**Exhibit 10.2**

**EMPLOYMENT AGREEMENT**

**THISEMPLOYMENT AGREEMENT** dated as of March 10, 2006 (“Agreement”),is by and between Transaction Network Services, Inc., a Delawarecorporation (the “Company”), and its parent, TNS, Inc., a Delawarecorporation (“Parent”), on the one hand (collectively, “TNS”), and Brian J.Bates (“Executive”), on the other hand. (The Company, Parent and Executive willbe referred to collectively as the “Parties” and may each be referred toindividually as a “Party”).

**WHEREAS,**Executive has been employed as the President and Chief Operating Officer ofTNS; 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 in Section 6(e) ofthis 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 October 1, 1990.

3.    **Position and Duties**.Executive shall serve as the President and Chief Operating Officer of TNS,shall report directly to the Chief Executive Officer and will perform suchduties as are set forth in the job description for such position, as it may beamended by TNS from time-to-time, and such other reasonably related dutiesconsistent with such position that are assigned to Executive by the ChiefExecutive Officer and/or the Board. Subject to reasonable business travelrequirements, Executive shall generally perform his duties from the TNS’general and administrative offices in Reston, Virginia and shall not berequired by TNS to be personally based or transferred anywhere other than themetropolitan area in which his office in TNS’ general and administrativeoffices is now located, without Executive’s prior written consent. Executivewill perform his duties in a professional and competent manner. Executive shalldevote all of his working time and attention and his reasonable best effortsand skills to the business and affairs of TNS, except (i) with respect toincidental business activities, including the management of his personalinvestments, outside directorships, and civic and charitable activities, whichshall be fully disclosed to the Board of Directors prior to engaging in suchactivities and which, in the determination of the Board of Directors, do notcause a conflict of interest or interfere with Executive’s performance of hisduties under this Agreement; and (ii) as otherwise approved by the Boardof Directors.

4.    **Base Salary and Incentives**.

(a)          **Base Salary.**Duringthe Term, the Company will pay Executive a base salary at the rate of $412,000per 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 Base Salary shall be subject to annual review andpossible increase by the Board of Directors, but it shall not be decreasedduring the Term of this Agreement.

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(b)         **Annual Incentive AwardOpportunity**. Executive shall be eligible to participate in theCompany’s Annual Incentive Plan (the “AIP”), in accordance with the terms ofthe AIP as they may be amended by the Board from time-to time. Executive’starget annual award opportunity under the AIP shall be 50% of the Base Salary(the “AIP Annual Target”) and shall be subject, in accordance with the terms ofthe AIP, to an annual cap equal to 2 times the AIP Annual Target. Actual awardswill be based on the achievement of specified performance objectives, asdetermined by the 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 by the Boardfrom time-to time. Executive’s target annual award opportunity under the LTIPshall be 170% of the Base Salary (the “LTIP Annual Target”) and shall besubject, in accordance with the terms of the LTIP, to an annual cap equal to 2times 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) shallbe entitled to the benefits set forth in the Summary of Executive Benefitsattached to this Agreement as Appendix 1 (and incorporated herein) and (ii) shallalso be eligible to participate in all other employee benefit plans andprograms offered by the Company to its senior executives generally, inaccordance with the terms of those plans and programs ((i) and (ii) collectivelybeing the “Fringe Benefits”), as the Fringe Benefits may be amended orterminated from time-to-time by the Company.

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(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 essential functions of his position, withor without reasonable accommodation, as such applicable terms are defined bythe federal Americans with Disabilities Act, as it may be amended fromtime-to-time.

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(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) theCompany reduces Executive’s Base Salary as in effect on the date hereof or asthe same may be increased from time to time; or (v) any material reductionin Benefits provided to Executive pursuant to Sections 4 and 5 of thisAgreement, other than in connection with a reduction in benefits generallyapplicable to senior executives of the Company. In the event that Executiveelects to terminate this Agreement for Good Reason, Executive shall be entitledto:  (aa) payment of accrued and/orvested but unpaid Base Salary, pro-rated Incentive Awards (calculated and paidwhen such awards are paid to other employees generally), vacation pay and otherBenefits as of the termination date, unless otherwise required by law or plandocuments; (bb) payment of two years of Base Salary at the rate in effect as ofthe date of termination in installments in accordance with the Company’spayroll practices in effect at the time; and (cc) continuation of FringeBenefits for two years after the date of termination. In the event the Company’sFringe Benefit plans do not permit continued participation by Executive afterhis termination, then Executive will instead be entitled to a lump sum paymentfrom the Company of the expected cost to Executive to purchase and continue allsuch Fringe Benefit programs, as an individual or family policyholder, grossedup for all local, state and Federal taxes at the maximum tax rates. Executive’sentitlement to the Base Salary described in (bb) and the Fringe Benefitsdescribed in (cc) is conditional on his execution of a Severance Agreement andGeneral Release in substantially the same form attached hereto as Appendix 3. TNSagrees to provide to Executive within ten (10) days of termination theSeverance Agreement and General Release for execution.

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(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 otheremployees generally), vacation pay and other Benefits as of the terminationdate, unless otherwise 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) substantialfailure on the part of Executive in his performance of the duties of the officeheld by him as reasonably directed by the Chief Executive Officer and/or theBoard (other than any such failure resulting from Executive’s incapacity due tophysical or mental illness), after notice to Executive and a reasonableopportunity to cure; (iii) gross negligence or willful misconduct by Executivewith respect to the Company or any of its affiliates (including, withoutlimitation, disparagement that adversely affects the reputation of the Companyor any of its affiliates); or (iv) any material breach by Executive ofSections 3, 7 or 8 of this Agreement. For purposes of this Agreement, an act,or failure to act, on the Executive’s part shall be considered “grossnegligence” or “willful misconduct” only if done, or omitted, by him not ingood faith and without reasonable belief that his action or omission was in thebest interest of the Company and its affiliates. The Executive’s employmentshall not be deemed to have been terminated for “Cause” unless the Companyshall have given or delivered to the Executive (A) reasonable noticesetting forth the reasons for the Company’s intention to terminate theExecutive’s employment for “Cause”; (B) a reasonable opportunity, at anytime during the 30 day period after the Executive’s receipt of such notice, forthe Executive, together with his counsel, to be heard before the Board; and (C) anotice of termination stating that, in the good faith opinion of not less thana majority of the entire 

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membership of the Board,the Executive was guilty 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, Disability oras a result of the Executive’s death, or if the Executive terminates hisemployment during the Protection Period for Good Reason, the Company shall,subject to Section 7 of this Agreement, provide Executive with thefollowing within then (10) days of the effective date of 

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the Severance Agreementand General 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) the Executive’sannual Base Salary from the Company plus (y) the amount of IncentiveAwards accrued by TNS for the Executive, in each case for the three calendaryears that ended immediately before (or, if applicable, coincident with) theChange 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”));

(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 

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entitled to a lump sum payment from the Company of the expected cost toExecutive to purchase and continue all such Fringe Benefit programs, as anindividual or family policyholder, grossed up for all local, state and Federaltaxes 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 this Section 6(g) andSection 6(h) of this Agreement, the following terms are definedbelow:

“Change in Control”shall mean a change in control of a nature that would be required to bereported in response to Item 6(e) of Schedule 14A of Regulation 14Apromulgated under the Securities and Exchange Act of 1934, as amended (the “ExchangeAct”), whether or not the Parent is then subject to such reportingrequirements; provided that, without limitation, a Change in Control shall bedeemed to have occurred if (i) any person (as such term is used in section13(d) and 14(d) of the Exchange Act) is or becomes beneficial owner(as defined in Rule 13d-3 under the Exchange Act), directly orindirectly, of securities of the Parent representing 25 percent or more of thecombined voting power of the Parent’s then outstanding securities; or (ii) duringany period 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 such period constitute the Board and newdirectors each of whose election to the Board or nomination for election to theBoard by the Parent’s security holders was approved by a vote of at least twothirds of the directors then still in office who either were directors at thebeginning of 

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the period or whoseelection or nomination for election was previously so approved; or (iii) thesecurityholders of the Parent approve a merger or consolidation of the Parentwith any other corporation, other than a merger or consolidation that wouldresult in the voting securities of the Parent outstanding immediately beforethe merger or consolidation continuing to represent (either by remainingoutstanding or by being converted into voting securities of such survivingentity) a majority of the voting securities of the Parent or of such survivingentity outstanding immediately after such merger or consolidation; or (iv) thesecurity holders of the Parent approve a plan of complete liquidation of Parentor the Company 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) otherwisearose in connection with or anticipation of a Change in Control, then for thepurposes of this Agreement the “Change in Control Date” shall mean the dateimmediately 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;

(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;

 

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(iii) a failure by TNS to maintainplans providing Benefits at least as beneficial as those provided by anybenefit or compensation plan (including, without limitation, any incentivecompensation plan, bonus plan, or program, retirement, pension or savings plan,life insurance plan, health and dental plan, or disability plan) in which theExecutive is participating immediately before the beginning of the ProtectionPeriod or any action taken by TNS that would adversely affect the Executive’sparticipation in, or reduce the Executive’s opportunity to benefit under, anyof such plans or deprive the Executive of any material fringe benefit enjoyedby him immediately before the beginning of the Protection Period; provided,however, that a reduction in benefits under TNS’ tax qualified retirement,pension, or savings plans or its life insurance plan, health and dental plan,disability plans, or other insurance plans, which reduction applies generallyto participants in the plans and has a de minimis effect on the Executive shallnot constitute “Good Reason” for termination by the Executive;

(iv) the Company requiring theExecutive, without the Executive’s written consent, to be based at any officeor location in excess of 25 miles from his office location immediately beforethe beginning of the Protection Period, except for travel reasonably requiredin the performance of the Executive’s responsibilities;

(v)  any purported termination bythe Company of the Executive’s employment for Cause otherwise than as provided inSection 6(e) of this Agreement; or

(vi) any failure by TNS to obtainthe assumption of the obligations contained in this Agreement by any successoras contemplated in Section 9(c) of this Agreement.

“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 benefits of this Section 6, the “Severance Benefits”), if(x) the Severance Benefits equal or exceed 110% of three times Executive’s“base amount” determined for purposes of Section 280G of the Code, theCompany shall pay to Executive an additional amount (the “Gross-Up 

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Payment”) equal to thesum of any excise tax imposed under Section 280G of the Code (“ExciseTax”) on Executive by reason of receiving the Severance Benefits plus theamount necessary to place Executive in the same after-tax position (taking intoaccount any and all applicable federal, state and local excise, income andother taxes on the Gross-Up Payment) as if no Excise Tax had been imposed onthe Severance Befits and no Gross-Up Payment had been made to Executive, and if(y) the Severance 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 constituteparachute payments, 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 ofall non-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 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 

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the highest marginal rateof taxation in the state and locality of his residence on the date oftermination, net of the maximum reduction in federal income taxes which couldbe obtained from deduction of such state and local taxes. In the event that theExcise Tax is subsequently determined to be less than the amount taken intoaccount hereunder in the computation of the Gross-Up Payment, Executive shallrepay to the Company (without interest), at the time that the amount of suchreduction in Excise Tax is finally determined, the portion of the Gross-UpPayment attributable to such reduction (plus that portion of the Gross-UpPayment attributable the Excise tax and federal, state and local income andemployment tax imposed on the portion of the Gross-Up Payment being repaid byExecutive to the extent that such repayment results in a reduction in theExcise Tax and/or in a federal, state or local income or employment taxdeduction). In the event that the Excise Tax is determined to exceed the amounttaken into account hereunder at the time of the computation of the Gross-UpPayment (including by reason of any payment the existence or amount of whichcannot be determined at the time of the Gross-Up payment), the Company shallmake an additional Gross-Up Payment in respect of such excess (plus anyinterest, penalties or additions payable by Executive with respect to suchexcess) at the time that the amount of such excess is finally determined.Executive and TNS shall each reasonably cooperate with the other in connectionwith any administrative or judicial proceedings concerning the existence oramount of liability for Excise Tax with respect to the Severance Benefits.

(i)           **Notice of Termination**.Termination of this Agreement by TNS or termination of this Agreement by Executiveshall be communicated by written notice to the other Party hereto, specificallyindicating 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 returnall property of TNS, and all copies, excerpts or summaries of such property inwhatever form, that are in his possession, custody or control.

7.    **Noncompetitionand Nonsolicitation**. Executive acknowledges that in the courseof his employment with the Company he has and will become familiar with the 

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Company’sand its affiliates’ trade secrets and with other confidential informationconcerning The Company and its affiliates and that his services will be ofspecial, unique and extraordinary value to the Company and its affiliates.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 requested andreceived confidential information relating to the acquisition of such businessby the Company or any of its affiliates in the two-year period immediatelypreceding the termination of employment.

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(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 (including Executive),it is expected that the Company and its affiliates will have businessactivities and have valuable business relationships within its industrythroughout the world; and (iii) as part of his responsibilities, Executivewill travel around the world in furtherance of the Company’s and itsaffiliates’ businesses and their relationships. Accordingly, the restrictionsset forth in this Section 7 shall be effective in all cities, counties andstates of the United States and all countries in which the Company or any ofits affiliates has an office or is engaged in business as of the date ofExecutive’s termination 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 in good faithbetween the parties hereto and is reasonable with respect to subject matter,time period and geographical area. During the Term and the Noncompete Period,Executive agrees to provide the Company (upon the Company’s reasonable request)with such information as may be 

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necessaryto demonstrate Executive’s compliance with the terms and provisions of thisAgreement.

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, unless, and then only to the extent that, theaforementioned matters become generally known to and available for use by thepublic other than as a result of Executive’s acts or omissions to act.Executive agrees to deliver to the Company upon termination of employment, orat any other time the Company may request in writing, any and all property belongingto the Company and its affiliates in his possession or under his controlincluding, but not limited to, any memoranda, notes, plans, records, reports,documents, discs and other data storage media (and any copies thereof).

(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 the Company’s orany of its affiliates’ actual or anticipated business, research anddevelopment, 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 

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informationor records) (“Work Product”) belong to the Company or the respective affiliate,and Executive hereby assigns, and agrees to assign, all of the above WorkProduct to the Company or to such affiliate. Any copyrightable work prepared inwhole or in part by Executive in the course of his work for any of theforegoing entities shall be deemed a “work made for hire” under the copyrightlaws, and the Company or such affiliate shall own all rights therein. To theextent that any such copyrightable work is not a “work made for hire,”Executive hereby assigns, and agrees to assign, to the Company or the respectiveaffiliate all of his right, title and interest in and to such copyrightablework. Executive shall promptly disclose such Work Product and copyrightablework to the Chief Executive 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 Party Information.Executive understands that the Company and its affiliates will receive fromthird parties confidential or proprietary information (“Third PartyInformation”) subject to a duty on the Company’s and such affiliates’ part tomaintain the confidentiality of such information and to use it only for certainlimited purposes. During the Term and thereafter, and without in any waylimiting the provisions of Section 8(a) above, Executive will holdThird Party Information in the strictest confidence and will not disclose toanyone (other than personnel of the Company or its affiliates who need to knowsuch information in connection with their work for the Company or suchaffiliates) or use, except in connection with his work for the Company or suchaffiliates, Third Party Information without the prior written consent of theChief Executive Officer.

(d)           Use ofInformation of Prior Employers. During the Term, Executive will notimproperly use or disclose any confidential information or trade secrets, ifany, of any former employers or any other person to whom Executive has anobligation of confidentiality, and will not bring onto the premises of theCompany or any of its affiliates any unpublished documents or any propertybelonging to any former employer or any other person to whom Executive has anobligation of confidentiality unless consented to in writing by the formeremployer or person. Executive will use in the performance of his duties onlyinformation which is (i)(x) common 

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knowledgein the industry or (y) is otherwise legally in the public domain;(ii) is otherwise provided or developed by the Company or its affiliates;or (iii) in the case of materials, property or information belonging toany former employer or other person to whom Executive has an obligation ofconfidentiality, approved for such use in writing by such former employer orperson.

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).

[REMAINDER OF PAGELEFT INTENTIONALLY BLANK]

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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/ Brian Bates |
|   | John J.  McDonnell, Jr.         |   | Brian Bates     |
|   | TNS, INC.:                           |   |            |
| By:    | /s/ John J.  McDonnell, Jr.     |   |            |
|   | John J.  McDonnell, Jr.         |   |            |

 

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