THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Ness Technologies, Inc. (NSTC)

4/28/2006 Proxy Information

Registration Rights Agreements

The holders of 8,040,805 shares of our common stock have the right to require us to register these shares with the SEC pursuant to the terms of certain registration rights agreements.

Registration Rights Agreements. Certain affiliates of Morris Wolfson, one of our directors, are parties to a registration rights agreement with us, dated March 26, 1999. The Warburg Pincus stockholders, Nesstech LLC and certain other common stockholders are parties to a second amended and restated registration rights agreement with us, dated June 30, 2003, as amended. Under these agreements, holders of shares having registration rights can demand that we file a registration statement or request to have their shares included in a registration statement that we file for our own account or for the account of other stockholders.

Demand Registration Rights. Beginning six months following the completion of our initial public offering, the stockholders party to the March 1999 agreement have the right to demand that we file a registration statement covering the offer and sale of their securities so long as these securities have an anticipated public offering price of at least $5.0 million. If we are eligible to file a registration statement on Form S-3, any holder of shares having registration rights under the March 1999 agreement has the right to demand that we file a registration statement on Form S-3 once in any six-month period, under the same aggregate offering price restrictions.

Under the second amended and restated agreement, certain holders have the right to demand that we file a registration statement covering the offer and sale of their securities so long as these securities have an anticipated public offering price of at least $15.0 million. If we are eligible to file a registration statement on Form S-3, any holder of shares having registration rights under this agreement has the right to demand that we file a registration statement on Form S-3 or similar short-form registration statement, once in any six-month period, so long as the value of the securities to be registered is at least $5.0 million. We have the ability to delay the filing of a registration statement under specified conditions, such as for a period of time following the effective date of a prior registration statement or during the period in which such disclosure would be seriously detrimental to us.

Piggyback Registration Rights. If we register any of our securities under the Securities Act for public sale, either for our own account or for the account of other stockholders exercising their registration rights, stockholders with registration rights under any of these agreements will have the right to include their shares in any subsequent registration statement we file. The underwriters of any underwritten offering will have the right to limit the number of shares of common stock having registration rights to be included in the registration statement.

Expenses of Registration. We are required to pay all expenses in connection with any registration, other than underwriting discounts and commissions. However, we will not pay for the expenses of any demand registration if the request is subsequently withdrawn by the requesting stockholders, subject to limited exceptions.

Indemnification. Each of these agreements contains customary indemnification provisions, pursuant to which each party is obligated to indemnify the other party in the event of material misstatements or omissions in a registration statement attributable to that party.

Expiration of Registration Rights. The registration rights described above will terminate with respect to a particular stockholderÕs securities on, or on such date after, they are freely transferable whether because they have been included in an effective registration statement, or pursuant to an exemption from registration.

Family Relationships to Executive Officers

Eyal Feldman, the son of Tuvia Feldman, our chief operating officer, is employed in our Israeli subsidiary as a division manager. His annual salary in 2005 was $116,275. He was also granted options to purchase 1,800 shares of our common stock on December 21, 2005 at an exercise price of $11.82 per share.