Document:

Filed by Automated Filing Services Inc. (604) 609-0244 - Alternet Systems, Inc. - Exhibit 4.2

CONSULTING AGREEMENT 

THIS CONSULTING AGREEMENT is made as of the
29th day of June 2007

BETWEEN: 

ALTERNET SYSTEMS INC., a Nevada
corporation, 
having an office located at Suite 610-815 West Hastings

Street, Vancouver, British Columbia, V6C 1B4

(The “Company”) 

AND: 

David Applegath 
1 Little
Toba Road 
Lund, BC
V0N 2G0 
Tel: (604) 314-0055 

(The “Consultant”) 

A.        The Company is a
Nevada corporation whose shares are posted for trading on the NASD’s OTCBB 

B.        The Company
develops and sells high speed Internet access systems, network services and
video conferencing to schools and communities, world-wide. 

	C. 	
      The Company has the need to acquire the skills of the
      Consultant for the purpose of performing the following duties:

	 	 
		
      Evaluating the market and developing a marketing plan for
      North America for SchoolWeb and HealthWeb.

and such other duties as assigned by
the Board of Directors; 

D.        The Company wishes
to retain the services of the Consultant on the terms and conditions of this
Agreement to perform the functions described in C. above. 

THIS AGREEMENT WITNESSES that in
consideration of the mutual covenants and agreements hereinafter contained and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows: 

	1. 	
      RETAINER OF CONSULTANT

	 	 
	1.1 	
      The Company hereby retains the Consultant in such
      capacity as the parties may mutually agree, upon the terms and conditions
      of the Agreement. The Consultant shall carry out such duties as the
      Company's board of directors may from time to time reasonably determine,
      including but not limited to:

-Developing a marketing plan and cost
strategy for North America for SchoolWeb and HealthWeb 
-Reporting to the
Company’s Board of Directors as determined by the Board 

and providing such other services as the Company and its Board
of Directors may reasonably request and which may be within the Consultant’s
capability to perform. 

2.         
TERM 

2.1        The term of this
Agreement shall be for a period of 10 months commencing as of the date of this
Agreement (the “Start Date”), subject to earlier termination as provided for in
this Agreement. This Agreement shall be renewed no later than one (1) month
prior to the expiry of its term provided the terms can be agreed upon by the
parties hereto in writing. 

	3. 	
      CONSULTING FEES

	 	 
	3.1 	
      In consideration of the Consultant's services under this
      Agreement, the Company shall pay to the Consultant a fee of 200,000 shares
      per month, payable at the beginning of the contract.

	 	 
	
      3.2 
	
      The Consultant may qualify for bonuses based on
      successful completion of corporate projects.

	 	 
	3.3 	
      The Company shall reimburse the Consultant for all
      reasonable and / or pre-agreed expenses incurred by the Consultant in
      furtherance of the Company's business. The Consultant shall, to the
      greatest extent possible, submit statements and vouchers for all expenses
      claimed. The Consultant acknowledges that the Company will only reimburse
      those expenses that the Company considers reasonable or to which the
      Company has granted prior authorization.

	 	 
	4. 	
      CONFIDENTIAL
INFORMATION

4.1        The Consultant
acknowledges that, in the course of providing services to the Company, it will
have access to confidential information concerning the Company and its
subsidiaries and, therefore, the Consultant agrees that it will not, either
during the term of this Agreement or for a period of one (1) year thereafter,
divulge or utilize to the detriment of the Company any of such confidential
information so obtained. The provisions of this section shall survive the expiry
or earlier termination of this Agreement. The Consultant shall ensure that its
employees, directors and officers are made aware of this confidential treatment
of information and shall not disclose confidential information of the Company to
these persons until it has satisfied itself that no confidential information
will be disclosed by these persons without the Company’s consent. 

5.         
DEVOTION OF TIME AND LIMITED NON-COMPETITION 

5.1        During the term
  and any renewal of this Agreement, the Consultant shall devote sufficient time
  and attention to the Company's business as may be required to properly perform
  his duties hereunder.

3

5.2        During the term
and any renewal of this Agreement and for a period of one year thereafter, the
parties agree that the Consultant may provide services similar to those provided
to the Company to other companies provided that these other companies do not
directly compete with the Company in the provision of internet access software
or services to rural communities, or educational facilities. 

5.3        The provisions of
this section shall survive the expiry or earlier termination of this Agreement.

6.        
 RELATIONSHIP OF PARTIES AND OWNERSHIP OF WORK PRODUCT

6.1        Nothing in this
Agreement shall create between the parties a partnership, joint venture or other
relationship than that of a Company hiring a consultant. 

6.2        Nothing in this
Agreement shall create in the Consultant any intellectual property rights or
interests in and to the trademarks, trade names, software or other assets of the
Company or its affiliated companies. The Company has full right to and ownership
of any work product created by the Consultant unless otherwise agreed, in
writing, between the Company and the Consultant. 

6.3        In recognition of
the Company’s concern that security regarding its source code, software and
software configuration be maintained, where the Consultant is working with
electronic materials concerning the Company’s source code, software and
configuration, he or she will be required to perform the work at the Company’s
offices on the Company’s computer or other technology equipment. The Consultant
agrees not to maintain, outside of the Company’s offices, any copies of the
Company’s software, source code or means of configuring caching servers. 

	7. 	
      TERMINATION OF AGREEMENT

	 	 
	7.1 	
      This Agreement may be terminated by either party at any
      time, with cause, by giving the other party written notice of such
      termination at least thirty (30) days prior to the termination date set
      forth in such written notice.

	 	 
	7.2 	
      Upon termination of this Agreement for any reason, the
      Consultant shall promptly deliver the following in accordance with the
      directions of the Company:

	(a) 	
      A final accounting, reflecting the balance of expenses
      incurred on behalf of the Company as of the date of termination;

	 	 
	(b) 	
      All documents (in electronic or written form) pertaining
      to the Company or this Agreement, including but not limited to all
      brochures, product promotional materials, books of account,
      correspondence, records and contracts provided that the Consultant shall
      be entitled thereafter to inspect, examine and copy all of the documents
      which it delivers in accordance with this provision at all reasonable
      times upon three days notice to the Company.

4 

7.3        Subject to
Section 5, the parties acknowledge that the legal doctrines sometimes referred
to as "corporate opportunity" and "business opportunity", which are usually
applied only to the directors and senior officers of a company, apply to the
Consultant upon termination.

7.4        Upon termination
of this Agreement, the Consultant shall be entitled to receive as full and sole
compensation in discharge of obligations of the Company to the Consultant under
this Agreement, all sums due and payable under this Agreement to the date of
termination and the Consultant shall have no right to receive any further
payments. 

8.         
MISCELLANEOUS 

8.1        All notices and
other communications required or permitted by this Agreement to be given or made
by either party to the other shall be given or made in writing and be delivered
by hand or registered mail (except during a postal disruption) to the parties at
the addresses set forth in this Agreement, or at such other address as the
parties designate by notice in writing to the other. Proof of delivery in such
manner shall constitute proof of receipt. 

	8.2 	
      This Agreement may not be assigned by either party
      without the prior written consent of the other. This agreement supersedes
      any replaces any previous agreement, written or oral, between the parties
      and corrects any deficiencies or errors in said previous agreements.
    

	  	
       

	8.3 	
      This Agreement shall be construed under and governed
      solely by the laws of British Columbia and the law of Canada applicable
      therein. 

	  	
       

	8.4 	
      This Agreement shall enure to the benefit of and be
      binding upon the parties and their respective successors and permitted
      assigns. 

	  	
       

	8,5 	
      The Consultant hereby acknowledges that it has been
      advised to seek independent legal and tax counsel and review of this
      Agreement prior to its execution. 

IN WITNESS WHEREOF the parties have executed this
Agreement as of the date first above written notwithstanding its actual date of
execution. 

ALTERNET SYSTEMS INC. 
by its authorized signatory:

 

	/s/ Griffin Jones	 	 
	Griffin Jones, Vice
      President 	 	Date: June 29, 2007

5 

Date: June 29, 2007

/s/ David Applegath

  __________________________________________

  Authorized Signatory: David ApplegathEXHIBIT 10.1

                           PURCHASE AND SALE AGREEMENT

         THIS  AGREEMENT,  made this 14th day of May,  2007 by and between Chula
Vista Cable Ltd., a Partnership dba Chula Vista Cable ("Chula" or the "Seller");
the General Partners of Chula, (each a "Partner" and together,  the "Partners");
and  NexHorizon  Communications,  Inc.,  a  Delaware  Corporation  or one of its
wholly-owned subsidiaries ("Buyer"), its successors and assigns.

                                    RECITALS

         WHEREAS,  Seller  owns  and  operates  a  business,  including  without
limitation, plant, equipment and infrastructure,  engaged in providing for cable
television and internet services in and around California (the "Business").

         WHEREAS,  Buyer desires to purchase  from Seller,  and Seller desire to
sell to Buyer, on the terms and conditions hereinafter set forth,  substantially
all of the assets of Seller used in the  operation of the  Business,  except the
Excluded Assets (as defined in Section 1.3).

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein  set  forth  and each act  done  pursuant  hereto,  the  parties  hereto,
intending to be legally  bound,  do  represent,  warrant,  covenant and agree as
follows:

1.       PURCHASE AND SALE OF ASSETS.

        1.1      Transfer of Assets.

                  On the  Consummation  Date, as defined in Section 2.1,  Seller
shall sell, convey,  transfer and assign to Buyer, and Buyer shall purchase from
Seller, all of the assets of Seller of every kind and character, real, personal,
tangible, intangible or mixed, used by, or held for use by, Seller in connection
with the operation of,  Business in existence and all conduit both installed and
in inventory  (the "Assets to be  Acquired"),  which shall  include,  but not be
limited to, the following:

     (a) All items of  tangible  personal  property  owned or leased and used by
Seller in  connection  with the  operation of Business,  including all equipment
associated with receiving and distributing signals at the head-end site, and all
other antennas and down leads and all electronic equipment,  head-end amplifiers
and associated  equipment,  line  amplifiers,  aerial and underground  trunk and
feeder line cable, conduit,  distribution plant, programming signal decoders for
each  satellite  service  which  scrambles its signal,  converters,  housedrops,
installed subscriber devices,  utility poles, local origination equipment,  test
equipment,  machinery, spare equipment and parts inventory,  housedrop equipment
inventory,  system design and engineering maps and drawings,  supplies, vehicles
and  trailers  (to  be  transferred  under  fee  title  and  not  under  lease),
furnishings  and other  personal  property of any nature,  and all leasehold and
rights-of-way    in   real   property,    buildings   and    improvements    and
construction-in-progress,  towers, fixtures, poles, vaults and pedestals and all

<PAGE>

assets of Seller relating to the competitive access or alternate access business
or  other  internet  or  telecommunications  business  used in  connection  with
Business.

     (b)  All of the  rights  of  Seller  to,  in and  under  any  and  all  (i)
subscription  contracts  with  subscribers  for  Broadband  service;  except  as
provided in Section 1.3, all instruments  and agreements for the purchase,  sale
or other receipt or distribution of programming,  news, data and microwave relay
signals;  and (ii) all of the Franchises  (as herein  defined) and any franchise
applications;  (iii) all of the Pole  Attachment  Agreements (as herein defined)
and  all   retransmission   consent   agreements;   all  variances,   easements,
right-of-way  agreements,  licenses,  registrations,  copyright notices,  signal
registration  and other  statements,  construction  and other  permits,  leases,
including  leases of all head-end  sites,  and all other contracts or agreements
relating to Business (i), (ii) and (iii) collectively, the "Assumed Contracts").

     (c) All refundable  deposits from  subscribers  for  converters,  encoders,
decoders and any related equipment,  all prepaid service charges and any prepaid
income items; options,  claims, contract rights and trade secrets; all goodwill;
all subscriber  accounts  receivable for all periods subsequent to Consummation;
subscriber lists and subscription  contracts of Business; and except as provided
in Section 1.3, all records  which relate  specifically  to the operation of the
Business  (including,  subscriber records,  accounts receivable records, and any
documents necessary to support a required regulatory filing).

     (d) Accounts Receivable, which shall be subject to the adjustment set forth
in Section 2.6.

        1.2      Assumed and Excluded Liabilities.

                  On the  Consummation  Date, the Seller shall pay off, in full,
all liabilities of the business up to and including the  Consummation  Date. The
Buyer shall assume,  by instruments  of assumption  reasonably  satisfactory  to
counsel for Seller,  and discharge at the Consummation or as they become due and
payable, the following  liabilities and obligations of Seller and no others (the
"Assumed Liabilities"):

     (a) All obligations of the Seller arising after the Consummation Date under
the Assumed  Contracts  and any other  agreements,  consents,  permits and other
instruments  relating to the Business and in existence on the Consummation  Date
and entered  into in the ordinary  course of business to the extent  included in
the Assets to be Acquired; and

     (b) All liabilities and obligations  arising out of events  occurring after
the Consummation  Date related to Buyer's ownership of the Assets to be Acquired
or its conduct of Business or operation of Business.

        1.3      Excluded Assets.

                  Notwithstanding the foregoing,  it is specifically agreed that
the following assets are excluded from the Assets to be Acquired  (collectively,
the "Excluded Assets"), as specifically enumerated and set forth on Schedule 1.3
hereto:

                                       2
<PAGE>

                (a) cash on hand or in the bank or other cash accounts of Seller
         including without limitation, any  and all  letters of credit  or other
         similar items and any cash surrender value in regard  thereto,  and any
         stocks, bonds, certificates of deposit and similar investments;

                (b) all documents relating to the legal existence of the Seller;

                (c) the life insurance policies on certain  employees if applic-
         able;

                (d) any claims, rights and  interest  in and to any  refunds for
         federal, state  or local income  or other taxes  or fees  of any nature
         whatsoever for periods prior to the Consummation Date;

                (e) any  books and  records that  Seller is  required  by law to

         retain and any correspondence, memoranda, books of account, tax returns
         related to personal  property and the like related to Business, and all
         other  books,  records,  and  documents  relating  to internal  company
         matters  and  financial   relationships   with   Seller's   lenders  or
         affiliates;  provided,  however,  that  notwithstanding   the foregoing
         provisions of this clause (e), Buyer shall be provided  with all books,
         records and  documents,  or copies  thereof,  as may  be  necessary  or
         warranted to conduct the Business;

                (f) any and all assets of Seller unrelated to the Business;

                (g) any  contracts,  agreements  or other  arrangements  between
         Seller and any affiliate of Seller.

2.      CLOSING AND CONSUMMATION DATES; PURCHASE PRICE, PAYMENT AND ADJUSTMENTS.

        2.1      Closing; Consummation, Date and Location.

     Unless  otherwise  mutually  agreed to by the  parties,  the Closing of the
transaction shall take place on May ___, 2007, at 10:00 a.m., local time, at the
offices of Seller's  legal council.  The Closing shall complete the  transaction
and will be held in escrow pending completion of a final audit.

     With the  completion of an audit,  on the first day of the month  following
audit  completion,  the  transfer  and  delivery of the Assets to be Acquired to
Buyer and the receipt of the consideration  therefore by Seller shall constitute
the "Consummation" of the transaction (the "Consummation Date").

     The  effective  date of the sale of Business  shall be at the  Consummation
Date and all prorations and allocations  provided for hereunder shall be made as
of the close of business on the Consummation Date, except as otherwise agreed in
writing by the parties.  Notwithstanding  the  foregoing,  this Agreement may be
terminated pursuant to Section 11 hereof if the Consummation has not occurred by
a mutually agreeable date (the "Termination Date").

                                       3
<PAGE>

         2.2      Purchase Price.

                    Buyershall acquire and accept the Assets and  Subscribers to
                         be  Acquired  from  Seller  and shall pay to Seller the
                         aggregate amount of  $4,250,000.00.  The Purchase Price
                         will be paid as follows:

                         1) $850,000 in cash to be paid to the Seller at Consum-
                         mation;

                         2)   $2,125,000   worth   of   Buyer's   common   stock
                         representing  _______  of the Buyer  Shares,  valued at
                         $_____  per  share  (share  price  determined   average
                         Consummation  "ask"  price 5  business  days  prior  to
                         Consummation);  Relevant  thereto,  Buyer hereby agrees
                         and  acknowledges  that it shall  provide  Sellers with
                         "piggyback"  registration  rights to the  Buyer  Shares
                         referenced  herein  in order to  register  said  shares
                         under the Securities Act of 1933, as amended,  with the
                         US Securities and Exchange Commission, which rights are
                         more  fully  described  in  that  certain  Registration
                         Rights  Agreement by and between the parties hereto,  a
                         copy of  which  is  attached  hereto  and  incorporated
                         herein  as  Exhibit  "A."  Further,  Sellers  agree  to
                         execute and deliver to the Buyer that certain  "Leakout
                         Agreement"  relevant  to the  Buyer  Shares,  a copy of
                         which is  attached  hereto and  incorporated  herein as
                         Exhibit B;" In  addition,  the Buyer  agrees to provide
                         "Floor Protection" of the shares the Seller acquires as
                         part of this transaction as long as the balloon note is
                         still in place.  The  protection,  better  described in
                         Exhibit C,  defines that if the Seller  actually  sells
                         stock  in a major  market  at a price  lower  than  the
                         original stock price  identified at  Consummation,  the
                         Buyer will  replace  the actual  loss either in cash or
                         common shares at the Buyer's option.

                         3) Seller  agrees to carry an 18 month  balloon note in
                         the amount of  $1,275,000 at an interest rate of 6% per
                         annum.  The interest due will be paid quarterly  within
                         10 business days after the close of the quarter.

                         4) Up to one year after the Consummation,  if the Buyer
                         identifies any additional  unpaid  liabilities that are
                         then  confirmed with the Seller that were due up to the
                         consummation  date,  the Buyer will  reduce the Balloon
                         Note by the amount of the liability  identified.  It is
                         the  Seller's  intent  to  fully  pay  all  outstanding
                         liabilities at the point of consummation.

                         5) From the Consummation  date and as long as the Buyer
                         still owns the high speed internet network,  as long as
                         the Seller still resides within the physical  abilities
                         of the  network,  the Buyer  will  provide  high  speed
                         internet service to the Seller at no charge.

                                       4
<PAGE>

         2.3      Payment of the Purchase Price.

         On the  Consummation  Date, Buyer will pay an aggregate amount equal to
the Purchase Price,  as adjusted at  Consummation  pursuant to the provisions of
Section 2.6.

         2.4      Escrow Amount.

                  Upon execution of this Agreement,  Buyer will deposit $100,000
in the form of the Buyer's  common stock with the same rights and privileges and
conditions in Section 2.a.2 above as a good faith deposit into an escrow account
reasonably  acceptable  to both  parties,  to be  released  to  Seller  upon the
Consummation  Date or upon Buyer's  failure to close as set for in ss. 11.2.  At
consummation  the five day closing "ask" price will be calculated net of deposit
shares  previously  issued.  In the event of Seller's failure to close under ss.
11.3 or a mutual  termination  under ss. 11.1,  the Deposit shall be returned to
Buyer.  At  Consummation  such deposit  shares shall be credited to the Purchase
Price against the common stock portion of the  consideration  all  calculated at
the five day Closing "ask" stock price.  Seller will be responsible  for payment
of any escrow fees.

                  Consummation  shall occur on the next first of the month after
audit completion.  If the Buyer is unable to close at the consummation  date, an
additional  $50,000 good faith deposit and a 30 day extension shall occur in the
form of the  Buyer's  common  stock  with the same  rights  and  privileges  and
conditions  in Section  2.a.2  above  shall be placed  into the  escrow  account
mentioned above.

         2.5      Allocation of Purchase Price.

                  The Purchase  Price shall be allocated  among the Assets to be
acquired  as set  forth on  Schedule  2.6.  Buyer  and  Seller  agree to take no
position  inconsistent  with such allocation and to file all returns and reports
in respect of the transactions herein contemplated, including all federal, state
and local tax returns, on the basis of such allocation.

         2.6      Adjustments to the Purchase Price; Prorations.

                (i)  The Seller shall pay for all liabilities up to the Consumma
         -tion  Date.  The payment of the Purchase Price shall be fixed. Outside
         of the Seller paying all  liabilities up to the Consummation date there
         will be no adjustments to the purchase price.

                (ii) A final  reconciliation of  the Sellers accounts receivable

         will be made 180 days after the Consummation date. Any liabilities that
         are received after the Consummation date but are for services  provided
         before  the Consummation  date  will be  netted  against  the  accounts
         receivable  outstanding at the  Consummation  date. After 180 days,  if
         there is any cash  left from the  accounts  receivable  balance a final
         check will be  sent to the Seller.  If  there is an  amount owed to the
         Buyer it  will be  netted back  against the outstanding Note Due to the
         Seller.

                                       5
<PAGE>

3.       REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER.

                  Seller and the Partners, jointly and severally,  represent and
warrant to Buyer that the following  statements and representations are true and
correct  as of the  date  hereof  and  will  also be  true  and  correct  on the
Consummation  Date to the best of the Seller's  knowledge.  For purposes of this
Agreement,  a "Material Adverse Effect" means a material adverse effect (whether
or not covered by insurance) on the assets, liabilities,  business,  operations,
condition  (financial  or  otherwise),  or results of operations of the Business
taken as a whole.

         3.1      Company Standing.

                  Seller  is  duly  organized,  validly  existing  and  in  good
standing  under the laws of the State of its  formation.  Seller  has all of the
requisite power and authority to own or lease all of its material assets, to own
and operate the Business  and the assets owned and operated by Seller,  to carry
on its business as now  conducted,  to enter into this  Agreement and to perform
the terms of this Agreement. Seller is duly qualified or licensed to do business
and in good standing in each jurisdiction in which the nature of its business or
the  character of the  properties  and assets which it owns or leases makes such
qualifications or licensing necessary.

         3.2      Authorization.

                  (a) Seller has taken all  necessary  action to  authorize  and
approve  this  Agreement  and the Seller  Transaction  Documents  (as defined in
Section 3.2(b) below), the consummation of the transactions  contemplated hereby
and thereby and the performance by Seller of all the terms and conditions hereof
and  thereof to be  performed  by Seller.  The  execution  and  delivery of this
Agreement and of the Seller Transaction Documents by Seller, the consummation of
the  transactions  contemplated  hereby  and  thereby  and  fulfillment  of  and
compliance with the terms and provisions hereof and thereof do not and will not:
(i) violate  any  provision  of any  judicial or  administrative  order,  award,
judgment or decree applicable to Seller or the Assets to be Acquired,  or any of
them;  (ii)  conflict  with or violate any of the  provisions of the Articles of
Organization or Operating Agreement of Seller; or (iii) conflict with, result in
a breach of or  constitute a default  under any agreement or instrument to which
any  Seller  is a party or by which any  Seller  or any of its  assets is bound,
subject to  obtaining  required  consents  from,  or giving  notices  to,  third
parties. Schedule 3.2 sets forth the name of any governmental authority or other
third party from whom  consent  must be obtained or to whom notice must be given
in order for Seller to validly and lawfully  perform its  obligations  hereunder
and under the Seller Transaction Documents.

     (b)  This  Agreement  has  been,  and  each  and  every  other   agreement,
instrument,  certificate or other document to which Seller is a party that is to
be executed,  delivered and performed by Seller pursuant  hereto  (collectively,
"Seller  Transaction  Documents"),  when executed and delivered by Seller,  will
have been, duly authorized, executed and delivered by Seller and constitute, or,
when executed and delivered by Seller will constitute,  legal, valid and binding
obligations of Seller,  enforceable  against it in accordance  with their terms,
except as may be limited by  applicable  bankruptcy,  insolvency or similar laws
affecting creditor's rights generally or by general principles of equity.

                                       6
<PAGE>

         3.3      Financial Information.

                  True,   complete  and  correct  copies  of  Seller's   audited
financial statements,  by the Consummation Date, prepared according to generally
accepted accounting principles ("GAAP"),  for the years ended December 31, 2006,
2005 and 2004, and Seller's  unaudited  financial  statements for management use
(not in accordance with GAAP),  for the current year (2007) for all months up to
and including at  Consummation,  are attached as Schedule 3.3(a) (the "Financial
Statements").  The Financial  Statements in all material respects present all of
the cash flows, income, expenses (excluding non-cash flow items), and operations
of Seller and Business at the  respective  dates  thereof and the  operations of
Business as of such dates.

         3.4      Title to Assets.

                  Except  as  set  forth  on  Schedule  3.4   attached   hereto,
including,  without  limitation,  any and all such items as set forth in clauses
(i) and (iii) of this Section 3.4, Seller has good title to all of the Assets to
be  Acquired,  free  and  clear  of  all  mortgages,  liens,  pledges,  security
interests,  liens,  restrictions,  encumbrances  or other  charges of any nature
whatsoever (collectively,  "Liens"), except for (i) Liens for taxes that are not
yet due and  payable or that are being  contested  in good faith by  appropriate
proceedings  and for which  adequate  reserves have been  established by Seller;
(ii) as to leased assets,  interests of the lessors  thereof and Liens affecting
the  interests  of the  lessors  thereof;  and  (iii) as to any  parcel  of real
property,  building  restrictions,  deed restrictions,  rights of subsurface and
mineral owners, and other Liens that are reflected in the public record and that
do not, individually or in the aggregate,  have a material adverse affect on the
merchantability  of title thereto or the use thereof  (collectively,  "Permitted
Liens"). The Assets to be Acquired,  whether owned or leased,  constitute all of
the assets used in connection with Business as presently  conducted,  except for
the any such assets as comprise part of the Excluded Assets.

         3.5      Business.

                  Seller  has not  itself,  nor have any of  Seller's  officers,
directors,  affiliates,  agents or employees  (except to the extent that payment
was made for Broadband  services  received by them at their own dwelling),  paid
any of Seller's accounts receivable from subscribers.

                  (a)      Except as set forth on Schedule 3.5,

                    (i) Seller has complied with all  notification and reporting
               provisions and all other  provisions of the rules and regulations
               of the Federal  Communications  Commission  ("FCC") applicable to
               the  Business;  the Business  has been and are being  operated in
               compliance  with  the  Communications  Act of 1934,  as  amended,
               including  the  amendments  effected by the Cable  Communications
               Policy  Act of  1984  (the  "1984  Act"),  the  Cable  Television
               Consumer Protection and Competition Act of 1992 (the "1992 Act"),
               the provisions of the  Telecommunications  Act of 1996 (the "1996
               Act") and the Copyright  Act of 1976, as amended (the  "Copyright
               Act"), and with all Rules and Regulations of the FCC and the U.S.
               Copyright  Office,  except in each case  where the  failure to so
               comply  would  not  reasonably  be  expected  to have a  Material
               Adverse Effect. Without limiting the generality of the foregoing,
               except in each  case  where the  failure  to so comply  would not
               reasonably be expected to have a Material Adverse Effect, each of
               the  communities  served by the Business has been registered with
               the FCC; all of the semi-annual and annual performance tests on

                                       7
<PAGE>

               the Business  described  in Section  76.601 of the  FCC Rules and
               Regulations  have been made by  Seller;  the  Business  currently
               meets  the  technical  standards  set  forth in the FCC Rules and
               Regulations,  including the leakage  limits  contained in Section
               76.605(a)(11);  and Seller has  delivered  to Buyer a copy of the
               most  recent  FCC  Forms  320 filed  with the FCC  (Basic  Signal
               Leakage  Performance  Report) for the  Business.  The Business is
               being  operated in  compliance  with the  provisions  of Sections
               76.610 through 76.619 of the FCC Rules and  Regulations  (midband
               and superband signal carriage),  appropriate  authorization  from
               the  FCC  has  been  obtained  for  the  use of all  aeronautical
               frequencies  in use in the  Business;  the  Business is presently
               being operated in compliance with such authorization;  Seller has
               provided  privacy  notices  to  subscribers  of the  Business  in
               accordance with the requirements of Section 631(a)(1) of the 1984
               Act; and the Business is in compliance  with the  requirements of
               Sections 76.92 (Network  Non-Duplication  Protection)  and 76.151
               (Syndicated   Program   Exclusivity)   of  the  FCC   Rules   and
               Regulations,  except in each case where the  failure to so comply
               would not  reasonably  be  expected  to have a  Material  Adverse
               Effect.

                    (ii) As of the date  hereof,  the monthly  rates  charged by
               Seller for each service  provided by Seller to subscribers of the
               Business  are  set  forth  on  Schedule   3.5.  Such  rates  were
               calculated  in good  faith in  accordance  with the FCC Rules and
               Regulations   to  comply  with  any   applicable  FCC  Rules  and
               Regulations  as of the date  hereof  and will  continue  to be in
               compliance with the applicable FCC Rules and Regulations  through
               the Consummation Date. Seller has not received any notice that it
               has any  obligation  or  liability  to refund any  portion of the
               revenue received by it from the subscribers of the Business.

                    (iii) There is no legal  action or  governmental  proceeding
               pending  or,  to  Seller's   knowledge,   any   investigation  or
               proceeding  threatened  (nor any basis  therefore  of which it is
               aware)  for the  purpose  of  modifying,  revoking,  terminating,
               suspending,  canceling or reforming  any of Seller's FCC licenses
               or other FCC  authorizations  or permits,  or which might have an
               adverse effect upon, or cause disruption to, the operation of the
               Business.

                    (iv) The Business is currently  operated and  maintained  in
               accordance  with  the  National  Electrical  Safety  Code  in all
               material  respects  and the  terms  and  conditions  of all  pole
               attachment  agreements  between  Seller and any  public  utility,
               municipality   or  other   authority   that  has   granted   such
               authorization.

                    (v)   Seller   holds   all   FCC   licenses,   permits   and
               authorizations necessary or used in connection with the operation
               of the Business.  Each such FCC license, permit and authorization
               is listed on Schedule 3.5. As of the  Consummation  Date,  Seller
               will have obtained all required FCC consents to the assignment of
               all such FCC licenses to Buyer.

                                       8
<PAGE>

                    (vi)  All  broadcast   television  signals  carried  by  the
               Business are being carried in accordance with the requirements of
               the Communications  Act of 1934, as amended,  and FCC regulations
               promulgated thereunder.

                  (c)  Appropriate  registration  of the  Business has been made
with the United States Copyright Office,  and the Business is in compliance with
respect to all  notices,  filings and  payments of  copyright  fees  required by
Section  111 of the  Copyright  Act  and  the  United  States  Copyright  Office
regulations.  Seller  has not  received  any  notices  from  the  United  States
Copyright Office or any other person or entity either  questioning any copyright
filing or payment or the failure to make any  copyright  filing or  payment,  or
threatening  to  bring  suit for  copyright  infringement,  which  have not been
settled and resolved.

                  (d) The  Business  is  being  operated  in  compliance  in all
material  respects  with the  Rules  and  Regulations  of the  Federal  Aviation
Administration  ("FAA").  Schedule 3.5 lists all of the  existing  towers of the
Business.  Except as shown on Schedule 3.5,  Seller does not lease space on such
towers to any third party.

                  (e) Except as set forth in Schedule 3.5, and except for claims
arising in the ordinary  course of business,  none of which,  individually or in
the aggregate will have a Material  Adverse Effect,  there are no claims pending
or, to  Seller's  knowledge,  threatened  against  Seller  with  respect  to the
operation of the Business.

                  (f)  Except  as  set  forth  on  Schedule  3.5,  there  are no
unfulfilled promises or commitments for capital  improvements,  which Seller has
made in connection with the Business. There are no obligations or liabilities to
subscribers or to other users of Seller's  Broadband services which are material
to Business of the Business,  except:  (i) with respect to deposits made by such
subscribers or such other users;  and (ii) the obligation to supply  services to
subscribers in the ordinary course of business,  pursuant to the Franchises.  No
default exists in respect of any provisions of any Franchise governing relations
with subscribers or other users of Seller's Broadband services, and no notice of
any such  default  has been  received  by  Seller.  To  Seller's  knowledge,  no
complaints  have been made by subscribers  or other users of Seller's  Broadband
services that,  individually  or in the aggregate,  could have an adverse effect
upon the Assets to be Acquired or the  financial  condition  or operation of the
Business.

                  (g)  The  Business is in  compliance  in all material respects
with engineering standards generally accepted in the Broadband industry.

                  (h)  Except as set  forth on  Schedule  3.5,  there is no free
service liability to subscribers  existing with respect to the Business.  Except
with  respect  to  deposits  for  converters,  encoders,  decoders  and  related
equipment,  and any other prepaid  income item that Buyer is to receive a credit
for  pursuant to Section 2.6,  Seller has no  obligation  or  liability  for the
refund of monies to its subscribers.

         3.6      Franchises.

         (a) Listed and  identified  on Schedule 3.6 attached  hereto are all of
the existing governmental authorizations,  and pending renewal proposals of such
authorizations,  for  construction,  upgrade,  maintenance  and operation of the

                                       9
<PAGE>

Business  (individually,  a  "Franchise"  and  collectively,  the  "Franchises")
presently  held by  Seller,  and the  political  entity or  authority  which has
granted each Franchise.  All governmental  authorizations  necessary or required
for the  construction,  maintenance  and  operation  of the  Business  have been
obtained by Seller,  and are listed and  identified in Schedule 3.6. Each of the
Franchises  expires  on the dates set forth on  Schedule  3.6  attached  hereto.
Except  as set  forth  on  Schedule  3.6,  none  of the  political  entities  or
authorities  that have granted a Franchise are  regulating  the Broadband  rates
charged by Seller pursuant to the 1992 Act and the FCC Rules and Regulations.

         (b)      Except as set forth on Schedule 3.6,

                           (i) The  Franchises  are  validly  existing,  legally
         enforceable  obligations  of Seller and are validly  existing,  legally
         enforceable  obligations  of the other parties  thereto,  in accordance
         with their terms.

                           (ii) Seller is  validly  and  lawfully  operating the
         Business  under the provisions of the Franchises and applicable law.

                           (iii) Seller has  complied  with all of the terms and
         conditions  of the  Franchises  and has not done or  performed  any act
         which would  invalidate  or impair in any  material  respect its rights
         under,  or give to the granting  authority the right to terminate,  the
         Franchises.

                           (iv)  There is no  pending  assertion  or claim  that
         operations pursuant to any Franchise have been improperly  conducted or
         maintained,  any  facts  or  circumstances  that  could  reasonably  be
         expected to give rise to any such assertion or claim.

         3.7  Pole  Attachment  Agreements.  Schedule  3.7  lists  each  of  the
agreements, ordinances, resolutions, licenses or permits granting or relating to
each pole attachment agreement or similar authorization  (individually,  a "Pole
Attachment Agreement" and collectively,  the "Pole Attachment Agreements").  All
of the Pole  Attachment  Agreements are validly  existing,  legally  enforceable
obligations of the parties thereto in accordance with their terms, and Seller is
validly and lawfully operating the Business under the Pole Attachment Agreements
and has Broadband pole attachment  rights under each Pole Attachment  Agreement.
Seller  has  complied  in all  material  respects  with  all of  the  terms  and
conditions of the Pole Attachment Agreements to which it is a party, and has not
done or performed any act which would  invalidate or impair its rights under the
Pole  Attachment  Agreements.  There is no pending  assertion  or claim  against
Seller that  operations  pursuant  to any Pole  Attachment  Agreement  have been
improperly conducted or maintained.  There have been no audits or investigations
conducted by any of the parties to the Pole Attachment Agreements during the one
year preceding the date of this Agreement

         3.8      Head-End Sites and Office Locations.

                  (a) All of the real  property  owned and utilized by Seller is
described  on Schedule  3.8 attached  hereto.  Except as otherwise  described on
Schedule  3.8,  Seller has good  title in fee simple to all such real  property,
free  and  clear  of  all  mortgages,   claims,  security  interests,  liens  or
encumbrances  of any kind,  except for minor  exceptions  to title  which do not

                                       10
<PAGE>

affect the use of, or merchantability of title to, the property in the Business.
A copy of the deeds pursuant to which Seller acquired such real property will be
made available by Seller to Buyer.

                  (b) All leases and written  rights of way used in the Business
are listed on Schedule 3.8 (the "Leases and Rights of Way"). Except as set forth
on  Schedule  3.8,  Seller has a valid and  subsisting  lease for and  leasehold
interest in and right of way to all of the real property not owned by Seller and
used as head-end sites or office locations for the Business. In addition, except
as set  forth on  Schedule  3.8 or where the  failure  to do so would not have a
Material  Adverse  Effect,  Seller  has  a  valid  and  subsisting  right-of-way
agreement,  whether  public  or  private,  for all of the real  property  by its
Broadband plant.  Except as disclosed on Schedule 3.8 attached hereto all Leases
and Rights of Way are fully  assignable  by Seller.  Seller has duly complied in
all material  respects  with all of the terms and  conditions of such Leases and
Rights of Way and has not done or  performed  or failed to perform any act which
would impair in any  material  respect its rights under such Leases or Rights of
Way.

         3.9      Other Material Contracts and Leases.

                  Schedule  3.9 sets  forth  each  contract,  agreement,  lease,
permit, license, fiber lease, microwave agreement or commitment,  including pole
line agreements,  whether written or oral, affecting or relating to the Business
and requiring payments by or to Seller in the aggregate of $5,000 or more during
the current term thereof other than the Excluded  Assets,  the  Franchises,  the
Pole  Attachment  Agreements,  the  Leases and the Rights of Way as set forth on
Schedule 3.9 (the  "Agreements").  Each of the  Agreements  is in full force and
effect in  accordance  with its  terms.  Without  limiting  the  foregoing,  the
Business and all equipment  and real  property used in connection  therewith are
now being  utilized,  operated  and  maintained  in  conformity  in all material
respects with the provisions of the Agreements,  and in material compliance with
all other applicable laws and regulations (including zoning regulations) and the
orders,  rules and  regulations of the FCC and of any government or governmental
agency or authority having jurisdiction with respect thereto.  Seller has not in
any manner  failed to so utilize,  operate and maintain the Business in a manner
which  could now or  hereafter  result in  cancellation  or  termination  of, or
liability for damages  under,  the  Agreements,  nor is Seller in default in any
material respect.  Seller is not in default in the performance of one or more of
its obligations pursuant to the Agreements.

         3.10     Agreements with Employees.

                  (a)  Except as set  forth on  Schedule  3.10,  Seller is not a
party to any employment agreement, written or oral, with respect to any employee
of the Business  which cannot be terminated at will by Seller,  and,  except for
standard medical and dental insurance, and except as set forth on Schedule 3.10,
Seller has not had and currently  does not have any pension or profit sharing or
other  employee  benefit plan for employees of the Business.  True,  correct and
complete  copies  of all  agreements  and  plans  listed  on  Schedule  3.10 are
available  for review  and will be  delivered  by Seller to Buyer  upon  Buyer's
request.

                  (b) The titles and rates of compensation of all of the employ-
ees of the Business have been made available to Buyer.

                                       11
<PAGE>

         3.11     Litigation or Judgments.

                  Except as set forth on Schedule 3.11,  there is no litigation,
at law or in equity, or any proceedings  before any commission,  agency or other
governmental  authority,  pending or, to Seller's knowledge,  threatened against
Seller or the Business,  and, to Seller's  knowledge,  no facts or circumstances
exist which could  reasonably be expected to give rise to any such litigation or
proceedings.

         3.12     Tax Returns and Payments.

                  Seller has timely and properly filed or caused to be filed all
tax  returns  which it is or has been  required  to file on or prior to the date
hereof  by any  jurisdiction  to which it is or has been  subject,  all such tax
returns were true,  correct and complete in all material respects at the time of
filing. All income, unemployment, social security, franchise, property and other
taxes  levied,  assessed or imposed  upon  Seller or the  Business by the United
States, or any state, or governmental  sub-division of either, to the extent due
and payable,  have been paid to date, and no liability exists for  deficiencies,
except for any such taxes that are being contested in good faith.  Except as set
forth on Schedule 3.12 attached hereto,  there are no tax audits pending nor any
outstanding  agreements or waivers extending the statutory period of limitations
applicable  to any  federal,  state or local income tax return of Seller for any
period. To Seller's  knowledge,  no tax deficiencies  have been determined,  nor
proposed tax assessments  charged,  against Seller (nor, Seller's knowledge,  is
there any reasonable basis therefore).  Seller has made or caused to be made all
withholdings  of taxes  required to be made, and such  withholdings  have either
been paid to the  appropriate  governmental  agency or set aside in  appropriate
accounts for such purpose.

         3.13     Compliance with Laws.

         Seller, to its knowledge, is in material compliance with all applicable
federal, state and local laws, rules,  regulations,  orders, writs, injunctions,
ordinances or decrees of any governing authority, federal, state or local court,
or of any  municipal or  governmental  department,  commission,  board,  bureau,
agency or municipality having jurisdiction over it or the Business.

         3.14     Condition of Assets to be Acquired and Insurance.

         The Assets to be Acquired  are in good  working  condition,  reasonable
wear and tear excepted.  The Assets to be Acquired  include a normal spare parts
inventory.  The Assets to be Acquired  are and have been  insured,  and all such
insurance policies are in full force and effect,  are on an "occurrence"  basis,
and are in terms and scope and amounts which are  customary in  accordance  with
industry standards for Broadband systems of comparable size, all as set forth on
Schedule 3.14 hereto.  Seller has not received any notice of  cancellation  with
respect  thereto.  During  the past one  year,  no  application  by  Seller  for
insurance  with  respect to the Assets to be  Acquired  has been  denied for any
reason.

                                       12
<PAGE>

         3.15     Patents, Trademarks and Copyrights.

                  Seller  does  not  possess  any  patent,   patent  right,   or
copyright, nor is it a party to any license or royalty agreement with respect to
any patent, or copyright,  except for licenses and consents  respecting  program
material and obligations under the Copyright Act applicable to Broadband systems
generally,  which licenses are all of the  intellectual  property  rights (other
than Excluded  Assets)  necessary to conduct  business of the  Business.  Seller
possesses  the  Trademarks  as set forth in Section  1.3,  free and clear of any
liens,  adverse  claims or  encumbrances  which  would  prevent  the Buyer's use
thereof as set forth in Section 1.3.

         3.16     Labor Relations.

                  The  employees  of Seller are not  parties  to any  collective
bargaining agreement. This Agreement and the transactions contemplated hereunder
shall not  obligate  Buyer to  recognize  any union or to assume any  collective
bargaining  agreement that applies to Seller's  employees.  There  currently are
not,  nor in the past five (5) years have there  been,  any  grievances,  unfair
labor practice claims,  disputes or controversies  with any union, or threats of
strikes,  work stoppages or any pending demands for collective bargaining by any
union.  Seller has received no notice of any  grievances,  unfair labor practice
claims,  disputes  or  controversies  with any other  organization  of  Seller's
employees,  or threats of strikes,  work  stoppages  or any pending  demands for
collective  bargaining  by any  such  organization.  Seller  has  less  than  50
employees.

         3.17     Right of First Refusal.

                  No person or entity has any option,  warrant or right of first
refusal to  purchase  either the  Business  (or any part  thereof) or any of the
Assets to be Acquired.

         3.18     Environmental Matters.

                  Seller  has been  and is in  compliance  with  all  applicable
federal, state and local laws, regulations and ordinances relating to protection
of human health and safety and the environment ("Environmental Laws"), including
those related to hazardous substances, wastes, discharges, emissions, disposals,
dumping,  burial or other  forms of  disposal.  There are no  current or pending
claims, administrative proceedings,  judgments,  declarations or orders relating
to violations of Environmental  Laws or to the presence of Hazardous  Substances
(as defined by the Environmental  Laws) on, in or under the owned or leased real
property  of  Seller.   No  hazardous  waste  in  quantities  that  violate  any
Environmental Laws has been dumped, buried,  discharged or disposed of on, in or
under  the  owned or leased  real  property  of Seller by Seller or by any other
person or entity. Neither Seller nor any third party has installed or placed on,
under or in the owned real property or the leased real property  constituting  a
part of the Assets to be  Acquired:  (i) any  treatment,  storage,  recycling or
disposal  facility for any hazardous  waste as that term is defined under 40 CFR
Part 261 or any state equivalent;  (ii) any underground storage tanks, in use or
abandoned; or (iii) any polychlorinated  biphenyls (PCBs) in any hydraulic oils,
transformers, capacitors or other electrical equipment.

                                       13
<PAGE>

         3.19     Bulk Sales Compliance and Transfer Taxes.

                  The sale and transfer of the Assets to be Acquired pursuant to
this  Agreement  will not result in or be subject to: (a) any law  pertaining to
bulk sales or  transfers  which make such sales or transfers  ineffective  as to
creditors  of Seller;  or (b) the  imposition  of any  liability  upon Buyer for
appraisal rights or other liability owing to Seller.

         3.20     Disclosure.

                  No  representation  and warranty by Buyer in this Agreement or
any Schedule hereto contains or will contain any untrue  statement of a material
fact,  or omits or will  omit to state a  material  fact  required  to be stated
therein or necessary to make the statements contained therein not misleading.

4.       REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER.

         Buyer   represents   and   warrants  to  Seller   that  the   following
representations  and  warranties  are true and correct as of the date hereof and
will also be true and correct on the Consummation Date:

         4.1      Status, Power and Authority.

                  Buyer  is  a  Delaware  corporation  duly  organized,  validly
existing and in good standing under the laws of its jurisdiction of organization
and has the power and authority to own and lease its  properties  and to conduct
its business as currently conducted and to acquire the Assets to be Acquired.

         4.2      Authorization of Agreement.

                  (a)  Buyer has taken all  necessary  action to  authorize  and
approve this Agreement and the Buyer  Transaction  Documents (as defined in this
Section 4.2(a)),  the consummation of the transactions  contemplated  hereby and
thereby and the  performance by Buyer of all of the terms and conditions  hereof
and thereof on the part of Buyer to be performed.  The execution and delivery by
Buyer  of this  Agreement  and  each  and  every  other  agreement,  instrument,
certificate  or  document  to  which  Buyer is a party  that is to be  executed,
delivered  and  performed  by  Buyer  pursuant  thereto  (collectively,   "Buyer
Transaction Documents"),  and the consummation of the transactions  contemplated
hereby and  thereby,  do not and will not:  (i)  violate any  provisions  of any
judicial or administrative order, award, judgment or decree applicable to Buyer,
or (ii) conflict with any of the  provisions of the charter  documents of Buyer,
or (iii) conflict with,  result in a breach of or constitute a default under any
material  agreement  or  instrument  to which Buyer is a party or by which it is
bound.

                  (b) This Agreement and the Buyer Transaction  Documents,  when
executed and delivered by Buyer,  will have been duly  authorized,  executed and
delivered by Buyer, and this Agreement  constitutes,  and the Buyer  Transaction
Documents,  when executed and delivered by Buyer, will constitute,  legal, valid
and binding  obligations of Buyer,  enforceable against Buyer in accordance with
their respective terms.

                                       14
<PAGE>

         4.3      Litigation.

                  There  is  no  litigation,   at  law  or  in  equity,  or  any
proceedings before any commission or other governmental  authority,  pending or,
to the knowledge of Buyer,  threatened  against  Buyer that could  reasonably be
expected  to  impair  the  ability  of  Buyer  to  consummate  the  transactions
contemplated by this Agreement.

         4.4      Disclosure.

                  No  representation  and warranty by Buyer in this Agreement or
any Schedule hereto contains or will contain any untrue  statement of a material
fact,  or omits or will  omit to state a  material  fact  required  to be stated
therein or necessary to make the statements contained therein not misleading.

        4.5      Qualifications and Financing.

                  Buyer has the requisite qualifications to be the transferee of
  the  Governmental  Licenses  and the owner and  operator of the Assets and the
  Systems.  Buyer has sufficient  cash reserves,  or commitments  from reputable
  financial  institutions  to obtain funds  necessary to enable Buyer to perform
  this Agreement in accordance  with its terms and has provided  Seller evidence
  of Buyer's  financial  capability,  which is true and correct according to the
  terms thereof.

5.       CONDUCT OF BUSINESS OF BUSINESS PENDING CLOSING, CONSUMMATION AND
         ADDITIONAL COVENANTS.

         Seller and Buyer  covenant  and agree that from the date  hereof to and
including the Consummation Date:

         5.1      Maintenance of Business.

                  (a) Seller shall continue to operate and maintain the Business
and the Assets to be Acquired (including the maintaining of an adequate level of
inventory  of spare  equipment  and parts),  and shall keep all of its  business
books,  records and files,  all in the ordinary course of business in accordance
with past practices  consistently  applied.  Seller shall not sell,  transfer or
assign any assets of the Business  except in the ordinary course of business and
for full and fair value.

                  (b) Seller shall not permit the  creation of any lien,  charge
or  encumbrance on any of its assets that would survive the  Consummation  other
than  Permitted  Liens.  Seller shall not initiate or otherwise  cause any other
person to initiate any action to amend or cancel, nor permit any other person to
take any  action to amend or cancel,  nor  permit  any other  person to take any
action to amend or cancel, any of the Franchises, the Pole Attachment Agreements
or the  Agreements  without the prior  written  consent of Buyer,  except  that,
without such consent,  Seller may conclude pending  Franchise  renewals on terms
substantially similar to pending renewal proposals.

                                       15
<PAGE>

                  (c) Promptly after becoming aware thereof, Seller shall notify
Buyer of any action  taken or proposed to be taken by a person other than Seller
to amend or cancel any of the Franchises,  the Pole Attachment Agreements or the
Agreements.  Seller shall not enter into any contract or  commitment of any kind
relating  to the  Business  for which  Buyer will have any  liability  after the
Consummation  which is not in the ordinary course of business in accordance with
past practices without the prior written consent of Buyer.

                  (d) Seller  shall not permit  any of its  partners,  officers,
directors,  shareholders, agents, employees or affiliates to pay any of Seller's
accounts   receivable   from   subscribers   outstanding  on  the  date  hereof.
Notwithstanding  the foregoing,  such persons shall be permitted to make payment
for Broadband services received by them at their own dwellings.

                  (e) Without the prior written consent of Buyer,  which consent
shall not be unreasonably  withheld,  delayed or conditioned,  Seller shall not,
except as otherwise  required by law (including  the  requirement to comply with
must-carry  requests):  (i) change the channel lineup of the Business;  (ii) add
additional channels to the Business, except for channels added at the request of
a franchising authority as part of the process of renewing a Franchise (in which
event, Seller shall give Buyer written notice of the addition of such channels);
(iii) change its subscriber rates (provided, however, that if Seller is required
to change its subscriber rates pursuant to a regulatory order,  Seller may do so
without  the  consent  of Buyer upon 30 days'  prior  written  notice);  or (iv)
conduct  any  extraordinary  or  unusual   marketing  or  collection   programs,
including,  without  limitation,  any  amnesty  programs,  or any  extraordinary
collection practices which might adversely affect customer relationships.

                  (f) Seller shall comply with all laws,  rules and  regulations
of federal,  state,  city and local  governments.  Seller  shall not violate the
terms of any lease or contract  connected  with the operation of the Business or
with the  utilization  of the Assets to be Acquired.  Seller shall not grant any
increase in the rate of wages,  salaries,  bonuses or other  remuneration of any
employee  except as may be consistent  with past  business  practices and not in
excess of five percent (5%) in the aggregate for such employee.

         5.2      Insurance.

                  Seller   shall   maintain  in  full  force  and  effect  until
Consummation all existing insurance policies or comparable replacements to cover
and protect the Assets to be Acquired against damage or destruction.

         5.3      Organization.

                  Seller  shall  use its  best  efforts  consistent  with  sound
business judgment to preserve intact its present business and  organization,  to
retain the services of its present employees, to preserve its relationships with
subscribers,  suppliers and others having business  relationships with it and to
maintain  the  goodwill  enjoyed  within  the  municipalities  serviced  by  the
Business.

                                       16
<PAGE>

         5.4      Access for Investigation.

                  Upon reasonable advance notice,  Seller shall afford Buyer and
its  representatives  reasonable  access  during  normal  business  hours to the
properties,  plant and equipment and to the books and records of Seller in order
that Buyer  shall  have full  opportunity  to  investigate  Business  affairs of
Seller.

         5.5      Consummation of Agreement.

                  Seller  and  Buyer  each  shall  use  commercially  reasonable
efforts  to  perform  and  fulfill  all  obligations  and  conditions  on  their
respective parts to be performed and fulfilled under this Agreement,  to the end
that the transactions contemplated by this Agreement shall be fully carried out.

         5.6      Cooperation.

                  Seller  and Buyer  shall  cooperate  with each  other,  to the
extent  not  inconsistent  with  their  respective  obligations  hereunder,   in
apprising the municipalities  serviced by the Business and the utility companies
which have issued the Pole Attachment  Agreements of the sale of the Business to
Buyer in such manner as to preserve  the  goodwill  of such  municipalities  and
utility companies. Buyer and Seller agree to file FCC Form 394's with respect to
the  Franchises  when  consent to  assignment  is required  within ten (10) days
following the date hereof.

         5.7      FCC Approval.

                  Seller shall make  application  to the FCC for the consent and
approval of the FCC to the transfer of the  ownership  and  operation of any FCC
licenses of the Business from Seller to Buyer, if required.

         5.8      Certificates.

                  On or before the  Consummation  Date,  Seller shall deliver to
Buyer a  Certificate  of Good  Standing  issued by the Secretary of State in the
state of Seller's  formation  as to Seller's  good  standing in such state and a
Certificate of Good Standing from each jurisdiction in which Seller is qualified
or licensed to do business.

         5.9      Third-Party Consents.

                 Seller   shall  make  such   applications   to  the   Franchise
authorities and other third parties  identified on Schedule 3.2 whose consent or
approval is  required  for the  consummation  of the  transactions  contemplated
hereby,  and shall  otherwise  use its best efforts to obtain such  consents and
approvals prior to the Consummation.  Buyer shall use its best efforts to assist
Seller and shall take such actions as may  reasonably  be necessary in obtaining
such consents and approvals and shall cooperate with Seller in the  preparation,
filing and  prosecution  of such  applications.  The  parties  agree to use best
efforts  to obtain  such  consents  and  approvals  in  writing  and in form and
substance  reasonably  acceptable  to  Buyer.  Seller  shall  not  agree  to any
materially  adverse  change in any  Franchise as a condition  to  obtaining  any
consent or approval  necessary for the transfer of such  Franchise  unless Buyer
shall  otherwise  consent  in  writing.  Buyer  agrees  that it  shall  not seek
amendments or  modifications  to Franchises or  agreements.  Buyer shall furnish

                                       17
<PAGE>

Seller with copies of such  documents  and  information  with  respect to Buyer,
including  financial  information  and  information  relating to cable and other
operations  of Buyer and its  affiliated  or  related  companies,  as Seller may
reasonably  request  in  connection  with  obtaining  any of  such  consents  or
approvals or as may be reasonably  requested by any Franchise authority or other
third party in  connection  with  obtaining  any consent or  approval.  Seller's
obligations hereunder with respect to obtaining any consent or approval shall be
satisfied if Buyer has executed a new franchise or contract with the  respective
Franchise authority or other third party or if such Franchise authority or other
third  party has  indicated  in  writing  that it is  willing  to  execute a new
franchise or contract with Buyer.

         5.10     FCC and Other Regulatory Compliance.

                  Seller  shall  consult  with Buyer prior to  implementing  any
subscriber rate changes relating to the  implementation  of any FCC regulations,
except as otherwise  provided in Section 5.1 hereof.  On the Consummation  Date,
the Business shall be in material  compliance  with all  requirements of the FCC
rules and regulations.

         5.11     Approval of Lessors.

                  Seller  shall use its best  efforts to obtain  the  consent of
each lessor of real property  relating to the Business listed on Schedule 3.2 as
being required to consent to the assignment to Buyer of any lease.

         5.12     Employees.

                  Seller shall  terminate  all of its employees as of the end of
business on the Consummation  Date.  Seller shall remain solely  responsible for
any termination  benefits to which any of the employees is entitled by reason of
such termination  whether or not such person is subsequently  employed by Buyer.
Buyer shall have no  obligation  to offer  employment to any of the employees of
Seller.  Buyer shall notify  Seller at least fifteen (15) business days prior to
the  Consummation  Date of  those  employees  to whom  Buyer  intends  to  offer
employment. Seller shall refrain from making any statements or communications to
its employees  regarding  subsequent  employment by Buyer or Buyer's  employment
policies without Buyer's prior written consent.

        5.13     Non-Compete

         In consideration for the payment of $_______, (which amount is included
in the purchase price referenced in Section 2.2, above), the receipt of which is
hereby  acknowledged  by Members (which amount is included in the purchase price
referenced  in  Section  2.2,  above),  for a period of three (3) years from the
Consummation  Date hereof,  neither the Seller nor the Members  Partners  shall,
without the prior written consent of the Buyer:

                  (a) offer  competitive  video  and data  services  within  the
communities  and geographic  areas served by the Acquired  System and within all
areas  which  are  within  the  state  of  California  of such  communities  and
geographic  areas  (whether as an  employee,  agent,  servant,  owner,  partner,
consultant, independent contractor, representative,  stockholder or in any other

                                       18
<PAGE>

capacity whatsoever), nor shall they: (i) conduct any business with any customer
of the  Buyer on behalf of any  entity  or person  other  than the Buyer if such
business is competitive  with the products or services  offered by the Buyer, or
(ii)  perform  any work  competitive  in any way with the  products  or services
offered or planned to be brought to market by the Buyer, on behalf of any entity
or  person  other  than  the  Buyer;  providing,  however,  that  the  foregoing
provisions  of this  Section  5.13  shall  not apply to any  existing  Broadband
systems  presently  owned and  operated by Seller,  any of the Partners or their
affiliates  within  the  present  geographic  area or areas  served  by any such
systems; and

                  (b) entice,  solicit or encourage any employee of the Buyer to
leave  the  employ  of the  Buyer or any  independent  contractor  to sever  its
engagement with the Buyer; and

                  (c) directly or indirectly,  entice,  solicit or encourage any
customer or  prospective  customer of the Buyer to cease doing business with the
Buyer, or reduce its relationship with the Buyer or refrain from establishing or
expanding a relationship with the Buyer.

        5.14     Management Agreement.

     Simultaneous  to the closing of this  document,  the Owner shall  execute a
Management  Agreement with the Buyer. The Buyer will name Calvin D. Smiley,  Sr.
as the Manager. In management of the Business Mr. Smiley and all other personnel
that  may  be  involved  with  the  business  shall  work  in  a  competent  and
professional manner at all times.

6.       CONDITIONS TO CONSUMMATION - BUYER.

         6.1      Conditions to Obligations of Buyer.

                  The  obligations  of Buyer to  consummate  the purchase of the
Assets to be Acquired at  Consummation  shall be subject to the  satisfaction of
the  following  conditions  precedent,  except to the extent  waived by Buyer in
writing:

                  (a) All of the  representations  and warranties of the Seller,
to the best of Seller's knowledge, contained in this Agreement shall be true and
correct in all material  respects at and as of the  Consummation  Date as though
such representations and warranties were made at and as of such time (except for
individual  representations  or warranties  that expressly  provide therein that
they are made at and as of a certain date),  and Seller shall have performed and
be in compliance in all material respects with all of the covenants, agreements,
terms and provisions set forth herein on its part to be observed or performed.

(b) The consents required from all governmental  agencies and entities and other
third parties (including the Buyers financial sources) to Buyer's acquisition of
the Business identified on Schedule 3.2 shall have been granted or obtained.

                  (c) On the  Consummation  Date,  no suit or  action  or  other
proceeding shall be pending or threatened before any court or other governmental

                                       19
<PAGE>

agency against  Seller or Buyer in which the  consummation  of the  transactions
contemplated by this Agreement are sought to be enjoined.

                  (d) Franchise  Consents.  Buyer shall have  received  evidence
that all of the necessary Consents relating to the Systems' franchises have been
obtained or given (or deemed to have been given in  accordance  with Section 617
of the  Communications  Act (47 U.S.C.  Section  537)) and are in full force and
effect.  This  Consummation  condition  shall be deemed  satisfied  when (i) the
number of Equivalent  Subscribers in franchising  areas where the consent of the
franchising  authority is not required to transfer the applicable franchise plus
(ii) the number of Equivalent  Subscribers in franchising  areas where the local
franchising  authorities  have  consented  to the  transfer  of  the  applicable
franchises equals or is greater than 97% of the number of Equivalent Subscribers
served by the Systems.

                  (e)      Seller shall have delivered to Buyer:

                           (i) the Good Standing Certificates described in
                           Section 5.8;

                           (ii) one or more  Officer  Certificates,  dated as of
                           the   Consummation   Date,   in  form  and  substance
                           reasonably satisfactory to Buyer, certifying:

                                    (A) that the conditions set forth in each of
                           the provisions of Section 6.1(a), (b) and (c) of this
                           Agreement have been satisfied in full;

                                    (B) that the  resolutions of the Seller's (a
                           copy of which shall be  attached to the  Certificate)
                           authorizing  the execution,  delivery and performance
                           of the Seller  Transaction  Documents and the sale of
                           the  Assets  to  be  Acquired  and  the  transactions
                           contemplated hereby have been approved and adopted;

                                    (C) the Certificate of Formation  of  Seller
                           (a copy of  which shall  be attached  to the Certifi-
                           cate),  certified  by the  Secretary  of State of the
                           state of formation;

                                    (D) a Certificate of Good Standing of Seller
                           (a copy of which shall be attached to the Certificate
                           and which  shall not be dated more than  thirty  (30)
                           days prior to  Consummation)  issued by the Secretary
                           of state of  formation,  and from the states in which
                           Seller is required to be qualified; and

                                    (E) a certificate of incumbency  executed by
                           the  secretary  and each of the  officers  of  Seller
                           executing this Agreement and the documents  delivered
                           hereunder.

                                       20
<PAGE>

                           (iii)  at   least   two  (2)   weeks   prior  to  the
                  Consummation  Date,  lien searches  dated not more than thirty
                  (30) days prior to the  Consummation  Date  showing  all UCC-1
                  financing  statements  filed with any filing  offices  wherein
                  Seller  is named a  debtor,  all  federal,  state or local tax
                  liens filed against the Seller,  all recorded mortgages naming
                  any Seller as a mortgagor,  all unsatisfied  judgments  naming
                  any Seller as a judgment debtor and all pending  litigation in
                  which  any  Seller  is a  defendant,  all of  which  shall  be
                  released or terminated  prior to or at the  Consummation.  The
                  expense of lien searches shall be shared by Buyer and Seller.

                           (iv) the matters described in Section 8 hereof or any
                  documents or other items required to be delivered hereunder to
                  Buyer at or prior to Consummation shall have been delivered.

7.       CONDITIONS TO CONSUMMATION - SELLER.

         7.1      Conditions to Obligations of Seller.

                  The  obligations  of the Seller to consummate  the sale of the
Assets to be Acquired at  Consummation  shall be subject to the  satisfaction of
the  following  conditions  precedent,  except to the extent waived by Seller in
writing:

                  (a)  All  of  the  representations  and  warranties  of  Buyer
contained in this Agreement  shall be true and correct in all material  respects
at and as of the Consummation Date as though such representations and warranties
were made at and as of such time  (except  for  individual  representations  and
warranties  that  expressly  provide  therein  that they are made at and as of a
certain  date),  and Buyer  shall have  performed  and be in  compliance  in all
material  respects with all of the covenants,  agreements,  terms and provisions
set forth herein on its part to be observed and performed.

                  (b) On the  Consummation  Date,  no suit or  action  or  other
proceeding shall be pending or threatened before any court or other governmental
agency against  Seller or Buyer in which the  consummation  of the  transactions
contemplated by this Agreement are sought to be enjoined.

                  (c)      Buyer shall have delivered to Seller:

                          (i) One or more Officer Certificates,  dated as of the
                  Consummation   Date,   in  form   and   substance   reasonably
                  satisfactory to Seller, certifying:

                                    (A) to the effect  that the  conditions  set
                           forth  in   Section  7.1(a)  and  (b)  of this Agree-
                           ment have been satisfied in full;

                                    (B) that  the  [resolutions  of the  Buyer's
                           board  of  directors]  (a  copy  of  which  shall  be
                           attached   to  the   Certificate)   authorizing   the
                           execution,  delivery  and  performance  of the  Buyer
                           Transaction  Documents and the purchase of the Assets
                           to be  Acquired  and  the  transactions  contemplated
                           hereby have been approved and adopted;

                                       21
<PAGE>

                                    (C) a Certificate  of Good Standing of Buyer
                           (a copy of which shall be attached to the Certificate
                           and which  shall not be dated more than  thirty  (30)
                           days prior to Consummation); and

                                    (D) a certificate of incumbency  executed by
                           the  secretary  and  each of the  officers  of  Buyer
                           executing this Agreement and the documents  delivered
                           hereunder.

                           (ii)    the Purchase Price, as adjusted in accordance
                   with Section 2.6;

                           (iii)  assumption  documents  in form  and  substance
                  reasonably  satisfactory  to Seller  pursuant  to which  Buyer
                  shall have assumed the Assumed Liabilities.

8.       ACTION TO BE TAKEN AT AND AFTER CONSUMMATION.

         8.1      Action to be Taken at and after Consummation.

                  (a)      At Consummation, Seller shall deliver to Buyer:

                           (i) Such  bills of sale,  endorsements,  assignments,
                  special   warranty   deeds  and  other  good  and   sufficient
                  instruments  of transfer and conveyance as shall be reasonably
                  deemed  necessary by Buyer to vest in or confirm to Buyer good
                  title to all of the assets  and  properties  constituting  the
                  Assets to be Acquired  free and clear of any Liens  except for
                  Permitted Liens;

                           (ii) A  complete  itemized  list  of all of  Seller's
                  subscriber  accounts receivable relating to the Business as of
                  a date no later than 10 days prior to the  Consummation  Date,
                  showing  sums due and their  respective  aging for the  period
                  ending on the Consummation Date;

                           (iii)  Actual possession and operating control of the
                  Business;

                           (iv)  The  documents and  instruments  required to be
                  delivered by  Seller to Buyer pursuant to the terms of Section
                  6; and

                           (v)  All of  the consents and approvals  indicated on
                  Schedule 3.2 as being required for the Consummation.

                  (b)      At Consummation, Buyer shall deliver to Seller:

                           (i)  The Purchase  Price, as  adjusted in  accordance
                  with Section 2.6; and

                           (ii)  The documents  and  instruments  required to be
                  delivered by  Buyer to Seller pursuant to the terms of Section
                  7.

                                       22
<PAGE>

                  (c)      After Consummation, Seller shall deliver to Buyer, as
             received from time to time:

                           (i) any cash or other property that it may receive in
                  respect to subscriber  accounts  receivable received after the
                  Consummation  Date relating to Business and  operations of the
                  Business  arising prior to or  subsequent to the  Consummation
                  Date;

                           (ii)   any  Assets  to be  Acquired  not  effectively
                  transferred to Buyer at the Consummation; and

                           (iii)  from time to time at the  request of Buyer and
                  without  further  consideration,  such further  instruments of
                  conveyance,  transfer and  assignment as Buyer may  reasonably
                  request in order to convey more  effectively  the  transfer to
                  Buyer of any of the Assets to be  Acquired,  and Seller  shall
                  assist  Buyer  in the  reduction  to  possession  of any  such
                  assets,  possession  of which  was not  delivered  to Buyer at
                  Consummation.  Buyer shall be responsible  for the preparation
                  of  the  entire  documents   incidental  to  such  conveyance,
                  transfer and reduction to possession.

9.       DAMAGE TO PROPERTY AND RISK OF LOSS.

                  (a)  The  risk of any  loss  or  damage  to the  Assets  to be
Acquired and the Business  resulting from fire, theft or any other casualty (but
excluding  any  loss  or  damage  attributable  to  reasonable  wear  and  tear)
("Damage") shall be borne by Seller at all times prior to the  Consummation.  In
the  event  that any such  Damage  shall be  sufficiently  substantial  so as to
preclude and prevent  resumption  of normal  operations of all or any portion of
the Business  within Sixty (60) days from the occurrence of the event  resulting
in such loss or damage,  Seller shall immediately notify Buyer in writing of its
inability  to resume  normal  operations  or to replace  or restore  the lost or
damaged  property,  and Buyer, at any time within ten (10) days after receipt of
such  notice,  may elect  either (a) to waive such  defect  and  proceed  toward
consummation  of the transaction in accordance with the terms of this Agreement,
or (b) to terminate this Agreement.  If Buyer elects to terminate this Agreement
pursuant to this  Section,  the parties  hereto  shall stand fully  released and
discharged  of any and all  obligations  hereunder,  and the  Deposit  shall  be
returned to Buyer.

                  (b) If  Buyer  shall  elect  to  consummate  this  transaction
notwithstanding  such  Damage  and does so,  or in the  event of  damage  to the
Business  which  is not  material  damage  to the  Business,  there  shall be no
diminution of the Purchase  Price,  and all insurance  proceeds  (other than for
bodily injury or for damage to property  other than the Assets to be Acquired or
for business interruption prior to the Consummation Date) payable as a result of
the occurrence of the event resulting in the Damage shall be delivered to Buyer,
or the rights thereto shall be assigned to Buyer if not yet paid over to Seller,
and Seller shall pay to Buyer the amount of any deductible  associated  with the
insurance claim.

                  (c)  Notwithstanding  the provisions of this Section 9, in the
event of Damage to the Business  which is not material  damage (i.e.,  less than
$10,000) to the  Business,  Seller  shall have the full  responsibility  for the

                                       23
<PAGE>

completion of all necessary repair and/or  restoration work with respect to such
damage,  whether  or not such work is capable  of being  completed  prior to the
Consummation  Date, and shall promptly and with due diligence,  in a prudent and
workmanlike manner, proceed with such work, time being of the essence.

10.      SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION.

         10.1     Survival of Representations and Warranties.

                  All  representations,   warranties,  covenants,  stipulations,
certifications,  indemnities and agreements  contained herein or in any document
delivered  pursuant hereto shall survive the  consummation  of the  transactions
provided for in this  Agreement  (except for the following  representations  and
warranties which will expire at consummation; 3.3, 3.5, 3.6, 3.7, 3.8 and 3.14);
provided that the  representations  and  warranties  contained in this Agreement
shall expire and be  extinguished  eighteen  (18) months after the  Consummation
Date, except for representations  and warranties relating to tax matters,  which
shall survive until the expiration of the statute of limitations with respect to
liabilities  related  thereto,  and Buyer's and  Seller's  rights to make claims
based thereon shall likewise expire and be extinguished on such dates.

         10.2     Indemnification.

                  (a) Seller and the  Partners,  jointly  and  severally,  shall
defend,  indemnify and hold Buyer  harmless from and against any and all claims,
liabilities,  damages,  losses,  deficiencies and expenses (including reasonable
attorneys' fees and expenses and costs of suit,  including,  but not limited to,
travel   expenses  and  discovery   costs  for  such  matters  as   transcripts,
photocopying,   subpoenas   and   telecopies)   (individually,   a  "Loss"   and
collectively,  "Losses")  arising out of or relating to (i) any and all breaches
of representations and warranties, and out of any and all breaches of covenants,
agreements and  certifications  made by or on behalf of Seller in this Agreement
or in any  document  delivered  hereunder,  (ii) any  failure to comply with any
applicable  bulk transfer acts, or (iii) any and all liabilities and obligations
of Seller (except for the Assumed  Liabilities).  Buyer shall not be entitled to
be indemnified  by Seller for any Losses under this Section  10.2(a) (other than
Losses  relating to tax  matters)  arising out of any single  claim or aggregate
claims  until the  total  amount of all such  Losses  suffered  or paid by Buyer
exceeds  $50,000.  Buyer shall then be entitled to be  indemnified  for all such
Losses under this Section 10.2(a) arising out a single claim or aggregate claims
up to an aggregate  indemnification  of $1,000,000  ("Seller's Cap"). All claims
due by Owner will be paid in the same  proportion of the Purchase  price (50% in
stock,  20% in cash and 30% in Note,  if note is paid off then 50% stock and 50%
in cash).

                  (b) Buyer  shall  defend,  indemnify  and hold  Seller and the
Partners harmless from and against any and all Losses arising out of or relating
to (i) any and all breaches of representations,  and out of any and all breaches
of covenants, warranties, stipulations, agreements and certifications made by or
on behalf  of Buyer in this  Agreement  or in any  document  delivered  by Buyer
hereunder;  (ii) the Assumed  Liabilities;  and (iii) all debts,  liabilities or
claims owing by or against Buyer subsequent to the Consummation  Date or arising
out of Business  activities  of Buyer  subsequent  thereto.  Seller shall not be
entitled to be  indemnified  by Buyer for any Losses under this Section  10.2(b)
arising out of any single  claim or  aggregate  claims until the total amount of
all such Losses suffered or paid by Seller exceeds $50,000. Seller shall then be

                                       24
<PAGE>

entitled  to be  indemnified  for all such  Losses  under this  Section  10.2(b)
arising  out  a  single   claim  or   aggregate   claims  up  to  an   aggregate
indemnification of $1,000,000 ("Buyer's Cap").

         10.3     Indemnification with Respect to Third-Party Claims.

                  (a) Definitions. As used herein, a "Third-Party Claim" means a
Loss or potential Loss for which  indemnification  is claimed by Buyer or Seller
(the  "Indemnitee")  under  the  provisions  of this  Article  10 and  which  is
consequent  to  a  claim  against  the  Indemnitee  by  a  person,  corporation,
association,  partnership or other business organization, or an individual, or a
government,  any  political  subdivision  thereof  or a  governmental  agency by
commencement  against the  Indemnitee of a legal action or proceeding or receipt
by the  Indemnitee  of an  assertion  of a claim  for which  indemnification  is
provided pursuant to this Article 10 by Buyer or Seller, as the case may be (the
"Indemnitor").

                  (b)  Notice of Claim.  The  Indemnitee  will give  notice of a
Third-Party Claim to the Indemnitor, together with, if such Third-Party Claim is
subject to arbitration  pursuant to Section 14 hereof,  demand for  arbitration,
stating  the nature  thereof and  enclosing  copies of any  complaint,  summons,
written assertion of such Third-Party  Claim or similar  document.  No claim for
indemnification  on  account  of a  Third-Party  Claim  shall  be  made  and  no
indemnification  therefor  shall be  available  under this  Article 10 until the
Indemnitee  shall  have  given  initial  written  notice  of  its  claim  to the
Indemnitor.

                  (c)  Retention  of  Counsel  by  the  Indemnitor.   Except  as
hereinafter  provided  (including,  but  not  limited  to,  Section  10.3(d)(ii)
hereof),  the Indemnitor shall engage counsel to defend a Third-Party Claim, and
shall provide notice to the Indemnitee not later than 15 business days following
delivery by the Indemnitee to the Indemnitor of a notice of a Third-Party Claim,
such  notice to  include an  acknowledgment  by the  Indemnitor  that it will be
liable  in full to the  Indemnitee  for  any  Losses  in  connection  with  such
Third-Party  Claim.  The Indemnitee will fully cooperate with such counsel.  The
Indemnitor will cause such counsel to consult with the Indemnitee as appropriate
as to the defense of such claim,  and the  Indemnitee  may, at its own  expense,
participate in such defense, assistance or enforcement, but the Indemnitor shall
control such defense, assistance or enforcement.  The Indemnitor will cause such
counsel  engaged by the Indemnitor to keep the Indemnitee  informed at all times
of the status of such defense, assistance or enforcement.

                  (d)      Employment of Counsel by the Indemnitee.

                           (i)   Notwithstanding   the   provisions  of  Section
                  10.3(c), the Indemnitee shall have the right to engage counsel
                  and to  control  the  defense  of a  Third-Party  Claim if the
                  Indemnitor  shall  not have  notified  the  Indemnitee  of its
                  appointment  of  counsel  and  control  of  the  defense  of a
                  Third-Party  Claim pursuant to Section 10.3(c) within the time
                  period therein provided.

                                       25
<PAGE>

                           (ii) Notwithstanding the engagement of counsel by the
                  Indemnitor,  the Indemnitee  shall have the right,  at its own
                  expense,  to engage  counsel to  participate  jointly with the
                  Indemnitor in, and to control jointly with the Indemnitor, the
                  defense of a Third-Party  Claim if (x) the  Third-Party  Claim
                  involves   remedies  other  than  monetary  damages  and  such
                  remedies, in the Indemnitee's reasonable judgment,  could have
                  an effect on the conduct of the Indemnitee's  business, or (y)
                  the Third-Party Claim relates to acts, omissions,  conditions,
                  events or other matters  occurring after the Consummation Date
                  as well as to acts,  omissions,  conditions,  events  or other
                  matters  occurring prior to the Consummation  Date, or (z) the
                  claims involve  monetary  damages which could exceed  Seller's
                  Cap or the Buyer's Cap.

                           (iii) If the Indemnitee chooses to exercise its right
                  to appoint counsel under this Section 10.3(d),  the Indemnitee
                  shall deliver notice  thereof to the Indemnitor  setting forth
                  in  reasonable  detail why it believes  that it has such right
                  and  the  name of the  counsel  it  proposes  to  employ.  The
                  Indemnitee  may  deliver  such  notice  at any  time  that the
                  conditions  to  the  exercise  of  such  right  appear  to  be
                  fulfilled,   it  being   recognized  that  in  the  course  of
                  litigation,  the scope of  litigation  and the amount at stake
                  may change.  The Indemnitee  shall thereupon have the right to
                  appoint such counsel.

                           (iv) The reasonable  fees and expenses of counsel and
                  any  accountants,   experts  or  consultants  engaged  by  the
                  Indemnitee  in  accordance  with  the  provisions  of  Section
                  10.3(d)(i) in connection  with  defending a Third-Party  Claim
                  shall  be  paid  by the  Indemnitor  in  accordance  with  the
                  provisions of this Article 10. If the Indemnitee's  employment
                  of counsel is for a Third-Party Claim of the type described in
                  subdivision  (ii)(y) or (ii)(z) of this Section 10.3(d),  then
                  subject to the  provisions of Section  10.3(e),  the amount of
                  fees and expenses so payable by the  Indemnitor  shall be that
                  fraction  of the  aggregate  of such  fees and  expenses,  the
                  numerator  of  which  is  the  portion  of the  amount  of any
                  judgment  on, or  settlement  of, such  Third-Party  Claim for
                  which the Indemnitee is  indemnified  pursuant to this Article
                  10 and the  denominator  of which is the total  amount of such
                  judgment or settlement,  but provided further, if such defense
                  of a Third-Party  Claim is successful  (in the sense that as a
                  consequence  thereof,  there is no Loss  (other than such fees
                  and expenses) for which the Indemnitee is indemnified pursuant
                  to this Article 10), the Indemnitee  and the  Indemnitor  will
                  attempt in good faith to reach an  agreement  on the amount of
                  such fees and expenses so payable by the Indemnitor.

                  (e)      Settlement of Third-Party Claims.

                           (i)  The Indemnitor may settle  any Third-Party Claim
                  solely involving  monetary damages only if the  amount of such
                  settlement is to be paid entirely by the  Indemnitor  pursuant
                  to this Article 10.

                                       26
<PAGE>

                           (ii) The Indemnitor  will not enter into a settlement
                  of a Third-Party Claim which involves a non-monetary remedy or
                  which will not be paid entirely by the Indemnitor  pursuant to
                  this Article 10 without the written  consent of the Indemnitee
                  (which consent shall not be unreasonably withheld,  delayed or
                  conditioned).

                           (iii) Indemnitee  will not enter into a settlement of
                  a Third-Party Claim without the written consent of the Indemni
                  -tor, which consent shall not be unreasonably  withheld, under
                  the  circumstances  described  in  subdivision  (i) of Section
                  10.3(d),  if the Indemnitor has accepted all or any portion of
                  the  liability  for  such  Third-Party   Claim. Otherwise, the
                  Indemnitee  shall  be free  to  compromise, defend  and settle
                  Third-Party  Claims  without  prejudice to  any of its  rights
                  hereunder or under applicable law and without prejudice to its
                  right to assert a claim that such claim is not valid.

                           (iv) As to any Third-Party Claim of the type describ-
                  ed in subsection  (ii)(y)  or  subsection  (ii)(z)  of Section
                  10.3(d), the Indemnitee and the Indemnitor shall consult as to
                  any  proposed settlement.  If  the  Indemnitee   notifies  the
                  Indemnitor that it  wishes to accept a proposed settlement and
                  the Indemnitor is unwilling to do so, if the  amount for which
                  the Third-Party  Claim is  ultimately resolved is greater than
                  the amount for which  the Indemnitee  desired to settle,  then
                  (x)  the Indemnitee  shall be  liable only for the amount,  if
                  any, which it would  have paid  had the Third-Party Claim been
                  settled as proposed by the Indemnitee, and (y) all  reasonable
                  attorneys' fees and expenses and costs of suit incurred by the
                  Indemnitee subsequent to the time  of the proposed  settlement
                  shall be paid or reimbursed by the Indemnitor.

                           (v) In  determining  whether to accept or reject  any
                  settlement proposal, each party  shall  act in good  faith and
                  with due regard for  the reasonable  commercial  and financial
                  interests of the other.

                  (f) Claims as to Which  Indemnification  is Partially Payable.
         Notwithstanding  the  foregoing,  in the event of any settlement of, or
         final  judgment with respect to, a  Third-Party  Claim which relates to
         acts,  omissions,  conditions,  events or other matters  occurring both
         before  and  after  the  Consummation  Date,  the  Indemnitee  and  the
         Indemnitor  shall  negotiate  in good  faith as to the  portion of such
         Third-Party Claim as to which such indemnification is payable.

                  (g) Cooperation,  etc. The Indemnitee and the Indemnitor shall
         cooperate  with  one  another  in good  faith  in  connection  with the
         defense,  compromise  or  settlement  of any claim or  action.  Without
         limiting the generality of the  foregoing,  the party  controlling  the
         defense  or  settlement  of any  matter  shall  take  steps  reasonably
         designed to ensure that the other party and its counsel are informed at
         all times of the status of such matter. Neither party shall dispose of,
         compromise  or  settle  any  claim or  action  in a manner  that is not
         reasonable  under the  circumstances  and in good faith. The Indemnitor
         and  Indemnitee  shall  enter  into  such   confidentiality  and  other

                                       27
<PAGE>

         non-disclosure  agreements as the Indemnitee or Indemnitor, as the case
         may be, shall reasonably  request in order to protect trade secrets and
         other  confidential  or  proprietary  information  of the Indemnitee or
         Indemnitor, as the case may be.

11.      TERMINATION.

         11.1     Termination by Mutual Agreement.

                  This Agreement may be terminated  prior to Consummation (i) by
mutual  agreement  of  Seller  and  Buyer  or (ii) by  Buyer  in the  event of a
substantial  loss under Section 9 and or  cancellation  of the Buyers  financial
sources.  In such event,  this Agreement  shall  terminate and neither Buyer nor
Seller shall have any further  obligation  or liability to the other  hereunder,
except that Sections 15, 16.5,  16.6 and 16.7 of the Agreement shall survive and
continue in full force and effect notwithstanding such termination.

         11.2     Buyer's Default.

                  In the  event  that  the  transactions  contemplated  by  this
Agreement are not consummated on the Consummation  Date (if and as extended) due
to Buyer's failure or refusal to close,  and all of the conditions  specified in
Section 7 (other than deliveries to be made at the Consummation) shall have been
satisfied or tendered,  this Agreement shall be  automatically  terminated,  and
Seller shall be entitled to the Deposit.

         11.3     Seller's Default.

                  In the  event  that  the  transactions  contemplated  by  this
Agreement are not consummated on the Consummation  Date (if and as extended) due
to Seller's failure or refusal to close, and all of the conditions  specified in
Section 7 (other than deliveries to be made at the Consummation) shall have been
satisfied or tendered,  this Agreement shall be  automatically  terminated,  and
Buyer  shall be  entitled  the  Deposit  back and to  pursue  any and all of its
equitable and legal causes of action against Seller.

         11.4     Termination by Buyer or Seller.

                  This  Agreement  may be  terminated  by Buyer or Seller at any
time  after  the  Termination  Date  in the  event  that  any  condition  to the
terminating  party's obligations set forth in Sections 6 or 7 hereof (other than
deliveries  to be made  at the  Consummation)  has not  been  (i)  satisfied  or
tendered by the party owing  performance or (ii) waived by the terminating party
(provided  that the  failure of such  condition  is not due to the breach of the
terminating  party),  and upon such termination,  neither Buyer nor Seller shall
have any further  obligation  or liability to the other  hereunder,  except that
Sections 15, 16.5, 16.6 and 16.7 of this Agreement shall survive and continue in
full force and effect notwithstanding such termination.

12.      NOTICE.

         All notices and other communications  hereunder shall be in writing and
delivered by one of the following methods of delivery:  (i) personally,  (ii) by
registered or certified mail, return receipt requested,  postage prepaid,  (iii)

                                       28
<PAGE>

by overnight courier,  or (iv) by legible facsimile  transmission,  in all cases
addressed as follows:

         To Buyer:

                  NexHorizon Communications, Inc.
                  9737 Wadsworth Parkway
                  Broomfield, CO 80021

                  Attn: Calvin D. Smiley, CEO

           With a copy to:

                  Michael Littman
                  7609 Ralston Road
                  Arvada, Colorado 80002

         To Seller:

                  CHULA VISTA CABLE, LTD.
                  396 E Street
                  Chula Vista, CA 91910

                  Attention: Barbara Altbaum

            With a copy to:

                  Higgs Fletcher & Mack
                  Attorney at Law
                  Attn: Richard W. Sweat
                  401 West A Street, Suite 2600
                  San Diego, CA 92101

or to such address as such party may indicate by a notice delivered to the other
parties  hereto.  Notice shall be deemed  received the same day (when  delivered
personally),  five (5) days after  mailing (when sent by registered or certified
mail) or the next  business  day (when sent by  facsimile  transmission  or when
delivered  by overnight  courier).  Any party to this  Agreement  may change its
address  to which  all  communications  and  notices  may be sent  hereunder  by
addressing notices of such change in the manner provided.

13.      BROKERAGE COMMISSION.

         Buyer and Seller  each  represent  and  warrant  that all  negotiations
relative to this Agreement and the  transactions  contemplated  hereby have been
carried on by each directly with the other without  intervention  of any person.
Each party to this Agreement indemnifies the other and holds it harmless against

                                       29
<PAGE>

and in respect of any claim against the other for brokerage or other commissions
relative  to this  Agreement  and the  transactions  contemplated  hereby by the
indemnifying party's employees, agents or consultants.

14.      LAWS GOVERNING.

         The construction,  interpretation and enforcement of this Agreement and
the rights of the parties  hereunder  shall be governed by the laws of the State
of California without regard to any jurisdiction's conflicts of law provisions.

15.      MISCELLANEOUS.

         15.1     Counterparts; Telecopy.

                  This  Agreement  may be executed in one or more  counterparts,
each of which shall be deemed an original,  but all of which when taken together
shall  constitute one and the same  instrument.  Delivery of executed  signature
pages hereof by facsimile  transmission  shall constitute  effective and binding
execution and delivery hereof.

         15.2     Assignment.

                  This Agreement may not be assigned by any party hereto without
the prior written consent of the other parties;  provided,  however,  that Buyer
may assign this  Agreement to one or more of the  subsidiaries  or affiliates of
Buyer,  without the prior  written  consent of Seller,  provided  Buyer  remains
primarily liable to fully perform the terms of this Agreement; provided, further
that such  assignment  does not cause any  consent or  approval  required  to be
obtained hereunder to be withheld, delayed or otherwise conditioned.

         15.3     Entire Agreement.

                  This Agreement is an integrated document,  contains the entire
agreement between the parties, wholly cancels, terminates and supersedes any and
all previous and/or contemporaneous oral agreements,  negotiations,  commitments
and writings between the parties hereto with respect to such subject matter.  No
change,  modification,   termination,   notice  of  termination,   discharge  or
abandonment  of  this  Agreement  or any  of  the  provisions  hereof,  nor  any
representation,  promise  or  condition  relating  to this  Agreement,  shall be
binding upon the parties hereto unless made in writing and signed by the parties
hereto,  except that termination or notices of termination which may be effected
pursuant to the terms of this  Agreement by either party to the Agreement  shall
be binding if made in writing and signed by the applicable party.

         15.4     Interpretation.

                  Article  titles and  headings to Sections  herein are inserted
for  convenience  of  reference  only and are not intended to be a part of or to
affect the meaning or interpretation of any of the provisions of this Agreement.
All references to Sections, subsections, Schedules or Exhibits contained in this
Agreement are  references to the Sections and  subsections of this Agreement and

                                       30
<PAGE>

the  Schedules  or Exhibits  described  on the list  immediately  following  the
signature  page  hereto  and  attached  hereto.   All  references  to  the  word
"including" shall have the meaning  represented by the phrase "including without
limitation."

         15.5     Expenses.

                  Each  of  Seller  and  Buyer  shall  pay  its  own  attorneys,
accountants,  advisors,  investment  bankers,  brokers  and  other  expenses  in
connection with the transaction  contemplated hereby, except that the Buyer will
pay all costs related to the audits required to consummate  this  transaction in
accordance with federal  regulations and the Buyer's financial  sources.  In the
event this  transaction  does not close the Buyer agrees to provide the audit as
consideration  to the Seller for future use as total and final settlement of any
and all future claims.

         15.6     Confidentiality.

                  Any and all  information  obtained  by Buyer  from  Seller  in
connection  with  the  transactions  contemplated  by this  Agreement  which  is
confidential in nature (collectively,  the "Evaluation  Material") shall be kept
strictly  confidential  by  Buyer  prior  to the  Consummation  Date;  provided,
however,  that any  Evaluation  Material may be disclosed to agents,  employees,
officers, directors,  investors, advisors and other representatives of Buyer who
need to know such Evaluation  Material (it being agreed that such representative
shall be  informed  by  Buyer  of the  confidential  nature  of such  Evaluation
Material  and  shall  be  directed  to  deal  with  such   Evaluation   Material
confidentially)  and,  further,  may be disclosed to the extent required by law,
including applicable  securities laws, or by written or oral question or request
for information or documents in legal proceedings,  interrogatories,  subpoenas,
civil  investigative  demands  or  similar  processes.   For  purposes  of  this
Agreement, the term "Evaluation Material" does not include information which (i)
becomes  generally  available to the public other than as a result of disclosure
by Buyer or any Buyer  representative in violation of the terms hereof, (ii) was
available on a non-confidential  basis prior to disclosure to Buyer by Seller or
any of its directors,  officers, employees, agents or representatives,  or (iii)
becomes available to Buyer on a non-confidential basis from a source (other than
Seller or any of its directors,  officers, employees, agents or representatives)
which is not bound by a confidentiality agreement with Seller.

                  The above  provisions  shall apply likewise to the Seller with
respect to any such information provided by the Buyer to the Seller.

         15.7     Public Announcements.

                  Neither  Buyer nor Seller  shall,  without the approval of the
other party (which may not be unreasonably withheld),  make any press release or
other public  announcement  concerning  the  transactions  contemplated  by this
Agreement,  except as and to the extent that such party shall be so obligated by
law  (including  any legal  obligation  imposed on Buyer in connection  with its
status as a publicly-held  corporation),  in which case the other party shall be
advised  and  Buyer  and  Seller  shall use its  reasonable  efforts  to cause a
mutually agreeable release or announcement to be issued.

                                       31
<PAGE>

         15.8     Waivers.

                  Any term or provision of this Agreement may be waived,  or the
time for its  performance may be extended,  by the party or parties  entitled to
the benefit thereof, but any such waiver must be in writing and must comply with
the notice  provisions  contained in Section 13. The failure of any party hereto
to enforce at any time any provision of this Agreement shall not be construed to
be a waiver of such  provision,  nor in any way to affect the  validity  of this
Agreement  or any part  hereof or the right of any party  thereafter  to enforce
each and every such  provision.  No waiver of any breach of this Agreement shall
be held to constitute a waiver of any other or subsequent breach.

         15.9     Partial Invalidity.

                  Wherever possible,  each provision hereof shall be interpreted
in such a manner as to be effective and valid under  applicable law, but in case
any one or more of the provisions  contained  herein shall,  for any reason,  be
held to be invalid,  illegal or unenforceable  in any respect,  such invalidity,
illegality  or  unenforceability  shall not affect any other  provisions of this
Agreement,  and this Agreement shall be construed as if such invalid, illegal or
unenforceable provisions had never been contained herein, unless the deletion of
such provision or provisions  would result in such a material change as to cause
the completion of the transactions contemplated hereby to be unreasonable.

         15.10    Incorporation by Reference.

                  Any and all Schedules, Exhibits or Recitals referred to herein
or attached hereto are incorporated  herein by reference thereto as though fully
set forth at the point referred to in this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly  authorized  corporate  officers  on the day and year first  above
written.

                                   NEXHORIZON COMMUNICATIONS, INC.

                                        By: /s/ Calvin D. Smiley, Sr.
                                            ----------------------------------
                                            Calvin D. Smiley, Sr., CEO

                                   CABLE VISTA CABLE, LTD. dba Chula Vista Cable

                                         By: /s/ Barbara Altbaum
                                             ----------------------------------
                                              Barbara Altbaum, General Partner

                                       32
<PAGE>

EXHIBITS

         Schedule 1.3       Excluded Assets

         Schedule 2.6       Purchase Price Allocation

         Schedule 3.4       Title to Assets

         Schedule 3.5       Subscribers Exclusion List

         Schedule 3.6       Franchise Agreements

         Schedule 3.7       Pole Attachment Agreements

         Schedule 3.8       Real Property

         Schedule 3.8a      Leases and Rights of Way

         Schedule 3.9       Other Material Contracts and Leases

         Schedule 3.10      Litigation or Judgements

         Schedule 3.11      Tax Returns and Payments

         Schedule 3.12      Condition of Assets to be Acquired and Insurance

                                       33

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