British Columbia) (hereafter, a "Misrepresentation"). Any
projections and forecasts relating to the Corporation provided by or on
behalf of the Corporation to the Agent have been prepared in good faith with
the assistance of competent professional advisors and are based upon
assumptions which, in light of the circumstances under which they are made,
are reasonable. The Corporation is not aware of any undisclosed facts or
information that could materially impact upon such projections and forecasts;

         (b) the Corporation and MDU Communications Inc. have been duly
incorporated and organized and are validly existing and in good standing under
the laws of their respective jurisdiction of incorporation and have all
requisite corporate power and authority to carry on their respective businesses
as now conducted and as presently proposed to be conducted, to own, lease and
operate their respective properties and assets and, in the case of the
Corporation, to carry out the provisions hereof;

         (c) the Corporation has no "subsidiaries" (as such term is defined in
the CANADA BUSINESS CORPORATIONS ACT (the "CBCA"), except for MDU Communications
Inc. (the "Subsidiary"), a corporation under the CBCA;

         (d) to the best of its knowledge, after due enquiry, the Corporation
and the Subsidiary are conducting their respective businesses in compliance in
all material respects with all applicable licensing and anti-pollution
legislation, regulations or by-laws, environmental protection legislation,
regulations or by-laws or other similar legislation, regulations or by-laws or
other lawful requirements of any governmental or regulatory bodies which are
applicable to the Corporation or the Subsidiary. The Corporation is not aware of
any such legislation, regulation, by-law or lawful requirement presently in
force or proposed to be brought into force by any governmental or regulatory
authority which the Corporation anticipates it or the Subsidiary will be unable
to comply with without materially adversely affecting the business of the
Corporation or the Subsidiary;

         (e) the Corporation or the Subsidiary is the beneficial owner of the
properties, business and assets, or the interest in the properties, business and
assets, referred to in the consolidated financial statements of the Corporation
most recently filed with the United States Securities and Exchange Commission,
and any and all agreements pursuant to which the Corporation or the Subsidiary
holds any such interest in property, business or assets are in good standing
under the applicable laws;

         (f) the authorized capital of the Corporation is as set forth on
Schedule D, of which the number of shares set forth on Schedule D are issued and
outstanding, all of such shares being fully paid and non-assessable and the only
outstanding options, warrants or other rights to acquire any shares or other
securities of the Corporation are as set forth on Schedule D; and all of the
issued and outstanding shares in the capital of the Subsidiary are owned,
beneficially and of record, by the Corporation, all such shares have

<PAGE>

been issued as fully paid and non-assessable, and there are no outstanding
options, warrants or other rights to acquire any shares or other securities
of the Subsidiary;

         (g) the audited consolidated balance sheets of the Corporation as at
September 30, 1999, and the audited consolidated statements of cash flow and
shareholders' equity for the period from inception to September 30, 1999, have
been prepared in accordance with generally accepted accounting principles in the
United States applied on a basis consistent with those of previous periods and
present fairly:

                  (i) the assets, liabilities (whether accrued, absolute,
contingent or otherwise) and the financial condition of the Corporation as at
September 30, 1999; and

                  (ii) the revenues, expenses and changes in financial position
of the Corporation for the period from inception to September 30, 1999;

         (h) no material adverse change, financial or otherwise, in the assets,
liabilities (contingent or otherwise), business, financial condition, capital or
prospects of the Corporation has occurred since September 30, 1999;

         (i) the Corporation is not in default or breach of, and the execution
and delivery of, and the performance and compliance with the terms of this
agreement, the Subscription Agreements, the Agent's Warrant, the Agent's
Underlying Warrant and all other agreements and other instruments to be executed
in connection herewith (collectively, the "Transaction Documents") does not and
will not result in any breach of, or constitute a default under, and does not
and will not create a state of facts which, after notice or lapse of time or
both, would result in a breach of or constitute a default under, in any material
respect, any term or provisions of the articles, by-laws, or resolutions of the
Corporation, or any indenture, agreement (written or oral), lease or other
document to which the Corporation is a party or by which it is bound, or any
judgment, decree or order, or to its knowledge, statute, rule or regulation
applicable to the Corporation, which default or breach might reasonably be
expected to materially adversely affect the business, operations, assets,
capital or condition (financial or otherwise) of the Corporation;

         (j) the Corporation has full corporate authority and capacity to enter
into the Transaction Documents and to perform its obligations under them, and
this agreement, and the Transaction Documents will, on the Closing Date, be duly
authorized, executed and delivered by the Corporation;

         (k) this agreement and the Transaction Documents will on the Closing
Date be, legal, valid and binding obligations of the Corporation, enforceable
against the Corporation in accordance with their respective terms, subject to
the laws relating to creditors' rights generally and equitable remedies and
except to the extent that the enforcement of rights to indemnity and waiver of
contribution may be limited by applicable law;

         (l) the Corporation has full corporate authority and capacity to issue
the Investor Preferred Stock, the Corporate Finance Shares, the Commission
Shares, the

<PAGE>

Underlying Shares, the Agent's Warrant, the Agent's Underlying Warrant and
the shares (the "Agent's Shares") issuable upon the exercise thereof, and, on
the Closing Date, the Agent's Warrant will be duly and validly created,
authorized and issued, and the Investor Preferred Stock, the Corporate
Finance Shares, the Commission Shares, the Underlying Shares and the Agent's
Shares will be duly and validly authorized and allotted for issuance, and
upon such issuance shall be issued as fully paid and non-assessable;

         (m) no consent of any third party is required in connection with the
transactions contemplated by the Transaction Documents, except to the extent
that this agreement and the Transaction Documents contemplate obtaining receipts
for the Preliminary Prospectus and the Prospectus and effecting registration
under the 1933 Act of the Underlying Shares and the Agent's Shares;

         (n) no securities regulatory authority has issued any order preventing
or suspending trading in any securities of the Corporation, and the Corporation
has not been, and is not currently, in default of any requirement of the
securities laws of any jurisdiction to which it is subject;

         (o) except as stated in the financial statements of the Corporation, no
litigation, administrative proceeding, arbitration or other proceeding before or
of any court, tribunal, arbitrator or regulatory or other governmental body or
dispute with any regulatory or other governmental body is presently in process
or, to the best of the knowledge and information of the Corporation, pending or
threatened against the Corporation which, if determined adversely to the
Corporation might have a material adverse effect on the financial condition,
results of operations, business or prospects of the Corporation, or which would
materially impair the ability of the Corporation to consummate the transactions
contemplated hereby or to duly observe and perform any of its covenants or
obligations herein or in the Transaction Documents;

         (p) the business and property of the Corporation and the Subsidiary
is, to the best of the Corporation's knowledge after due enquiry, in
compliance in all material respects with all Environmental Laws (as defined
below), and there are no facts known after due enquiry by the Corporation
which could give rise to a notice of non-compliance with any Environmental
Laws. The term "Environmental Laws" means all applicable laws, rules,
regulations, orders, policies, guidelines, notices, approvals and permits
relating to environmental or occupational health and safety matters, in
effect as at the date hereof, including, without limitation, those pertaining
to reporting, licensing, permitting, investigation, remediation and clean-up
in connection with any release or threat of release of a Contaminant or
relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling and the like of a Contaminant.
The term "Contaminant" means any substance or material that is prohibited,
controlled or regulated by any governmental authority, including without
limitation, any contaminants, pollutants, petroleum, its derivatives,
by-products or other hydrocarbons, dangerous substances or goods, asbestos,
toxic or hazardous substances or materials, controlled products, wastes
involving hazardous wastes and any other materials that are by their nature
hazardous, either in fact or as defined in or pursuant to any Environmental
Laws;

<PAGE>

         (q) there are , to the best of the knowledge of the Corporation
after due enquiry, no existing claims, demands, damages, expenses, suits,
proceedings, actions, negotiations, or causes of action of any nature
whatsoever, whether threatened or pending, arising out of the presence on any
property in respect of which the Corporation or the Subsidiary has an
interest, either past or present, of any Contaminant, or out of any past or
present activity conducted on any such property, involving any Contaminant or
any violation of any Environmental Law;

         (r) the Corporation shall not reject any Subscription Agreement
tendered by the Agent, unless all such subscriptions tendered by the Agent
exceed the number of shares of Investor Preferred Stock offered hereunder; and

         (s) the Corporation shall conduct its activities in connection with the
distribution of the Investor Preferred Stock in compliance with all applicable
laws and regulatory requirements and, without limiting the foregoing:

                  (i) all solicitations, offerings and other selling efforts
carried out by the Corporation in connection with the distribution of the
Investor Preferred Stock have been and will be made in accordance with the
Exemptions; and

                  (ii) no advertising of the Investor Preferred Stock has been
or will be made by the Corporation in any media whatsoever;

         (t) the Corporation has not made any form of general solicitation
within the meaning of Rule 502(c) of Regulation D ("Regulation D") under the
1933 Act in connection with the offer of Preferred Stock contemplated by this
Agreement; and

         (u) none of the Corporation or any of its predecessors or affiliates
have been subject to any order or other proceeding described in Rule 507 of
Regulation D enjoining such person for failure to comply with Rule 503 of
Regulation D.

3.       COVENANTS OF THE CORPORATION

3.1      The Corporation covenants with the Purchasers and the Agent, as
covenants that are intended to be contractually enforceable by the Purchasers
or one or more of them against the Corporation, notwithstanding the
Purchasers are not parties to this agreement, as follows:

         (a) subject to Section 3.1(k) below, the Corporation shall file the
Preliminary Prospectus and use its reasonable commercial efforts to obtain
receipts for the Preliminary Prospectus and the Prospectus qualifying the
distribution of the Underlying Shares and the Agent's Underlying Warrant
(subject to the Agent assisting the Corporation in the preparation and filing
of, and execution of the certificate page of, the Preliminary Prospectus and the
Prospectus) from each of the relevant securities regulatory authorities in the
Qualifying Jurisdictions within Canada as soon as possible in compliance with
all applicable laws, and the Corporation shall notify the Agent in writing
forthwith upon obtaining such receipts;

<PAGE>

         (b) the Corporation shall use its best efforts to list its Common Stock
on the NASDAQ or the Exchange (subject to the Agent acting as the Corporation's
sponsor for listing on the Exchange);

         (c) prior to the filing of the Preliminary Prospectus and the
Prospectus, the Corporation shall allow the Agent to participate fully in the
preparation of such documents and any amendments to them, and shall allow the
Agent to conduct all due diligence which the Agent may require, acting
reasonably, in order to fulfill its obligations as Agent and in order to enable
the Agent responsibly to execute the agent's certificate in such documents. The
Corporation shall cause to be delivered to the Agent such legal opinions as the
Agent or its counsel may require, acting reasonably, in connection with material
issues relating to, or discovered in the course of, such due diligence;

         (d) during the period from the date of this agreement to the completion
of the distribution of the securities qualified for distribution under the
Preliminary Prospectus and the Prospectus, the Corporation shall promptly
discuss with the Agent and immediately thereafter notify the Agent in writing of
any material adverse change (actual, anticipated or threatened), financial or
otherwise, in the assets, liabilities (contingent or otherwise), business,
financial condition, capital or prospects of the Corporation;

         (e) during the period from the signing of the Preliminary Prospectus to
the completion of the distribution of the securities qualified for distribution
under the Preliminary Prospectus and the Prospectus, the Corporation shall
promptly discuss with the Agent and immediately thereafter notify the Agent in
writing of (i) any actual or proposed "material change" (as that term is defined
under applicable securities laws and policies) in respect of the Corporation and
(ii) any change of any nature that would result in the Preliminary Prospectus,
the Prospectus or any amendment (a "Prospectus Amendment") to any such documents
containing a Misrepresentation (as defined in paragraph 2.1(a)) or which would
result in any of such documents not complying with the laws of the Qualifying
Jurisdictions;

         (f) the Corporation shall indemnify and hold the Purchasers and the
Agent harmless from and against any loss or damage sustained as a result of:

                  (i) any misrepresentation, breach of warranty or
non-fulfillment of any covenant on the part of the Corporation hereunder or
under the Information, or from any misrepresentation in or omission from any
certificate or other instrument furnished or to be furnished to the Agent or the
Purchasers under this agreement except a misrepresentation or omission relating
solely to either or both of the Agent or the Purchasers; and

                  (ii) any and all actions, suits, proceedings, demands,
assessments and judgments alleging or finding the existence of any of the
foregoing, and all legal costs, fees and other expenses incidental to any of the
foregoing;

         (g) the Corporation will use its best efforts to cause to be delivered
to the Agent prior to (or, if agreed to by the Agent, within a reasonable period
thereafter not

<PAGE>

exceeding 3 business days ) the filing of the Preliminary Prospectus and the
Prospectus (and any Prospectus Amendment) in the Qualifying Jurisdictions a
certificate signed by the Chief Executive Officer and by the Chief Financial
Officer of the Corporation under its corporate seal, dated the date of the
Preliminary Prospectus, the Prospectus (and any Prospectus Amendment), as the
case may be, addressed to the Agent, in a form satisfactory to the Agent,
acting reasonably, to the effect that each such officer has carefully
examined the Preliminary Prospectus, the Prospectus (or any Prospectus
Amendment), as the case may be, and each such document (any Prospectus
Amendment taken with the document it amends) contains full, true and plain
disclosure of all material facts in relation to the Corporation and the
securities offered in such document, and since the respective dates as of
which information is given therein, the Corporation has not incurred any
material liabilities or obligations (absolute, accrued, contingent or
otherwise) or entered into any transaction not in the ordinary course of
business; there has been no material change in the assets, financial
position, business or results of operations of the Corporation and, to the
best of their knowledge and information, there has occurred no event and
exists no state of facts that, under the applicable securities laws and the
terms of this agreement, is required to be set forth in an amendment to the
Preliminary Prospectus, the Prospectus (or any Prospectus Amendment), as the
case may be, that has not been so set forth;

         (h) the Corporation shall cause the Corporation's auditors to deliver
to the Agent a comfort letter, in form and substance satisfactory to the Agent,
acting reasonably, dated the date of the Prospectus and addressed to the Agent
and the directors of the Corporation verifying the financial information and
accounting data contained in the Prospectus and matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus to a date not more than 2 business days
prior to the date of such letter. A similar letter shall be delivered to the
Agent with respect to any Prospectus Amendment, where financial information has
changed;

         (i) the Corporation will deliver to the Agent, upon written request and
without cost to the Agent, as many copies of the Preliminary Prospectus, the
Prospectus and any Prospectus Amendment as the Agent may require, acting
reasonably, for the purposes contemplated hereunder, within 3 business days of
any such request; and

         (j) if the Agent believes that the prospectus exemption provided by
Ontario Securities Commission Rule 72-501 is, or will be, available in respect
of first trades in Underlying Shares held by Purchasers resident in Ontario, and
if the Agent delivers to the Corporation waivers from the Purchasers resident in
Ontario of the Corporation's obligation to file a Preliminary Prospectus and
Prospectus in Ontario, in form and substance satisfactory to the Corporation,
acting reasonably, the Corporation shall, at the option of the Agent exercisable
by written notice to the Corporation:

                  (i) not file the Preliminary Prospectus and the Prospectus
with the Ontario Securities Commission; and

<PAGE>

                  (ii) if the Preliminary Prospectus has been filed with the
Ontario Securities Commission, do everything required to withdraw the
Preliminary Prospectus from the Ontario Securities Commission.

3.2      The Corporation's delivery to the Agent of the Preliminary
Prospectus, the Prospectus and any Prospectus Amendment signed by the
Corporation shall constitute:

         (a) the Corporation's representation and warranty to the Agent that
each such document at the time of its filing complies with the requirements of
applicable securities laws and that all of the information and statements
contained therein (except information or statements furnished by and relating
solely to the Agent), contain no Misrepresentation and constitute full, true and
plain disclosure of all material facts relating to the Corporation and the
securities qualified for distribution; and

         (b) the Corporation's consent to the use by the Agent of such documents
in connection with the distribution in the Qualifying Jurisdictions of the
securities qualified for distribution.

4.       COVENANTS OF THE AGENT

4.1      Subject to completion of the sale of the Investor Preferred Stock on
the Closing Date, the Agent covenants with the Corporation as follows:

         (a) the Agent will if, acting in good faith, it reasonably believes
that to do so is in accordance with applicable securities laws and the terms of
the certificate being signed, upon the request of the Corporation, execute the
certificate page of the Preliminary Prospectus and the Prospectus (and any
Prospectus Amendment) presented to it for execution and will assist the
Corporation in obtaining any requisite regulatory approvals and receipts in
connection with the preparation and filing of such documents;

         (b) the Agent will if, acting in good faith, it reasonably believes
that to do so is in accordance with its obligations under the rules and policies
of the Exchange, sponsor the Corporation for listing on the Exchange; and

         (c) the Agent will assist the Corporation in facilitating the
conversion of the Investor Preferred Stock and the issuance of the Underlying
Shares.

5.       CONDITIONS IN FAVOUR OF THE PURCHASERS AND THE AGENT

5.1      The following are conditions of the Agent's obligations under this
agreement and the Purchasers' obligations to close the purchase of Investor
Preferred Stock, which conditions the Corporation shall use its reasonable
best efforts to have fulfilled at or prior to the Closing Time (as defined in
section 6.1) and which conditions may be waived in writing in whole or in
part by the Agent, on its own behalf and on behalf of the Purchasers:

         (a) the Corporation shall have issued the Corporate Finance Shares and
the Commission Shares and granted the Agent's Warrant;

<PAGE>

         (b) the Corporation shall have made all necessary filings and obtained
all necessary approvals, consents and acceptances of appropriate regulatory
authorities in order to permit the Corporation to issue and sell the Investor
Preferred Stock to the Purchasers as contemplated hereby, and evidence of such
approval satisfactory to the Agent, acting reasonably, shall have been delivered
to the Agent;

         (c) the Corporation shall have delivered to the Agent a certified
resolution of the board of directors authorizing and approving this agreement
and the Transaction Documents, and such other matters as the Agent may require,
acting reasonably;

         (d) the Corporation shall have delivered to the Agent a favourable
legal opinion from the Corporation's counsel addressed to the Agent, the Agent's
counsel and the Purchasers with respect to such matters as the Agent may
require, acting reasonably;

         (e) the Corporation shall have delivered to the Agent the Transaction
Documents, each in form and on terms satisfactory to the Agent, acting
reasonably, executed by the Corporation;

         (f) the Corporation shall have delivered to the Agent a definitive
certificate or certificates representing, in the aggregate, all of the Investor
Preferred Stock subscribed for under the Subscription Agreements (and issuable
under this agreement), registered as required by the Subscription Agreements;

         (g) the Corporation shall have complied in all material respects with
all of the terms and conditions of this agreement which it is required to comply
with at or prior to the Closing Time; and

         (h) the Corporation shall have delivered to the Agent a certificate
signed by the Chief Executive Officer and by the Chief Financial Officer of the
Corporation under its corporate seal, dated the Closing Date, addressed to the
Agent, to the effect that after due enquiry:

                  (i) the representations and warranties of the Corporation
contained in this agreement, and in any certificate of the Corporation delivered
pursuant hereto or in connection herewith, are true and correct as of the
Closing Time with the same force and effect as if made at and as of the Closing
Time after giving effect to the transactions contemplated hereby;

                  (ii) the Corporation has duly complied in all material
respects with all of the covenants of the Corporation contained herein and
satisfied all the conditions contained herein on its part to be performed or
satisfied at or prior to the Closing Time; and

                  (iii) no order, ruling or determination having the effect of
suspending the sale or ceasing the trading of the Preferred Stock or the Common
Stock has been issued and no proceedings for that purpose have been instituted
or are pending or are, to their knowledge and information, contemplated or
threatened under any of the applicable securities laws or by any regulatory
authority.

<PAGE>

6.       CLOSING

6.1      Closing of the purchase and sale of the Investor Preferred Stock
will occur at 10:00 a.m. (the "Closing Time") on January 28, 2000 (the
"Closing Date"), or such other date and time as the Agent may specify,
provided that such date is on or before February 28, 2000.

6.2      At closing the Corporation shall deliver to the Agent, on behalf of
the Purchasers, a certificate or certificates representing the Investor
Preferred Stock, registered in accordance with the Subscription Agreements,
against payment to the Corporation by certified cheque or bank draft of the
aggregate purchase price payable for the Investor Preferred Stock pursuant to
the Subscription Agreements tendered at closing less all amounts payable by
the Corporation to the Agent pursuant to this Agreement.

7.       INDEMNITY

7.1      The Corporation shall protect and indemnify the Agent and its
directors, officers, employees and agents (the "Indemnified Parties") from
and against all losses, claims, costs, damages and liabilities caused by or
arising directly or indirectly by reason of:

         (a) any information or statement (except any information or statement
furnished by and relating solely to the Agent) contained in the Preliminary
Prospectus, the Prospectus or any Prospectus Amendment or in any other document
or material filed or delivered pursuant hereto or in connection herewith
(including, without limitation, the Information), being or being alleged to be a
Misrepresentation; or

         (b) any order made or any inquiry, investigation or proceeding
commenced or threatened by any securities regulatory or other authority, based
upon any Misrepresentation or alleged Misrepresentation (except a
Misrepresentation or alleged Misrepresentation relating solely to the Agent) in
the Preliminary Prospectus, the Prospectus or any Prospectus Amendment or in any
other document or material filed or delivered pursuant hereto or in connection
herewith (including, without limitation, the Information) (except any document
or material delivered or filed solely by the Agent) preventing or restricting
the trading in or the sale or distribution of the any securities issuable in
connection, directly or indirectly, with the transactions contemplated by this
agreement in any of the Qualifying Jurisdictions.

If any claim contemplated by this paragraph 7 is asserted against any of the
Indemnified Parties, or if any potential claim contemplated by this paragraph
comes to the knowledge of any of the Indemnified Parties, the Indemnified Party
concerned shall notify the Corporation as soon as possible of the nature of such
claim (provided that any failure to so notify shall not affect the Corporation's
liability under this paragraph) and the Corporation shall, subject as
hereinafter provided, be entitled (but not required) to assume the defence on
behalf of the Indemnified Party of any suit brought to enforce such claim. Any
such defence shall be through legal counsel acceptable to the Indemnified Party
and no admission of liability shall be made by the Corporation or the
Indemnified Party without, in each case, the prior written consent of all the
parties hereto, such consent not to be unreasonably withheld. An Indemnified
Party shall have the right to employ

<PAGE>

separate counsel in any such suit and participate in the defence thereof but
the fees and expenses of such counsel shall be at the expense of the
Indemnified Party unless: (i) the Corporation fails to assume the defence of
such suit on behalf of the Indemnified Party within a reasonable period of
receiving notice of such suit, provided that the expiration of such period
shall be deemed to occur on the second clear business day immediately
preceding the date by which the Indemnified Party is required by law (in the
absence of agreement to the contrary) to take action (such as the filing of
an appearance or its equivalent) in connection with defending such suit; (ii)
the employment of such counsel has been authorized by the Corporation; or
(iii) the named parties to any such suit include both the Indemnified Party
and the Corporation and the Indemnified Party shall have been advised by
counsel that there may be one or more legal defences available to the
Indemnified Party which are different from or in addition to those available
to the Corporation (in each of which cases the Corporation shall not have the
right to assume the defence of such suit on behalf of the Indemnified Party
but shall be liable to pay the reasonable fees and expenses of counsel for
the Indemnified Party).

7.2      If the indemnity provided for in paragraph 7.1 is declared by a
court of competent jurisdiction to be illegal or unenforceable for any
reason, the Agent and the Corporation shall contribute to the aggregate of
all losses, claims, costs, damages, expenses or liabilities of the nature
provided for above such that the Agent shall be responsible for that portion
represented by the percentage that the Commission received by the Agent under
this agreement bears to the gross proceeds realized from the offering of
Investor Preferred Stock and the Corporation shall be responsible for the
balance, provided that, in no event, shall the Agent be responsible for an
amount in excess of the Commission. Notwithstanding the foregoing, a person
guilty of fraudulent misrepresentation, bad faith or gross negligence shall
not be entitled to contribution from any other party. Any party entitled to
contribution will, promptly after receiving notice of commencement of any
claim, action, suit or proceeding against such party in respect of which a
claim for contribution may be made against another party or parties under
this paragraph, notify such party or parties for whom contribution may be
sought. In no case shall such party from whom contribution may be sought be
liable to contribute pursuant to this agreement unless such notice shall have
been provided, but the omission to so notify such party shall not relieve the
party from whom contribution may be sought from any other obligation it may
have otherwise than under this paragraph. The right to contribution provided
in this paragraph shall be in addition to and not in derogation of any other
right to contribution which the Agent may have by statute or otherwise by law.

8.       TERMINATION

8.1      The Agent may at any time, without liability on its part and by
notice in writing given to the Corporation, terminate its obligations
hereunder if, after the date hereof:

         (a) any order to cease or suspend trading in any securities of the
Corporation, or prohibiting or materially restricting the distribution of any
securities issuable in connection, directly or indirectly, with the transactions
contemplated by this agreement is made, or proceedings are announced or
commenced for the making of any such order, by any securities commission or
similar regulatory authority, or by any other competent

<PAGE>

authority, not based solely upon the activities or alleged activities of the
Agent or any Sub-Agent, and has not been rescinded, revoked or withdrawn;

         (b) any inquiry, investigation (whether formal or informal) or other
proceeding in relation to the Corporation or any of its directors or senior
officers is announced or commenced by any securities commission or similar
regulatory authority, any stock exchange or by any other competent authority,
not based solely upon the activities or alleged activities of the Agent or any
Sub-Agent, if, in the Agent's opinion, acting reasonably, the announcement or
commencement thereof materially adversely affects the trading or distribution of
any of the securities issuable in connection, directly or indirectly, with the
transactions contemplated by this agreement;

         (c) there shall have occurred or be anticipated any material adverse
change, as determined by the Agent in its discretion, acting reasonably,
financial or otherwise, in the assets, liabilities (contingent or otherwise),
business, condition, capital or prospects (financial or otherwise) of the
Corporation;

         (d) in the Agent's opinion, acting reasonably, it would be
impracticable or unprofitable to offer or continue to offer the Investor
Preferred Stock for sale or there has developed, occurred or come into effect
any financial occurrence or any catastrophe of national or international
consequence, any governmental action, law or regulation, or any other occurrence
of any nature whatsoever which, in the opinion of the Agent, acting reasonably,
seriously adversely affects or would seriously adversely affect the North
American financial markets, the Corporation's business or the distribution of
the Investor Preferred Stock; or

         (e) the Corporation is in breach of, default under or non-compliance
with any representation, warranty, term or condition of this agreement.

8.2.      Any termination pursuant to the terms of this agreement shall be
effected by notice in writing delivered to the Corporation, provided that no
termination shall discharge or otherwise affect any obligation of the
Corporation under paragraphs 7.1, 7.2 or 10.1. The rights of termination
contained in paragraph 8.1 are in addition to, and without prejudice to, any
other rights or remedies the Agent may have at law or in equity.

9.       RIGHT OF FIRST REFUSAL

9.1      Subject to paragraph 9.2, the Corporation will notify the Agent in
writing of the terms of any further equity financing or financing involving
the issuance of convertible securities that it requires or proposes to obtain
during the 12 months following the Closing Date and the Agent will have the
right of first refusal to provide any such financing. The right of first
refusal must be exercised by the Agent within 10 business days following the
receipt of the notice by notifying the Corporation in writing that it will
provide such financing on the terms set out in the notice. If the Agent fails
to give notice within the 10 business days that it will provide such
financing upon the terms set out in the notice, the Corporation will then be
free to make other arrangements to obtain financing from another source on
the same terms or on terms no less favourable to the Corporation, subject to
obtaining the acceptance of the applicable regulatory authorities.

<PAGE>

The right of first refusal will not terminate if, on receipt of any notice
from the Corporation under this paragraph, the Agent fails to exercise the
right.

9.2      The provisions of paragraph 9.1 shall not apply in respect of
efforts by the Corporation to obtain a financing through a broker/dealer
registered under the securities laws of the United States, provided that if
the Corporation is able to obtain such a financing during the 12 months
following the Closing Date, the Agent shall have the right to participate in
not less than 40% of such financing.

10.      EXPENSES

10.1     Whether or not the transactions contemplated by this agreement
proceed or complete, all reasonable expenses of or incidental to the
transactions contemplated by this agreement and the Agent's sponorship of the
Corporation for the purpose of listing on the Exchange, including without
limitation, reasonable expenditures incurred by the Agent in connection with
the Agent's due diligence, preparation for marketing presentations and the
holding of information meetings, the Agent's out of pocket costs related to
information meetings and travel, the Agent's costs in having a report
prepared in connection with the Company, if required or advisable in the
opinion of the Agent, acting reasonably, and the reasonable fees and
disbursements of the Agent's counsel, shall be borne by the Corporation.

11.      MISCELLANEOUS

11.1     Any notice or other communication to be given hereunder shall be in
writing and delivered or telecopied as follows:

         If to the Corporation to:

         MDU Communications International, Inc.
         108-11951 Hammersmith Way
         Richmond, British Columbia
         V7A 5H9

         Attention: Sheldon Nelson

         Telecopy No. (604) 277-8301

         with a copy to:

         Catalyst Corp. Finance Lawyers
         #1100 - 1055 West Hastings Street
         Vancouver, B.C.  V6E 2E9

         Attention: David Toyoda

         Telecopy No. (604) 443-7000

<PAGE>

         and:

         Davis Wright Tremaine LLP
         2600 Century Square
         1501 4th Ave
         Seattle, WA  98101

         Attention: Mr. William Pusch

         Telecopy No. (206) 628-7699

         If to the Agent to:

         Haywood Securities Inc.
         11th Floor Commerce Place
         400 Burrard Street
         Vancouver, B.C.  V6C 3A6

         Attention: Fabio Banducci

         Telecopy No. (604) 643-2305

         with a copy to:

         Getz Prince Wells
         1810-1111 West Georgia St.
         Vancouver, B.C.
         V6E 4M3

         Attention: Drew Wells

         Telecopy No. (604) 685-9798

Any such notice or other communication shall be deemed to have been given and
received on the day after being telecopied or upon delivery if delivered, or, if
such day is not a business day in the location where it is telecopied or
delivered, on the next following business day.

11.2     The covenants, representations and warranties of the Corporation
contained in this agreement and contained in any certificates or documents
submitted pursuant to or in connection with the transactions provided for
herein shall survive the closing of the purchase and sale of the Investor
Preferred Stock and the conversion thereof, and shall continue in full force
and effect. The Purchasers are entitled to rely on the representations and
warranties of the Corporation contained herein or in any certificates or
documents submitted pursuant to or in connection with the transactions
provided for herein, notwithstanding any investigation which the Agent, or
the Purchasers may undertake or which may be undertaken on the Agent's or the
Purchasers behalf.

<PAGE>

11.3     The Agent may waive in whole or in part any breach of, default
under or non-compliance with any representation, warranty, term or condition
of this agreement, or extend the time for compliance, without prejudice to
any of its rights in respect of any other representation, warranty, term or
condition of this agreement or any breach of, default under or non-compliance
with them, provided that any such waiver or extension shall be binding on the
Agent only if it is in writing.

11.4     If one or more of the provisions contained in this agreement is
determined to be invalid, illegal or unenforceable in any respect, such
provision shall either be severed from this agreement or this agreement shall
be construed as if such provision had never been contained in it.

11.5     This agreement may be executed in one or more counterparts, both of
which together shall constitute one and the same agreement.

11.6     This agreement, together with the Registration Rights Agreement
between the Agent and the Corporation relating to the Underlying Shares,
constitutes the entire agreement between the parties with respect to its
subject matter, and supersedes any prior agreements with respect thereto
between the Corporation and the Agent, including, without limitation, the
letter of intent between the Corporation and the Agent dated January 6, 2000.

11.7     This agreement shall be governed by and construed in accordance with
the laws of British Columbia and each of the parties hereby irrevocably
submits to the non-exclusive jurisdiction of the courts of British Columbia.

11.8     Time shall be of the essence hereof.

If this letter accurately reflects the terms of the transaction which the Agent
and the Corporation are to enter into, and if such terms are agreed to by the
Corporation, please communicate acceptance by executing two copies where
indicated below and delivering them to the Agent. Upon such execution and
delivery, this letter shall constitute a binding agreement between us.

Yours very truly,

HAYWOOD SECURITIES INC.

By:  /s/ Fabio Banducci
     -----------------------------
     Authorized Signatory

ACCEPTED AND AGREED to as of the 28th day of January, 2000.

MDU COMMUNICATIONS INTERNATIONAL, INC.

By:  /s/ Sheldon Nelson
     -----------------------------
     Authorized Signatory

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