**Exhibit 10.5**

**EMPLOYMENT AGREEMENT**

**THISEMPLOYMENT AGREEMENT** dated as of March 10, 2006(“Agreement”), is by and between Transaction Network Services, Inc., aDelaware corporation

(the “Company”), and itsparent, TNS, Inc., a Delaware corporation (“Parent”), on the one hand(collectively, “TNS”), and Matthew M. Mudd (“Executive”), on the other hand.(The Company, Parent and Executive will be referred to collectively as the“Parties” and may each be referred to individually as a “Party”).

**WHEREAS,**Executive has been employed as Executive Vice President and Chief DevelopmentOfficer of TNS; and

**WHEREAS,**the Board of Directors of TNS (the “Board” or “Board of Directors”) hasdetermined that it is in the best interest of TNS and its shareholders tocontinue to employ Executive in such capacity and Executive desires to continuehis employment in such capacity;

**NOWTHEREFORE,** in consideration of the mutual covenants andpromises contained herein, the receipt and adequacy of which are acknowledged,the parties agree as follows:

1.    **Acceptance of Employment.**Subjectto the terms and conditions set forth below, the Company agrees to employExecutive and Executive accepts such employment.

2.    **Term**. Theperiod of employment and term of this Agreement will be from January 1,2006 through December 31, 2009, unless further extended or soonerterminated as hereinafter set forth (the “Term”). The Term shall automaticallybe extended for successive one (1) year periods unless one Party heretohas provided the other with at least three (3) months’ prior writtennotice of its intention to allow this Agreement to expire at the end of suchinitial or extended Term, in which event the employment period will terminateon the last day of such Term. If the Company provides Executive such notice ofits intention to allow this Agreement to expire without thereafter providingExecutive with a timely written notice of termination for Cause (as defined inSection 6(e) of this Agreement) and otherwise complying with the 

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procedures set forth in Section 6(e),the expiration of the Agreement will be considered a termination “for otherthan Cause” as provided in Section 6(f). The Company hereby acknowledgesthat Executive has been employed by the Company since November 5, 1990.

3.    **Position and Duties**.Executive shall serve as Executive Vice President and Chief Development Officerof TNS, shall report directly to the Chief Executive Officer and will performsuch duties as are set forth in the job description for such position (whichshall include global product development, integration and management and globalsoftware systems development and integration) as it may be amended by TNS fromtime-to-time, and such other reasonably related duties consistent with suchposition that are assigned to Executive by the Chief Executive Officer and/orthe Board. Subject to reasonable business travel requirements, Executive shallgenerally perform his duties from the TNS’ general and administrative officesin Reston, Virginia and shall not be required by TNS to be personally based ortransferred anywhere other than the metropolitan area in which his office inTNS’ general and administrative offices is now located, without Executive’sprior written consent. Executive will perform his duties in a professional andcompetent manner. Executive shall devote all of his working time and attentionand his reasonable best efforts and skills to the business and affairs of TNS,except (i) with respect to incidental business activities, including themanagement of his personal investments, outside directorships, and civic andcharitable activities, which shall be fully disclosed to the Board of Directorsprior to engaging in such activities and which, in the determination of theBoard of Directors, do not cause a conflict of interest or interfere withExecutive’s performance of his duties under this Agreement; and (ii) asotherwise approved by the Board of Directors.

4.    **Base Salary and Incentives**.

(a)          **Base Salary.**Duringthe Term, the Company will pay Executive a base salary at the rate of $291,750per annum, less customary withholdings and deductions (the “Base Salary”)payable in accordance with the payroll procedures for the Company’s salariedemployees in effect during the Term. Beginning in January 2007 andannually thereafter, the 

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Base Salary shall besubject to annual review and possible increase by the Board of Directors, butit shall not be decreased during the Term of this Agreement.

(b)         **Annual Incentive AwardOpportunity**. Executive shall be eligible to participate in the Company’sAnnual Incentive Plan (the “AIP”), in accordance with the terms of the AIP asthey may be amended by the Board from time-to time. Executive’s target annualaward opportunity under the AIP shall be 35% of the Base Salary (the “AIPAnnual Target”) and shall be subject, in accordance with the terms of the AIP,to an annual cap equal to 2 times the AIP Annual Target. Actual awards will bebased on the achievement of specified performance objectives, as determined bythe Board.

(c)          **Long-Term Incentive PlanOpportunity.** Executiveshall be eligible to participate in the Parent’s Long-Term Incentive Plan (the“LTIP”), in accordance with the terms of the LTIP, as they may be amended bythe Board from time-to time. Executive’s target annual award opportunity underthe LTIP shall be 150% of the Base Salary (the “LTIP Annual Target”) and shallbe subject, in accordance with the terms of the LTIP, to an annual cap equal to2 times the LTIP Annual Target. Awards will be comprised of a combination oflong-term incentive vehicles, as determined by the Board. Awards under the AIPand LTIP will be referred to collectively as “Incentive Awards.”

5.    **Benefits.**Duringthe Term, Executive will be eligible for the following benefits in connectionwith his employment (collectively, the “Benefits”):

(a)          **Retirement Benefits.**Executive will be eligible to participate in the Company’s 401(k) Planin accordance with the terms of that plan, as they may be amended fromtime-to-time by the Company.

(b)         **Other Fringe Benefits**.In addition to any other benefits specifically set forth herein, Executive(i) shall be entitled to the benefits set forth in the Summary ofExecutive Benefits attached to this Agreement as Appendix 1 (and incorporatedherein) and (ii) shall also be eligible to participate in all otheremployee benefit plans and programs offered by the 

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Company to its seniorexecutives generally, in accordance with the terms of those plans and programs((i) and (ii) collectively being the “Fringe Benefits”), as theFringe Benefits may be amended or terminated from time-to-time by the Company.

(c)          **Business and TravelExpenses**. Executive shall be entitled to reimbursement of allreasonable and necessary business-related expenses he incurs in performing hisduties, in accordance with and to the extent permitted by the Company’spolicies in effect from time to time.

(d)         **Indemnification**.Executive shall be entitled to such indemnification rights as are set forth inthe Indemnification Agreement between Executive and the Parent, a copy of whichis attached hereto and incorporated by reference as Appendix 2.

6.    **Termination of Employmentand Effect of Termination**.

(a)          **By Company for Death**.Executive’s employment hereunder shall terminate upon his death, in which eventTNS shall have no further obligation to Executive or his estate other than thepayment of accrued and/or vested but unpaid Base Salary, pro-rated IncentiveAwards (calculated and paid when such awards are paid to other employeesgenerally), vacation pay and other Benefits as of the termination date, unlessotherwise required by law or plan documents.

(b)         **By Company for Disability**.If Executive incurs a Disability and such Disability continues for a period oftwelve (12) consecutive months, then the Company may, to the extent permittedby applicable law, terminate Executive’s employment upon written notice toExecutive, in which event TNS shall have no further obligation to Executiveother than the payment of accrued and/or vested but unpaid Base Salary,pro-rated Incentive Awards (calculated and paid when such awards are paid toother employees generally), vacation pay and other Benefits as of thetermination date, unless otherwise required by law or plan documents. For thepurposes of this Agreement, a “Disability” means a physical or mentalimpairment that substantially limits a major life activity and that precludesExecutive from performing all of the 

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essential functions ofhis position, with or without reasonable accommodation, as such applicableterms are defined by the federal Americans with Disabilities Act, as it may beamended from time-to-time.

(c)          **By Executive for GoodReason**. Executive may terminate his employment hereunder forGood Reason after giving at least 30 days’ notice to the Company. The date ofsuch termination must be no more than 90 days from the date of the occurrencegiving rise to the Good Reason. For purposes of this Agreement, Good Reasonmeans that, without Executive’s prior written consent: (i) the Companyrelocates its general and administrative offices or Executive’s place ofemployment to an area other than the Washington, D.C. Standard MetropolitanStatistical Area; (ii) Executive is assigned duties substantiallyinconsistent with his responsibilities as described in Section 3 of thisAgreement or a substantial adverse alteration is made to the nature or statusof such responsibilities; (iii) Executive’s title is diminished;(iv) the Company reduces Executive’s Base Salary as in effect on the datehereof or as the same may be increased from time to time; or (v) anymaterial reduction in Benefits provided to Executive pursuant to Sections 4 and5 of this Agreement, other than in connection with a reduction in benefitsgenerally applicable to senior executives of the Company. In the event thatExecutive elects to terminate this Agreement for Good Reason, Executive shallbe entitled to:  (aa) payment of accruedand/or vested but unpaid Base Salary, pro-rated Incentive Awards (calculatedand paid when such awards are paid to other employees generally), vacation payand other Benefits as of the termination date, unless otherwise required by lawor plan documents; (bb) payment of two years of Base Salary at the rate ineffect as of the date of termination in installments in accordance with theCompany’s payroll practices in effect at the time; and (cc) continuation ofFringe Benefits for two years after the date of termination. In the event theCompany’s Fringe Benefit plans do not permit continued participation byExecutive after his termination, then Executive will instead be entitled to alump sum payment from the Company of the expected cost to Executive to purchaseand continue all such Fringe Benefit programs, as an individual or familypolicyholder, grossed up for all local, state and Federal taxes at the maximumtax rates. Executive’s entitlement to the Base Salary described in (bb) and theFringe Benefits described in (cc) is conditional on his execution of aSeverance Agreement and General Release in 

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substantially the sameform attached hereto as Appendix 3. TNS agrees to provide to Executive withinten (10) days of termination the Severance Agreement and General Releasefor execution.

(d)         **By Executive without GoodReason**. Executive may terminate this Agreement without GoodReason upon ninety (90) days’ prior written notice to the Company. In the eventExecutive’s employment is terminated pursuant to this Section 6(d), theCompany may in its discretion relieve Executive of his duties and provide himwith Base Salary and Benefits through the date of termination. In the eventExecutive terminates his employment without Good Reason, Executive shall beentitled to payment of accrued and/or vested but unpaid Base Salary, pro-ratedIncentive Awards (calculated and paid when such awards are paid to other employeesgenerally), vacation pay and other Benefits as of the termination date, unlessotherwise required by law or plan documents.

(e)          **By Company for Cause**.The Board of Directors of the Company may terminate this Agreement for Causeupon written notice to Executive. “Cause” shall be defined as: (i) thecommission of a felony or a crime involving moral turpitude or the commissionof any other act or omission involving dishonesty or fraud with respect to theCompany or any of its affiliates or any of their customers or suppliers;(ii) substantial failure on the part of Executive in his performance ofthe duties of the office held by him as reasonably directed by the ChiefExecutive Officer and/or the Board (other than any such failure resulting fromExecutive’s incapacity due to physical or mental illness), after notice toExecutive and a reasonable opportunity to cure; (iii) gross negligence orwillful misconduct by Executive with respect to the Company or any of itsaffiliates (including, without limitation, disparagement that adversely affectsthe reputation of the Company or any of its affiliates); or (iv) anymaterial breach by Executive of Sections 3, 7 or 8 of this Agreement. Forpurposes of this Agreement, an act, or failure to act, on the Executive’s partshall be considered “gross negligence” or “willful misconduct” only if done, oromitted, by him not in good faith and without reasonable belief that his actionor omission was in the best interest of the Company and its affiliates. TheExecutive’s employment shall not be deemed to have been terminated for “Cause”unless the Company shall have given or delivered to the Executive(A) reasonable notice setting forth the reasons for the Company’sintention to terminate the Executive’s employment for “Cause”; (B) areasonable 

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opportunity, at any timeduring the 30 day period after the Executive’s receipt of such notice, for theExecutive, together with his counsel, to be heard before the Board; and(C) a notice of termination stating that, in the good faith opinion of notless than a majority of the entire membership of the Board, the Executive wasguilty of the conduct set forth in clauses (i), (ii), (iii) or(iv) of the first sentence of this Section 6(e).

In the eventExecutive is terminated for Cause, TNS’ only obligation to Executive will bethe payment of accrued and/or vested but unpaid Base Salary, vacation pay andother Benefits as of the termination date, unless otherwise required by law orplan documents.

(f)          **By the Company for Otherthan Cause**. The Board of Directors may terminate this Agreementfor reasons other than Cause after giving at least ninety (90) days’ priorwritten notice of such termination to Executive. In the event the Companyterminates Executive pursuant to this Section 6(f), Executive shall beentitled to:  (aa) payment of accruedand/or vested but unpaid Base Salary, pro-rated Incentive Awards (calculatedand paid when such awards are paid to other employees generally), vacation payand other Benefits as of the termination date, unless otherwise required by lawor plan documents; (bb) payment of two years of Base Salary at the rate ineffect as of the date of termination in installments in accordance with theCompany’s payroll practices in effect at the time; and (cc) continuation ofFringe Benefits for two years after the date of termination. In the event theCompany’s Fringe Benefit plans do not permit continued participation byExecutive after his termination, then Executive will instead be entitled to alump sum payment from the Company of the expected cost to Executive to purchaseand continue all such Fringe Benefit programs, as an individual or familypolicyholder, grossed up for all local, state and Federal taxes at the maximumtax rates. Executive’s entitlement to the Base Salary described in (bb) and theFringe Benefits described in (cc) is conditional on his execution of aSeverance Agreement and General Release in substantially the same form attachedhereto as Appendix. TNS agrees to provide to Executive within ten (10) daysof termination the Severance Agreement and General Release for execution.

(g)         **Termination Following aChange in Control**. If the Executive’s employment is terminatedby the Company during the Protection Period other than for Cause, 

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Disability or as a resultof the Executive’s death, or if the Executive terminates his employment duringthe Protection Period for Good Reason, the Company shall, subject toSection 7 of this Agreement, provide Executive with the following withinthen (10) days of the effective date of the Severance Agreement andGeneral Release described below (the “Effective Date”) unless otherwiseindicated below:

(i)       TheExecutive’s Base Salary and vacation pay (for vacation not taken) accrued butunpaid through the date of termination of employment;

(ii)      a lumpsum severance payment in an amount equal to the product of 2.99 times theExecutive’s “Average Annual Compensation.” For the purposes of this Agreement, “Average Annual Compensation” shallbe an amount equal to the annual average of the sums of (x) theExecutive’s annual Base Salary from the Company plus (y) the amount ofIncentive Awards accrued by TNS for the Executive, in each case for the threecalendar years that ended immediately before (or, if applicable, coincidentwith) the Change in Control Date;

(iii)     within30 days of the Effective Date, upon surrender by the Executive of theoutstanding options to purchase shares of common stock (“Shares”) of Parentgranted to the Executive by the Parent (the “Outstanding Options”) and anystock appreciation rights granted to the Executive by the Parent (“SARs”), anamount with respect to each Outstanding Option and SAR (whether vested or not)equal to the difference between the exercise price of such Outstanding Optionsand SARs and the higher of (x) the fair market value of the Shares on thedate of such termination (but not less than the closing price for the Shares onthe New York Stock Exchange, or such other national stock exchange on whichsuch shares may be listed, on the last trading day such shares traded prior tothe date of termination); and (y) the highest price paid for Shares or, inthe cases of securities convertible into Shares or carrying a right to acquireShares, the highest effective price (based on the prices paid for suchsecurities) at which such securities are convertible into Shares or at whichShares may be acquired, by any person or group whose acquisition of votingsecurities has resulted in a Change in Control of the Parent; provided,however, that this Section 6(g)(iii) shall not apply to the surrenderof any Outstanding Option that is an incentive stock option (within the meaningof Section 422 of the Internal Revenue Code of 1986, as amended (the“Code”));

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(iv)     theCompany shall provide continuation of Fringe Benefits for three years after thedate of termination. In the event the Company’s Fringe Benefit plans do notpermit continued participation by Executive after his termination, thenExecutive will instead be entitled to a lump sum payment from the Company ofthe expected cost to Executive to purchase and continue all such Fringe Benefitprograms, as an individual or family policyholder, grossed up for all local,state and Federal taxes at the maximum tax rate;

(v)      all ofthe Executive’s Benefits accrued under any supplemental retirement plans,excess retirement plans, and deferred compensation plans maintained by theCompany or any of its affiliates shall become immediately vested in full;

(vi)     all ofthe Executive’s Outstanding Options shall become immediately vested andexercisable in full; and

(vii)    all ofthe Executive’s outstanding shares of restricted stock shall become immediatelyvested in full.

Executive’s entitlementto the foregoing benefits described in (g) is conditional on his executionof a Severance Agreement and General Release in substantially the same form asis attached hereto as Appendix 3. TNS agrees to provide to Executive within ten(10) days of termination the Severance Agreement and General Release forexecution.

For the purposes of thisSection 6(g) and Section 6(h) of this Agreement, thefollowing terms are defined below:

“Change inControl” shall mean a change in control of a nature that would be required tobe reported in response to Item 6(e) of Schedule 14A of Regulation 14A promulgatedunder the Securities and Exchange Act of 1934, as amended (the “Exchange Act”),whether or not the Parent is then subject to such reporting requirements;provided that, without limitation, a Change in Control shall be deemed to haveoccurred if (i) any person (as such term is used in section 13(d) and14(d) of the Exchange Act) is or becomes beneficial owner (as defined inRule 13d-3 under the Exchange Act), directly or indirectly, ofsecurities of the Parent representing 25 percent or more of the combined votingpower of the Parent’s then outstanding securities; or (ii) during anyperiod of two consecutive years, the following persons (the “ContinuingDirectors”) cease for any reason to constitute a majority of the Board:individuals who at the beginning of 

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such period constitutethe Board and new directors each of whose election to the Board or nominationfor election to the Board by the Parent’s security holders was approved by avote of at least two thirds of the directors then still in office who eitherwere directors at the beginning of the period or whose election or nominationfor election was previously so approved; or (iii) the securityholders ofthe Parent approve a merger or consolidation of the Parent with any othercorporation, other than a merger or consolidation that would result in thevoting securities of the Parent outstanding immediately before the merger orconsolidation continuing to represent (either by remaining outstanding or bybeing converted into voting securities of such surviving entity) a majority ofthe voting securities of the Parent or of such surviving entity outstandingimmediately after such merger or consolidation; or (iv) the securityholders of the Parent approve a plan of complete liquidation of Parent or theCompany or an agreement for the sale or disposition by the Parent or theCompany of all or substantially all of its assets.

The “Change inControl Date” shall be any date during the term of this Agreement on which aChange in Control occurs. Notwithstanding any contrary provision in thisAgreement, if the Executive’s employment or status as an elected or appointedofficer with the Company is terminated by the Company within six months beforethe date on which a Change in Control occurs, and it is reasonably demonstratedthat such termination (i) was at the request of a third party who hastaken steps reasonably calculated or intended to effect a Change in Control or(ii) otherwise arose in connection with or anticipation of a Change inControl, then for the purposes of this Agreement the “Change in Control Date”shall mean the date immediately before the date of such termination.

“Good Reason”means:

(i)       theassignment to the Executive within the Protection Period of any dutiesinconsistent in any respect with the Executive’s position (including status,offices, titles and reporting requirements, authority, duties, orresponsibilities) or any other action that results in a diminution in suchposition, authority, duties, or responsibilities excluding for this purpose anisolated, insubstantial, and inadvertent action that is not taken in bad faithand is remedied by TNS promptly after receipt of notice given by the Executive;

 

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(ii)      areduction by the Company in the Executive’s Base Salary in effect immediatelybefore the beginning of the Protection Period or as increased from time to timeafter the beginning of the Protection Period;

(iii)     afailure by TNS to maintain plans providing Benefits at least as beneficial asthose provided by any benefit or compensation plan (including, withoutlimitation, any incentive compensation plan, bonus plan, or program,retirement, pension or savings plan, life insurance plan, health and dentalplan, or disability plan) in which the Executive is participating immediatelybefore the beginning of the Protection Period or any action taken by TNS thatwould adversely affect the Executive’s participation in, or reduce theExecutive’s opportunity to benefit under, any of such plans or deprive theExecutive of any material fringe benefit enjoyed by him immediately before thebeginning of the Protection Period; provided, however, that a reduction inbenefits under TNS’ tax qualified retirement, pension, or savings plans or itslife insurance plan, health and dental plan, disability plans, or otherinsurance plans, which reduction applies generally to participants in the plansand has a de minimis effect on the Executive shall not constitute “Good Reason”for termination by the Executive;

(iv)     theCompany requiring the Executive, without the Executive’s written consent, to bebased at any office or location in excess of 25 miles from his office locationimmediately before the beginning of the Protection Period, except for travelreasonably required in the performance of the Executive’s responsibilities;

(v)      anypurported termination by the Company of the Executive’s employment for Causeotherwise than as provided in Section 6(e) of this Agreement; or

(vi)     anyfailure by TNS to obtain the assumption of the obligations contained in thisAgreement by any successor as contemplated in Section 9(c) of thisAgreement.

“ProtectionPeriod” means the period beginning on the Change in Control Date and ending onthe last day of the 24th calendar month following the Change in Control Date.

(h)           **Adjustment in Benefits.**In the event that Executive becomes entitled to the payments and benefitsdescribed in this Section 6 (together with any other benefits to whichExecutive is entitled hereunder following a termination entitling Executive tothe payments and

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benefits of thisSection 6, the “Severance Benefits”), if (x) the Severance Benefitsequal or exceed 110% of three times Executive’s “base amount” determined forpurposes of Section 280G of the Code, the Company shall pay to Executivean additional amount (the “Gross-Up Payment”) equal to the sum of any excisetax imposed under Section 280G of the Code (“Excise Tax”) on Executive byreason of receiving the Severance Benefits plus the amount necessary to placeExecutive in the same after-tax position (taking into account any and allapplicable federal, state and local excise, income and other taxes on theGross-Up Payment) as if no Excise Tax had been imposed on the Severance Befitsand no Gross-Up Payment had been made to Executive, and if (y) theSeverance Benefits are less than 110% of three times Executive’s “base amount”determined for purposes of Section 280G of the Code, the SeveranceBenefits shall be limited to no more than 2.99 times Executive’s “base amount”determined for purposes of Section 280G of the Code. For purposes ofdetermining whether any of the Severance Benefits will be subject to the ExciseTax and the amount of such Excise Tax, (i) any other payments or benefitsreceived or to be received by Executive in connection with a Change in Controlor Executive’s termination of employment (whether pursuant to the terms of thisAgreement or any other plan, arrangement or agreement with TNS, any personwhose actions result in a change in control or any person affiliated with theCompany or such person) shall be treated as “parachute payments” within themeaning of Section 280G(b)(2) of the Code, and all “excess parachutepayments” within the meaning of Section 280G(b)(1) of the Code shallbe treated as subject to the Excise Tax, unless in the opinion of tax counselselected by TNS’ independent auditors and reasonably acceptable to Executivesuch other payments or benefits (in whole or in part) do not constitute parachutepayments, including without limitation by reason ofSection 280G(b)(4)(A) of the Code, or such excess parachute payments(in whole or in part) represent reasonable compensation for services actuallyrendered, within the meaning of Section 280G(b)(4)(B) of the Code inexcess of the Base Amount as defined in Section 280G(b)(3) of theCode allocable to such reasonable compensation, or are otherwise not subject tothe Excise Tax, (ii) the amount of the Severance Benefits that shall betreated as subject to the Excise Tax shall be equal to the lesser of(a) the total amount of the Severance Benefits or (b) the amount ofexcess parachute payments within the meaning of Section 280G(b)(1) ofthe Code (after applying clause (i) above), and (iii) the value of allnon-cash benefits or any deferred payment or benefit shall be determined byTNS’ independent auditors in accordance with the principles ofSection 280G(d)(3) and (4) of the

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Code. For purposes ofdetermining the amount of the Gross-Up Payment, Executive shall be deemed topay federal income taxes at the highest marginal rate of federal incometaxation in the calendar year in which the Gross-Up Payment is to be made andstate and local income taxes at the highest marginal rate of taxation in thestate and locality of his residence on the date of termination, net of themaximum reduction in federal income taxes which could be obtained fromdeduction of such state and local taxes. In the event that the Excise Tax issubsequently determined to be less than the amount taken into account hereunderin the computation of the Gross-Up Payment, Executive shall repay to theCompany (without interest), at the time that the amount of such reduction inExcise Tax is finally determined, the portion of the Gross-Up Paymentattributable to such reduction (plus that portion of the Gross-Up Paymentattributable the Excise tax and federal, state and local income and employmenttax imposed on the portion of the Gross-Up Payment being repaid by Executive tothe extent that such repayment results in a reduction in the Excise Tax and/orin a federal, state or local income or employment tax deduction). In the eventthat the Excise Tax is determined to exceed the amount taken into accounthereunder at the time of the computation of the Gross-Up Payment (including byreason of any payment the existence or amount of which cannot be determined atthe time of the Gross-Up payment), the Company shall make an additionalGross-Up Payment in respect of such excess (plus any interest, penalties oradditions payable by Executive with respect to such excess) at the time thatthe amount of such excess is finally determined. Executive and TNS shall eachreasonably cooperate with the other in connection with any administrative orjudicial proceedings concerning the existence or amount of liability for ExciseTax with respect to the Severance Benefits.

(i)           **Notice of Termination**.Termination of this Agreement by TNS or termination of this Agreement byExecutive shall be communicated by written notice to the other Party hereto,specifically indicating the termination provision relied upon.

(j)           **Property**.Upon the termination of Executive’s employment under this Agreement, for anyreason, or at any time upon request from the Company, Executive shall return allproperty of TNS, and all copies, excerpts or summaries of such property inwhatever form, that are in his possession, custody or control.

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7.    **Noncompetitionand Nonsolicitation**. Executive acknowledges that in the courseof his employment with the Company he has and will become familiar with theCompany’s and its affiliates’ trade secrets and with other confidentialinformation concerning The Company and its affiliates and that his serviceswill be of special, unique and extraordinary value to the Company and itsaffiliates. Therefore, Executive agrees that:

(a)          Noncompetition.During the Term and (i) in the case of termination by the Company withoutCause or resignation by Executive for Good Reason, for a period of two yearsthereafter, or (ii) in the case of termination or resignation for anyother reason, for a period of one year thereafter (as applicable, the“Noncompete Period”), Executive shall not, directly or indirectly, either aloneor in association with others, own, manage, operate, sell, control orparticipate in the ownership, management, operation, sales or control of, beinvolved with the development efforts of, serve as a technical advisor to,license intellectual property to, provide services to or in any manner engagein any business that competes with any business in which the Company or any ofits affiliates is engaged as of the date of Executive’s termination orresignation; provided, however, that Executive may own as a passiveinvestor up to 5.0% of any class of an issuer’s publicly traded securities.

(b)         Nonsolicitation.During the Noncompete Period, Executive shall not, directly or indirectly,alone or in association with others, (i) induce or attempt to induce anyemployee of the Company or any of its affiliates to leave the employ of theCompany or such affiliate, or in any way interfere with the relationshipbetween the Company and any of its affiliates and any employee thereof;(ii) hire any person who was an employee of the Company or any of itsaffiliates within one year prior to the time such employee was hired byExecutive; (iii) induce or attempt to induce any customer, supplier,licensee or other business relation of the Company or any of its affiliates tocease doing business with the Company or such affiliate or in any way interferewith the relationship between any such customer, supplier, licensee or businessrelation and the Company or any of its affiliates; or (iv) acquire orattempt to acquire an interest in any business which relates to any business ofthe Company or any of its affiliates and with which the Company and any of itsaffiliates has entered into substantive negotiations or has

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requestedand received confidential information relating to the acquisition of suchbusiness by the Company or any of its affiliates in the two-year periodimmediately preceding the termination of employment.

(c)          Business Scope andGeographical Limitation. Executive acknowledges (i) that the businessof the Company and its affiliates is, and is expected to remain, internationalin scope and without geographical limitation; (ii) notwithstanding thestate of incorporation or principal office of the Company or any of itsaffiliates, or any of their respective executives or employees (includingExecutive), it is expected that the Company and its affiliates will havebusiness activities and have valuable business relationships within itsindustry throughout the world; and (iii) as part of his responsibilities,Executive will travelaround the world in furtherance of the Company’s and its affiliates’ businessesand their relationships. Accordingly, the restrictions set forth in thisSection 7 shall be effective in all cities, counties and states of theUnited States and all countries in which the Company or any of its affiliateshas an office or is engaged in business as of the date of Executive’stermination or resignation.

(d)         Enforcement.If, at the time of enforcement of this Section 7, a court holds that therestrictions stated herein are unreasonable under circumstances then existing,the parties hereto agree that the maximum duration, scope or geographical areareasonable under such circumstances shall be substituted for the stated period,scope or area and that the court shall be allowed to revise the restrictionscontained herein to cover the maximum duration, scope and area permitted bylaw.

(e)          AdditionalAcknowledgments. Executive acknowledges that the provisions of thisSection 7****are in considerationof employment with the Company and the additional good and valuableconsideration as set forth in this Agreement. Executive acknowledges that hehas carefully read this Agreement and has given careful consideration to therestraints imposed upon Executive by this Agreement, and is in full accord asto their necessity for the reasonable and proper protection of confidential andproprietary information of the Company and its affiliates now existing or to bedeveloped in the future. Executive expressly acknowledges and agrees that eachand every restraint imposed by this Agreement was discussed

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ingood faith between the parties hereto and is reasonable with respect to subjectmatter, time period and geographical area. During the Term and the NoncompetePeriod, Executive agrees to provide the Company (upon the Company’s reasonablerequest) with such information as may be necessary to demonstrate Executive’scompliance with the terms and provisions of this Agreement.

8.    **Confidential Information.**

(a)          Obligation toMaintain Confidentiality. Executive acknowledges that the information,observations and data obtained by him during the course of his performanceunder this Agreement concerning the business and affairs of the Company and itsaffiliates are the property of the Company or such affiliates, includinginformation concerning acquisition opportunities in or reasonably related tothe Company’s or any of its affiliates’ business or industry of which Executivebecomes aware during the Term. Therefore, Executive agrees that he will notdisclose to any unauthorized person or use for his own account any of suchinformation, observations or data without the prior written consent of theChief Executive Officer or the Chief Operating Officer, unless, and then onlyto the extent that, the aforementioned matters become generally known to andavailable for use by the public other than as a result of Executive’s acts oromissions to act. Executive agrees to deliver to the Company upon terminationof employment, or at any other time the Company may request in writing, any andall property belonging to the Company and its affiliates in his possession orunder his control including, but not limited to, any memoranda, notes, plans,records, reports, documents, discs and other data storage media (and any copiesthereof).

(b)         Ownership ofProperty. Executive expressly understands and agrees that any and allright, title or interest he has or obtains in any documentation, trade secrets,technical specifications, data, know-how, inventions, concepts, ideas,techniques, innovations, discoveries, improvements, developments, methods,processes, programs, designs, analyses, drawings, reports, memoranda, marketingplans, and all similar or related information (whether or not patentable) conceived, devised, developed, contributedto, made, reduced to practice or otherwise had or obtained by Executive (eithersolely or jointly with others) during the Term that relate to

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theCompany’s or any of its affiliates’ actual or anticipated business, researchand development, or existing or future products or services, or that arise out ofExecutive’s employment with the Company or any of its affiliates (including anyof the foregoing that constitutes any proprietary information or records)(“Work Product”) belong to the Company or the respective affiliate, andExecutive hereby assigns, and agrees to assign, all of the above Work Productto the Company or to such affiliate. Any copyrightable work prepared in wholeor in part by Executive in the course of his work for any of the foregoingentities shall be deemed a “work made for hire” under the copyright laws, andthe Company or such affiliate shall own all rights therein. To the extent thatany such copyrightable work is not a “work made for hire,” Executive herebyassigns, and agrees to assign, to the Company or the respective affiliate allof his right, title and interest in and to such copyrightable work. Executiveshall promptly disclose such Work Product and copyrightable work to the ChiefExecutive Officer or Chief Operating Officer and perform all actions reasonablyrequested by the Board (whether during or after the Employment Period) toestablish and confirm the Company’s or the respective affiliate’s ownershiptherein (including executing and delivering any assignments, consents, powersof attorney and other instruments).

(c)          Third PartyInformation. Executive understands that the Company and its affiliates willreceive from third parties confidential or proprietary information (“ThirdParty Information”) subject to a duty on the Company’s and such affiliates’part to maintain the confidentiality of such information and to use it only forcertain limited purposes. During the Term and thereafter, and without in anyway limiting the provisions of Section 8(a) above, Executive willhold Third Party Information in the strictest confidence and will not discloseto anyone (other than personnel of the Company or its affiliates who need toknow such information in connection with their work for the Company or suchaffiliates) or use, except in connection with his work for the Company or such affiliates,Third Party Information without the prior written consent of the ChiefExecutive Officer or the Chief Operating Officer.

(d)         Use of Informationof Prior Employers. During the Term, Executive will not improperly use ordisclose any confidential information or trade secrets, if any, of any formeremployers or any other person to whom Executive has an obligation ofconfidentiality, and will not bring onto the premises of the Company or any ofits affiliates any unpublished documents or

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anyproperty belonging to any former employer or any other person to whom Executivehas an obligation of confidentiality unless consented to in writing by theformer employer or person. Executive will use in the performance of his dutiesonly information which is (i)(x) common knowledge in the industry or(y) is otherwise legally in the public domain; (ii) is otherwiseprovided or developed by the Company or its affiliates; or (iii) in thecase of materials, property or information belonging to any former employer or otherperson to whom Executive has an obligation of confidentiality, approved forsuch use in writing by such former employer or person.

9.    **Arbitration.**Alldisputes concerning the application, interpretation or enforcement of thisAgreement or otherwise arising out of the relationship between Executive, onthe one hand, and the Company or Parent, on the other hand, except for thosearising under Section 7 or 8 of this Agreement, shall be resolvedexclusively by final and binding arbitration before a single arbitrator inaccordance with the Employment Rules of the American ArbitrationAssociation then in effect. The arbitration shall be held in Washington, D.C.,and the arbitrator shall have the authority to permit the parties to engage inreasonable pre-hearing discovery. In any litigation or arbitration to enforcethis Agreement, the prevailing party will be awarded reasonable attorneys’ feesand costs. Each Party knowingly and voluntarily waives its right to a trial byjury with respect to disputes that are covered by this Section 9.

10.  **Notices.**Anynotice provided for or required by this Agreement must be in writing and mustbe either personally delivered, mailed by first class mail (postage prepaid andreturn receipt requested) or sent by reputable overnight courier service(charges prepaid) to the recipient at the addresses indicated below or to suchother address as a Party may designate in writing to the other Party:

If to the Company or Parent:Transaction Network Services, Inc.11480 Commerce Park DriveSuite 600Reston, VA  20191Attention:  General Counsel

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With a copy to:Arent Fox PLLC1050 Connecticut Avenue, N.W.Washington, D.C. 20036Attention:  Jeffrey E. Jordan, Esquire

If to Executive:To his last known home address on file with the Company

11.  **No Waiver**.The failure of either Party at any time to enforce any provision of thisAgreement or to exercise any remedy, option, right, power or privilege providedfor herein, or to require the performance by the other party of any of theprovisions hereof, shall in no way be deemed a waiver of such provision at thesame or at any prior or subsequent time.

12.  **Governing Law**.This Agreement is governed by and shall be construed in accordance with thelaws of the Commonwealth of Virginia, without reference to the principles ofconflict of laws therein. Executive agrees to submit to personal jurisdictionand venue in the Commonwealth of Virginia.

13.  **Validity**.The invalidity or unenforceability of any provision or provisions of thisAgreement shall not be deemed to affect the validity or enforceability of anyother provision of this Agreement, which shall remain in full force and effect.The court or arbitrator will modify any invalid or unenforceable provision tomake it valid and enforceable to the maximum extent permitted by law.

14.  **Successors**.This Agreement shall be binding upon TNS, its successors and assigns, includingany corporation or other business entity which may acquire all or substantiallyall of TNS’ assets or business, or within which TNS may be consolidated ormerged, or any surviving corporation in a merger involving TNS.

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15.  **Waiver or Modification ofAgreement**. No waiver or modification of this Agreement shall bevalid unless in writing and duly executed by both Parties.

16.  **Counterparts**.This Agreement may be executed in one or more counterparts, each of which andtogether will constitute one and the same instrument.

17.  **Entire Agreement**.   This Agreement represents the entireagreement, and supersedes all other agreements, discussions or understandingsconcerning the subject matter. The Amended and Restated Senior ManagementAgreement among Executive, the Company and Parent, dated March 19, 2004,is hereby terminated (except for any provisions relating to the continuedvesting of Carried Shares after the date hereof).

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**INWITNESS WHEREOF**, the parties have duly executed thisAgreement as of the date and year first above written.
| TRANSACTION NETWORK SERVICES, INC.: |   | EXECUTIVE:                      |
|-------------------------------------|--------|---------------------------------|
|                                |   |                            |   |   |
|                                |   |                            |   |   |
| By:                                 |   | /s/ John J. McDonnell, Jr. |   | /s/ Matthew M. Mudd |
|                                |   | John J. McDonnell, Jr.     |   | Matthew M. Mudd |
|                                |   |                            |   |   |
|                                |   |                            |   |   |
| TNS, INC.:                          |   |                            |
|                                |   |                            |   |   |
|                                |   |                            |   |   |
| By:                                 |   | /s/ John J. McDonnell, Jr. |   |   |
|                                |   | John J. McDonnell, Jr.     |   |   |

 

 

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