Document:

REGISTRATION RIGHTS AGREEMENT

         THIS REGISTRATION RIGHTS AGREEMENT, dated as of January 28, 2005 (this
"Agreement"), is made by and between XENOMICS, INC., a Florida corporation,
having its principal place of business located at 420 Lexington Avenue, Suite
1701, New York, NY 10170 (the "Company"), and each entity named on a signature
page hereto (each, an "Initial Investor") (each agreement with an Initial
Investor being deemed a separate and independent agreement between the Company
and such Initial Investor, except that each Initial Investor acknowledges and
consents to the rights granted to each other Initial Investor under such
agreement).

                              W I T N E S S E T H:

         WHEREAS, upon the terms and subject to the conditions of the
Subscription Agreement between the Initial Investor and the Company, the Company
has agreed to issue and sell to the Initial Investor shares of the Common Stock
and Warrants of the Company; and

         WHEREAS, to induce the Initial Investor to execute and deliver the
Subscription Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"Securities Act"), with respect to the Registrable Securities;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and the
Initial Investor hereby agree as follows:

         1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:

         (a) "Equity Securities" of any Person means (i) any capital stock,
partnership, membership, joint venture or other ownership or equity interest,
participation or securities in or of such Person (whether voting or non-voting,
whether preferred, common or otherwise, and including any stock appreciation,
contingent interest or similar right) and (ii) any option, warrant, security or
other right (including debt securities) directly or indirectly convertible into
or exercisable or exchangeable for, or otherwise to acquire directly or
indirectly, any stock, interest, participation or security described in clause
(i) above

         (b) "Investor" means the Initial Investor and any permitted transferee
or assignee who agrees to become bound by the provisions of this Agreement in
accordance with Section 9 hereof and who holds Registrable Securities.

         (c) "Potential Material Event" means any of the following: (i) the
possession by the Company of material information not ripe for disclosure in a
registration statement, which shall be evidenced by a determination in good
faith by the Board of Directors of the Company that disclosure of such
information in the registration statement would be detrimental to the business

<PAGE>

and affairs of the Company or (ii) any material engagement or activity by the
Company which would, in the good faith determination of the Board of Directors
of the Company, be adversely affected by disclosure in a registration statement
at such time; in each case where such determination shall be accompanied by a
good faith determination by the Board of Directors of the Company that the
registration statement would be materially misleading absent the inclusion of
such information.

         (d) "Register," "Registered," and "Registration" refer to a
registration effected by preparing and filing a Registration Statement or
Statements in compliance with the Securities Act and pursuant to Rule 415 under
the Securities Act or any successor rule providing for offering securities on a
continuous basis ("Rule 415"), and the declaration or ordering of effectiveness
of such Registration Statement by the United States Securities and Exchange
Commission (the "SEC").

         (e) "Registrable Securities" means (i) Common Stock held by the
Investors as of the date hereof, including the shares of Common Stock issuable
upon exercise of the Warrants and (ii) any Equity Securities of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, in exchange for or in replacement of the shares referenced in clause (i)
above, excluding in all cases, however, (a) any Registrable Securities that have
been previously sold pursuant to a registration statement filed and declared
effective by the SEC, (b) Registrable Securities that have been sold by a Person
in a transaction in which his or her rights under this Section 1 are not duly
assigned as provided herein, (c) any Registrable Securities after such
securities have been sold in a Public Sale.

         (f) "Registration Statement" means a registration statement of the
Company under the Securities Act covering Registrable Securities on Form S-3, if
the Company is then eligible to file using such form, and if not eligible, on
Form SB-2 or other appropriate form.

         (g) "Effective Date" means the date the SEC declares a Registration
Statement covering Registrable Securities and otherwise meeting the conditions
contemplated hereby to be effective.

         (h) "Public Sale" means a sale of securities pursuant to a registration
statement declared effective under the Securities Act or to the public through a
broker, dealer or market maker pursuant to the provisions of Rule 144 (or any
similar provision then in effect) adopted under the Securities Act.

         2. Registration.

         (a) Mandatory Registration. The Company shall prepare and file with the
SEC, as soon as possible after the final Closing Date but no later than one
hundred twenty (120) days after the Closing Date (the "Required Filing Date"),
either a Registration Statement or an amendment to an existing Registration
Statement, in either event registering for resale by the Investor a sufficient
number of shares of Common Stock for the Initial Investors to sell the
Registrable Securities, but in no event less than the number of shares equal to

                                       2
<PAGE>

the Registrable Securities at the time of filing of such Registration Statement
(or such lesser number as may be required by the SEC). The Registration
Statement shall include the Registrable Securities, and shall also state that,
in accordance with Rule 416 and 457 under the Securities Act, it also covers
such indeterminate number of additional shares of Common Stock as may become
issuable to prevent dilution resulting from stock splits, or stock dividends.
The Company will use its reasonable best efforts to cause such Registration
Statement to be declared effective on a date (the "Initial Effective Date")
which is no later than the earlier of five (5) days after oral or written notice
by the SEC that it may be declared effective or two hundred seventy (270) days
after the Closing Date.

         (b) Payments by the Company.

                  (i) If the Registration Statement covering the Registrable
Securities is not filed in accordance with the terms of this Agreement with the
SEC by the Required Filing Date, the Company will make payment to the Initial
Investor in such amounts and at such times as shall be determined pursuant to
this Section 2(b).

                  (ii) The amount (the "Periodic Amount") to be paid by the
Company to the Initial Investor shall be determined as of each Computation Date
(as defined below) and such amount shall be equal to one eighth percent (1/8%)
of the Purchase Price for the period from the date following the Required Filing
Date to the first relevant Computation Date, and thereafter to each subsequent
Computation Date, in each case prorated on a daily basis. By way of illustration
and not in limitation of the foregoing, if the Registration Statement is not
filed until one hundred eighty (180) days after the final Closing Date, the
Periodic Amount will aggregate one-quarter percent (1/4%) of the Purchase Price
(1/8% for days 121-150, plus 1/8% for days 151-180).

                  (iii) Upon demand therefor by the Investor, each Periodic
Amount will be payable by the Company, at the Company's option, in cash or in
common stock of the Company (which if issued shall be deemed to be Registrable
Securities pursuant to this Agreement) to the Investor (1) on the earlier of the
thirty-first day after the Required Filing Date, and (2) on the earlier of (A)
each thirtieth day thereafter or, (B) the third business day after the date the
Registration Statement is filed. Any common stock of the Company issued pursuant
to this Section 2(b)(iii) shall be valued at the closing bid price of the
Company's common stock as reported by the OTC Bulletin Board (or Nasdaq if the
common stock is then quoted on Nasdaq) on the day preceding the Investor's
demand or if the common stock is not trading on the OTC Bulletin Board (or
Nasdaq) the common stock of the Company shall be valued at a price determined in
good faith by the Board of Directors of the Company.

                  (iv) The parties acknowledge that the damages which may be
incurred by the Investor if the Registration Statement is not filed by the
Required Filing Date, including if the right to sell Registrable Securities
under a previously effective Registration Statement is suspended may be
difficult to ascertain. The parties agree that the Periodic Amounts represent a
reasonable estimate on the part of the parties, as of the date of this
Agreement, of the amount of such damages.

                                       3
<PAGE>

                  (v) Notwithstanding the foregoing, the amounts payable by the
Company pursuant to this provision shall not be payable (A) to the extent any
delay in the filing of the Registration Statement occurs because of an act of,
or a failure to act or to act timely by the Initial Investor or its counsel, or
(B) in the event all of the Registrable Securities may be sold pursuant to Rule
144 or another available exemption under the Act without volume or other
restrictions or limits.

                  (vi) "Computation Date" means (A) the date which is the
earlier of (1) thirty (30) days after the Required Filing Date or (2) the date
after the Required Filing Date on which the Registration Statement is filed
(with respect to payments due as contemplated by Section 2(b)(i) hereof) and (B)
each date which is the earlier of (1) thirty (30) days after the previous
Computation Date or (2) the date after the previous Computation Date on which
the Registration Statement is filed (with respect to payments due as
contemplated by Section 2(b)(i) hereof).

         3. Obligations of the Company. In connection with the registration of
the Registrable Securities, the Company shall do each of the following:

         (a) Prepare promptly, and file with the SEC by the Required Filing Date
a Registration Statement with respect to not less than the number of Registrable
Securities provided in Section 2(a) above, and thereafter use its reasonable
best efforts to cause such Registration Statement relating to Registrable
Securities to become effective by the Initial Effective Date and keep the
Registration Statement effective at all times during the period (the
"Registration Period") continuing until the earliest of (i) the date that is two
(2) years after the last day of the calendar month following the month in which
the relevant Effective Date occurs, (ii) the date when the Investors may sell
all Registrable Securities under Rule 144 without volume or other restrictions
or limits or (iii) the date the Investors no longer own any of the Registrable
Securities, which Registration Statement (including any amendments or
supplements thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;

         (b) Prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and, during the Registration Period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by the Registration Statement
until such time as all of such Registrable Securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof as set forth in the Registration Statement;

         (c) Permit a single firm of counsel designated by the Initial Investors
to review the Registration Statement and all amendments and supplements thereto
a reasonable period of time (but not less than three (3) business days) prior to
their filing with the SEC, and not file any document in a form to which such
counsel reasonably objects;

                                       4
<PAGE>

         (d) Notify each Investor and such Investor's legal counsel identified
to the Company and which has requested by written notice to the Company that it
receive such notification ("Investor's Counsel") and any managing underwriters
immediately (and, in the case of(i)(A) below, not less than three (3) business
days prior to such filing) and (if requested by any such person) confirm such
notice in writing no later than one (1) business day following the day (i)(A)
when a Prospectus or any Prospectus supplement or post-effective amendment to
the Registration Statement is proposed to be filed; (B) whenever the SEC
notifies the Company whether there will be a "review" of such Registration
Statement; (C) whenever the Company receives (or a representative of the Company
receives on its behalf) any oral or written comments from the SEC in respect of
a Registration Statement (copies or, in the case of oral comments, summaries of
such comments shall be promptly furnished by the Company to the Investors); and
(D) with respect to the Registration Statement or any post-effective amendment,
when the same has become effective; (ii) of any request by the SEC or any other
Federal or state governmental authority for amendments or supplements to the
Registration Statement or Prospectus or for additional information; (iii) of the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement covering any or all of the Registrable Securities or the
initiation of any proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any proceeding for such
purpose; and (v) of the occurrence of any event that to the best knowledge of
the Company makes any statement made in the Registration Statement or Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. In
addition, the Company shall furnish the Investor's Counsel with copies of all
intended written responses to the comments contemplated in clause (C) of this
Section 3(d) not later than one (1) business day in advance of the filing of
such responses with the SEC so that the Investors shall have the opportunity to
comment thereon;

         (e) Furnish to each Investor and such Investor's Counsel (i) promptly
after the same is prepared and publicly distributed, filed with the SEC, or
received by the Company, one (1) copy of the Registration Statement, each
preliminary prospectus and prospectus, and each amendment or supplement thereto,
and (ii) such number of copies of a prospectus, and all amendments and
supplements thereto and such other documents, as such Investor may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Investor;

         (f) As promptly as practicable after becoming aware thereof, notify
each Investor of the happening of any event of which the Company has knowledge,
as a result of which the prospectus included in the Registration Statement, as
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the

                                       5
<PAGE>

statements therein, in light of the circumstances under which they were made,
not misleading, and use its best efforts promptly to prepare a supplement or
amendment to the Registration Statement or other appropriate filing with the SEC
to correct such untrue statement or omission, and deliver a number of copies of
such supplement or amendment to each Investor as such Investor may reasonably
request;

         (g) As promptly as practicable after becoming aware thereof, notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance by the SEC
of a Notice of Effectiveness or any notice of effectiveness or any stop order or
other suspension of the effectiveness of the Registration Statement at the
earliest possible time;

         (h) Notwithstanding the foregoing, if at any time or from time to time
after the date of effectiveness of the Registration Statement, the Company
notifies the Investors in writing of the existence of a Potential Material
Event, the Investors shall not offer or sell any Registrable Securities, or
engage in any other transaction involving or relating to the Registrable
Securities, from the time of the giving of notice with respect to a Potential
Material Event until such Investor receives written notice from the Company that
such Potential Material Event either has been disclosed to the public or no
longer constitutes a Potential Material Event.

         (i) Use its reasonable efforts to secure and maintain the designation
of all the Registrable Securities covered by the Registration Statement on the
OTC Bulletin Board.

         (j) Provide a transfer agent and registrar, which may be a single
entity, for the Registrable Securities not later than the Initial Effective
Date.

         (k) Cooperate with the Investors who hold Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the Registration Statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts as the case may be, as the Investors may reasonably
request, and, within five (5) business days after a Registration Statement which
includes Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel selected by the Company to deliver,
to the transfer agent for the Registrable Securities (with copies to the
Investors whose Registrable Securities are included in such Registration
Statement) an appropriate instruction and, if necessary, an opinion of such
counsel; and

         (l) Take all other reasonable actions necessary to expedite and
facilitate disposition by the Investor of the Registrable Securities pursuant to
the Registration Statement.

         4. Obligations of the Investors. In connection with the registration of
the Registrable Securities, the Investors shall have the following obligations:

         (a) It shall be a condition precedent to the obligations of the Company
to complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of the Registrable Securities
held by it, as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such

                                       6
<PAGE>

registration as the Company may reasonably request. At least ten (10) days prior
to the first anticipated filing date of the Registration Statement, the Company
shall notify each Investor of the information the Company requires from each
such Investor (the "Requested Information") if such Investor has any Registrable
Securities included in the Registration Statement. If at least two (2) business
days prior to the filing date the Company has not received the Requested
Information from an Investor (a "Non-Responsive Investor"), then the Company may
file the Registration Statement without including Registrable Securities of such
Non-Responsive Investor;

         (b) Each Investor, by such Investor's acceptance of the Registrable
Securities, agrees to cooperate with the Company as reasonably requested by the
Company in connection with the preparation and filing of the Registration
Statement hereunder, unless such Investor has notified the Company in writing of
such Investor's election to exclude all of such Investor's Registrable
Securities from the Registration Statement; and

         (c) Each Investor agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in Section 3(f) or
3(g), above, such Investor will immediately discontinue disposition of
Registrable Securities pursuant to the Registration Statement covering such
Registrable Securities until such Investor's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3(f) or 3(g) and, if
so directed by the Company, such Investor shall deliver to the Company (at the
expense of the Company) or destroy (and deliver to the Company a certificate of
destruction) all copies in such Investor's possession, of the prospectus
covering such Registrable Securities current at the time of receipt of such
notice.

         5. Expenses of Registration. All reasonable expenses (other than
underwriting discounts and commissions of the Investor) incurred in connection
with registrations, filings or qualifications pursuant to Section 3, but
including, without limitation, all registration, listing, and qualifications
fees, printers and accounting fees, the fees and disbursements of counsel for
the Company shall be borne by the Company.

         6. Indemnification. In the event any Registrable Securities are
included in a Registration Statement under this Agreement:

         (a) To the extent permitted by law, the Company will indemnify and hold
harmless each Investor who holds such Registrable Securities, the directors, if
any, of such Investor, the officers, if any, of such Investor, each person, if
any, who controls any Investor within the meaning of the Securities Act or the
Exchange Act (each, an "Indemnified Person" or "Indemnified Party"), against any
losses, claims, damages, liabilities or expenses (joint or several) incurred
(collectively, "Claims") to which any of them may become subject under the
Securities Act, the Exchange Act or otherwise, insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any of the following statements, omissions or
violations in the Registration Statement, or any post-effective amendment
thereof, or any prospectus included therein: (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
any post-effective amendment thereof or the omission or alleged omission to

                                       7
<PAGE>

state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (ii) any untrue statement or alleged
untrue statement of a material fact contained in the final prospectus (as
amended or supplemented, if the Company files any amendment thereof or
supplement thereto with the SEC) or the omission or alleged omission to state
therein any material fact necessary to make the statements made therein, in
light of the circumstances under which the statements therein were made, not
misleading or (iii) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act, any state securities law or any rule or
regulation under the Securities Act, the Exchange Act or any state securities
law (the matters in the foregoing clauses (i) through (iii) being, collectively,
"Violations"). Subject to clause (b) of this Section 6, the Company shall
reimburse the Investors, promptly as such expenses are incurred and are due and
payable, for any legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement
contained in this Section 6(a) shall not (I) apply to a Claim arising out of or
based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of any
Indemnified Person expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement thereto,
after such prospectus was made available by the Company pursuant to Section 3(c)
hereof; (II) be available to the extent such Claim is based on a failure of the
Investor to deliver or cause to be delivered the prospectus made available by
the Company or the amendment or supplement thereto made available by the
Company; (III) be available to the extent such Claim is based on the delivery of
a prospectus by the Investor after receiving notice from the Company under
Section 3(f), (g) or (h) hereof (other than a notice regarding the effectiveness
of the Registration Statement or any amendment or supplement thereto), or (IV)
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed. Each Investor will indemnify the Company and
its officers, directors and agents (each, an "Indemnified Person" or
"Indemnified Party") against any claims arising out of or based upon a Violation
which occurs in reliance upon and in conformity with information furnished in
writing to the Company, by or on behalf of such Investor, expressly for use in
connection with the preparation of the Registration Statement or the amendment
or supplement thereto, subject to such limitations and conditions as are
applicable to the Indemnification provided by the Company to this Section 6.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Indemnified Person and shall survive
the transfer of the Registrable Securities by the Investors pursuant to Section
9.

         (b) Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 6 of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 6, deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be. In case any such action is brought against any Indemnified Person
or Indemnified Party, and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate in, and, to the
extent that it may wish, jointly with any other indemnifying party similarly
notified, assume the defense thereof, subject to the provisions herein stated

                                       8
<PAGE>

and after notice from the indemnifying party to such Indemnified Person or
Indemnified Party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such Indemnified Person or Indemnified
Party under this Section 6 for any legal or other reasonable out-of-pocket
expenses subsequently incurred by such Indemnified Person or Indemnified Party
in connection with the defense thereof other than reasonable costs of
investigation, unless the indemnifying party shall not pursue the action to its
final conclusion. The Indemnified Person or Indemnified Party shall have the
right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and reasonable out-of-pocket expenses of such
counsel shall not be at the expense of the indemnifying party if the
indemnifying party has assumed the defense of the action with counsel reasonably
satisfactory to the Indemnified Person or Indemnified Party provided such
counsel is of the opinion that all defenses available to the Indemnified Party
can be maintained without prejudicing the rights of the indemnifying party. The
failure to deliver written notice to the indemnifying party within a reasonable
time of the commencement of any such action shall not relieve such indemnifying
party of any liability to the Indemnified Person or Indemnified Party under this
Section 6, except to the extent that the indemnifying party is prejudiced in its
ability to defend such action. The indemnification required by this Section 6
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.

         7. Contribution. To the extent any indemnification by an indemnifying
party is prohibited or limited by law, the indemnifying party agrees to make the
maximum contribution with respect to any amounts for which it would otherwise be
liable under Section 6 to the fullest extent permitted by law; provided,
however, that (a) no contribution shall be made under circumstances where the
maker would not have been liable for indemnification under the fault standards
set forth in Section 6; (b) no seller of Registrable Securities guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of Registrable
Securities who was not guilty of such fraudulent misrepresentation; and (c)
except where the seller has committed fraud (other than a fraud by reason of the
information included or omitted from the Registration Statement as to which the
Company has not given notice as contemplated under Section 3 hereof) or
intentional misconduct, contribution by any seller of Registrable Securities
shall be limited in amount to the net amount of proceeds received by such seller
from the sale of such Registrable Securities.

         8. Reports under Securities Act and Exchange Act. With a view to making
available to Investor the benefits of Rule 144 promulgated under the Securities
Act or any other similar rule or regulation of the SEC that may at any time
permit Investor to sell securities of the Company to the public without
Registration ("Rule 144"), the Company agrees to:

         (a) make and keep public information available, as those terms are
understood and defined in Rule 144;

         (b) file with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and

                                       9
<PAGE>

         (c) furnish to Investor so long as Investor owns Registrable
Securities, promptly upon request, (i) a written statement by the Company that
it has complied with the reporting requirements of the Securities Act and the
Exchange Act, and (ii) such other information as may be reasonably requested to
permit Investor to sell such securities pursuant to Rule 144 without
Registration.

         (d) The Company will, at the request of any Holder of Registrable
Securities, upon receipt from such Holder of a certificate certifying (i) that
such Holder has held such Registrable Securities for a period of not less than
one (1) year, (ii) that such Holder has not been an affiliate (as defined in
Rule 144) of the company for more than the ninety (90) preceding days, and (iii)
as to such other matters as may be appropriate in accordance with such Rule,
remove from the stock certificate representing such Registrable Securities that
portion of any restrictive legend which relates to the registration provisions
of the Securities Act, provided, however, counsel to Investor may provide such
instructions and opinion to the transfer agent regarding the removal of the
restrictive legend.

         9. Assignment of the Registration Rights. The rights to have the
Company register Registrable Securities pursuant to this Agreement shall be
automatically assigned by the Investors to any transferee of the Registrable
Securities only if: (a) the Investor agrees in writing with the transferee or
assignee to assign such rights, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment, (b) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (i) the name and address of such transferee or assignee and
(ii) the securities with respect to which such registration rights are being
transferred or assigned, (c) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws, (d) at
or before the time the Company received the written notice contemplated by
clause (b) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein, and (e) such
transfer of Registrable Securities is completed and disclosed to the Company
prior to the Initial Effective Date. In the event of any delay in filing or
effectiveness of the Registration Statement as a result of such assignment, the
Company shall not be liable for any damages arising from such delay, or the
payments set forth in Section 2(b) hereof arising from such delay.

         10. Amendment of Registration Rights. Any provision of this Agreement
may be amended and the observance thereof may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Company and Investors who hold a sixty-seven percent
(67%) interest of the Registrable Securities. Any amendment or waiver effected
in accordance with this Section 10 shall be binding upon each Investor and the
Company.

         11. Miscellaneous.

         (a) A person or entity is deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or

                                       10
<PAGE>

elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

         (b) Notices required or permitted to be given hereunder shall be given
in the manner contemplated by the Securities Purchase Agreement, (i) if to the
Company or to the Initial Investor, to their respective address contemplated by
the Securities Purchase Agreement, and (ii) if to any other Investor, at such
address as such Investor shall have provided in writing to the Company, or at
such other address as each such party furnishes by notice given in accordance
with this Section 11(b).

         (c) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

         (d) This Agreement shall be governed by and interpreted in accordance
with the laws of the State of New York for contracts to be wholly performed in
such state and without giving effect to the principles thereof regarding the
conflict of laws. Each of the parties consents to the jurisdiction of the
federal courts whose districts encompass any part of the City of New York or the
state courts of the State of New York sitting in the City of New York in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on forum non coveniens, to the bringing of any such proceeding in such
jurisdictions. To the extent determined by such court, either party hereto shall
reimburse the other party for any reasonable legal fees and disbursements
incurred by such party in enforcement of or protection of any of its rights
under this Agreement.

         (e) If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement or the
validity or enforceability of this Agreement in any other jurisdiction.

         (f) Subject to the requirements of Section 9 hereof, this Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties hereto.

         (g) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

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

         (i) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. This Agreement, once executed by a party, may be delivered to
the other party hereto by telephone line facsimile transmission of a copy of
this Agreement bearing the signature of the party so delivering this Agreement.

                                       11
<PAGE>

         (j) The Company acknowledges that any failure by the Company to perform
its obligations under Section 3(a) hereof, or any delay in such performance
could result in loss to the Investors, and the Company agrees that, in addition
to any other liability the Company may have by reason of such failure or delay,
the Company shall be liable for all direct damages caused by any such failure or
delay, unless the same is the result of force majeure. Neither party shall be
liable for consequential damages.

         (k) This Agreement constitutes the entire agreement among the parties
hereto with respect to the subject matter hereof There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings among
the parties hereto with respect to the subject matter hereof This Agreement may
be amended only by an instrument in writing signed by the party to be charged
with enforcement thereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first above written.

                                         COMPANY:
                                         XENOMICS, INC.

                                         By:
                                            ------------------------------------

                                         Name:
                                               ---------------------------------
                                         Title:
                                                --------------------------------

                                         INITIAL INVESTOR:

                                         [Print Name of Initial Investor]

                                         By:
                                             -----------------------------------

                                         Name;
                                               ---------------------------------
                                         Title:
                                                --------------------------------

                                       13<Page>

                                                                   Exhibit 10.5

                               MORNINGSTAR, INC.
                           2004 STOCK INCENTIVE PLAN
                           -------------------------

<Page>

                   MORNINGSTAR, INC. 2004 STOCK INCENTIVE PLAN
                   -------------------------------------------

                               TABLE OF CONTENTS

<Table>
<Caption>

                                                                         Page
                                                                         ----
<S>            <C>                                                       <C>
Article 1.     Establishment, Objectives and Duration...................   1
Article 2.     Definitions..............................................   1
Article 3.     Administration...........................................   7
Article 4.     Shares Subject to the Plan and Maximum Awards............   7
Article 5.     Eligibility and Participation............................   8
Article 6.     Options..................................................   9
Article 7.     Stock Appreciation Rights................................  13
Article 8.     Restricted Stock and Restricted Stock Units..............  13
Article 9.     Performance Shares.......................................  15
Article 10.    Performance Measures.....................................  16
Article 11.    Beneficiary Designation..................................  17
Article 12.    Deferrals................................................  17
Article 13.    Rights of Participants...................................  17
Article 14.    Amendment, Modification and Termination..................  17
Article 15.    Nontransferability of Awards.............................  18
Article 16.    Withholding..............................................  19
Article 17.    Indemnification..........................................  19
Article 18.    Successors...............................................  20
Article 19.    Breach of Restrictive Covenants..........................  20
Article 20.    Legal Construction.......................................  20
Appendix A     Special Provisions Applicable to Foreign Nationals
               and Employees Outside of the United States...............

</Table>

                                       -i-

<Page>

                    MORNINGSTAR, INC. 2004 STOCK INCENTIVE PLAN
                    -------------------------------------------

ARTICLE 1.    ESTABLISHMENT, OBJECTIVES AND DURATION

      1.1     ESTABLISHMENT OF THE PLAN. Morningstar, Inc., an Illinois
corporation, hereby establishes this Morningstar, Inc. 2004 Stock Incentive
Plan (the "Plan") as set forth in this document. Capitalized terms used but
not otherwise defined herein will have the meanings given to them in Article
2. The Plan permits the grant of Nonstatutory Stock Options, Incentive Stock
Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units,
and Performance Shares. In addition, the Plan provides the opportunity for
the deferral of the payment of salary, bonuses and other forms of incentive
compensation.

      Subject to the approval of the Company's shareholders, the Plan will
become effective upon its approval by the Board of Directors, and will remain
in effect as provided in Section 1.3 hereof.

      1.2     PURPOSE OF THE PLAN. The purpose of the Plan is to promote the
success and enhance the value of the Company by linking the personal
interests of Participants to those of Company shareholders, and by providing
Participants with an incentive for outstanding performance. The Plan is
further intended to provide flexibility to the Company in its ability to
motivate, attract and retain the services of Participants upon whose
judgment, interest, and special effort the successful conduct of its business
is largely dependent.

      1.3     DURATION OF THE PLAN. The Plan will commence on the Effective
Date, as described in Article 2, and will remain in effect, subject to the
right of the Committee to amend or terminate the Plan at any time pursuant to
Article 14, until all Shares subject to it pursuant to Article 4 have been
issued or transferred according to the Plan's provisions. In no event may an
Award be granted under the Plan on or after the tenth annual anniversary of
the Effective Date.

      1.4     PLAN MERGER. The 2001 Morningstar Stock Option Plan, as
amended, the Amended and Restated 2000 Morningstar Stock Option Plan, and the
Amended and Restated 1993 Morningstar Stock Option Plan shall be merged into
this Plan as of the Effective Date. Stock options awarded under the Prior
Plans shall be governed by the terms of this Plan.

ARTICLE 2.    DEFINITIONS

      Whenever used in the Plan, the following terms have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
is capitalized:

      "AFFILIATES" means (a) for purposes of Incentive Stock Options, any
corporation that is a Parent or Subsidiary of the Company, and (b) for all
other purposes hereunder, an entity that is (directly or indirectly)
controlled by, or controls, the Company.

      "AWARD" means, individually or collectively, a grant under this Plan to
a Participant of Nonstatutory Stock Options, Incentive Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, and
Performance Shares.

<Page>

      "AWARD AGREEMENT" means an agreement entered into by the Company and a
Participant setting forth the terms and provisions applicable to an Award or
Awards granted to the Participant or the terms and provisions applicable to
an election to defer compensation under Section 8.2.

      "BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company.

      "CAUSE" shall mean the Participant's:

      (a)   willful neglect of or continued failure to substantially perform
            his or her duties with or obligations for the Company or an
            Affiliate in any material respect (other than any such failure
            resulting from his or her incapacity due to physical or mental
            illness);

      (b)   commission of a willful or grossly negligent act or the willful
            or grossly negligent omission to act that causes or is
            reasonably likely to cause material harm to the Company or an
            Affiliate; or

      (c)   commission or conviction of, or plea of NOLO CONTENDERE to,
            any felony or any crime significantly injurious to the Company
            or an Affiliate.

An act or omission is "willful" for this purpose if it was knowingly done, or
knowingly omitted, by the Participant in bad faith and without reasonable
belief that the act or omission was in the best interest of the Company or an
Affiliate. Determination of Cause shall be made by the Committee in its sole
discretion.

      "CHANGE IN CONTROL" means the occurrence of any one or more of the
following: (a) any "person" (as such term is defined in Section 3(a)(9) of
the Exchange Act and as used in Sections 13(d)(3) and 14(d)(2) of the
Exchange Act) who, after the Effective Date, becomes a "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
more than fifty percent (50%) of the Shares (other than Joe Mansueto, his
spouse and descendants, and any trustee or custodian for and on behalf of any
of them), (b) the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company (a
"Business Combination"), unless immediately following such Business
Combination more than sixty percent (60%) of the total voting power of (i)
the company resulting from such Business Combination (the "Surviving
Company"), or (ii) if applicable, the ultimate parent company that directly
or indirectly has beneficial ownership of one hundred percent (100%) of the
voting securities eligible to elect directors of the Surviving Company (the
"Parent Company") is represented by Shares that were outstanding immediately
prior to such Business Combination (or, if applicable, is represented by
shares into which such Shares were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Shares among
the holders thereof immediately prior to the Business Combination, or (c) the
stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or a sale of all or substantially all of the
Company's assets.

      "CODE" means the Internal Revenue Code of 1986, as amended from
time to time.

                                      -2-
<Page>

      "COMMITTEE" shall mean the Compensation Committee of the Board of
Directors, the composition of which shall at all times satisfy the provisions
of Section 162(m) of the Code and shall consist of at least two directors who
are "independent directors" within the meaning of the NASDAQ marketplace
rules, and "nonemployee directors" within the meaning of Exchange Act Rule
16b-3.

      "COMPANY" means Morningstar, Inc., an Illinois corporation, and any
successor thereto as provided in Article 18.

      "CONSULTANT" means any person, including an advisor, engaged by the
Company or an Affiliate to render services to such entity and who is not a
Director or an Employee.

      "DIRECTOR" means any individual who is a member of the Board of
Directors.

      "DISABILITY" shall mean

      (a)   A physical or mental condition that would qualify a Participant
            for a disability benefit under the long-term disability plan of
            the Company applicable to him or her;

      (b)   If the Participant is not covered by such a long-term disability
            plan, disability as defined for purposes of eligibility for a
            disability award under the Social Security Act;

      (c)   When used in connection with the exercise of an Incentive
            Stock Option following termination of employment, disability within
            the meaning of Code Section 22(e)(3); or

      (d)   Such other condition as may be determined by the Committee
            in its sole discretion to constitute Disability.

      "EFFECTIVE DATE" means the date of the Plan's adoption by the Board
subject to the approval of the Plan by the Company's shareholders.

      "EMPLOYEE" means any person employed by the Company or an Affiliate in
a common law employee-employer relationship. A Participant shall not cease to
be an Employee for purposes of this Plan in the case of (i) any leave of
absence approved by the Company or (ii) transfers between locations of the
Company or among the Company, its Parent, any Subsidiary, or any successor.
For purposes of Incentive Stock Options, no such leave may exceed ninety (90)
days, unless reemployment upon expiration of such leave is guaranteed by
statute or contract. If reemployment upon expiration of a leave of absence
approved by the Company is not so guaranteed, on the one hundred and
eighty-first (181st) day of such leave any Incentive Stock Option held by the
Participant shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option. Neither service
as a Director nor payment of a director's fee by the Company shall be
sufficient to constitute "employment" by the Company.

      "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.

                                      -3-
<Page>

      "EXERCISE PRICE" means the price at which a Share may be purchased by a
Participant pursuant to an Option.

      "FAIR MARKET VALUE" shall be determined as follows:

      (a)   At all times prior to an IPO, "Fair Market Value" shall be
            determined pursuant to one or more Valuations conducted
            on behalf of the Company. The Committee shall determine Fair
            Market Value at its sole discretion, based upon the results
            of each Valuation, as more fully provided herein. At times
            when the Fair Market Value of a Share is determined pursuant
            to a Valuation, the following timing rules shall apply:

            (i)   In the event that the date on which a transaction
                  involving Shares occurs is within six (6) months
                  following the most recently completed Valuation, the
                  Fair Market Value of the Shares involved in the
                  transaction shall be determined by reference to the
                  results of the most recently completed Valuation.

           (ii)   In the event that the date on which a transaction involving
                  Shares occurs is six (6) months or more after the most
                  recently completed Valuation, the Fair Market Value of the
                  Shares involved in the transaction shall be determined by
                  reference to the results of the Valuation or Valuations that
                  the Committee, in its sole discretion, deems appropriate.

           The Committee shall have the authority to modify the results of any
           Valuation in any manner that it deems necessary to ensure the
           consistency of the determination of Fair Market Value throughout the
           term of the Plan.

      (b)   At all times following an IPO, "Fair Market Value" means

            (i)   the average of the high and low trading prices of the Shares
                  on the New York Stock Exchange or on such other national
                  securities exchange on which the Shares are listed, or, if the
                  Shares are not traded on any other exchange and are regularly
                  quoted on the NASDAQ National Market System, on the NASDAQ
                  National Market System if the Shares are admitted for
                  quotation thereon; or

           (ii)   if the Shares are not traded on any exchange or regularly
                  quoted on the NASDAQ National Market System, the mean between
                  the closing bid and asked prices of the Shares in the
                  over-the-counter market; or

          (iii)   if those bid and asked prices are not available, then the Fair
                  Market Value as of any given date shall be determined in good
                  faith by the Committee; or

           (iv)   the actual sale price of the Shares, where a Participant pays
                  the Exercise Price and/or any related withholding taxes to the
                  Company by tendering Shares issuable to the Participant upon
                  exercise of an Option.

                                      -4-
<Page>

      "FREESTANDING SAR" means a SAR that is granted independently of any
Options, as described in Article 7.

      "INCENTIVE STOCK OPTION" or "ISO" means an option to purchase Shares
granted under Article 6 that is designated as an Incentive Stock Option and
that is intended to meet the requirements of Code Section 422.

      "INITIAL PUBLIC OFFERING" or "IPO" means an initial public offering of
the Company's Shares pursuant to an effective registration statement filed
with the U.S. Securities and Exchange Commission.

      "NONSTATUTORY STOCK OPTION" or "NQSO" means an option to purchase
Shares granted under Article 6 that is not intended to meet the requirements
of Code Section 422.

      "OPTION" means an Incentive Stock Option or a Nonstatutory Stock
Option, as described in Article 6.

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

      "PARTICIPANT" means an Employee, Consultant or Director who the
Committee has selected to participate in the Plan pursuant to Section 5.2 and
who has an Award outstanding under the Plan.

      "PERFORMANCE-BASED EXCEPTION" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m) and any
regulations promulgated thereunder.

      "PERFORMANCE PERIOD" means the time period during which performance
objectives must be met in order for a Participant to earn Performance Shares
granted under Article 9.

      "PERFORMANCE SHARE" means an Award of Shares with an initial value
equal to the Fair Market Value of a Share on the date of grant, which is
based on the Participant's attainment of certain performance objectives
specified in the Award Agreement, as described in Article 9.

      "PERSONAL LEAVE" means a leave of absence as described in Section 5.3.

      "PLAN" means the Morningstar, Inc. 2004 Stock Incentive Plan, as set
forth in this document, and as amended from time to time.

      "PRIOR PLANS" means the 2001 Morningstar Stock Option Plan, as amended,
the Amended and Restated 2000 Morningstar Stock Option Plan, and the Amended
and Restated 1993 Morningstar Stock Option Plan. The Prior Plans shall be
merged into this Plan as of the Effective Date and stock options awarded
under the Prior Plans shall be governed by the terms of this Plan.

      "RESTRICTION PERIOD" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of
time, the achievement of performance objectives, or the occurrence of other
events as determined by the Committee, in its sole discretion) or the
Restricted Stock is not vested.

                                      -5-
<Page>

      "RESTRICTED STOCK" means a contingent grant of Shares awarded to a
Participant pursuant to Article 8. The Shares awarded to the Participant will
vest over the Restricted Period and according to the time-based or
performance-based criteria, specified in the Award Agreement.

      "RESTRICTED STOCK UNIT" or "RSU" means a notional account established
pursuant to an Award granted to a Participant, as described in Article 8,
that is (a) valued solely by reference to Shares, (b) subject to restrictions
specified in the Award Agreement, and (c) payable only in Shares. The RSUs
awarded to the Participant will vest according to the time-based or
performance-based criteria specified in the Award Agreement.

      "SERVICE" means the provision of services to the Company or its
Affiliates in the capacity of (i) an Employee, (ii) a Director, or (iii) a
Consultant. For purposes of this Plan, the transfer of an Employee from the
Company to an Affiliate, from an Affiliate to the Company or from an
Affiliate to another Affiliate shall not be a termination of Service.
However, if the Affiliate for which an Employee, Director or Consultant is
providing services ceases to be an Affiliate of the Company due to a sale,
transfer or other reason, and the Employee, Director or Consultant ceases to
perform services for the Company or any Affiliate, the Employee, Director or
Consultant shall incur a termination of Service.

      "SHARES" means the shares of common stock, no par value, of the Company.

      "STOCK APPRECIATION RIGHT" or "SAR" means an Award of the contingent
right to receive Shares or cash, as specified in the Award Agreement, in the
future, based on the value, or the appreciation in the value, of Shares,
pursuant to the terms of Article 7. SARs may be granted alone or in
connection with a related Option.

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

      "TANDEM SAR" means a SAR that is granted in connection with a related
Option pursuant to Article 7, the exercise of which requires forfeiture of
the right to purchase a Share under the related Option (and when a Share is
purchased under the Option, the Tandem SAR will similarly be canceled).

      "VALUATION" means a periodic valuation conducted on behalf of the
Company, pursuant to such terms and methodologies that the Committee, in its
sole discretion, deems appropriate. At all times prior to an IPO, the
Committee shall establish the Fair Market Value of Shares in reliance upon
one or more Valuations.

      "VESTED" means, with respect to an Option, that such Option has become
fully or partly exercisable; provided, however, that notwithstanding its
status as a Vested Option, an Option shall cease to be exercisable pursuant
to (and while exercisable shall be subject to) such terms as are set forth
herein and in the relevant Award Agreement. Similarly, terms such as "Vest,"
"Vesting," and "Unvested" shall be interpreted accordingly.

                                      -6-
<Page>

ARTICLE 3.    ADMINISTRATION

      3.1     THE COMMITTEE. The Plan will be administered by the Committee,
or by any other committee appointed by the Board whose composition satisfies
the "nonemployee director" requirements of Rule 16b-3 under the Exchange Act
and the regulations of Rule 16b-3 under the Exchange Act, the "independent
director" requirements of the NASDAQ marketplace rules, and the "outside
director" provisions of Code Section 162(m), or any successor regulations or
provisions.

      3.2     AUTHORITY OF THE COMMITTEE. Except as limited by law and
subject to the provisions of this Plan, the Committee will have full power
to: select Employees, Directors and Consultants to participate in the Plan;
determine the sizes and types of Awards; determine the terms and conditions
of Awards in a manner consistent with the Plan; construe and interpret the
Plan and any agreement or instrument entered into under the Plan; establish,
amend or waive rules and regulations for the Plan's administration; and
(subject to the provisions of Article 15) amend the terms and conditions of
any outstanding Award to the extent they are within the discretion of the
Committee as provided in the Plan. Further, the Committee will make all other
determinations that may be necessary or advisable to administer the Plan. As
permitted by law and consistent with Section 3.1, the Committee may delegate
some or all of its authority under the Plan, including to an officer of the
Company to designate the Employees (other than such officer himself or
herself) to receive Options and to determine the number of Shares subject to
the Options such Employees will receive.

      3.3     DECISIONS BINDING. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan will be final, conclusive
and binding on all persons, including, without limitation, the Company, its
Board of Directors, its shareholders, all Affiliates, Employees, Participants
and their estates and beneficiaries.

      3.4     CHANGE IN CONTROL. In the event of a Change in Control, the
Committee shall have the discretion to accelerate the vesting of Awards,
eliminate any restrictions applicable to Awards, deem the performance
measures to be satisfied, or take such other action as it deems appropriate,
in its sole discretion.

ARTICLE 4.    SHARES SUBJECT TO THE PLAN AND MAXIMUM AWARDS

      4.1     NUMBER OF SHARES AVAILABLE FOR AWARDS.

      (a)     Subject to adjustment as provided below and in Sections 4.2 and
              4.3, the maximum number of Shares that may be issued or
              transferred to Participants under the Plan will be 5,628,843.
              The maximum number of Shares that may be issued or transferred to
              Participants as Incentive Stock Options is 1,000,000. The maximum
              number of Shares and Share equivalent units that may be granted
              during any calendar year to any one Participant under all types
              of Awards available under the Plan is 1,000,000 (on an aggregate
              basis); the foregoing limit will apply whether the Awards are paid
              in Shares or in cash. All limits described in this Section 4.1(a)
              are subject to adjustment as provided in Section 4.3.

      (b)     The Prior Plans shall be merged into and continued in the form
              of this Plan as of the Effective Date. Awards made and Shares
              awarded under the Prior Plans prior

                                      -7-
<Page>

              to the Effective Date, which remain outstanding on the Effective
              Date, shall be governed by the terms of this Plan, but shall not
              count against the number of Shares authorized under 4.1(a) above.
              No additional awards will be made under any Prior Plan on or after
              the Effective Date.

      4.2   LAPSED AWARDS. Any Shares (a) subject to an Award under the Plan
that are forfeited, canceled, settled or otherwise terminated without a
distribution of Shares to a Participant; or (b) delivered by attestation to,
or withheld by, the Company in connection with the exercise of an Option
awarded under the Plan or in payment of any required income tax withholding
for the exercise of an Option or the vesting of Restricted Stock awarded
under the Plan will thereafter be deemed to be available for Award. Any
Shares (a) subject to an Award under a Prior Plan that are forfeited,
canceled, settled or otherwise terminated without a distribution of Shares to
a Participant; or (b) delivered by attestation to, or withheld by, the
Company in connection with the exercise of an Option awarded under a Prior
Plan or in payment of any required income tax withholding for the exercise of
an Option awarded under a Prior Plan will not be available for Award under
this Plan or the Prior Plan.

      4.3   ADJUSTMENTS IN AUTHORIZED SHARES.

      (a)   In the event of any merger, reorganization, consolidation,
            recapitalization, separation, liquidation, split-up, share
            combination, or other such change in the corporate structure
            of the Company affecting the Shares, such adjustment shall be
            made in the number and class of Shares which may be delivered
            under the Plan, and in the number and class of and/or price of
            Shares subject to outstanding Awards granted under the Plan,
            as may be determined to be appropriate and equitable by the
            Committee, in its sole discretion, to prevent dilution or
            enlargement of rights and provided that the number of Shares
            subject to any Award shall always be a whole number.

      (b)   Fractional Shares resulting from any adjustment in Awards
            pursuant to this section may be settled in cash or otherwise as
            the Committee determines. The Company will give notice of any
            adjustment to each Participant who holds an Award that has been
            adjusted and the adjustment (whether or not that notice is given)
            will be effective and binding for all Plan purposes.

ARTICLE 5.  ELIGIBILITY AND PARTICIPATION

      5.1   ELIGIBILITY. An Employee shall be deemed eligible for
participation upon such Employee's first day of employment. Additionally,
non-Employee Directors and Consultants and/or their representatives who are
chosen from time to time at the sole discretion of the Company to receive one
or more Awards are also eligible to participate in the Plan.

      5.2   ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the
Committee will, from time to time, select those Employees, non-Employee
Directors and Consultants to whom Awards will be granted, and will determine
the nature and amount of each Award.

      5.3   PERSONAL LEAVE STATUS.

                                      -8-
<Page>

       (a)  Notwithstanding anything in the Plan to the contrary, the Committee,
            in its sole discretion, reserves the right to designate a
            Participant's leave of absence as "Personal Leave." No Options shall
            be granted to a Participant during Personal Leave. A Participant's
            Unvested Options shall remain Unvested during such Personal Leave
            and the time spent on such Personal Leave shall not count towards
            the Vesting of such Options. A Participant's Vested Options that may
            be exercised pursuant to Section 6.6 hereof shall remain exercisable
            upon commencement of Personal Leave until the earlier of (i) a
            period of one year from the date of commencement of such Personal
            Leave; or (ii) the remaining exercise period of such Options.
            Notwithstanding the foregoing, if a Participant returns to the
            Company from a Personal Leave of less than one year and the
            Participant's Options have not lapsed, the Options shall remain
            exercisable for the remaining exercise period as provided at the
            time of grant and subject to the conditions contained herein.

      (b)   If the Participant leaves the employ of the Company within six (6)
            months' time of the date on which he or she returned from Personal
            Leave, the Fair Market Value figure used to calculate the purchase
            price of any Shares that the Company may choose to repurchase from
            that individual pursuant to Section 6.9(b) will be the lower of:
            (i) the Fair Market Value of the underlying Shares as of the date
            the Participant commenced his or her Personal Leave, and (ii) the
            Fair Market Value of such Shares as of the date of that departure.
            Upon returning to the Company from Personal Leave, the Participant
            must complete six (6) months of Service before the Participant will
            be eligible to receive any other Awards under the Plan.

      (c)   The Committee, in its sole discretion, may waive or alter the
            provisions of this Section 5.3 with respect to any Participant. The
            waiver or alteration of such provisions with respect to any
            Participant shall have no effect on any other Participant.

ARTICLE 6.  OPTIONS

      6.1   GRANT OF OPTIONS. Subject to the terms and provisions of the
Plan, Options may be granted to Employees, non-Employee Directors and
Consultants in the number, and upon the terms, and at any time and from time
to time, as determined by the Committee.

      6.2   AWARD AGREEMENT. Each Option grant will be evidenced by an
Award Agreement that specifies the Exercise Price, the duration of the
Option, the number of Shares to which the Option pertains, the manner, time
and rate of exercise or Vesting of the Option, and such other provisions as
the Committee determines. The Award Agreement will also specify whether the
Option is intended to be an ISO or an NQSO.

      6.3   EXERCISE PRICE. The Exercise Price for each Share subject
to an Option will be determined by the Committee; provided, however, that the
exercise price of Incentive Stock Options shall in all cases be equal or
greater to the Fair Market Value on the date the Option is granted.

                                      -9-
<Page>

      6.4   DURATION OF OPTIONS. Each Option will expire at the time
determined by the Committee at the time of grant, but no later than the tenth
anniversary of the date of its grant.

      6.5   DIVIDEND EQUIVALENTS. The Committee may, but will not be required
to, grant payments in connection with Options that are equivalent to
dividends declared and paid on the Shares underlying the Options. Such
dividend equivalent payments may be made in cash or in Shares, upon such
terms as the Committee, in its sole discretion, deems appropriate.

      6.6   EXERCISE OF OPTIONS. Options will be exercisable at such times
and be subject to such restrictions and conditions as the Committee in each
instance approves, which need not be the same for each Award or for each
Participant. Notwithstanding the foregoing, Vested Options granted under the
Plan may be exercised to purchase Shares only upon the earlier of: (a) the
date on which the Company completes an IPO; and (b) the date on which the
Company undergoes a Change in Control. The only exception to this requirement
that the Company first complete an IPO or undergo a Change in Control before
the Participant can exercise his or her Vested Options is in those instances
where the Participant's Service with the Company has terminated, as more
specifically set forth in Section 6.10.

      6.7   PAYMENT. The holder of an Option may exercise the Option only by
delivering a written notice, or if permitted by the Committee, in its
discretion and in accordance with procedures adopted by it, by delivering an
electronic notice, of exercise to the Company setting forth the number of
Shares as to which the Option is to be exercised, together with full payment
at the Exercise Price for the Shares and any withholding tax relating to the
exercise of the Option.

      The Exercise Price and any related withholding taxes will be payable to
the Company in full either: (a) in cash, or its equivalent, in United States
dollars; (b) if permitted in the governing Award Agreement, by tendering
Shares owned by the Participant for at least six months and duly endorsed for
transfer to the Company, or Shares issuable to the Participant upon exercise
of the Option; or (c) any combination of (a) and (b); or (d) by any other
means the Committee determines to be consistent with the Plan's purposes and
applicable law.

      6.8   SPECIAL PROVISIONS FOR ISOS. Notwithstanding any other provision
of this Article 6, the following special provisions shall apply to any Award
of Incentive Stock Options:

      (a)   The Committee may award Incentive Stock Options only to Employees.

      (b)   An Option will not constitute an Incentive Stock Option under
            this Plan to the extent it would cause the aggregate Fair
            Market Value of Shares with respect to which Incentive Stock
            Options are exercisable by the Participant for the first time
            during a calendar year (under all plans of the Company and its
            Affiliates) to exceed $100,000. Such Fair Market Value shall be
            determined as of the date on which each such Incentive Stock Option
            is granted.

      (c)   If the Employee to whom the Incentive Stock Option is granted
            owns stock possessing more than ten (10%) percent of the total
            combined voting power of all classes of the Company or any
            Affiliate, then: (i) the exercise Price for each Share subject
            to an Option will be at least one hundred ten percent (110%) of the
            Fair Market Value of the Share on the Effective Date of the Award;
            and (ii) the

                                     -10-
<Page>

            Option will expire upon the earlier of (A) the time
            specified by the Committee in the Award Agreement, or (B) the fifth
            anniversary of the date of grant.

      (d)   No Option that is intended to be an Incentive Stock Option may be
            granted under the Plan until the Company's shareholders approve the
            Plan. If such shareholder approval is not obtained within 12 months
            after the Board's adoption of the Plan, then no Options may be
            granted under the Plan that are intended to be Incentive Stock
            Options. No Option that is intended to be an Incentive Stock Option
            may be granted under the Plan after the tenth anniversary of the
            date the Company adopted the Plan or the Company's shareholders
            approved the Plan, whichever is earlier.

      (e)   An Incentive Stock Option must be exercised, if at all, by the
            earliest of (i) the time specified in the Award Agreement,
            (ii) three months after the Participant's termination of Service
            for a reason other than death or Disability, or (iii) twelve months
            after the Participant's termination of Service for death or
            Disability.

      6.9   RESTRICTIONS ON SHARE TRANSFERABILITY.

      (a)   The Committee may impose such restrictions on any Shares acquired
            through exercise of an Option as it deems necessary or advisable,
            including, without limitation, restrictions under applicable
            federal securities laws, under the requirements of any stock
            exchange or market upon which the Shares are then listed or traded,
            and under any blue sky or state securities laws applicable to the
            Shares.

      (b)   No person (the "Seller") may sell, assign or otherwise transfer
            or dispose of all or any part of his or her Shares acquired pursuant
            to an exercised Option under the Plan except to the Company. In the
            event the Seller desires to sell his or her Shares to the Company,
            the Seller shall give the Company notice of the desired transfer and
            the Company shall have the right, but not the obligation, anytime
            within thirty (30) days after the receipt of such notice, to
            purchase the Shares proposed for transfer at their Fair Market Value
            as of the date the Seller provides written notice to the Company of
            the desired transfer. Any payment of the purchase price, along with
            applicable interest thereon, may be made by the Company over a
            period of up to five (5) years and shall be subject to any
            additional limitations and/or restrictions that the Company may
            choose to impose at that time.

            The rights and obligations of the Seller and the Company, as set
            forth in this Section 6.9(b), shall terminate on the earlier of
            (i) the date on which the Company completes an IPO; and (ii) the
            date on which the Company undergoes a Change in Control.

      6.10  TERMINATION OF SERVICE. Unless the applicable Award Agreement
provides otherwise and subject to Section 6.8(e):

      (a)   In the event that the Service of a Participant is terminated by
            the Company for any reason other than Cause, Disability or death,
            Options that are exercisable at the

                                      -11-
<Page>

            time of such termination shall remain exercisable until the
            earlier of (i) the remaining exercise period or (ii) one year from
            the date of such Service termination. Options that are not
            exercisable at the time of such termination of Service shall expire
            at the close of business on the date of such termination.

      (b)   In the event that the Service of a Participant with the Company
            terminates on account of the Disability or death of the Participant,
            Options that are exercisable at the time of such termination shall
            remain exercisable until the expiration of the term of the Option.
            Options that are not exercisable at the time of such termination
            shall expire at the close of business on the date of such
            termination.

      (c)   In the event of termination of a Participant's Service for Cause,
            all outstanding Options granted to such Participant shall expire as
            of the commencement of business on the date of such termination.

      (d)   In the event of a Participant's termination of Service for any
            reason other than those described in subsections (a), (b) and (c) of
            this Section 6.10, Options that are exercisable at the time of such
            termination shall remain exercisable until the earlier of (i) the
            remaining exercise period or (ii) 30 days from the date of such
            termination. Options that are not exercisable at the time of such
            termination shall expire at the close of business on the date of
            such termination.

      (e)   Notwithstanding the foregoing, prior to the date of any IPO, the
            Company may, in its sole discretion, cancel the portion of any
            outstanding Option that is Vested as of the date of a Participant's
            termination of Service in return for a payment to the Participant.
            In such instance, the amount of money to which the Participant will
            be entitled will be equivalent to the difference between the Fair
            Market Value of the underlying Shares (as of the date of termination
            or as otherwise provided herein) and the Option Price on those
            Shares multiplied by the number of such Options cancelled. In the
            event of such a pay out, the Committee may, in its sole discretion,
            make such payment in installments over a period of up to five (5)
            years' time and may impose such additional limitations or
            restrictions that the Company otherwise deems appropriate. If
            payment is made in installments, the outstanding balance of the
            value of the Vested Options to be paid to the Participant shall earn
            interest (at the Company's expense) at a rate determined by the
            Committee.

      Each Option Award Agreement will set forth the extent to which the
Participant has the right to exercise the Option after his or her termination
of Service. These terms will be determined by the Committee in its sole
discretion, need not be uniform among all Options, and may reflect, among
other things, distinctions based on the reasons for termination of Service.
However, notwithstanding any other provision herein to the contrary, no
additional Options will Vest after a Participant's Service ceases or has
terminated for any reason, whether such cessation or termination is lawful or
unlawful.

                                     -12-
<Page>

ARTICLE 7.  STOCK APPRECIATION RIGHTS

      7.1   GRANT OF SARS. Subject to the terms and conditions of the Plan,
SARs may be granted to Participants at any time and from time to time, as
determined by the Committee. The Committee may grant Freestanding SARs,
Tandem SARs or any combination of the two, as specified in the Award
Agreement.

      Within the limits of Article 4, the Committee will have sole discretion
to determine the number of SARs granted to each Participant and, consistent
with the provisions of the Plan, to determine the terms and conditions
pertaining to SARs.

      The grant price for any SAR shall be determined by the Committee, but
in the case of a Tandem SAR, the grant price shall not be less than the
exercise price of the Option to which it relates.

      7.2   EXERCISE OF TANDEM SARS. Tandem SARs may be exercised for all or
part of the Shares subject to the related Option, upon the surrender of the
right to exercise the equivalent portion of the related Option. A Tandem SAR
may be exercised only with respect to the Shares for which its related Option
is then exercisable.

      7.3   EXERCISE OF FREESTANDING SARS. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes.

      7.4   AWARD AGREEMENT. Each SAR grant will be evidenced by an Award
Agreement that specifies the grant price, whether settlement of the SAR will
be made in cash or in Shares, the term of the SAR and such other provisions
as the Committee determines.

      7.5   TERM OF SARS. The term of a SAR will be determined by the
Committee, in its sole discretion, but may not exceed ten years.

      7.6   PAYMENT OF SAR AMOUNT. Upon exercise of a SAR with respect to a
Share, a Participant will be entitled to receive an amount equal to the
excess, if any, of the Fair Market Value on the date of exercise of the SAR
over the grant price specified in the Award Agreement. At the discretion of
the Committee, the payment that may become due upon SAR exercise may be made
in cash, in Shares or in some combination of the two.

      7.7   TERMINATION OF SERVICE. Each SAR Award Agreement will set forth
the extent to which the Participant has the right to exercise the SAR after
his or her termination of Service. These terms will be determined by the
Committee, in its sole discretion, need not be uniform among all SARs issued
under the Plan, and may reflect, among other things, distinctions based on
the reasons for termination of Service.

ARTICLE 8.  RESTRICTED STOCK AND RESTRICTED STOCK UNITS

      8.1   GRANT OF RESTRICTED STOCK OR RESTRICTED STOCK UNITS. Subject to
the terms and provisions of the Plan, the Committee may, at any time and from
time to time, grant Restricted Stock or Restricted Stock Units to
Participants in such amounts as it determines.

      8.2   DEFERRAL OF COMPENSATION INTO RESTRICTED STOCK UNITS. Subject to
the terms and provisions of the Plan, the Committee may, at any time and from
time to time, allow (or

                                     -13-
<Page>

require, as to bonuses) selected Employees and Directors to defer the payment
of any portion of their salary or bonuses or both pursuant to this section. A
Participant's deferral under this section will be credited to the Participant
in the form of Shares of Restricted Stock Units. The Committee will establish
rules and procedures for the deferrals, as it deems appropriate.

      If a Participant's compensation is deferred under this Section 8.2, he
or she will be credited, as of the date specified in the Award Agreement,
with a number of Restricted Stock Units no less than the amount of the
deferral divided by the Fair Market Value on that date, rounded to the
nearest whole unit.

      8.3   AWARD AGREEMENT. Each grant of Restricted Stock or Restricted
Stock Units will be evidenced by an Award Agreement that specifies the
Restriction Periods, the number of Shares or Share equivalent units granted,
and such other provisions as the Committee determines.

      8.4  OTHER RESTRICTIONS. Subject to Article 11, the Committee may
impose such other conditions or restrictions on any Restricted Stock or
Restricted Stock Units as it deems advisable, including, without limitation,
restrictions based upon the achievement of specific performance objectives
(Company-wide, business unit, individual, or any combination of them),
time-based restrictions on vesting, and restrictions under applicable federal
or state securities laws. The Committee may provide that restrictions
established under this Section 8.4 as to any given Award will lapse all at
once or in installments.

      The Company will retain the certificates representing Shares of
Restricted Stock in its possession until all conditions and restrictions
applicable to the Shares have been satisfied.

      8.5   PAYMENT OF AWARDS. Except as otherwise provided in this Article
8, Shares covered by each Restricted Stock grant will become freely
transferable by the Participant after the last day of the applicable
Restriction Period, and Share equivalent units covered by a Restricted Unit
will be paid out in cash or Shares to the Participant following the last day
of the applicable Restriction Period, or on the date provided in the Award
Agreement.

      8.6   VOTING RIGHTS. During the Restriction Period, Participants
holding Shares of Restricted Stock may exercise full voting rights with
respect to those Shares.

      8.7   DIVIDENDS AND OTHER DISTRIBUTIONS. During the Restriction Period,
Participants awarded Shares of Restricted Stock or Restricted Stock Units
hereunder will be credited with regular cash dividends or dividend
equivalents paid on those Shares or with respect to those Share equivalent
units. Dividends may be paid currently, accrued as contingent cash
obligations, or converted into additional Shares of Restricted Stock or
Restricted Stock Units upon such terms as the Committee establishes.

      The Committee may apply any restrictions it deems advisable to the
crediting and payment of dividends and other distributions. Without limiting
the generality of the preceding sentence, if the grant or vesting of
Restricted Stock is designed to qualify for the Performance-Based Exception,
the Committee may apply any restrictions it deems appropriate to the payment
of dividends declared with respect to the Restricted Stock, so that the
dividends and the Restricted Stock continue to be eligible for the
Performance-Based Exception.

                                     -14-
<Page>

      8.8   TERMINATION OF SERVICE. Each Award Agreement will set forth the
extent to which the Participant has the right to retain unvested Restricted
Stock or Restricted Stock Units after his or her termination of Service.
These terms will be determined by the Committee in its sole discretion, need
not be uniform among all Awards of Restricted Stock, and may reflect, among
other things, distinctions based on the reasons for termination of Service.

ARTICLE 9.  PERFORMANCE SHARES

      9.1   GRANT OF PERFORMANCE SHARES. Subject to the terms of the Plan,
Performance Shares may be granted to Participants in such amounts and upon
such terms, and at any time and from time to time, as the Committee
determines. The Award of Performance Shares may be based on the Participant's
attainment of performance objectives, or the vesting of an Award of
Performance Shares may be based on the Participant's attainment of
performance objectives, each as described in this Article 9.

      9.2   VALUE OF PERFORMANCE SHARES. Each Performance Share will have an
initial value equal to the Fair Market Value on the date of grant. The
Committee will set performance objectives in its discretion which, depending
on the extent to which they are met, will determine the number or value (or
both) of Performance Shares that will be paid out to the Participant. For
purposes of this Article 9, the time period during which the performance
objectives must be met will be called a "Performance Period" and will be set
by the Committee in its discretion.

      9.3   EARNING OF PERFORMANCE SHARES. Subject to the terms of this Plan,
after the applicable Performance Period has ended, the holder of Performance
Shares will be entitled to receive payout on the number and value of
Performance Shares earned by the Participant over the Performance Period, to
be determined as a function of the extent to which the corresponding
performance objectives have been achieved.

      9.4   AWARD AGREEMENT. Each grant of Performance Shares will be
evidenced by an Award Agreement specifying the material terms and conditions
of the Award (including the form of payment of earned Performance Shares),
and such other provisions as the Committee determines.

      9.5   FORM AND TIMING OF PAYMENT OF PERFORMANCE SHARES. Except as
provided in Article 12, payment of earned Performance Shares will be made as
soon as practicable after the close of the applicable Performance Period, in
a manner determined by the Committee in its sole discretion. The Committee
will pay earned Performance Shares in the form of cash, in Shares, or in a
combination of cash and Shares, as specified in the Award Agreement.
Performance Shares may be paid subject to any restrictions deemed appropriate
by the Committee.

      9.6   TERMINATION OF SERVICE. Each Award Agreement will set forth the
extent to which the Participant has the right to retain Performance Shares
after his or her termination of Service. These terms will be determined by
the Committee, in its sole discretion, need not be uniform among all Awards
of Performance Shares, and may reflect, among other things, distinctions
based on the reasons for termination of Service.

                                     -15-
<Page>

ARTICLE 10.  PERFORMANCE MEASURES

      Unless and until the Committee proposes and the Company's shareholders
approve a change in the general performance measures set forth in this
Article 10, the performance measure(s) to be used for purposes of Awards
designed to qualify for the Performance-Based Exception will be chosen from
among the following alternatives (or in any combination of such alternatives):

      (a)   net earnings;
      (b)   operating earnings or income;
      (c)   earnings growth;
      (d)   net income (absolute or competitive growth rates comparative);
      (e)   net income applicable to Shares;
      (f)   cash flow, including operating cash flow, free cash flow,
            discounted cash flow return on investment, and cash flow in excess
            of cost of capital;
      (g)   earnings per Share;
      (h)   return on shareholders' equity (absolute or peer-group comparative);
      (i)   stock price (absolute or peer-group comparative);
      (j)   absolute and/or relative return on common shareholders' equity;
      (k)   absolute and/or relative return on capital;
      (l)   absolute and/or relative return on assets;
      (m)   economic value added (income in excess of cost of capital);
      (n)   customer satisfaction;
      (o)   expense reduction;
      (p)   ratio of operating expenses to operating revenues;
      (q)   gross revenue or revenue by pre-defined business segment (absolute
            or competitive growth rates comparative);
      (r)   revenue backlog; and
      (s)   margins realized on delivered services.

      The Committee will have the discretion to adjust targets set for
preestablished performance objectives; however, Awards designed to qualify
for the Performance-Based Exception may not be adjusted upward, except to the
extent permitted under Code Section 162(m), to reflect accounting changes or
other events.

      If Code Section 162(m) or other applicable tax or securities laws
change to allow the Committee discretion to change the types of performance
measures without obtaining shareholder approval, the Committee will have sole
discretion to make such changes without obtaining shareholder approval. In
addition, if the Committee determines it is advisable to grant

                                     -16-
<Page>

Awards that will not qualify for the Performance-Based Exception, the
Committee may grant Awards that do not so qualify.

ARTICLE 11.  BENEFICIARY DESIGNATION

      Each Participant may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case the Participant should die
before receiving any or all of his or her Plan benefits. Each beneficiary
designation will revoke all prior designations by the same Participant, must
be in a form prescribed by the Committee, and must be made during the
Participant's lifetime. If the Participant's designated beneficiary
predeceases the Participant or no beneficiary has been designated, benefits
remaining unpaid at the Participant's death will be paid to the Participant's
estate or other entity described in the Participant's Award Agreement.

ARTICLE 12.  DEFERRALS

      The Committee may permit or require a Participant to defer receipt of
cash or Shares that would otherwise be due to him or her by virtue of an
Option or SAR exercise, the lapse or waiver of restrictions on Restricted
Stock, or the satisfaction of any requirements or objectives with respect to
Performance Shares. If any such deferral election is permitted or required,
the Committee will, in its sole discretion, establish rules and procedures
for such deferrals. Notwithstanding the foregoing, the Committee in its sole
discretion may defer payment of cash or the delivery of Shares that would
otherwise be due to a Participant under the Plan if payment or delivery would
result in the Company's or an Affiliate's being unable to deduct compensation
under Code Section 162(m). Deferral of payment or delivery by the Committee
may continue until the Company or Affiliate is able to deduct the payment or
delivery under the Code.

ARTICLE 13.  RIGHTS OF PARTICIPANTS

      13.1   EMPLOYMENT AND SERVICE. Nothing in the Plan will confer upon any
Participant any right to continue in the employ of the Company or any
Affiliate, or interfere with or limit in any way the right of the Company or
any Affiliate to terminate any Participant's employment or Service at any
time.

      13.2   PARTICIPATION. No Employee, Consultant or Director will have the
right to receive an Award under this Plan, or, having received any Award, to
receive a future Award.

ARTICLE 14.  AMENDMENT, MODIFICATION AND TERMINATION

      14.1   AMENDMENT, MODIFICATION AND TERMINATION. The Committee may at
any time and from time to time, alter, amend, modify or terminate the Plan in
whole or in part. The Committee will not, however, increase the number of
Shares that may be issued or transferred to Participants under the Plan, as
described in the first sentence of Section 4.1 (and subject to adjustment as
provided in Sections 4.2 and 4.3).

      Subject to the terms and conditions of the Plan, the Committee may
modify, extend or renew outstanding Awards under the Plan, or accept the
surrender of outstanding Awards (to the extent not already exercised) and
grant new Awards in substitution of them (to the extent not already
exercised). The Committee will not, however, modify any outstanding Option so
as to

                                     -17-
<Page>

specify a lower Exercise Price, without the approval of the Company's
shareholders. Notwithstanding the foregoing, no modification of an Award will
materially alter or impair any rights or obligations under any Award already
granted under the Plan, without the prior written consent of the Participant.

      14.2   ADJUSTMENT OF AWARDS UPON THE OCCURRENCE OF CERTAIN UNUSUAL OR
NONRECURRING EVENTS. In recognition of unusual or nonrecurring events
(including, without limitation, the events described in Section 4.3)
affecting the Company or its financial statements, or in recognition of
changes in applicable laws, regulations, or accounting principles, and,
whenever the Committee determines that adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan, the Committee may, using
reasonable care, make adjustments in the terms and conditions of, and the
criteria included in, Awards. In case of an Award designed to qualify for the
Performance-Based Exception, the Committee will take care not to make an
adjustment that would disqualify the Award.

      14.3   AWARDS PREVIOUSLY GRANTED. No termination, amendment or
modification of the Plan will adversely affect in any material way any Award
already granted, without the written consent of the Participant who holds the
Award.

      14.4   COMPLIANCE WITH CODE SECTION 162(M). Awards will comply with the
requirements of Code Section 162(m), unless the Committee determines that
such compliance is not desired with respect to an Award available for grant
under the Plan. In addition, if changes are made to Code Section 162(m) to
permit greater flexibility as to any Award available under the Plan, the
Committee may, subject to this Article 14, make any adjustments it deems
appropriate.

ARTICLE 15.  NONTRANSFERABILITY OF AWARDS.

      Except as otherwise provided in a Participant's Award Agreement, no
Option, SAR, Performance Share, Restricted Stock, or Restricted Stock Unit
granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution, or pursuant to a domestic relations order (as
defined in Code Section 414(p)). All rights with respect to Performance
Shares, Restricted Stock and Restricted Stock Units will be available during
the Participant's lifetime only to the Participant or his or her guardian or
legal representative. Except as otherwise provided in a Participant's Award
Agreement or in paragraph (a) below, all Options and SARs will be exercisable
during the Participant's lifetime only by the Participant or his or her
guardian or legal representative. The Participant's beneficiary may exercise
the Participant's rights to the extent they are exercisable under the Plan
following the Participant's death. The Committee may, in its discretion,
require a Participant's guardian, legal representative or beneficiary to
supply it with the evidence the Committee deems necessary to establish the
authority of the guardian, legal representative or beneficiary to act on
behalf of the Participant.

      (a)   Notwithstanding the foregoing, with respect to any Nonstatutory
            Stock Options, each Participant shall be permitted at all times
            to transfer any or all of the Options, or, in the event the
            Options have not yet been issued to the Participant, the Company
            shall be permitted to issue any or all of the Options, to certain
            trusts

                                     -18-
<Page>

            designated by the Participant as long as such transfer or
            issuance is made as a gift (I.E., a transfer for no consideration,
            with donative intent), whether during lifetime or to take effect
            upon (or as a consequence of) his or her death, to his or her spouse
            or children. Gifts in trust shall be deemed gifts to every
            beneficiary and contingent beneficiary, and so shall not be
            permitted under this paragraph (a) if the beneficiaries or
            contingent beneficiaries shall include anyone other than such spouse
            or children. Transfers to a spouse or child for consideration,
            regardless of the amount, shall not be permitted under this Section.

      (b)   Any Options issued or transferred under this Article 15 shall be
            subject to all terms and conditions contained in the Plan and the
            applicable Award Agreement. If the Committee makes an Option
            transferable, such Option shall contain such additional terms and
            conditions, as the Committee deems appropriate.

ARTICLE 16.  WITHHOLDING

      16.1   TAX WITHHOLDING. The Company will have the power and the right
to deduct or withhold, or require a Participant to remit to the Company, the
minimum amount necessary to satisfy federal, state, and local taxes, domestic
or foreign, required by law or regulation to be withheld with respect to any
taxable event arising under this Plan.

      16.2   SHARE WITHHOLDING. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted
Stock, or upon any other taxable event arising as a result of Awards granted
hereunder, the Company may satisfy the minimum withholding requirement for
supplemental wages, in whole or in part, by withholding Shares having a Fair
Market Value (determined on the date the Participant recognizes taxable
income on the Award) equal to the minimum withholding tax required to be
collected on the transaction. The Participant may elect, subject to the
approval of the Committee, to deliver the necessary funds to satisfy the
withholding obligation to the Company, in which case there will be no
reduction in the Shares otherwise distributable to the Participant.

ARTICLE 17.  INDEMNIFICATION

      Each person who is or has been a member of the Committee or the Board,
and any officer or Employee to whom the Committee has delegated authority
under Section 3.1 or 3.2 of the Plan, will be indemnified and held harmless
by the Company from and against any loss, cost, liability, or expense that
may be imposed upon or reasonably incurred by him or her in connection with
or as a result of any claim, action, suit or proceeding to which he or she
may be a party or in which he or she may be involved by reason of any action
taken, or failure to act, under the Plan. Each such person will also be
indemnified and held harmless by the Company from and against any and all
amounts paid by him or her in a settlement approved by the Company, or paid
by him or her in satisfaction of any judgment, of or in a claim, action, suit
or proceeding against him or her and described in the previous sentence, so
long as he or she gives the Company an opportunity, at its own expense, to
handle and defend the claim, action, suit or proceeding before he or she
undertakes to handle and defend it. The foregoing right of indemnification
will not be exclusive of any other rights of indemnification to which a
person who is or has been a member of the Committee or the Board may be
entitled under the

                                     -19-
<Page>

Company's Articles of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify him or her or
hold him or her harmless.

ARTICLE 18.  SUCCESSORS

      All obligations of the Company under the Plan or any Award Agreement
will be binding on any successor to the Company, whether the existence of the
successor results from a direct or indirect purchase of all or substantially
all of the business or assets of the Company or both, or a merger,
consolidation, or otherwise.

ARTICLE 19.  BREACH OF RESTRICTIVE COVENANTS

      An Award Agreement may provide that, notwithstanding any other
provision of this Plan to the contrary, if the Participant breaches any
competition, nonsolicitation or nondisclosure provisions contained in the
Award Agreement, whether during or after termination of Service, the
Participant will forfeit:

      (a)   any and all Awards granted or transferred to him or her under the
            Plan, including Awards that have become Vested; and

      (b)   the profit the Participant has realized on the exercise of any
            Options, which is the difference between the Exercise Price of the
            Options and the applicable Fair Market Value of the Shares (the
            Participant may be required to repay such difference to the
            Company).

ARTICLE 20.  LEGAL CONSTRUCTION

      20.1   NUMBER. Except where otherwise indicated by the context, any
plural term used in this Plan includes the singular and a singular term
includes the plural.

      20.2   SEVERABILITY. If any provision of the Plan is held illegal or
invalid for any reason, the illegality or invalidity will not affect the
remaining parts of the Plan, and the Plan will be construed and enforced as
if the illegal or invalid provision had not been included.

      20.3   REQUIREMENTS OF LAW. The granting of Awards and the issuance of
Share or cash payouts under the Plan will be subject to all applicable laws,
rules, and regulations, and to any approvals by governmental agencies or
national securities exchanges as may be required.

      20.4   SECURITIES LAW COMPLIANCE. As to any individual who is, on the
relevant date, an officer, director or ten percent beneficial owner of any
class of the Company's equity securities that is registered pursuant to
Section 12 of the Exchange Act, all as defined under Section 16 of the
Exchange Act, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 under the Exchange Act, or any successor
rule. To the extent any provision of the Plan or action by the Committee
fails to so comply, it will be deemed null and void, to the extent permitted
by law and deemed advisable by the Committee.

      If at any time the Committee determines that exercising an Option or
SAR or issuing Shares pursuant to an Award would violate applicable
securities laws, the Option or SAR will not be exercisable, and the Company
will not be required to issue Shares. The Company may require a Participant
to make written representations it deems necessary or desirable to comply
with applicable securities laws. No person who acquires Shares under the Plan
may sell the

                                     -20-
<Page>

Shares, unless he or she makes the offer and sale pursuant to an effective
registration statement under the Exchange Act, which is current and includes
the Shares to be sold, or an exemption from the registration requirements of
the Exchange Act.

      20.5  AWARDS TO FOREIGN NATIONALS AND EMPLOYEES OUTSIDE THE UNITED
STATES. To the extent the Committee deems it necessary, appropriate or
desirable to comply with foreign law or practice and to further the purposes
of this Plan, the Committee may, without amending the Plan, (i) establish
rules applicable to Awards granted to Participants who are foreign nationals
or are employed outside the United States, or both, including rules that
differ from those set forth in this Plan, and (ii) grant Awards to such
Participants in accordance with those rules. Appendix A to this Plan contains
special provisions applicable to foreign nationals and employees outside the
United States.

      20.6  UNFUNDED STATUS OF THE PLAN. The Plan is intended to constitute
an "unfunded" plan for incentive and deferred compensation. With respect to
any payments or deliveries of Shares not yet made to a Participant by the
Company, the Participant's rights are no greater than those of a general
creditor of the Company. The Committee may authorize the establishment of
trusts or other arrangements to meet the obligations created under the Plan,
so long as the arrangement does not cause the Plan to lose its legal status
as an unfunded plan.

      20.7  GOVERNING LAW. To the extent not preempted by federal law, the
Plan and all agreements hereunder will be construed in accordance with and
governed by the laws of the State of Illinois.

      20.8  NO LIMITATION ON RIGHTS OF THE COMPANY. The grant of the Award
does not and will not in any way affect the right or power of the Company to
make adjustments, reclassifications or changes in its capital or business
structure, or to merge, consolidate, dissolve, liquidate, sell or transfer
all or any part of its business or assets.

      20.9  PARTICIPANT TO HAVE NO RIGHTS AS A SHAREHOLDER. Before the date
as of which he or she is recorded on the books of the Company as the holder
of any Shares underlying an Award, a Participant will have no rights as a
shareholder with respect to those Shares.

                                     -21-
<Page>

                                   APPENDIX A
                                   ----------

              SPECIAL PROVISIONS APPLICABLE TO FOREIGN NATIONALS AND
              ------------------------------------------------------
                       EMPLOYEES OUTSIDE OF THE UNITED STATES
                       --------------------------------------

The following special provisions apply to Awards to Employees who are foreign
nationals or are employed outside of the United States, or both. In addition
to these special provisions and in accordance with Section 20.5, to the
extent the Committee deems it necessary, appropriate or desirable to comply
with foreign law or practice and to further the purposes of the Plan, the
Committee may, without amending the Plan, (i) establish rules applicable to
Awards granted to Participants who are foreign nationals or are employed
outside the United States, or both, including rules that differ from those
set forth in this Plan, and (ii) grant Awards to such Participants in
accordance with those rules.

      1.    With respect to Options issued in Canada:

            in addition to any restrictions on resale and transfer in the Plan,
            Shares purchased under the Plan may be subject to certain
            restrictions on resale imposed by Canadian provincial securities
            laws. Participants will be encouraged to seek legal advice prior to
            any resale of such Shares. In general, Participants resident in
            Canada may not resell their Shares to purchasers within Canada; and

            personal information collected from Participants in furtherance of
            their participation in the Plan will be used and disclosed to an
            Option plan administrator for the purposes of managing and
            administering the Plan and communicating with Participants.

      2.    With respect to Options issued in France:

            the benefits under the Plan and the Plan itself are for a specified,
            limited duration and future benefits or plans are subject to the
            sole discretion of the Company; and

            notwithstanding any other provision of this Plan, a minimum
            four-year Vesting period will apply to any Options for which the
            Company seeks tax-advantaged treatment.

      3.    With respect to Options issued in Italy, the terms of the Plan
            may be amended as specified in the Award Agreement, the terms of
            which shall, to the extent they may be in contrast to the terms of
            the Plan, and for such purposes, prevail.

      4.    With respect to Options issued in the Netherlands, the term
            "Company" shall include both Morningstar, Inc. and Morningstar,
            Inc.'s Dutch subsidiary for purposes of Article 16 of the Plan.

      5.    With respect to Options issued in Spain, all beneficiaries shall be
            bound by the terms of the Plan and any applicable restrictions on
            the transfer of Shares under the Plan.

<Page>

      6.    With respect to Options issued in the U.K., where (i) a mechanism
            for collecting tax from a Participant's salary is in place; (ii) the
            salary of the Participant is insufficient to satisfy such tax; and
            (iii) the Participant has not otherwise remitted to the Company an
            amount of funds sufficient to satisfy such tax, the Company may
            satisfy the withholding requirement, in whole or in part, by
            withholding Shares having a Fair Market Value (determined in
            accordance with Section 16.2 of the Plan) equal to the minimum
            withholding tax required to be collected on the transaction.

                                     -2-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00077-of-00352.parquet"}]]