Document:

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                                                                 EXHIBIT 10.2

                            INDEMNIFICATION AGREEMENT

       This INDEMNIFICATION AGREEMENT (the "Agreement") is made and entered into
as of this ___ day of January 2002, by and between J.L. Halsey Corporation, a
Delaware corporation (the "Company"), and _______________, a resident of the
State of _________ ("Indemnitee").

                                    RECITALS:

       A. Indemnitee is willing to serve, continue to serve, and to take on
additional service for or on behalf of the Company on the condition that he be
indemnified to the fullest extent permitted by law.

       B. The Certificate of Incorporation of the Company requires the Company
to indemnify its directors and officers to the fullest extent permitted by law.

                                   AGREEMENTS:

       NOW, THEREFORE, in consideration of the foregoing premises, Indemnitee's
agreement to serve as a member of the Board of Directors of the Company, and the
covenants contained in this Agreement, the Company and Indemnitee hereby
covenant and agree as follows:

       1. CERTAIN DEFINITIONS.

          (a) ACQUIRING PERSON: shall mean any Person other than (i) the
Company, (ii) any of the Company's Subsidiaries, (ii) any employee benefit plan
of the Company or of a Subsidiary of the Company or of a corporation owned
directly or indirectly by the stockholders of the Company in substantially the
same proportions as their ownership of stock of the Company, or (iv) any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company or of a Subsidiary of the Company or of a corporation owned directly or
indirectly by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company.

          (b) CHANGE OF CONTROL: shall be deemed to have occurred if:

              (i) an Acquiring Person is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), directly or indirectly, of securities of the Company
representing thirty percent or more of the combined voting power of the then
outstanding Voting Securities of the Company; or

              (ii) members of the Incumbent Board cease for any reason to
constitute at least a majority of the Board of Directors of the Company; or

              (iii) a public announcement is made of a tender or exchange offer
by any Acquiring Person for fifty percent or more of the outstanding Voting
Securities of the

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Company, and the Board of Directors of the Company approves or fails to oppose
that tender or exchange offer in its statements in Schedule 14D-9 under the
Exchange Act; or

              (iv) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation or partnership (or, if
no such approval is required, the consummation of such a merger or consolidation
of the Company); or

              (v) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets (other than factoring
the Company's current receivables or escrows due), (or, if no such approval is
required, the decision by the Board of Directors of the Company to proceed with
such a liquidation, sale, or disposition in one transaction or series of related
transactions).

          (c) CLAIM: any threatened, pending, or completed action, suit, or
proceeding (including, without limitation, securities laws actions, suits, and
proceedings), or any inquiry or investigation (including discovery), whether
conducted by the Company or any other party, that Indemnitee in good faith
believes might lead to the institution of any action, suit, or proceeding,
whether civil, criminal, administrative, investigative, or other.

          (d) EXPENSES: all costs, expenses (including attorneys' and expert
witnesses' fees), and obligations paid or incurred in connection with
investigating, defending (including affirmative defenses and counterclaims),
being a witness in, or participating in (including on appeal), or preparing to
defend, be a witness in, or participate in, any Claim relating to any
Indemnifiable Event.

          (e) INCUMBENT BOARD: individuals who, as of the date of merger of
NAHC, Inc., a Delaware corporation, with and into the Company, constitute the
Board of Directors of the Company and any other individual who becomes a
director of the Company after that date and whose election or appointment by the
Board of Directors or nomination for election by the Company's stockholders was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board

          (f) INDEMNIFIABLE EVENT: an event or occurrence related to the fact
that Indemnitee is or was a director, officer, employee, agent, or fiduciary of
the Company, or is or was serving at the request of the Company as a director,
officer, employee, trustee, agent, or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust, or other enterprise,
or by reason of any thing done or not done by Indemnitee in any such capacity.
For purposes of this Agreement, the Company agrees that Indemnitee's service on
behalf of or with respect to any Subsidiary of the Company shall be deemed to be
at the request of the Company.

          (g) PERSON: shall mean any person or entity of any nature whatsoever,
specifically including an individual, a firm, a company, a corporation, a
partnership, a trust or other entity. A Person, together with that Person's
Affiliates and Associates (as those terms are defined in Rule 12b-2 under the
Exchange Act), and any Persons acting as a partnership, limited partnership,
joint venture, association, syndicate, or other group (whether or not formally
organized), or otherwise acting jointly or in concert or in a coordinated or
consciously parallel

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manner (whether or not pursuant to any express agreement), for the purpose of
acquiring, holding, voting, or disposing of securities of the Company with such
Person, shall be deemed a single "Person."

          (h) POTENTIAL CHANGE OF CONTROL: shall be deemed to have occurred if
(i) the Company enters into an agreement, the consummation of which would result
in the occurrence of a Change of Control; (ii) any Person (including the
Company) publicly announces an intention to take or to consider taking actions
that, if consummated, would constitute a Change in Control; (iii) any Acquiring
Person who is or becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 10% or more of the combined voting power
of the then outstanding Voting Securities of the Company increases his
beneficial ownership of such securities by 5% or more over the percentage so
owned by that Person on the date hereof; or (iv) the Board of Directors of the
Company adopts a resolution to the effect that, for purposes of this Agreement,
a Potential Change of Control has occurred.

          (i) REVIEWING PARTY: any appropriate person or body consisting of a
member or members of the Company's Board of Directors or any other person or
body appointed by the Board (including Special Counsel referred to in Section 3)
who is not a party to the particular Claim for which Indemnitee is seeking
indemnification.

          (j) SPECIAL COUNSEL: special, independent counsel selected by
Indemnitee and approved by the Company (which approval shall not be unreasonably
withheld), and who has not otherwise performed services for the Company or for
Indemnitee within the last three years (other than as Special Counsel under this
Agreement or similar agreements).

          (k) SUBSIDIARY: with respect to any Person, any corporation or
other entity of which a majority of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by that
Person.

          (l) VOTING SECURITIES: any securities that vote generally in the
election of directors or in the selection of any other similar governing body.

       2. BASIC INDEMNIFICATION AND EXPENSE REIMBURSEMENT ARRANGEMENT.

          (a) In the event Indemnitee was, is, or becomes a party to or witness
or other participant in, or is threatened to be made a party to or witness or
other participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest
extent permitted by law as soon as practicable but in any event no later than 30
days after written demand is presented to the Company, against any and all
Expenses, judgments, fines, penalties, and amounts paid in settlement (including
all interest, assessments, and other charges paid or payable in connection with
or in respect of such Expenses, judgments, fines, penalties, or amounts paid in
settlement) of or with respect to that Claim. Notwithstanding the foregoing, the
obligations of the Company under Section 2(a) shall be subject to the condition
that the Reviewing Party shall not have determined (in a written opinion, in any
case in which Special Counsel referred to in Section 3 hereof is involved) that
Indemnitee would not be permitted to be indemnified under applicable law.
Nothing contained in this Agreement shall require any determination under this
Section 2(a) to be made to the Reviewing Party prior to the

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disposition or conclusion of the Claim against the Indemnitee; provided,
however, that Expense Advances shall continue to be made by the Company pursuant
to and to the extent required by the provisions of Section 2(b).

          (b) If so requested by Indemnitee, the Company shall pay any and all
Expenses incurred by Indemnitee (or, if applicable, reimburse Indemnitee for any
and all Expenses incurred by Indemnitee and previously paid by Indemnitee)
within two business days after such request (an "Expense Advance"). The Company
shall be obligated to make or pay an Expense Advance in advance of the final
disposition or conclusion of any Claim. In connection with any request for an
Expense Advance, if requested by the Company, Indemnitee or Indemnitee's counsel
shall submit an affidavit stating that the Expenses incurred were reasonable.
Any dispute as to the reasonableness of any Expense shall not delay an Expense
Advance by the Company, and the Company agrees that any such dispute shall be
resolved only upon the disposition or conclusion of the underlying Claim against
the Indemnitee. If, when, and to the extent that the Reviewing Party determines
that Indemnitee would not be permitted to be indemnified with respect to a Claim
under applicable law, the Company shall be entitled to be reimbursed by
Indemnitee and Indemnitee hereby agrees to reimburse the Company without
interest (which agreement shall be an unsecured obligation of Indemnitee) for
all related Expense Advances theretofore made or paid by the Company; provided,
however, that if Indemnitee has commenced legal proceedings in a court of
competent jurisdiction to secure a determination that Indemnitee should be
indemnified under applicable law, any determination made by the Reviewing Board
that Indemnitee would not be permitted to be indemnified under applicable law
shall not be binding and Indemnitee shall not be required to reimburse the
Company for any Expense Advance, and the Company shall be obligated to continue
to make Expense Advances, until a final judicial determination is made with
respect thereto (as to which all rights of appeal therefrom have been exhausted
or lapsed). If there has not been a Change of Control, the Reviewing Party shall
be selected by the Board of Directors of the Company. If there has been a Change
in Control, the Reviewing Party shall be advised by or shall be Special Counsel
referred to in Section 3 hereof, if and as Indemnitee so requests. If there has
been no determination by the Reviewing Party or if the Reviewing Party
determines that Indemnitee substantively would not be permitted to be
indemnified in whole or in part under applicable law, Indemnitee shall have the
right to commence litigation in any court in the states of Delaware or
Pennsylvania having subject matter jurisdiction thereof and in which venue is
proper seeking an initial determination by the court or challenging any such
determination by the Reviewing Party or any aspect thereof, and the Company
hereby consents to service of process and to appear in any such proceeding. Any
determination by the Reviewing Party otherwise shall be conclusive and binding
on the Company and Indemnitee.

       3. CHANGE OF CONTROL. The Company agrees that, if there is a Change in
Control and if Indemnitee requests in writing that Special Counsel advise the
Reviewing Party or be the Reviewing Party, then the Company shall not deny any
indemnification payments (and Expense Advances shall continue to be paid by the
Company pursuant to Section 2(b)) that Indemnitee requests or demands under this
Agreement or any other agreement or law now or hereafter in effect relating to
Claims for Indemnifiable Events. The Company further agrees not to request or
seek reimbursement from Indemnitee of any related Expense Advances unless, with
respect to a denied indemnification payment, Special Counsel has rendered its
written opinion to the Company and Indemnitee that the Company would not be
permitted under applicable law to pay

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Indemnitee such indemnification payment. The Company agrees to pay the
reasonable fees of Special Counsel referred to in this Section 3 and to
indemnify fully Special Counsel against any and all expenses (including
attorneys' fees), claims, liabilities, and damages arising out of or relating to
this Agreement or Special Counsel's engagement pursuant hereto.

       4. ESTABLISHMENT OF TRUST. In the event of a Potential Change in Control,
the Company shall, upon written request by Indemnitee, create a trust for the
benefit of Indemnitee (the "Trust") and from time to time upon written request
of Indemnitee shall fund the Trust in an amount sufficient to satisfy any and
all Expenses reasonably anticipated at the time of each such request to be
incurred in connection with investigating, preparing for, and defending any
Claim relating to an Indemnifiable Event, and any and all judgments, fines,
penalties, and settlement amounts (including all interest, assessments, and
other charges paid or payable in connection with or in respect of such expenses,
judgments, fines, penalties, and settlement amounts) of any and all Claims
relating to an Indemnifiable Event from time to time actually paid or claimed,
reasonably anticipated, or proposed to be paid. The amount or amounts to be
deposited in the Trust pursuant to the foregoing funding obligation shall be
determined by the Reviewing Party, in any situation in which Special Counsel
referred to in Section 3 is involved. The terms of the Trust shall provide that,
upon a Change in Control, (i) the Trust shall not be revoked or the principal
thereof invaded, without the written consent of Indemnitee; (ii) the trustee of
the Trust shall advance, within two business days of a request by Indemnitee,
any and all expenses to Indemnitee (and Indemnitee hereby agrees to reimburse
the trust under the circumstances in which Indemnitee would be required to
reimburse the Company for Expense Advances under Section 2(b) of this
Agreement); (iii) the Trust shall continue to be funded by the Company in
accordance with the funding obligation set forth above; (iv) the trustee of the
Trust shall promptly pay to Indemnitee all amounts for which Indemnitee shall be
entitled to indemnification pursuant to this Agreement or otherwise; and (v) all
unexpended funds in that Trust shall revert to the Company upon a final
determination by the Reviewing Party or a court of competent jurisdiction, as
the case may be, that Indemnitee has been fully indemnified under the terms of
this Agreement. The trustee of the Trust shall be chosen by Indemnitee. Nothing
in this Section 4 shall relieve the Company of any of its obligations under this
Agreement.

       5. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall
(within two business days of that request) advance those costs and expenses to
Indemnitee, that are incurred by Indemnitee in connection with any claims
asserted against or action brought by Indemnitee for (i) indemnification or
advance payment of Expenses by the Company under this Agreement or any other
agreement or provision of the Company's Certificate of Incorporation or Bylaws
now or hereafter in effect relating to Claims for Indemnifiable Events or (ii)
recovery under any directors' and officers' liability insurance policies
maintained by the Company, regardless of whether Indemnitee ultimately is
determined to be entitled to that indemnification, advance expense payment, or
insurance recovery, as the case may be.

       6. PARTIAL INDEMNITY. If Indemnitee is entitled under any provision of
this Agreement to indemnification by the Company for some or a portion of the
Expenses, judgments, fines, penalties, and amounts paid in settlement of a Claim
but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is
entitled. Moreover, notwithstanding any other provision of this

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Agreement, to the extent that Indemnitee has been successful on the merits or
otherwise in defense of any or all Claims relating in whole or in part to an
Indemnifiable Event or in defense of any issue or matter therein, including
dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.

       7. CONTRIBUTION.

          (a) CONTRIBUTION PAYMENT. To the extent the indemnification provided
for under any provision of this Agreement is determined (in the manner
hereinabove provided) not to be permitted under applicable law, then in the
event Indemnitee was, is or becomes a party to or witness or other participant
in, or is threatened to be made a party to or witness or other participant in, a
Claim by reason of (or arising in part out of) an Indemnifiable Event, the
Company, in lieu of Indemnifying Indemnitee, shall contribute to the amount of
any and all Expenses, judgments, fines, or penalties assessed against or
incurred or paid by Indemnitee on account of that Claim and any and all amounts
paid in settlement of that Claim (including all interest, assessments, and other
charges paid or payable in connection with or in respect of such Expenses,
judgments, fines, penalties, or amounts paid in settlement) for which such
indemnification is not permitted ("Contribution Amounts"), in such proportion as
is appropriate to reflect the relative fault with respect to the Indemnifiable
Event giving rise to the Contribution Amounts of Indemnitee, on the one hand,
and of the Company and any and all other parties (including officers and
directors of the Company other than Indemnitee) who may be at fault with respect
to such Indemnifiable Event (collectively, including the Company, the "Third
Parties") on the other hand.

          (b) RELATIVE FAULT. The relative fault of the Third Parties and the
Indemnitee shall be determined (i) by reference to the relative fault of
Indemnitee as determined by the court or other governmental agency assessing the
Contribution Damages or (ii) to the extent such court or other governmental
agency does not apportion relative fault, by the Reviewing Party (which shall
include Special Counsel) after giving effect to, among other things, the
relative intent, knowledge, access to information, and opportunity to prevent or
correct the applicable Indemnifiable Event and other relevant equitable
considerations of each party. The Company and Indemnitee agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 7(b).

       8. BURDEN OF PROOF. In connection with any determination by the Reviewing
Party or otherwise as to whether Indemnitee is entitled to be indemnified under
any provision of this Agreement or to receive contribution pursuant to Section 7
of this Agreement, the burden of proof shall be on the Company to establish that
Indemnitee is not so entitled.

       9. NO PRESUMPTION. For purposes of this Agreement, the termination of any
claim, action, suit, or proceeding, by judgment, order, settlement (whether with
or without court approval), or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that Indemnitee did not meet any
particular standard of conduct or have any particular belief or that a court has
determined that indemnification is not permitted by applicable law.

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<PAGE>

       10. ACTION OF OTHERS. The knowledge and/or actions, or failure to act, of
any director, officer, agent, or employee of the Company shall not be imputed to
the Indemnitee for purposes of determining the right to indemnification under
this Agreement.

       11. INDEMNITEE'S INDIVIDUAL CAPACITY. The Company acknowledges that the
Indemnitee is undertaking to act as an officer or director of the Company at the
request of the Company and solely in the Indemnitee's individual capacity and
not in any capacity as a director, officer, member, partner, employee, trustee,
or other representative of any other corporation, partnership, association,
business trust, trust, or similar organization or entity. The Company covenants
and agrees to indemnify any such organization or entity from and against any and
all judgments, fines, or penalties assessed against or incurred or paid by such
organization or entity and any and all amounts paid in settlement (including all
interest, attorneys' and expert witnesses' fees, and other charges paid or
payable in connection with such judgments, fines, penalties, or amounts paid in
settlement) that relate to any action or inaction taken in the course of the
Indemnitee's duties as an officer or director of the Company.

       12. NON-EXCLUSIVITY. The rights of Indemnitee hereunder shall be in
addition to any other rights Indemnitee may have under the Company's Bylaws or
Certificate of Incorporation or the Delaware General Corporation Law or
otherwise. To the extent that a change in the Delaware General Corporation Law
(whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Company's Bylaws or
Certificate of Incorporation and this Agreement, it is the intent of the parties
hereto that Indemnitee shall enjoy by this Agreement the greater benefits so
afforded by that change.

       13. LIABILITY INSURANCE. Except as otherwise agreed to by the Company and
Indemnitee in a written agreement, to the extent the Company maintains an
insurance policy or policies providing directors' and officers' liability
insurance, Indemnitee shall be covered by that policy or those policies, in
accordance with its or their terms, to the maximum extent of the coverage
available for any Company director or officer.

       14. PERIOD OF LIMITATIONS. No legal action shall be brought and no cause
of action shall be asserted by or on behalf of the Company or any affiliate of
the Company against Indemnitee or Indemnitee's spouse, heirs, executors, or
personal or legal representatives after the expiration of three years from the
date of accrual of that cause of action, and any claim or cause of action of the
Company or its affiliate shall be extinguished and deemed released unless
asserted by the timely filing of a legal action within that three-year period;
provided, however, that, if any shorter period of limitations is otherwise
applicable to any such cause of action, the shorter period shall govern.

       15. AMENDMENTS. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provision of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall that waiver constitute a continuing waiver.

       16. SUBROGATION. In the event of payment under this Agreement, the
Company shall, subject to the conflicting rights of an insurer pursuant to any
policy contemplated by Section 13 hereof, be subrogated to the extent of that
payment to all of the rights of recovery of Indemnitee,

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who shall execute all papers required and shall do everything that may be
necessary to secure those rights, including the execution of the documents
necessary to enable the Company effectively to bring suit to enforce those
rights.

       17. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under
this Agreement to make any payment in connection with any claim made against
Indemnitee to the extent Indemnitee has otherwise actually received payment
(under an insurance policy, provision of the Company's Certificate of
Incorporation or Bylaws or otherwise) of the amounts otherwise indemnifiable
hereunder.

       18. BINDING EFFECT. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors, assigns (including any direct or indirect successor by purchase,
merger, consolidation, or otherwise to all or substantially all of the business
or assets of the Company), spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or
another enterprise at the Company's request.

       19. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future laws effective during
the term hereof, that provision shall be fully severable; this Agreement shall
be construed and enforced as if that illegal, invalid, or unenforceable
provision had never comprised a part hereof; and the remaining provisions shall
remain in full force and effect and shall not be affected by the illegal,
invalid, or unenforceable provision or by its severance from this Agreement.
Furthermore, in lieu of that illegal, invalid, or unenforceable provision, there
shall be added automatically as a part of this Agreement a provision as similar
in terms to the illegal, invalid, or unenforceable provision as may be possible
and be legal, valid, and enforceable.

       20. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware applicable to
contracts made and to be performed in that state without giving effect to the
principles of conflicts of laws.

       21. HEADINGS. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.

       22. NOTICES. Whenever this Agreement requires or permits notice to be
given by one party to the other, such notice must be in writing to be effective
and shall be deemed delivered and received by the party to whom it is sent upon
actual receipt (by any means) of such notice. Receipt of a notice by any officer
of the Company shall be deemed receipt of such notice by the Company.

       23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but in making proof
hereof it shall not be necessary to produce or account for more than one such
counterpart.

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       EXECUTED as of the date first written above.

                             J.L. HALSEY CORPORATION.

                             By:
                                   -----------------------------------
                                   David R. Burt
                                   Chief Executive Officer

                                   ------------------------------------
                                   ________________, IndemniteePrepared by MERRILL CORPORATION

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MDU COMMUNICATIONS INTERNATIONAL, INC.
  
    2001 EMPLOYEE STOCK PURCHASE PLAN    
  

        The following constitute the provisions of the 2001 Employee Stock Purchase Plan of MDU Communications International, Inc. (the "Company"). 

        1.    Purpose. The purpose of the Plan is to provide employees of the Company and its Designated Parents
or Subsidiaries with an opportunity to purchase Common Stock of the Company through accumulated payroll deductions. It is the intention of the Company to have the Plan qualify as an "Employee Stock
Purchase Plan" under Section 423 of the Code. The provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in a manner consistent with the requirements of
that section of the Code. 

        2.    Definitions. As used herein, the following definitions shall apply: 

        (a)  "Administrator" means either the Board or a committee of the Board that is responsible for the administration of the Plan
as is designated from time to time by resolution of the Board. 

        (b)  "Applicable Laws" means the legal requirements relating to the administration of employee stock purchase plans, if any,
under applicable provisions of federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange or national market system, and the rules of any
foreign jurisdiction applicable to participation in the Plan by residents therein. 

        (c)  "Board" means the Board of Directors of the Company. 

        (d)  "Change in Control" means a change in ownership or control of the Company effected through the direct or indirect
acquisition by any person or related group of persons (other than an acquisition from or by the Company or by a Company-sponsored employee benefit plan or by a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's
outstanding securities. 

        (e)  "Code" means the Internal Revenue Code of 1986, as amended. 

        (f)    "Common Stock" means the common stock of the Company. 

        (g)  "Company" means MDU Communications International, Inc., a Delaware corporation. 

        (h)  "Compensation" means an Employee's base salary, overtime, bonus and annual award and other incentive payments from the
Company or one or more Designated Parents or Subsidiaries, including such amounts of base salary as are deferred by the Employee (i) under a qualified cash or deferred arrangement described in
Section 401(k) of the Code, or (ii) to a plan qualified under Section 125 of the Code. Compensation does not include reimbursements or other expense allowances, fringe benefits
(cash or noncash), moving expenses, deferred compensation, contributions (other than contributions described in the first sentence) made on the Employee's behalf by the Company or one or more
Designated Parents or Subsidiaries under any employee benefit or welfare plan now or hereafter established, and any other payments not specifically referenced in the first sentence. 

        (i)    "Corporate Transaction" means any of the following transactions: 

        (1)  a
merger or consolidation in which the Company is not the surviving entity, except for a transaction the principal purpose of which is to change the state in which the
Company is incorporated; 

1

 

        (2)  the
sale, transfer or other disposition of all or substantially all of the assets of the Company (including the capital stock of the Company's subsidiary corporations)
in connection with complete liquidation or dissolution of the Company; 

        (3)  any
reverse merger in which the Company is the surviving entity but in which securities possessing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to a person or persons different from those who held such securities immediately prior to such merger; or 

        (4)  acquisition
by any person or related group of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial ownership (within the
meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities (whether
or not in a transaction also constituting a Change in Control), but excluding any such transaction that the Administrator determines shall not be a Corporate Transaction. 

        (j)    "Designated Parents or Subsidiaries" means the Parents or Subsidiaries which have been designated by the Administrator
from time to time as eligible to participate in the Plan. 

        (k)  "Effective Date" means the 23rd day of October, 2001. However, should any Designated Parent or Subsidiary
become a participating company in the Plan after such date, then such entity shall designate a separate Effective Date with respect to its employee-participants. 

        (l)    "Employee" means any individual, including an officer or director, who is an employee of the Company or a Designated
Parent or Subsidiary for purposes of Section 423 of the Code. For purposes of the Plan, the employment relationship shall be treated as continuing intact while the individual is on sick leave
or other leave of absence approved by the individual's employer. Where the period of leave exceeds ninety (90) days and the individual's right to reemployment is not guaranteed either by
statute or by contract, the employment relationship will be deemed to have terminated on the ninety-first (91st) day of such leave, for purposes of determining eligibility to participate in the Plan. 

        (m)  "Enrollment Date" means the first day of each Offer Period. 

        (n)  "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        (o)  "Exercise Date" means the last day of each Purchase Period. 

        (p)  "Fair Market Value" means, as of any date, the value of Common Stock determined as follows: 

        (1)  where
there exists a public market for the Common Stock, the Fair Market Value shall be (i) the closing price for a Share on the date of the determination (or, if
no closing price was reported on that date, on the last trading date on which a closing price was reported) on the stock exchange determined by the Administrator to be the primary market for the
Common Stock or the NASDAQ National Market, whichever is applicable or (ii) if the Common Stock is not traded on any such exchange or national market system, the average of the closing bid and
asked prices of a Share on the Over the Counter Bulleting Board on the date of the determination (or, if no such prices were reported on that
date, on the last date on which such prices were reported), in each case, as reported in such source as the Administrator deems reliable; or 

        (2)  in
the absence of an established market of the type described in (1), above, for the Common Stock, and subject to (3), below, the Fair Market Value thereof shall be
determined by the Administrator in good faith. 

        (q)  "Offer Period" means an Offer Period established pursuant to Section 4 hereof. 

2

 

        (r)  "Parent" means a "parent corporation," whether now or hereafter existing, as defined in Section 424(e) of the
Code. 

        (s)  "Participant" means an Employee of the Company or Designated Parent or Subsidiary who is actively participating in the
Plan. 

        (t)    "Plan" means this 2001 Employee Stock Purchase Plan. 

        (u)  "Purchase Period" means a period of three months, commencing on January 1, April 1, July 1 and
October 1 of each year and terminating on the next following March 31, June 30, September 30 and December 31, respectively; provided, however, that the first
Purchase Period shall commence on the Effective Date and shall end on December 31, 2001. 

        (v)  "Purchase Price" shall mean an amount equal to 85% of the Fair Market Value of a share of Common Stock at the beginning
of the Purchase Period or on the Exercise Date, whichever is lower. 

        (w)  "Reserves" means the sum of the number of shares of Common Stock covered by each option under the Plan which have not yet
been exercised and the number of shares of Common Stock which have been authorized for issuance under the Plan but not yet placed under option. 

        (x)  "Subsidiary" means a "subsidiary corporation," whether now or hereafter existing, as defined in Section 424(f) of
the Code. 

        3.    Eligibility.

        (a)  General. Any individual who is an Employee on a given Enrollment Date shall be eligible to participate in the Plan for
the Offer Period commencing with such Enrollment Date. 

        (b)  Limitations on Grant and Accrual. Any provisions of the Plan to the contrary notwithstanding, no Employee shall be
granted an option under the Plan (i) if, immediately after the grant, such Employee (taking into account stock owned by any other person whose stock would be attributed to such Employee
pursuant to Section 424(d) of the Code) would own stock and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any Parent or Subsidiary, or (ii) which permits the Employee's rights to purchase stock under all employee stock purchase plans of the Company and its
Parents or Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the Fair Market Value of the shares at the time such option
is granted) for each calendar year in which such option is outstanding at any time. The determination of the accrual of the right to purchase stock shall be made in accordance with
Section 423(b)(8) of the Code and the regulations thereunder. 

        (c)  Other Limits on Eligibility. Notwithstanding Subsection (a), above, the following Employees shall not be eligible to
participate in the Plan for any relevant Offer Period: (i) Employees whose customary employment is 20 hours or less per week; (ii) Employees whose customary employment is for not
more than 5 months in any calendar year; (iii) Employees who have been employed for fewer than six consecutive calendar months; and (iv) Employees who are subject to rules or laws
of a foreign jurisdiction that prohibit or make impractical the participation of such Employees in the Plan. 

        4.    Offer Periods.

        (a)  The
Plan shall be implemented through overlapping or consecutive Offer Periods until such time as (i) the maximum number of shares of Common Stock available for
issuance under the Plan shall have been purchased or (ii) the Plan shall have been sooner terminated in accordance with Section 19 hereof. The maximum duration of an Offer Period shall
be twenty-seven (27) months. Initially, the Plan shall be implemented through overlapping Offer Periods of 

3

 

twenty-four (24) months' duration commencing January 1, 2002 (except that the initial Offer Period shall commence on the Effective Date and shall end on December 31,
2001. 

        (b)  A
Participant shall be granted a separate option for each Offer Period in which he or she participates. The option shall be granted on the Enrollment Date and shall be
automatically exercised in successive installments on the Exercise Dates ending within the Offer Period. 

        (c)  Except
as specifically provided herein, the acquisition of Common Stock through participation in the Plan for any Offer Period shall neither limit nor require the
acquisition of Common Stock by a Participant in any subsequent Offer Period. 

        5.    Participation.

        (a)  All
Employees eligible to participate in the Plan as of the first Enrollment Date of the Plan shall be eligible to make payroll deductions or a direct payment (up to
$5,000) for shares of the Common Stock on the Exercise Date of the first Purchase Period of the initial Offer Period in an amount up to the aggregate Purchase Price for such number of shares of the
Common Stock as equals fifty percent (50%) of the Participant's annual salary and one hundred percent (100%) of all bonus and other Compensation that he or she receives during calendar year 2001.
Participants shall complete and sign the Subscription Agreement in the form of Exhibit A to this Plan, indicating the amount of payroll deduction and/or direct payment. 

        (b)  After
the initial Offer Period, an eligible Employee may become a Participant in the Plan by completing a subscription agreement authorizing payroll deductions in the
form of Exhibit A to this Plan (or such other form (including electronic forms) as determined by the Administrator from time to time) and filing it with the designated payroll office of the
Company at least three (3) business days prior to the Enrollment Date for the Offer Period in which such participation will commence, unless a later time for filing the subscription agreement
is set by the Administrator for all eligible Employees with respect to a given Offer Period. No direct payment for shares shall be permitted after the initial Offer Period. 

        (c)  For
Offer Periods other than the initial Offer Period, payroll deductions for a Participant shall commence with the first partial or full payroll period beginning on the
Enrollment Date and shall end on the last complete payroll period during the Offer Period, unless sooner terminated by the Participant as provided in Section 10. 

        6.    Payroll Deductions.

        (a)  At
the time a Participant files a subscription agreement, the Participant shall elect to have payroll deductions made during the Offer Period in amounts between one
percent (1%) and not exceeding fifty percent (50%) of the Participant's salary and between one percent (1%) and not exceeding one hundred percent (100%) of all bonuses and other Compensation which the
Participant receives during the Offer Period. 

        (b)  All
payroll deductions made for a Participant shall be credited to the Participant's account under the Plan and will be withheld in whole percentages only. A Participant
may not make any additional payments into such account. 

        (c)  A
Participant may discontinue participation in the Plan as provided in Section 10, or may increase or decrease the rate of payroll deductions during the Offer
Period by completing and filing with the Company a change of status notice in the form of Exhibit B to this Plan (or such other form (including electronic forms) as determined by the
Administrator from time to time) authorizing an increase or decrease in the payroll deduction rate. Any increase or decrease in the rate of a Participant's payroll deductions shall be effective with
the first full payroll period commencing three (3) business days after the Company's receipt of the change of status notice unless the Company elects to process a given change in participation
more quickly. A Participant's subscription agreement (as modified by any change of status notice) shall remain in effect for 

4

 

successive Offer Periods unless terminated as provided in Section 10. The Administrator shall be authorized to limit the number of payroll deduction rate changes during any Offer Period. 

        (d)  Notwithstanding
the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(b) herein, a Participant's payroll
deductions shall be decreased to 0%. Payroll deductions shall recommence at the rate provided in such Participant's subscription agreement, as amended, at the time when permitted under
Section 423(b)(8) of the Code and Section 3(b) herein, unless such participation is sooner terminated by the Participant as provided in Section 10. 

        7.    Grant of Option. On the Enrollment Date, each Participant shall be granted an option to purchase
(at the applicable Purchase Price) such number of shares of the Common Stock in an amount of aggregate Purchase Price as equals up to fifty percent (50%) of the Participant's salary and one hundred
percent (100%) of bonus and other Compensation for the period, subject to adjustment as provided in Section 18 hereof; provided that such option shall be subject to the limitations set forth in
Sections 3(b), 6 and 12 hereof, subject to adjustment as provided in Section 18 hereof. Exercise of the option shall occur as provided in Section 8, unless the Participant has withdrawn
pursuant to Section 10, and the option, to the extent not exercised, shall expire on the last day of the Offer Period. 

        8.    Exercise of Option. The Participant's option for the purchase of shares will be exercised
automatically on each Exercise Date, by applying the accumulated payroll deductions in the Participant's account to purchase the number of full shares subject to the option by dividing such
Participant's payroll deductions accumulated prior to such Exercise Date and retained in the Participant's account as of the Exercise Date by the applicable Purchase Price, provided, however, that if
a Participant is eligible to purchase any shares on the first Exercise Date of the initial Offer Period by direct payment, the Participant's option for the purchase of shares will be exercised to the
extent possible by applying the direct payment amount made by the Participant to purchase the number of full shares subject to the option by dividing such direct payment amount by the applicable
Purchase Price and, provided, further, in no event may the accumulated payroll deductions and direct payment amounts applied to the
purchase of shares on the first Exercise Date of the initial Offer Period exceed the amount specified in Section 5(a). No fractional shares will be purchased; any payroll deductions accumulated
in a Participant's account which are not sufficient to purchase a full share shall be carried over to the next Purchase Period or Offer Period, whichever applies, or returned to the Participant, if
the Participant withdraws from the Plan. Any direct payment amounts which are not sufficient to purchase a full share shall be returned to the Participant. Notwithstanding the foregoing, any amount
remaining in a Participant's account or any excess direct payment amount following the purchase of shares on the Exercise Date due to the application of Section 423(b)(8) of the Code or
Section 7, above, shall be returned to the Participant and shall not be carried over to the next Offer Period or Purchase Period. During a Participant's lifetime, a Participant's option to
purchase shares hereunder is exercisable only by the Participant. 

        9.    Delivery. Upon receipt of a request from a Participant after each Exercise Date on which a
purchase of shares occurs, the Company shall arrange the delivery to such Participant, as promptly as practicable, of a certificate representing the shares purchased upon exercise of the Participant's
option. 

        10.  Withdrawal; Termination of Employment.

        (a)  A
Participant may not withdraw the payroll deductions credited to the Participant's account and not yet used to exercise the Participant's option under the Plan. A
participant may at any time terminate future payroll deductions, but allow accumulated payroll deductions to be used to exercise the Participant's option under the Plan at any time by giving written
notice to the Company in the form of Exhibit B to this Plan (or such other form (including electronic forms) as determined by the Administrator from time to time). Upon termination, no further
payroll deductions for the purchase of shares will be made during the Offer Period, all of the Participant's 

5

 

payroll deductions credited to the Participant's account will be applied to the exercise of the Participant's option on the next Exercise Date, and after such Exercise Date, such Participant's option
for the Offer Period will be automatically terminated. If a Participant withdraws from an Offer Period, payroll deductions will not resume at the beginning of the succeeding Offer Period unless the
Participant delivers to the Company a new subscription agreement. 

        (b)  Upon
termination of a Participant's employment relationship (as described in Section 2(k)), the payroll deductions credited to such Participant's account during
the Offer Period but not yet used to exercise the option will be applied to the purchase of Common Stock on the next Exercise Date. In such a case, no further payroll deductions will be credited to
the Participant's account following the Participant's termination of employment and the Participant's option under the Plan will be automatically terminated after the purchase of Common Stock on the
next scheduled Exercise Date. 

        11.  Interest. No interest shall accrue on the payroll deductions credited to a Participant's account
under the Plan. 

        12.  Stock.

        (a)  Subject
to adjustment upon changes in capitalization of the Company as provided in Section 18, the maximum number of shares of Common Stock which shall be made
available for sale under the Plan shall be two million (2,000,000) shares. If the Administrator determines that on a given Exercise Date the number of shares with respect to which options are to be
exercised may exceed (x) the number of shares then available for sale under the Plan or (y) the number of shares available for sale under the Plan on the Enrollment Date(s) of one or
more of the Offer Periods in which such Exercise Date is to occur, the Administrator may make a pro rata allocation of the shares remaining available for purchase on such Enrollment Dates or Exercise
Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine to be equitable, and shall either continue all Offer Periods then in effect or terminate any one or more
Offer Periods then in effect pursuant to Section 19, below. 

        (b)  A
Participant will have no interest or voting right in shares covered by the Participant's option until such shares are actually purchased on the Participant's behalf in
accordance with the applicable provisions of the Plan. No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date of such purchase. 

        (c)  Shares
to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and his or her spouse. 

        13.  Administration. The Plan shall be administered by the Administrator which shall have full and
exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding, decision
and determination made by the Administrator shall, to the full extent permitted by Applicable Law, be final and binding upon all persons. 

        14.  Designation of Beneficiary.

        (a)  Each
Participant shall file a written designation of a beneficiary who is to receive any shares and cash, if any, from the Participant's account under the Plan in
the event of such Participant's death. If a Participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be effective. 

        (b)  Such
designation of beneficiary may be changed by the Participant (and the Participant's spouse, if any) at any time by written notice. In the event of the death of a
Participant and in the absence of a beneficiary validly designated under the Plan who is living (or in existence) at the time of such
Participant's death, the Company shall deliver such shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been 

6

 

appointed (to the knowledge of the Administrator), the Administrator shall deliver such shares and/or cash to the spouse (or domestic partner, as determined by the Administrator) of the Participant,
or if no spouse (or domestic partner) is known to the Administrator, then to the issue of the Participant, such distribution to be made per stirpes (by right of representation), or if no issue are
known to the Administrator, then to the heirs at law of the Participant determined in accordance with Section 27. 

        15.  Transferability. Neither payroll deductions credited to a Participant's account nor any rights
with regard to the exercise of an option or to receive shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and
distribution, or as provided in Section 14 hereof) by the Participant. Any such attempt at assignment, transfer, pledge or other disposition shall be without effect, except that the
Administrator may treat such act as an election to withdraw funds from an Offer Period in accordance with Section 10. 

        16.  Use of Funds. All payroll deductions received or held by the Company under the Plan may be used
by the Company for any corporate purpose, and the Company shall not be obligated to segregate such payroll deductions. The funds allocated to a Participant's account shall remain the property of the
Participant but may be commingled with the general funds of the Company. 

        17.  Reports. Individual accounts will be maintained for each Participant in the Plan. Statements of
account will be given to Participants at least annually, which statements will set forth the amounts of payroll deductions, the Purchase Price, the number of shares purchased and the remaining cash
balance, if any. 

        18.  Adjustments Upon Changes in Capitalization; Corporate Transactions.

        (a)  Adjustments Upon Changes in Capitalization. Subject to any required action by the stockholders of the Company, the
Reserves, the Purchase Price, the maximum number of shares that may be purchased in any Offer Period or Purchase Period, as well as any other terms that the Administrator determines require adjustment
shall be proportionately adjusted for (i) any increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, (ii) any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company, or
(iii) as the Administrator may determine in its discretion, any other transaction with respect to Common Stock to which Section 424(a) of the Code applies; provided, however that
conversion of any convertible securities of the Company shall not be deemed to have been "effected without receipt of consideration." Such adjustment shall be made by the Administrator and its
determination shall be final, binding and conclusive. Except as the Administrator determines, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock
of any class, shall affect, and no adjustment by reason hereof shall be made with respect to, the Reserves and the Purchase Price. 

        (b)  Corporate Transactions. In the event of a proposed Corporate Transaction, each option under the Plan shall be assumed by
such successor corporation or a parent or subsidiary of such successor corporation, unless the Administrator determines, in the exercise of its sole discretion and in lieu of such assumption, to
shorten the Offer Period then in progress by setting a new Exercise Date (the "New Exercise Date"). If the Administrator shortens the Offer Period then in progress in lieu of assumption in the event
of a Corporate Transaction, the Administrator shall notify each Participant in writing, at least ten (10) business days prior to the New Exercise Date, that the Exercise Date for the
Participant's option has been changed to the New Exercise Date and that the Participant's option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has
withdrawn from the Offer Period as provided in Section 10. For purposes of this Subsection, an option granted under the Plan shall be deemed to be assumed if, in connection with the Corporate
Transaction, the option is replaced with a comparable option 

7

 

with respect to shares of capital stock of the successor corporation or Parent thereof. The determination of option comparability shall be made by the Administrator prior to the Corporate Transaction
and its determination shall be final, binding and conclusive on all persons. 

        19.  Amendment or Termination.

        (a)  The
Administrator may at any time and for any reason terminate or amend the Plan. Except as provided in Section 18, no such termination can affect options
previously granted, provided that the Plan or any one or more Offer Periods may be terminated by the Administrator on any Exercise Date or by the Administrator establishing a new Exercise Date with
respect to any Offer Period and/or any Purchase Period then in progress if the Administrator determines that the termination of the Plan or such one ore more Offer Periods is in the best interests of
the Company and its stockholders. Except as provided in Section 18 and this Section 19, no amendment may make any change in any option theretofore granted which adversely affects the
rights of any Participant without the consent of affected Participants. To the extent necessary to comply with Section 423 of the Code (or any successor rule or provision or any other
Applicable Law), the Company shall obtain stockholder approval in such a manner and to such a degree as required. 

        (b)  Without
stockholder consent and without regard to whether any Participant rights may be considered to have been "adversely affected," the Administrator shall be entitled
to limit the frequency and/or number of changes in the amount withheld during Offer Periods, change the length of Purchase Periods within any Offer Period, determine the length of any future Offer
Period, determine whether future Offer Periods shall be consecutive or overlapping, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, establish
additional terms, conditions, rules or procedures to accommodate the rules or laws of applicable foreign jurisdictions, permit payroll withholding in excess of the amount designated by a Participant
in order to adjust for delays or mistakes in the Company's processing of properly completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with amounts withheld from the Participant's Compensation, and establish such
other limitations or procedures as the Administrator determines in its sole discretion advisable and which are consistent with the Plan. 

        20.  Notices. All notices or other communications by a Participant to the Company under or in
connection with the Plan shall be deemed to have been duly given when received in the form specified by the Administrator at the location, or by the person, designated by the Administrator for the
receipt thereof. 

        21.  Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an option unless
the exercise of such option and the issuance and delivery of such shares pursuant thereto shall comply with all Applicable Laws and shall be further subject to the approval of counsel for the Company
with respect to such compliance. As a condition to the exercise of an option, the Company may require the Participant to represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to sell or distribute such shares if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned Applicable Laws. 

        22.  Term of Plan. The Plan shall become effective upon the earlier to occur of its adoption by the
Board or its approval by the stockholders of the Company. It shall continue in effect for a term of five (5) years unless sooner terminated under Section 19. 

        23.  Stockholder Approval. Continuance of the Plan shall be subject to approval by the stockholders of
the Company within twelve (12) months before or after the date the Plan is adopted. Such stockholder approval shall be obtained in the degree and manner required under Applicable Laws. 

8

 

        24.  No Employment Rights. The Plan does not, directly or indirectly, create any right for the benefit
of any employee or class of employees to purchase any shares under the Plan, or create in any employee or class of employees any right with respect to continuation of employment by the Company or a
Designated Parent or Subsidiary, and it shall not be deemed to interfere in any way with such employer's right to terminate, or otherwise modify, an employee's employment at any time. 

        25.  No Effect on Retirement and Other Benefit Plans. Except as specifically provided in a retirement
or other benefit plan of the Company or a Designated Parent or Subsidiary, participation in the Plan shall not be deemed compensation for purposes of computing benefits or contributions under any
retirement plan of the Company or a Designated Parent or Subsidiary, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which
the availability or amount of benefits is related to level of compensation. The Plan is not a "Retirement Plan" or "Welfare Plan" under the Employee Retirement Income Security Act of 1974, as amended. 

        26.  Effect of Plan. The provisions of the Plan shall, in accordance with its terms, be binding upon,
and inure to the benefit of, all successors of each Participant, including, without limitation, such Participant's estate and the executors, administrators or trustees thereof, heirs and legatees, and
any receiver, trustee in bankruptcy or representative of creditors of such Participant. 

        27.  Governing Law. The Plan is to be construed in accordance with and governed by the internal laws
of the State of Delaware without giving effect to any choice of law rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of Delaware to the
rights and duties of the parties, except to the extent the internal laws of the State of Delaware are superseded by the laws of the United States. Should any provision of the Plan be determined by a
court of law to be illegal or unenforceable, the other provisions shall nevertheless remain effective and shall remain enforceable. 

        28.  Dispute Resolution. The provisions of this Section 28 (and as restated in the Subscription
Agreement) shall be the exclusive means of resolving disputes arising out of or relating to the Plan. The Company and the Participant, or their respective successors (the "parties"), shall attempt in
good faith to resolve any disputes arising out of or relating to the Plan by negotiation between individuals who have authority to settle the controversy. Negotiations shall be commenced by either
party by notice of a written statement of the party's position and the name and title of the individual who will represent the party. Within thirty (30) days of the written notification, the
parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem necessary, to resolve the dispute. If the dispute has not been resolved by negotiation, the
parties agree that any suit, action, or proceeding arising out of or relating to the Plan shall be brought in the United States District Court for the District of New Jersey (or should such court lack
jurisdiction to hear such action, suit or proceeding, in a New Jersey state court in Passaic County) and that the parties shall submit to the jurisdiction of such court. The parties irrevocably waive,
to the fullest extent permitted by law, any objection the party may have to the laying of venue for any such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY
RIGHT THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more provisions of this Section 28 shall for any reason be held invalid or unenforceable, it is
the specific intent of the parties that such provisions shall be modified to the minimum extent necessary to make it or its application valid and enforceable. 

        29.  Additional Restrictions of Rule 16b-3. The terms and conditions of options
granted hereunder to, and the purchase of share of Common Stock by, persons subject to Section 16 of the Exchange Act shall comply with the applicable provisions of
Rule 16b-3. This Plan shall be deemed to contain, and such options shall contain, and the shares issued upon exercise thereof shall be subject to, such additional conditions and
restrictions as may be required by Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions. 

9

 
 

Exhibit A
  
    MDU Communications International, Inc.—2001 Employee Stock Purchase Plan
  
    SUBSCRIPTION AGREEMENT
  
    Effective with the Offer Period beginning
on:                            , 2001    

	1.
	Personal
Information. 

	 	

	 	Legal Name (Please Print)	Daytime Telephone
	

 	

	 	Street Address	Home Telephone
	

 	

	 	City, State, Country, Zip/Postal	 
	

 	

	 	Social Security No.	 

	2.
	Eligibility.
Any Employee whose customary employment is more than 20 hours per week and more than 5 months per calendar year, who has been an Employee for more than 6
consecutive calendar months and who does not hold (directly or indirectly) five percent (5%) or more of the combined voting power of the Company, a parent or a subsidiary, whether in stock or options
to acquire stock is eligible to participate in the MDU Communications International, Inc. 2001 Employee Stock Purchase Plan (the "ESPP"); provided, however, that Employees who are subject to
the rules or laws of a foreign jurisdiction that prohibit or make impractical the participation of such Employees in the ESPP are not eligible to participate.

	3.
	Definitions.
Each capitalized term in this Subscription Agreement shall have the meaning set forth in the ESPP.

	4.
	Subscription.
I hereby elect to participate in the ESPP and subscribe to purchase shares of the Company's Common Stock in accordance with this Subscription Agreement and the ESPP. I
have received a complete copy of the ESPP and a prospectus describing the ESPP and understand that my participation in the ESPP is in all respects subject to the terms of the ESPP. The effectiveness
of this Subscription Agreement is dependent on my eligibility to participate in the ESPP.

	5.
	Payroll
Deduction Authorization.

	(a)
	I
hereby authorize payroll deductions from my Compensation during the Offer Period in the percentage specified below (payroll reductions may not exceed 50% of salary and 100% of bonus
and other Compensation, subject to the overall limitation of no more than $25,000 per calendar year): 

	 
	 
	 
	Percentage of Salary to be Deducted:	            
	%

	Percentage of Bonus and other Compensation:	            
	%

	(b)
	Direct
Payment. As to the Initial Period only, I endorse payment in the following amount, which shall not exceed 50% of salary and 100% of bonus and other Compensation in calendar
year 2001 (no more than $25,000): 

	Direct Payment Amount:	$
	            

	6.
	ESPP
Accounts and Purchase Price. I understand that all payroll deductions will be credited to my account under the ESPP. No additional payments may be made to my account. No interest
will be credited on funds held in the account at any time including any refund of the account caused by withdrawal from the ESPP. All payroll deductions shall be accumulated for the purchase of 

Company
Common Stock at the applicable Purchase Price determined in accordance with the ESPP. 

	7.
	Withdrawal
and Changes in Payroll Deduction. I understand that I may discontinue my participation in the ESPP at any time prior to an Exercise Date as provided in Section 10 of
the ESPP, any accumulated payroll deductions will be applied automatically to purchase Company Common Stock. I may increase or decrease the rate of my payroll deductions in whole percentage increments
to not less than one percent (1%) on one occasion during any Purchase Period by completing and timely filing a Change of Status Notice. Any increase or decrease will be effective for the full payroll
period occurring after three (3) business days from the Company's receipt of the Change of Status Notice.

	8.
	Perpetual
Subscription. I understand that this Subscription Agreement shall remain in effect for successive Offer Periods until I withdraw from participation in the ESPP, or
termination of the ESPP.

	9.
	Taxes.
I have reviewed the ESPP prospectus discussion of the federal tax consequences of participation in the ESPP and consulted with tax consultants as I deemed advisable prior to my
participation in the ESPP. I hereby agree to notify the Company in writing within fifteen (15) days of
any disposition (transfer or sale) of any shares purchased under the ESPP if such disposition occurs within two (2) years of the Enrollment Date (the first day of the Offer Period during which
the shares were purchased) or within one (1) year of the Exercise Date (the date I purchased such shares), and I will make adequate provision to the Company for foreign, federal, state or other
tax withholding obligations, if any, which arise upon the disposition of the shares. In addition, the Company may withhold from my Compensation any amount necessary to meet applicable tax withholding
obligations incident to my participation in the ESPP, including any withholding necessary to make available to the Company any tax deductions or benefits contingent on such withholding.

	10.
	Dispute
Resolution. The provisions of this Section 10 and Section 28 of the ESPP shall be the exclusive means of resolving disputes arising out of or relating to the
Plan. The Company and I, or our respective successors (the "parties"), shall attempt in good faith to resolve any disputes arising out of or relating to the Plan by negotiation between individuals who
have authority to settle the controversy. Negotiations shall be commenced by either party by notice of a written statement of the party's position and the name and title of the individual who will
represent the party. Within thirty (30) days of the written notification, the parties shall meet at a mutually acceptable time and place, and thereafter as often as they reasonably deem
necessary, to resolve the dispute. If the dispute has not been resolved by negotiation, the Company and I agree that any suit, action, or proceeding arising out of or relating to the Plan shall be
brought in the United States District Court for the District of New Jersey (or should such court lack jurisdiction to hear such action, suit or proceeding, in a New Jersey state court in Passaic
County) and that we shall submit to the jurisdiction of such court. The Company and I irrevocably waive, to the fullest extent permitted by law, any objection we may have to the laying of venue for
any such suit, action or proceeding brought in such court. THE COMPANY AND I ALSO EXPRESSLY WAIVE ANY RIGHT WE HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or
more provisions of this Section 10 or Section 28 of the ESPP shall for any reason be held invalid or unenforceable, it is the specific intent of the Company and I that such provisions
shall be modified to the minimum extent necessary to make it or its application valid and enforceable. 

	11.
	Designation
of Beneficiary. In the event of my death, I hereby designate the following person or trust as my beneficiary to receive all payments and shares due to me under the ESPP: 

/ /        I
am single                        / /        I am married 

	 	Beneficiary (please print)	 
	 	 	

	

 	

Relationship to Beneficiary (if any)	

 
	 	 	

	

 	

Street Address of Beneficiary	

 
	 	 	

	

 	

City, State,Country,Zip/Postal	

 
	 	 	

	

 	

Social Security Number of Beneficiary	

 
	 	 	

	12.
	Termination
of ESPP. I understand that the Company has the right, exercisable in its sole discretion, to amend or terminate the ESPP at any time, and a termination may be effective as
early as an Exercise Date, including the establishment of an alternative date for an Exercise Date within each outstanding Offer Period. 

	Date:	 	 	Employee Signature:	 
	 	
	 	 	

	

 	

 	
 	

Spouse's signature (if new beneficiary is other than spouse):
	

 	

 	
 	

 
 

Exhibit B
  
    MDU Communications International, Inc.—2001 Employee Stock Purchase Plan
  
    CHANGE OF STATUS NOTICE    
  

	

	Participant Name (Please Print)
	

 	
 	

 
	

	Social Security Number
	

 	
 	

 
	/ /	 	Withdrawal and Purchase of Common Stock:
	

 	
 	

I hereby withdraw from the MDU Communications International, Inc. 2001 Employee Stock Purchase Plan (the "ESPP") and agree that my option and payroll deduction under the applicable Offer Period will be automatically terminated and all
accumulated payroll deductions credited to my account will be applied to the purchase of Common Stock. No further payroll deductions will be made for the purchase of shares in the applicable Offer Period and I shall be eligible to participate in a
future Offer Period only by timely delivery to the Company of a new Subscription Agreement.
	

/ /	
 	

Change in Payroll Deduction:
	

 	
 	

I hereby elect to change my rate of payroll deduction under the ESPP as follows:

	 
	 
	 
	Percentage of Salary to be Deducted:	            
	%

	

Percentage of Bonus and other Compensation to be Deducted:	

            
	
%

	

 	
 	

An increase or a decrease in payroll deduction will be effective for the first full payroll period commencing no fewer than three (3) business days following the Company's receipt of this notice, unless this change is processed more
quickly.
	

/ /	
 	

Change of Beneficiary:                        / /        I am
single                        / /        I am married
	

 	
 	

This change of beneficiary shall terminate my previous beneficiary designation under the ESPP. In the event of my death, I hereby designate the following person or trust as my beneficiary to receive all payments and shares due to me under the
ESPP:

	 	 	New Beneficiary (please print)	 	 
	 	 	 	 	

	

 	
 	

Relationship to Beneficiary (if any)	
 	

 
	 	 	 	 	

	

 	
 	

Street Address of Beneficiary	
 	

 
	 	 	 	 	

	

 	
 	

City, State,Country, Zip/Postal	
 	

 
	 	 	 	 	

	

 	
 	

Social Security Number of Beneficiary	
 	

 
	 	 	 	 	

	Date:	 	 	Employee Signature:	 
	 	
	 	 	

	

 	

 	
 	

Spouse's signature (if new beneficiary is other than spouse):
	

 	

 	
 	

QuickLinks

MDU COMMUNICATIONS INTERNATIONAL, INC. 2001 EMPLOYEE STOCK PURCHASE PLAN

Exhibit A MDU Communications International, Inc.—2001 Employee Stock Purchase Plan SUBSCRIPTION AGREEMENT Effective with the Offer Period beginning on: , 2001

Exhibit B MDU Communications International, Inc.—2001 Employee Stock Purchase Plan CHANGE OF STATUS NOTICE

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