Document:

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                                                                   Exhibit 10.5

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

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

                               TABLE OF CONTENTS

<Table>
<Caption>

                                                                         Page
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<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
</Table>

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                    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.

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      "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.

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      "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.

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      "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.

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      "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-
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      "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-
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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-
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              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-
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       (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-
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      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-
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            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.

      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-Exhibit
4.4

 

NEUSTAR,
INC.

 

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT, dated as of June 5,
2001 (as amended, modified or supplemented from time to time, this “Agreement”),
by and among (i) Warburg, Pincus Equity Partners, L.P., a Delaware limited
partnership; Warburg, Pincus Netherlands Equity Partners I, C.V., a Netherlands
limited partnership; Warburg, Pincus Netherlands Equity Partners II, C.V., a
Netherlands limited partnership; and Warburg, Pincus Netherlands Equity
Partners III, C.V., a Netherlands limited partnership (collectively, the “Initial
Warburg Holders”); (ii) DB Capital Investors, L.P., a Delaware limited
partnership (the “Initial DB Holder”); (iii) ABS Capital Partners
IV, L.P., a Delaware limited partnership; ABS Capital Partners IV Offshore,
L.P., a Delaware limited partnership; ABS Capital Partners IV-A, L.P., a
Delaware limited partnership; and ABS Capital Partners IV Special Offshore,
L.P., a Delaware limited partnership (collectively, the “Initial ABS Holders”);
and (iv) NeuStar, Inc., a Delaware corporation (the “Company”).

 

W I  T  N  E  S
S  E  T  H :

 

WHEREAS, the Company, the Initial DB Holder,
the Initial ABS Holders and the Initial Warburg Holders have entered into a
Securities Purchase Agreement, dated as of June 5, 2001 (as amended,
modified or supplemented from time to time, the “Securities Purchase
Agreement”), pursuant to which, among other things, the Initial DB Holder,
the Initial ABS Holders and the Initial Warburg Holders have agreed to
purchase, and the Company has agreed to issue and sell, subject to the
conditions set forth therein, (i) an aggregate of 9,098,525 shares of
Series D Voting Convertible Preferred Stock, $.01 par value per share, of the
Company (the “Series D Preferred Stock”), which shares are convertible
into shares of Common Stock, $.002 par value per share, of the Company (the “Common
Stock”) in accordance with the terms thereof and (ii) upon the request
of the Company from time to time after the date hereof, up to an aggregate of
4,633,508 shares of Series E Voting Convertible Preferred Stock, $.01 par value
per share, of the Company (the “Series E Preferred Stock”), which shares
are convertible into shares of Common Stock in accordance with the terms
thereof;

 

WHEREAS, the Initial Warburg Holders
collectively own on the date hereof (after giving effect to the transactions
contemplated in the Securities Purchase Agreement to occur on the date hereof)
(i) 28,569,692 shares of Series C Voting Convertible Preferred Stock, $.01
par value per share, of the Company (the “Series C Preferred Stock”),
which shares are convertible into shares of Common Stock in accordance with the
terms thereof, (ii) 673,965 shares of Series D Preferred Stock, and (iii)
warrants to purchase 4,543,845 shares of Common Stock (collectively, the “Warrants”);
and

 

WHEREAS, it is a condition precedent to the
closing of the transactions contemplated in the Securities Purchase Agreement
that the parties hereto execute and deliver this Agreement;

 

NOW THEREFORE, in consideration of the
premises, mutual promises and covenants contained in this Agreement and
intending to be legally bound, the parties hereto hereby agree as follows:

 

 

ARTICLE I

 

DEFINITIONS

 

Section 1.01  Definitions.  Terms defined in the Securities Purchase
Agreement are used herein as therein defined. 
In addition, the following terms, as used herein, have the following
meanings.

 

“ABS Holders” means, collectively, the
Initial ABS Holders, their direct and indirect successors and permitted assigns
and any direct or indirect transferee of any Registrable Securities initially
held by any of the Initial AB S Holders.

 

“Agreement” has the meaning set forth
in the preamble.

 

“Commission” means the United States
Securities and Exchange Commission, and any successor thereto.

 

“Common Stock” has the meaning set
forth in the first recital “Company” has the meaning set forth in the preamble,

 

“Conversion Shares” means,
collectively, all shares of Common Stock or other securities issued upon the
conversion of any Preferred Stock or upon the exercise of any Warrants, in each
case in accordance with the terms thereof,

 

“Demand Registration” means a
registration under the Securities Act requested in accordance with Section 2.01.

 

“DB Holders” means, collectively, the
Initial DB Holder, its direct and indirect successors and permitted assigns and
any direct or indirect transferee of any Registrable Securities initially held
by the Initial DB Holder.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and all rules and regulations promulgated
thereunder, as in effect from time to time,

 

“Holders” means, collectively, the
Warburg Holders, the DB Holders and the ABS Holders.

 

“Indemnified Party” has the meaning
set forth in Section 4.03.

 

“Indemnifying Party” has the meaning
set forth in Section 4.03.

 

“Initial ABS Holders” has the meaning
et forth in the preamble.

 

“Initial DB Holder” has the meaning
set forth in the preamble.

 

“Initial Holders” means, collectively,
the Initial Warburg Holders, the Initial DB Holder and the Initial ABS Holders.

 

2

 

“Initial Public Offering” means the
initial underwritten public offering of Common Stock pursuant to an effective
registration statement under the Securities Act.

 

“Initial Warburg Holders” has the
meaning set forth in the preamble.

 

“Losses” has the meaning set forth in Section 4.01.

 

“Material Adverse Effect” has the
meaning set forth in Section 2.01(e)  

 

“Person” means arty individual,
partnership, corporation, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated organization,
government or agency or political subdivision thereof, or other entity.

 

“Piggyback Registration” has the
meaning set forth in Section 2.02.

 

“Preferred Stock” means, collectively,
the Series Preferred Stock, the Series D Preferred Stock and the Series F
Preferred Stock.

 

“Registrable ABS Securities” means,
collectively, (a) any Registrable Common Stock from time to time acquired
or held by any ABS Holder (whether upon the conversion of any Preferred Stock
or otherwise) and (b) any securities of the Company or any successor
entity into which Registrable Common Stock may hereafter be reclassified,
converted or changed.  As to any
particular Registrable ABS Securities, such securities shall cease to be
Registrable ABS Securities upon the earliest to occur of (i) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of under such registration statement in accordance with the plan of
distribution set forth therein; (ii) such securities shall have been
transferred pursuant to Rule 144 or are eligible for sale under rule 144(k)
without regard to the volume limitations contained in Rule 144(e);
(iii) such securities shall have been otherwise transferred or disposed
of, and new certificates therefor not bearing a legend restricting further
transfer shall have been delivered by the Company, and subsequent transfer of
such securities shall not require registration or qualification under the
Securities Act or any similar state law then in force; or (iv) such
securities shall have ceased to be outstanding.

 

“Registrable Common Stock” means, with
respect to any Person, the shares of Common Stock (including, without
limitation, the Conversion Shares) now or hereafter held by such Person,
together with any securities issued in respect thereof in connection with any
stock split, stock dividend, merger, consolidation, reclassification,
recapitalization or similar event with respect to such shares of Common Stock.

 

“Registrable DB Securities” means,
collectively, (a) any Registrable Common Stock from time to time acquired
or held by any DB Holder (whether upon the conversion of any Preferred Stock or
otherwise) and (b) any securities of the Company or any successor entity
into which Registrable Common Stock may hereafter be reclassified, converted or
changed.  As to any particular
Registrable DB Securities, such securities shall cease to be Registrable DB
Securities upon the earliest to occur of (i) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of under such
registration statement in accordance with the plan of distribution set forth
therein;

 

3

 

(ii) such securities shall
have been transferred pursuant to Rule 144 or are eligible for sale under Rule
144(k) without regard to the volume limitations contained in Rule 144(e);
(iii) such securities shall have been otherwise transferred or disposed
of, and new certificates therefor not bearing a legend restricting further
transfer shall have been delivered by the Company, and subsequent transfer of
such securities shall not require registration or qualification under the
Securities Act or any similar state law then in force; or (iv) such
securities shall have ceased to be outstanding,

 

“Registrable Securities” means,
collectively, the Registrable AB Securities, the Registrable DB Securities and
the Registrable Warburg Securities.

 

“Registrable Warburg Securities”
means, collectively, (a) any Registrable common Stock from time to time
acquired or held by any Warburg Holder (whether upon the conversion of any
Preferred Stock, the exercise of any Warrants or otherwise) and (b) any
securities of the Company or any successor entity into which Registrable Common
Stock may hereafter be reclassified, converted or changed.  As to any particular Registrable Warburg
Securities, such securities shall cease to be Registrable Warburg Securities
upon the earliest to occur of (i) a registration statement with respect to
the sale of such securities shall have become effective under the Securities
Act and such securities shall have been disposed of under such registration
statement in accordance with the plan of distribution set forth therein;
(ii) such securities shall have been transferred pursuant to Rule 144 or
are eligible for sale under Rule 144(k) without regard to the volume
limitations contained in Rule 144(e); (iii) such securities shall have
been otherwise transferred or disposed of, and new certificates therefor not
bearing a legend restricting further transfer shall have been delivered by the
Company, and subsequent transfer of such securities shall not require
registration or qualification under the Securities Act or any similar state law
then in force; or (iv) such securities shall have ceased to be
outstanding.

 

“Registration Expenses” has the
meaning set forth in Section 3.02.

 

“Requesting Holders” means the Holders
requesting a Demand Registration, and shall include, except in the case of Section 2.01(c),
parties deemed “Requesting Holders” pursuant to Sections 2.01 (a)(v), (vi) and
(vii).

 

“Rule 144” means Rule 144 (or any
successor rule of similar effect) promulgated under the Securities Act.

 

“Securities Act” means the Securities
Act of 1933, as amended, and all rules and regulations promulgated thereunder,
as in effect from time to time.

 

“Securities Purchase Agreement” has
the meaning set forth in the first recital.

 

“Selling Holder” means any Holder
which is selling Registrable Securities pursuant to a public offering
registered hereunder.

 

“Series C Preferred Stock” has the
meaning set forth in the second recital.

 

“Series D Preferred Stock” has the
meaning set forth in the first recital.

 

4

 

“Series E Preferred Stock” has the
meaning set forth in the first recital.

 

“Shelf Registration” means a Demand
Registration which is effected pursuant to Rule 415 under the Securities Act.

 

“Underwriter” means a securities
dealer which purchases any Registrable Securities as principal in connection
with a Demand Registration or a Piggyback Registration and not as part of such
dealer’s market-making activities.

 

“Warburg Holders” means, collectively,
the Initial Warburg Holders, their direct and indirect successors and permitted
assigns and any direct or indirect transferee of any Registrable Securities
initially held by any of the Initial Warburg Holders.

 

“Warrants” has the meaning set forth
in the second recital.

 

Section 1.02  Internal References.  Unless the context indicates otherwise,
references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to this Agreement.

 

ARTICLE II

 

REGISTRATION RIGHTS

 

Section 2.01  Demand Registration.  (a) (i) Holders of not less than a
majority of the Registrable Warburg Securities may make up to three (3) written
requests for a Demand Registration (of which such Demand Registrations, two (2)
may be Shelf Registrations) of all or any part of the Registrable Warburg
Securities held by such Warburg Holders; provided that the Warburg
Holders shall not be entitled to a Demand Registration if, during the nine (9)
months preceding such request, a Demand Registration shall have been declared
effective by the Commission and the requesting Warburg Holders included
Registrable Securities in such Demand Registration.  In the event that any Initial Warburg Holder
requests a registration pursuant to this Section 2.01(a)(i) in connection
with a distribution of Registrable Warburg Securities to its partners, the
registration shall, if requested by such Initial Warburg Holder, provide for
the resale by such partners.

 

(ii)                                  Holders of not less
than a majority of the Registrable DB Securities may make up to two (2) written
requests for a Demand Registration (of which such Demand Registrations, one (1)
may be a Shelf Registration) of all or any part of the Registrable DB
Securities held by such DB Holders; provided that (A) no such Demand
Registration may be requested by the DB Holders if the related registration
statement would be required to become effective prior to the date which is one
hundred and eighty one (181) days after the consummation of an Initial Public
Offering and (B) the DB Holders shall not be entitled to a Demand
Registration if, during the nine (9) months preceding such request, a Demand
Registration shall have been declared effective by the Commission and the
requesting DB Holders included Registrable Securities in such Demand
Registration.  In the event that the
Initial DB Holder requests a registration pursuant to this Section 2.01(a)(ii)
in connection with a distribution of Registrable DB Securities

 

5

 

to its partners, the
registration shall, if requested by the Initial DB Holder, provide for the
resale by such partners.

 

(iii)                               Holders of not less than
a majority of the Registrable ABS Securities may make one (1) written request
for a Demand Registration of all or any part of the Registrable ABS Securities
held by such ABS Holders; provided that (A) no such Demand
Registration may be requested by the ABS Holders if the related registration
statement would be required to become effective prior to the date which is one
hundred and eighty one (181) days after the consummation of an Initial Public
Offering and (B) the ABS Holders shall not be entitled to a Demand
Registration if, during the nine (9) months preceding such request, a Demand
Registration shall have been declared effective by the Commission and the
requesting ABS Holders Included Registrable Securities in such Demand
Registration.  In the event that any
Initial ABS Holder requests a registration pursuant to this Section 2.01
(a)(iii) in connection with a distribution of Registrable ABS Securities to its
partners, the registration shall, if requested by such Initial ABS Holder,
provide for the resale by such partners.

 

(iv)                              Any request for a Demand
Registration will specify the aggregate number of shares of Registrable
Securities proposed to be sold by the Requesting Holders and will also specify
the intended method of disposition thereof. 
Any such request for a Demand Registration shall specify whether such
registration will be a Shelf Registration. 
For so long as the Initial Warburg Holders hold Registrable Warburg
Securities, no Demand Registration made by any Warburg Holder shall be a Shelf
Registration without the consent of a majority in interest of the Initial
Warburg Holders.  For so long as the
Initial DB Holder holds Registrable DB Securities, no Demand Registration made
by any DB Holder shall be a Shelf Registration without the consent of the
Initial DB Holder.  For so long as the
Initial ABS Holders hold Registrable ABS Securities, no Demand Registration
made by any ABS Holder shall be a Shelf Registration without the consent of a
majority in interest of the Initial ABS Holders.  The Company shall not be required to honor
any written request for a Demand Registration with respect to the Registrable
Warburg Securities, the Registrable DH Securities or the Registrable ABS
Securities, as the case may be, unless such Registrable Securities subject to
such Demand Registration shall (x) have an anticipated aggregate public
market offering price of not less than ten million dollars ($10,000,000), or
(y) constitute not less than fifteen percent (15%) of the Registrable
Securities held on the date of this Agreement by the respective Initial Holders
of such Registrable Securities requesting such Demand Registration or
(z) constitute all remaining Registrable Securities held by the Holders of
such Registrable Securities requesting such Demand Registration.  A registration will not count as a Demand
Registration unless it has become effective, unless it has been withdrawn at
the request of the Requesting Holders.

 

(v)                                 Upon receipt of any
request for a Demand Registration by Holders of not less than a majority of the
Registrable Warburg Securities held by the Warburg Holders, the Company shall
promptly (but in any event within ten (10) days) give written notice of such
proposed Demand Registration to all other Holders, and subject to Section 2.01(e),
all such Holders shall have the right, exercisable by written notice to the
Company within ten (10) days of their receipt of the Company’s notice, to elect
to include in such Demand Registration such portion of their Registrable
Securities as they may request.  All such
Holders requesting to have their Registrable Securities included in a Demand
Registration in accordance with the preceding sentence shall be deemed to be “Requesting
Holders” for purposes of this Section 2.01; provided that any DB

 

6

 

Holders and any ABS Holders
shall not be deemed to be “Requesting Holders” for purposes of Section 2.01(c)
or for purposes of clause (x) of the proviso set forth in the last sentence of Section 2.01(e).

 

(vi)                              Upon receipt of any
request for a Demand Registration by Holders of not less than a majority of the
Registrable DB Securities held by the DB Holders, the Company shall promptly
(but in any event within ten (10) days) give written notice of such proposed
Demand Registration to all other Holders, and subject to Section 2.01(e),
all such Holders shall have the right, exercisable by written notice to the
Company within ten (10) days of their receipt of the Company’s notice, to elect
to include in such Demand Registration such portion of their Registrable
Securities as they may request.  All such
Holders requesting to have their Registrable Securities included in a Demand
Registration in accordance with the preceding sentence shall be deemed to be “Requesting
Holders” for purposes of this Section 2.01; provided that any Warburg
Holders and any AB Holders shall not be deemed to be “Requesting Holders” for
purposes of Section 2.01(c) or for purposes of clause (x) of the proviso
set forth in the last sentence of Section 2.01(e).

 

(vii)                           Upon receipt of any request
for a Demand Registration by Holders of a majority of the Registrable ABS
Securities held by the ABS Holders, the Company shall promptly (but in any
event within ten (10) days) give written notice of such proposed Demand
Registration to all other Holders, and subject to Section 2,01(e), all
such Holders shall have the -right, exercisable by written notice to the
Company within ten (10) days of their receipt of the Company’s notice, to elect
to include in such Demand Registration such portion of their Registrable
Securities as they may request.  All such
Holders requesting to have their Registrable Securities included in a Demand
Registration in accordance with the preceding sentence shall be deemed to be “Requesting
Holders” fox purposes of this Section 2.01; provided that any
Warburg Holders and any DB Holders shall not be deemed to be “Requesting
Holders” for purposes of Section 2.01(c) or for purposes of clause (x) of
the proviso set forth in the last sentence of Section 2.01(e).

 

(b)                                 In the event that the
Requesting Holders withdraw or do not pursue a request for a Demand
Registration and, pursuant to Section 2.01(a) hereof, such Demand
Registration is deemed to have been effected, the Holders may reacquire such
Demand Registration (such that the withdrawal or failure to pursue a request
will not count as a Demand Registration hereunder) if the Requesting Holders
reimburse the Company for any and all Registration Expenses actually incurred
by the Company in connection with such request for a Demand Registration.

 

(c)                                  If the Requesting
Holders so elect, the offering of such Registrable Securities pursuant to such
Demand Registration shall be in the form of a “firm commitment” underwritten
offering.  The Company shall have the
right to select the managing Underwriters and any additional investment bankers
and managers to be used in connection with any offering under this Section 2.01,
subject to the approval of a majority in interest of the Requesting Holders,
which approval shall not be unreasonably withheld.

 

(d)                                 The Requesting Holders
will inform the Company of the time and manner of any disposition of
Registrable Securities (which may be pursuant to a Shelf Registration), and
agree to take reasonable action to cooperate with the Company in effecting the
disposition of the

 

7

 

Registrable Securities in a
manner that does not unreasonably disrupt the public trading market for the
Common Stock,

 

(e)                                  Priority on Demand
Registrations.  No securities to be
sold for the account of any Person (including the Company) other than a
Requesting Holder shall be included in a Demand Registration unless the
managing Underwriter or Underwriters shall advise the Company and the
Requesting Holders in writing that the inclusion of such securities will not
materially and adversely affect the price, distribution or timing of the
offering (a “Material Adverse Effect”). 
Any additional securities to be included in a Demand Registration
pursuant to this Section 2.01(e) shall be included in such Demand
Registration in accordance with their relative rights.  Furthermore, in the event the managing
Underwriter or Underwriters shall advise the Company or the Requesting Holders
that even after exclusion of all securities of other Persons (including the
Company) pursuant to the immediately preceding sentence, the amount of
Registrable Securities proposed to be included in such Demand Registration by
Requesting Holders is sufficiently large to cause a Material Adverse Effect,
the Registrable Securities of the Requesting Holders to be included in such
Demand Registration shall equal the number of shares which the Company and the
Requesting Holders are so advised can be sold in such offering without a
Material Adverse Effect and such shares shall be allocated pro rata among the
Requesting Holders on the basis of the number of Registrable Securities held by
each such Requesting Holder; provided, however, that if more than twenty
percent (20%) of the Registrable Securities originally requested to be
registered pursuant to a Demand Registration under Section 2.01 are
excluded from registration hereunder, then (x) the Requesting Holders
shall have the right to withdraw all of their shares from such registration,
(y) such registration will not count as a Demand Registration for purposes
of this Section 2.01 and (z) upon such withdrawal, the Company shall
not have the obligation to effect such Demand Registration.

 

Section 2.02  Piggyback Registration.  (a) If the Company at any time proposes
to file a registration statement under the Securities Act with respect to an
offering of securities for its own account or for the account of another Person
(other than a registration statement on Form S-4 or S-8 (or any substitute form
that may be adopted by the Commission) and other than a Demand Registration
hereunder), the Company shall give written notice of such proposed filing to
the Holders at the address set forth in the share register of the Company as
soon as reasonably practicable (but in no event less than fifteen (15) days
before the anticipated date on which such registration will be first filed with
the Commission), undertaking to provide each Holder the opportunity to register
on the same terms and conditions such number and type of Registrable Securities
as such Holder may request (a “Piggyback Registration”).  Each Holder will have ten (10) business days
after receipt of any such notice to notify the Company as to whether it wishes
to participate in a Piggyback Registration (which notice shall not be deemed to
be a request for a Demand Registration); provided that should a Holder
fail to provide timely notice to the Company, such Holder will forfeit any
rights to participate in the Piggyback Registration with respect to such
proposed offering.  In the event that the
registration statement is filed on behalf of a Person other than the Company,
the Company will use its reasonable best efforts to have the shares of
Registrable Securities that the Holders wish to sell included in the
registration statement.  If the Company
shall determine in its sole discretion not to register or to delay the proposed
oft-ring, the Company shall, provide written notice of such determination to
the Holders and (i) in the case of a determination not to effect the
proposed offering, shall thereupon be relieved of the obligation to register
such Registrable Securities in connection therewith and

 

8

 

(ii) in the case of a
determination to delay a proposed offering, shall thereupon be permitted to
delay registering such Registrable Securities for the same period as the delay
in respect of the proposed offering, in any case, without obligation or
liability to any Holder.  As between the
Company and the Selling Holders, the Company shall be entitled to select the
Underwriters in connection with any Piggyback Registration. In the event that
any Initial Warburg Holder, the Initial DB Holder or any Initial ABS Holder, as
the case may be, requests a registration pursuant to this Section 2.02(a)
in connection with a distribution of Registrable Warburg Securities.
Registrable DB Securities or Registrable ABS Securities, as the case may be, to
its respective partners, the registration shall, if requested by such Initial
Warburg Holder, Initial DB Holder or Initial ABS Holder, as the case may be,
provide for the resale by such partners.

 

(b)                                 Priority on
Piggyback Registrations.  Subject to
the succeeding provisions of this Section 2.02(b), if the managing
Underwriter advises the Company that the inclusion of Registrable Securities
requested to be included in the Piggyback Registration by any Holder would
cause a Material Adverse Effect, the Company will be obligated to include in
such registration statement, as to each Holder only a portion of the shares
such Holder has requested be registered equal to the ratio which such Holder’s
requested shares bears to the total number of shares requested to be included
in such registration statement by the Company and all Persons which have the
contractual right to request that their shares be included in such registration
statement and which have requested their shares be included; provided, however,
that the provisions of this sentence shall not be applicable to the Person or
Persons initiating such registration statement. 
If the Company initiated the registration, then the Company may include
all of its securities in such registration statement before any such Holder’s
requested shares are included.  If
another security holder initiated the registration and the Company wishes to
include any of its securities in such registration statement, then the number
of securities which all security holders (which have the contractual right to
request that their shams be included in such registration statement, including
the Holders) and the Company have requested or otherwise sought to be included
in such registration statement shall be reduced as necessary pro rata in proportion
to the relative number of securities requested or otherwise sought by each such
security holder and the Company to be included in such registration statement
until the number of securities to be included in such registration statement no
longer exceeds the number which can be sold in such offering.  If, as a result of the provisions of this Section 2.02(b),
any Holder shall not be entitled to include all Registrable Securities in a
registration that such Holder has requested to be so included, such Holder may
withdraw such Holder’s request to include Registrable Securities in such
registration statement prior to its effectiveness.

 

ARTICLE III

 

REGISTRATION PROCEDURES

 

Section 3.01  Filings; Information.  In connection with the registration of Registrable
Securities pursuant to Section 2.01 and Section 2.02 hereof, the
Company will use its reasonable best efforts to effect the registration of such
Registrable Securities as promptly as is reasonably practicable, and in
connection with any such request:

 

(a)                                  The Company will
expeditiously prepare and file as soon as practicable but in any event within
sixty (60) days with respect to a Demand Registration) with the

 

9

 

Commission a registration
statement on any form for which the Company then qualifies and which counsel
for the Company shall deem appropriate and available for the sale of the
Registrable Securities to be registered thereunder in accordance with the
intended method of distribution thereof, and use its reasonable best efforts to
cause such filed registration statement to become and remain effective
(i) with respect to any Demand Registration (other than a Shelf
Registration) or Piggyback Registration, for such period equal to the lesser of
(x) ninety (90) days, and (y) the completion of the distribution of
such securities and (ii) with respect to a Shelf Registration, until the
earlier of the sale of all Registrable Securities thereunder and the end of the
12th calendar month from the time the Shelf Registration becomes effective; provided
that if the Company shall furnish to the Selling Holder a certificate signed by
the Company’s Chairman or president stating that the Company’s Board of
Directors (not including directors nominated by the Selling Holders) has
determined in good faith that required financial statements are not available
or that it would be detrimental or otherwise disadvantageous to the Company or
its stockholders for such a registration statement to be filed as
expeditiously- as possible because the sale of Registrable Securities covered
by such registration statement or the disclosure of information in any related
prospectus or prospectus supplement would materially interfere with any
acquisition, financing or other material event or transaction which is then
intended or the public disclosure of which at the time would be materially
prejudicial to the Company, the Company may postpone the filing or
effectiveness of a registration statement for a period of not more than one
hundred and twenty (120) days; provided, fuurther, that the Company
shall not exercise its right to preempt, delay or postpone any registration
pursuant to the first proviso to this Section 3.01(a) or Section 3.01(b)
for more than one hundred and eighty (180) days in the aggregate for all such
provisions during any period of three hundred sixty (36O) consecutive days; provided,
further, that the Company may exercise its rights under Section 3.01
(a) only once with respect to any particular registration statement; and provided,
further, that if (i) the effective date of any registration
statement filed pursuant to a Demand Registration would otherwise be at least
forty five (45) calendar days, but fewer than ninety (90) calendar days, after
the end of the Company’s fiscal year and (ii) the Securities Act requires
the Company to include audited financial statements of the Company as of the
end of such fiscal year, the Company may delay the effectiveness of such
registration statement for such period as is reasonably necessary to include
therein its audited financial statements for such fiscal year.

 

(b)                                 Anything in this
Agreement to the contrary notwithstanding, it is understood and agreed that the
Company shall not be required to keep any Shelf Registration effective or
useable for offers and sales of the Registrable Securities, file a post
effective amendment to a Shelf Registration statement or prospectus supplement
of to supplement or amend any registration statement, if the Company has
determined that required financial statements are not available to it or if the
Company is then involved in discussions concerning, or otherwise engaged in,
any material financing or investment, acquisition or divestiture transaction or
other material business purpose, if the Company determines in good faith that
the keeping of such Shelf Registration effective or useable or the making of
such a filing, supplement or amendment at such time would interfere with such
transaction or purpose.  The Company
shall promptly give the Holders of Registrable Securities written notice of
such postponement containing a general statement

 

10

 

of the reasons for such
postponement and an approximation of the anticipated delay.  Upon receipt by a Holder of Registrable
Securities of notice of an event of the kind described in this Section 3.01(b),
such Holder shall forthwith discontinue such Holder’s disposition of
Registrable Securities until such Holder’s receipt of notice from the Company
that such disposition may continue and of any supplemented or amended
prospectus indicated in such notice. 
Notwithstanding anything to the contrary contained herein, the Company
shall not be entitled to preempt, delay or postpone the filing or effectiveness
of any registration statement, pre- or post-effective amendment or supplement
to any registration statement or prospectus supplement pursuant to the first
proviso of Section 3,01 (a or this Section 3-01(b) for more than one
hundred and eighty (180) days in the aggregate for all such provisions during
any period of three hundred sixty (360) consecutive days.

 

(c)                                  Before filing a
;registration statement or prospectus or any amendments or supplements thereto,
the Company will furnish to any Selling Holder and to the applicable managing
Underwriters, if any, draft copies of all such documents proposed to be filed
at least ten (10) days prior thereto, which documents will be subject to the
reasonable review of such Selling Holders, the applicable managing
Underwriters, if any, and their respective counsel, agents and representatives,
and the Company will not file any registration statement or amendment thereto
or any prospectus or any supplement thereto (including such documents
incorporated by reference) to which any Selling Holder or Underwriter shall
reasonably object.

 

(d)                                 The Company will
notify the Selling Holders requesting such registration and (if requested)
confirm such advice in writing, as soon as practicable after notice thereof is
received by the Company (i) when the registration statement or any
amendment thereto has been filed or becomes effective, the prospectus or any
amendment or supplement to the prospectus has been filed (ii) of any
request by the Commission for amendments or supplements to the registration statement
or the prospectus or for additional information, (iii) if at any time the
representations and warranties of the Company contemplated by Section 5.01
cease to be true and correct and (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Registrable Securities for offering or sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.

 

(e)                                  After the filing of
the registration statement, the Company will promptly notify the Selling
Holders of any stop order issued, or, to the Company’s knowledge, threatened to
be issued, by the Commission and use its reasonable best efforts to prevent the
entry of such stop order or to remove it if entered.

 

(f)                                    The Company will
prepare and file with the Commission such amendments, post-effective amendments
and supplements to such registration statement and.. the prospectus used in
connection therewith as may be necessary to keep such registration statement
effective for a period of not less than ninety (90) days (or such shorter
period which will terminate when all Registrable Securities covered by such
registration statement have been sold or withdrawn, but not prior to the
expiration of the applicable period referred to in Section 4(3) of the
Securities Act and Rule 174

 

11

 

thereunder, if applicable),
cause the prospectus to be supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule 42.4 under the Securities
Act, and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such registration statement (to the
extent such compliance obligations fall on the Company) during such period in
accordance with the intended methods of disposition by the Selling Holders set
forth in such registration statement.

 

(g)                                 The Company will
furnish to each Selling Holder requesting such registration and the managing
Underwriter, if any, without charge, one signed copy and such number of
conformed copies of such registration statement, each amendment and supplement
thereto, the prospectus included in such registration statement (including each
preliminary prospectus) and any amendments or supplements thereto, any
documents incorporated by reference therein and such other documents as any
such Selling Holder or such managing Underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities (it being
understood that, subject to Section 3.01(b) hereof, the Company consents
to the use of the prospectus (including the preliminary prospectus) and any
amendment or supplement thereto by the Selling Holder requesting such
registration and the managing Underwriter, if any, in connection with the
offering and sale of the Registrable Securities covered by the prospectus or
any amendment or supplement thereto).

 

(h)                                 The Company will use
its reasonable best efforts to qualify the Registrable Securities for offer and
sale under such other securities or blue slew laws of such jurisdictions in the
United States as the Selling Holders reasonably request; keep each such
registration or qualification (or exemption therefrom) effective during the
period in which such registration statement is required under this Agreement or
pursuant to applicable law to be kept effective; and do any and all other acts
and things which may be reasonably necessary or advisable to enable each
Selling Holder to consummate the disposition of the Registrable Securities
owned by such Selling Holder in such jurisdictions; provided that the Company
will not be required to qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this paragraph
3.01(h), (ii) subject itself to taxation in any such jurisdiction or
(iii) consent to general service of process in any such jurisdiction.

 

(i)                                     The Company will
as promptly as is practicable notify the Selling Holders, at any time when a
prospectus relating to the sale of the Registrable Securities is required by
law to be delivered under the Securities Act, of the occurrence of any event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the purchasers of such Registrable Securities,
such prospectus will not contain an 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 the light of the circumstances under which they were
made, not misleading and, subject to Section 3.01(b) hereof, promptly make
available to the Selling Holders and to the Underwriters any such supplement or
amendment.  Upon receipt of any notice of
the occurrence of any event of the kind described in the preceding sentence,
Selling Holders will forthwith discontinue the offer and sale of Registrable
Securities pursuant to the registration

 

12

 

statement covering such
Registrable Securities until receipt by the Selling Holders and the
Underwriters of the copies of such supplemented or amended prospectus and, if
so directed by the Company, the Selling Holders will deliver to the Company all
copies, other than permanent file copies then in the possession of Selling
Holders, of the most recent prospectus covering such Registrable Securities at
the time of receipt of such notice.  In
the event the Company shall give such notice, the Company shall extend the
period during which such registration statement shall be maintained effective
as provided in Section 3.01(a) hereof by the number of days during the
period from and including the date of the giving of such notice to the date
when the Company shall make available to the Selling Holders such supplemented
or amended prospectus.

 

(j)                                     The Company will
enter into customary agreements (including an underwriting agreement in
customary form, including customary representations, warranties, covenants,
conditions and indemnities) and take such other actions as are required or reasonably
requested by the Selling Holders or the managing Underwriter in order to
expedite or facilitate the sale of such Registrable Securities.

 

(k)                                  At the request of any
Underwriter in connection with an underwritten offering the Company will
furnish an opinion of counsel, addressed to the Underwriters, covering such
customary matters as the managing Underwriter may reasonably request and
(ii) a comfort letter or comfort letters (and updates thereof) from the
Company’s independent public accountants covering such customary matters as the
managing Underwriter may reasonably request.

 

(l)                                     If requested by
the managing Underwriter or any Selling Holder, the Company shall promptly
incorporate in a prospectus supplement or post effective amendment such information
as the managing Underwriter or any Selling Holder reasonably requests to be
included therein, including without limitation, with respect to the Registrable
Securities being sold by such Selling Holder, the purchase price being paid
therefor by the Underwriters and with respect to any other terms of the
underwritten offering of the Registrable Securities to be sold in such
offering, and promptly make all required filings of such prospectus supplement
or post effective amendment.

 

(m)                               The Company shall promptly
make available for inspection by any Selling Holder or Underwriter
participating in any disposition pursuant to any registration statement, and
any attorney, accountant or other agent or representative retained by any such
Selling Holder or Underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, as shall be reasonably
necessary to enable them to exercise their due diligence responsibility, and
cause the Company’s officers, directors and employees to supply all information
reasonably requested by any such Selling Holder or Underwriter in connection
with such registration statement; provided that such Selling Holder
shall {to the extent that the same is within its reasonable control) maintain,
and cause its representatives to maintain, the confidentiality of such
information (other than any information or portion thereof which (i) was
in the public domain at or subsequent to the time such information or portion
thereof was communicated to the receiving party by the disclosing party through
no fault of the receiving party, (ii) was rightfully in the receiving
party’s possession free of any

 

13

 

obligation of confidentiality
at or subsequent to the time such information or portion thereof was
communicated to the receiving party by the disclosing party, (iii) was
developed by employees or agents of the receiving party independently of and
without reference to any information communicated to the receiving party by the
disclosing party or (iv) was communicated by the disclosing party to an
unaffiliated third party free of any obligation of confidentiality); provided,
however, that, notwithstanding anything to the contrary set forth above,
the disclosure by any party of any such information or portion thereof
(i) to any Affiliate of such disclosing party, or to any officer,
director, employee, agent, representative, attorney or other advisor of such
disclosing party or of any Affiliate of such disclosing party, which, in each
case, agrees to be bound by the provisions of this Section 3.01(m),
(ii) to any foreign or domestic Governmental or quasi-Governmental
Authority, (iii) in response to an order by a court or other Governmental
Authority, (iv) which is otherwise required by applicable law or
regulation or (v) which is necessary or advisable to establish the rights
of any party under this Agreement, shall not be considered to be a breach of
this Agreement by the party making such disclosure.

 

(n)                                 The Company shall cause
the Registrable Securities included in any registration statement to be
(A) listed on each securities exchange, if any, on which similar
securities issued by the Company are then listed or (B) authorized to be
quoted and/or listed (to the extent applicable) on the Nasdaq National Market,
if the Registrable Securities so qualify.

 

(o)                                 The Company shall
provide a CUSIP number, registrar and transfer agent for the Registrable
Securities included in any registration statement not later than the effective date
of such registration statement.

 

(p)                                 The Company shall
cooperate with each Selling Holder and each Underwriter participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the National Association
of Securities Dealers, Inc.

 

(q)                                 The Company shall
during the period when the prospectus is required to be delivered under the
Securities Act, promptly file all documents required to be filed with the
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act.

 

(r)                                    The Company will
make generally available to its security holders, as soon as reasonably
practicable, an earnings statement covering a period of twelve (12) months,
beginning within three (3) months after the effective date of the registration
statement, which earnings statement shall satisfy the provisions of Section 11
(a of the Securities Act and the rules and regulations of the Commission
thereunder.

 

(s)                                  Following the
consummation of an initial Public Offering, the Company shall use its
reasonable best efforts to qualify for registration on Form S-3 for secondary
sales as soon as possible.  The Company
will use its reasonable best efforts to cause all such Registrable Securities
to be listed on each securities exchange or quoted on each inter-dealer
quotation system on which the Common Stock is then listed or quoted.

 

14

 

The Company may require Selling Holders
promptly to furnish in writing to the Company such information regarding such
Selling Holders, the plan of distribution of the Registrable Securities and
other information as may be legally required in connection with such
registration, and the Selling Holders agree to do so as promptly as reasonably
practicable.

 

Section 3.02  Registration Expenses.  The Company will pay all registration
expenses (collectively, “Registration Expenses”) of the Selling Holders
in connection with any Demand and/or Piggyback Registrations including but not
limited to (i) registration and filing fees with the Commission and the
National Association of Securities Dealers, Inc., (ii) fees and expenses
of compliance with securities or blue sky laws (including reasonable fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities), (iii) printing expenses, (iv) fees and
expenses incurred in connection with the listing or quotation of the
Registrable Securities, (v) fees and expenses of counsel to the Company
and the reasonable fees and expenses of independent certified public
accountants for the Company (including fees and expenses associated with the
special audits or the delivery of comfort letters), (vi) the reasonable
fees and expenses of any additional experts retained by the Company in
connection with such registration, (vii) all roadshow costs and expenses
not paid by the Underwriters, (viii) rating agency fees and
(ix) reasonable fees and expenses of one counsel to the holders of
Registrable Securities.

 

The Company will not be required to pay for
any underwriting discounts or commissions or any broker’s fees or other similar
selling fees attributable to the sale of Registrable Securities, which shall be
borne by the Holders of the Registrable Securities so registered pro rata on
the basis of the number of their shares so registered.

 

ARTICLE IV

 

INDEMNIFICATION AND CONTRIBUTION

 

Section 4.01  Indemnification by the Company.  The Company agrees to indemnify and hold
harmless, to the fullest extent permitted by applicable law, each Selling
Holder and its Affiliates and their respective officers, directors, partners,
stockholders, members, employees, agents and representatives and each Person
(if any) which controls a Selling Holder within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, from and against
any and all losses, claims, damages, liabilities, costs and expenses (including
attorneys’ fees) (collectively, “Losses”) caused by, arising out of,
resulting from or related to any untrue statement or alleged untrue statement
of a material fact contained in any registration statement, preliminary
prospectus or prospectus relating to the Registrable Securities (as amended or
supplemented from time to time), or caused by any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein, in the case of the prospectus, in light of the
circumstances under which they were made, not misleading, except insofar as such
Losses are caused by or contained in or based upon any information furnished in
writing to the Company by or on behalf of such Selling Holder or any
Underwriter expressly for use therein (which was not subsequently corrected in
writing prior to the sale of Registrable Securities to the Person asserting the
Loss in sufficient time to permit the Company to amend or supplement the
Registration Statement or such prospectus appropriately) or by the Selling
Holder’s failure to deliver a copy of the registration statement or prospectus
or

 

15

 

any amendments or supplements
thereto after the Company has furnished the Selling Holder with copies of the
same.  The Company also agrees to
indemnify any Underwriters of the Registrable Securities, their officers and
directors and each Person which controls such Underwriters on substantially the
same basis as that of the indemnification of the Selling Holders provided in
this Section 4.01.  Notwithstanding
the foregoing, the Company shall have no obligation to indemnify under this Section 4.01
to the extent any such Losses have been finally and non-appealably determined
by a court of competent jurisdiction to have resulted from a Selling Holder’s
or Underwriters willful misconduct or gross negligence.

 

Section 4.02  Indemnification by Selling Holders.  The Selling Holders agree to indemnify and
hold harmless, to the fullest extent permitted by applicable law, the Company
and its Affiliates and their respective officers, directors, partners,
stockholders, members, employees, agents and representatives and each Person
(if any) which controls the Company within the meaning of either Section 1
of the Securities Act or Section 20 of the Exchange Act, from and against
any and all Losses caused by, arising out of, resulting from or related to any
untrue statement or alleged untrue statement of a material fact contained in
any registration statement, preliminary prospectus or prospectus relating to
the Registrable Securities (supplemented from time to time) or any preliminary
prospectus, or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein, in the case of the prospectus, in light of the circumstances under
which they were made, not misleading, but only insofar as such Losses are
caused by or contained in or based upon any information furnished in writing to
the Company by or on behalf of such Selling Holder or any Underwriter expressly
for use therein (which was not subsequently corrected in writing prior to or
concurrently with the sale of Registrable Securities to the Person asserting
the Loss in sufficient time to permit the Company to amend or supplement the
Registration Statement or such prospectus appropriately). Notwithstanding the
foregoing, the Selling Holder shall have no obligation to indemnify under this Section 4.02
to the extent that any such Losses have been finally and non-appealably
determined by a court of competent jurisdiction to have resulted from the
Company’s willful misconduct or gross negligence.

 

Section 4.03  Conduct of Indemnification Proceedings.  In case any claim or proceeding (including
any governmental investigation) shall be instituted or threatened involving any
Person in respect of which indemnity may be sought pursuant to Section 4.01
or Section 4.02, such Person (the “Indemnified Party”) shall
promptly notify the Person against which such indemnity may be sought (the “Indemnifying
Party”) in writing (it being understood that the failure to give such
notice shall not relieve any Indemnifying Party from any liability which it may
have hereunder except to the extent the Indemnifying Party is actually and
materially prejudiced by such failure) and the Indemnifying Party, upon the
request of the Indemnified Party, shall retain counsel reasonably satisfactory
to such Indemnified Party to represent such Indemnified Party and any other
Persons the Indemnifying Party may designate in such claim or proceeding and
shall pay the fees and disbursements of such counsel related to such claim or
proceeding.  If the Indemnifying Party
does not elect within fifteen (15) days after receipt of the notice required
hereby to assume the defense of any claim or proceeding, the Indemnified Party
may assume such defense with counsel of its choice at the cost and expense of
the Indemnifying Party.  In any such
claim or proceeding where the Indemnifying Party has assumed the defense, any
indemnified Party shall have the right to retain its oven counsel and
participate in, but not control, the defense, but the fees and expenses of such
counsel shall be at the expense of such

 

16

 

Indemnified Party unless
(i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any
such proceeding (including any impleaded parties) include both the Indemnified
Party and the Indemnifying Party and, in the opinion of counsel for the
Indemnified Party, representation of both parties by the same counsel would be
inappropriate due to actual or potential conflicting interests between them or
there exist defenses available to the Indemnified Party which are not available
to the Indemnifying Party, in which case the Indemnified Party may retain
counsel of its choice, which counsel shall be reasonably satisfactory to the
Indemnifying Party, and such counsel may defend the Indemnified Party.  It is understood that the Indemnifying Party
shall not, in connection with any claim or proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel for each such
jurisdiction) at any time for all such Indemnified Parties, and that all such
fees and expenses shall be reimbursed as they are incurred.  In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the
Indemnified Parties.  The Indemnifying
Party shall not settle any claim or proceeding without the written consent of
the Indemnified Party, unless such settlement (x) requires no relief or
penalty other than the payment of money damages, (y) does not require any
Indemnified Party to admit culpability or fault in any respect and
(z) contains a full and complete release of the Indemnified Party with
respect to all matters arising from the facts giving rise to the underlying
claim or proceeding.  The Indemnifying
Party shall not be liable for any settlement of any claim or proceeding
effected without its written consent, but if settled with such consent (riot to
be unreasonably withheld), or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.

 

Section 4.04  Contribution.  If the indemnification provided for in this Article IV
is unavailable to an Indemnified Party in respect of any Losses in respect of
which indemnity is to be provided hereunder, then each such Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall to the fullest extent
permitted by law contribute to the amount paid or payable by such Indemnified
Party as a result of such Losses in such proportion as is appropriate to
reflect the relative fault of such party in connection with the statements or
omissions that resulted in such Losses, as well as any other relevant equitable
considerations.  The relative fault of
the Company, each Selling Holder and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by such party and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 

The Company and each Selling Holder agrees
that it would not be just and equitable if contribution pursuant to this Section 4.04
were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph.  The amount paid or
payable by an Indemnified Party as a result of the Losses referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such Indemnified Party in connection with investigating or defending any such
action or claim or proceeding. 
Notwithstanding the provisions of this Article IV, no Selling
Holder shall be

 

17

 

required to indemnify for or
contribute any amount in excess of the amount by which the net proceeds of the
offering received by such Selling Holder exceeds the amount of any damages, if
any, which such Selling Holder has otherwise been required to pay to a third
party by reason of such untrue or alleged untrue statement or omission or
alleged omission.  No Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person which was not
guilty of such fraudulent misrepresentation.

 

ARTICLE V

 

MISCELLANEOUS

 

Section 5.01  Participation in Underwritten
Registrations.  No Person may
participate in any underwritten registered offering contemplated hereunder
unless such Person (a), if the offering is underwritten, agrees to sell
its securities on the basis provided in any underwriting arrangements approved
by the Persons entitled hereunder to approve such arrangements, (b) completes
and executes all questionnaires, powers of attorney, custody arrangements,
indemnities, underwriting agreements and other documents reasonably required
under the terms of such underwriting arrangements and this Agreement and
(c) furnishes in writing to the Company such information regarding such
Person, the plan of distribution of the Registrable Securities and other
information as the Company may from time to time request or as may be legally
required in connection with such registration and (d) sells or otherwise
transfers its securities in accordance with the plan of distribution described
in the prospectus covering such sale and delivers a current prospectus in
connection therewith in accordance with the requirements of the Securities Act;
provided, however, that no such Person shall be required to make.
any representations or warranties in connection with any such registration
other than representations and warranties as to (i) such Person’s
ownership of his or it` Registrable Securities to be sold or transferred free
and clear of all liens, claims and encumbrances, (ii) such Person’s power
and authority to effect such transfer and (iii) such matters pertaining to
compliance with securities laws as may be reasonably requested; provided,
further, however, that the obligation of such person to indemnify
pursuant to any such underwriting agreements shall be several, not joint and
several, among such Persons selling Registrable Securities, and the liability
of each such Person will be in proportion to. and limited to, the net amount
received by such Person from the sale of such Person’s Registrable Securities
pursuant to such registration.

 

Section 5.02  Rule 144.  The Company covenants that, at all times
after the consummation of an Initial Public Offering, it Will file any reports
required to be filed by it under the Securities Act and the Exchange Act and
that it will take such further action as the Holders may reasonably request to
the extent required from time to time to enable the Holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission.  Upon the
request of any Holder, the Company will deliver to such Holder a written
statement as to whether it has complied with such reporting requirements.

 

Section 5.03  Termination.  The registration rights granted under this
Agreement will terminate at such time as there shall no longer be any
Registrable Securities.

 

18

 

Section 5.04  Amendments, Waivers, Etc.  This Agreement may not be amended, waived or
otherwise modified or terminated except by an instrument in writing signed by
(i) the Company, (ii) Holders of at least 66-2/3% of the Registrable
Warburg Securities, (iii) Holders of least 66-2/3% of the Registrable DB
Securities and (iv) Holders of at least 66-2/3% of the Registrable ABS
Securities, whereupon the amendment shall be effective against the Company and
all of the Holders.

 

Section 5.05  Counterparts.  This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same agreement.  Each party need not sign the same
counterpart.

 

Section 5.06  Entire Agreement.  This Agreement, together with the Securities
Purchase Agreement and the other Equity Documents referred to therein,
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof.

 

Section 5.07  Governing Law.  This Agreement shall be governed by, and
construed in accordance with, he laws of the State of New York regardless of
the laws that might otherwise govern under applicable principles of conflicts
of law thereof.

 

Section 5.08  Assignment of Registration Rights.  Each Holder of the Registrable Securities may
assign all or any part of its rights under this Agreement to any person to
which such Holder sells, transfers or assigns at least 10% of its Registrable
Securities; provide d that each Holder may assign all or any part of its rights
under this Agreement to (i) any partner of or member in such Holder in connection
with a distribution to such partner or member of Registrable Securities
regardless of the number of shares of Registrable Securities so distributed or
(ii) any Affiliate of such Holder. 
In the event that the Holder shall assign its rights pursuant to this
Agreement in connection ‘With the transfer of less than all its Registrable
Securities, the Holder shall also retain his rights With respect to its
remaining Registrable Securities.

 

Section 5.09  Specific Performance.  The Company agrees that monetary damages
would not be adequate compensation for any loss inured by the Holders by reason
of any breach by it of the provisions of this Agreement and hereby agrees that
the Holders, in addition to any remedies which they may have at law, including
monetary damages, will be entitled to the remedy of specific performance.

 

Section 5.10  No Superior Registration Rights.  The Company will not grant registration
rights that conflict with those of the Holders pursuant to this Agreement,

 

[Signature pages follow]

 

19

 

IN WITNESS WHEREOF, the Company and the
Initial Holders have caused this Agreement to be signed on their behalf by
their officer thereunto duly authorized as of the date first written above

 

 

	
   

  	
  NEUSTAR, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Jeffrey Ganek

  	
   

  
	
   

  	
   

  	
  Name:  Jeffrey Ganek

  
	
   

  	
   

  	
  Title:  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  WARBURG,
  PINCUS EQUITY PARTNERS,

  L.P.

  
	
   

  	
  WARBURG,
  PINCUS NETHERLANDS

  EQUITY PARTNERS I, C.V.

  
	
   

  	
  WARBURG,
  PINCUS NETHERLANDS

  EQUITY PARTNERS II, C.V.

  
	
   

  	
  WARBURG,
  PINCUS NETHERLANDS

  EQUITY PARTNERS III, C.V.

  
	
   

  	
   

  
	
   

  	
  Each by:
  Warburg, Pincus & Co., as General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Joseph P. Landy

  	
   

  
	
   

  	
   

  	
  Name:  Joseph P. Landy

  
	
   

  	
   

  	
  Title:

  

 

 

 

	
   

  	
  DB CAPITAL INVESTORS, L.P.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  DB Capital Partners, L.P.,

  as General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
  DB Capital Partners, Inc.,

  as General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Frank L. Schiff

  	
   

  
	
   

  	
   

  	
  Name:  Frank L. Schiff

  
	
   

  	
   

  	
  Title:  Managing Director

  
	
   

  	
   

  
	
   

  	
  ABS CAPITAL PARTNERS IV, L.P.

  
	
   

  	
  ABS CAPITAL
  PARTNERS IV OFFSHORE,

  L.P.

  
	
   

  	
  ABS CAPITAL PARTNERS IV-A, L.P.

  
	
   

  	
  ABS CAPITAL
  PARTNERS IV SPECIAL

  OFFSHORE, L.P.

  
	
   

  	
  Each by: Tim Weglicki, as General Partner

  
	
   

  	
   

  
	
   

  	
  By:

  	
     Tim Weglicki

  	
   

  
	
   

  	
   

  	
  Name:  Tim Weglicki

  
	
   

  	
   

  	
  Title:  General Partner

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00082-of-00352.parquet"}]]