Public Offering Registration - SYNTEL INC - 6-6-1997 by SYNT-Agreements

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									As filed with the Securities and Exchange Commission on June 6, 1997 Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT Under THE SECURITIES ACT OF 1933

SYNTEL, INC.
(Exact name of Registrant as specified in its charter) Michigan (State or other jurisdiction of incorporation or organization) 7371 (Primary Standard Industrial Classification Code Number) 38-2312018 (I.R.S. Employer Identification No.) 2800 Livernois--Suite 400 Troy, Michigan 48083 (248) 619-2800 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) BHARAT DESAI President and Chief Executive Officer 2800 Livernois--Suite 400 Troy, Michigan 48083 (248) 619-2800 (Name and address, including zip code, and telephone number, including area code, of agent for service) COPIES TO: D. RICHARD McDONALD, ESQ. Dykema Gossett PLLC 1577 North Woodward Avenue--Suite 300 Bloomfield Hills, Michigan 48304 (248) 203-0859 DANIEL M. MOORE, ESQ. Syntel, Inc. 2800 Livernois--Suite 400 Troy, Michigan 48083 (248) 619-3508 KEVIN F. BLATCHFORD, ESQ. Sidley & Austin One First National Plaza Chicago, Illinois 60603-2279 (312) 853-2076

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"), please check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]____________________ If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]____________________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ]

CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------- ----------------------------------------------------------------------------------------------------------------------------- ---PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION SECURITIES TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE(1) FEE - ----------------------------------------------------------------------------------------------------------------------------- ---Common Stock, no par value............... 3,450,000 $11.00 $37,950,000 $11,500 =================================================================================================================================

(1) Estimated solely for purposes of determining the registration fee pursuant to Rule 457(o) under the Securities Act.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED PROSPECTUS - ---------, 1997

3,000,000 SHARES [SYNTEL LOGO] COMMON STOCK All of the 3,000,000 shares of Common Stock offered hereby are being sold by Syntel,(R) Inc. ("Syntel" or the "Company"). Prior to this offering, there has been no public market for the Common Stock of the Company. It is currently estimated that the initial public offering price will be between $9.00 and $11.00 per share. See "Underwriting" for a discussion of the factors to be considered in determining the initial public offering price. The Company will apply to have the Common Stock approved for quotation on the Nasdaq National Market under the symbol SYNT.

THE SHARES OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" COMMENCING ON PAGE 7. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
=============================================================================================================== PRICE TO UNDERWRITING PROCEEDS TO PUBLIC DISCOUNT (1) COMPANY (2) - --------------------------------------------------------------------------------------------------------------Per Share.................. $ $ $ - --------------------------------------------------------------------------------------------------------------Total (3).................. $ $ $ ===============================================================================================================

(1) See "Underwriting" for indemnification arrangements with the several Underwriters. (2) Before deducting expenses payable by the Company, estimated at $600,000. (3) The Company has granted to the Underwriters a 30-day option to purchase up to 450,000 additional shares of Common Stock solely to cover over-allotments, if any. If all such shares are purchased, the total Price to the Public, Underwriting Discount and Proceeds to the Company will be $ , $ , and $ , respectively. See "Underwriting."

The shares of Common Stock are offered by the several Underwriters subject to prior sale, receipt and acceptance by them and subject to the right of the Underwriters to reject any order in whole or in part and certain other conditions. It is expected that certificates for such shares will be available for delivery on or about , 1997, at the office of the agent of Hambrecht & Quist LLC in New York, New York. HAMBRECHT & QUIST PRUDENTIAL SECURITIES INCORPORATED ROBERTSON, STEPHENS & COMPANY

, 1997

[A diagram on this page includes the following: Syntel corporate logo ("Syntel") and two branded Company icons ("TeamSourcing" and "IntelliSourcing") Beneath each logo a description of the Company's services - TeamSourcing: "Professional IT Staffing Services and Systems Specification, Design, Development, Implementation and Maintenance." - IntelliSourcing: "Outsourcing Services for Ongoing Applications Management, Development and Maintenance of Customer Systems, Access to Best Practice Solutions, Availability of IT Personnel, Flexibility and Responsive Service Delivery Tailored for Each Customer and Year 2000 Compliance Services." Several photographs intended to represent Company employees at work.]

CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK, INCLUDING BY ENTERING STABILIZING BIDS, EFFECTING SYNDICATE COVERING TRANSACTIONS OR IMPOSING PENALTY BIDS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING." Syntel(R) is a registered trademark, and Method2000(sm) is a registered service mark, of the Company. All other trademarks, service marks and trade names referred to in this Prospectus are the property of their respective owners. 2

PROSPECTUS SUMMARY The following summary is qualified in its entirety by the more detailed information and the Financial Statements, including the Notes thereto, appearing elsewhere in this Prospectus. Unless otherwise indicated, all information contained in this Prospectus: (i) assumes no exercise of the Underwriters' over-allotment option; and (ii) has been adjusted to give retroactive effect to a 22,000-for-1 split of the shares of the Company's common stock (the "Common Stock"). See "Description of Capital Stock" and "Underwriting." Unless otherwise indicated, references herein to the "Company" or "Syntel" refer to Syntel, Inc. and its affiliated corporation, Syntel Software Private Limited ("Syntel India"), which the Company will acquire upon consummation of this offering. Unless otherwise indicated, references to historical financial information of the Company refer only to the historical financial information of Syntel, Inc. See "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Syntel India Acquisition" and "Certain Transactions." The Common Stock offered hereby involves a high degree of risk. See "Risk Factors." THE COMPANY Syntel is a worldwide provider of professional information technology ("IT") staffing and outsourcing services to Fortune 1000 companies, as well as to government entities. The Company's service offerings include TeamSourcing, consisting of professional IT staffing services, and IntelliSourcing, consisting of outsourcing services for ongoing management, development and maintenance of business applications, including Year 2000 compliance services. Syntel believes that its service offerings are distinguished by its Global Service Delivery Model, a corporate culture focused on customer service and responsiveness, and its own internally developed "intellectual capital" based on a proven set of methodologies, practices and tools for managing the IT functions of its customers. Through TeamSourcing, Syntel provides professional IT staffing services directly to customers. TeamSourcing services include systems specification, design, development, implementation and maintenance of complex IT applications involving diverse computer hardware, software, data and networking technologies and practices. TeamSourcing services are provided by individual professionals and teams of professionals dedicated to assisting customer IT departments with systems projects and ongoing functions. For the year ended December 31, 1996 and for the three months ended March 31, 1997, TeamSourcing accounted for approximately 64% and 56% of revenues, respectively. Through IntelliSourcing, Syntel provides higher-value outsourcing services for ongoing management, development and maintenance of customers' business applications. Syntel assumes responsibility for and manages selected application support functions of the customer. Utilizing its developed methodology of activities, processes and tools, known as IntelliTransfer, the Company is able to assimilate the business process knowledge of its customers to develop and deliver services specifically tailored for that customer. The Company also provides Year 2000 compliance services to customers using its proprietary Method2000(sm) solution. For the year ended December 31, 1996 and for the three months ended March 31, 1997, IntelliSourcing accounted for approximately 36% and 44% of revenues, respectively. The Company's Global Service Delivery Model provides Syntel with flexibility to deliver to each customer a unique mix of services on-site at the customer's location, off-site at its U.S. locations and offshore at its Mumbai (formerly Bombay), India location. The benefits to the customer from this customized service approach include responsive delivery based on an in-depth understanding of the specific processes and needs of the customer, quick turnaround, access to the most knowledgeable personnel and best practices, resource depth, 24-hour support seven days a week and cost-effectiveness. By linking each of its service locations together through a dedicated data and voice network, Syntel provides a seamless service capability to its customers around the world largely unconstrained by geographies, time zones and cultures. The Company is expanding its Global Development Center in Mumbai, India and is establishing a new Global Development Center in Chennai (formerly Madras), India. 3

Syntel provides its services to a broad range of Fortune 1000 companies principally in the financial services, manufacturing, retail, transportation and information/communications industries, as well as to government entities. Principal customers include American International Group, Inc., Ford Motor Co., AT&T Corp., Dayton Hudson Corp., Chrysler Corporation and the State of New Mexico. The Company has been chosen as a preferred vendor by several of its customers and has been recognized for its quality and responsiveness. The Company has a focused sales effort that includes a strategy of migrating existing TeamSourcing customers to higher-value IntelliSourcing services. The Company recently realigned its resources to focus on the development, marketing and sales of its IntelliSourcing services. The Company believes its human resources are its most valuable asset and invests significantly in programs to recruit, train and retain IT professionals. The Company recruits globally through its worldwide recruiting network, trains recent college graduates and other recruits and maintains a broad package of employee support programs. Syntel believes that its management structure and human resources organization is designed to maximize the Company's ability to rapidly and efficiently expand its IT professional staff in response to customer needs. This scalable business model has enabled the Company to grow significantly in recent years. The Company's revenues increased from $29.7 million in 1992 to $92.2 million in 1996. As of June 1, 1997, Syntel's worldwide billable headcount consisted of 1,402 IT professionals. THE OFFERING
Common Stock offered by the Company......................... Common Stock to be outstanding after the offering........... Use of proceeds............................................. 3,000,000 shares 25,000,000 shares(1) Purchase of Syntel India; payment of undistributed S corporation taxable income; and general corporate purposes, including working capital and possible future acquisitions. SYNT

Proposed Nasdaq National Market symbol......................

(1) Excludes (i) 2,000,000 shares of Common Stock reserved for issuance under the Company's Stock Option Plan, which include options outstanding on the date hereof to purchase 608,750 shares at a weighted average exercise price of $5.85 per share and options to purchase approximately 42,000 additional shares which will be granted upon the consummation of this offering at an exercise price equal to the initial offering price of the Common Stock offered hereby, and (ii) 1,000,000 shares of Common Stock reserved for issuance under the Company's Employee Stock Purchase Plan. See "Capitalization," "Management--Stock Option Plan" and "-- Employee Stock Purchase Plan" and "Shares Eligible for Future Sale." 4

AFFILIATE TRANSACTIONS Bharat Desai and Neerja Sethi are the Company's President and Chief Executive Officer and the Company's Vice President, Corporate Affairs, respectively, and together they beneficially own substantially all of the outstanding Common Stock of the Company. Mr. Desai and Ms. Sethi are husband and wife. See "Management" and "Principal Shareholders." Mr. Desai and Ms. Sethi also own all of the outstanding capital stock of Syntel Software Private Limited ("Syntel India"), a corporation organized under the laws of India. Syntel India provides offshore software development services to the Company and derives substantially all of its revenues from the Company. Upon the consummation of this offering, the Company will acquire all of the outstanding capital stock of Syntel India for $7.0 million. The purchase price will be paid from a portion of the net proceeds of this offering. See "Use of Proceeds" and "Certain Transactions." The Company has elected to be treated as an S corporation and, as a result, the income of the Company has been taxed for federal and state tax purposes directly to the Company's shareholders, rather than to the Company. Prior to completion of this offering, the Company will terminate its S corporation status, and, thereafter, will be subject to federal and state income taxes on its earnings. The Company's taxable income through the date of termination will be taxed directly to the Company's shareholders. Accordingly, prior to completion of this offering, the Company will declare a distribution to Mr. Desai, Ms. Sethi and the Company's other shareholders in an amount equal to the Company's undistributed S corporation taxable income through the date immediately preceding the date of termination, which the Company estimates will be approximately $3.5 million (the "S Corporation Distribution"). The S Corporation Distribution will be paid from a portion of the net proceeds of this offering. The Company distributed $7.0 million in the aggregate to Mr. Desai and Ms. Sethi from cash in the second quarter of 1997 relating to undistributed S corporation taxable income through December 31, 1996. See "Use of Proceeds," "Prior S Corporation Status and Distribution" and "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Liquidity and Capital Resources." The Company was incorporated under the laws of the State of Michigan in 1980. The Company maintains its principal executive offices at 2800 Livernois, Suite 400, Troy, Michigan 48083, and its telephone number is (248) 619-2800. The Company's web site is http://www.syntelinc.com. The Company's web site is not a part of this Prospectus. FORWARD-LOOKING STATEMENTS This Prospectus contains certain forward-looking statements that involve substantial risks and uncertainties. When used in the Prospectus, the words "anticipates," "believes," "estimates," "expects," and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements. The Company's actual results, performance or achievement could differ materially from the results expressed in, or implied by, these forward-looking statements. Factors that could cause or contribute to such differences include those discussed under the caption "Risk Factors." 5

SUMMARY FINANCIAL INFORMATION
THREE MONTHS YEAR ENDED DECEMBER 31, ENDED MARCH 31, --------------------------------------------------------------1992 1993 1994 1995 1996 1996 1997 ------------------------------------------(IN THOUSANDS, EXCEPT PER SHARE DATA) $29,717 6,920 721 $ 935 $45,345 6,336 1,122 $ 1,021 $67,247 11,310 3,101 $ 3,032 $90,326 18,788 5,479 $ 5,237 $92,237 22,454 4,193 $ 4,171 $ 2,775 ======= $ 0.13 ======= 22,135 ======= $92,330 25,247 5,934 $ 4,354 ======= $ 0.17 ======= 25,135 ======= $21,862 5,116 1,041 $ 1,165 $26,262 6,368 1,308 $ 1,383 $ 854 ======= $ 0.04 ======= 22,197 ======= $26,294 7,402 1,986 $ 1,57 5 ======= $ 0.06 ======= 25,197 =======

HISTORICAL STATEMENT OF INCOME DATA: Revenues...................... Gross profit.................. Income from operations........ Net income(1)................. Pro forma net income(2)....... Pro forma net income per share(2).................... Pro forma weighted average common shares outstanding(2).............. PRO FORMA CONSOLIDATED STATEMENT OF INCOME DATA(3): Revenues...................... Gross profit.................. Income from operations........ Net income.................... Net income per share.......... Weighted average common shares outstanding.................

BALANCE SHEET DATA: Working capital........................................ Total assets........................................... Long-term debt......................................... Total shareholders' equity.............................

MARCH 31, 1997 ---------------------------ACTUAL AS ADJUSTED(4) -------------------(IN THOUSANDS) $ 8,014 32,403 -11,288 $29,919 55,770 -30,922

(1) For all periods shown, the Company elected to be treated as an S corporation and, as a result, the income of the Company has been taxed for federal and state purposes (with exceptions under certain state income tax laws) directly to the Company's shareholders rather than to the Company. See "Prior S Corporation Status and Distribution." (2) Historical pro forma data reflect income tax provisions of $1.4 million and $0.5 million for the year ended December 31, 1996 and the three months ended March 31, 1997, respectively, for federal and additional state income taxes as if the Company had been taxed as a C corporation since January 1, 1996. (3) Pro forma consolidated statement of income data reflect: (i) income tax provisions of $1.4 million and $0.5 million for the year ended December 31, 1996 and the three months ended March 31, 1997, respectively, for federal and additional state income taxes as if the Company had been taxed as a C corporation since January 1, 1996, (ii) the results of operations of Syntel, India, as if the acquisition of Syntel India had occurred as of January 1, 1996 and (iii) the compensation component associated with the granting on April 1, 1997 of options to purchase 140,000 shares, as if such options had been granted on January 1, 1996. See "Pro Forma Consolidated Financial Statements." (4) As adjusted to give effect to: (i) the sale by the Company of 3,000,000 shares of Common Stock offered hereby at an assumed public offering price of $10.00 per share and the application of the estimated net proceeds therefrom; (ii) the recording of $4.6 million, or $0.18 per share, of deferred tax liability as a result of the termination of the Company's S corporation election as if terminated on March 31, 1997 (the Company estimates that this deferred tax liability will be approximately $3.3 million, or $0.13 per share, at the time of consummation of this offering); (iii) the distribution to the Company's shareholders of undistributed S corporation taxable income (while there was no undistributed S corporation taxable income as of March 31, 1997, the Company estimates that undistributed S corporation taxable income will be approximately $3.5 million at the time of consummation of this offering); and (iv) the acquisition of Syntel India for $7.0 million and the elimination of the intercompany balance between the Company and Syntel India. See "Use of Proceeds," "Prior S Corporation Status and Distribution," "Management's Discussion and Analysis of Financial Condition and Results of Operations--Syntel India Acquisition," "--Net Charge Resulting from S Corporation Termination" and "-- Liquidity and Capital Resources" and "Certain Transactions." 6

RISK FACTORS In addition to the other information contained in this Prospectus, investors should consider carefully the following factors in evaluating an investment in the shares of the Common Stock offered hereby. Recruitment and Retention of IT Professionals. The Company's business of delivering professional IT services is labor intensive, and, accordingly, its success depends upon its ability to attract, develop, motivate, retain and effectively utilize highly-skilled IT professionals. The Company believes that both in the United States and in India there is a growing shortage of, and significant competition for, IT professionals who possess the technical skills and experience necessary to deliver the Company's services, and that such IT professionals are likely to remain a limited resource for the foreseeable future. The Company believes that, as a result of these factors, it operates within an industry that experiences a significant rate of annual turnover of IT personnel. The Company's business plans are based on hiring and training a significant number of additional IT professionals each year to meet anticipated turnover and increased staffing needs. The Company's ability to maintain and renew existing engagements and to obtain new business depends, in large part, on its ability to hire and retain qualified IT professionals. Historically, the Company has performed a significant portion of its employee recruiting in foreign countries, particularly in India. Any perception among the Company's recruits or foreign IT professionals, whether or not well-founded, that the Company's ability to assist them in obtaining permanent residency status in the United States has been diminished could result in increased recruiting and personnel costs or lead to significant employee attrition or both. There can be no assurance that the Company will be able to recruit and train a sufficient number of qualified IT professionals or that the Company will be successful in retaining current or future employees. Failure to hire and train or retain qualified IT professionals in sufficient numbers could have a material adverse effect on the Company's business, results of operations and financial condition. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Overview" and "Business --Human Resources" and "--Competition." Government Regulation of Immigration. The Company recruits its IT professionals on a global basis and, therefore, must comply with the immigration laws in the countries in which it operates, particularly the United States. As of June 1, 1997, approximately 59% of Syntel's U.S. workforce (42% of Syntel's worldwide workforce) worked under H-1B visas (permitting temporary residence while employed in the U.S.). Pursuant to United States federal law, the Department of Immigration and Naturalization Services (the "INS") limits the number of new H-1B visas to be approved in any government fiscal year. In years in which this limit is reached, the Company may be unable to obtain enough H-1B visas to bring a sufficient number of foreign employees to the U.S. If the Company were unable to obtain sufficient H-1B employees, the Company's business, results of operations and financial condition could be materially and adversely affected. Furthermore, Congress and administrative agencies have periodically expressed concerns over the levels of legal immigration into the U.S. These concerns have often resulted in proposed legislation, rules and regulations aimed at reducing the number of work visas, including H-1B visas, that may be issued. Since September 29, 1995, the Company has been subject to a consent decree with the U.S. Department of Labor relating to its H-1B employees. As a result of the consent decree, the Company did not seek any new H-1B visas during the fourth quarter of 1995, significantly curtailed its H-1B hiring from April 1995 through September 1996, and significantly increased its U.S. domestic recruiting and hiring efforts throughout 1996. While the Company believes that these steps adversely affected revenue growth in 1995 and 1996, the Company believes that it has fully complied with the consent decree and that continued compliance through the expiration of the decree in September 1997 will not have a material adverse effect on the Company. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Overview" and "Business--Human Resources--DOL Consent Decree." The failure of the Company to comply with applicable laws and regulations, any changes in the interpretation of existing laws and regulations or the adoption of new laws and regulations making it more difficult to hire foreign nationals, or limiting the ability of the Company to retain foreign employees, could have a material adverse effect on the Company's business, results of operations and financial condition. 7

Variability of Quarterly Operating Results. The Company has experienced and expects to continue to experience fluctuations in revenues and operating results from quarter to quarter due to a number of factors, including: the timing, number and scope of customer engagements commenced and completed during the quarter; progress on fixed-price engagements; timing and cost associated with expansion of the Company's facilities; changes in IT professional wage rates; the accuracy of estimates of resources and time frames required to complete pending assignments; the number of working days in a quarter; employee hiring, attrition and utilization rates; the mix of services performed on-site, off-site and offshore; termination of engagements; start-up expenses for new engagements; longer sales cycles for IntelliSourcing engagements; customers' budget cycles; and investment time for training. Because a significant percentage of the Company's selling, general and administrative expenses are relatively fixed, variations in revenues may cause significant variations in operating results. Although fixed-price engagements have not contributed significantly to revenues and earnings to date, operating results may be adversely affected in the future by cost overruns on fixed-price engagements. In addition, it is possible that in some future quarter the Company's operating results will be below the expectations of public market analysts and investors. In such event, the price of the Company's Common Stock would likely be materially adversely affected. No assurance can be given that quarterly results will not fluctuate causing a material adverse effect on the Company's financial condition. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Selected Quarterly Results of Operations." Customer Concentration; Risk of Termination. The Company has in the past derived, and believes it will continue to derive, a significant portion of its revenues from a limited number of large, corporate customers. The Company's ten largest customers represented approximately 81%, 78% and 77% of revenues for the year ended December 31, 1995 and 1996 and for the three months ended March 31, 1997, respectively. The Company's largest customer is American Home Assurance Company and certain other subsidiaries of American International Group Inc. (collectively, "AIG"). AIG accounted for approximately 38%, 34% and 31% of revenues for the year ended December 31, 1995 and 1996 and for the three months ended March 31, 1997, respectively. Ford Motor Company ("Ford"), the Company's next largest customer, accounted for approximately 14%, 12% and 10% of revenues for the year ended December 31, 1995 and 1996 and for the three months ended March 31, 1997, respectively. The volume of work performed for specific customers is likely to vary from year to year, and a significant customer in one year may not provide the same level of revenues in any subsequent year. Because many of its engagements involve functions that are critical to the operations of its customer's businesses, any failure by Syntel to meet a customer's expectations could result in cancellation or nonrenewal of the engagement and could damage Syntel's reputation and adversely affect its ability to attract new business. Most of the Company's contracts are terminable by the customer with limited notice and without penalty. An unanticipated termination of a significant engagement could result in the loss of substantial anticipated revenues and could require the Company to either maintain or terminate a significant number of unassigned IT professionals. The loss of any significant customer or engagement could have a material adverse effect on the Company's business, results of operations and financial condition. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business--Customers." Exposure to Regulatory and General Economic Conditions in India. A significant element of the Company's business strategy is to continue to develop and expand offshore Global Development Centers in India. As of June 1, 1997, the Company had approximately 29% of its workforce in India, and anticipates that this percentage will increase over time. While wage costs in India are significantly lower than in the U.S. and other industrialized countries for comparably skilled IT professionals, wages in India are increasing at a faster rate than in the U.S., and could result in the Company incurring increased costs for IT professionals. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Overview" and "-- Results of Operations - -- Syntel India." In the past, India has experienced significant inflation and shortages of foreign exchange, and has been subject to civil unrest. No assurance can be given that the Company will not be adversely affected by changes in inflation, interest rates, taxation, social stability or other political, economic or diplomatic 8

developments in or affecting India in the future. In addition, the Indian government is significantly involved in and exerts significant influence over its economy. In the recent past, the Indian government has provided significant tax incentives and relaxed certain regulatory restrictions in order to encourage foreign investment in certain sectors of the economy, including the technology industry. Certain of these benefits that directly benefitted the Company included, among others, tax holidays, liberalized import and export duties and preferential rules on foreign investment. After acquiring Syntel India, the Company plans to treat any Syntel India earnings as permanently invested in India. If the Company decides to repatriate any earnings of Syntel India, it will incur a "border" tax, currently 10%, under Indian tax law and be required to pay U.S. corporate income taxes on such earnings. See "Management's Discussion and Analysis of Financial Condition and Results of Operations -- Income Tax Matters." Changes in the business or regulatory climate of India could have a material adverse effect on the Company's business, results of operations and financial condition. Intense Competition. The IT services industry is intensely competitive, highly fragmented and subject to rapid change and evolving industry standards. The Company competes with a variety of other companies, depending on the IT services it offers. The Company's primary competitors for professional IT staffing engagements include participants from a variety of market segments, including "Big Six" accounting firms, systems consulting and implementation firms, applications software development and maintenance firms, service groups of computer equipment companies and temporary staffing firms. In applications outsourcing services, the Company competes primarily with Electronic Data Systems Corp., IBM Global Solutions (ISSC), Andersen Consulting and Computer Sciences Corporation. The Company's principal competitors for Year 2000 compliance engagements include IBM Global Solutions (ISSC), Cap Gemini and Andersen Consulting. Many of the Company's competitors have substantially greater financial, technical and marketing resources and greater name recognition than the Company. As a result, they may be able to compete more aggressively on pricing, respond more quickly to new or emerging technologies and changes in customer requirements, or devote greater resources to the development and promotion of IT services than the Company. In addition, there are relatively few barriers to entry into the Company's markets and the Company has faced, and expects to continue to face, additional competition from new IT service providers. Further, there is a risk that the Company's customers may elect to increase their internal resources to satisfy their IT services needs as opposed to relying on a third-party vendor such as the Company. The IT services industry is also undergoing consolidation which may result in increased competition in the Company's target markets. Increased competition could result in price reductions, reduced operating margins and loss of market share, any of which could have a material adverse effect on the Company. The Company also faces significant competition in recruiting and retaining IT professionals which could result in higher labor costs or shortages. There can be no assurance that the Company will compete successfully with existing or new competitors or that competitive pressures faced by the Company will not materially adversely affect its business, results of operations or financial condition. See "Business--Competition." Ability to Manage Growth. The Company's business has experienced rapid growth over the years that has placed significant demands on the Company's managerial, administrative and operational resources. Revenues have increased from $29.7 million in 1992 to $92.2 million in 1996, and the number of worldwide billable employees has increased from 481 as of December 31, 1992 to 1,402 as of June 1, 1997. The Company established a sales office in London, England in 1996, opened a sales and service office in Singapore in May 1997, is expanding its Global Development Center in Mumbai, India and is establishing a new Global Development Center in Chennai, India. See "Business--Global Service Delivery Model." The Company's future growth depends on recruiting, hiring and training IT professionals, increasing its international operations, expanding its U.S. and offshore capabilities, adding effective sales and management staff and adding service offerings. Effective management of these and other growth initiatives will require the Company to continue to improve its operational, financial and other management processes and systems. Failure to manage growth effectively could have a material adverse effect on the quality of the Company's services and engagements, its ability to attract and retain IT professionals, its business prospects, and its results of operations and financial 9

condition. The Company has historically derived most of its revenues from professional IT staffing services. In the second half of 1996, the Company realigned personnel and resources to focus more attention on outsourcing services for ongoing applications management, development and maintenance and Year 2000 compliance services. A key factor in the Company's growth strategy is to substantially increase outsourcing service engagements with new and existing customers. The Company is less experienced in marketing, developing and performing such outsourcing services, which have a longer sales cycle (up to 12 months) and generally require approval by more senior levels of management within the customer's organization, as compared to more traditional IT staffing services. There can be no assurance that the Company's increased focus on outsourcing services will be successful, and any failure of such strategy could have a material adverse effect on the Company's business, results of operations and financial condition. See "Business--Strategies." Fixed-Price Engagements. The Company undertakes, from time to time, certain engagements billed on a fixed-price basis, as distinguished from the Company's principal method of billing on a time-and-materials basis. In addition, the Company offers its Year 2000 compliance services on a fixed-price basis in contrast to most other compliance service providers who charge customers on a time-and-materials basis. Furthermore, the Company has a strategy to increase its percentage of revenue from fixed-price outsourcing. The Company's failure to estimate accurately the resources and time required for an engagement or its failure to complete fixed-price engagements within budget, on time and to the required quality levels would expose the Company to risks associated with cost overruns and, in certain cases, penalties, any of which could have a material adverse effect on the Company's business, operating results and financial condition. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Overview" and "Business--Services--IntelliSourcing." Potential Liability to Customers. Many of the Company's engagements involve IT services that are critical to the operations of its customers' businesses. The Company's failure or inability to meet a customer's expectations in the performance of its services could result in a claim for substantial damages against the Company, regardless of the Company's responsibility for such failure. Although the Company attempts to limit contractually its liability for damages arising from negligent acts, errors, mistakes or omissions in rendering its IT services, there can be no assurance the limitations of liability set forth in its service contracts will be enforceable in all instances or would otherwise protect the Company from liability for damages. Although the Company maintains general liability insurance coverage, including coverage for errors and omissions, there can be no assurance that such coverage will continue to be available on reasonable terms or will be available in sufficient amounts to cover one or more large claims, or that the insurer will not disclaim coverage as to any future claim. The successful assertion of one or more large claims against the Company that are uninsured, exceed available insurance coverage or result in changes to the Company's insurance policies, including premium increases or the imposition of large deductible or co-insurance requirements, could adversely affect the Company's business, results of operations and financial condition. Dependence on Principal. The success of the Company is highly dependent on the efforts and abilities of Bharat Desai, the Company's founder, Chief Executive Officer and President. Mr. Desai is subject to an employment agreement with the Company with a term ending December 31, 1999, which contains noncompetition, nonsolicitation and nondisclosure covenants during the term of the agreement and for two years following termination of employment. The loss of the services of this key executive for any reason could have a material adverse effect on the Company's business, operating results and financial condition. See "Management--Executive Officers and Directors." Control by and Benefits to Existing Shareholders. Upon completion of this offering, Bharat Desai and Neerja Sethi, who are husband and wife, will beneficially own in the aggregate approximately 88% of the Company's Common Stock (approximately 86% if the Underwriters' over-allotment is exercised in full). As a result, Mr. Desai and Ms. Sethi will be able to elect the entire Board of Directors, and will retain the voting power to control all matters requiring shareholder approval, including approval of significant corporate transactions, provided that they vote together on such matters. Such a concentration of ownership may have the effect of delaying or preventing a change in control of the Company, 10

and may also impede or preclude transactions in which shareholders might otherwise receive a premium for their shares over then-current market prices. In addition, Mr. Desai and Ms. Sethi will receive material benefits in connection with this offering, including dedication of a portion of the net proceeds to the payment of the $7.0 million purchase price for Syntel India and payment of an estimated $3.5 million of undistributed S corporation taxable income through the date of termination of the Company's S corporation status. This offering will establish a public market for the Common Stock and provide significantly increased liquidity to Mr. Desai and Ms. Sethi for the shares of Common Stock they will own after this offering. See "Use of Proceeds," "Dilution," "Management--Executive Officers and Directors," "Principal Shareholders" and "Certain Transactions." Risks Related to Possible Acquisitions. The Company may expand its operations through the acquisition of additional businesses. Financing of any future acquisition could require the incurrence of indebtedness, the issuance of equity (common or preferred) or a combination thereof. There can be no assurance that the Company will be able to identify, acquire or profitably manage additional businesses or successfully integrate any acquired businesses into the Company without substantial expense, delays or other operational or financial risks and problems. Furthermore, acquisitions may involve a number of special risks, including diversion of management's attention, failure to retain key acquired personnel, unanticipated events or legal liabilities and amortization of acquired intangible assets, any of which could have a material adverse effect on the Company's business, results of operations and financial condition. Customer satisfaction or performance problems within an acquired firm could have a material adverse impact on the reputation of the Company as a whole. In addition, there can be no assurance that acquired businesses, if any, will achieve anticipated revenues and earnings. While the Company from time to time considers acquisition opportunities, it has never acquired a business, and as of the date of this Prospectus, has no existing agreements, understandings or commitments to effect any acquisitions, with the exception of the acquisition of Syntel India. The failure of the Company to manage its acquisition strategy successfully could have a material adverse effect on the Company's business, results of operations and financial condition. See "Business--Strategies" and "Certain Transactions." Limited Intellectual Property Protection. The Company's success depends in part upon certain methodologies, practices, tools and technical expertise it utilizes in designing, developing, implementing and maintaining applications and other proprietary intellectual property rights. The Company is also developing proprietary conversion tools specifically tailored to address the Year 2000 problem. In order to protect its proprietary rights in these various intellectual properties, the Company relies upon a combination of nondisclosure and other contractual arrangements and trade secret, copyright and trademark laws which afford only limited protection. The Company also generally enters into confidentiality agreements with its employees, consultants, customers and potential customers and limits access to and distribution of its proprietary information. India is a member of the Berne Convention, an international treaty, and has agreed to recognize protections on intellectual property rights conferred under the laws of foreign countries, including the laws of the U.S. The Company believes that laws, rules, regulations and treaties in effect in the U.S. and India are adequate to protect it from misappropriation or unauthorized use of its intellectual property. However, there can be no assurance that such laws will not change and, in particular, that the laws of India will not change in ways that may prevent or restrict the transfer of software components, libraries and toolsets from India to the U.S. There can be no assurance that the steps taken by the Company will be adequate to deter misappropriation of its intellectual property, or that the Company will be able to detect unauthorized use and take appropriate steps to enforce its rights. Although the Company believes that its intellectual property rights do not infringe on the intellectual property rights of others, there can be no assurance that such a claim will not be asserted against the Company in the future or what impact any such claim, would have on the Company's business, results of operation or financial condition. The Company presently holds no patents or registered copyrights, trademarks or servicemarks other than Syntel(R) and Method2000(sm). The Company has submitted federal trademark applications to register certain names for its service offerings, including the IntelliSourcing and TeamSourcing names. There can be no 11

assurance, however, that the Company will be successful in obtaining federal trademarks for these trade names. See "Business--Intellectual Property Rights." No Prior Market; Possible Volatility of Stock Price. Prior to this offering, there has been no public market for the Common Stock of the Company. The initial public offering price per share of the Common Stock will be determined by negotiations between management of the Company and the representatives of the Underwriters and may bear no relationship to the market price of the Common Stock after the offering. Although the Company expects that the Common Stock will be approved for quotation on the Nasdaq National Market, there can be no assurance that an active public market in the Company's Common Stock will develop or be sustained. The prices at which the Common Stock trades will be determined by the marketplace and influenced by many factors, including the Company's operating and financial performance, the depth and liquidity of the market for the Common Stock, future sales of Common Stock, including sales by Mr. Desai and Ms. Sethi, investor perceptions of the Company and its prospects, the Company's dividend policy and general economic conditions. The stock market has from time to time experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of particular companies. In addition, factors such as announcements of technological innovations, new products or services or new customer engagements by the Company or its competitors or third parties, as well as market conditions in the IT services industry, may have a significant impact on the market price of the Company's Common Stock. See "Underwriting." Anti-Takeover Provisions. The Company's Restated Articles of Incorporation (the "Articles") and Bylaws and the Michigan Business Corporation Act ("MBCA") include provisions that may be deemed to have anti-takeover effects; may delay, deter or prevent a takeover attempt that shareholders might consider in their best interests; and will effectively make it more difficult for a third party to acquire control of the Company by means of a tender offer or a proxy contest for the election of directors or otherwise. The Articles provide for 5,000,000 authorized shares of Preferred Stock ("Preferred Stock"), the rights, preferences, qualifications, limitations and restrictions of which may be fixed by the Board of Directors without any vote or action by the shareholders. The rights of the holders of the Common Stock will be subject to, and may be adversely affected by, the rights of the holders of any preferred stock that may be issued in the future. Preferred Stock, if issued, may be senior in rights to dividends and liquidation preferences to holders of Common Stock and could have voting rights that may substantially dilute the voting rights of Common Stock holders. The Company has no present plans to issue any shares of Preferred Stock. The Articles provide for a classified Board of Directors consisting of three classes selected to serve staggered three year terms, and members of the Board of Directors may be removed only for cause upon the affirmative vote of holders of a majority of shares entitled to vote. In addition, the number of directors which constitutes the whole Board of Directors may be changed only by the vote of at least two-thirds of the directors then in office. The Company's Bylaws reserve the authority to call a special shareholders meeting to the Board of Directors, the Chairman of the Board, or the President, and require advance notice by a shareholder of a proposal or director nomination which such shareholder desires to present at any annual or special meeting of shareholders. Chapter 7A of the MBCA provides, with certain exceptions, that business combinations between a Michigan corporation and an "interested shareholder" generally require the approval of 90% of the votes of each class of stock entitled to vote, and not less than 2/3 of the votes of each class of stock entitled to vote, excluding shares owned by such interested shareholder. An "interested shareholder" is a person directly or indirectly owning 10% or more of the corporation's outstanding voting power, or an affiliate of the corporation who at any time within two years prior to the date in question directly or indirectly owned 10% or more of such voting power. Chapter 7B of the MBCA provides that "control shares" of the Company acquired in a control share acquisition have no rights except as granted by the shareholders of the Company. Control shares are shares that, when added to shares previously owned by a shareholder, increase such shareholder's ownership of voting stock to at least 20%, at least 33 1/3% or a majority of the outstanding voting power of the Company. With certain exceptions, a control share acquisition must be approved by a majority of the votes cast by holders of stock entitled to vote excluding shares owned by the acquiror and certain officers and directors. These 12

factors may have the effect of delaying or preventing a change in control of the Company without action by the shareholders, may discourage bids for the Common Stock at a premium over the market price and may deter efforts to obtain control of the Company, each of which could adversely affect the market price of the Common Stock. See "Description of Capital Stock." Shares Eligible for Future Sale. Sales of substantial amounts of the Company's Common Stock in the public market following this offering could adversely affect the market price of the Common Stock. Immediately after completion of this offering, the Company will have 25,000,000 shares of Common Stock outstanding, of which 3,000,000 shares sold pursuant to this offering will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended (the "Securities Act"), except those shares held by affiliates of the Company. The Company and its current shareholders have agreed not to offer, sell, or otherwise dispose of any shares of Common Stock, options, or warrants to acquire shares of Common Stock or securities exchangeable for or convertible into shares of Common Stock during the 180-day period following the date of this Prospectus. However, Hambrecht & Quist, LLC, in its sole discretion, may release the shareholders from these lock-up agreements, in whole or in part, at any time and without notice. Following the 180-day lock-up period, all of the restricted securities will become eligible for sale, subject to the manner of sale, volume, notice and information requirements of Rule 144 of the Securities Act. Promptly following consummation of this offering, the Company expects to file a registration statement on Form S-8 with the Securities and Exchange Commission registering 2,000,000 shares of Common Stock reserved for issuance under the Company's Stock Option Plan. The Company granted options to purchase 140,000 shares on April 1, 1997, 468,750 shares on June 2, 1997 and, upon consummation of this offering, intends to grant options to its employees to purchase in the aggregate approximately 42,000 additional shares. Such options vest in increments of 10%, 20%, 30% and 40% of the shares subject to the option on the first, second, third and fourth anniversaries, respectively, of the grant date of the option. Promptly following consummation of the offering, the Company also intends to file a registration statement on Form S-8 with the Commission registering 1,000,000 shares of Common Stock reserved for issuance under the Company's Employee Stock Purchase Plan. Sales of substantial amounts of such shares in the public market or the availability of such shares for future sales could adversely affect the market price of the shares of Common Stock and the Company's ability to raise additional capital at a price favorable to the Company. See "Shares Eligible for Future Sale" and "Underwriting." Immediate and Substantial Dilution. The initial public offering price per share of Common Stock is substantially higher than the net tangible book value per share of the Common Stock. At an assumed initial public offering price of $10.00 per share, purchasers of shares of Common Stock in this offering will experience immediate and substantial dilution of $8.76 in the pro forma net tangible book value per share of Common Stock. See "Dilution." Management Discretion as to Use of Unallocated Net Proceeds. A substantial portion of the anticipated net proceeds of this offering will be allocated to general corporate purposes and working capital and have not been designated for specific uses. Therefore, the Board of Directors will have broad discretion with respect to the use of a substantial portion of the net proceeds of this offering. See "Risk Factors--Risks Related to Possible Acquisitions," and "Use of Proceeds." 13

USE OF PROCEEDS The net proceeds to the Company from the sale of the 3,000,000 shares of Common Stock offered hereby, after deducting the underwriting discount and estimated offering expenses payable by the Company, are estimated to be approximately $27,300,000 (approximately $31,485,000 if the Underwriters' overallotment option is exercised in full), assuming an initial offering price of $10.00 per share. The Company expects to use the net proceeds from this offering for: (i) payment of approximately $7.0 million in the aggregate to Bharat Desai and Neerja Sethi for the acquisition of Syntel India; (ii) payment to Mr. Desai, Ms. Sethi and the Company's other shareholders of undistributed S corporation taxable income through the date of termination of the Company's S corporation election, estimated to be approximately $3.5 million; and (iii) general corporate purposes, including working capital and possible future acquisitions. See "Prior S Corporation Status and Distribution," "Management's Discussion and Analysis of Financial Condition and Results of Operations--Syntel India Acquisition" and "Certain Transactions." The Company may use a portion of the net proceeds from this offering to make one or more acquisitions of, or investments in, businesses and technologies that are complementary to those offered by the Company. Except for the acquisition of Syntel India described in this Prospectus, the Company has no specific agreements, understandings or commitments with respect to any such acquisition. See "Risk Factors--Risks Related to Possible Acquisitions" and "Business--Strategies." Pending such uses, the Company intends to invest the remaining net proceeds from this offering in short-term, investment grade, interest-bearing instruments. PRIOR S CORPORATION STATUS AND DISTRIBUTION The Company has elected to operate under Subchapter S of the Internal Revenue Code of 1986, as amended (the "Code"), and comparable provisions of certain state income tax laws. An S corporation generally is not subject to income tax at the corporate level (with exceptions under certain state income tax laws). Instead, the S corporation's income generally passes through to the shareholders and is taxed on their personal income tax returns. Prior to completion of this offering, the Company will terminate its S corporation status. The Company's earnings through the date of termination of the Company's S corporation status will continue to be taxed for federal and state income tax purposes, with certain exceptions, directly to the Company's shareholders. Subsequent to the termination of its S corporation status, the Company will be subject to federal and state income taxes on its earnings. Prior to the completion of this offering, the Company will declare a distribution to Mr. Desai, Ms. Sethi and the Company's other shareholders in an amount equal to the Company's undistributed S corporation taxable income through the date of termination of the Company's S corporation election (the "S Corporation Distribution"). The amount of the S Corporation Distribution is estimated to be approximately $3.5 million. The S Corporation Distribution will be paid from a portion of the net proceeds of this offering. The Company distributed $7.0 million in the aggregate to Mr. Desai and Ms. Sethi from cash in the second quarter of 1997 relating to undistributed S corporation taxable income through December 31, 1996. See "Risk Factors--Benefits of Offering to Existing Shareholders," "Use of Proceeds," "Management's Discussion and Analysis of Financial Condition and Results of Operations--Liquidity and Capital Resources" and "Certain Transactions." Prior to the consummation of this offering, the Company will enter into an S corporation termination, tax allocation and indemnification agreement with its shareholders relating to the distribution of undistributed S corporation taxable income to the shareholders and to the mutual indemnification arrangements among such shareholders and the Company for certain tax liabilities. See "Certain Transactions." In connection with the termination of its S corporation status, the Company will be required by the Code to change its method of accounting for tax reporting purposes from the cash method to the 14

accrual method, resulting in a net charge to earnings which the Company estimates will be approximately $3.3 million ($4.6 million at March 31, 1997). This charge will be recognized in the quarter in which this offering is consummated, but will be paid in four equal annual installments. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Net Charge Resulting from S Corporation Termination." DIVIDEND POLICY Other than the S Corporation Distribution, the Company does not intend to declare or pay cash dividends in the foreseeable future. Management anticipates that future earnings will be retained to fund the growth and development of its business. The payment of future dividends, if any, will be at the discretion of the Company's Board of Directors and will depend on various factors, including the Company's operating results, current and anticipated cash needs for working capital and capital expenditures, general financial condition, restrictions imposed by financing agreements, if any, and any other factors the Company's Board of Directors deems relevant. 15

CAPITALIZATION The following table sets forth at March 31, 1997: (i) the actual capitalization of the Company; (ii) the pro forma capitalization of the Company after giving effect to the deferred tax liability resulting from the termination of the S corporation election; and (iii) the pro forma capitalization of the Company as further adjusted to reflect the issuance and sale by the Company of 3,000,000 shares of Common Stock offered hereby at an assumed offering price of $10.00 per share and the application of the estimated net proceeds therefrom. See "Use of Proceeds." This table should be read in conjunction with the Company's Financial Statements, including the Notes thereto.
MARCH 31, 1997 ----------------------------------------ACTUAL PRO FORMA(3) AS ADJUSTED(4) ------------------------------(IN THOUSANDS) $ -$ -$ -------------------

Long-term debt...................................... Shareholders' equity: Preferred stock, no par value; no shares authorized or issued (actual and pro forma); 5,000,000 shares authorized, no shares issued (as adjusted)(1)............................... Common stock, $1.00 par value; 1,000 shares authorized, 1,000 shares issued (actual); 40,000,000 shares authorized, 25,000,000 shares issued (pro forma and as adjusted)(1)(2)....... Additional paid-in capital.......................... Retained earnings................................... Total shareholders' equity........................ Total capitalization...........................

--

--

--

1 -11,287 ------11,288 ------$11,288 =======

1 6,651 ------6,652 -----$6,652 ======

1 30,921 -------30,922 ------$30,922 =======

(1) In May 1997, the Company amended its Articles of Incorporation to, among other things: (i) increase the number of authorized shares of Common Stock to 40,000,000; (ii) split each existing share of Common Stock into 22,000 shares of Common Stock; and (iii) create a class of preferred stock and authorized 5,000,000 shares of such class. See "Description of Capital Stock." (2) Shares issued excludes (i) 2,000,000 shares of Common Stock reserved for issuance under the Stock Option Plan, which include options outstanding on the date hereof to purchase 608,750 shares at a weighted average exercise price of $5.85 per share and options to purchase approximately 42,000 additional shares which will be granted upon consummation of this offering at an exercise price equal to the initial offering price of the Common Stock offered hereby, and (ii) 1,000,000 shares of Common Stock reserved for issuance under the Company's Employee Stock Purchase Plan. See "Management--Stock Option Plan," "--Employee Stock Purchase Plan," and "--Director Compensation." (3) Pro forma data give effect to: (i) deferred income taxes of $4.6 million recorded as a result of the termination of the S corporation election as if terminated on March 31, 1997 (the Company estimates that this deferred tax liability will actually be approximately $3.3 million at the time of consummation of this offering); (ii) a distribution to the Company's shareholders of undistributed S corporation taxable income (while there was no undistributed S corporation taxable income as of March 31, 1997, the Company estimates that undistributed S corporation taxable income will be approximately $3.5 million at the time of consummation of this offering); and (iii) reclassification of remaining accumulated earnings to additional paid-in capital. (4) As adjusted data give effect to: (i) the issuance and sale by the Company of the 3,000,000 shares of Common Stock offered hereby, after deducting estimated underwriting discount and offering expenses; and (ii) payment of approximately $7.0 million to Bharat Desai and Neerja Sethi in conjunction with the Syntel India acquisition, which will be accounted for on the carryover basis of accounting, resulting in a $3.0 million reduction in equity. See "Use of Proceeds" and "Certain Transactions." 16

DILUTION As of March 31, 1997, the pro forma net tangible book value of the Company was approximately $6,652,000 or $0.31 per share of Common Stock. Pro forma net tangible book value per share represents the amount of the Company's total tangible assets less total liabilities on a pro forma basis to give effect to the termination of the S corporation election and distribution to the Company's shareholders of undistributed S corporation taxable income, divided by the aggregate number of shares of Common Stock outstanding. After giving effect to the sale by the Company of the 3,000,000 shares of Common Stock offered hereby at an assumed initial public offering price of $10.00 per share and the application of the estimated net proceeds therefrom, the adjusted pro forma net tangible book value of the Company at March 31, 1997, would have been $30,922,000 or $1.24 per share of Common Stock. This amount represents an immediate increase in such pro forma net tangible book value of $0.93 per share of Common Stock to existing shareholders and an immediate dilution in pro forma net tangible book value of $8.76 per share to new investors. The following table illustrates this per share dilution to new investors:
Assumed initial public offering price per share............. Pro forma net tangible book value per share as of March 31, 1997.............................................. Increase in pro forma net tangible book value per share attributable to new investors(1)...................... Adjusted pro forma net tangible book value per share after the offering(2)........................................... Dilution per share to new investors......................... $10.00 $0.31 $0.93 ----$ 1.24 -----$ 8.76 ======

(1) Includes a reduction in equity of $3.0 million in connection with the acquisition of Syntel India. (2) Does not include earnings subsequent to March 31, 1997, nor does it reflect the related S corporation distribution of taxable income to the Company's shareholders, which is estimated to be $3.5 million at the date of consummation of this offering. The dilution table set forth above does not include the effect of (i) 2,000,000 shares of Common Stock reserved for issuance under the Company's Stock Option Plan, of which options to purchase (a) 140,000 shares were granted on April 1, 1997 at an exercise price of $2.00 per share, (b) 468,750 shares were granted on June 2, 1997 at an exercise price of $7.00 per share, and (c) approximately 42,000 shares will be granted upon the consummation of this offering at an exercise price equal to the initial offering price of the Common Stock offered hereby, and (ii) 1,000,000 shares of Common Stock reserved for issuance under the Company's Employee Stock Purchase Plan. 17

SELECTED FINANCIAL DATA The following selected financial data should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Company's Financial Statements, including the Notes thereto, appearing elsewhere in this Prospectus. The financial data for each of the four years ended December 31, 1996 are derived from the Company's audited Financial Statements, which are included elsewhere in this Prospectus. Financial data for the year ended December 31, 1992 and for the three months ended March 31, 1997 are derived from unaudited financial statements which, in the opinion of management, have been prepared on the same basis as the audited financial statements and include all adjustments (all of which are of a normal recurring nature) that are necessary for a fair presentation of the results for the year. Except as noted, the following selected financial data does not reflect financial data for Syntel India.
THREE MONTHS YEAR ENDED DECEMBER 31, ENDED MARCH 31, -------------------------------------------------------------------1992 1993 1994 1995 1996 1996 1997 ------------------------------------------(IN THOUSANDS, EXCEPT PER SHARE DATA) STATEMENT OF INCOME DATA: Revenues................................... Cost of revenues........................... Gross profit............................... Selling, general and administrative expenses................................. Income from operations..................... Other income (expense), net................ Income before income taxes................. State income taxes......................... Net income(1).............................. Pro forma net income(2).................... Pro forma net income per share(2).......... Pro forma weighted average common shares outstanding.............................. $29,717 22,797 ------6,920 6,199 ------721 214 ------935 -------$ 935 ======= $45,345 39,009 ------6,336 5,214 ------1,122 (101) ------1,021 -------$ 1,021 ======= $67,247 55,937 ------11,310 8,209 ------3,101 (69) ------3,032 -------$ 3,032 ======= $90,326 71,538 ------18,788 13,309 ------5,479 186 ------5,665 428 ------$ 5,237 ======= $92,237 69,783 ------22,454 18,261 ------4,193 299 ------4,492 321 ------$ 4,171 ======= $ 2,775 ======= $ 0.13 ======= 22,135 ======= $21,862 16,746 ------5,116 4,075 ------1,041 124 ------1,165 -------$ 1,165 ======= $26,262 19,894 ------6,368 5,060 ------1,308 75 ------1,383 -------$ 1,383 ======= $ 854 ======= $ 0.04 ======= 22,197 ======= AS ADJUSTED MARCH 31, 1997(3) ----------$29,919 55,770 -30,922

BALANCE SHEET DATA: Working capital.................. Total assets..................... Long-term debt................... Total shareholders' equity....... OTHER DATA: Billable headcount in U.S. ...... Billable headcount in India...... Total billable headcount.........

DECEMBER 31, --------------------------------------------------MARCH 31, 1992 1993 1994 1995 1996 1997 --------------------------------------(IN THOUSANDS, EXCEPT OTHER DATA) $ 8,228 11,821 -8,443 454 37 ------491 ======= $ 8,948 15,974 -9,465 670 19 ------689 ======= $11,638 22,190 -12,497 1,097 83 ------1,180 ======= $14,785 27,878 -17,734 1,029 107 ------1,136 ======= $ 6,544 29,649 -9,905 1,103 190 ------1,293 ======= $ 8,014 32,403 -11,288 1,083 263 ------1,346 =======

(1) For all periods shown, the Company elected to be treated as an S corporation and, as a result, the income of the Company has been taxed for federal and state purposes (with exceptions under certain state income tax laws) directly to the Company's shareholders rather than to the Company. See "Prior S Corporation Status and Distribution." (2) Pro forma data reflect income tax provisions of $1.4 million and $0.5 million for the year ended December 31, 1996 and for the three months ended March 31, 1997, respectively, for federal and additional state income taxes as if the Company had been taxed as a C corporation since January 1, 1996. See "Prior S Corporation Status and Distribution." (3) As adjusted to give effect to: (i) the sale by the Company of 3,000,000 shares of Common Stock offered hereby at an assumed public offering price of $10.00 per share and the application of the estimated net proceeds therefrom; (ii) the recording of $4.6 million, or $0.18 per share, of deferred tax liability as a result of the termination of the Company's S corporation election as if terminated on March 31, 1997 (the Company estimates that this deferred tax liability will be approximately $3.3 million, or $0.13 per share, at the time of consummation of this offering); (iii) the distribution to the Company's shareholders of undistributed S corporation taxable income (while there was no undistributed S corporation taxable income as of March 31, 1997, the Company estimates that undistributed S corporation taxable income will be approximately $3.5 million at the time of consummation of this offering); and (iv) the acquisition of Syntel India for $7.0 million and the elimination of the intercompany balance between the Company and Syntel India. See "Use of Proceeds," "Prior S Corporation Status and Distribution", "Management's Discussion and Analysis of Financial Condition and Results of Operation--Syntel India Acquisition," "--Net Charge resulting from S Corporation Termination" and "-- Liquidity and Capital Resources" and "Certain Transactions." 18

PRO FORMA CONSOLIDATED STATEMENT OF INCOME DATA The following unaudited Pro Forma Consolidated Statement of Income Data give effect to the acquisition of Syntel India and the Company's conversion from an S corporation to a C corporation for federal and state income tax purposes. Such data are derived from the Company's audited Financial Statements, for the year ended December 31, 1996, which are included elsewhere in this Prospectus, and from Syntel India's Financial Statements, including the Notes thereto, which have been audited by Rajkamal Shah & Co., Mumbai, India, independent chartered accountants and from the unaudited financial statements for the three months ended March 31, 1997 for the Company and Syntel India which in the opinion of management, have been prepared on the same basis as the audited financial statements and include all adjustments (all of which are of a normal recurring nature) that are necessary for a fair presentation. The Consolidated Pro Forma Statement of Income Data are presented for informational purposes only and may not be indicative of the results of operations had the acquisition occurred on January 1, 1996 and had the Company been subject to corporate income taxes in 1996 and 1997, nor do they purport to indicate the future results of operations of the Company. The following Consolidated Pro Forma Statement of Income Data should be read in conjunction with the Pro Forma Consolidated Financial Statements, appearing elsewhere in this Prospectus. Management believes that all adjustments necessary to present fairly such Pro Forma Consolidated Statement of Income Data have been made.
YEAR ENDED DECEMBER 31, 1996 THREE MONTHS ENDED MARCH 31, 1997 -------------------------------------------------------------------------------------------SYNTEL, SYNTEL PRO FORMA SYNTEL, SYNTEL PRO FORMA INC. INDIA ADJUSTMENTS CONSOLIDATED INC. INDIA ADJUSTMENTS CONSOLIDATED ----------------------------------------------------------------(IN THOUSANDS, EXCEPT PER SHARE DATA) $92,237 $4,159 $(4,066) (1) $92,330 $26,262 $1,505 $(1,473)(1) $26,294 69,783 1,366 (4,066) (1) 67,083 19,894 471 (1,473)(1) 18,892 ----------------------------------------------22,454 2,793 -25,247 6,368 1,034 -7,402 18,261 ------4,193 299 ------4,492 321 ------$ 4,171 ======= 1,010 -----1,783 (150) -----1,633 29 -----$1,604 ====== 42 (2) ------(42) -------(42) 1,379 (3) ------$(1,421) ======= 19,313 ------5,934 149 ------6,083 1,729 ------$ 4,354(4) ======= $ 0.17 ======= 25,135 ======= 5,060 ------1,308 75 ------1,383 ------$ 1,383 ======= 335 -----699 46 -----745 12 -----$ 733 ====== 21 (2) ------(21) -------(21) 520 (3) ------$ (541) ======= 5,416 ------1,986 121 ------2,107 532 ------$ 1,575(4) ======= $ 0.06 ======= 25,197 =======

Revenues.................. Cost of revenues.......... Gross profit.............. Selling, general and administrative expenses................ Income from operations.... Other income (expense), net..................... Income before income taxes............ Income taxes.............. Net income................ Net income per share...... Pro forma weighted average common shares outstanding.............

(1) Reflects the elimination of the intercompany transactions between the Company and Syntel India. (2) Reflects the compensation component associated with the granting of stock options to purchase 140,000 shares granted on April 1, 1997. See "Management -- Stock Option Plan." (3) Reflects income tax provisions of $1.4 million and $0.5 million for the year ended December 31, 1996 and for the three months ended March 31, 1997, respectively, for federal and additional state income taxes as if the Company had been taxed as a C corporation since January 1, 1996. See "Prior S Corporation Status and Distribution." (4) After acquiring Syntel India, the Company plans to treat any Syntel India earnings as permanently invested in India. Accordingly, pro forma consolidated net income does not reflect any additional income taxes attributable to the earnings of Syntel India. If the Company decides to repatriate any earnings of Syntel India, it will incur a "border" tax, currently 10%, under Indian tax law and be required to pay U.S. corporate income taxes on such earnings. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Income Tax Matters." 19

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with "Selected Financial Data" and the Company's Financial Statements, including the Notes thereto, included elsewhere in this Prospectus. Except for information relating to Syntel India included under the captions "Syntel India Acquisition" and "Results of Operations - Syntel India," references to "Syntel" or the "Company" in the following discussion and analysis refer only to Syntel, Inc. Except for the historical information contained herein, the discussion in this Prospectus contains certain forward-looking statements that involve risks and uncertainties, such as statements of the Company's plans, objectives, expectations and intentions. The cautionary statements made in this Prospectus should be read as being applicable to all related forward-looking statements wherever they appear in this Prospectus. The Company's actual results could differ materially from those discussed here. Factors that could cause or contribute to such differences include those discussed in "Risk Factors," as well as those discussed elsewhere herein. OVERVIEW Syntel is a worldwide provider of professional IT staffing and outsourcing services to Fortune 1000 companies, as well as to government entities. The Company's service offerings include TeamSourcing, consisting of professional IT staffing services, and IntelliSourcing, consisting of outsourcing services for ongoing management, development and maintenance of business applications, including Year 2000 compliance services. The Company's revenues are generated from professional services fees provided through TeamSourcing and IntelliSourcing engagements. For the year ended December 31, 1996 and the three months ended March 31, 1997, the percentage of revenues generated by TeamSourcing engagements was 64% and 56%, respectively. Historically, the majority of the Company's revenues have been generated from TeamSourcing engagements. On TeamSourcing engagements, Syntel's professional services typically are provided at the customer's site and under the direct supervision of the customer. TeamSourcing revenues generally are recognized on a time-and-materials basis as services are performed. The Company has invested significantly in developing its ability to sell and deliver IntelliSourcing services, and is seeking to shift a larger portion of its business to IntelliSourcing engagements which the Company believes have higher gross margin potential. For the year ended December 31, 1996 and for the three months ended March 31, 1997, the percentage of revenues generated by IntelliSourcing engagements was 36% and 44%, respectively. On IntelliSourcing engagements, the Company typically assumes responsibility for engagement management and generally is able to allocate certain portions of the engagement to on-site, off-site and offshore personnel. Syntel may bill the customer on either a time-and-materials or fixed-price basis, although a significant portion of IntelliSourcing engagements have been historically on a time-and-materials basis. Syntel recognizes revenues from fixed-price engagements on the percentage of completion method. See "Risk Factors--Fixed Price Engagements." The Company's most significant cost is personnel cost, which consists of compensation, benefits and other related costs for its IT professionals. The Company strives to maintain its gross margin by controlling engagement costs and offsetting increases in salaries and benefits with increases in billing rates. The Company has established a human resource allocation team whose purpose is to staff IT professionals on engagements that efficiently utilize their technical skills and allow for optimal billing rates. Approximately $4.1 million, or 5.9%, and $1.5 million, or 7.5% of the Company's cost of revenues for the year ended December 31, 1996 and for the three months ended March 31, 1997, respectively, consisted of the cost of services provided by Syntel India. Syntel India derives substantially all of its revenues from providing software development services to the Company from Mumbai, India, where salaries of IT professionals are comparatively lower than in the U.S. The Company will acquire all of the outstanding equity of Syntel India upon consummation of the offering. See "--Syntel India Acquisition." Upon consummation of the acquisition, Syntel India will be a wholly-owned subsidiary of the Company, and its results of operations will be consolidated with those of the Company. 20

The Company has performed a significant portion of its employee recruiting in other countries. As of June 1, 1997, approximately 59% of Syntel's U.S. workforce (42% of Syntel's worldwide workforce) worked under H-1B temporary work visas in the U.S. To resolve a 1994 investigation of the Company by the U.S. Department of Labor ("DOL") for failing to meet prevailing wage requirements for certain H-1B employees, the Company voluntarily entered into a two-year consent decree with the DOL. In response to the consent decree, the Company did not seek any new H-1B visas during the fourth quarter of 1995, significantly curtailed its H-1B hiring from April 1995 through September 1996, and significantly increased its U.S. domestic recruiting and hiring efforts throughout 1996. As a result, the Company believes that it was unable to increase billable IT personnel during 1995 and 1996 to levels that it would have otherwise expected in the absence of these factors. Because the Company's revenues are closely related to the number of billable IT professionals it employs, the Company believes that these developments adversely affected revenue growth in 1995 and 1996. From June 30, 1995, to June 30, 1996, the total number of U.S. billable IT personnel declined from 1,137 to 1,019, but the Company has increased billable IT personnel significantly beginning in the fourth quarter of 1996. As of June 1, 1997, total billable U.S. headcount had increased to 1,123. The Company believes that it has fully complied with the consent decree and that continued compliance through the expiration of the decree in September 1997 will not have a material adverse effect on the Company. See "Risk Factors--Government Regulation of Immigration" and "Business--Human Resources--DOL Consent Decree." The Company has made substantial investments in infrastructure since 1995, including: (i) establishing the Company's Global Development Center in Cary, North Carolina to support up to 400 IT professionals; (ii) establishing a dedicated telecommunications link between the Company's United States operations and those in Mumbai, India; (iii) relocating the Company's headquarters to larger offices in Troy, Michigan; (iv) increasing IntelliSourcing sales and delivery capabilities through significant expansion of the IntelliSourcing sales force and the Technical Services Group, which develops and formalizes proprietary methodologies, practices and tools for the entire Syntel organization; (v) hiring additional experienced senior management; and (vi) expanding global recruiting and training capabilities. Through its strong relationships with customers, the Company has been able to generate recurring revenues from repeat business. For the year ended December 31, 1995 and 1996 and for the three months ended March 31, 1997, over 90% of Syntel's revenues were derived from customers served in the prior period. These strong relationships also have resulted in the Company generating a significant percentage of revenues from key customers. The Company's top ten customers accounted for approximately 81%, 78% and 77% of revenues for the year ended December 31, 1995 and 1996 and for the three months ended March 31, 1997. The Company's top two customers are AIG and Ford. AIG accounted for approximately 38%, 34% and 31% of revenues for the year ended December 31, 1995 and 1996 and for the three months ended March 31, 1997. Ford accounted for approximately 14%, 12% and 10% of revenues for the year ended December 31, 1995 and 1996 and for the three months ended March 31, 1997. SYNTEL INDIA ACQUISITION Bharat Desai and Neerja Sethi are the sole beneficial shareholders of Syntel India. Syntel India provides offshore software development services to the Company and derives substantially all of its revenues from the Company. Prior to the offering, the Company will enter into an agreement pursuant to which the Company will acquire Mr. Desai and Ms. Sethi's combined 100% ownership interest in Syntel India for $7.0 million in cash. The $7.0 million purchase price is based on a valuation performed by independent chartered accountants in India pursuant to guidelines established by the Reserve Bank of India for acquisitions of Indian corporations. The purchase price will be paid from a portion of the net proceeds of this offering. This acquisition will be closed upon consummation of this offering, and the portion of the purchase price in excess of the carrying value of the net assets acquired ($3.0 million) will be accounted for as a reduction in shareholders' equity. See "Certain Transactions." 21

INCOME TAX MATTERS The Company has elected to operate as an S corporation under the Code. An S corporation generally is not subject to income taxes at the corporate level (with exceptions under certain state income tax laws). Prior to completion of this offering, the Company will terminate its S corporation status and, thereafter, will be subject to federal and state income taxes on its earnings. See "Prior S Corporation Status and Distribution." Syntel India is eligible for certain favorable tax provisions provided under Indian tax law including: (i) an exemption from payment of corporate income taxes for a period of five consecutive years in the first eight years of operation (the "Tax Holiday"); or (ii) an exemption from income taxes on the profits derived from exporting computer software services from India (the "Export Exemption"). The Export Exemption remains available after expiration of the Tax Holiday. After the Company acquires Syntel India, the Company plans to treat any Syntel India earnings as permanently invested in India and does not anticipate repatriating any of these earnings to the U.S. If the Company decides to repatriate any earnings of Syntel India, it will incur a "border" tax, currently 10%, under Indian tax law and will be required to pay U.S. corporate income taxes on such earnings. See "Risk Factors--Exposure to Regulatory and General Economic Conditions in India." NET CHARGE RESULTING FROM S CORPORATION TERMINATION In connection with the termination of its S corporation status, the Company is required by the Code to change its method of accounting for tax reporting purposes from the cash method to the accrual method. This change will result in a net charge to earnings in the quarter in which this offering closes resulting from differences in the tax treatment of certain of the Company's assets and liabilities under the cash and accrual methods of accounting and will be reflected through an increase in current and deferred income tax liabilities. Based upon current estimates, the Company anticipates the net charge to earnings as a provision for current and deferred income taxes will be approximately $3.3 million. The actual net charge to earnings could be greater, depending upon the Company's results of operations and financial condition through and as of the date of termination of the Company's S corporation status. This tax liability will be recognized in the quarter in which this offering is consummated, but will be paid in four equal annual installments. See "Prior S Corporation Status and Distribution" and "Use of Proceeds." RESULTS OF OPERATIONS The following table sets forth for the periods indicated selected income statement data as a percentage of the Company's total revenues. The percentages set forth below do not reflect the results of operations of Syntel India. See "--Syntel India Acquisition."
PERCENTAGE OF REVENUES ------------------------------------------------------------THREE MONTHS ENDED YEAR ENDED DECEMBER 31, MARCH 31, --------------------------------------------------1994 1995 1996 1996 1997 --------------------100.0% 100.0% 100.0% 100.0% 100.0% 83.2 79.2 75.7 76.6 75.8 --------------------16.8 20.8 24.3 23.4 24.2 12.2 ----4.6% 14.7 ----6.1% 19.8 ----4.5% 18.6 ----4.8% 19.3 ----4.9%

Revenues.............................. Cost of revenues...................... Gross profit.......................... Selling, general and administrative expenses............. Income from operations................

22

COMPARISON OF THREE MONTHS ENDED MARCH 31, 1997 AND 1996 Revenues. The Company's revenues consist of fees derived from its TeamSourcing and IntelliSourcing business units. Total revenues increased to $26.3 million for the three months ended March 31, 1997, representing an increase of 20.1% over revenues of $21.9 million for the three months ended March 31, 1996. TeamSourcing Revenues. For the three months ended March 31, 1997, TeamSourcing revenues increased to $14.8 million, or 56% of total revenues, from $13.2 million, or 60% of total revenues for the three months ended March 31, 1996. The increase in the TeamSourcing revenues was primarily attributable to an increase in average billing rates per person of approximately 8% for the first quarter of 1997 as compared to the first quarter of 1996. IntelliSourcing Revenues. For the three months ended March 31, 1997, IntelliSourcing revenues increased to $11.5 million, or 44% of total revenues, compared to $8.6 million, or 40% of total revenues, for the three months ended March 31, 1996. The increase in revenues was primarily attributable to the addition of ten new IntelliSourcing engagements, of which six were added in the three months ended March 31, 1997. The worldwide billable headcount, including personnel employed by Syntel India, as of March 31, 1997 increased to 1,346 compared to 1,125 as of March 31, 1996. Cost of Revenues. Cost of revenues consist primarily of salaries, payroll taxes, benefits, relocation costs, immigration costs, finders fees, trainee compensation and payments for offshore services. Cost of revenues were $19.9 million for the three months ended March 31, 1997, representing 75.8% of revenues, compared to $16.7 million or 76.6% of revenues for the three months ended March 31, 1996. The decrease in the cost of revenues as a percentage of total revenues was primarily attributable to increased TeamSourcing average billing rates relative to compensation increases and, to a lesser degree, improved margins on new IntelliSourcing engagements. Selling, General and Administrative Expenses. Selling, general and administrative expenses consist primarily of salaries, payroll taxes and benefits for sales, finance, administrative and corporate staff, travel, telecommunications, business promotions, marketing and various facility costs for the company's Global Development Centers. Selling, general and administrative expenses for the three months ended March 31, 1997 increased to $5.0 million, or 19.3% of total revenues, from $4.0 million, or 18.6% of total revenues, for three months ended March 31, 1996. The $1.0 million increase in selling, general and administrative expenses was the result of increased personnel costs of $0.3 million for IntelliSourcing sales, marketing, training, solutions development and legal staff, as well as field and corporate office facility and related infrastructure costs of an additional $0.3 million. To a lesser extent, the increase was attributable to additional marketing costs and annual compensation increases. COMPARISON OF YEAR ENDED DECEMBER 31, 1996 AND 1995 Revenues. Total revenues increased to $92.2 million in 1996 from $90.3 million in 1995. The primary cause of this growth was an increase in TeamSourcing revenues, which offset a decline in IntelliSourcing revenues. The Company believes that actions taken in 1995 and 1996 in response to the DOL consent decree adversely affected revenue growth in the last quarter of 1995 and in 1996. See "Risk Factors--Government Regulation of Immigration," "--Overview" and "Business--Human Resources--DOL Consent Decree." TeamSourcing Revenues. TeamSourcing revenues in 1996 increased to $59.0 million, or 64.0% of total revenues, from $53.6 million, or 59.3% of total revenues in 1995. The increase in TeamSourcing revenues was primarily attributable to a substantial increase in the scope of services provided to two of the Company's largest customers, including maintenance services and the development of new applications. The increase in TeamSourcing revenues was also the result of an increase in the average billing rates for IT professionals. 23

IntelliSourcing Revenues. IntelliSourcing revenues in 1996 decreased to $33.3 million, or 36.0% of total revenues, from $36.8 million, or 40.7% of total revenues in 1995, despite an increase in the number of IntelliSourcing customers. The number of the Company's IntelliSourcing customers increased to five in 1996 from two in 1995, but the Company recorded minimal revenues from these new engagements as they commenced in the fourth quarter of 1996. Approximately $1.9 million of the $3.5 million decrease in the Company's IntelliSourcing revenues was attributable to a significant reduction in the funding for a state government project. The remainder of the decrease was the result of the Company increasing the efficiency of services provided under a time-and-materials based contract to its largest customer, which enabled the Company to maintain the customer's applications with fewer employees. The Company's total revenues were less dependent upon its largest customers in 1996 as compared to 1995. The top two customers accounted for 45% of total revenues in 1996, down from 52% of total revenues in 1995. The worldwide billable headcount, including personnel employed by Syntel India, as of December 31, 1996 increased to 1,293 compared to 1,136 as of December 31, 1995. Cost of Revenues. Cost of revenues in 1996 decreased to $69.8 million, or 75.7% of revenues, from $71.5 million, or 79.2% of revenues in 1995. The decrease in cost of revenues was primarily attributable to reduced health benefit costs resulting from a self-insurance program the Company instituted in the second half of 1995, and to an increase in the billing rates of certain IT professionals performing IntelliSourcing services for a major customer which occurred in the second half of 1995. To a lesser extent, the decrease in cost of revenues was attributable to the migration of work to the Company's offshore facility in India where the salaries of IT professionals are lower as a percentage of professional service fees. The number of billable IT professionals in India increased to 190 at December 31, 1996, compared to 107 at December 31, 1995. In addition, the Company incurred one-time costs of approximately $0.5 million for the relocation of employees to its Cary, North Carolina Global Development Center in 1995 which did not recur in 1996. Selling, General and Administrative Expenses. Selling, general and administrative expenses in 1996 increased to $18.3 million, or 19.8% of revenues, from $13.3 million, or 14.7% of revenues in 1995. The $5.0 million increase in selling, general and administrative expenses resulted primarily from $2.1 million in additional personnel cost to strengthen the IntelliSourcing sales and support staff and $0.9 million to develop the Company's proprietary Method2000(sm) solution for its Year 2000 compliance service offering, reflecting the Company's focus on increasing revenues from its IntelliSourcing business unit. In addition, the increase in selling, general and administrative expenses was attributable to $1.5 million in additional personnel cost to strengthen the TeamSourcing sales and support staff and $0.5 million increased facilities costs. The $3.6 million aggregate personnel cost to build the TeamSourcing and IntelliSourcing sales and support staff consisted primarily of hiring additional sales executives, account executives, recruiting personnel and operational support personnel. COMPARISON OF YEAR ENDED DECEMBER 31, 1995 AND 1994 Revenues. Total revenues in 1995 increased to $90.3 million from $67.2 million in 1994. This increase in total revenues was principally the result of a significant IntelliSourcing engagement with the Company's largest customer that commenced in late 1994. The Company believes that actions taken in 1995 in response to the DOL consent decree adversely affected revenue growth in 1995. See "Risk Factors -- Government Regulation of Immigration," "-- Overview" and "Business -- Human Resources -- DOL Consent Decree." TeamSourcing Revenues. The Company's TeamSourcing revenues in 1995 decreased to $53.6 million, or 59.3% of total revenues, from $59.4 million, or 88.4% of total revenues in 1994. This decline was attributable to the Company's characterization of revenues for services performed for the Company's 24

largest customer as IntelliSourcing revenues in 1995, versus TeamSourcing revenues in 1994. This change in the characterization of revenue was the result of changes in the contractual terms, scope and manner of delivering services to this customer which occurred in the later part of 1994. IntelliSourcing Revenues. IntelliSourcing revenues in 1995 increased to $36.8 million, or 40.8% of total revenues, from $7.8 million, or 11.6% of total revenues in 1994. This increase in revenues was attributable to work performed under the terms of a contract signed in September 1994 with the Company's largest customer. The Company's total revenues were more dependent upon its largest customers in 1995 as compared to 1994. The top two customers accounted for 52% of total revenues in 1995, up from 39% of total revenues in 1994. The worldwide billable headcount, including personnel employed by Syntel India, as of December 1995 decreased to 1,136 compared to 1,180 as of December 1994. Cost of Revenues. Cost of revenues in 1995 increased to $71.5 million, or 79.2% of revenues, from $55.9 million, or 83.2% of revenues in 1994. The decrease in cost of revenues as a percentage of revenues was primarily attributable to an increase in average billing rates, relative to compensation rate increases, for IT professionals performing both TeamSourcing and IntelliSourcing services. The decrease in cost of revenues as a percentage of revenues was also attributable to the Company's ability to migrate an increased percentage of work to the Company's Global Development Center in India, where salaries of IT professionals are comparatively lower than in the U.S. The hiring of entry-level IT professionals throughout 1995, with a correspondingly lower compensation cost, also contributed to the decreased percentage. A $0.5 million one-time charge to relocate employees to the Company's Cary, North Carolina Global Development Center partially offset this decreased percentage. Selling, General and Administrative Expenses. The Company's selling, general and administrative expenses in 1995 increased to $13.3 million, or 14.7% of total revenues, from $8.2 million, or 12.2% of revenues in 1994. This increase in selling, general and administrative expenses primarily was the result of the expansion of the Company's sales and support staff and increased facilities and equipment expenses at the Cary, North Carolina Global Development Center. In addition, the Company incurred additional compensation expenses as a result of strengthening senior management by hiring a chief financial officer, vice president of marketing, vice president of human resources and three assistant vice presidents, all of whom were hired in late 1994 or in 1995. RESULTS OF OPERATIONS--SYNTEL INDIA Syntel India provides offshore software development services to the Company and derives substantially all of its revenues from the Company. Syntel India's revenues are the result of negotiated intercompany billing rates between Syntel India and the Company based upon competitive market rates, demand for services and volume considerations. These intercompany billing rates are dollar denominated, whereas operating expenses of Syntel India are paid in local currency. COMPARISON OF THREE MONTHS ENDED MARCH 31, 1997 AND 1996--SYNTEL INDIA Revenues. Syntel India's revenues for the three months ended March 31, 1997 increased to $1.5 million from $0.7 million for the three months ended March 31, 1996. The increase in revenues was primarily attributable to the transfer of additional work to Syntel India by the Company. Billable headcount for Syntel India increased to 263 as of March 31, 1997 compared to 97 as of March 31, 1996. Increases in intercompany billing rates also contributed to the increase in the revenues. Cost of Revenues. Syntel India's cost of revenues consists primarily of compensation expenses and benefits for its IT professionals and is affected primarily by increases in wage rates in India. Cost of revenues increased to $0.5 million, or 31.2%, of revenues for the three months ended March 31, 1997 compared to $0.3 million, or 36.7%, of revenues for the three months ended March 31, 1996. The decrease in the cost of revenues as a percentage of revenues was mainly attributable to improvement 25

in the utilization rate of billable personnel during the three months ended March 31, 1997 to 62%, compared to 42% during the three months ended March 31, 1996. This improvement was partially offset by an increase in compensation expenses. Selling, General and Administrative Expenses. Selling, general and administrative expenses consist primarily of salaries and benefits for finance, administration and corporate staff, travel, telecommunications and various facilities costs. Selling, general and administrative expenses as a percentage of revenues decreased to 22.3% during the three months ended March 31, 1997 from 28.8% during the three months ended March 31, 1996. This overall decrease was primarily due to the fact that the increase in the revenues for the period did not require a corresponding increase in facility costs. COMPARISON OF YEAR ENDED DECEMBER 31, 1996 AND 1995--SYNTEL INDIA Revenues. Syntel India's revenues in 1996 increased to $4.2 million from $2.5 million in 1995. The increase in Syntel India's revenues was primarily attributable to the transfer of additional work to Syntel India by the Company, which resulted in an increase in Syntel India's billable headcount to 190 at December 31, 1996 compared to 107 at December 31, 1995. Cost of Revenues. Cost of revenues increased to $1.4 million, or 33% of revenues, in 1996, from $1.0 million, or 40% of revenues, in 1995. The decrease in cost of revenues as a percentage of revenues was attributable to the improvement in utilization rate of billable personnel in 1996 to 54% from 47% in 1995, partially offset by increases in compensation expenses. The average increase in compensation for existing employees was 36% in 1996 compared to 33% in 1995. Selling, General and Administrative Expenses. Selling, general and administrative expenses as a percentage of revenues in both years ended December 31, 1996 and 1995 were approximately 24%. 26

SELECTED QUARTERLY RESULTS OF OPERATIONS The following table sets forth certain unaudited quarterly income statement data for each of the nine quarters beginning January 1, 1995 and ended March 31, 1997, and the percentage of the Company's total revenues represented by each item in the respective quarter. Results of operations shown below do not reflect the operations of Syntel India. See "--Syntel India Acquisition." In the opinion of management, this information has been presented on the same basis as the Company's Financial Statements appearing elsewhere in this Prospectus and all necessary adjustments (consisting only of normal recurring adjustments) have been included in the amounts stated below to present fairly the unaudited quarterly results, when read in conjunction with the Financial Statements of the Company, including the Notes thereto, contained elsewhere in this Prospectus. The results of operations for any quarter are not necessarily indicative of the results for any future period.
QUARTER ENDED ----------------------------------------------------------------------------------------1995 1996 1997 --------------------------------------------------------------------------------MAR. 31 JUNE 30 SEPT. 30 DEC. 31 MAR. 31 JUNE 30 SEPT. 30 DEC. 31 MAR. 31 --------------------------------------------------------(IN THOUSANDS) $22,646 $22,709 $22,915 $22,056 $21,862 $22,696 $23,433 $24,246 $26,26 2 18,540 18,880 17,491 16,627 16,746 17,002 17,760 18,275 19,894 ------------------------------------------------------4,106 3,829 5,424 5,429 5,116 5,694 5,673 5,971 6,368 2,407 ------1,699 (11) ------1,688 2,618 ------1,211 (20) ------1,191 3,726 ------1,698 54 ------1,752 4,558 ------871 163 ------1,034 4,075 ------1,041 124 ------1,165 4,612 ------1,082 69 ------1,151 4,790 ------883 16 ------899 4,784 ------1,187 90 ------1,277 5,060 ------1,308 75 ------1,383

Revenues............. Cost of revenues..... Gross profit......... Selling, general and administrative expenses........... Income from operations......... Other income (expense), net..... Income before income taxes..............

Revenues............. Cost of revenues..... Gross profit......... Selling, general and administrative expense............ Income from operations......... Other income (expense), net..... Income before income taxes..............

PERCENTAGE OF REVENUES ----------------------------------------------------------------------------------------100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 81.9 83.1 76.3 75.4 76.6 74.9 75.8 75.4 75.8 ------------------------------------------------------18.1 16.9 23.7 24.6 23.4 25.1 24.2 24.6 24.2 10.6 ------7.5 0.0 ------7.5% 11.5 ------5.4 (0.1) ------5.3% 16.3 ------7.4 0.2 ------7.6% 20.7 ------3.9 0.7 ------4.6% 18.6 ------4.8 0.6 ------5.4% 20.3 ------4.8 0.3 ------5.1% 20.4 ------3.8 0.0 ------3.8% 19.7 ------4.9 0.4 ------5.3% 19.3 ------4.9 0.3 ------5.2%

The Company's quarterly revenues and results of operations have fluctuated from quarter to quarter in the past and will likely fluctuate in the future. Various factors causing such fluctuations include: the timing, number and scope of customer engagements commenced and completed during the quarter; progress on fixed-price engagements; timing and cost associated with expansion of the Company's facilities; changes in IT professional wage rates; the accuracy of estimates of resources and time frames required to complete pending assignments; the number of working days in a quarter; employee hiring and training, attrition and utilization rates; the mix of services performed on-site, off-site and offshore; termination of engagements; start-up expenses for new engagements; longer sales cycles for IntelliSourcing engagements; customers' budget cycles and investment time for training. 27

Because a significant percentage of the Company's selling, general and administrative expenses are relatively fixed, variations in revenues may cause significant variations in operating results. Although fixed-price engagements have not contributed significantly to revenues and earnings to date, operating results may be adversely affected in the future by cost overruns on fixed-price engagements. See "Risk Factors--Fixed-Price Engagements." In addition, it is possible that in some future quarter the Company's operating results will be below the expectations of public market analysts and investors. In such event, the price of the Company's Common Stock could potentially be materially adversely affected. No assurance can be given that quarterly results will not fluctuate causing a material adverse effect on the Company's financial condition. See "Risk Factors--Variability of Quarterly Operating Results." LIQUIDITY AND CAPITAL RESOURCES The Company generally has financed its working capital needs through operations, occasionally supplemented by borrowings under a line of credit with a commercial bank. Net cash provided by operating activities was $0.4 million, $11.0 million and $4.2 million and ($1.1) million for the year ended December 31, 1994, 1995 and 1996 and for the three months ended March 31, 1997, respectively. Net cash provided by operating activities in 1994 was affected by a $7.1 million increase in accounts receivable due from the Company's largest customer. The increase in net cash provided by operating activities in 1995 over 1994 primarily reflected a net $4.3 million reduction in accounts receivable from this customer. The decrease in net cash provided by operating activities in 1996 over 1995 was attributable to a $3.9 million increase in accounts receivable due to revenue growth in the fourth quarter of 1996, as compared to the fourth quarter of 1995, and advance billings of $1.3 million. The negative net cash generated by operating activities in the three months ended March 31, 1997 was primarily due to a one-time transition from monthly to twice a month payroll payments to employees and, to a lesser extent, to the payment of annual performance bonuses and unused vacation time which the Company pays in the first quarter of each year. In 1997, the Company began billing in advance on certain fixed-price contracts, resulting in advance billings of approximately $3.3 million as of March 31, 1997. Net cash used in investing activities was $0.6 million, $3.0 million and $1.6 million and $0.3 million for the year ended December 31, 1994, 1995 and 1996 and for the three months ended March 31, 1997, respectively. Cash used in investing activities in 1995 included $2.7 million to establish the Company's Cary, North Carolina Global Development Center. Cash used in investing activities in 1996 included $0.9 million for the relocation of the Company's worldwide headquarters to the Troy, Michigan Global Development Center and $0.5 million invested in recruiting and training software. Net cash used in financing activities was $0.1 million, $0.3 million, and $5.0 million in 1994, 1995 and 1996, respectively. Net cash used in financing activities in 1994 and 1995 reflects net payments on the bank's line of credit. Net cash used in financing activities in 1996 reflects a dividend paid to the Company's shareholders. In addition, the Company distributed $7.0 million to the Company's shareholders from cash in the second quarter of 1997 relating to undistributed S corporation taxable income through December 31, 1996. See "Prior S Corporation Status and Distribution." The Company has a line of credit with NBD Bank with a commitment in an amount equal to the lesser of $20.0 million or 80% of eligible accounts receivable. The line of credit matures on August 31, 1997. The Company intends to renew or replace this facility prior to the maturity date. The line of credit contains covenants restricting the Company from, among other things, incurring additional debt, issuing guarantees and creating liens on the Company's property, without the prior consent of the bank. The line of credit also requires the Company to maintain certain tangible net worth levels and leverage ratios. Borrowings under the line of credit are short-term and are collateralized by the Company's eligible accounts receivable. At June 1, 1997, there was no indebtedness outstanding under the line of credit. Borrowings under the line of credit bear interest at the lower of the Eurodollar rate 28

plus the applicable Eurodollar margin, the bank's prime rate or a negotiated rate established by the bank at the time of borrowing. In addition to the bank line of credit, the Company has a $10.0 million facility with NBD Bank to finance acquisitions which terminates on August 31, 1997. The Company intends to renew or replace this facility prior to the maturity date. The Company has not borrowed any amounts under this facility. The Company believes that the combination of proceeds from this offering, present cash balances and future operating cash flows will be sufficient to meet the Company's currently anticipated cash requirements for at least the next 12 months. 29

BUSINESS OVERVIEW Syntel is a worldwide provider of professional information technology ("IT") staffing and outsourcing services to Fortune 1000 companies, as well as to government entities. The Company's service offerings include TeamSourcing, consisting of professional IT staffing services, and IntelliSourcing, consisting of outsourcing services for ongoing management, development and maintenance of business applications, including Year 2000 compliance services. Syntel believes that its service offerings are distinguished by its Global Service Delivery Model, a corporate culture focused on customer service and responsiveness and its own internally developed "intellectual capital" based on a proven set of methodologies, practices and tools for managing the IT functions of its customers. Through TeamSourcing, Syntel provides professional IT staffing services directly to customers. TeamSourcing services include systems specification, design, development, implementation and maintenance of complex IT applications involving diverse computer hardware, software, data and networking technologies and practices. TeamSourcing services are provided by individual professionals and teams of professionals dedicated to assisting customer IT departments with systems projects and ongoing functions. TeamSourcing accounted for approximately 64% and 56% of revenues, for the year ended December 31, 1996 and the three months ended March 31, 1997, respectively. Through IntelliSourcing, Syntel provides higher-value outsourcing services for ongoing management, development and maintenance of customers' business applications. Syntel assumes responsibility for and manages selected application support functions of the customer. Utilizing its developed methodologies, processes and tools, known as IntelliTransfer, the Company is able to assimilate the business process knowledge of its customers to develop and deliver services specifically tailored for that customer. The Company also provides Year 2000 compliance services to customers using its proprietary Method2000(sm) solution. IntelliSourcing accounted for approximately 36% and 44% of revenues, for the year ended December 31, 1996 and the three months ended March 31, 1997, respectively. The Company's Global Service Delivery Model provides Syntel with flexibility to deliver to each customer a unique mix of services on-site at the customer's location, off-site at its U.S. locations and offshore at its Mumbai, India location. The benefits to the customer from this customized service approach include responsive delivery based on an in-depth understanding of the specific processes and needs of the customer, quick turnaround, access to the most knowledgeable personnel and best practices, resource depth, 24-hour support seven days a week and cost-effectiveness. By linking each of its service locations together through a dedicated data and voice network, Syntel provides a seamless service capability to its customers around the world largely unconstrained by geographies, time zones and cultures. The Company is expanding its Global Development Center in Mumbai, India and is establishing a new Global Development Center in Chennai, India. Syntel provides its services to a broad range of Fortune 1000 companies principally in the financial services, manufacturing, retail, transportation and information/communications industries, as well as to government entities. Principal customers include American International Group, Inc., Ford Motor Co., AT&T Corp., Dayton Hudson Corp., Chrysler Corporation and the State of New Mexico. The Company has been chosen as a preferred vendor by several of its customers and has been recognized for its quality and responsiveness. The Company has a focused sales effort that includes a strategy of migrating existing TeamSourcing customers to higher-value IntelliSourcing services. The Company recently realigned its resources to focus on the development, marketing and sales of its IntelliSourcing services. The Company believes its human resources are its most valuable asset and invests significantly in programs to recruit, train and retain IT professionals. The Company recruits globally through its worldwide recruiting network, trains recent college graduates and other recruits and maintains a broad package of employee support programs. Syntel believes that its management structure and human 30

resources organization is designed to maximize the Company's ability to efficiently expand its IT professional staff in response to customer needs. This scalable business model has enabled the Company to grow significantly in recent years. The Company's revenues increased from $29.7 million in 1992 to $92.2 million in 1996. As of June 1, 1997, Syntel's worldwide billable headcount consisted of 1,402 IT professionals. INDUSTRY BACKGROUND Increasing globalization, technological innovation and deregulation are creating an increasingly competitive business environment that is requiring companies to change fundamentally their business processes. This change is driven by increasing demand from customers for increased quality, lower costs, faster turnaround, and highly responsive and personalized service. To effect these changes and adequately address these needs, companies are focusing on their core competencies and cost-effectively utilizing IT solutions to improve productivity, lower costs and manage operations more effectively. Designing, developing, implementing and maintaining IT solutions requires highly skilled individuals trained in diverse technologies. However, there is a growing shortage of these individuals and many companies are reluctant to expand their IT departments through additional staffing, particularly at a time when they are attempting to minimize their fixed costs and reduce workforces. The Company believes that many organizations are concluding that using outside specialists to address their IT requirements enables them to develop better solutions in shorter time frames and to reduce implementation risks and ongoing maintenance costs. Those outside specialists best positioned to benefit from these trends have access to a pool of skilled technical professionals, have demonstrated the ability to manage IT resources effectively, have low-cost offshore software development facilities, and can efficiently expand operations to meet customer demands. Demand for IT services has grown significantly as companies seek ways to outsource not only specific projects for the design, development and integration of new technologies, but also ongoing management, development and maintenance of existing IT systems. According to Gartner Group, the worldwide market for professional IT services, excluding Year 2000 compliance services, was $118 billion in 1995 and is projected to grow to $258 billion by the year 2000. In addition, many organizations face a significant challenge because many of their existing computer systems run software programs which cannot properly process dates after 1999. Without a resolution of this Year 2000 problem, these software programs will fail due to an inability to correctly interpret dates in the year 2000 and thereafter. The Company believes that outsourcing the ongoing management, development and maintenance of IT applications is becoming increasingly critical to business enterprises. The difficulties of IT planning, budgeting and execution in the face of technological innovations and uncertainties, the focus on cost cutting, and a growing shortage of skilled personnel are driving senior corporate management to strategically pursue outsourcing of critical internal IT functions. Organizations are seeking an experienced IT services outsourcing provider that not only has the expertise and knowledge to address the complexities of rapidly changing technologies, but also possesses the capability to understand and automate the business processes and knowledge base of the organization. In addition, the IT provider must be able to develop customized solutions to problems unique to the organization. This involves maintaining on-site professionals who know the customer's IT processes, providing access to a wide range of expertise and best practices, providing responsiveness and accountability to allow internal IT departments to meet organization goals, and providing low cost, value-added services to stay within the organization's IT budget constraints. In this environment, large organizations are increasingly finding that full facilities management outsourcing providers who own and manage an organization's entire IT function do not permit the organization to retain control over, or permit flexible reallocation of, its IT resources. At the same time, IT service providers focused on project oriented professional services, with a finite beginning and end, 31

or "deliverables," do not typically provide ongoing maintenance services and management of IT functions. As a result, the Company believes there is a significant opportunity to provide outsourcing services to customers for ongoing IT management, development and maintenance of their business applications. SYNTEL SOLUTION Syntel provides TeamSourcing services consisting of professional IT staffing services, and IntelliSourcing services consisting of outsourcing services for ongoing management, development and maintenance of business applications, including Year 2000 compliance services. The Company believes that its IntelliSourcing approach to IT services outsourcing, which involves assuming responsibility for management of selected applications rather than taking over an entire IT department or providing facilities management, provides significant differentiation from its competitors in the IT services market. Syntel believes that its TeamSourcing and IntelliSourcing service offerings are distinguished by its Global Service Delivery Model, a corporate culture focused on customer service and responsiveness and its internally developed "intellectual capital," comprised of a proven set of methodologies, practices and tools for managing the IT functions of its customers. Global Service Delivery Model. Syntel performs its services on-site at the customer's location, off-site at Syntel's U.S. locations and offshore at its Indian location. By linking each of its service locations together through a dedicated data and voice network, Syntel provides a seamless service capability to its customers around the world, largely unconstrained by geographies, time zones and cultures. This Global Service Delivery Model gives the Company the flexibility to deliver to each customer a unique mix of on-site, off-site and offshore services to meet varying customer needs for direct interaction with Syntel personnel, access to technical expertise, resource availability and cost-effective delivery. The benefits to the customer from this customized service include responsive delivery based on an in-depth understanding of the specific processes and needs of the customer, quick turnaround, access to the most knowledgeable personnel and best practices, resource depth, 24-hour support seven days a week, and cost-effectiveness. To support its Global Service Delivery Model, the Company currently has two primary Global Development Centers located in Cary, North Carolina and Mumbai, India, and two additional Global Development Centers located in Troy, Michigan and Santa Fe, New Mexico. The Company is establishing another Global Development Center in Chennai, India, which is anticipated to be active by the end of 1997. See "Risk Factors -- Exposure to Regulatory and General Economic Conditions in India." Focus on Customer Service. The Syntel corporate culture reflects a "customer for life" philosophy which emphasizes flexibility, responsiveness, cost-consciousness and a tradition of excellence. The Company recognizes that its best source for new business opportunities comes from existing customers and believes its customer service is a significant factor in Syntel's high rate of repeat business. For the year ended December 31, 1995 and 1996 and for the three months ended March 31, 1997, over 90% of the Company's annual revenues were from customers for whom the Company provided services during the previous period. See "Risk Factors -- Customer Concentration; Risk of Termination." At engagement initiation, Syntel's services are typically based on expertise in the software life-cycle and underlying technologies. Over time, however, as Syntel develops an in-depth knowledge of a customer's business processes, IT applications and industry, Syntel gains a competitive advantage to perform higher-value IT services for that customer. Proven Intellectual Capital. Over its 17-year history, Syntel has developed a proven set of methodologies, practices, tools and technical expertise for the development and management of its customers' information systems. This "intellectual capital" of Syntel includes methodologies for the selection of appropriate customer IT functions for management by Syntel, tools for the transfer to Syntel of the systems knowledge of the customer, and techniques for providing systems support improvements to the customer. Syntel also offers to its customers well-trained personnel backed by a proven, extensive employee training and continuing development program. The Company believes its 32

intellectual capital enhances its ability to understand customer needs, design customized solutions and provide quality services on a timely and cost-effective basis. SYNTEL STRATEGY The Company's objective is to become a strategic partner with its customers in the ongoing management, development and maintenance of their IT systems by utilizing its Global Service Delivery Model, intellectual capital and customer service orientation. The Company plans to continue to pursue the following strategies to achieve this objective: Leverage Global Service Delivery Model. The ability to deliver a seamless service capability virtually anywhere in the world from its domestic and offshore facilities gives the Company an effective ability to meet customer needs for technical expertise, best practice IT solutions, resource availability, responsive turnaround and cost-effective delivery. The Company strives to leverage this capability to provide reliable and cost-effective services to its existing customers, expand services to existing customers and to attract new customers. Moreover, the flexibility and capacity of the Global Service Delivery Model and the Company's worldwide recruitment and training programs enhance the ability of the Company to expand its business as the number of customers grows and their IT demands increase. The Company intends to expand the capacity of its Global Development Centers worldwide. Focus Resources on IntelliSourcing Services. Through IntelliSourcing, the Company markets its higher value outsourcing services for ongoing applications management, development, maintenance and Year 2000 compliance functions. In recent years, the Company has significantly increased its investment in IntelliSourcing Services. The Company recently realigned its resources to focus on the development, marketing and sales of its IntelliSourcing services, including the hiring of additional salespeople and senior managers, redirecting personnel experienced in the sale of higher value contracts, developing proprietary methodologies, such as Year 2000 offerings and services, increasing marketing efforts, and redirecting organizational support in the areas of finance and administration, human resources and legal. As a result, the Company has increased its IntelliSourcing opportunities. Expand Customer Base and Role with Current Customers. The Company's sales efforts focus on its strategy of migrating existing TeamSourcing customers to higher value IntelliSourcing services. Traditionally, the Company has formed strong relationships with customers through its high quality and responsive TeamSourcing services. The Company's emphasis on customer service and long-term relationships has enabled the Company to generate recurring revenues from existing customers. These long-term relationships also provide the opportunity for the Company to cross-sell IntelliSourcing services which, in some cases, represent a natural extension of work initially performed under the TeamSourcing engagement. The Company also seeks to expand its customer base by leveraging its expertise in providing services to the financial services, manufacturing, retail, transportation and information/communications industries, as well as to government entities. With the expansion of the Company's Indian operations, the Company also intends to increase its marketing efforts in other parts of the world, particularly in Asia. Enhance Proprietary Knowledge Base and Expertise. The Company believes that its "intellectual capital" of methodologies, practices, tools and technical expertise is an important part of its competitive advantage. The Company strives to continually enhance this knowledge base by creating competencies in emerging technical fields such as Internet/intranet applications, client/server applications and object-oriented software. The Company continually develops new methodologies and toolsets such as its package of Year 2000 services, building skills in enterprise resource planning (ERP), and acquiring a broad knowledge and expertise in the IT functions of specific industries. Through these efforts, the Company becomes more valuable to the customer, is often able to expand the scope of its work to existing customers, and is able to offer industry-specific expertise. Attract and Retain Highly Skilled IT Professionals. The Company believes that its human resources are its most valuable asset. Accordingly, its success depends in large part upon its ability to attract, develop, motivate, retain and effectively utilize highly skilled IT professionals. Over the years, the 33

Company has developed a worldwide recruiting network, logistical expertise to relocate its personnel, and programs for human resource retention and development. The Company (i) employs 17 professional recruiters who recruit qualified professionals throughout the U.S. and in India, Canada, Europe, Singapore, the Philippines, Australia and New Zealand, (ii) trains recent college graduates and other recruits through its four training centers, three of which are located in the U.S. and one of which is located in India, and (iii) maintains a broad range of employee support programs, including relocation assistance, a comprehensive benefits package, career planning and incentive plans. The Company believes that its management structure and human resources organization is designed to maximize the Company's ability to efficiently expand its professional IT staff in response to customer needs. See "Risk Factors -- Recruitment and Retention of IT Professionals" and "-- Ability to Manage Growth." Pursue Selective Acquisition Opportunities. Given the highly fragmented nature of the IT services market, the Company believes that opportunities exist to expand through the selective acquisitions of smaller regional IT services firms with established customers. The Company may also consider potential acquisition candidates to augment its technical expertise. While the Company from time to time considers acquisition opportunities, it currently has no agreements, understandings or commitments to effect any acquisitions, except for the acquisition of Syntel India. See "Risk Factors -- Risks Related to Possible Acquisitions." SERVICES Syntel provides a broad range of IT services through its TeamSourcing and IntelliSourcing service offerings. Through TeamSourcing, the Company provides professional IT staffing services. Through IntelliSourcing, the Company provides outsourcing services for ongoing management, development and maintenance of customer applications, including Year 2000 compliance services. The Company believes that its established TeamSourcing customers represent an attractive base from which to grow its IntelliSourcing services and, as such, has recently increased the personnel and resources dedicated to the development, marketing and sales of its IntelliSourcing services. TeamSourcing and IntelliSourcing services are based on Syntel's methodologies and technical expertise, which the Company continues to develop on an ongoing basis in order to further enhance the value of its services to customers. For the year ended December 31, 1996 and the three months ended March 31, 1997, TeamSourcing accounted for approximately 64% and 56%, respectively, of the Company's revenues and IntelliSourcing represented approximately 36% and 44%, respectively, of the Company's revenues. TeamSourcing Syntel offers professional IT staffing services directly to its customers and, to a lesser degree, in partnership with other service providers. The professional IT staffing services include individual professionals and teams of professionals dedicated to assisting customer systems projects and ongoing IT functions. This service responds to the demand from internal IT departments for additional expertise, technical skills and personnel. The Company's wide range of TeamSourcing services include IT applications systems specification, design, development, implementation and maintenance, which involve diverse computer hardware, software, data and networking technologies and practices. Syntel also provides professional IT staffing services to state governments, principally in the area of state welfare automation services. Services to state governments are provided directly by Syntel and in partnership with Deloitte & Touche and with Unisys. In providing its TeamSourcing services, Syntel utilizes its Global Service Delivery Model, primarily through international recruiting, training and relocation, to meet customer needs for resource depth, expertise, responsiveness, 24-hour support seven days a week and cost-effective delivery. Through its flexible service delivery, Syntel is able not only to deliver more effective services to the customer, but also to more efficiently utilize its IT professionals. By focusing on customer satisfaction and the delivery of quality services to TeamSourcing customers, the Company believes it is able to generate opportunities to provide its TeamSourcing 34

customers with higher value application outsourcing services and Year 2000 compliance services. The Company has recently realigned its TeamSourcing sales people on an account basis within each sales region in an effort to further enhance customer relationships and marketing to larger, more complex businesses. The effectiveness of its TeamSourcing services and its focus on customer service is evidenced by the high level of repeat business from existing customers and the quality awards its customers have bestowed on Syntel. During 1996, Syntel received the Q-1 rating from Ford Motor Company, became a Preferred Supplier to Chrysler Corporation and was rated first in customer service among all Chrysler vendors in its service category. The Company is also a Microsoft Certified Solution Partner. For the year ended December 31, 1995 and 1996 and the three months ended March 31, 1997, over 90% of Syntel's annual revenues were from customers for whom the Company provided services during the previous period. In order to continue to enhance its TeamSourcing services expertise, Syntel has enhanced its capabilities in enterprise resource planning (ERP), including the implementation of software packages from SAP and Oracle. The Company has also developed expertise in emerging technologies such as Internet/intranet applications, client/server applications and object-oriented software. IntelliSourcing Syntel also provides higher-value outsourcing services for ongoing management, development and maintenance of business applications, including Year 2000 compliance services. Over the last 18 months, the Company has made significant investments in IntelliSourcing, including the hiring of additional sales people and senior managers, redirecting personnel experienced in the sale of higher-value contracts, developing proprietary methodologies, including a package of Year 2000 offerings and services, increasing marketing efforts, and realigning organizational support in the areas of finance, administration, human resources and legal. See "Risk Factors -- Ability to Manage Growth." The Global Service Delivery Model is central to Syntel's delivery of IntelliSourcing services. It enables the Company to respond to customers' needs for ongoing service and flexibility and has provided the capability to become productive quickly on a cost-effective basis to meet timing and resource demands for mission critical applications. Business Applications Outsourcing. Through IntelliSourcing, Syntel assumes responsibility for and manages selected application support functions of the customer. Rather than being responsible for an entire IT department, including computers, other hardware, networks and all IT functions, IntelliSourcing focuses solely on providing professional services for selected IT applications. IntelliSourcing is fundamentally different than facilities management, which is cost-intensive and involves the ownership of hardware. IntelliSourcing is a more flexible alternative to traditional full-scale outsourcing, as it permits the customer to maintain control of its IT resources and establish priorities. IntelliSourcing permits the customer to select the applications best-suited to remain managed in-house, while still benefiting from Syntel's expertise and resource availability. The benefits of IntelliSourcing also include reliable maintenance and up-keep of systems on which the business depends, reduced operating costs, availability of IT personnel and access to best-practice solutions, while allowing the customer to focus on its core competencies. Syntel has developed methodologies, processes and tools to effectively integrate and execute IntelliSourcing engagements. Referred to as "IntelliTransfer," this methodology is implemented in three stages of planning, transition and launch. Syntel first focuses on the customer's personnel, processes, technology and culture to develop a plan to effectively assimilate the business process knowledge of the customer. Syntel then begins to learn the business processes of the customer, and, finally, seeks to assume responsibility for performance of a particular customer application system or systems. As the Company develops an in-depth knowledge of the customer's personnel, processes, technology and culture, Syntel acquires a competitive advantage to pursue more value-added services. The Company believes its approach to providing these services results in a long-term customer relationship involving a key Syntel role in the business processes and applications of the customer. 35

At engagement initiation, Syntel's services are based on its expertise in the software life-cycle and underlying technologies, and are thus focused on technical solutions. For most new engagements, the Company starts by performing functions primarily revolving around production control, application systems maintenance, development of new and changed systems functionality, and 24-hour help desk support. As IntelliSourcing engagements progress, the Company typically provides an increasing proportion of software development services offshore, allowing Syntel to reduce its overall cost of service and improve responsiveness. Because providing IntelliSourcing services typically involves close participation in the IT strategy of a customer's organization, Syntel adjusts the manner in which it delivers these services to meet the specific needs of each customer. For example, if the customer's business requires fast delivery of a mission-critical application update, Syntel will combine its on-site professionals, who have knowledge of the customer's business processes and applications, together with its global infrastructure to deliver around-the-clock resources. If the customer's need is for cost reduction, Syntel may increase the portion of work performed at its offshore Global Development Center, which has significantly lower costs. The Company believes that its ability to provide flexible service delivery and access to resources permits responsiveness to customer needs and are important factors that distinguish its IntelliSourcing services from other outsourcing services. Year 2000 Compliance Services. As a component of its IntelliSourcing services, the Company has invested substantial resources in developing a package of Year 2000 offerings and services. The Company intends to use its Year 2000 capabilities to expand its role with existing TeamSourcing customers, gain new customers and market its IntelliSourcing services. All of Syntel's Year 2000 service packages are based on Method2000(sm), a proprietary solution developed by Syntel. Method2000(sm) is a second generation solution aimed at innovative business processes, methodologies, techniques and tools, and maximizing the use of lower-cost offshore resources. The Method2000(sm) service packages are: Pilot2000, Implement2000 and Recover2000. Using the Pilot2000 service package, Syntel identifies a small representative portion of the customer's application systems portfolio, and executes an entire Year 2000 compliance project on the representative sample. In addition to constituting an effective "proof of concept," this provides specific customer environment knowledge to Syntel. With this specific knowledge, Syntel seeks to offer fixed-price solutions for additional applications beyond the pilot using the offering Implement2000. See "Risk Factors--Fixed-Price Engagements." The Company is also marketing a Recover2000 service package in which Syntel assumes responsibility for in-progress Year 2000 compliance projects previously performed by the customer or another IT service provider. Syntel markets its applications outsourcing services as a follow-on to its Year 2000 compliance services. The Company believes that such follow-on services will be an attractive offering in the coming years based on the current trend of most Year 2000 service providers not to provide warranties or services to fix any Year 2000 failures that may result from limitations, if any, of their services. Syntel believes that the most efficient way for customers to achieve Year 2000 compliance is to have key team members from the Year 2000 compliance project fully employed in ongoing maintenance and development of the same applications portfolio. Technical Services Group The Company seeks to gain a competitive advantage through its methodologies, tools and technical expertise. The Company employs a team of professionals in its Technical Services Group whose mission is to develop and formalize Syntel's "intellectual capital" for use by the entire Syntel organization. The Technical Services Group focuses on monitoring industry trends, creating competencies in emerging technical fields, developing new methodologies, techniques and tools such as IntelliTransfer and Method2000(sm), creating reusable software components to enhance quality and value on customer assignments, and educating Syntel's personnel to improve marketing, sales and 36

delivery effectiveness. The Technical Services Group consists of senior technical personnel located in both the U.S. and India. CUSTOMERS Syntel provides its services to a broad range of Fortune 1000 companies principally in the financial services, manufacturing, retail, transportation and information/communications industries, as well as to government entities. During 1996, the Company provided services to over 100 customers, principally in the U.S. The Company also provides services to customers in Europe and Southeast Asia, many of whom are subsidiaries or affiliates of its U.S. customers. Representative customers include:
FINANCIAL SERVICES -----------------American International Group, Inc. World Bank Colonial Management CitiBank CIGNA Corp. First Union Corp. NationsBank Corp. MANUFACTURING ------------Ford Motor Co. Chrysler Corporation International Business Machines Corp. Unisys Corp. New Venture Gear Meldisco Hewlett-Packard Corp. Xerox Corp. Westinghouse Electric Corp. RETAIL -----Dayton Hudson Corp. Safeway, Inc. Mervyn's Kmart Corp. Lucky Stores

TRANSPORTATION -------------Norfolk Southern Corp. Allied Van Lines Burlington Northern, Inc. Yellow Technologies Northwest Airlines Corp.

INFORMATION/ COMMUNICATIONS -------------AT&T Corp. Consolidated Communication Directories Intellisoft McDonnell Douglas Information Systems LM Ericsson Telephone Co.

GOVERNMENT ---------New Mexico New York Malta West Virginia Illinois

For the year ended December 31, 1995 and 1996 and for the three months ended March 31, 1997, the Company's top ten customers accounted for approximately 81%, 78% and 77% of the Company's revenues, respectively. American International Group, Inc. and Ford Motor Co., the Company's largest customers, represented approximately 38% and 14% of revenue for the year ended December 31, 1995, respectively, approximately 34% and 12% of revenue for the year ended December 31, 1996, respectively, and 31% and 10% of revenues for the three months ended March 31, 1997, respectively. The Company recently entered into outsourcing contracts with Ford Motor Co. and Norfolk Southern Corp. The Company also recently entered into Year 2000 engagements with American International Group, Inc., Northwest Airlines Corp., Yellow Technologies and Norfolk Southern Corp. Most of the Company's contracts are terminable by the customer with limited notice and without penalty. See "Risk Factors -- Customer Concentration; Risk of Termination." American International Group. The Company's largest customer is American Home Assurance Company, and certain other subsidiaries of American International Group, Inc. (collectively, "AIG"). This customer relationship began with the placement of a single IT professional in 1989 and has grown to over 450 Syntel professionals as of June 1, 1997. The Company supports AIG systems throughout the U.S. and in selected countries around the world. Both the Company's Cary, North Carolina and Mumbai, India Global Development Centers were initially established to support AIG. As the Company has become more knowledgeable about AIG's personnel, processes, technology and culture, it has had the opportunity to expand the range of its services beyond contract minimums and to play an increasingly valuable role in project management and systems design. Currently, the Company provides applications development and maintenance services in support of various AIG subsidiaries. Its applications development services focus on providing customized solutions and applications in support of policy underwriting, claims management and financial reporting and encompass both mainframe and client/server environments. The Company also provides Year 2000 conversion services to AIG on a fixed-price basis. The Company's applications maintenance 37

services focus on enhancing existing business systems, including 24-hour management of data processing functions and a 24 hour customer assistance center. The Company is responsible for complete production support, maintenance and related activities for over 250 applications. Through its long-term relationship with AIG, Syntel has enabled AIG to better control and manage its IT resource allocation and simplified management of AIG's IT functions. Syntel has also delivered to AIG greater resource availability, 24-hour support, fast turnaround and the capacity to address AIG enterprise needs in other parts of the world. The Company has a four-year contract with AIG which commenced in 1994 and expires in December 1998. It may be terminated by AIG in 1997 upon payment of a monetary penalty and in 1998 without penalty. Syntel's service delivery to AIG is an integrated effort involving on-site, off-site and offshore service teams. Initially, the on-site team gained knowledge of the particular AIG applications and systems to be supported. Management support of these applications and systems was then shifted to the off-site team at the Company's Cary, North Carolina Global Development Center with certain underlying work functions ultimately migrating to the offshore team at the Company's Mumbai, India Global Development Center. Currently, Syntel coordinates the AIG customer relationship using a number of on-site project management teams which interface with AIG management teams at the AIG location for each principal IT support function. As a result, AIG maintains management control of its IT planning and priorities while at the same time benefiting from Syntel's expertise, practices and resource availability for the cost-efficient execution of AIG plans and priorities. GLOBAL SERVICE DELIVERY MODEL Syntel's Global Service Delivery Model gives the Company the flexibility and resources to perform services on-site at the customer's location, off-site at the Company's U.S. locations and offshore at the Company's Indian locations. By linking each of its service locations together through a dedicated data and voice network, Syntel provides a seamless service capability to its customers. The Global Service Delivery Model gives the Company the flexibility to deliver to each customer a customized mix of integrated on-site, off-site and offshore services to meet varying customer needs for direct interaction with Syntel personnel, access to technical expertise and best practices, resource availability and cost-effective delivery. [A diagram on this page represents a map of the world with the Company's offices and facilities indicated. Footnote: The Company has leased space for a new Global Development Center in Chennai, India. The Company has already begun staffing the Chennai Center and will continue to incrementally increase staffing over time in response to customer needs.] Through on-site service delivery at the customer's location, the Company is able to gain comprehensive knowledge concerning the customer's personnel, processes, technology and culture, and maintain direct customer contact to facilitate project management, problem solving and integration of Syntel services. Off-site service delivery at the Company's U.S. locations provides the customer with access to the diverse skill base and technical expertise resident at different regional centers, availability of resources, and cost-effective delivery due to the savings in transportation, facilities and relocation costs associated with on-site work. Offshore service delivery at the Company's Indian location provides the customer with the capacity to receive around the clock attention to applications maintenance and project development for faster turnaround, greater availability of resources, expertise resident in India and more cost-effective delivery than the Company's off-site services. The Company has developed global recruiting and training programs which have efficiently provided skilled IT professionals to meet customer needs. In addition, the Company's sales, solutions and delivery functions are closely integrated in the Global Service Delivery Model so that appropriate resources can be provided to the customer at the right time and at the most advantageous location. Each customer is tracked and serviced through a multi-stage customer care process. Weekly meetings 38

are held with key project management, sales, technical, legal and finance personnel to monitor progress, identify issues and discuss solutions. As engagements evolve and customer needs change, the Company can reallocate resources responsively from among these locations as necessary. The Company's two primary Global Development Centers located in Cary, North Carolina and Mumbai, India, two additional Global Development Centers located in Troy, Michigan and Santa Fe, New Mexico, and the Global Development Center being established in Chennai, India support the Company's Global Service Delivery Model. The Cary, North Carolina Global Development Center, which employs over 350 persons, serves as the hub for the Company's telecommunications, project management, technical training and professional development programs. Its support functions include administration of a dedicated data and voice network, a 24-hour customer assistance center which coordinates problem resolution worldwide, and a development center for the sharing of knowledge and expertise among IT professionals. Moreover, due to its proximity to a large number of major universities, the Cary, North Carolina Global Development Center has access to a relatively large talent pool. The Mumbai, India Global Development Center, which employed over 525 persons as of June 1, 1997, serves as the hub of the Company's Indian operations. This Global Development Center provides substantial resource depth to meet customer needs around the world, low-cost service delivery, a 24-hour customer assistance center and development of technical solutions and expertise. Mumbai also serves as a principal recruiting and training center for the Company due to the large resource pool of skilled IT professionals and college graduates. The Company is in the process of expanding its operations in India. The Company believes that it has developed considerable skill in the operation of offshore facilities and expects its Indian expansion to significantly increase its offshore capabilities. The Mumbai Center, which has been in operation for four years, is being expanded to accommodate an additional 300 persons. Such expansion is expected to be completed by the end of 1997. The Company also has leased space for a new Global Development Center in Chennai, India. This Center is intended to provide additional resources and will include a training and development center. The Company has already begun staffing the Chennai Center and will continue to incrementally increase staffing over time in response to customer needs. Once fully developed and operational, the Chennai Center will be able to accommodate up to 600 persons. See "Risk Factors -- Exposure to Regulatory and General Economic Conditions in India." The Troy, Michigan Global Development Center serves as the Company's world headquarters, sales and marketing center, training and development center, and is the hub of its Southeastern Michigan operations, which employs over 300 people. The Santa Fe, New Mexico Global Development Center, which employs 29 people, serves as a training and development center. SALES AND MARKETING The Company markets and sells its services directly through its professional salespeople and senior management operating principally from the Company's offices in Chicago, Illinois; Dallas, Texas; Durham, North Carolina; Fremont, California; Minneapolis, Minnesota; New York, New York; Troy, Michigan; Woodbridge, New Jersey; and London, England. The Company recently realigned its sales staff into two sales forces, one for TeamSourcing services and one for IntelliSourcing services. Each sales region has a separate TeamSourcing and IntelliSourcing sales staff with specific sales executives assigned to each account. The TeamSourcing sales organization consists of approximately 18 account executives. The sales cycle for TeamSourcing engagements, from initial contact to execution of an agreement, varies by type of service and account size, but is typically completed within 30 days. A significant amount of TeamSourcing engagements are developed from existing customers. During 1996, over 90% of TeamSourcing revenues were from customers who received services during 1995. TeamSourcing account executives are paid a base salary plus quarterly incentive compensation based upon specified profit targets. 39

Syntel's IntelliSourcing sales organization consists of 10 sales executives. Since 1995, when it had four sales executives, Syntel has increased its professional salespeople in IntelliSourcing both by dedicating internal sales professionals to this service offering and through outside hiring of professionals experienced in marketing outsourcing engagements. The sales cycle for IntelliSourcing engagements ranges from 3 to 12 months depending on the complexity of the engagement. Due to this longer sales cycle, IntelliSourcing sales executives follow an integrated sales process for the development of engagement proposals and solutions, and receive ongoing input from the Company's technical services, delivery, finance and legal departments throughout the sales process. The IntelliSourcing sales process also typically involves a greater number of customer personnel at more senior levels of management than the TeamSourcing sales process. IntelliSourcing account executives are paid a base salary plus quarterly incentive compensation based on reaching specified profit targets on closed contracts. Syntel's marketing organization seeks to promote brand identities for its TeamSourcing, IntelliSourcing and Method2000(sm) services and to generate sales leads. The Company's current marketing efforts consist of direct mail, trade shows, publications and public relations campaigns targeted to CEOs, CFOs and CIOs of Fortune 500 organizations and CIOs of government agencies. In addition, Syntel maintains relationships with key industry research groups such as the Gartner Group, Meta Group, Giga Group, and the Information Technology Association of America. HUMAN RESOURCES The Company believes that its human resources are its most valuable asset. Accordingly, the Company's success depends in large part upon its ability to attract, develop, motivate, retain and effectively utilize highly skilled IT professionals. The Company has developed a number of processes, methodologies, technologies and tools for the recruitment, training, development and retention of its employees. As of June 1, 1997, the Company employed in its U.S. operations 1,318 persons, including 1,179 IT professionals, 28 in sales and marketing, and 111 in general and administrative positions. Of these, 523 were U.S. citizens and permanent residents, 776 held H-1B visas (permitting temporary residency in the U.S.), 5 held F-1 visas (permitting foreign students to work in the U.S.) and 14 held TN visas (permitting Canadians to work in the U.S.). As of June 1, 1997, the Company employed in its Indian operations 529 persons, including 461 IT professionals, 2 in sales and marketing, and 66 in general and administrative positions. A majority of the Company's professional employees have a Bachelor of Science degree or its equivalent, or higher degrees in computer science, engineering disciplines, management, finance and other areas. Their experience level ranges from entry-level programmers to engagement managers and senior consultants with over 20 years of IT experience. The Company has personnel who are experienced in mainframe, client/server and open systems technologies, and proficient in a variety of computer programming languages, software tools, database management systems, networks, processes, methodologies, techniques and standards. The Company has implemented a management structure and human resources organization intended to maximize the Company's ability to efficiently expand its professional staff. Although the Company believes that it has the capability to meet its anticipated future needs for IT professionals through its established recruiting and training programs, there can be no assurance that the Company will be able to hire, train or retain qualified IT professionals in sufficient numbers to meet anticipated staffing needs. See "Risk Factors -- Recruitment and Retention of IT Professionals" and "-- Ability to Manage Growth." Recruiting. The Company has developed a recruiting methodology and organization which is a core competency. The Company has a 15-person U.S.-based recruiting team, 10 of whom primarily recruit from across the U.S., and 5 of whom primarily recruit international candidates from India, Canada, Europe, Singapore, the Philippines, Australia and New Zealand. The Company also has a 4- person India-based recruiting team in Mumbai which primarily recruits for the Company's needs in 40

India, although that team also from time to time recruits for the Company's U.S. operations. The Company uses a standardized global selection process that includes interviews and reference checks. Among the Company's other recruiting techniques are the placement of advertisements on its web site, in newspapers and trade magazines, providing bonuses to its employees who refer qualified applicants, participating in job fairs and recruiting on university campuses. In addition, the Company has developed a proprietary database of talent utilizing the Resumix database system, which is an automated tool for managing all phases of recruiting. This system directly downloads resumes from the Internet, directly loads faxed resumes and currently stores approximately 40,000 resumes. This system enhances the ability of the Company's recruiters to select appropriate candidates and can distribute resumes directly to the recruiters. Training. The Company uses a number of established training delivery mechanisms in its efforts to provide a consistent and reliable source for qualified IT professionals. Recent college graduates and other recruits selected by the Company participate in Syntel's Technical and Professional Development ("TPD") program. The TPD program consists of 8-13 weeks of training programs, including classroom lectures, hands-on experience, exercises, projects and tests. Another entry-level training program is the Syntel Management Trainee Program. As part of this program, Syntel selects graduates from leading universities who are suited for corporate and regional positions within Syntel in account management, sales, recruiting and other management areas. Syntel also maintains a comprehensive Computer Based Training program ("CBT"), with over 200 training modules, which Syntel employees can use at their convenience. The CBT topics cover the latest client/server areas, local-area and wide-area networks, relational data base management systems, object-oriented systems, Microsoft products, in addition to a number of management and related developmental areas. The Company has been accepted as a Microsoft solution provider partner and sponsors the Microsoft Certification Program at its Cary, North Carolina Global Development Center, and provides opportunities for cross-training of its professionals in emerging technologies. Support and Retention. The Company seeks to provide meaningful support to its employees which the Company believes leads to improved employee retention and better quality services to its customers. Traditionally, a significant percentage of the Company's employees have been recruited from outside the U.S. and relocated to the U.S. This has resulted in the need to provide a higher level of initial support to its employees than is common for U.S.-based employees. As a result of these activities, Syntel has developed a significant knowledge base in making foreign professionals comfortable and quickly productive in the U.S. and Europe. The Company also conducts regular career planning sessions with its employees, and seeks to meet their career goals over a long-term planning horizon. As part of its retention strategy, the Company strives to provide a competitive compensation and benefits package, including relocation reimbursement and support, health insurance, auto insurance, 24-hour on-call nurse consulting, a 401(K) plan, life insurance, dental options, a vision eye-care program, long-term disability coverage, short-term disability options, tuition subsidy plan, PC purchase plan and an employee referral plan. The Company intends to offer stock options to substantially all of its employees under the Stock Option Plan upon consummation of the offering, and to offer substantially all of its employees an opportunity to purchase the Company's Common Stock at a discount to fair market value under the Employee Stock Purchase Plan. See "Management--Stock Option Plan" and "--Employee Stock Purchase Plan." DOL Consent Decree. To resolve an investigation of the Company by the U.S. Department of Labor for failure to meet prevailing wage requirements for certain H-1B employees, the Company voluntarily entered into a two-year consent decree with the DOL on September 29, 1995. Under the consent decree, the Company agreed not to file any new H-1B petitions for 90 days after the date of the decree, to invest an additional $1 million to train its U.S. domestic employees as IT professionals, to increase by ten percentage points its proportion of U.S. domestic workers employed in positions in which H-1B workers are used, and to interview and offer employment to all qualified displaced workers whenever the Company places 25 or more employees at a facility where H-1B workers may be used. While the Company believes that the steps taken to comply with the consent decree adversely 41

affected revenue growth during 1995 and 1996, the Company believes that it has fully complied with the decree and that continued compliance with the decree through its expiration in September 1997 will not have a material adverse effect on the Company. See "Management's Discussion and Analysis of Financial Condition and Results of Operations--Overview." COMPETITION The IT services industry is intensely competitive, highly fragmented and subject to rapid change and evolving industry standards. The Company competes with a variety of other companies, depending on the IT services it offers. The Company's primary competitors for professional IT staffing engagements include participants from a variety of market segments, including "Big Six" accounting firms, systems consulting and implementation firms, applications software development and maintenance firms, service groups of computer equipment companies and temporary staffing firms. In applications outsourcing services, the Company competes primarily with Electronic Data Systems Corp., IBM Global Solutions (ISSC), Andersen Consulting and Computer Sciences Corporation. The Company's principal competitors for Year 2000 compliance engagements include IBM Global Solutions (ISSC), Cap Gemini and Andersen Consulting. Many of the Company's competitors have substantially greater financial, technical and marketing resources and greater name recognition than the Company. As a result, they may be able to compete more aggressively on pricing, respond more quickly to new or emerging technologies and changes in customer requirements, or devote greater resources to the development and promotion of IT services than the Company. In addition, there are relatively few barriers to entry into the Company's markets and the Company has faced, and expects to continue to face, additional competition from new IT service providers. Further, there is a risk that the Company's customers may elect to increase their internal resources to satisfy their IT services needs as opposed to relying on a third-party vendor such as the Company. The IT services industry is also undergoing consolidation which may result in increased competition in the Company's target markets. Increased competition could result in price reductions, reduced operating margins and loss of market share, any of which could have a material adverse effect on the Company. The Company also faces significant competition in recruiting and retaining IT professionals which could result in higher labor costs or shortages. There can be no assurance that the Company will compete successfully with existing or new competitors or that competitive pressures faced by the Company will not materially adversely affect its business, results of operations or financial condition. See "Risk Factors--Intense Competition." INTELLECTUAL PROPERTY The Company's business includes the development of custom software applications and other deliverables in connection with specific customer engagements. Ownership of such software and associated deliverables created for customers is generally retained by or assigned to the customer. The Company also develops software components and libraries that can be reused in application software development, and certain software toolsets and proprietary methodologies, most of which remain the property of the Company. In order to protect its proprietary rights in these various intellectual properties, the Company relies upon a combination of trade secret, nondisclosure and other contractual arrangements, and copyright and trademark laws. The Company generally enters into confidentiality agreements with its employees, consultants, customers and potential customers and limits access to and distribution of its proprietary information. India is a member of the Berne Convention, and has agreed to recognize protection on intellectual property rights conferred under the laws of other member countries, including the U.S. The Company believes that the laws, rules, regulations and treaties in effect in the U.S. and India are adequate to protect it from misappropriation or unauthorized use of its intellectual property. However, there can be no assurance that such laws will not change and, in particular, that the laws of India will not change in ways that may prevent or restrict the transfer of software components, libraries and toolsets from India to the U.S. There can be no assurance that the steps 42

taken by the Company will be adequate to deter misappropriation of its intellectual property or that the Company will be able to detect unauthorized use and take appropriate steps to enforce its rights. Although the Company believes that its services and products do not infringe on the intellectual property rights of others, there can be no assurance that such a claim will not be asserted against the Company in the future. See "Risk Factors -- Limited Intellectual Property Protection." FACILITIES The Company's headquarters and principal administrative, sales and marketing, and system development operations are located in approximately 24,900 square feet of leased space in Troy, Michigan. The Company occupies these premises under a lease expiring on November 30, 2001. The Company's primary training and development center is located in approximately 50,240 square feet of leased space in Cary, North Carolina, under a lease which expires March 31, 1999. The Company also leases regional office facilities in Dallas, Texas; Fremont, California; Oakbrook, Illinois; Minneapolis, Minnesota; Durham, North Carolina; Santa Fe, New Mexico; Woodbridge, New Jersey; and London, England. Syntel India leases approximately 20,210 square feet of office space in Mumbai, India, under four leases expiring on various dates from October 14, 1997 to September 30, 1998, each of which is expected to be renewed for a period of five years upon expiration. This leased space is in the process of being expanded by approximately 13,000 square feet. Syntel India's IT professionals, as well as its senior management, administrative personnel, human resources and sales and marketing functions are housed in this facility. Syntel has leased substantially all of an office building in Chennai, India consisting of approximately 33,000 square feet. The lease terms expire May 2003, subject to the Company's option to renew for an additional period of three years. The Company believes that these facilities are adequate for its currently anticipated future needs. LEGAL PROCEEDINGS The Company is not currently a party to any material legal proceedings or governmental investigation and is not aware of any threatened litigation or governmental investigation. 43

MANAGEMENT EXECUTIVE OFFICERS AND DIRECTORS The Company's executive officers, directors and prospective directors, who have agreed to serve as directors upon consummation of this offering, are as follows:
NAME ---Bharat Desai..................... Neerja Sethi..................... John Andary...................... Ken Kenjale...................... Daniel M. Moore.................. Richard Baldyga.................. John Kennedy..................... Jay Clark........................ Venkat Mallya.................... Paritosh K. Choksi............... Douglas Van Houweling............ AGE --44 42 47 47 43 36 56 34 36 44 53 POSITION -------President, Chief Executive Officer and Director Vice President, Corporate Affairs and Director Chief Financial Officer and Treasurer Chief Technology Officer General Counsel, Secretary and Acting Vice President, Human Resources Vice President, Global Delivery Services Vice President, Sales and Relationship Management Assistant Vice President, Outsourcing Solutions Assistant Vice President, TeamSourcing Prospective Director Prospective Director

Bharat Desai is a co-founder of the Company and has served as its President, Chief Executive Officer and Director since its formation in 1980. Mr. Desai holds an M.B.A. in Systems and Finance from the University of Michigan and a Bachelor of Technology degree in Electrical Engineering from the Indian Institute of Technology in Mumbai, India. Mr. Desai is the spouse of Ms. Sethi. Neerja Sethi is a co-founder of the Company and has served as a Vice President, Corporate Affairs and Director since its formation in 1980 and as Secretary and Treasurer from 1980 to March 1996. Ms. Sethi holds an M.S. in Computer Science from Oakland University, an M.B.A. in Operations Research from Delhi University, and a B.S. in Mathematics from Delhi University. Ms. Sethi is the spouse of Mr. Desai. John Andary has served the Company as Chief Financial Officer since August 1994 and as Treasurer since March 1996. From October 1992 to April 1994, Mr. Andary was a General Manager of Automatic Data Processing and from May 1987 to October 1992 he was one of its Division Controllers. Mr. Andary has a B.A. in Accountancy from Walsh College and is a Certified Public Accountant. Ken Kenjale has served the Company as Chief Technology Officer since July 1995. From April 1988 to July 1995, Mr. Kenjale served in various positions with the Company. Mr. Kenjale holds a Bachelor of Engineering degree and a Master of Technology degree in Computer Science from the Indian Institute of Technology in Kanpur, India. Daniel M. Moore has served the Company as General Counsel and Secretary since March 1996 and Acting Vice President, Human Resources since July 1996. From June 1992 to March 1996, Mr. Moore served as Vice President and Senior Corporate Counsel with Comerica Incorporated, and he was Vice President and Managing Commercial Counsel with Manufacturers National Corporation prior to its merger with Comerica Incorporated. Mr. Moore has a B.A. in Accounting from Michigan State University and a J.D. from the Detroit College of Law. Richard Baldyga has served the Company as Vice President, Global Delivery since February 1997. From July 1994 to February 1997, Mr. Baldyga served as the Company's Vice President, Operations. From 1984 to July 1994, Mr. Baldyga served in various positions at EDS. Mr. Baldyga holds a B.S. in Engineering Technology from the New Jersey Institute of Technology. 44

John Kennedy has served the Company as Vice President, Sales and Relationship Management of the Company since February 1997. From August 1995 to February 1997, Mr. Kennedy served as the Company's Assistant Vice President, National Accounts and Sales. From April 1993 to August 1995, Mr. Kennedy served as Director of Corporate Accounts at Kelly Services, Inc. From July 1981 to March 1993, Mr. Kennedy served as a Business Unit Executive at IBM Corporation. Mr. Kennedy holds a B.S. in Mechanical Engineering, an M.B.A. in Business Administration, and a Certificate of Advanced Engineering Study, all from Cornell University. Jay Clark has served the Company as Assistant Vice President, Outsourcing Solutions of the Company since August 1994. From January 1985 to August 1994, Mr. Clark served in various positions at EDS. Mr. Clark holds a degree in Management Information Systems from Tennessee Technological University. Venkat Mallya has served the Company as Assistant Vice President, TeamSourcing of the Company since February 1997. From June 1992 through February 1997, Mr. Mallya served in various positions with the Company, most recently as a Branch Manager and a Director, Sales. From 1990 to 1992, Mr. Mallya served as Group Marketing Manager for Onward Technology Group. Mr. Mallya holds a Masters in Commerce and Finance and an M.B.A. in Marketing/Management, both from Bombay University. Paritosh K. Choksi has been associated with the Phoenix American group of companies since 1977 and is currently Phoenix American's Senior Vice President, Chief Financial Officer and Treasurer and a director. He has significant experience in corporate finance, debt and equity placements and mergers and acquisitions. Mr. Choksi has an M.B.A. from the University of California, Berkeley in Finance and Marketing, and a Bachelor of Technology degree in Mechanical Engineering from Indian Institute of Technology in Mumbai, India. Douglas E. Van Houweling has served as Dean for Academic Outreach since 1995, and as Vice Provost for Information and Technology since 1984, at the University of Michigan. As Vice Provost for Information and Technology, Dr. Van Houweling is responsible for the University's strategic direction in the information technology arena. At the University, Dr. Van Houweling holds professorial appointments in the School of Information, the Business School and the Department of Political Science in the College of Literature, Science and the Arts. Dr. Van Houweling holds an undergraduate degree from Iowa State University and a Ph.D in Government from Indiana University. The Company's Board of Directors currently consists of two members. Upon completion of this offering, the Board of Directors will be increased to five members. The Board is divided into three classes, each of whose members serve for staggered three-year terms. Mr. Desai is a Class III Director and will serve an initial three-year term. Ms. Sethi is a Class II Director and will serve an initial two-year term. The Class I directorship, which will be for an initial one-year term, is currently vacant. There are also vacancies for one Class II Director and one Class III Director. The three vacancies on the Board will be filled by appointment by the current Board of Directors, with Mr. Choksi serving as a Class III Director, and Mr. Van Houweling serving as a Class II Director. The vacancy in the Class I directorship will be filled after completion of this offering. At each annual meeting of shareholders after this offering, the appropriate number of directors will be elected for a three-year term to succeed the directors of the same class whose terms are then expiring. BOARD COMMITTEES In the past, the Company has not maintained any committees of the Board of Directors. Upon completion of this offering, the Board of Directors will establish an Audit Committee and a Compensation Committee. The Audit Committee will be responsible for reviewing with management the financial controls and accounting and reporting activities of the Company. The Audit Committee will review the qualifications of the Company's independent auditors, make recommendations to the Board of 45

Directors regarding the selection of independent auditors, review the scope, fees and results of any audit and review non-audit services and related fees. The members of the Audit Committee have not yet been appointed. All members of the Audit Committee will be non-employee directors. The Compensation Committee will be responsible for the administration of all salary and incentive compensation plans for the officers and key employees of the Company, including bonuses. The Compensation Committee will also administer the Company's Stock Option and Incentive Plan. The members of the Compensation Committee have not yet been appointed. All members of the Compensation Committee will be non-employee directors. The Board of Directors does not have a Nominating Committee. The selection of nominees to the Board of Directors will be made by the entire Board of Directors. DIRECTOR COMPENSATION Directors who are not employees of the Company will be paid $2,000 per Board meeting and $500 per Committee meeting, and all directors will be reimbursed for travel expenses incurred in connection with attending Board and Committee meetings. Each non-employee director will be granted an option to purchase 1,000 shares of the Company's Common Stock under the Stock Option Plan at the first Board meeting that he or she attends, which will vest on the first anniversary of the grant date, and thereafter will be granted an annual option to purchase 1,000 shares of the Company's Common Stock at the first Board meeting of the year he or she attends. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Company did not have a Compensation Committee prior to this offering. Accordingly, Mr. Desai and Ms. Sethi, the Company's President and Chief Executive Officer and Vice President, Corporate Affairs, respectively, had responsibility for all decisions with respect to executive officer compensation. EXECUTIVE COMPENSATION The following table sets forth certain information regarding compensation paid for the year ended December 31, 1996 to the Company's Chief Executive Officer and each of the Company's four other most highly compensated executive officers whose total salary plus bonus exceeded $100,000 for the year ended December 31, 1996. SUMMARY COMPENSATION TABLE
NAME AND PRINCIPAL POSITION - -------------------------------------------------Bharat Desai, President and Chief Executive Officer......................................... Neerja Sethi, Vice President, Corporate Affairs... Richard Baldyga, Vice President, Global Delivery Services........................................ Jay Clark, Assistant Vice President, Outsourcing Solutions....................................... John Kennedy, Vice President, Sales and Relationship Management......................... ANNUAL COMPENSATION -----------------------SALARY($) BONUS($) ------------------$420,000 $360,000 $180,000 $145,000 $140,000 $350,000 $250,000 $ 20,000 $ 17,500 $ 14,000

46

EMPLOYMENT AGREEMENTS The Company is a party to employment agreements with Mr. Desai and Ms. Sethi through December 31, 1999, pursuant to which they will continue to serve the Company in their current positions, at initial salaries of $300,000 and $96,000, respectively. Salaries during calendar year 1999 will be determined by the Compensation Committee of the Board of Directors, as will annual bonuses throughout the employment term. The agreements provide that upon termination of employment by the Company for reasons other than for cause (as defined in the agreements), or death, disability or incapacity, the Company shall pay the executive for his or her then salary for the remaining term of the agreement, without reduction for any compensation received from other sources. Under the agreements, Mr. Desai and Ms. Sethi are subject to noncompetition, nonsolicitation and nondisclosure covenants during the employment term and for two years following termination of employment. STOCK OPTION PLAN The Company's Stock Option and Incentive Plan (the "Stock Option Plan") became effective on April 1, 1997. The aggregate number of shares reserved for issuance under the Stock Option Plan is 2,000,000 shares. Options granted under the Stock Option Plan typically vest in increments of 10%, 20%, 30%, and 40% of the shares subject to the option on the first, second, third and fourth anniversaries, respectively, of the grant date of the option. The purpose of the Stock Option Plan is to provide incentives for employees and non-employee directors to promote the success of the Company, and to enhance the Company's ability to attract and retain the services of such persons. Options granted under the Stock Option Plan may be either: (i) options intended to qualify as "incentive stock options" under Section 422 of the Code; or (ii) non-qualified stock options. The Stock Option Plan also permits the grant of stock appreciation rights in connection with the grant of stock options, and the grant of restricted stock awards, performance shares and annual incentive awards. Stock options and stock awards may be granted under the Stock Option Plan to all employees and non-employee directors of the Company, or of any present or future subsidiary or parent of the Company. The Stock Option Plan is administered by the Board of Directors, which may, and is expected to, delegate administrative responsibility for the Stock Option Plan to the Compensation Committee. The Compensation Committee has the authority to determine exercise prices applicable to the option, the eligible officers, directors or employees to whom options may be granted, the number of shares of the Company's Common Stock subject to each option and the extent to which options may be exercisable. The Compensation Committee also has the authority to determine the recipients and the terms of grants of stock appreciation rights, restricted stock awards, performance share awards and annual incentive awards under the Stock Option Plan. The Compensation Committee is empowered to interpret the Stock Option Plan and to prescribe, amend and rescind the rules and regulations pertaining to the Stock Option Plan. No option is transferable by the optionee other than by will or the laws of descent and distribution, and each option is exercisable, during the lifetime of the optionee, only by such optionee. Any incentive stock option that is granted under the Stock Option Plan may not be granted at a price less than the fair market value of the Company's Common Stock on the date of grant (or less than 110% of fair market value in the case of holders of 10% or more of the total combined voting power of all classes of stock of the Company or a subsidiary or parent of the Company). Non-qualified stock options may be granted at the exercise price established by the Compensation Committee, which may be less than the fair market value of the Company's Common Stock on the date of grant. The annual incentive awards are based on pre-established objective performance goals. Non-qualified stock options, stock appreciation rights and annual incentive awards are intended to comply with the requirements of Section 162(m) of the Code to ensure that such incentive compensation is fully tax deductible. Each option granted under the Stock Option Plan is exercisable for a period not to exceed ten years from the date of grant (or five years in the case of a holder of more than 10% of the total 47

combined power of all classes of stock of the Company or of a subsidiary or parent of the Company) and shall lapse upon expiration of such period, or earlier upon termination of the recipient's employment with the Company, or as determined by the Compensation Committee. Options to purchase 608,750 shares are outstanding under the Stock Option Plan, of which 140,000 options were granted at an exercise price of $2.00 per share on April 1, 1997 and 468,750 options were granted at an exercise price of $7.00 per share on June 2, 1997. Of these options, 10,000 were granted to each of Mr. Baldyga, Mr. Clark and Mr. Kennedy at exercise prices of $2.00 per share. In addition, upon consummation of the offering, the Company intends to grant options to substantially all other employees to purchase in the aggregate approximately 42,000 additional shares at an exercise price equal to the initial offering price of Common Stock offered hereby. Prior to this offering no shares of Common Stock will have been issued upon exercise of options granted under the Stock Option Plan. EMPLOYEE STOCK PURCHASE PLAN The Company's Employee Stock Purchase Plan (the "Stock Purchase Plan") will become effective upon consummation of the offering. A total of 1,000,000 shares of the Company's Common Stock have been reserved for issuance under the Stock Purchase Plan. The Stock Purchase Plan is intended to qualify under Section 423 of the Code. An employee electing to participate in the Stock Purchase Plan must authorize a stated dollar amount or percentage of the employee's regular pay to be deducted by the Company from the employee's pay for the purpose of purchasing shares of Common Stock over a period of six months. The price at which employees may purchase Common Stock will be set by the Compensation Committee of the Board of Directors at not less than the lesser of 85% of the fair market value of the Common Stock on the Nasdaq National Market on the first day of the purchase period or 85% of the fair market value of the Common Stock on the last day of the purchase period. Employees of the Company who have completed six full months of service with the Company and whose customary employment is more than 20 hours per week and five or more months per calendar year are eligible to participate in the Stock Purchase Plan. An employee may not be granted an option under the Stock Purchase Plan if after the granting of the option such employee would be deemed to own 5% or more of the combined voting power of value of all classes of stock of the Company. No employee may be granted an option which, together with options granted under all stock purchase plans of the Company and its subsidiaries, permits the employee to accrue option rights in excess of $25,000 of the fair market value of such shares for any calendar year in which an option is outstanding. The maximum number of shares of Common Stock an employee may purchase during a purchase period shall be determined by the Compensation Committee, but may not exceed 30% of the employee's cash compensation during any purchase period. As of June 1, 1997, approximately 1,318 employees were eligible to participate in the Stock Purchase Plan. The Stock Purchase Plan will be administered by the Compensation Committee. CERTAIN TRANSACTIONS Syntel India is an Indian corporation that the Company has engaged as a subcontractor to perform offshore software development projects. Mr. Desai and Ms. Sethi, the President and Vice President, Corporate Affairs, respectively, and majority shareholders of the Company, own 100% of the capital stock of Syntel India. Syntel India derives substantially all of its revenues from the Company. For the year ended December 31, 1995 and 1996 and for the three month period ended March 31, 1997, the Company purchased services from Syntel India in the amounts of approximately $2,674,000, $4,066,000 and $1,473,000, respectively. Prior to the offering, the Company will enter into a Stock Purchase Agreement to purchase all of the shares of Syntel India from Mr. Desai and Ms. Sethi for $7.0 million in cash. The $7.0 million purchase price is based on a valuation performed by independent chartered accountants in India pursuant to guidelines established by the Reserve Bank of India for acquisitions of Indian corporations. The purchase price for this acquisition will be paid from a portion of the net proceeds of this offering. 48

This acquisition will be completed upon consummation of this offering. Upon consummation of the acquisition, Syntel India will become a wholly-owned subsidiary of the Company. See "Use of Proceeds" and "Management's Discussion and Analysis of Results of Operations and Financial Condition--Syntel India Acquisition". Prior to the consummation of this offering, the Company, Mr. Desai, Ms. Sethi and the Company's other shareholders will enter into a mutual indemnification agreement relating to income tax liabilities of the Company and the shareholders in connection with the termination of the Company's S corporation status. The agreement provides that the shareholders, severally (according to their relative percentage ownership of the Common Stock) and not jointly, will indemnify the Company against any unpaid income tax liability of the Company attributable to the period prior to the termination of the Company's S corporation status. The agreement also provides that the Company will indemnify the shareholders against any income tax liability they may incur as a result of a final adjustment to the taxable income of the Company for any period ending after the termination date of the Company's S corporation status which results in a decrease for any period in the Company's taxable income and a corresponding increase in the taxable income of the shareholders. PRINCIPAL SHAREHOLDERS The following table sets forth information regarding the beneficial ownership of the Company's Common Stock as of June 1, 1997, and as adjusted to reflect the sale of the shares offered by this Prospectus, by Mr. Desai and Ms. Sethi, who each beneficially own in excess of 5% of the outstanding Common Stock of the Company, Mr. Choksi, who will become a director upon the consummation of this offering, and by all executive officers and directors of the Company as a group.
PERCENT OF SHARES BENEFICIALLY OWNED(1) ---------------------BEFORE AFTER OFFERING OFFERING ----------------60% 13,187,500(2) 40% 8,787,500(3) * 25,000(4) 100% 22,000,000

BENEFICIAL OWNERS ----------------Neerja Sethi........................................ Bharat Desai........................................ Paritosh K. Choksi.................................. All directors and executive officers as a group (9 persons)..........................................

NUMBER OF SHARES BENEFICIALLY OWNED -----------13,187,500(2) 8,787,500(3) 25,000(4) 22,000,000

* Less than 1%. (1) Assumes no exercise of the Underwriters' over-allotment option. (2) Includes 7,100,000 shares of Common Stock held in several trusts for the benefit of Ms. Sethi and her descendants, of which trusts Ms. Sethi is a trustee. Ms. Sethi disclaims beneficial ownership of shares held by her spouse, Mr. Desai. The business address of Ms. Sethi is Suite 400, 2800 Livernois, Troy, Michigan 48083. (3) Includes 100,000 shares of Common Stock held in several trusts for the benefit of Mr. Desai's descendants, of which trusts Mr. Desai is a trustee. Mr. Desai disclaims beneficial ownership of shares held by his spouse, Ms. Sethi. The business address of Mr. Desai is Suite 400, 2800 Livernois, Troy, Michigan 48083. (4) Includes 5,000 shares owned by Mr. Choksi's spouse, of which he disclaims beneficial ownership. 49

DESCRIPTION OF CAPITAL STOCK The Company's authorized capital stock consists of 40,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock. As of the consummation of this offering, the Company will have outstanding 25,000,000 shares of Common Stock (25,450,000 if the Underwriters' overallotment option is exercised in full). In addition, the Company has reserved 2,000,000 shares under its Stock Option Plan, of which 140,000 were granted at an exercise price of $2.00 per share on April 1, 1997 and of which 468,750 were granted at an exercise price of $7.00 per share on June 2, 1997. The Company intends to grant options to substantially all of its employees to purchase in the aggregate approximately 42,000 additional shares at an exercise price equal to the initial offering price of the Company's Common Stock offered hereby. Further, the Company has reserved 1,000,000 shares of issuance under the Employee Stock Purchase Plan. No shares of Preferred Stock have been designated or issued. The following description of the capital stock of the Company is a summary and is qualified in its entirety by the provisions of the Company's Articles of Incorporation ("Articles") and Bylaws, copies of which have been filed as exhibits to the Registration Statement of which this Prospectus is a part. COMMON STOCK Subject to the rights of any holder of Preferred Stock, each holder of Common Stock is entitled to one vote per share for the election of directors as well as on other matters, to dividends as, when, and if declared by the Company's Board of Directors, and upon liquidation to share in the net assets of the Company pro rata in accordance with such shareholder's holdings. The Common Stock has no preemptive, redemption, conversion or subscription rights, and all outstanding shares of Common Stock are, and the shares of Common Stock offered by the Company hereby will be, duly authorized, validly issued and fully paid and nonassessable. PREFERRED STOCK The Articles authorize the issuance of Preferred Stock. The Board of Directors has the power, without further action by the shareholders, to divide any and all shares of Preferred Stock into series and to fix and determine the relative rights and preferences of the Preferred Stock, such as the designation of series and the number of shares constituting such series, dividend rights, redemption and sinking fund provisions, liquidation and dissolution preferences, conversion or exchange rights and voting rights, if any. Issuances of Preferred Stock by the Board of Directors may result in such shares having senior dividend and/or liquidation preferences to the holders of shares of Common Stock and may dilute the voting rights of such holders. Issuances of Preferred Stock, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, adversely affect the voting rights of holders of the Common Stock. In addition, the issuance of Preferred Stock could make it more difficult for a third party to acquire a majority of the outstanding voting stock. Accordingly, the issuance of Preferred Stock may be used as an "anti-takeover" device without further action on the part of the shareholders of the Company. The Company has no present plans to issue any shares of Preferred Stock. See "Risk Factors--Anti-Takeover Provisions." CERTAIN PROVISIONS OF THE ARTICLES AND BYLAWS Indemnification. The Articles and Bylaws provide that directors and officers of the Company will be indemnified by the Company to the fullest extent authorized by Michigan law against all expenses and liabilities reasonably incurred in connection with service for or on behalf of the Company. Limitation of Liability. The Articles provide that directors of the Company will not be personally liable for monetary damages to the Company for certain breaches of their fiduciary duty as directors, unless they violated their duty of loyalty to the Company or its shareholders, acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived an improper personal benefit from their actions as directors. This provision would have no effect on the availability of equitable remedies or nonmonetary relief, such an injunction or rescission for breach of 50

the duty of care. In addition, the provision applies only to claims against a director arising out of his role as a director and not in any other capacity (such as an officer or employee of the Company). Further, liability of a director for violations of the federal securities laws will not be limited by this provision. Classified Board; Removal for Cause. The Company's Restated Articles of Incorporation provide that the directors of the Company shall be divided into three classes and serve staggered three-year terms. As a result, approximately one-third of the Board of Directors will be elected each year. Classification of the Board of Directors expands the time required to change the composition of a majority of Directors and may tend to discourage a proxy contest or other takeover bid for the Company. In addition, the Company's Bylaws provide that members of the Board of Directors may be removed by a majority of the shareholders only for cause at a special meeting called for such purpose. Special Meetings; Advance Notice. The Company's Bylaws reserve the authority to call a special shareholder's meeting to the Board of Directors, the Chairman of the Board or the President. In addition, the Company's Bylaws establish an advance notice procedure for the nomination of candidates for election as directors, as well as for other shareholder proposals to be considered at annual shareholders meetings, notice of shareholder proposals and director nominations must be given timely in writing to the Secretary of the Company. Such notice, to be timely, must be received at the principal executive offices of the Company not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; however, in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. ANTI-TAKEOVER STATUTES Upon the effectiveness of this offering, the Company will be subject to the provisions of Chapter 7A and 7B of the Michigan Business Corporation Act ("MBCA"). Chapter 7A provides that business combinations between a Michigan corporation which is subject to Chapter 7A and a beneficial owner of 10% or more of the voting power of such corporation generally require the approval of 90% of the votes of each class of stock entitled to be cast, and at least 2/3 of the votes of each class of stock entitled to be cast other than shares owned by such 10% owner. Such requirements will not apply if: (i) the corporation's board of directors approves the transaction prior to the time the 10% owner becomes such; or (ii) the transaction satisfies certain fairness standards, certain other conditions are met and the 10% owner has been such for at least five years. Chapter 7B of the MBCA provides that "control shares" of a corporation acquired in a control share acquisition have no rights except as granted by the shareholders of the corporation. Control shares are shares that, when added to shares previously owned by a shareholder, increase such shareholder's ownership of voting stock to at least 20%, at least 33 1/3% or a majority of the outstanding voting power of a corporation. A control share acquisition must be approved by a majority of the votes cast by holders of stock entitled to vote excluding shares owned by the acquiror and certain officers and directors. No such approval is required, however, for gifts or acquisitions pursuant to a merger to which the corporation is a party. If a corporation's articles of incorporation or bylaws so provide, control shares acquired in a control share acquisition with respect to which no acquiring person statement has been filed may be redeemed at "fair value" by the corporation at any time during the period ending 60 days after the last control share acquisition. In addition, if a corporation's articles of incorporation or bylaws so provide, control shares may be redeemed at fair value after an acquiring person statement has been filed and after the meeting at which the voting rights of the control shares are submitted to shareholders if the control shares are not accorded full voting rights. In the event control shares acquired in a control share acquisition are accorded full voting rights and the acquiring person has acquired a majority of all voting power of the corporation, the shareholders of the 51

corporation, other than the acquiring person, have dissenters' rights. Fair value means a value not less than the highest price paid per share by the acquiring person in the control share acquisition. TRANSFER AGENT Harris Trust and Savings Bank of Chicago, Illinois will be the Transfer Agent for the Common Stock. SHARES ELIGIBLE FOR FUTURE SALE Upon completion of this offering, there will be 25,000,000 shares of Common Stock outstanding. The 3,000,000 shares (or up to 3,450,000 shares if the Underwriters' over-allotment option is exercised in full) of Common Stock issued and sold in this offering will be freely tradeable (other than by an "affiliate" of the Company as such term is defined in the Securities Act) without restriction under the Securities Act. The remaining shares of Common Stock then outstanding will be deemed "restricted securities" within the meaning of Rule 144 under the Securities Act (the "Restricted Shares") and may be resold only in compliance with the registration provisions of the Securities Act or an exemption thereunder. In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated), including an affiliate, who has beneficially owned Restricted Shares for at least one year from the later of the date such Restricted Shares were acquired from the Company or (if applicable) from an affiliate or the date on which they were fully paid, is entitled to sell within any three-month period a number of shares that does not exceed the greater of 1% of the then-outstanding shares of Common Stock or the average weekly trading volume in the public market as reported through the Nasdaq National Market during the four calendar weeks preceding such sale. Sales under Rule 144 are also subject to certain requirements as to the manner and notice of sale and the availability of public information concerning the Company. Restricted Shares held by affiliates of the Company are subject to the foregoing volume limitations, holding period and other restrictions under Rule 144. Affiliates may sell shares other than Restricted Shares in accordance with the foregoing volume limitations and other restrictions, but without regard to any holding period. Further, under Rule 144(k), if a period of at least two years has elapsed since the later of the date Restricted Shares were acquired from the Company or from an affiliate of the Company or the date on which they were fully paid, a holder of such Restricted Shares who is not an affiliate of the Company at the time of the sale, and has not been an affiliate of the Company for at least three months prior to the sale, would be entitled to sell the shares immediately without regard to volume limitations and the other conditions described above. Prior to this offering, there has been no market for the Common Stock and no prediction can be made as to the effect, if any, that market sales of shares or the availability of such shares for sale will have on the market price of the Common Stock from time to time. Nevertheless, sales of substantial amounts of Common Stock in the public market could have an adverse impact on such market price and the Company's ability to raise additional equity capital. The holders of all of the shares of Common Stock currently outstanding and the Company have agreed that for a period of 180 days after the date of this Prospectus they will not offer, sell or otherwise dispose of any shares of Common Stock, options or warrants to acquire shares of Common Stock or securities exchangeable for or convertible into Common Stock, during the 180-day period following the date of this Prospectus. However, Hambrecht & Quist, LLC, in its sole discretion, may release the shareholders from these lock-up agreements, in whole or in part, at any time without notice. Following the 180-day lock-up period, all of the restricted securities will become eligible for sale, subject to the manner of sale, volume, notice and information requirements of Rule 144 of the Securities Act. See "Risk Factors -- Shares Eligible for Future Sale." 52

UNDERWRITING Subject to certain terms and conditions of the Underwriting Agreement, the underwriters named below (the "Underwriters"), for whom Hambrecht & Quist LLC, Prudential Securities Incorporated and Robertson, Stephens & Company LLC are acting as representatives (the "Representatives"), have severally agreed to purchase from the Company the following respective number of shares of Common Stock:
NAME - ---Hambrecht & Quist LLC....................................... Prudential Securities Incorporated.......................... Robertson, Stephens & Company LLC........................... Total.................................................. NUMBER OF SHARES ---------

--------3,000,000 =========

The Underwriting Agreement provides that the obligations of the Underwriters are subject to certain conditions precedent, including the absence of any material adverse change in the Company's business and the receipt of certain certificates, opinions and letters from the Company, its counsel and independent auditors. The nature of the Underwriters' obligation is such that they are committed to purchase all shares of Common Stock offered hereby if any of such shares are purchased. The Underwriters propose to offer the shares of Common Stock directly to the public at the initial public offering price set forth on the cover page of this Prospectus and to certain dealers at such price less a concession not in excess of $ per share. The Underwriters may allow and such dealers may reallow a concession not in excess of $ per share to certain other dealers. After the initial public offering of the shares, the offering price and other selling terms may be changed by the Representatives. The Representatives have informed the Company that the Underwriters do not intend to confirm sales to any accounts over which they exercise discretionary authority. The Company has granted to the Underwriters an option, exercisable no later than 30 days after the date of this Prospectus, to purchase up to 450,000 additional shares of Common Stock at the initial public offering price, less the underwriting discount, set forth on the cover page of this Prospectus. To the extent that the Underwriters exercise this option, each of the Underwriters will have a firm commitment to purchase approximately the same percentage thereof that the number of shares of Common Stock to be purchased by it shown in the table above bears to the total number of shares of Common Stock offered hereby. The Company will be obligated, pursuant to the option, to sell shares to the Underwriters to the extent the option is exercised. The Underwriters may exercise such option only to cover over-allotments made in connection with the sale of shares of Common Stock offered hereby. The offering of the shares is made for delivery when, as and if accepted by the Underwriters and subject to prior sale and to withdrawal, cancellation or modification of the offering without notice. The Underwriters reserve the right to reject an order for the purchase of shares in whole or in part. The Company has agreed to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act, and to contribute to payments the Underwriters may be required to make in respect thereof. The Company's shareholders have agreed that they will not, without the prior written consent of Hambrecht & Quist LLC, offer, sell or otherwise dispose of any shares of Common Stock, options or warrants to acquire shares of Common Stock or securities exchangeable for or convertible into shares 53

of Common Stock owned by them during the 180-day period following the date of this Prospectus. The Company has agreed that it will not, without the prior written consent of Hambrecht & Quist LLC, offer, sell or otherwise dispose of any shares of Common Stock, options or warrants to acquire shares of Common Stock or securities or exchangeable for or convertible into shares of Common Stock during the 180-day period following the date of this Prospectus, except that the Company may grant options pursuant to the Company's Stock Option Plan provided that, without the prior written consent of Hambrecht & Quist LLC, such options shall not be exercisable during such period. Prior to this offering, there has been no public market for the Common Stock. The initial public offering price for the Common Stock will be determined by negotiation among the Company and the Representatives. Among the factors to be considered in determining the initial public offering price are prevailing market and economic conditions, revenues and earnings of the Company, market valuations of other companies engaged in activities similar to the Company, estimates of the business potential and prospects of the Company, the present state of the Company's business operations, the Company's management and other factors deemed relevant. The estimated initial public offering price range set forth on the cover of this Prospectus is subject to change as a result of market conditions and other factors. Certain persons participating in this offering may overallot or effect transactions which stabilize, maintain or otherwise affect the market price of the Common Stock at levels above those which might otherwise prevail in the open market, including by entering stabilizing bids, effecting syndicate covering transactions or imposing penalty bids. A stabilizing bid means the placing of any bid or effecting of any purchase, for the purpose of pegging, fixing or maintaining the price of the Common Stock. A syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase to reduce a short position created in connection with the offering. A penalty bid means an arrangement that permits the Underwriters to reclaim a selling concession from a syndicate member in connection with the offering when shares of Common Stock sold by the syndicate member are purchased in syndicate covering transactions. Such transactions may be effected on the Nasdaq Stock Market, in the over-the-counter market, or otherwise. Such stabilizing, if commenced, may be discontinued at any time. LEGAL MATTERS The legality of the shares of Common Stock offered hereby and certain other legal matters will be passed upon for the Company by Dykema Gossett PLLC, Bloomfield Hills, Michigan. Certain legal matters will be passed upon for the Underwriters by Sidley & Austin, Chicago, Illinois. EXPERTS The balance sheets as of December 31, 1996 and 1995 and the statements of income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 1996 of Syntel, Inc. included in this Prospectus, have been included herein in reliance upon the report of Coopers & Lybrand, L.L.P., independent accountants, given on the authority of that firm as experts in auditing and accounting. The balance sheet as of December 31, 1996, and the statements of income, stockholders' equity and cash flows for the year ended December 31, 1996 of Syntel India included in this Prospectus, have been included herein in reliance upon the report of Rajkamal Shah & Co., Mumbai, India, independent chartered accountants, given on the authority of that firm as experts in auditing and accounting. 54

ADDITIONAL INFORMATION The Company has filed with the Commission a Registration Statement on Form S-1 under the Securities Act with respect to the Common Stock offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules filed therewith. Statements contained in this Prospectus as to the contents of any contract or any other document referred to are not necessarily complete, and in each instance reference is made to the copy of such contract or document filed as an exhibit to the Registration Statement, each such statement being qualified in all respects by such reference. For further information with respect to the Company and the Common Stock offered hereby, reference is made to the Registration Statement and the exhibits and schedules thereto. The Registration Statement, including the exhibits and schedules thereto, may be inspected without charge at the principal office of the Commission, 450 Fifth Street, N.W., Washington, DC 20549, the New York Regional Office located at 7 World Trade Center, Suite 1300, New York, New York 10048, and the Chicago Regional Office located at 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and copies of all or any part thereof may be obtained at prescribed rates from the Commission's Public Reference Section at its principal office. The Commission maintains a World Wide Web site that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The address of the Commission's World Wide Web site is http://www.sec.gov. 55

INDEX TO FINANCIAL STATEMENTS SYNTEL, INC. AND SYNTEL SOFTWARE PRIVATE LIMITED
PAGES ----------F-2 F-3 F-4 F-4

PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) Basis of Presentation.................................. Pro Forma Consolidated Balance Sheet................... Pro Forma Consolidated Statement of Income............. Notes to Pro Forma Consolidated Financial Statements... FINANCIAL STATEMENTS Report of Independent Accountants on the financial statements of Syntel, Inc. as of December 31, 1995 and 1996 and for each of the three years in the period ended December 31, 1996......................................... Syntel, Inc. Balance Sheets as of December 31, 1995, 1996 and March 31, 1997............................... Syntel, Inc. Statement of Income for the year ended December 31, 1994, 1995, 1996 and for three months ended March 31, 1996 and 1997.................................................. Syntel, Inc. Statement of Shareholders' Equity for the year ended December 31, 1994, 1995, 1996 and for three months ended March 31, 1997........................... Syntel, Inc. Statement of Cash Flows for the year ended December 31, 1994, 1995 and 1996 and for the three months ended March 31, 1996 and 1997.................. Syntel, Inc. Notes to Financial Statements............. Report of Independent Chartered Accountants on the financial statements of Syntel Software Private Limited as of and for the year ended December 31, 1996...................... Syntel Software Private Limited Balance Sheet as of December 31, 1996 and March 31, 1997.................. Syntel Software Private Limited Statement of Income for the year ended December 31, 1996 and for the three months ended March 31, 1997........................... Syntel Software Private Limited Statement of Stockholders' Equity for the year ended December 31, 1996 and the three months ended March 31, 1997........ Syntel Software Private Limited Statement of Cash Flows for the year ended December 31, 1996 and for the three months ended March 31, 1997........................... Syntel Software Private Limited Notes Forming Part of Accounts..............................................

F-5 F-6

F-7 F-8 F-9 F-10 F-13 F-14 F-15 F-16 F-17 F-18

F-1

SYNTEL, INC. AND SUBSIDIARY PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) BASIS OF PRESENTATION The following Pro Forma Consolidated Balance Sheet as of March 31, 1997 and the Pro Forma Consolidated Statement of Income for the year ended December 31, 1996 and the three months ended March 31, 1997 give effect to the issuance and sale by the Company of 3,000,000 shares of Common Stock, the application of estimated net proceeds therefrom, including the Syntel India acquisition, and the Company's conversion from an S corporation to a C corporation for U.S. federal and state income tax purposes. The Pro Forma Consolidated Balance Sheet as of March 31, 1997 is presented as if the application of estimated net proceeds including the Syntel India acquisition and the conversion from an S corporation to a C corporation for U.S. federal and state income tax purposes had taken place on January 1, 1996. The Pro Forma Consolidated Statement of Income for the year ended December 31, 1996 and three months ended March 31, 1997 presents the pro forma results of operations assuming the above described transactions had occurred January 1, 1996. The unaudited Pro Forma Consolidated Financial Statements have been prepared based upon the historical financial statements of Syntel, Inc. and Syntel India for the periods stated above. Such pro forma statements are presented for informational purposes only and may not be indicative of the results that would have occurred if the Syntel India acquisition and the conversion from an S corporation to a C corporation for U.S. federal and state income tax purposes had been consummated on the dates indicated, or of the operating results that may be achieved in the future. The pro forma statements should be read in conjunction with the financial statements and notes to financial statements contained elsewhere herein. F-2

SYNTEL, INC. AND SUBSIDIARY PRO FORMA CONSOLIDATED BALANCE SHEET (UNAUDITED) (IN THOUSANDS)
MARCH 31, 1997 -----------------------------------------------------SYNTEL PRO FORMA SYNTEL, INC. INDIA ADJUSTMENTS CONSOLIDATED -------------------------------------$ 3,942 20,741 4,446 ------29,129 6,277 3,003 ------3,274 ------$32,403 ======= $ 938 5,163 3,286 7,000 4,728 -------21,115 -------21,115 ------1 -$1,463 1,229 391 -----3,083 1,905 699 -----1,206 -----$4,289 ====== $ 277 ----42 -----319 ------319 -----160 -$27,300(a) (7,000)(d) (1,222)(e) -------19,078 ---------------$19,078 ======= --(1,222)(e) --1,159 (b) ------(63) 3,477 (b) ------3,414 ------(160)(d) 27,300 (a) 11,287 (c) (3,030)(d) (4,636)(b) (11,287)(c) (3,959)(d) 149 (d) ------15,664 ------$19,078 ======= $ $25,705 20,748 4,837 ------51,290 8,182 3,702 ------4,480 ------$55,770 ======= $ 1,215 5,163 2,064 7,000 4,728 1,201 ------21,371 3,477 ------24,848 ------1 30,921

Current assets: Cash and cash equivalents........... Accounts receivable, net............ Other current assets................ Total current assets........... Property and equipment................... Less accumulated depreciation....... Property and equipment, net....

Current liabilities: Accounts payable.................... Accrued payroll and related costs... Other accrued liabilities........... Dividends payable................... Deferred revenue.................... Income taxes payable................ Total current liabilities...... Income taxes payable..................... Total liabilities.............. Common stock............................. Additional paid-in capital...............

Retained earnings........................ Cumulative translation adjustment........ Total shareholders' equity.....

11,287 -------11,288 ------$32,403 =======

3,959 (149) -----3,970 -----$4,289 ======

--------30,922 ------$55,770 =======

(a) Reflects the sale of shares of Common Stock by the Company and the application of the estimated net proceeds of $27.3 million therefrom. (b) Reflects the recording of the net current and deferred tax liabilities upon termination of the Company's S corporation status. (c) Reflects the transfer of undistributed accrual basis earnings to additional paid-in capital. (d) Reflects the acquisition of Syntel India for $7.0 million accounted for on the carryover basis of accounting with the excess purchase price $3.0 million treated as a reduction of equity. (e) Reflects the elimination of the intercompany balances between the Company and Syntel India. F-3

SYNTEL, INC. AND SUBSIDIARY PRO FORMA CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) (IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR ENDED DECEMBER 31, 1996 --------------------------------------------------------PRO FORMA SYNTEL, INC. SYNTEL INDIA ADJUSTMENTS CONSOLIDATED -------------------------------------------$92,237 $4,159 $(4,066) (a) $92,330 69,783 1,366 (4,066) (a) 67,083 -----------------------22,454 2,793 25,247 18,261 ------4,193 299 ------4,492 321 ------$ 4,171 ======= 1,010 -----1,783 (150) -----1,633 29 -----$1,604 ====== 42 ------(42) -------(42) 1,379 (c) ------$(1,421) ======= (b) 19,313 ------5,934 149 ------6,083 1,729 ------$ 4,354 ======= $ 0.17 ======= 25,135 ======= THREE MONTHS ENDED MARCH 31, 1997 ----------------------------------------------------------PRO FORMA SYNTEL, INC. SYNTEL INDIA ADJUSTMENTS CONSOLIDATED -------------------------------------------$26,262 $1,505 $(1,473) (a) $26,294 19,894 471 (1,473 (a) 18,892 -----------------------6,368 1,034 7,402 5,060 ------1,308 75 ------1,383 -------$ 1,383 ======= 335 -----699 46 -----745 12 -----$ 733 ====== 21 ------(21) -------(21) 520 (c) ------$ (541) ======= (b) 5,416 ------1,986 121 ------2,107 532 ------$ 1,575 ======= $ 0.06 ======= 25,197 =======

Revenues................. Cost of revenues......... Gross profit............. Selling, general and administrative expenses................ Income from operations.............. Other income (expense), net..................... Income before income taxes................... Income taxes............. Net income............... Net income per share(d)................ Pro forma weighted average common shares outstanding.............

Revenues................. Cost of revenues......... Gross profit............. Selling, general and administrative expenses................ Income from operations.............. Other income (expense), net..................... Income before income taxes................... Income taxes............. Net income............... Net income per share(d)................ Pro forma weighted average common shares outstanding.............

(a) Reflects the elimination of the intercompany transactions between the Company and Syntel India. (b) Reflects the compensation component associated with the granting of stock options on April 1, 1997. (c) Reflects the provision for federal and state income taxes at the effective income tax rate as if the Company had been taxed as a C corporation. The tax provision was computed as follows:
YEAR ENDED DECEMBER 31, 1996 ----------------34.0% 2.7 (8.6) 0.3 ----THREE MONTHS ENDED MARCH 31, 1997 -----------------34.0% 2.4 (11.3) 0.1 ------

Statutory U.S. federal income tax rate................. State income taxes, net of federal tax benefit......... Tax rate impact from foreign earnings, exempt from foreign taxes........................................ Other..................................................

28.4% =====

25.2% ======

(d) Earnings per share are based on weighted average common shares outstanding and the impact of unexercised stock options using the treasury stock method computed as follows:
YEAR ENDED THREE MONTHS ENDED DECEMBER 31, 1996 MARCH 31, 1997 ---------------------------------(IN THOUSANDS) 25,000 25,000 135 ------25,135 ======= 197 ------25,197 =======

Weighted average common shares outstanding........... Dilutive effect assuming exercise of certain stock options............................................ Weighted average common shares outstanding...........

F-4

REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Syntel, Inc.: We have audited the accompanying balance sheet of Syntel, Inc. as of December 31, 1996 and 1995, and the related statements of income, shareholders' equity, and cash flows for each of the three years in the period ended December 31, 1996. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statement based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Syntel, Inc. as of December 31, 1996 and 1995, and the results of its operations and cash flows for the three years in the period ended December 31, 1996, in conformity with generally accepted accounting principles. COOPERS & LYBRAND, L.L.P. Detroit, Michigan February 28, 1997 F-5

SYNTEL, INC. BALANCE SHEET
DECEMBER 31, ------------------------1995 1996 --------------------ASSETS Current assets: Cash and cash equivalents........................ Accounts receivable, net......................... Advance billings................................. Employee and other advances...................... Deposits......................................... Total current assets........................ Property and equipment................................ Less accumulated depreciation.................... Property and equipment, net................. MARCH 31, 1997 ----------(UNAUDITED) $ 3,942,024 20,741,395 3,370,334 982,211 93,560 ----------29,129,524 6,276,614 3,002,676 ----------3,273,938 ----------$32,403,462 =========== $ 938,004 5,162,630 3,286,405 7,000,000 4,728,712 ----------21,115,751

LIABILITIES Current liabilities: Accounts payable................................. Accrued payroll and related costs................ Other accrued liabilities........................ Dividends payable................................ Deferred revenue................................. Total current liabilities................... SHAREHOLDERS' EQUITY Common stock, $1 par value per share, 1,000 shares authorized, issued and outstanding.................. Retained earnings..................................... Total shareholders' equity..................

$ 7,681,748 16,838,704 -316,614 90,812 ----------24,927,878 4,413,299 1,463,390 ----------2,949,909 ----------$27,877,787 =========== $ 1,084,574 7,698,352 1,360,524 ------------10,143,450 1,000 17,733,337 ----------17,734,337 ----------$27,877,787 ===========

$ 5,277,388 20,588,748 -332,236 90,101 ----------26,288,473 6,001,087 2,640,313 ----------3,360,774 ----------$29,649,247 =========== $ 1,140,510 8,019,218 2,307,474 7,000,000 1,276,910 ----------19,744,112 1,000 9,904,135 ----------9,905,135 ----------$29,649,247 ===========

1,000 11,286,711 ----------11,287,711 ----------$32,403,462 ===========

The accompanying notes are an integral part of the financial statements. F-6

SYNTEL, INC. STATEMENT OF INCOME
YEAR ENDED DECEMBER 31, ----------------------------------------1994 1995 1996 ------------------------------Revenues....................... Cost of revenues............... Gross profit................... Selling, general and administrative expenses...... Income from operations......... Other income (expense), net.... Income before income taxes..... State income taxes............. Net income................ Pro forma income data (unaudited)(1): Income before income taxes..... Pro forma income taxes......... Pro forma net income......... Pro forma net income per share........................ Pro forma weighted average common shares outstanding.... $67,247,016 55,936,542 ----------11,310,474 8,209,000 ----------3,101,474 (68,966) ----------3,032,508 -----------$ 3,032,508 =========== $90,325,724 71,537,550 ----------18,788,174 13,309,366 ----------5,478,808 186,286 ----------5,665,094 427,877 ----------$ 5,237,217 =========== $92,236,968 69,783,193 ----------22,453,775 18,260,622 ----------4,193,153 299,122 ----------4,492,275 321,477 ----------$ 4,170,798 =========== $ 4,492,275 1,717,000 ----------$ 2,775,275 =========== $ 0.13 =========== 22,134,830 =========== THREE MONTHS ENDED MARCH 31, -------------------------1996 1997 --------------------(UNAUDITED) $21,861,696 $26,262,190 16,746,014 19,893,773 --------------------5,115,682 6,368,417 4,075,240 ----------1,040,442 124,029 ----------1,164,471 -----------$ 1,164,471 =========== 5,060,488 ----------1,307,929 74,647 ----------1,382,576 -----------$ 1,382,576 =========== $ 1,382,576 529,000 ----------$ 853,576 =========== $ 0.04 =========== 22,197,489 ===========

(1) Presentation as if the Company was a C corporation during the periods presented. The accompanying notes are an integral part of the financial statements. F-7

SYNTEL, INC. STATEMENT OF SHAREHOLDERS' EQUITY FOR THE YEAR ENDED DECEMBER 31, 1994, 1995 AND 1996 AND FOR THREE MONTHS ENDED MARCH 31, 1997
COMMON STOCK --------------SHARES AMOUNT ----------1,000 $1,000 -----------1,000 1,000 -----------1,000 1,000 -------------1,000 1,000 --------------1,000 ===== ------$1,000 ====== RETAINED EARNINGS ----------$ 9,463,612 3,032,508 ----------12,496,120 5,237,217 ----------17,733,337 4,170,798 12,000,000 ----------9,904,135 ----------1,382,576 ----------$11,286,711 =========== SHAREHOLDERS' EQUITY ------------$ 9,464,612 3,032,508 ----------12,497,120 5,237,217 ----------17,734,337 4,170,798 12,000,000 ----------9,905,135 ----------1,382,576 ----------$11,287,711 ===========

Balance, January 1, 1994....................... Net income..................................... Balance, December 31, 1994..................... Net income..................................... Balance, December 31, 1995..................... Net income..................................... Dividends declared............................. Balance, December 31, 1996..................... Net income for three months ended March 31, 1997 (unaudited)............................. Balance, March 31, 1997 (unaudited)............

The accompanying notes are an integral part of the financial statements. F-8

SYNTEL, INC. STATEMENT OF CASH FLOWS
YEAR ENDED DECEMBER 31, --------------------------------------1994 1995 1996 ------------------------------Cash flows from operating activities: Net income............................ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation..................... Changes in assets and liabilities: Accounts receivable, net..... Advance billings............. Employee and other advances................... Deposits..................... Accounts payable............. Accrued payroll and related costs...................... Deferred revenue............. Other accrued liabilities.... Net cash provided by operating activities..................... Cash flows used in investing activities, property and equipment expenditures..... Cash flows from financing activities: Net payments on bank line of credit... Dividend payments..................... Net cash used in financing activities..................... Net increase (decrease) in cash and cash equivalents............................. Cash and cash equivalents, beginning of year.................................... Cash and cash equivalents, end of year.... Cash paid during the year for interest.... Cash paid during the year for income taxes................................... $ 3,032,508 ----------$ 5,237,217 ----------$ 4,170,798 ----------THREE MONTHS ENDED MARCH 31, ------------------------1996 1997 --------------------(UNAUDITED) $ 1,164,471 ----------$ 1,382,576 -----------

231,524 (5,518,029) -(414,271) (167,499) 1,310,076 2,631,099 (766,856) 68,952 ----------407,504 (574,168) ----------(60,000) -----------(60,000) ----------(226,664) 226,664 -----------=========== $ 69,918 =========== -===========

904,084 3,338,475 -658,041 88,332 (621,930) 425,093 30,000 957,449 ----------11,016,761 (2,995,013) ----------(340,000) -----------(340,000) ----------7,681,748 -----------$ 7,681,748 =========== $ 37,784 =========== -===========

1,176,923 (3,750,044) -(15,622) 711 55,936 320,866 1,276,910 946,950 ----------4,183,428 (1,587,788) -----------(5,000,000) ----------(5,000,000) ----------(2,404,360) 7,681,748 ----------$ 5,277,388 =========== $ 928 =========== $ 723,003 ===========

266,052 1,804,182 -(109,727) (37,573) (460,123) (1,484,618) 46,442 934,640 ----------2,123,746 (148,241) ---------------------------------1,975,505 7,681,748 ----------$ 9,657,253 =========== -=========== -===========

362,363 (829,427) (3,370,334) 26,805 (3,459) (202,506) (2,886,956) 3,451,802 1,009,299 ----------(1,059,837) (275,527) ---------------------------------(1,335,364) 5,277,388 ----------$ 3,942,024 =========== -=========== -===========

The accompanying notes are an integral part of the financial statements. F-9

SYNTEL, INC. NOTES TO FINANCIAL STATEMENTS 1. BUSINESS: Syntel, Inc. (the "Company") provides professional information technology staffing and outsourcing services. The Company provides services to customers primarily in the financial, manufacturing, transportation, retail and information/communications industries, as well as to government entities. While contracts with customers are generally terminable by the customer without penalty, the Company's largest customer is currently under contract. In addition, the Company has a history of repeat business among its customer base. During the year ended December 31, 1994, 1995 and 1996, there were sales to two major customers that exceeded 10 percent of total revenues. Sales to these customers approximated: 1994 Customer A, $12,018,000 (17.9 percent), Customer B, $14,202,000 (21.1 percent); 1995 Customer A, $34,084,000 (37.7 percent), Customer B, $12,455,000 (13.8 percent) and 1996 Customer A, $30,980,000 (33.6 percent), Customer B, $10,757,000 (11.7 percent). At December 31, 1995 and 1996, approximately 31 and 30 percent of accounts receivable, net were from these two customers, respectively. Although management does not believe the Company will lose a significant customer, the loss of any significant customer could have a material adverse affect on the Company's business, operating results and financial condition. 2. SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES: a. Interim Financial Information: The unaudited interim financial statements as of March 31, 1997 and 1996 and for each of the three months then ended include, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to present fairly the Company's financial position, results of operations, and cash flows. Operating results for the three months ended March 31, 1997 are not necessarily indicative of the results that may be expected for the year ended December 31, 1997. b. Revenue Recognition: The Company recognizes revenues from time and material contracts as services are rendered and costs are incurred. Revenues from fixed-price contracts are recognized on the percentage-of-completion method, measured by the percentage of cost incurred to date to the estimated total cost at completion. The cumulative impact of any revision in estimates of the percentage complete or losses on contracts is reflected in the year in which the changes become known. c. Cash and Cash Equivalents: For the purpose of reporting cash and cash equivalents, the Company considers all liquid investments purchased with a maturity of three months or less to be cash equivalents. d. Financial Instruments: The carrying amount of cash equivalents, trade receivables, trade payables and line-of-credit borrowings approximate fair value because of the short-term nature of these instruments. e. Property and Equipment: Property and equipment are stated at cost. Maintenance and repairs are charged to expense when incurred. Depreciation is computed primarily using the straight-line method over the estimated useful lives of the assets ranging from three to five years. Upon sale or retirement, the cost of assets and related accumulated depreciation is eliminated from the respective accounts, and the resulting gain or loss is included in operations. f. Income Taxes: In January 1990 the Company elected to be taxed as an S Corporation under Section 1361 of the Internal Revenue Code. Accordingly, federal and certain state income taxes are not F-10

SYNTEL, INC. NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 2. SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED): reflected in the financial statements since the tax attributes of the Company flow directly to the shareholders and are included in their individual tax returns. g. Estimates: Use of estimates, as determined by management, are required in the preparation of financial statements in conformity with generally accepted accounting principles. Actual results could differ from estimates. 3. PROPERTY AND EQUIPMENT: Cost of property and equipment at December 31, 1995 and 1996 is summarized as follows:
1995 ---------$2,613,672 1,718,814 80,813 ---------4,413,299 1,463,390 ---------$2,949,909 ========== 1996 ---------$3,508,776 2,462,341 29,970 ---------6,001,087 2,640,313 ---------$3,360,774 ==========

Computer equipment and software............................. Furniture and equipment..................................... Leasehold improvements...................................... Accumulated depreciation....................................

4. LINE OF CREDIT: The Company has a line of credit with a bank which will expire August 31, 1997 which provides for borrowings up to the lesser of $20,000,000 or 80 percent of certain accounts receivable. Borrowings under the line of credit are collateralized by accounts receivable. Interest is computed on the basis of the Company's option at (i) the Eurodollar Rate plus the applicable Eurodollar Margin, (ii) the bank's prime rate or (iii) a negotiated rate, as defined. The Company also has a line of credit with a bank which will expire August 31, 1997 which provides for borrowings up to $10,000,000 to finance acquisitions. 5. LEASES: The Company leases certain facilities and equipment under operating leases. Current operating lease obligations are expected to be renewed or replaced upon expiration. Future minimum payments under noncancelable leases as of December 31, 1996 are as follows:
1997........................................................ 1998........................................................ 1999........................................................ 2000........................................................ 2001........................................................ $1,571,567 1,541,580 851,112 539,440 445,118 ---------$4,948,817 ==========

Total rent expense charged to operations amounted to approximately $385,000, $1,207,000 and $1,342,000 for the year ended December 31, 1994, 1995 and 1996, respectively. 6. RELATED PARTY: The Company purchases services from Syntel Software Private Limited, an affiliated company through common ownership located in Mumbai, India ("Syntel India"). The Company purchased approximately $1,410,000, $2,674,000, $4,066,000 of services from Syntel India for the year ended December 31, 1994, 1995 and 1996, respectively. The amount payable to this affiliate at December 31, 1996 was $179,695. There were no amounts due to the affiliate at December 31, 1995. F-11

SYNTEL, INC. NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 7. SUBSEQUENT EVENTS (UNAUDITED): The Company is in the process of preparing an initial public offering registration statement for the purpose of selling common stock securities. In connection with the offering, related transactions will include the acquisition of Syntel India, adoption of incentive stock plans (which will be accounted for in accordance with APB No. 25 with appropriate disclosures being made in accordance with SFAS No. 123) and the termination of the Company's S corporation status. F-12

RAJKAMAL R. SHAH RAJKAMAL SHAH & CO. B. Com. (Hons.) LL.B., F.C.A. CHARTERED ACCOUNTANTS - ------------------------------------------------------------ 311 BHAVESHWAR MARKET, M. G. ROAD GHATKOPAR (EAST), BOMBAY-400 077, Tel.: 512 72 56 Tel./Fax: 514 37 28

REPORT OF INDEPENDENT ACCOUNTANTS To the Board of Directors of Syntel Software Private Limited: We have audited the accompanying balance sheet of Syntel Software Private Limited as on December 31, 1996 and the related statements of income, stockholders' equity, and cash flows for the year then ended. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Syntel Software Private Limited as on December 31, 1996 and the results of its operations and cash flows for the year then ended, in conformity with generally accepted accounting principles. For Rajkamal Shah & Co. Rajkamal Shah Proprietor, Mumbai, India March 20, 1997 F-13

SYNTEL SOFTWARE PRIVATE LIMITED BALANCE SHEET (IN U.S. DOLLARS)
DECEMBER 31, 1996 ----------------ASSETS Current assets: Cash and cash equivalents.......................... Accounts receivable................................ Employee and other advances........................ Deposits and interest accrued...................... Total current assets............................. Property and equipment: Less accumulated depreciation...................... Property and equipment, net...................... MARCH 31, 1997 -------------(UNAUDITED) $1,462,883 1,228,665 224,626 166,565 ---------3,082,739 1,905,387 699,137 ---------1,206,250 ---------$4,288,989 ========== $ 277,254 42,026 ----------319,280

LIABILITIES Current liabilities: Accounts payable................................... Accrued income tax................................. Advance from customer.............................. Total current liabilities........................ STOCKHOLDERS' EQUITY Common stock, 500,000 shares issued, subscribed and paid up.................................................... Retained earnings....................................... Accumulated translation adjustments..................... Total stockholders' equity.........................

$2,055,193 343,038 165,084 17,893 ---------2,581,208 1,549,771 607,579 ---------942,192 ---------$3,523,400 ========== $ 242,715 30,960 9,771 ---------283,446 160,411 3,225,928 (146,385) ---------3,239,954 ---------$3,523,400 ==========

160,411 3,959,275 (149,977) ---------3,969,709 ---------$4,288,989 ==========

The accompanying notes are an integral part of the financial statements. F-14

SYNTEL SOFTWARE PRIVATE LIMITED STATEMENT OF INCOME (IN U.S. DOLLARS)
YEAR ENDED DECEMBER 31, 1996 ----------------Revenues.................................. Cost of revenues.......................... Gross profit.............................. Selling, general and administrative expenses................................ Income from operations.................... Other income (expense): Interest income...................... Miscellaneous income (expense)....... Income tax expense................... Provision for doubtful loan.......... Net income........................... $4,158,719 1,366,191 ---------2,792,528 1,010,078 ---------1,782,450 71,200 (2,836) (28,888) (217,681) ---------$1,604,245 ========== THREE MONTHS ENDED MARCH 31, 1997 -----------------(UNAUDITED) $1,505,144 470,587 ---------1,034,557 335,429 ---------699,128 23,403 22,433 (11,617) ----------$ 733,347 ==========

The accompanying notes are an integral part of the financial statements. F-15

SYNTEL SOFTWARE PRIVATE LIMITED STATEMENT OF STOCKHOLDERS' EQUITY (IN U.S. DOLLARS)
COMMON STOCK ------------------SHARES AMOUNT -------------500,000 $160,411 -----------------500,000 $160,411 ======= ======== --------500,000 ======= ---------$160,411 ======== RETAINED EARNINGS ---------$1,474,590 1,604,245 708 ---------$3,079,543 ========== 733,347 (3,592) ---------$3,809,298 ========== $ STOCKHOLDERS' EQUITY ------------$1,635,001 1,604,245 708 ---------$3,239,954 ========== 733,347 (3,592) ---------$3,969,709 ========== $

Balance, January 1, 1996....................... Net income..................................... Translation adjustments........................ Balance, December 31, 1996..................... Net income for three months ended March 31, 1997......................................... Translation adjustments........................ Balance, March 31, 1997 (unaudited)............

The accompanying notes are an integral part of the financial statements. F-16

SYNTEL SOFTWARE PRIVATE LIMITED STATEMENT OF CASH FLOWS (IN U.S. DOLLARS)
YEAR ENDED DECEMBER 31, 1996 ----------------Cash flows from operating activities: Net income................................... Adjustments to reconcile net income to net cash provided by operating activities: Depreciation charges, net............... Changes in assets and liabilities: Accounts receivable................ Employee and other advances, net... Deposits and interest accrued...... Accounts payable................... Accrued income tax................. Advance from customer.............. Translation adjustment............................ Net cash provided by operating activities:........ Cash flow used in investing activities, purchases of property and equipment....................... Net increase in cash.............................. Cash and cash equivalents, beginning of year...... Cash and cash equivalents, end of period.......... $1,604,245 264,590 (343,038) (6,464) 1,016 193,062 29,478 4,299 708 ---------1,747,896 (549,718) ---------1,198,178 857,015 ---------$2,055,193 ========== THREE MONTHS ENDED MARCH 31, 1997 -----------------(UNAUDITED) $ 733,347 91,558 (885,627) (59,542) (148,672) 34,539 11,066 (9,771) (3,592) ---------(236,694) (355,616) ---------(592,310) 2,055,193 ---------$1,462,883 ==========

The accompanying notes are an integral part of the financial statements. F-17

SYNTEL SOFTWARE PRIVATE LIMITED NOTES FORMING PART OF ACCOUNTS AS ON DECEMBER 31, 1996 1. BUSINESS: Syntel Software Private Limited ("Syntel India") is engaged in the business of software development, maintenance, support, conversion and consultancy services. Substantially all of the revenues of Syntel India, are attributable to Syntel, Inc., an affiliated company through common ownership. 2. SUMMARY OF CERTAIN SIGNIFICANT ACCOUNTING POLICIES: a. The unaudited interim financial statements as of March 31, 1997 and 1996 and for each of the three months then ended include, in the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary to present fairly Syntel India's financial position, results of operations, and cash flows. Operating results for the three months ended March 31, 1997 are not necessarily indicative of the results that may be expected for the year ended December 31, 1997. b. Syntel India's software development center is located in a free trade zone in India. Syntel India is, therefore, entitled to claim tax holiday for a period of five years from April 1, 1995 through March 31, 2000, in respect of its export profits. Income Tax expenses in respect of income from non-export activities is accounted as per Indian Income Tax Laws. c. Revenue from software exports is recognized based on contractual obligations and as services are rendered and approved by customers. d. Depreciation is charged to revenue using straight line method over estimated useful life of the assets as follows. - Computer Equipment and Software -- 3 years - Furniture and Fixture -- 7 years - Transport Equipment -- 3 years - Leasehold Improvement comprise capital expenditure on renovating leasehold premises, and are amortized proportionately over extended leasehold option period which is 10 years. e. Property and equipments are stated at cost and do not include equipment received from Syntel, Inc. for execution of projects on no charge basis which amounted to US $315,536 as on December 31, 1996. Upon sale or retirement, the cost of assets and related accumulated depreciation is eliminated from the respective accounts, and resulting gain or loss is included in general expenses. f. Income from software exports is accounted at exchange rate at which remittances are received. g. For the purpose of translation from functional currency (Indian Rupees) to reporting currency the weighted average rate ($1.00 = Rs.36.59) is used for translating revenues and expenses and the year end rate ($1.00 = Rs.35.82) is used for translating assets and liabilities. The common stock and retained earnings are translated at historical rates. F-18

SYNTEL SOFTWARE PRIVATE LIMITED NOTES FORMING PART OF ACCOUNTS AS ON DECEMBER 31, 1996 -- (CONTINUED) 3. PROPERTY AND EQUIPMENT: Cost of property and equipment at December 31, 1996 is summarized as follows:
US$ ---------$ 574,268 667,463 269,610 38,430 ---------1,549,771 607,579 ---------$ 942,192 ==========

Computer equipment and software............................. Furniture and fixture and other equipment................... Leasehold improvement....................................... Transport equipment......................................... Total....................................................... Accumulated depreciation.................................... Balance.....................................................

4. RELATED PARTY TRANSACTIONS: Syntel India exports software to Syntel, Inc., an affiliated company through common ownership. The software exports to Syntel, Inc. for the year ended December 31, 1996 amounted to US$4,065,514. The net amount receivable from Syntel, Inc. in respect of software exports was US$179,695 as on December 31, 1996. 5. LEASES: Syntel India has acquired premises measuring 1,919 square metres on leases for a period of five years each, which are expected to be renewed upon expiration, for further period of five years. Lease rental expenses charged to operations amount to US$16,636 for the year ended December 31, 1996. The dates of expiry of present leases are as follows.
UNIT NO. AREA SQUARE METRES - -------- -----------------76A 320 76B 320 69 751 96 528 LEASE EXPIRY DATES -----------------October 14, 1997 December 31, 1997 September 8, 1998 September 30, 1998

6. Syntel India has paid contributions to the Employee Provident Fund amounting to US$19,145 for the year ended December 31, 1996 into the Government Provident Fund Account. Provision for the other retirement benefits are not yet applicable to the company as per Indian Laws. The same will be provided out of revenue as and when they become applicable. F-19

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY TO ANY PERSON IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL OR TO ANY PERSON TO WHOM IT IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.

TABLE OF CONTENTS
PAGE ---3 7 14 14 15 16 17 18 19 20 30 44 48 49 50 52 53 54 54 55 F-1

Prospectus Summary............... Risk Factors..................... Use of Proceeds.................. Prior S Corporation Status and Distribution................... Dividend Policy.................. Capitalization................... Dilution......................... Selected Financial Data.......... Pro Forma Consolidated Statement of Income Data................. Management's Discussion and Analysis of Financial Condition and Results of Operations...... Business......................... Management....................... Certain Transactions............. Principal Shareholders........... Description of Capital Stock..... Shares Eligible for Future Sale........................... Underwriting..................... Legal Matters.................... Experts.......................... Additional Information........... Index to Financial Statements....

UNTIL , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

3,000,000 SHARES SYNTEL LOGO COMMON STOCK

PROSPECTUS HAMBRECHT & QUIST PRUDENTIAL SECURITIES INCORPORATED ROBERTSON, STEPHENS & COMPANY , 1997

PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION The following table sets forth the estimated expenses and costs (other than underwriting discounts) expected to be incurred by the Company in connection with the issuance and distribution of the securities being registered under this registration statement. Except for the Securities and Exchange Commission, NASD and Nasdaq fees, all expenses have been estimated and are subject to future contingencies.
Securities and Exchange Commission registration fee......... NASD Fee.................................................... Nasdaq National Market Listing Fee.......................... Printing and engraving expenses............................. Legal fees and expenses..................................... Accounting fees and expenses................................ Blue Sky fees and expenses.................................. Transfer agent and registrar fees and expenses.............. Miscellaneous............................................... Total.................................................. $ 11,500 4,295 50,000 175,000 135,000 100,000 5,000 5,000 114,205 -------$600,000 ========

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS Sections 561 through 571 of the Michigan Business Corporation Act (the "MBCA") govern the indemnification of officers, directors and other persons. In this regard, the MBCA provides for indemnification of directors and officers acting in good faith and in a manner they reasonably believe to be in, or not opposed to, the best interest of the Company or its shareholders (and, with respect to a criminal proceeding, if they have no reasonable cause to believe their conduct to be unlawful). Such indemnification may be made against (a) expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred in connection with any threatened, pending or completed action, suit or proceeding (other than an action by, or in the right of, the Company) arising by reason of the fact that they were serving as a director, officer, employee or agent of the Company (or some other entity at the Company's request), and (b) expenses (including attorneys' fees) and amounts paid in settlement actually and reasonably incurred in connection with a threatened, pending or completed action or suit by, or in the right of, the Company, unless the director or officer is found liable to the Company and an appropriate court does not determine that he or she is nevertheless fairly and reasonably entitled to indemnification. The MBCA requires indemnification for expenses to the extent that a director or officer is successful in defending against any such action, suit or proceeding, and otherwise required in general that the indemnification provided for in (a) and (b) above be made only on a determination by a majority vote of a quorum of the Board of Directors comprised of members who were not parties to or threatened to be made parties to such action. In certain circumstances, the MBCA further permits advances to cover such expenses before a final determination that indemnification is permissible, upon receipt of (i) a written standard by the director or officer of his or her good faith belief that he or she has met the applicable affirmation of conduct set forth in the MBCA, and (ii) a written undertaking by or on behalf of the director or officer to repay such amounts unless it shall ultimately be determined that he or she is entitled to indemnification and a determination that the facts then known to those making the advance would not preclude indemnification. The Company's Articles of Incorporation provide the same indemnification rights at the MBCA. Subject to the exceptions recited in the following sentence, the Company's Articles of Incorporation provide that no director shall be personally liable to the Company or its shareholders for damages for breach of his or her duty as a director. Such exculpatory language does not, however, eliminate or II-1

limit the liability of a director for (a) breach of the duty of loyalty, (b) acts or omissions that are not in good faith or involve intentional misconduct or a knowing violation of the law, (c) certain other violations of the Michigan Business Corporation Act, or (d) responsibility in respect of any transaction from which the director has derived an improper personal benefit. The MBCA permits the Company to purchase insurance on behalf of its directors and officers against liabilities arising out of their positions with the Company, whether or not such liabilities would be within the indemnification provisions of the MBCA. Under an insurance policy maintained by the Company, the directors and officers of the Company are insured, within the limits and subject to the limitations of the policy, against certain expenses in connection with the defense of certain claims, actions, suits or proceedings, and certain liabilities which might be imposed as a result of such claims, actions, suits or proceedings, which may be brought against them by reason of being or having served as directors and officers of the Company of certain other entities. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to officers and directors pursuant to the foregoing provisions, the Company has been informed that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. The Underwriting Agreement provides for indemnification of directors and officers of the Company by the Underwriters against certain liabilities. ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES The Company granted options to purchase 140,000 shares of Common Stock at an exercise price of $2.00 per share on April 1, 1997, and options to purchase 468,750 shares at an exercise price of $7.00 per share on June 2, 1997, to its employees under the Stock Option Plan. The Company relied upon Rule 701 under the Securities Act of 1933, as amended, in issuing such options. ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES The following exhibits are filed with this Registration Statement:
EXHIBIT NUMBER - ------1 3.1 3.2 4.2 5.1 10.1 10.2 10.3 10.4 10.5 10.6 10.7 DESCRIPTION ----------*Underwriting Agreement. Restated Articles of Incorporation of the Company. Bylaws of the Company. *Specimen Stock Certificate representing the Common Stock. *Opinion of Dykema Gossett PLLC regarding the legality of the securities being registered. Credit Authorization Agreement, dated September 13, 1996, between the Company and NBD Bank. Letter Agreement between the Company and NBD Bank dated March 11, 1997 amending Credit Authorization Agreement. Letter Agreement between the Company and NBD Bank dated March 25, 1997 amending Credit Authorization Agreement. Form of Stock Purchase Agreement between the Company and the stockholders of Syntel Software Private Limited. Lease, dated August 22, 1996, between WRC Properties, Inc. and the Company. Lease Agreement, dated November 30, 1994, between the Company and NationsBank of North Carolina, N.A., as Trustee for the Public Employees Retirement System of Ohio. Lease Agreement, dated June 7, 1995, between the Company and Office Court Development Ltd. Co., a New Mexico General Partnership.

II-2

EXHIBIT NUMBER - ------10.8

10.9 10.10 10.11 10.12 10.13 10.14 10.15 10.16

23.1 23.2 23.3 23.4 23.5 24.1 27

DESCRIPTION ----------Indentures of Lease entered into between the President of India and Syntel Software Pvt. Ltd. on the dates and for the square footage indicated below for the Mumbai Global Development Center: - October 11, 1993; 7,825 sq. ft. - January 18, 1993; 3,443 sq. ft. - November 2, 1992; 3,443 sq. ft. - October 11, 1993; 5,502 sq. ft. Rental Agreement, dated February 24, 1997, between Syntel Software Pvt. Ltd. and the Landlords for the Chennai Global Development Center. **Agreement for Software Programming Services, dated as of September 6, 1994, between the Company and American Home Assurance Company. **PeopleNet Supplier Contract, effective as of April 1, 1996, between the Company and Geometric Results, Incorporated (d/b/a "PeopleNet"). Form of 1997 Stock Option and Incentive Plan. Company Employee Stock Purchase Plan. Employment Agreement dated June 5, 1997, between the Company and Bharat Desai. Employment Agreement dated June 5, 1997, between the Company and Neerja Sethi. Form of S Corporation Revocation, Tax Allocation and Indemnification Agreement (the "Agreement"), between the Company and the shareholders of the Company on the date of the Agreement. Consent of Coopers & Lybrand, L.L.P. Consent of Rajkamal Shah & Co. Consent of Dykema Gossett PLLC (contained in the opinion filed as Exhibit 5.1 hereto). Consent of Paritosh Choksi. Consent of Douglas Van Houweling. Powers of Attorney (contained on the signature page hereto). Financial Data Schedule.

* To be filed by amendment. ** Portions of this document have been redacted pursuant to the Company's request to the Secretary of the Commission for confidential treatment pursuant to Rule 406 under the Securities Act of 1933, as amended. (B) FINANCIAL STATEMENT SCHEDULES: The following financial statement schedule is included in Part II of this Registration Statement and should be read in conjunction with the Financial Statements and Notes thereto included elsewhere herein: Schedule II -- Valuation and Qualifying Account and Reserves ITEM 17. UNDERTAKINGS. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described in Item 14 above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense any action, suit or proceeding) is II-3

asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The undersigned registrant hereby undertakes (1) to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser, (2) that for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of a registration statement in reliance upon Rule 430A and contained in the form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and (3) that for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-4

SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Troy, State of Michigan, on June 6, 1997. SYNTEL, INC.
By: /s/ BHARAT DESAI -----------------------------------Bharat Desai, President

POWER OF ATTORNEY Each of the undersigned whose signature appears below hereby constitutes and appoints Bharat Desai, John Andary and Daniel Moore, and each of them acting alone, his or her true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, under the Securities Act of 1933. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on June 6, 1997.
TITLE ----------------------------------------------------/s/ BHARAT DESAI President and Director - ----------------------------------------------------- (principal executive officer) Bharat Desai /s/ NEERJA SETHI Vice President and Director - ----------------------------------------------------Neerja Sethi /s/ JOHN ANDARY Chief Financial Officer and Treasurer - ----------------------------------------------------- (principal financial and principal accounting John Andary officer)

II-5

In connection with our audits of the financial statements of Syntel, Inc. as of December 31, 1996 and 1995, and for each of the three years in the period ended December 31, 1996, which financial statements are included in the Prospectus, we have also audited the financial statement schedule listed in Item II herein. In our opinion, this financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information required to be included therein. COOPERS & LYBRAND, L.L.P. Detroit, Michigan February 28, 1997

SYNTEL, INC. SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
COLUMN A - ------------------------------------------COLUMN B ---------BALANCE AT BEGINNING OF PERIOD ---------$112,000 ======== $112,000 ======== $82,000 ======== COLUMN C ---------ADDITIONS CHARGED TO COSTS AND EXPENSES ---------$416,290 ======== $ -======== $ 30,000 ======== COLUMN D ---------COLUMN E ---------BALANCE AT END OF PERIOD ---------$412,793 ======== $112,000 ======== $112,000 ========

DESCRIPTION ----------Year ended December 31, 1996: Allowance for possible losses on accounts receivable............................ Year ended December 31, 1995: Allowance for possible losses on accounts receivable............................ Year ended December 31, 1994: Allowance for possible losses on accounts receivable............................

DEDUCTIONS ---------$115,497 ======== $ -======== $ -========

C&S 510 (Rev. 7/96) EXHIBIT 3.1 MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES CORPORATION, SECURITIES AND LAND DEVELOPMENT BUREAU Date Received (FOR BUREAU USE ONLY) Name D. Richard McDonald - Dykema Gossett PLLC
- ---------------------------------------------Address Suite 300 - 1577 North Woodward Avenue - ---------------------------------------------City State Zip Code Bloomfield Hills Michigan 48304 - ----------------------------------------------

EFFECTIVE DATE:

Document will be returned to the name and address you enter above CID Number: 202 - 412 RESTATED ARTICLES OF INCORPORATION For use by domestic profit corporations Pursuant to the provisions of Act 284, Public Acts of 1972, as amended, the undersigned corporation executes the following Articles:
1. The present name of the corporation is: 2. The corporation identification number (CID) assigned by the Bureau is: 3. All former names of the corporation are: 4. The date of filing the original Articles of Incorporation was: Syntel, Inc. 202-412 Systems International, Inc. April 15, 1980.

The following Restated Articles of Incorporation supersede the Articles of Incorporation as amended and shall be the Articles of Incorporation for the corporation: ARTICLE I The name of the corporation is Syntel, Inc. ARTICLE II The purposes for which the corporation is organized is to engage in any activity within the purposes for which corporations may be organized under the Business Corporation Act of Michigan, as it exists on the date hereof and as it may be amended from time to time hereafter (the "Michigan Business Corporation Act").

ARTICLE III The total authorized capital stock of the corporation is as follows: (i) 40,000,000 shares of Common Stock; and (ii) 5,000,000 shares of Preferred Stock. A statement of the designations, relative rights, preferences and limitations of the shares of each class is as follows: Preferred Stock Subject to the limitations and restrictions set forth in this Article III, and without action or approval by the shareholders, the Board of Directors is authorized and empowered at any time, and from time to time, to designate and issue any authorized and unissued shares of Preferred Stock (whether or not previously designated as shares of a particular series, and including Preferred Stock of any series issued and thereafter acquired by the corporation) as shares of one or more series, hereby or hereafter to be designated. Each different series of Preferred Stock may vary as to dividend rate, redemption price, liquidation price, voting rights and conversion rights, if any, all of which shall be fixed as hereinafter provided. Each series of Preferred Stock issued hereunder shall be so designated as to distinguish the shares thereof from the shares of the other series and classes. All shares of Preferred Stock of any one series shall be alike in every particular. The rights, qualifications, limitations or restrictions of each series of Preferred Stock shall be as stated and expressed in the resolution or resolutions adopted by the Board of Directors which provides for the issuance of such series, which resolutions shall determine, fix or alter the following: (1) The distinctive designation and number of shares comprising such series, which number may (except where otherwise provided by the Board of Directors in creating such series) be increased or decreased (but not below the number of shares then outstanding) from time to time by action of the Board of Directors; (2) The rate of the annual dividends thereon and the relation which such dividends shall bear to the dividends payable on any other class of capital stock or on any other series of Preferred Stock, the terms and conditions upon which and the periods in respect of which dividends shall be payable, whether and upon what conditions such dividends shall be cumulative and if cumulative, the date or dates from which dividends shall accumulate; (3) The amount per share, if any, which the holders of Preferred Stock of such series shall be entitled to receive, in addition to any dividends accrued and unpaid thereon, (a) upon the redemption thereof, plus the premium payable upon redemption, if any; or (b) upon the 2

voluntary liquidation, dissolution or winding up of the corporation; or (c) upon the involuntary liquidation, dissolution or winding up of the corporation; (4) The conversion or exchange rights, if any, of such series, including without limitation, the price or prices, rate or rates, provisions for the adjustment thereof (including provisions for protection against the dilution or impairment of such rights), and all other terms and conditions upon which Preferred Stock constituting such series may be convertible into, or exchangeable for shares of any other class or classes or series; (5) Whether the shares of such series shall be redeemable, and, if redeemable, whether redeemable for cash, property or rights, including securities of any other corporation, at the option of either the holder or the corporation or upon the happening of a specified event, the limitations and restrictions with respect to such redemption, the time or times when, the price or prices or rate or rates at which, the adjustments with which and the manner in which such shares shall be redeemable, including the manner of selecting shares of such series for redemption if less than all shares are to be redeemed; (6) Whether the shares of such series shall be subject to the operation of a purchase, retirement, or sinking fund, and, if so, whether and upon what conditions such purchase, retirement or sinking fund shall be cumulative or noncumulative, the extent to which and the manner in which such fund shall be applied to the purchase or redemption of the shares of such series for retirement or to other corporate purposes and the terms and provisions relative to the operation thereof; (7) The voting rights per share, if any, of each such series, and whether and under what conditions the shares of such series (alone or together with the shares of one or more other series) shall be entitled to vote separately as a single class; (8) Whether the issuance of any additional shares of such series, or of any shares of any other series shall be subject to restrictions as to issuance or as to the power, preferences or rights of any such other series; and (9) Any other preferences, privileges and powers and relative, participating, optional or other special rights and qualifications, limitations or restrictions of such series, as the Board of Directors may deem advisable and as shall not be inconsistent with the provisions of these Articles of Incorporation. Any resolution of the Board of Directors establishing and designating a series of Preferred Stock and fixing and determining the relevant rights and preferences thereof shall be appropriately filed with the State of Michigan as an amendment to the Articles of Incorporation. 3

Common Stock None of the Common Stock shall be entitled to any preferences, and each share of Common Stock shall be equal to every other share of such class of stock in every respect. After payment or declaration of full cumulative dividends on all shares having priority over the Common Stock as to dividends, and after making all sinking or retirement fund payments on all series of Preferred Stock and on any other stock of the corporation ranking as to dividends or assets prior to the Common Stock providing for the same, dividends on the Common Stock may be declared and paid, but only when and as determined by the Board of Directors. On any dissolution, liquidation or winding up of the corporation, after there shall have been paid to or set aside for the holders of all shares having priority over the Common Stock the full preferential amounts to which they are respectively entitled, the holders of the Common Stock shall be entitled to receive pro rata all the remaining assets of the corporation available for distribution to its shareholders. At all meetings of shareholders of the corporation, the holders of the Common Stock shall be entitled to one vote for each share of Common Stock held by them of record. ARTICLE IV The address and the mailing address of the current registered office of the corporation is 2800 Livernois, Suite 400, Troy, Michigan 48083. The name of the resident agent at the registered office is Daniel M. Moore. ARTICLE V When a compromise or arrangement or a plan or reorganization of this corporation is proposed between this corporation and its creditors or any class of them or between this corporation and its shareholders or any class of them, a court of equity jurisdiction within the state, on application of this corporation or of a creditor or shareholder thereof, or on application of a receiver appointed for the corporation, may order a meeting of the creditors or class of creditors or of the shareholders or class of shareholders to be affected by the proposed compromise or arrangement or reorganization, to be summoned in such manner as the court directs. If a majority in number, and representing three-fourths in value of claims, of the creditors or class of creditors, or if the shareholders or class of shareholders to be affected by the proposed compromise or arrangement or a reorganization representing three-fourths of such shares, agree to a compromise or arrangement or a reorganization of this corporation as a consequence of the compromise or arrangement, the compromise or arrangement and the reorganization, if sanctioned by the court to which the application has been made, shall be binding on all the creditors or class of creditors, or on all the shareholders or class of shareholders and also on this corporation. 4

ARTICLE VI At the effective date of these Restated Articles of Incorporation, the Board of Directors shall be divided into three classes as nearly equal in number as possible, with the term of office of one class expiring each year. The Board of Directors shall by resolution designate the directors for each class, and directors in the first class (Class I) shall hold office for a term expiring at the annual meeting of shareholders in 1998, directors of the second class (Class II) shall hold office for a term expiring at the next succeeding annual meeting, and directors of the third class (Class III) shall be elected to hold office for a term expiring at the third succeeding annual meeting. The number of directors which shall constitute the whole Board of Directors shall be the number from time to time fixed by the Board of Directors, and such number of directors so fixed may be changed only by the affirmative vote of at least two-thirds of the directors then in office. During the intervals between annual meetings of shareholders, any vacancy occurring in the Board of Directors caused by resignation, removal, death or incapacity, and any newly created directorships resulting from an increase in the number of directors, shall be filled only by a majority vote of the directors then in office, whether or not a quorum. Each director chosen to fill a vacancy shall hold office for the unexpired term of the Class in which such vacancy occurred. Each director chosen to fill a newly created directorship shall hold office until the next election of the Class for which such director shall have been chosen. When the number of directors is changed, any newly created directorships or any decrease in directorships shall be so apportioned among the Classes as to make all Classes as nearly equal in number as possible. No decrease in the number of directors shall have the effect of shortening the term of any incumbent director. Any director may be removed from office as a director at any time, but only for cause, by the affirmative vote of shareholders of record holding a majority of the outstanding shares of stock of the corporation entitled to vote in elections of directors given at a meeting of the shareholders specifically called for that purpose. ARTICLE VII No director of the corporation shall be personally liable to the corporation or its shareholders for monetary damages for breach of fiduciary duty as a director, provided that the foregoing shall not eliminate or limit the liability of a director for any of the following: (i) a breach of the director's duty of loyalty to the corporation or its shareholders; (ii) acts or omissions not in good faith or that involve intentional misconduct or knowing violation of law; (iii) a violation of Section 551(1) of the Michigan Business Corporation Act; or (iv) any transaction from which the director derived an improper personal benefit. If the Michigan Business Corporation Act hereafter is amended to authorize the further elimination or limitation of the liability of directors, then the liability of a director of the corporation, in addition to the limitation on personal liability contained herein, shall be eliminated or limited to the fullest extent permitted by the Michigan Business Corporation Act as so amended. No amendment or repeal of this Article VIII shall apply to or have any effect on the liability or alleged liability of any director of the corporation for or with respect to any acts or omissions of such director occurring prior to the effective date of any such amendment or repeal. 5

ARTICLE VIII Directors and officers of the corporation shall be indemnified in connection with any actual or threatened action or proceeding (including civil, criminal, administrative or investigative proceedings) arising out of their service to the corporation or to another organization at the corporation's request, and shall be paid expenses incurred in defending any such proceeding in advance of its final disposition to the fullest extent permitted by law. Persons who are not directors or officers of the corporation may be similarly indemnified in respect of such service to the extent authorized at any time by the Board of Directors or the Bylaws of the corporation. The provisions of this Article shall be applicable to actions or proceedings commenced after the adoption hereof, whether arising from acts or omissions occurring before or after the adoption hereof, and to persons who have ceased to be directors, officers or employees, and shall inure to the benefit of their heirs, executors and administrators. The right to indemnification and advancement of expenses conferred hereunder shall be a contract right which may not be modified retroactively without the written consent of the director or officer and shall not be deemed exclusive of any other rights to indemnification or advancement of expenses such person may have or to which such person may be entitled. If a claim under this Article VIII is not paid in full by the corporation with thirty days after a written claim has been received by the corporation, the indemnitee may at any time thereafter bring suit against the corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit or in a suit brought by the corporation to recover advance, the indemnitee shall be entitled to be paid also the expense of prosecuting or defending such claim. In any action brought by the indemnitee to enforce a right hereunder (other than an action brought to enforce a claim for expenses incurred in defending any proceeding in advance of its final disposition where the required undertaking has been tendered to the corporation) it shall be a defense that, and in any action brought by the corporation to recover advances the corporation shall be entitled to recover such advances if, the indemnitee has not met the applicable standard of conduct set forth in the Michigan Business Corporation Act. Neither the failure of the corporation (including its Board of Directors, a committee of its Board of Directors, independent legal counsel, or its shareholders) to have made a determination prior to the commencement of such action that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the Michigan Business Corporation Act, nor an actual determination by the corporation (including its Board of Directors, a committee of its Board of Directors, independent legal counsel or its shareholders) that the indemnitee has not met such applicable standard of conduct, shall be a defense to an action brought by the indemnitee or create a presumption that the indemnitee has not met the applicable standard of conduct. In any action brought by the indemnitee to enforce a right hereunder or by the corporation to recover payments by the corporation of advances, the burden of proof shall be on the corporation. 6

ARTICLE IX Notwithstanding any other provisions of these Restated Articles of Incorporation, no amendment to these Restated Articles of Incorporation shall amend or repeal any or all of the provisions of Articles VI, VII, VIII or this Article IX of these Restated Articles of Incorporation, and the shareholders of the corporation shall not have the right to amend or repeal any or all provisions of the Bylaws of the corporation, unless so adopted by the affirmative vote of the holders of not less than three-fourths of the outstanding shares of stock of the corporation generally entitled to vote in the election of directors, considered for purposes of this Article IX as a class; provided, however, that in the event the Board of Directors of the corporation shall recommend to the shareholders the adoption of any such amendment of a nature described in this Article IX, the shareholders of record holding a majority of the outstanding shares of stock of the corporation entitled to vote in elections of directors, considered for the purposes of this Article IX as a class, may amend, modify or repeal any or all of such provisions. ****** These Restated Articles of Incorporation were duly adopted on the ____ day of ____, 1997, in accordance with the provisions of Section 642 of the Michigan Business Corporation Act and were duly adopted by the written consent of all the shareholders entitled to vote in accordance with Section 407(2). Signed this ___ day of ____, 1997. By: _______________________________
Name of person or organization remitting fees: Dykema Gossett PLLC Preparer's name and business telephone number: D. Richard McDonald (248) 203-0859

7 BH\113306.1 ID\ DRM

EXHIBIT 3.2 BYLAWS OF SYNTEL, INC. ARTICLE I OFFICES 1.01 PRINCIPAL OFFICE. The principal office of the corporation shall be at such place within or outside the State of Michigan as the Board of Directors shall determine from time to time. 1.02 OTHER OFFICES. The corporation also may have offices at such other places as the Board of Directors from time to time determines or the business of the corporation requires. ARTICLE II SEAL 2.01 SEAL. The corporation may have a seal in such form as the Board of Directors may from time to time determine. The seal may be used by causing it or a facsimile to be impressed, affixed, reproduced or otherwise. ARTICLE III CAPITAL STOCK 3.01 ISSUANCE OF SHARES. The shares of capital stock of the corporation shall be issued in such amounts, at such times, for such consideration and on such terms and conditions as the Board shall deem advisable, subject to the provisions of the Articles of Incorporation of the Corporation and the further provisions of these Bylaws, and subject also to any requirements of the laws of the State of Michigan. 3.02 CERTIFICATES FOR SHARES. The shares of the corporation shall be represented by certificates signed by the Chairman of the Board, Vice Chairman of the Board, President or a Vice President of the corporation, and may be sealed with the seal of the corporation or a facsimile thereof. A certificate representing shares shall state upon its face that the corporation is formed under the laws of the State of Michigan, the name of the person to whom it is issued, the number and class of shares, and the designation of the series, if any, which the certificate represents and such other provisions as may be required by the laws of the State of Michigan.

3.03 TRANSFER OF SHARES. The shares of the capital stock of the corporation are transferable only on the books of the corporation upon surrender of the certificate therefor, properly endorsed for transfer, and the presentation of such evidences of ownership and validity of the assignment as the corporation may require. 3.04 REGISTERED SHAREHOLDERS. The corporation shall be entitled to treat the person in whose name any share of stock is registered as the owner thereof for purposes of dividends and other distributions in the course of business, or in the course of recapitalization, consolidation, merger, reorganization, sale of assets, liquidation or otherwise and for the purpose of votes, approvals and consents by shareholders, and for the purpose of notices to shareholders, and for all other purposes whatever, and shall not be bound to recognize any equitable or other claim to or interest in such shares on the part of any other person, whether or not the corporation shall have notice thereof, save as expressly required by the laws of the State of Michigan. 3.05 LOST OR DESTROYED CERTIFICATES. Upon the presentation to the corporation of a proper affidavit attesting the loss, destruction or mutilation of any certificate or certificates for shares of stock of the corporation, the Board of Directors shall direct the issuance of a new certificate or certificates to replace the certificates so alleged to be lost, destroyed or mutilated. The Board of Directors may require as a condition precedent to the issuance of new certificates a bond or agreement of indemnity, in such form and amount and with such sureties, or without sureties, as the Board of Directors may direct or approve. ARTICLE IV SHAREHOLDERS AND MEETINGS OF SHAREHOLDERS 4.01 PLACE OF MEETINGS. All meetings of shareholders shall be held at the principal office of the corporation or at such other place as shall be determined by the Board of Directors and stated in the notice of meeting. 4.02 ANNUAL MEETING. The annual meeting of the shareholders of the corporation shall be held on the last Monday of the fifth calendar month after the end of the corporation's fiscal year at 2 o'clock in the afternoon, or on such other date and at such other time as may be determined by the Board of Directors. Directors shall be elected at each annual meeting and such other business transacted as may come before the meeting. 4.03 SPECIAL MEETINGS. Special meetings of shareholders may be called by the Board of Directors, the Chairman of the Board (if such office is filled) or the President. At any special meeting of shareholders, the business which may be transacted shall be limited to that which was specifically stated in the notice of such special meeting provided to shareholders. 2

4.04 NOTICE OF MEETINGS. Except as otherwise provided by statute, written notice of the time, place and purposes of a meeting of shareholders shall be given not less than 10 nor more than 60 days before the date of the meeting to each shareholder of record entitled to vote at the meeting, either personally or by mailing such notice to his last address as it appears on the books of the corporation. No notice need be given of an adjourned meeting of the shareholders provided the time and place to which such meeting is adjourned are announced at the meeting at which the adjournment is taken and at the adjourned meeting only such business is transacted as might have been transacted at the original meeting. However, if after the adjournment a new record date is fixed for the adjourned meeting a notice of the adjourned meeting shall be given to each shareholder of record on the new record date entitled to notice as provided in this Bylaw. 4.05 RECORD DATES. The Board of Directors may fix in advance a date as the record date for the purpose of determining shareholders entitled to notice of and to vote at a meeting of shareholders or an adjournment thereof, or to express consent or to dissent from a proposal without a meeting, or for the purpose of determining shareholders entitled to receive payment of a dividend or allotment of a right, or for the purpose of any other action. The date fixed shall not be more than 60 nor less than 10 days before the date of the meeting, nor more than 60 days before any other action. In such case only such shareholders as shall be shareholders of record on the date so fixed shall be entitled to notice of and to vote at such meeting or adjournment thereof, or to express consent or to dissent from such proposal, or to receive payment of such dividend or to receive such allotment of rights, or to participate in any other action, as the case may be, notwithstanding any transfer of any stock on the books of the corporation, or otherwise, after any such record date. Nothing in this Bylaw shall affect the rights of a shareholder and his transferee or transferor as between themselves. 4.06 LIST OF SHAREHOLDERS. The Secretary of the corporation or the agent of the corporation having charge of the stock transfer records for shares of the corporation shall make and certify a complete list of the shareholders entitled to vote at a shareholders' meeting or any adjournment thereof. The list shall be arranged alphabetically within each class and series, with the address of, and the number of shares held by, each shareholder; be produced at the time and place of the meeting; be subject to inspection by any shareholder during the whole time of the meeting; and be prima facie evidence as to who are the shareholders entitled to examine the list or vote at the meeting. 4.07 QUORUM. Unless a greater or lesser quorum is required in the Articles of Incorporation or by the laws of the State of Michigan, the shareholders present at a meeting in person or by proxy who, as of the record date for such meeting, were holders of a majority of the outstanding shares of the corporation entitled to vote at the meeting shall constitute a quorum at the meeting. Whether or not a quorum is present, a meeting of shareholders may be adjourned by a vote of the shares present in person or by proxy. When the holders of a class or series of shares are entitled to vote separately on an item of business, this Bylaw applies in determining the presence of a quorum of such class or series for transaction of such item of business. 3

4.08 PROXIES. A shareholder entitled to vote at a meeting of shareholders or to express consent or dissent without a meeting may authorize other persons to act for the shareholder by proxy. A proxy shall be signed by the shareholder or the shareholder's authorized agent or representative and shall not be valid after the expiration of three years from its date unless otherwise provided in the proxy. A proxy is revocable at the pleasure of the shareholder executing it except as otherwise provided by the laws of the State of Michigan. 4.09 VOTING. Each outstanding share is entitled to one vote on each matter submitted to a vote, unless otherwise provided in the Articles of Incorporation. Votes shall be cast in writing and signed by the shareholder or the shareholder's proxy. When an action, other than the election of directors, is to be taken by a vote of the shareholders, it shall be authorized by a majority of the votes cast by the holders of shares entitled to vote thereon, unless a greater vote is required by the Articles of Incorporation or by the laws of the State of Michigan. Except as otherwise provided by the Articles of Incorporation, directors shall be elected by a plurality of the votes cast at any election. 4.10 MEETINGS OF SHAREHOLDERS. (A) Annual Meetings of Shareholders. (1) Nominations of persons for election to the Board of Directors of the corporation and the proposal of business to be considered by the shareholders may be made at an annual meeting of shareholders (a) pursuant to the corporation's notice of meeting, (b) by or at the direction of the Board of Directors or (c) by any shareholder of the corporation who was a shareholder of record at the time of giving of notice provided for in this Bylaw, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Bylaw. (2) For nominations or other business to be properly brought before an annual meeting by a shareholder pursuant to clause (c) of paragraph (A)( 1) of this Bylaw, the shareholder must have given timely notice thereof in writing to the Secretary of the corporation. To be timely, a shareholder's notice shall be delivered to the Secretary at the principal executive offices of the corporation not less than 60 days nor more than 90 days prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date, notice by the shareholder to be timely must be so delivered not earlier than the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the 10th day following the day on which public announcement of the date of such meeting is first made. Such shareholder's notice shall set forth (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (b) as to any other business that the shareholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting 4

and any material interest in such business of such shareholder and the beneficial owner, if any, on whose behalf the proposal is made; (c) as to the shareholder giving the notice and beneficial owner, if any, on whose behalf the nomination or proposal is made (i) the name and address of such shareholder, as they appear on the corporation's books, and of such beneficial owner and (ii) the class and number of shares of the corporation which are owned beneficially and of record by such shareholder and such beneficial owner. (3) Notwithstanding anything in the second sentence of paragraph (A)(2) of this Bylaw to the contrary, in the event that the number of directors to be elected to the Board of Directors of the corporation is increased and there is no public announcement naming all of the nominees for director or specifying the size of the increased Board of Directors made by the corporation at least 70 days prior to the first anniversary of the preceding year's annual meeting, a shareholder's notice required by this Bylaw shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be delivered to the Secretary at the principal executive offices of the corporation not later than the close of business on the 10th day following the day on which such public announcement is first made by the corporation. (B) Special Meetings of Shareholders. Only such business shall be conducted at a special meeting of shareholders as shall have been brought before the meeting pursuant to the corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of shareholders at which directors are to be elected pursuant to the corporation's notice of meeting (a) by or at the direction of the Board of Directors or (b) by any shareholder of the corporation who is a shareholder of record at the time of giving of notice provided hereunder, who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this Bylaw. Nominations by shareholders of persons for election to the Board of Directors may be made at such a special meeting of shareholders if the shareholder's notice required by paragraph (A)(2) of this Bylaw shall be delivered to the Secretary at the principal executive offices of the corporation not earlier than the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting or the 10th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. (C) General. (1) Only such persons who are nominated in accordance with the procedures set forth in this Bylaw shall be eligible to serve as directors and only such business shall be conducted at a meeting of shareholders as shall have been brought before the meeting in accordance with the procedures set forth in this Bylaw. The Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made in accordance with the procedures set forth in this Bylaw and, if any proposed nomination or business is not in compliance with this Bylaw, to declare that such defective proposal shall be disregarded. (2) For purposes of this Bylaw, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news 5

service or in a document publicly filed by the corporation with the Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the Exchange Act. (3) Notwithstanding the foregoing provisions of this Bylaw, a shareholder shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights of shareholders to request inclusion of proposals in the corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act. ARTICLE V DIRECTORS 5.01 NUMBER. The business and affairs of the corporation shall be managed by a Board of not less than three nor more than twelve directors as shall be fixed from time to time by the Board of Directors. The directors need not be residents of Michigan or shareholders of the corporation. 5.02 ELECTION, RESIGNATION AND REMOVAL. Directors shall be elected at each annual meeting of the shareholders, each to hold office for the term specified in the Articles of Incorporation and until the director's successor is elected and qualified, or until the director's resignation or removal. A director may resign by written notice to the corporation. The resignation is effective upon its receipt by the corporation or a subsequent time as set forth in the notice of resignation. A director or the entire Board of Directors may be removed, with cause, by the affirmative vote of the holders of a majority of the outstanding shares entitled to vote at an election of directors given at a meeting specifically called for that purpose. 5.03 VACANCIES. Vacancies in the Board of Directors occurring by reason of death, resignation, removal, increase in the number of directors or otherwise shall be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the Board of Directors. Each person so elected shall be a director for a term of office continuing until the next election of the class of directors for which such director was elected. 5.04 ANNUAL MEETING. The Board of Directors shall meet each year immediately after the annual meeting of the shareholders, or within three (3) days of such time excluding Sundays and legal holidays if such later time is deemed advisable, at the place where such meeting of the shareholders has been held or such other place as the Board may determine, for the purpose of election of officers and consideration of such business that may properly be brought before the meeting; provided, that if less than a majority of the directors appear for an annual meeting of the Board of Directors the holding of such annual meeting shall not be required and the matters which might have been taken up therein may be taken up at any later special or annual meeting, or by consent resolution. 6

5.05 REGULAR AND SPECIAL MEETINGS. Regular meetings of the Board of Directors may be held at such times and places as the majority of the directors may from time to time determine at a prior meeting or as shall be directed or approved by the vote or written consent of all the directors. Special meetings of the Board may be called by the Chairman of the Board (if such office is filled) or the President and shall be called by the President or Secretary upon the written request of any two directors. 5.06 NOTICES. No notice shall be required for annual or regular meetings of the Board or for adjourned meetings, whether regular or special. Twenty-four hours written notice shall be given for special meetings of the Board, and such notice shall state the time, place and purpose or purposes of the meeting. 5.07 QUORUM. A majority of the Board of Directors then in office, or of the members of a committee thereof, constitutes a quorum for the transaction of business. The vote of a majority of the directors present at any meeting at which there is a quorum shall be the acts of the Board or of the committee, except as a larger vote may be required by the laws of the State of Michigan. A member of the Board or of a committee designated by the Board may participate in a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can communicate with the other participants. Participation in a meeting in this manner constitutes presence in person at the meeting. 5.08 EXECUTIVE AND OTHER COMMITTEES. The Board of Directors may, by resolution passed by a majority of the whole Board, appoint three or more members of the Board as an executive committee to exercise all powers and authorities of the Board in management of the business and affairs of the corporation, except that the committee shall not have power or authority to (a) amend the Articles of Incorporation; (b) adopt an agreement of merger or consolidation; (c) recommend to shareholders the sale, lease or exchange of all or substantially all of the corporation's property and assets; (d) recommend to shareholders a dissolution of the corporation or revocation of a dissolution; (e) amend these Bylaws; (f) fill vacancies in the Board; or (g) unless expressly authorized by the Board, declare a dividend or authorize the issuance of stock. The Board of Directors from time to time may, by like resolution, appoint such other committees of one or more directors to have such authority as shall be specified by the Board in the resolution making such appointments. The Board of Directors may designate one or more directors as alternate members of any committee who may replace an absent or disqualified member at any meeting thereof. 5.09 DISSENTS. A director who is present at a meeting of the Board of Directors, or a committee thereof of which the director is a member, at which action on a corporate matter is taken is presumed to have concurred in that action unless the director's dissent is entered in the minutes of the meeting or unless the director files a written dissent to the action with the person acting as secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the corporation promptly after the adjournment of the meeting. Such right 7

to dissent does not apply to a director who voted in favor of such action. A director who is absent from a meeting of the Board, or a committee thereof of which the director is a member, at which any such action is taken is presumed to have concurred in the action unless the director files a written dissent with the Secretary of the corporation within a reasonable time after the director has knowledge of the action. 5.10 COMPENSATION. Except as provided in the Articles of Incorporation, the Board of Directors, by affirmative vote of a majority of directors in office and irrespective of any personal interest of any of them, may establish reasonable compensation of directors for services to the corporation as directors or officers. ARTICLE VI NOTICES, WAIVERS OF NOTICE AND MANNER OF ACTING 6.01 NOTICES. All notices of meetings required to be given to shareholders, directors or any committee of directors may be given by mail, telecopy, telegram, radiogram or cablegram to any shareholder, director or committee member at his last address as it appears on the books of the corporation. Such notice shall be deemed to be given at the time when the same shall be mailed or otherwise dispatched. 6.02 WAIVER OF NOTICE. Notice of the time, place and purpose of any meeting of shareholders, directors or committee of directors may be waived by telecopy, telegram, radiogram, cablegram or other writing, either before or after the meeting, or in such other manner as may be permitted by the laws of the State of Michigan. Attendance of a person at any meeting of shareholders, in person or by proxy, or at any meeting of directors or of a committee of directors, constitutes a waiver of notice of the meeting except when the person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. 6.03 ACTION WITHOUT A MEETING. Any action required or permitted at any meeting of shareholders or directors or committee of directors may be taken without a meeting, without prior notice and without a vote, if all of the shareholders or directors or committee members entitled to vote thereon consent thereto in writing. ARTICLE VII OFFICERS 7.01 NUMBER. The Board of Directors shall elect or appoint a President, a Secretary and a Treasurer, and may select a Chairman of the Board, and one or more Vice Presidents, Assistant 8

Secretaries or Assistant Treasurers. Any two or more of the above offices, except those of President and Vice President, may be held by the same person. No officer shall execute, acknowledge or verify an instrument in more than one capacity if the instrument is required by law, the Articles of Incorporation or these Bylaws to be executed, acknowledged, or verified by one or more officers. 7.02 TERM OF OFFICE, RESIGNATION AND REMOVAL. An officer shall hold office for the term for which he is elected or appointed and until his successor is elected or appointed and qualified, or until his resignation or removal. An officer may resign by written notice to the corporation. The resignation is effective upon its receipt by the corporation or at a subsequent time specified in the notice of resignation. An officer may be removed by the Board with or without cause. The removal of an officer shall be without prejudice to his contract rights, if any. The election or appointment of an officer does not of itself create contract rights. 7.03 VACANCIES. The Board of Directors may fill any vacancies in any office occurring for whatever reason. 7.04 AUTHORITY. All officers, employees and agents of the corporation shall have such authority and perform such duties in the conduct and management of the business and affairs of the corporation as may be designated by the Board of Directors and these Bylaws. ARTICLE VIII DUTIES OF OFFICERS 8.01 CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside at all meetings of the shareholders and of the Board of Directors at which the Chairman is present. The Chairman shall be the Chief Executive Officer of the corporation. The Chairman shall see that all orders and resolutions of the Board are carried into effect and the Chairman shall have the general powers of supervision and management usually vested in the chief executive officer of a corporation, including the authority to vote all securities of other corporations and organizations held by the corporation. 8.02 VICE CHAIRMAN. The Vice Chairman, if such position is filled, shall, in the absence or disability of the Chairman, perform the duties and exercise the powers of the Chairman of the Board and shall perform such other duties as the Board of Directors or the Chairman of the Board may from time to time prescribe. 8.03 PRESIDENT. The President shall be the Chief Operating Officer of the corporation and shall have the general powers of supervision and management over the day-to-day operations of the corporation. The President shall see that all orders and resolutions of the Board are carried into effect and shall be ex officio a member of all management committees. He may execute any 9

documents in the name of the corporation and shall have such other powers and duties as may be prescribed by the Board. 8.04 VICE PRESIDENTS. The Vice Presidents, in order of their seniority, shall, in the absence or disability of the President, perform the duties and exercise the powers of the President and shall perform such other duties as the Board of Directors or the President may from time to time prescribe. 8.05 SECRETARY. The Secretary shall attend all meetings of the Board of Directors and of shareholders and shall record all votes and minutes of all proceedings in a book to be kept for that purpose, shall give or cause to be given notice of all meetings of the shareholders and of the Board of Directors, and shall keep in safe custody the seal of the corporation and, when authorized by the Board, affix the same to any instrument requiring it, and when so affixed it shall be attested by the signature of the Secretary, or by the signature of the Treasurer or an Assistant Secretary. The Secretary may delegate any of the duties, powers and authorities of the Secretary to one or more Assistant Secretaries, unless such delegation is disapproved by the Board. 8.06 TREASURER. The Treasurer shall have the custody of the corporate funds and securities; shall keep full and accurate accounts of receipts and disbursements in books of the corporation; and shall deposit all moneys and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the Board of Directors. The Treasurer shall render to the President and directors, whenever they may require it, an account of his or her transactions as Treasurer and of the financial condition of the corporation. The Treasurer may delegate any of his or her duties, powers and authorities to one or more Assistant Treasurers unless such delegation is disapproved by the Board of Directors. 8.07 ASSISTANT SECRETARIES AND TREASURERS. The Assistant Secretaries, in order of their seniority, shall perform the duties and exercise the powers and authorities of the Secretary in case of the Secretary's absence or disability. The Assistant Treasurers, in the order of their seniority, shall perform the duties and exercise the powers and authorities of the Treasurer in case of the Treasurer's absence or disability. The Assistant Secretaries and Assistant Treasurers shall also perform such duties as may be delegated to them by the Secretary and Treasurer, respectively, and also such duties as the Board of Directors may prescribe. ARTICLE IX SPECIAL CORPORATE ACTS 9.01 ORDERS FOR PAYMENT OF MONEY. All checks, drafts, notes, bonds, bills of exchange and orders for payment of money of the corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. 10

9.02 CONTRACTS AND CONVEYANCES. The Board of Directors of the corporation may in any instance designate the officer and/or agent who shall have authority to execute any contract, conveyance, mortgage or other instrument on behalf of the corporation, or may ratify or confirm any execution. When the execution of any instrument has been authorized without specification of the executing officers or agents, the Chairman of the Board, the President or any Vice President, and the Secretary or Assistant Secretary or Treasurer or Assistant Treasurer, may execute the same in the name and on behalf of this corporation and may affix the corporate seal thereto. ARTICLE X BOOKS AND RECORDS 10.01 MAINTENANCE OF BOOKS AND RECORDS. The proper officers and agents of the corporation shall keep and maintain such books, records and accounts of the corporation's business and affairs, minutes of the proceedings of its shareholders, Board and committees, if any, and such stock ledgers and lists of shareholders, as the Board of Directors shall deem advisable, and as shall be required by the laws of the State of Michigan and other states or jurisdictions empowered to impose such requirements. Books, records and minutes may be kept within or without the State of Michigan in a place which the Board shall determine. 10.02 RELIANCE ON BOOKS AND RECORDS. In discharging his or her duties, a director or an officer of the corporation is entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, if prepared or presented by any of the following: (a) one or more directors, officers, or employees of the corporation, or of a business organization under joint control or common control whom the director or officer reasonably believes to be reliable and competent in the matters presented, (b) legal counsel, public accountants, engineers, or other persons as to matters the director or officer reasonably believes are within the person's professional or expert competence, or (c) a committee of the Board of Directors of which he or she is not a member if the director or officer reasonably believes the Committee merits confidence. A director or officer is not entitled to rely on such information if he or she has knowledge concerning the matter in question that makes such reliance unwarranted. ARTICLE XI INDEMNIFICATION 11.01 NON-DERIVATIVE ACTIONS. Subject to all of the other provisions of this Article XI, the corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal (other than an action by or in the right of the corporation), by reason of the fact that the person is or was a director or officer of the 11

corporation, or is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, against expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders, and with respect to any criminal action or proceeding, if the person had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his or her conduct was unlawful. 11.02 DERIVATIVE ACTIONS. Subject to all of the provisions of this Article XI, the corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the fact that the person is or was a director or officer of the corporation, or is or was serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of another foreign or domestic corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, against expenses (including attorneys' fees) and amounts paid in settlement incurred by the person in connection with such action or suit if the person acted in good faith and in a manner the person reasonably believed to be in or not opposed to the best interests of the corporation or its shareholders. However, indemnification shall not be made for any claim, issue or matter in which such person has been found liable to the corporation unless and only to the extent that the court in which such action or suit was brought has determined upon application that, despite the adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnification for the expenses which the court considers proper. 11.03 EXPENSES OF SUCCESSFUL DEFENSE. To the extent that a person has been successful on the merits or otherwise in defense of any action, suit or proceeding referred to in Section 11.01 or 11.02 of these Bylaws, or in defense of any claim, issue or matter in the action, suit or proceeding, the person shall be indemnified against expenses (including attorneys' fees) incurred by such person in connection with the action, suit or proceeding and any action, suit or proceeding brought to enforce the mandatory indemnification provided by this Section 11.03. 11.04 DEFINITIONS. For the purposes of Sections 11.01 and 11.02, "other enterprises" shall include employee benefit plans; "fines" shall include any excise taxes assessed on a person with respect to an employee benefit plan; "serving at the request of the corporation" shall include any service as a director, officer, employee, or agent of the corporation which imposes duties on, or involves services by, the director or officer with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner the person reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan shall 12

be considered to have acted in a manner "not opposed to the best interests of the corporation or its shareholders" as referred to in Sections 11.01 and 11.02. 11.05 CONTRACT RIGHT; LIMITATION ON INDEMNITY. The right to indemnification conferred in this Article XI shall be a contract right, and shall apply to services of a director or officer as an employee or agent of the corporation as well as in such person's capacity as a director or officer. Except as provided in Section 11.03 of these Bylaws, the corporation shall have no obligations under this Article XI to indemnify any person in connection with any proceeding, or part thereof, initiated by such person without authorization by the Board of Directors. 11.06 DETERMINATION THAT INDEMNIFICATION IS PROPER. Any indemnification under Section 11.01 or 11.02 of these Bylaws (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the person is proper in the circumstances because the person has met the applicable standard of conduct set forth in Section 11.01 or 11.02, whichever is applicable. Such determination shall be made in any of the following ways: (i) By a majority vote of a quorum of the Board consisting of directors who were not parties to such action, suit or proceeding. (ii) If the quorum described in clause (i) above is not obtainable, then by a committee of directors who are not parties to the action, suit or proceeding. The committee shall consist of not less than two disinterested directors. (iii) By independent legal counsel in a written opinion. Legal counsel for this purpose shall be chosen by the Board or its committee prescribed in clauses (i) or (ii), or if a quorum of the Board cannot be obtained under clause (i) and a committee cannot be designated under clause (ii), by the Board. (iv) By the shareholders. Shares held by directors or officers who are parties or threatened to be made parties to the action, suit or proceeding may not be voted. 11.07 PROPORTIONATE INDEMNITY. If a person is entitled to indemnification under Section 11.01 or 11.02 of these Bylaws for a portion of expenses, including attorneys' fees, judgments, penalties, fines, and amounts paid in settlement, but not for the total amount thereof, the corporation shall indemnify the person for the portion of the expenses, judgments, penalties, fines, or amounts paid in settlement for which the person is entitled to be indemnified. 11.08 EXPENSE ADVANCE. Expenses incurred in defending a civil or criminal action, suit or proceeding described in Section 11.01 or 11.02 of these Bylaws shall be paid by the 13

corporation in advance of the final disposition of such action, suit or proceeding if the corporation receives from the person requesting such advance the following: (i) a written affirmation of the person's good faith belief that the person has met the applicable standard of conduct in Section 11.01 or 11.02 and (ii) a written undertaking by or on behalf of the person to repay the expenses if it is ultimately determined that the person is not entitled to be indemnified by the corporation. The undertaking shall be an unlimited general obligation of the person on whose behalf advances are made but need not be secured. 11.09 NON-EXCLUSIVITY OF RIGHTS. The indemnification or advancement of expenses provided under this Article XI is not exclusive of other rights to which a person seeking indemnification or advancement of expenses may be entitled under a contractual arrangement with the corporation. However, the total amount of expenses advanced or indemnified from all sources combined shall not exceed the amount of actual expenses incurred by the person seeking indemnification or advancement of expenses. 11.10 INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION. The corporation may, to the extent authorized from time to time by the Board of Directors, grant rights to indemnification and to the advancement of expenses to any employee or agent of the corporation to the fullest extent of the provisions of this Article XI with respect to the indemnification and advancement of expenses of directors and officers of the corporation. 11.11 FORMER DIRECTORS AND OFFICERS. The indemnification provided in this Article XI continues as to a person who has ceased to be a director or officer and shall inure to the benefit of the heirs, executors and administrators of such person. 11.12 INSURANCE. The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against the person and incurred by him or her in any such capacity or arising out of his or her status as such, whether or not the corporation would have power to indemnify the person against such liability under these Bylaws or the laws of the State of Michigan. 11.13 CHANGES IN MICHIGAN LAW. In the event of any change of the Michigan statutory provisions applicable to the corporation relating to the subject matter of this Article XI, then the indemnification to which any person shall be entitled hereunder shall be determined by such changed provisions, but only to the extent that any such change permits the corporation to provide broader indemnification rights than such provisions permitted the corporation to provide prior to any such change. Subject to Section 11.14, the Board of Directors is authorized to amend these Bylaws to conform to any such changed statutory provisions. 11.14 AMENDMENT OR REPEAL OF ARTICLE XI. No amendment or repeal of this Article XI shall apply to or have any effect on any director or officer of the corporation for or with 14

respect to any acts or omissions of such director or officer occurring prior to such amendment or repeal. ARTICLE XII AMENDMENTS 12.01 AMENDMENTS. Subject to Section 11.14, the Bylaws of the corporation may be amended, altered or repealed, in whole or in part, by a majority vote of the Board of Directors at any meeting duly held in accordance with these Bylaws, provided that notice of the meeting includes notice of the proposed amendment, alteration or repeal. ARTICLE XIII CONTROL SHARES AND CONTROL SHARE ACQUISITIONS 13.01 CONTROL SHARE ACQUISITIONS. The corporation is subject to Chapter 7B, "Control Share Acquisitions," of the Michigan Business Corporation Act, effective on the first day on which the corporation has 100 or more shareholders of record. As long as the corporation is subject to Chapter 7B, shares of capital stock of the corporation constituting "control shares" acquired in "control share acquisitions" (as defined in Chapter 7B) have the same voting rights as were accorded the shares before the "control share acquisition" only to the extent granted by resolution approved by the shareholders of the Company in accordance with Chapter 7B. 13.02 REDEMPTION OF CONTROL SHARES. Control shares as to which all of the following conditions are met may be redeemed by the corporation, upon approval by the Board of Directors, at any time after such conditions have been met: (a) (i) An acquiring person statement has been filed with the corporation, a meeting of the shareholders of the corporation has been held at which the voting rights of the control shares have been submitted to the shareholders for a vote, and the shareholders do not grant full voting rights to the control shares; or (ii) If an "acquiring person statement" (as such term appears in Section 795 of the Michigan Business Corporation Act) has not been filed with the corporation with respect to a control share acquisition and the redemption is completed during the period ending 60 days after the last acquisition of control shares, or the power to direct the exercise of voting power of control shares, by the acquiring persons; and 15

(b) The consideration to be paid for the control shares consists of cash, property or securities of the corporation, or any combination thereof, including shares of capital stock of the corporation or debt obligations of the corporation; and (c) The price to be paid for the control shares does not exceed the fair value of the shares, as determined by the Board of Directors, which value shall not be less than the highest price paid per share by the acquiring person in the control share acquisition. 13.03 PROCEDURES. The Board of Directors may, by resolution, adopt procedures for the giving of notice of such redemption to the "acquiring person" and for the delivery of certificates representing the control shares to be acquired in exchange for the corporation's payment of fair value therefor. BH/115413.2 ID/DRM 16

EXHIBIT 10.1 [NBD LOGO] CREDIT AUTHORIZATION AGREEMENT NBD Bank (the "Bank"), 611 Woodward Avenue, Detroit, Michigan 48226-3947, has approved the credit facilities listed below (collectively, the "Credit Facilities," and, individually, as designated below) to: Syntel, Inc. (the "Borrower"), (Borrower's Name) 5700 Crooks Road, Suite 301, Troy, MI 48098 - -------------------------------------------------------------------------------. (Borrower's Name) subject to the terms and conditions set forth in this agreement. 1.0 CREDIT FACILITIES. (Check and complete applicable sections) 1.1 UNCOMMITTED CREDIT AUTHORIZATIONS. The Bank has approved the uncommitted credit authorization listed below (collectively, the "Credit Authorizations," and, individually, as designated below) subject to the terms and conditions of this agreement and the Bank's continuing satisfaction with the Borrower's financial status. Disbursements under the Credit Authorizations are solely at the Bank's discretion. Any disbursement on one or more occasions shall not commit the Bank to make any subsequent disbursement. / / A. FACILITY A. The Bank has approved an uncommitted Credit Authorization to the Borrower in the principal sum not to exceed $____________________ in the aggregate at any one time outstanding ("Facility A"). Credit under Facility A shall be in the form of disbursements evidenced by credits to the Borrower's accounts and shall be repayable as set forth in a Master Demand Note executed concurrently (referred to in this agreement both singularly and together with any other promissory notes referenced in this Section 1 as the "Notes"). The proceeds of Facility A shall be used for the following purpose:__________________________________________, Facility A shall expire on __________________________________, 199__ unless earlier withdrawn. /X/ B. FACILITY B (INCLUDING LETTERS OF CREDIT). The Bank has approved an uncommitted Credit Authorization to the Borrower in the principal sum not to exceed $15,000,000.00 in the aggregate at any one time outstanding ("Facility B"). Facility B shall include the issuance of [commercial/standby] letters of credit not exceeding $750,000.00 in the aggregate at any one time outstanding, expiring not later than April 14, 1998 [which shall include time drafts expiring not later than ** *** ** *** *** *** **, 199 __] (the "Letters of Credit"). (Strike bracketed words if inapplicable.) Each Letter of Credit shall be in form acceptable to the Bank and shall bear a fee of 1% per year of the face amount of each standby Letter of Credit plus an issuance fee of $150.00 upon issuance of each Letter of Credit. (If no fee is listed, the Letter of Credit shall bear a fee to be agreed upon by the Bank and the Borrower). Credit under Facility B shall be in the form of disbursements evidenced by credits to the Borrower's account and shall be repayable as set forth in a Master Demand Note executed concurrently (referred to in this agreement both singularly and together with any other promissory notes referenced in this Section 1 as the "Notes") or by issuance of a Letter of Credit upon completion of an application acceptable to the Bank. The proceeds of Facility B shall be used for the following purpose: working capital. Facility B shall expire on August 31, 1997 unless earlier withdrawn. /X/ C. FACILITY C (PURCHASE MONEY TERM LOANS). The Bank has approved an uncommitted credit authorization to the Borrower in the principal sum not to exceed $10,000,000.00 in the aggregate at any one time outstanding ("Facility C"). Facility C shall be in the form of loans evidenced by the Borrower's notes on the Bank's form (referred to in this agreement both singularly and together with any other promissory notes referenced in this Section I as the "Notes"), the proceeds of which shall be used to purchase the following: acquisition of companies. Interest on each loan shall accrue at a rate to be agreed upon by the Bank and the Borrower at the time the loan is made. The maturity of each note shall note shall not exceed 18 months from the note date. Facility C shall expire on August 31, 1997 unless earlier withdrawn. / / 1.2 TERM LOANS. The Bank agrees to extend credit to the Borrower in the form of term loans(s) (whether one or more, the "Term Loans") in the principal sum(s) of ____________________________________________ respectively, bearing interest and payable as set forth in the Term Note(s) executed concurrently (referred to in this agreement both singularly and together with any other promissory notes referenced in this Section 1 as the "Notes"). The proceeds of the Term Loans shall be used for the following purpose: ___________________________________ _____________________________________________________________________ . 2.0 CONDITIONS PRECEDENT.

2.1 CONDITIONS PRECEDENT TO INITIAL EXTENSION OF CREDIT. Before the first extension of credit under this agreement, whether by disbursement of a loan, issuance of a letter of credit, or otherwise, the Borrower shall deliver to the Bank, in form and substance satisfactory to the Bank:

A. LOAN DOCUMENTS. The Notes; the letter of credit applications required by Section 1.2; the security agreements, financing statements, mortgages and other documents required by Section 5.1; the guaranties required by Section 6.0; the subordination agreements required by Section 7.0; and any other loan documents which the Bank may resonably require to give effect to the transactions contemplated by this agreement; B. EVIDENCE OF DUE ORGANIZATION AND GOOD STANDING. Evidence satisfactory to the Bank of the due organization and good standing of the Borrower and every other business entity that is a party to this agreement or any other loan doucment required by this agreement; and C. EVIDENCE OF AUTHORITY TO ENTER INTO LOAN DOUCMENTS. Evidence satisfactory to the Bank that (i) each party to this agreement or any other loan document required by this agreement is authorized to enter into the transactions contemplated by this agreement and the other loan documents, and (ii) the person signing on behalf of each such party is authorized to do so. 2.2 CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. Before any extension of credit under this agreement, whether by disbursement of a loan, issuance of a letter of credit, or otherwise, the following conditions shall have been satisfied: A. REPRESENTATIONS. The representations contained in Section 10 shall be true on and as of the date of the extension of credit; B. NO EVENT OF ACCELERATION. No event of acceleration shall have occurred and be continuing or would result from the extension of credit. C. CONTINUED SATISFACTION. The Bank shall have remained satisfied with the Borrower's managerial and financial status; D. ADDITIONAL APPROVALS, OPINIONS, AND DOCUMENTS. The Bank shall have received such other approvals, opinions and documents as it may reasonably request; and E. OTHER CONDITIONS. For Facility C. satisfactory receipt and review of acquisition candidate financial statements and borrower's pro forma verifying covenant complian 3.0 BORROWING BASE/ANNUAL PAY DOWN. 3.1 BORROWING BASE. (complete if applicable) Notwithstanding any other provision of this agreement, the aggregate principal amount outstanding at any
one time under (check applicable clauses) [ ] Facility A [X] Facility B shall not exceed the lesser of the Borrowing Base or $ 15,000,000.00 . Borrowing Base means: ---------------(Check and complete applicable clauses)

[X] A. 75% of the Borrower's trade accounts receivable in which the Bank has a perfected, first priority, security interest, excluding accounts more than 90 days past due from the date of invoice, accounts subject to offset or defense, government, bonded, affiliate and foreign accounts, and accounts otherwise unacceptable to the Bank, plus [ ] B. Inventory of the Borrower in which the Bank has a perfected, first priority, security interest, valued at the lower of cost or market, but not exceeding $_______________ in aggregate, as follows:

[] (1)___________% of aggregate inventory; or [] (1)___________% of raw material inventory; and [] (2)___________% of work-in-process inventory; and [] (3)___________% of finished goods inventory, plus [ ] C. ____% of the ________ value of the Borrower's machinery and equipment in which the Bank has a perfected, first priority, security interest, but not exceeding $_________________, plus [ ] D. Additional Borrowing Base provisions are contained in the attached addedum. 3.2 ANNUAL PAY DOWN. (complete if applicable) Notwithstanding any other provision of this agreement, there shall be no debt outstanding under ___________________________________for a period of ______________________ (Facility A, Facility B, etc.) consecutive months during each fiscal year of the Borrower. 4.0 FEES AND EXPENSES. (complete if applicable) 4.1 FEES. The Borrower shall pay the Bank the following fees, all of which the Borrower acknowledges have been earned by the Bank: 1/4% of amounts advanced under Facility C. ---------------

4.2 OUT-OF POCKET EXPENSES. In addition to any fee set forth in Section 4.1 above, the Borrower shall reimburse the Bank for its out-of-pocket expenses and reasonable attorney's fees (including the fees of in-house counsel) allocated to the Credit Facilities. 5.0 SECURITY. 5.1 Payment of all amounts owing under the Credit Facilities shall be secured by the Borrower's grant of a continuing first security interest and/or real estate mortgage, as the case may be, covering its interest in the following property and all its additions, substitutions, increments, proceeds and products, present and future, whether now owned or later acquired. (the "Collateral"):

(check and complete applicable clauses) [x] A. Accounts Receivable. All of the Borrower's accounts, chattel paper, general intangibles, instruments, and documents (as those terms are defined in the Uniform Commercial Code), rights to refunds of taxes paid at any time to any governmental entity, and any letters of credit and drafts under them given in support of the foregoing, wherever located. The Borrower shall deliver to the Bank executed security agreements and financing statements in form and substance satisfactory to the Bank. [ ] B. Inventory. All of the Borrower's inventory, wherever located. The Borrower shall deliver to the Bank executed security agreements and financing statements in form and substance satisfactory to the Bank. [ ] C. Equipment. All of the Borrower's equipment, wherever located. The Borrower shall deliver to the Bank executed security agreements and financing statements in form and substance satisfactory to the Bank. [ ] D. Real Estate. The real property, including improvements, located at __________________________________________________________________. The Borrower shall deliver to the Bank an executed mortgage ALTA mortgage title insurance policy without exceptions with mortgage survey certified to the Bank and the title company, and, where applicable, an assignment of rents, subordinations of leases and assignments of land contracts, all in form and substance satisfactory to the Bank. [ ] E. _________________________________________________________ 5.2 No forbearance or extension of time granted any subsequent owner of the Collateral shall release the Borrower from liability. 5.3 Additional Collateral/Setoff. To further secure payment of all amounts owing under the Credit Facilities and all of the Borrower's other liabilities to the Bank, the Borrower grants to the Bank a continuing security interest in: (i) all securities and other property of the Borrower in the custody, possession or control of the Bank (other than property held by the Bank solely in a fiduciary capacity), and (ii) all balances of deposit accounts of the Borrower with the Bank. The Bank shall have the right at any time to apply its own debt or liability to the Borrower, or to any other party liable for payment of the Credit Facilities, inn whole or partial payment of the Credit Facilities or other present or future liabilities, without any requirement of mutual maturity. 5.4 Cross Lien. Any of the Borrower's other property in which the Bank has a security interest to secure payment of any other debt, whether absolute, contingent, direct or indirect, including the Borrower's guaranties of the debts of others, shall also secure payment of and be part of the Collateral for the Credit Facilities. 6.0 Guaranties. (complete if applicable) Payment of the Borrower's liabilities under the Credit Facilities shall be guaranteed by______________________________________________________________, by execution of the Bank's form of guaranty agreement. The liability of the guarantors, if more than one, shall be joint and several. 7.0 Subordination. (complete if applicable) The Credit Facilities shall be supported by the subordination of debt owing from the Borrower to ___________________________________________________, including without limitation debt currently owing in the amount of $_____________________, in manner and by agreement satisfactory to the Bank. 8.0 Affirmative covenants. So long as any debt remains outstanding under the Credit Facilities, the Borrower, and each of its subsidiaries, if any, shall: 8.1 Insurance. Maintain insurance with financially sound and reputable insurers covering its properties and business against those casualties and contingencies and in the types and amounts as shall be in accordance with sound business and industry practices. 8.2 Existence. Maintain its existence and business operations as presently in effect in accordance with all applicable laws and regulations, pay its debts and obligations when due under normal terms, and pay on or before their due date all taxes, assessments, fees and other governmental monetary obligations, except as they may be contested in good faith if they have been properly reflected on its books and, at the Bank's request, adequate funds or security has been pledged to insure payment. 8.3 Financial Records. Maintain proper books and records of account, in accordance with generally accepted accounting principles where applicable, and consistent with financial statements previously submitted to the Bank. 8.4 Notice. Give prompt notice to the Bank of the occurance of (i) any event of acceleration, and (ii) any other development, financial or otherwise, which would affect the Borrower's business, properties or affairs in a materially adverse manner. 8.5 Collateral Audits. (complete if applicable) Permit the Bank or its agents to perform___________________________________________ (monthly, annual, etc.) audits of the Collateral. The Borrower shall compensate the Bank for those audits in accordance with the Bank's

schedule of fees as may be amended from time to time. Whether or not this section has been completed, the Bank shall retain the right to inspect the Collateral and business records related to it at such times and at such intervals as the Bank may reasonably require.

8.6 MANAGEMENT, (complete if applicable) Maintain __________________________ as ____________________________________________________________________________. 8.7 FINANCIAL REPORTS. Furnish to the Bank whatever information, books and records the Bank may reasonably request, including at a minimum: (Check and complete applicable clauses. If the Borrower has subsidiaries, all financial statements required will be provided on a consolidated and on a separate basis.) A. Within 45 days after each quarterly period, a balance sheet

(Monthly/quarterly) as of the end of that period and statements of income, retained earnings, and cash flows from the beginning of that fiscal year to the end of that period, certified as correct by one of its authorized agents. B. Within 180 days after and as of the end of each of its fiscal years, a detailed audit (audit/financial statement) including a balance sheet and statements of income, retained earnings, and cash flows certified (reviewed/compiled/certified) by an independent certified public accountant of recognized standing. C. Within 25 days after and as of the end of each calendar month, the following lists, each certified as correct by one of its authorized agents: /X/ (1) a list of accounts receivable, aged from date of invoice; / / (2) a list of accounts payable, aged from date of receipt; / / (3) a list of inventory, valued at the lower of cost or market. / / D. Within _______ days after and as of the end of each calendar year, the signed personal financial statement of ________________________________.

(Borrower/Guarantor/other) E. Within 5 days after filing, a signed copy of the annual tax return, with exhibits, of Syntel, Inc. (Borrower/Guarantor/other) / / F. An Environmental Certificate on the Bank's form on and as of due of this agreement, and thereafter as required by the Environmental Certificate. / / G. __________________________________________________________________ ___________________________________________________________________________. 9.0 NEGATIVE COVENANTS. 9.1 DEFINITIONS. As used in this agreement, the following terms have the following respective meanings: A. "Subordinated Debt" means debt subordinated to the Bank in manner and by agreement satisfactory to the Bank. B. "Tangible Net Worth" means total assets less intangible assets and total liabilities. Intangible assets include goodwill, patents, copyrights, mailing lists, catalogs, trademarks, bond discount and underwriting expenses, organization expenses, and all other intangibles. 9.2 Unless otherwise noted, the financial requirements set forth in this section shall be computed in accordance with generally accepted accounting principles applied on a basis consistent with financial statements previously submitted by the Borrower to the Bank. 9.3 Without the written consent of the Bank, so long as any debt remains outstanding under the Credit Facilities, the Borrower shall not: (where appropriate, covenants shall apply on a consolidated basis - clauses H0 apply only if completed.) A. DIVIDENDS. Acquire or retire any of its shares of capital stock, or declare or pay dividends or make any other distributions upon any of its shares of capital stock, except dividends payable in its capital stock, and dividends payable to "Subchapter S" corporation shareholders, in amounts sufficient to pay the shareholder(s) income tax obligations related to the Borrower's taxable income. B. SALE OF SHARES. Issue, sell or otherwise dispose of any shares of its capital stock or other securities, or rights, warrants or options to purchase or acquire any such shares or securities. C. DEBT. Incur, or permit to remain outstanding, debt for borrowed money or installment obligations, except debt reflected in the latest financial statement of the Borrower furnished to the Bank prior to execution of this agreement and not to be paid with proceeds of borrowings under the Credit Facilities. For purposes of this covenant, the sale of any accounts receivable shall be deemed the incurring of debt for borrowed money. D. GUARANTIES. Guarantee or otherwise become or remain secondarily liable on the undertaking of

another, except for endorsement of drafts for deposit and collection in the ordinary course of business. E. LIENS. Create or permit to exist any of its property, real or personal, except: existing liens known to the Bank; liens to the Bank; liens incurred in the ordinary course of business securing current nondelinquent liabilities for taxes, worker's compensation, unemployment insurance, social security and pension liabilities; and liens for taxes being contested in good faith. F. ADVANCES AND INVESTMENTS. Purchase or acquire any securities of, or make any loans or advances to, or investments in, any person, firm or corporation, except obligations of the United States Government, open market commercial paper rated one of the top two ratings by a rating agency of recognized standing, or certificates of deposit in insured financial institutions.

G. USE OF PROCEEDS. Use, or permit any proceeds of the Credit Facilities to be used, directly or indirectly, for the purpose of "purchasing or carrying any margin stock" within the meaning of Federal Reserve Board Regulation U. At the Banks request, the Borrower shall furnish to the Bank a completed Federal Reserve Board Form U-1. H. WORKING CAPITAL. Permit the difference between its current assets [less all sums owing from stockholders, members or partners, as the case may be, and from officers, managers and directors] and current liabilities [plus all sums (other than Subordinated Debt) owing to stockholders, members or partners, as the case may be, and to officers, managers and directors] to be less than $____________________. (Strike bracketed words if not applicable.) I. TANGIBLE NET WORTH [Plus Subordinated Debt]. Permit its Tangible Net Worth to be less than $14,000,000.00. Increasing annually by 50% net income after sub-s tax distributions. J. CURRENT RATION. Permit the ratio of its current liabilities to be less than __________________________________to 1.00. K. LEVERAGE RATIO. Permit the ratio of its total liabilities to its Tangible Net Worth to exceed 1.00 to 1.00. (Strike bracketed words if not applicable). L. FIXED ASSETS. Expend for, contract for, lease, rent, or otherwise acquire fixed assets, of the expense to the Borrower, and all subsidiaries, if any, shall exceed $___________________________ in the aggregate of any one fiscal year. M. LEASES. Contract for or assume in any manner, lease obligations if the aggregate of all payments shall exceed $______________________ in any one fiscal year. N. COMPENSATION. Pay, or award compensation of any kind, in any one fiscal year, to___________________________________exceeding $______________. **(T/N/W defined as total assets less intangible assets, investments in related entities, sums owing from stockholders, officers, directors, and employees, less total liabilities). 10.0 REPRESENTATIONS BY BORROWER. Each Borrower represents that: (a) the execution and delivery of this agreement and the Notes and the performance of the obligations they impose do not violate any law, conflict with any agreement by which it is bound, or require the consent or approval of any governmental authority or any third party; (b) this agreement and the Notes are valid and binding agreements, enforceable according to their terms; and (c) all balance sheets, income statements, and other financial statements furnished to the Bank are accurate and fairly reflect the financial condition of the organizations and persons to which they apply on their effective dates, including contingent liabilities of every type, which financial condition has not changed materially and adversely since those dates. Each Borrower, if other than a natural person, further represents that: (a) it is duly organized, existing and in good standing under the laws of the jurisdiction under which it was organized; and (b) the execution and delivery of this agreement and the Notes and the performance of the obligations they impose (i) are within its powers; (ii) and have been duly authorized by all necessary action of its governing body, and (iii) do not contravene the terms of its articles of incorporation or organization, its by laws, or any partnership, operating or other agreements governing its affairs. 11.0 ACCELERATION. 11.1 EVENTS OF ACCELERATION. If any of the following events occur, the Credit Facilities shall terminate and all borrowings under them shall become due immediately, without notice, at the Bank's option, whether or not the Bank has made demand. A. The Borrower or any guarantor of any of the Credit Facilities ("Guarantor") fails to pay when due any amount payable under the Credit Facilities or under any agreement or instrument evidencing debt to any creditor. B. The Borrower or any Guarantor (a) fails to observe or perform any other term of this agreement or the Notes; (b) makes any materially incorrect or misleading representation, warranty or certificate to the Bank; (c) makes any materially incorrect or misleading representation in any financial statement or other information delivered to the Bank; or (d) defaults under the terms of any agreement or instrument relating to any debt for borrowed money (other than borrowings under the Credit Facilities) such that the creditor declares the debt due before its maturity. C. There is a default under the terms of any loan agreement, mortgage, security agreement or any other document executed as part of the Credit Facilities, or any guaranty of the liabilities under the Credit Facilities becomes unenforceable in whole or in part or any Guarantor fails to promptly perform under its guaranty. D. A "reportable event" (as defined in the Employee Retirement Income Security Act of 1974 as amended) occurs that would permit the Pension Benefit Guaranty Corporation to terminate any employee benefit plan of the Borrower or any affiliate the Borrower. E. The Borrower or any guarantor becomes insolvent or unable to pay its debts as they become due. F. The Borrower or any Guarantor (a) makes an assignment for the benefit of creditors; (b) consents to the appointment of a custodian, receiver or trustee for it or for a substantial part of its assets; or (c) commences any proceeding under any bankruptcy, reorganization, liquidation or similar laws of any jurisdiction. G. A custodian, receiver or trustee is appointed for the Borrower or any Guarantor or for a substantial part of its assets without its consent and is not removed within 60 days after the appointment. H. Proceedings are commenced against the Borrower or any Guarantor under any bankruptcy, reorganization, liquidation, or similar laws of any jurisdiction, and those proceedings remain undismissed for 60 days after commencement; or the Borrower or Guarantor consents to the commencement of the proceedings. I. Any judgment is entered against the

Borrower or any Guarantor, or any attachment, levy or garnishment is issued against any property of the Borrower or any Guarantor. J. The Borrower or any Guarantor dies.

K. The Borrower or any Guarantor, without the Bank's written consent, (a) is dissolved, (b) merges or consolidates with any third party, (c) leases, sells or otherwise conveys a material part of its assets or business outside the ordinary course of business, (d) leases, purchases, or otherwise aquires a material part of the assets of any other corporation or business entity, except in the ordinary course of business, or (e) agrees to do any of the foregoing (notwighstanding the foregoing, any subsidiary may merge or consolidate with any other subsidiary, or with the Borrower, so long as the Borrower is the survivor). L. The loan-to-value ratio of any pledged securities at any time exceeds ______%, and such excess continues for five (5) days after notice from the Bank to the Borrower. M. There is a substantial change in the existing or prospective financial conditionof the Borrower or any Guarantor which the Bank in good faith determines to be materially adverse. N. The Bank in good faith shall deem itself insecure. 11.2 REMEDIES. If the amounts owing under the Credit Facilities are not paid at maturity, whether by demand, acceleration, or otherwise, the Bank shall have all of the rights and remedies provided by any law or agreement. Any requirement of reasonable notice shall be met if the Bank sends the notice to the borrower at least seven (7) days prior to the date of sale, disposition or other event giving rise to the required notice. the Bank is authorized to cause all or any part of the Collateral to be transferred to or registered in its name or in the name of any other person, firm or corporation, with or without designation of the capacity of such nominee. The Borrower shall be liable for any deficiency remaining after disposition of any collateral. The borrower is liable to the Bank for all reasonable costs and expenses of every kind incurred in the making or collection of the Credit Facilities, including, without limitation, reasonable attorneys' fees and court costs (whether attributable to the Bank's in-house or outside counsel.) These costs and expenses shall include, without limitation, any costs or expenses incurred by SCHEDULE 3.02(l)(ii)
Union Contractsff Carlisle, PA Lewistown, PA Carlisle, PA Mississauga, Ont. UNITE (formerly ACTWU) UNITE (formerly ACTWU) IUOE UNITE (formerly ACTWU)

Organizing Attempts in past 5 years Sidney, Ohio Teamsters (vote taken and turned down) Lebanon, Ohio UAW and United Food and Commercial Workers Union the Bank in any bankruptcy, reorganization, insolvency or other similar proceeding. 12.0 MISCELLANEOUS. 12.1 Notice from one party to another relating to this agreement shall be deemed effective if made in writing (including telecommunications) and delivered to the recipient's address, telex number or fax number set forth under its name below by any of the following means: (a) hand delivery, (b) registered or certified mail, postage prepaid, with return receipt requested, (c) first class or express mail, postage prepaid, (d) Federal Express, or like overnight courier service, or (e) fax, telex or other wire transmission with request for assurance of receipt in a manner typical with respect to communication of that type. Notice made in accordance with this section shall be deemed delivered upon receipt kf delivered by hand or wire transmission, three (3) business days after mailing if mailed by first class, registered or certified mail, or one business day after mailing or deposit with an overnight courier service if delivered by express mail or overnight courier. 12.2 No delay on the part of the Bank in the execise of any right or remedy shall operate as a waiver. No single or partial exercise by the bank of any right or remedy shall preclude any other future exercise of it or the exercise of any other right or remedy. No waiver or indulgence by the Bank of any default shall be effective unless in writing and signed by the Bank, nor shall a waiver on one occasion be construed as a bar to or waiver of that right on any future occassion. 12.3 This agreement, the Notes, and any related loan doucments embody the entire agreement and understanding between the Borrower and the Bank and supersede all prior agreements and understandings relating to their subject matter. If any one or more of the obligations of the Borrower under this agreement or the Notes shall be invalid, illegal or uneforceable in any jurisdiction, the validity, legality and enforceability of the remaining obligations of the Borrower shall not in any way be affected or impaired, and such validity, illegality or unenforceability in one jurisdiction shall not affect the validity, legality or enforceability of the obligations of the borrower under this agreement or the Notes in any other jurisdiction. 12.4 The Borrower, if more than one, shall be jointly and severally liable. 12.5 This agreement is delivered in the State of Michigan and governed by Michigan law. This agreement is binding on the Borrower and its successors, and shall inure to the benefit of the Bank, its successors and assigns. 12.6 Section headings are for convenience of reference only and shall not affect the interpretation of this agreement. 13.0 WAIVER OF JURY TRIAL. The Bank and Borrower, after consulting or having had the opportunity to consult with counsel, knowingly, voluntarily and intentionally waive any right either of them may have to a trial by jury in any litigation based upon or arising out of this agreement or any related instrument or agreement, or any of the transactions contemplated by this agreement, or any course of conduct,

dealing, statements (whether oral or written), or actions of either of them. Neither the Bank nor the Borrower shall seek to consolidate, by counterclaim or otherwise, any action in which a jury trial has been waived with any other action in which a jury trial canot be or has not been waived. These provisions shall not be deemed to have been modified in any respect or relinquished by either the Bank or the Borrower except by a written instrument executed by both of them. Executed by the parties on: Sept. 13, 1996.

(Date)
"BANK": NBD Bank - -------------------------- -------------------------BY: MARY ANN LIEVOIS - -------------------------Mary Ann Lievois - -------------------------ADDRESS FOR NOTICES: 2155 W. Big Beaver - -------------------------Troy, MI 48084 - -------------------------- -------------------------Fax/Telex No. 810-816-0233 ------------"BORROWER": Syntel, Inc. --------------------------------------------------BY: X -------------------------Bharat Desai, President -------------------------ADDRESS FOR NOTICE: 5700 Crooks Road, Suite 301 --------------------------Troy, MI 48098-2809 ----------------------------------------------------Fax/Telex No. --------------

EXHIBIT 10.2 [NBD LETTERHEAD] March 11, 1997 Mr. Bharat Desai President Syntel, Inc. 2800 Livernois, Suite 400 Troy, MI 48083 Dear Bharat: We are pleased to inform you that NBD Bank has increased the uncommitted credit authorization described in Section 1.1 of the Credit Authorization Agreement executed by you and the Bank on September 13, 1996 from $15,000,000 to $20,000,000. In conjunction with this increase, Section 3.1 BORROWING BASE A. is increased from 75% to 80% of the Borrower's trade accounts receivable. The requirements of Section 9.3(I) TANGIBLE NET WORTH and (K) LEVERAGE RATIO remain in place, however NBD Bank hereby waives compliance with these terms through December 31, 1996. Except as modified by this letter, all of the terms and conditions of the Credit Authorization Agreement remain in effect. Please sign on the following page to confirm these changes.

[NBD LETTERHEAD]
Sincerely, NBD Bank By: Mary Ann Lievois -------------------------Mary Ann Lievois Its: Vice President ----------------------------day of By: Rebecca Smith ------------------------Rebecca Smith Senior Vice President ------------------------

Its:

Accepted and Agreed to this

, . -------------------- ------

Syntel, Inc. By: Neerja Jethi Neerja Jethi Its: V. President

EXHIBIT 10.3 [NBD LETTERHEAD] March 25, 1997 Mr. R.S. Ramdas Sr. Director Internal Audit, Tax & Treasury Syntel, Inc. 2800 Livernois Suite 400 Troy, MI 48083 Dear Ramdas: NBD Bank hereby removes items 9.3A Dividends and 9.3B Sale of Shares under the terms and conditions of the Credit Authorization Agreement dated September 13, 1996 between NBD Bank and Syntel, Inc. All other terms and conditions remain the same as referenced in the addendum letter dated March 11, 1997. Please sign below to acknowledge your acceptance and confirmation. Sincerely, NBD Bank By: Mary Ann Lievois Mary Ann Lievois Its: Vice President Accepted and Agreed to this 25th day of March 1997. Syntel, Inc. By: R. S. Ramdas R. S. Ramdas Its: Sr. Director Internal Audit, Tax & Treasury

EXHIBIT 10.4 STOCK PURCHASE AGREEMENT This STOCK PURCHASE AGREEMENT (the "Agreement") is made on _______, 1997, between Syntel, Inc., a Michigan corporation ("Buyer"), and Bharat Desai and Neerja Sethi (each a "Stockholder" and, collectively, the "Stockholders"), the stockholders of Syntel Software Private Limited, a corporation organized under the laws of India (the "Company"). The Stockholders are the beneficial and registered owners of all of the issued and outstanding capital stock (the "Shares") of the Company. The Stockholders desire to sell to Buyer and Buyer desires to purchase from the Stockholders all of the Shares for the price, upon the terms and subject to the conditions hereinafter set forth. Capitalized terms not otherwise defined at the time of usage shall have the meanings designated in Section 8.8 hereof. In consideration of the premises and of the respective covenants and agreements contained herein, the parties agree as follows: ARTICLE I Purchase and Sale of Shares; Closing 1.1 Purchase and Sale. On the terms and subject to the conditions set forth in this Agreement, the Stockholders shall sell and transfer to Buyer, and Buyer shall purchase and accept from the Stockholders, all of the outstanding Shares. 1.2 Purchase Price. Buyer agrees to pay to the Stockholders at the Closing the aggregate sum of $7,000,000 (the "Purchase Price") by wire transfer of immediately available federal funds to such accounts as the Stockholders shall designate. The Purchase Price shall be allocated among the Stockholders in proportion to their respective holdings of the Shares as set forth on Annex A hereto. 1.3 Closing. Subject to the conditions set forth in this Agreement, the purchase and sale of the Shares pursuant to this Agreement (the "Closing") shall take place upon consummation of the public offering of Buyer's Common Stock (the "Public Offering") pursuant to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 6, 1997 (the "Closing Date"). 1.4 Deliveries at the Closing. At the Closing, the Stockholders shall deliver to Buyer certificates representing all the Shares, endorsed in blank in proper form for transfer, and Buyer shall deliver the Purchase Price to the Stockholders in proportion to their respective holdings of the Shares as set forth in Annex A hereto.

ARTICLE II Representations and Warranties of the Stockholders The Stockholders jointly and severally represent and warrant to the Buyer that the following representations and warranties are true and correct on the date hereof and will be true and correct as of the Closing Date in all material respects. 2.1 Authority. The Stockholders have the authority to enter into this Agreement and to carry out the transactions contemplated hereby. This Agreement has been duly executed by the Stockholders and constitutes a valid and binding agreement of the Stockholders, enforceable against the Stockholders in accordance with its terms. 2.2 Consents and Approvals; No Violation. To the knowledge of the Stockholders, neither the execution and delivery of this Agreement by the Stockholders nor the consummation of the transactions contemplated hereby will (a) result in any breach of any provision of the charter or Bylaws (or other similar governing documents) of the Company,(b) result in a violation or breach of, or constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, lease, contract, agreement or other instrument or obligation to which the Company or any of its subsidiaries is a party or by which any of them or any of their properties or assets may be bound, or (c) violate any order, writ, injunction, decree, statute, rule or regulation applicable to the Company, any of its subsidiaries or any of their properties or assets, except in the case of (b) and (c) for violations, breaches or defaults which would not individually or in the aggregate, have a Material Adverse Effect on the Company and its subsidiaries taken as a whole. 2.3 Organization of Company; Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the country of India, and has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. 2.4 No Encumbrances; Capitalization. (a) The Shares are free all Liens and the Stockholders have full authority to transfer the Shares pursuant to this Agreement. (b) The issued and outstanding common stock of the Company consists of 500,000 shares US $0.32 per share. All such outstanding shares of the Company's capital stock are validly issued, subscribed and paid up. There is no security, option, warrant, right, call, subscription, agreement, commitment or understanding of any nature whatsoever, fixed or contingent, that directly or indirectly (i) calls for the issuance, sale, pledge or other disposition of any shares of stock of the Company or any securities convertible into, or exchangeable for, or other rights to acquire, any shares of stock of the Company, or (ii) obligates the Company to grant, offer or enter into any of the 2

foregoing. There are no outstanding contractual obligations of the Company to repurchase, redeem or otherwise acquire any outstanding shares of its capital stock. There are no agreements or understandings to which the Company is a party with respect to the (A) voting of capital stock or other securities of the Company, (B) dividends or distributions on account of such capital stock or (C) the transfer or disposition of such capital stock. (c) Upon delivery of the Shares to Buyer and full payment therefor as contemplated by this Agreement, Buyer shall acquire good and valid title to all of the Shares free and clear of all Liens. 2.5 Financial Statements. The Stockholders have previously furnished to Buyer (a) an unaudited balance sheet of the Company as of March 31, 1997 and related statement of income of the Company for the period then ended, (b) audited balance sheet of the Company as of December 31, 1996 and (c) the related audited statement of income, statement of stockholders' equity and statement of cash flows for the fiscal year then ended together with the related notes thereto and the report thereon of Rajkamal Shah & Co., chartered accountants. The balance sheet of the Company as of March 31, 1997, is hereafter referred to as the "1997 Balance Sheet". All such financial statements are in accordance with the books and records of the Company and have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved. The balance sheets included in the financial statements referred to in this Section 2.5 (including the related notes thereto) present fairly the financial position of the Company as of their respective dates, and each of the related statements of income and (where applicable) stockholders' equity and cash flows included therein (including the related notes thereto) present fairly the results of operations and (where applicable) cash flows for the fiscal years or periods then ended. 2.6 Absence of Certain Changes. Since March 31, 1997, there has not been any Material Adverse Effect and the Stockholders are not aware of any condition, development or contingency existing which, so far as reasonably can be foreseen at this time, may reasonably be expected to result in any Material Adverse Effect. 2.7 Properties; Title. (a) The Company does not own any real property, but leases property in Mumbai, India and Chennai, India. True and correct copies of such leases have been delivered to Buyer. Each lease is in full force and effect and there is no default thereunder. (b) The Company has (i) good, valid and marketable title to the tangible property and all of the other assets reflected on the 1997 Balance Sheet, except as disposed of in the ordinary course of business, and (ii) a valid leasehold interest in its leased real property, in each case with respect to subsections (i) and (ii) above, free and clear of all Liens other than (A) Liens for current taxes, assessments or governmental charges not yet due and delinquent, or (B) Liens which do not, 3

individually or in the aggregate, materially interfere with the use of the real properties or materially detract from their value. 2.8 Legal Compliance, Licenses and Authorizations. (a) To the knowledge of the Stockholders, the Company has complied in all material respects with all applicable laws, statutes, rules, regulations and orders, of federal, state, local and foreign governments (and all agencies thereof), including, without limitation, all environmental laws and no action, proceeding, complaint, claim, demand or notice has been filed or commenced against it alleging any failure so to comply. (b) To the knowledge of the Stockholders, the Company holds all material licenses and other permits and authorizations necessary for the operation of the business of the Company as presently conducted. There is not now pending or threatened any action by the grantor of any such license, permit or authorization to revoke, cancel or refuse to renew any such license, permit or authorization. 2.9 Labor Matters. The Company is not a party to or subject to any labor union or collective bargaining agreement. The Company is in compliance with all applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and is not engaged in any unfair labor practice except where the failure to be in compliance would not reasonably be expected to have a Material Adverse Effect. 2.10 Material Contracts. No material default or alleged material default exists under any of the Material Contracts. Each of the Material Contracts is now valid, in full force and effect and enforceable in accordance with its terms and the Company has fulfilled in all respects, or taken all action reasonably necessary to enable it to fulfill when due, all its obligations under such contracts, except where the failure to fulfill such obligations would not reasonably be expected to have a Material Adverse Effect. 2.11 Legal Proceedings. There is no claim, action, proceeding or investigation pending or, to the knowledge of the Company, threatened in writing against the Company before any court or governmental or regulatory authority or body wherein a result adverse to the Company's interests would have a Material Adverse Effect, or would prevent or delay the transactions contemplated in this Agreement. The Company is not subject to any outstanding order, writ, injunction or decree which would have a Material Adverse Effect or would prevent or delay the transactions contemplated in this Agreement. 2.12 Taxes. The Company has duly filed (or caused to be filed) all returns of Taxes (as defined below) required to be filed by it, and has paid or provided for all Taxes shown to be due on such returns. No action or proceeding for the assessment or collection of any Taxes is pending or proposed in writing against the Company, and no deficiency, assessment or other claim in writing for any Taxes has been asserted or made against the Company that has not been fully paid or finally 4

settled. To the knowledge of the Stockholders, all Taxes which the Company has been required to collect or withhold have been duly withheld or collected and, to the extent required, have been paid to the proper taxing authority. As used herein, "Taxes" shall mean all taxes, charges, fees, levies or other assessments including, without limitation, income, excise, property, transfer, payroll, withholding, employment, value added, capital, net worth, estimated, sales, use and franchise taxes, imposed by any government or subdivision or agency thereof, and including any interest, penalties or additions attributable thereto. ARTICLE III Representations and Warranties of Buyer Buyer represents and warrants to the Company that the following representations and warranties are true and correct on the date hereof and will be true and correct as of the Closing Date in all material respects. 3.1 Organization. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the State of Michigan. 3.2 Authority Relative to this Agreement. Buyer has all requisite corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of Buyer, and no other corporate proceedings on the part of Buyer are necessary to authorize this Agreement or to consummate the transactions contemplated hereby or thereby. This Agreement has been duly and validly executed and delivered by Buyer and constitutes a valid and binding agreement of Buyer, enforceable against Buyer in accordance with its terms. 3.3 Consents and Approvals; No Violation. To the knowledge of Buyer, neither the execution and delivery of this Agreement by Buyer nor the consummation of the transactions contemplated hereby will (a) result in any breach of any provision of the Articles of Incorporation or Bylaws (or other similar governing documents) of Buyer, (b) result in a violation or breach of, or constitute a default under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, lease, contract, agreement or other instrument or obligation to which Buyer is a party or by which Buyer or any of its properties or assets may be bound, or (c) violate any order, writ, injunction, decree, statute, rule or regulation applicable to Buyer, any of its subsidiaries or any of their properties or assets, except in the case of (b) and (c) for violations, breaches or defaults which would not individually or in the aggregate, have a Material Adverse Effect on Buyer. 5

ARTICLE IV Covenants of the Parties 4.1 Conduct of Business. Except as contemplated by this Agreement, during the period from the date of this Agreement to the Closing Date, the Stockholders will cause the Company to conduct its business and operations according to its ordinary and usual course of business and consistent with past practices. 4.2 Consents. Buyer and Stockholders will use their respective best efforts to obtain consents of all persons and governmental authorities necessary to the consummation of the transactions contemplated by this Agreement, including the consent of the Reserve Bank of India. 4.3 Additional Agreements. Subject to the terms and conditions of this Agreement, each of the parties hereto agrees to use its reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement. In case at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement, each of the parties hereto, the Company, as applicable, shall take all such necessary action. 4.4 Notification of Certain Matters. Between the date hereof and the Closing, the Stockholders shall give prompt notice in writing to Buyer of: (a) the occurrence of any event which will result in a Material Adverse Effect or in the failure to satisfy a condition specified in Article V hereof; and (b) any notice or other communication from any third person alleging that the consent of such third person is or may be required in connection with the transactions contemplated by this Agreement. 4.5 Tax Returns. All Tax returns required to be filed after the date hereof but prior to the Closing shall be prepared, and any elections with respect to such returns shall be made, to the extent permitted by law, in a manner consistent with prior practice with respect to the Company. ARTICLE V Conditions To Obligations Of Buyer The obligations of Buyer required to be performed by it at the Closing shall be subject to the satisfaction, at or prior to the Closing, of each of the following conditions, each of which may be waived by Buyer as provided herein except as otherwise required by applicable law: 5.1 Representations and Warranties; Performance of Obligations. Each of the representations and warranties of the Stockholders contained in this Agreement shall be true in all material respects at and as of the Closing; provided that a breach of any representation or warranty shall not constitute a failure of the condition contained in this Section 5.1 if such breach, either 6

alone, or in conjunction with all other breaches, has not had, and would not reasonably be expected to have, a Material Adverse Effect. 5.2 Authorization; Consents. All notices to, and declarations, filings and registrations with, and consents, authorizations, approvals and waivers from, governmental and regulatory bodies and any third parties required to consummate the transactions contemplated hereby, and all other governmental, regulatory or third party consents or waivers which, either individually or in the aggregate, if not made or obtained, would have a Material Adverse Effect shall have been made or obtained. ARTICLE VI Conditions To Obligations Of The Stockholders The obligations of the Stockholders required to be performed by them at the Closing shall be subject to the satisfaction, at or prior to the Closing, of each of the following conditions, each of which may be waived by the Stockholders as provided herein except as otherwise required by applicable law: 6.1 Representations and Warranties; Performance of Obligations. Each of the representations and warranties of the Buyer contained in this Agreement shall be true in all material respects at and as of the Closing; provided that a breach of any representation or warranty shall not constitute a failure of the condition contained in this Section 6.1 if such breach, either alone, or in conjunction with all other breaches, has not had, and would not reasonably be expected to have, a Material Adverse Effect. 6.2 Authorization; Consents. All notices to, and declarations, filings and registrations with, and consents, authorizations, approvals and waivers from, governmental and regulatory bodies and any third parties required to consummate the transactions contemplated hereby, and all other governmental, regulatory or third party consents or waivers which, either individually or in the aggregate, if not made or obtained, would have a Material Adverse Effect shall have been made or obtained. ARTICLE VII Indemnification 7.1 Indemnification. The Stockholders jointly and severally agree to indemnify and hold Buyer harmless from and against any and all liabilities, losses, damages, deficiencies, judgments, fines, costs and expenses, including reasonable counsel fees ("Losses"), incurred or sustained by Buyer that result from, relate to or arise out of: (a) any material breach of any representation or warranty or material nonfulfillment of any agreement or covenant on the part of the Stockholders under this Agreement; and 7

(b) any and all actions, suits, claims or proceedings incident to any of the foregoing or to the enforcement of this Section 7.1; provided, however that (i) the Stockholders shall not have any obligation to indemnify Buyer under this Section 7.1 until Buyer has suffered Losses in excess of $350,000 (after which point the Stockholders will be obligated to indemnify Buyer only from and against further such Losses), and (ii) the obligation of the Stockholders to indemnify Buyer from and against Losses under this Section 7.1 shall not exceed the Purchase Price. ARTICLE VIII Miscellaneous 8.1 Survival. All representations, warranties, covenants and agreements contained in this Agreement shall survive the Closing for a period of one year. 8.2 Headings. Section headings herein are for convenience of reference only, do not constitute part of this Agreement and shall not be deemed to limit or otherwise affect any of the provisions hereof. 8.3 Notices. All notices or other communications required or permitted hereunder shall be given in writing and shall be deemed sufficient if delivered by hand (including by courier), mailed by registered or certified mail, postage prepaid (return receipt requested), or sent by facsimile: Notice to the Stockholders shall be made at 2800 Livernois, Suite 400, Troy, Michigan 48083; Attention: Bharat Desai, and notices to the Buyer shall be made at 2800 Livernois, Suite 400, Troy, Michigan 48083, Attention: Daniel M. Moore, or such other address as shall be furnished in writing by such party. 8.4 Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns; provided, however, that neither this Agreement nor any of the rights, interests, or obligations hereunder may be assigned by any of the parties hereto without the prior written consent of the other parties. 8.5 Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties with respect to the transactions contemplated hereby and supersedes all prior or contemporaneous written or oral commitments, arrangements or understandings with respect thereto. There are no restrictions, agreements, promises, warranties, covenants or undertakings with respect to the transactions contemplated hereby other than those expressly set forth herein. 8.6 Modifications, Amendments and Waivers. At any time prior to the Closing, to the extent permitted by law, (a) Buyer and the Stockholders may, by written agreement, modify, amend 8

or supplement any term or provision of this Agreement and (b) any term or provision of this Agreement may be waived in writing by the party which is entitled to the benefits thereof. 8.7 Governing Law. This Agreement shall be governed by the laws of the State of Michigan (regardless of the laws that might be applicable under principles of conflicts of law) as to all matters including, but not limited to, matters of validity, construction, effect and performance. 8.8 Certain Definitions. For purposes of this Agreement: "Lien" shall mean any pledge, lien (including without limitation any tax lien), charge, claim, encumbrance, security interest, mortgage, option, restriction on transfer (including without limitation any buy-sell agreement or right of first refusal or offer), forfeiture, penalty, equity or other right of another person of every nature and description whatsoever. "Material Adverse Effect" shall mean a loss, expense or cost to the Company which is, or with reasonable probability might be, materially adverse to the business, operations, assets, properties, results of operations or financial condition of the Company taken as a whole, it being understood that a loss, expense or cost to the Company shall be rendered materially adverse only if the present value of such loss, expense or cost to the Buyer, calculated at a discount rate of 10% per annum, after taking into account all tax effects, exceeds $350,000. "Material Contract" shall mean a contract which: (i) involves the payment of an amount in excess of $100,000 in the aggregate or $50,000 per annum ; and (ii) is not subject to cancellation without penalty upon 60 days written notice. "Person" or "person" shall mean an individual or any corporation, partnership, joint venture, association, limited liability company, trust, unincorporated organization, or other legal entity or a government or governmental entity. "To the knowledge," or "known," and words of similar import shall mean actual knowledge of a person. 8.9 Severability. If any one or more of the provisions of this Agreement shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions of this Agreement shall not be affected thereby and this Agreement will be construed and enforced as if such invalid, illegal or unenforceable provisions had not been included herein. To the extent permitted by applicable law, each party waives any provision of law which renders any provision of this Agreement invalid, illegal or unenforceable in any respect. ***** 9

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. SYNTEL, INC. By:__________________________ Bharat Desai Its: President

Bharat Desai

Neerja Sethi 10

ANNEX A Bharat Desai Neerja Sethi BH/106782.4 ID/DRM 11

EXHIBIT 10.5

LEASE Between WRC PROPERTIES, INC., AS Landlord And SYNTEL, INC., as Tenant

TABLE OF CONTENTS SECTION 1. BASIC LEASE PROVISIONS.......................................... 1 SECTION 2. THE PREMISES.................................................... 2 SECTION 3. THE TERM........................................................ 2 SECTION 4. THE BASE RENT................................................... 3 SECTION 5. LATE CHARGES AND INTEREST....................................... 3 SECTION 6. OPERATING EXPENSES, UTILITIES, AND TAXES........................ 3 SECTION 7. USE OF PREMISES................................................. 6 SECTION 8. INSURANCE....................................................... 8 SECTION 9. DAMAGE BY FIRE OR OTHER CASUALTY................................ 9 SECTION 10. REPAIRS, RENOVATIONS AND ALTERATIONS.......................... 10 SECTION 11. LEINS......................................................... 11 SECTION 12. EMINENT DOMAIN................................................ 11 SECTION 13. ASSIGNMENT OR SUBLETTING...................................... 12 SECTION 14. INSPECTION OF PREMISES........................................ 13 SECTION 15. FIXTURES AND EQUIPMENT........................................ 13 SECTION 16. PARKING AREAS................................................. 13 SECTION 17. NOTICE OR DEMANDS............................................. 14 SECTION 18. BREACH; INSOLVENCY; RE-ENTRY.................................. 14 SECTION 19. SURRENDER OF PREMISES ON TERMINATION.......................... 16 SECTION 20. PERFORMANCE BY LANDLORD OF THE COVENANTS OF TENANT............ 16 SECTION 21. SUBORDINATION; ESTOPPEL CERTIFICATES.......................... 16 SECTION 22. QUIET ENJOYMENT............................................... 17 SECTION 23. HOLDING OVER.................................................. 17 SECTION 24. REMEDIES NOT EXCLUSIVE; WAIVER................................ 17 SECTION 25. WAIVER OF SUBROGATION......................................... 18 SECTION 26. RIGHT TO SHOW PREMISES........................................ 18 SECTION 27. INDEMNIFICATION............................................... 18 SECTION 28. DEFINITION OF LANDLORD; LANDLORD'S LIABILITY.................. 19 SECTION 29. SECURITY DEPOSIT AND SECURITY INTEREST........................ 19 SECTION 30. RULES AND REGULATIONS......................................... 20 SECTION 31. SIGNS AND ADVERTISING......................................... 20 SECTION 32. GENERAL....................................................... 20 EXHIBIT A SPACE PLAN...................................................... 23 EXHIBIT B RULES AND REGULATIONS OF THE PROJECT............................ 24 EXHIBIT C DAILY JANITORIAL SERVICE........................................ 27 EXHIBIT D SPECIAL PROVISIONS.............................................. 28 D1 EXCESS TENANT IMPROVEMENT COST. ..................................... 28 D2 MOVING ALLOWANCE. ................................................... 28 D3 OPTION TERM.......................................................... 28 D4 TENANT AUDIT RIGHT. ................................................. 28 D5 TENANT'S RIGHT TO CURE. ............................................. 28 D6 NON-DISTURBANCE. .................................................... 29

LEASE THIS LEASE is made entered into as of August 22, 1996, by and between WRC Properties, Inc. (the "Landlord"), a Deleware Corporation having its principal office at 730 Third Avenue, New York, New York 10017, and Tenant named below who agree as follows: SECTION 1. BASIC LEASE PROVISIONS 1.01 The following basic lease provisions are an integral part of this Lease and are referred to in other Sections of this Lease.
(a) Tenant's name and jurisdiction of formation: SYNTEL, INC., a Michigan Corporation -------------------------------------------Tenant Social Security/Taxpayer Indentification Number: Tenant Standard Industrial Classification (SIC) Code Number: (b) Tenant's Address: 5700 Crooks Road ------------------------Suite 301 ------------------------Troy, Michigan 48098 ------------------------Attn: Daniel Moore, Esq. ------------------------Apex Management, Inc. 20500 Civic Center Drive Suite 3000 Southfield, Michigan 48076 Troy Officentre A - D -----------------------Troy Officentre D -----------------------2800 Livernois -----------------------Troy, Michigan 48083 -----------------------Floor: Suite Number: Square Feet: (f) Term: Scheduled Occupancy Date: Scheduled Expiration Date of Initial Term: Initial Term: (g) Base Rent: Monthly Annual Aggregate (h) $ 32,681.25 ------------$ 392,175.00 ------------$1,960,875.00 ------------December 1, 1996 -----------------November 30, 2001 -----------------Five (5) years -----------------4th Floor ------------------------------------------400 ------------------------------------------23,328 usable / 24,900 rentable square feet ------------------------------------------38-2312018 ---------7371 ----------

(c)

Manager's Name and Address:

(d)

Project Name: Building Name: Building Address:

(e)

Premises:

Tenant's Proportionate Share: 24,900 Rentable square feet in the Premises diveded by ------140,590 Rentable square feet in the Building = 17.711% ------------

(i) (j) (k) (l) (m)

Number of Exclusive Parking Spaces: Security Deposit: None ----

None at an initial increase of additional rent of $ -0------

Tenant Improvement Allowance: Base Year: Permitted Use: 1997 --------

See Exhibit D

General Office and training of staff personnel ----------------------------------------------

SECTION 2. THE PREMISES 2.01 Landlord, in consideration of the rents to be paid and the covenants and agreements to be performed by Tenant, hereby leases to Tenant the premises set forth in Section 1.01(e) (the "Premises") in the building(s) (the "Building") described in Section 1.01 (d), together with the right to use the parking and common areas and facilities which may be furnished from time to time by Landlord (collectively the "Common Areas"), including, without limitation, all common elevators, hallways and stairwells located within the Building, and all common parking facilities, driveways and sidewalks, in common with Landlord and with the tenants and occupants of the Project, their agents, employees, customers, clients and invitees. Tenant agrees that the Premises and the Building shall be deemed to include the number of rentable square feet set forth in Section 1.01 (h) and in no event shall Tenant have the right to challenge, demand, request or receive any change in the base rent or other sums due hereunder as a result of any claimed or actual error or omission in the rentable or usable square footage of the Premises, the Building or the Project. Landlord reserves the right at any time and from time to time to make alterations or additions to the Building or the Common Areas, and to demolish improvements on and to build additional improvements on the land surrounding the Building and to add or change the name of the Building from time to time, in its sole discretion without the consent of Tenant and the same shall not be construed as a breach of this Lease. The Building, the other buildings listed in Section 1.01(d), the Common Areas and the land surrounding the Building and the Common Areas are hereinafter collectively referred to as the "Project". 2.02 Landlord agrees to construct the improvements to the Premises (the "Tenant Improvements") in accordance with the space plan(s) (as it may be amended by approved change orders, the "Plans"), attached as Exhibit "A". All material changes from the Plans which Landlord determines are necessary during construction shall be submitted to Tenant for Tenant's approval or rejection. If Tenant fails to notify Landlord of Tenant's approval or rejection of such changes within five (5) days of receipt thereof, Tenant shall be conclusively deemed to have approved such changes. Landlord's approval of the Plans shall not constitute a representation, warranty or agreement (and Landlord shall have no responsibility or liability for) the completeness or design sufficiency of the Plans or the Tenant Improvements, or the compliance of the Plans or Tenant Improvements with any laws, rules or regulations of any governmental or other authority. 2.03 The provisions of Exhibit D, special provisions, shall govern the cost of constructing Tenant Improvements. 2.04 Landlord intends to construct the Tenant Improvements and deliver the Premises "ready for occupancy" (as defined below) to Tenant on the Scheduled Occupancy Date set forth in Paragraph 1.01(f). The Premises will be conclusively deemed "ready for occupancy" on the earlier to occur of when: (i) the work to be done under this Paragraph has been substantially completed and after the issuance of a conditional or temporary certificate of occupancy for the Premises by the appropriate government agency within whose jurisdiction the Building is located, or (ii) when Tenant takes possession of the Premises. The Premises will not be considered unready or incomplete if only minor or insubstantial details of construction, decoration or mechanical adjustments remain to be done within the Premises or Common Areas of the Building, or if only landscaping or exterior trim remains to be done outside the Premises, or if the delay in the availability of the Premises for Tenant's occupancy is caused in whole or in material part by Tenant. By occupying the premises, Tenant will be deemed to have accepted the Premises and to have acknowledged that they are in the condition called for in this Lease, subject only to "punch list" items (as the term "punch list" is customarily used in the construction industry in the area where the Project is located) identified by Tenant by written notice delivered to Landlord within thirty (30) days after the date Landlord tenders possession of the Premises to Tenant. If in good faith Landlord is delayed or hindered in construction by any labor dispute, strike, lockout, fire, unavailability of material, severe weather, acts of God, restrictive governmental laws or regulations, riots, insurrection, war or other casualty or events of a similar nature beyond its reasonable control ("Force Majeure"), the date for the delivery of the Premises to Tenant "ready for occupancy" shall be extended for the period of delay caused by the Force Majeure. If Landlord is delayed or hindered in construction as a result of change orders or other requests by, or acts of, Tenant ("Tenant Delay") the date for the delivery of the Premises to Tenant "ready for occupancy" shall be accelerated by the number of days of delay caused by Tenant Delay. The Scheduled Occupancy Date as extended or accelerated as a result of the occurrence of a Force Majeure or Tenant Delay or with the consent of Tenant, is herein referred to as the Occupancy Date. SECTION 3. THE TERM 3.01 The initial term of this Lease (the "Initial Term or "Term") will commence (the "Commencement Date") on the earlier of: (i) the date Tenant takes possession of the Premises; or (II) the Occupancy Date; or (iii) the date the Occupancy Date would have occurred in the absence of Tenant 2

Delay. Unless sooner terminated or extended in accordance with the terms hereof, the Lease will terminate the number of Lease Years and Months set forth in Paragraph 1.01(f) after the Commencement Date. If the Commencement Date is other than the first day of a calendar month, the first Lease Year shall begin on the first day of the first full calendar month following the Commencement Date. Upon request by Landlord, Tenant will execute a written instrument confirming the Commencement Date and the expiration date of the Initial Term. SECTION 4. THE BASE RENT 4.01 From and after the Commencement Date, Tenant agrees to pay to Landlord, as minimum net rental for the Initial Term and Option Terms of this Lease, the sum(s) set forth In Paragraph 1.01(g) (the "Base Rent"). The term "Lease Year" as used herein shall be defined to mean a period of twelve (12) consecutive calendar months. The first Lease Year shall begin on the date determined in accordance with Section 3.01. Each succeeding Lease Year shall commence on the anniversary date of the first Lease Year. 4.02 Base Rent and other sums due Landlord hereunder shall be paid by Tenant to Landlord in equal monthly installments (except as otherwise provided herein), in advance, without demand and without any setoffs or deductions whatsoever, except as otherwise provided in this Lease, on the first day of each and every calendar month (the "Rent Day") during the Initial Term and Option Terms, if any, at the office of Manager as set forth in Section 1.01 (c), or at such other place as Landlord from time to time may designate in writing. In the event the Commencement Date is other than the first day of a calendar month, the Base Rent for the partial first calendar month of the Initial Term will be prorated on a daily basis based on the number of days in the calendar month and will be paid in addition to the rent provided in Paragraph 4.01 above. Base Rent for such partial calendar month and for the first full calendar month of the first Lease Year shall be paid upon the execution of this Lease by Tenant. SECTION 5. LATE CHARGES AND INTEREST 5.01 Any rent or other sums payable by Tenant to Landlord under this Lease which are not paid within five (5) days after they are due will be subject to a late charge of ten (10%) percent of the amount due. Such late charges will be due and payable as additional rent on or before the next Rent Day. 5.02 Any rent, late charges or other sums payable by Tenant to Landlord under this Lease not paid within ten (10) days after the same are due will bear interest at a per annum rate equal to the lower of: (i) City Bank Prime Rate plus five percent (5%) per annum, or (ii) the highest rate permitted by law. Such interest will be due and payable as additional rent on or before the next Rent Day, and will accrue from the date that such rent, late charges or other sums are payable under the provisions of this Lease until actually paid by Tenant. 5.03 Any default in the payment of rent, late charges or other sums will not be considered cured unless and until the late charges and interest due hereunder are paid by Tenant to Landlord. If Tenant defaults in paying such late charges and/or interest, Landlord will have the same remedies as Landlord would have if Tenant had defaulted in the payment of rent. The obligation hereunder to pay late charges and interest will exist in addition to, and not in the place of, the other default provisions of this Lease. SECTION 6. OPERATING EXPENSES, UTILITIES, AND TAXES 6.01 In the event that Operating Expenses for the Project, in any calendar year, exceed the Operating Expenses for the Base Year (as defined in Paragraph 1.01 (I)), Tenant shall pay to Landlord, as additional rent, Tenant's Proportionate Share (as defined in Paragraph 1.01(h)) of any such excess. Tenant's obligations hereunder shall be pro-rated for any calendar year in which Tenant is obligated to pay rent for only a portion thereof. For the purposes of this Section, the term "Operating Expenses" shall mean and include those expenses paid or incurred by Landlord for: maintaining, operating, owning, and repairing the Project, providing electricity, steam, water, sewer, fuel, heating, lighting, air conditioning, window cleaning, janitorial service, personal property taxes, insurance (including, but not limited to, fire, extended coverage, liability, workers compensation, elevator, boiler and machinery, war risk, or any other insurance carried in good faith by Landlord and applicable to the Project); painting, uniforms, management fees, supplies, sundries, sales, or use taxes on supplies or services; wages and salaries of all persons engaged in the operation, maintenance and repair of the Project, and so-called fringe benefits, including social security taxes, unemployment insurance taxes, providing coverage for disability benefits, pension, hospitalization, welfare or retirement plans, or any other similar or like expenses 3

incurred under the provisions of any collective bargaining agreement, or any other similar or like expenses which Landlord pays or incurs to provide benefits for employees so engaged in the operation, maintenance and repair of the Project; the charges of any independent contractor who, under contract with Landlord or its representatives, does any of the work of operating, maintaining or repairing the Project; capital expenditures required under any governmental law or regulation; legal and accounting expenses including, but not limited to, such expenses as relate to seeking or obtaining reductions in, and refunds of, real estate taxes; or any other expenses or charges, whether or not hereinbefore mentioned, which in accordance with generally accepted accounting and management principles would be considered as an expense of maintaining, operating, owning or repairing the Project. 6.02 The term "Operating Expenses" shall not include the following items: (a) costs of a capital nature under generally accepted accounting principles consistently applied, including, but not limited to: (1) rentals and other related expenses in leasing capital items, and (2) replacements of capital items except capital expenditures not required to be made under this Lease by Landlord and made at the specific request of Tenant. (b) resale costs incurred by Landlord with respect to goods and/or services to the extent that is entitled to reimbursement for such costs by others: (c) depreciation of the Building and equipment; (d) amortization payments on mortgages or deeds of trust and any ground lease rental; (e) expenses of leasing other premises within the Building (including without limitation attorneys' fees, accounting fees and real estate brokerage commissions); (f) advertising, promotions and public relations attributable to Landlord's efforts to increase or maintain the occupancy rate in the Building; (g) the cost of tenant improvements incurred in leasing other premises within the Building; (h) expenses performed as a special service for another tenant that are not standard too all tenants; and (i) any fines or penalties incurred because Landlord violated any governmental rule or authority. 6.03 If the Project is not fully rented during all or a portion of any year, then Landlord shall may elect to make an appropriate adjustment of the Operating Expenses and Real Estate Taxes (as defined below) for such year and for the Base Year employing sound accounting and management principles, to determine the amount of Operating Expenses and Real Estate Taxes that would have been paid or incurred by Landlord had the Project been fully rented; and the amount so determined shall be deemed to have been the amount of Operating Expenses and Real Estate Taxes for such year. If any expenses relating to the Project, though paid in one year, relate to more than one calendar year, at the option of Landlord such expense will proportionately allocated among such related calendar years. In addition, in the event any Operating Expense or Real Estate Tax applies to only some portion of the Project or is partially allocable to other buildings or projects, Landlord shall allocate such expense among such buildings and projects in accordance with sound accounting and management principles to determine the amount of Operating Expenses and Real Estate Taxes for the Project and the Building. 6.04 In the event that Real Estate Taxes (as hereinafter defined) for the Project, In any calendar year, exceed the Real Estate Taxes for the Base Year, Tenant shall pay to Landlord, as additional rent, Tenant's Proportionate Share of any such excess over and above the Base Real Estate Taxes (as hereinafter defined). The "Base Real Estate Taxes" shall be the Real Estate Taxes shown on the bills for which the "due date" occurs in the Base Year. "Real Estate Taxes" as used herein shall mean real estate taxes, assessments (general, special, ordinary or extraordinary) sewer rents, rates and charges, taxes based upon the receipt of rent, and any other federal, state or local charge (general, special, ordinary or extraordinary) which may now or hereafter be imposed, levied or assessed against the Project or any part thereof, or on any building or improvements at any time situated thereon. In the event the State of Michigan or any political subdivision thereof having taxing authority shall modify, repeal or abolish the ad valorem tax on real property, or impose a tax or assessment of any kind or nature upon, against, or with respect to the Project or the rents payable by Tenant or on the income derived from the Project, or with respect to Landlord's ownership interest in the Project, which tax is assessed or imposed by way of substitution for or in addition to all or any part of the Real Estate Taxes, then such tax or assessment shall be included within the definitions of "Real Estate Taxes"; provided, however, nothing herein contained shall impose an obligation on Tenant to pay the general income tax or 4

Michigan Single Business Tax liabilities of Landlord, except to the extent such a tax is being used to fund governmental functions presently or previously funded by ad valorem taxes on real properly. 6.05 At any time and from time to time, Landlord may reasonably estimate the amount by which current Real Estate Taxes and Operating Expenses are expected to exceed the Real Estate Taxes and Operating Expenses for the Base Year (the "Estimated Excess Expenses"). Tenant shall pay its Proportionate Share of the Estimated Excess Expenses by depositing with Landlord on each Rent Day during the term hereof an amount equal to one-twelfth (1/12) of its annual share of the Estimated Excess Expenses. Landlord shall deliver to Tenant, within a reasonable period of time after the close of each calendar year, an annual statement indicating the amount by which the Real Estate Taxes and Operating Expenses actually incurred in that calendar year exceed the Real Estate Taxes and Operating Expenses for the Base Year (the "Actual Excess Expenses"). In the event that the Actual Excess Expenses exceed the Estimated Excess Expenses, Tenant shall pay Tenant's Proportionate Share of the difference to Landlord within fifteen (15) days of delivery of the annual statement. In the event that Estimated Excess Expenses exceed Actual Excess Expenses, then at Landlord's option Tenant shall either be reimbursed to the extent that Tenant's payments toward Tenant's share of the Estimated Excess Expenses exceed Tenant's Proportionate Share of the Actual Excess Expenses, or Tenant shall be granted a corresponding credit against the Base Rent or other sums next due Landlord hereunder. 6.06 Tenant shall be responsible for and pay before delinquent all municipal, county, and state taxes assessed, levied or imposed during the term of this Lease, and all extensions thereof, upon the leasehold interest and all furniture, fixtures, machinery, equipment, apparatus, systems and all other personal properly of any kind whatsoever located at, placed in or used in connection with the Premises. 6.07 Landlord agrees with Tenant that Landlord will furnish heat and air conditioning during normal business hours (8:00 a.m. to 6:00 p.m. Monday through Friday and Saturday 9:00 a.m. to 2:00 p.m., excluding Building holidays), usual and customary janitorial services, as set forth in Exhibit "C", and provide water and sewer service to the Premises and hot and cold water for ordinary lavatory purposes in the common area restrooms. However, if Tenant uses or consumes water for any other purpose or in unusual quantities (of which fact Landlord shall be the sole judge) Landlord may install a water meter at Tenant's expense which Tenant shall thereafter maintain at Tenant's expense in good working order and repair, to register such water consumption. Tenant shall pay for the quantity of water shown on said meter, together with the sewer rents, debt service and other charges made by the local utilities for water and sewer service, as additional rent, at the secondary rate per gallon (general service rate) established by the applicable governmental authority or the applicable utility company providing the water. Whenever machines or equipment which generate heat are used in the Premises which affect the temperature otherwise maintained by the air-conditioning system, Landlord reserves the right to install supplementary air-conditioning equipment in the Premises, and the cost thereof, and the expense of operation and maintenance thereof, shall be paid by Tenant to Landlord. Although Landlord will provide air-conditioning and/or heat upon the prior request of Tenant in accordance with Building practices for hours other than regular business hours, Tenant will pay Landlord's charges for providing such service. Said charges shall include a cost equal to the cost to operate the equipment for Tenant's expanded business hours and days, and Landlord's maintenance, equipment amortization and other appropriate charges which Landlord determines are attributable to operating the equipment for periods in excess of the normal business hours described above. 6.08 Tenant shall pay all charges made against the Premises for electricity used upon or furnished to the Premises as and when due during the continuance of this Lease and electricity shall be separately metered for the Premises. Whether or not metered, Tenant shall pay for the electricity at the secondary rate (general service rate) established by the applicable governmental authority or the applicable utility company providing the electricity. Tenant shall also pay for fluorescent or other electric light bulbs or tubes and electric equipment used in the leased premises. 6.09 Notwithstanding anything to the contrary contained in this Section 6, in the event that the Operating Expenses excluding insurance and all utilities (the "Adjusted Operating Expenses"), in any calendar year of the Initial Term, exceed the Operating Expenses excluding insurance and all utilities for the Base Year (the "Adjusted Base Year Operating Expenses"), Tenant shall pay Landlord Tenant's Proportionate Share of such excess (the "Adjusted Operating Expense Escalation") which shall in no event exceed the escalation cap (the "Escalation Cap"). The Escalation Cap shall be based on the increase in the cost of living Plus ten percent (10%) in accordance with the following formula:. (i) The increase, if any, in the cost of living shall be determined, using as a basis for computation the Revised Consumer's Price Index for Urban Wage Earners and Clerical Workers for the Detroit Area, published by the Bureau of Labor Statistics of the United States Department of Labor (1982-1984 equals 100) (the "Index"). 5

(ii) The Index in the column entitled "All Items" for the first calendar month of the first calendar year of the Initial Term of this Lease (the "Base Lease Year") shall be the base index (the Base Index") and the corresponding Index for the first month in each succeeding calendar year shall be the current index (the "Current Index"). (iii) The annual increase in the cost of living, if any, shall be determined by annually dividing the Current Index by the Base Index or the previous year's Current Index in succeeding years. (iv) Annually the quotient derived by the computation provided in subsection (iii) plus ten percent (10%) shall be multiplied by Adjusted Operating Expenses Escalation for the preceding calendar year, and such computation shall be the Escalation Cap, provided, however, in no event shall the adjustment cause the Base Rent to be reduced. (v) Appropriate adjustments shall be made in the event there is a published amendment to the Index figures upon which the above computation is based. If the publication of the Index is discontinued, Landlord and Tenant shall accept comparable statistics on the cost of living for the nearest metropolitan area to the location of the Premises, as computed and published by an agency of the United States or a responsible financial periodical or recognized authority selected by both Landlord and Tenant. SECTION 7. USE OF PREMISES 7.01 Tenant shall occupy and use the Premises during the Term for the purposes set forth in Section 1.01(m) only, and for no other purpose without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. Tenant agrees that it will not use or permit any person to use the Premises or any part thereof for any use or purpose in violation of the laws of the United States, the laws, ordinances or other regulations of the State or municipality in which the Premises are located, or of any other lawful authorities, or any building and use restrictions, now or hereafter affecting the Premises or any part thereof. 7.02 Tenant will not do or permit any act or thing to be done in or to the Premises or the Project which will invalidate or be in conflict with any terms or conditions required to be contained in any property or casualty insurance policy authorized to be issued in the State of Michigan or any term or condition of the Insurance Services Office's (ISO) Commercial Property Insurance and/or Commercial General Liability Insurance Conditions or any different or additional terms and conditions of any insurance policy in effect on the Premises or the Project from time to time (collectively the *Building Insurance"), Nor shall Tenant do nor permit any other act or thing to be done in or to the Premises or the Project which shall or might subject Landlord to any liability or responsibility to any person or for property damage, nor shall Tenant use the Premises or keep anything on or in the Project except as now or hereafter permitted by the fire regulations, the fire department or zoning, health, safety, land use or other regulations. Tenant, at Tenant's sole cost and expense, shall comply with all requirements and recommendations set forth by any property or casualty insurer or reinsurer providing coverage for the Premises or the Project or by any person or entity engaged by Landlord or Manager to perform any loss control, analysis or assessment for the Premises or the Project. Tenant shall not do or permit anything to be done in or upon the Premises or the Project or bring or keep anything therein or use the Premises or the Project in a manner which increases the rate of premium for any Building insurance or any property or equipment located therein over the rate in effect at the commencement of the Term of this Lease. In addition, Tenant agrees to pay Landlord the amount of any increase in premiums for insurance which may be charged during the term of this Lease resulting from the act or omissions of Tenant or the character or nature of its occupancy or use of the Project or the Premises, whether or not Landlord has consented to the same. Any scheduled or "make-up" of any insurance rate for the Premises, the Building or the Project issued by any insurance company establishing insurance premium rates for the Premises, Building or the Project shall be prima facie evidence of the facts therein stated and of the several items and charges in the insurance premium rates then applicable to the Premises, the Building or the Project. Tenant shall give Landlord notice promptly after Tenant learns of any accident, emergency, or occurrence for which Landlord is or may be liable, or any fire or other casualty or damage or defects to the Premises, the Building or the Project which Landlord is or may be responsible or which constitutes the property of Landlord. 7.03 Tenant shall not perform acts or carry on any activities or engage in any practices which may injure the Premises or any portion of the Project or which may be a nuisance or menace to other persons on or in the Project. Tenant shall pay all costs, expenses, fines, penalties, or damages which may be imposed upon Landlord by reason of Tenant's failure to comply with the provisions of this Section. 6

7.04 Tenant will not place any load upon any floor of the Premises exceeding the floor load per square foot area which it was designed to carry and which is allowed by law. Landlord reserves the right to prescribe the weight and position of all safes, business machines and mechanical equipment. Such items shall be placed and maintained by Tenant, at Tenant's expense, in settings sufficient in Landlord's judgment, to absorb and prevent vibration, noise and annoyance. If at any time any windows of the Premises are temporarily or permanently closed, darkened or covered for any reason whatsoever, including Landlord's own acts, Landlord shall not be liable for any damage Tenant may sustain thereby, and the same shall not be considered a default under this Lease and Tenant shall not be entitled to any compensation therefore nor abatement of any Base Rent or any other sums due hereunder, nor shall the same release Tenant from its obligations hereunder nor constitute an eviction, construction, actual or otherwise. 7.05 During the term hereof, and consistent with janitorial services provided by Landlord, Tenant will keep the Premises in a clean and wholesome condition, will use the same in a careful and proper manner, and generally will comply with all laws, ordinances, orders and regulations affecting the Premises and the cleanliness, safety, occupancy and use thereof. Tenant will not commit waste in or on the Premises, and will use the Premises in accordance with the Rules and Regulations of the Project, as set forth in Exhibit B, attached hereto and made a part hereof. 7.06 As between Landlord and Tenant, Tenant shall be responsible for any alterations, changes or improvements to the Premises which may be necessary in order for the Premises and Tenant's use thereof to be in compliance with the Americans with Disabilities Act of 1990 and its state and local counterparts or equivalents (the "Disabilities Act") during the term of this Lease. 7.07 For the purposes of this Lease, the term "Hazardous Materials" shall mean, collectively, (i) any biological materials, chemicals, materials, substances or wastes which are now or hereafter become defined as or included in the definition of "hazardous substances", "hazardous wastes", "hazardous materials", "extremely hazardous wastes", "restricted hazardous wastes", "toxic substances", "toxic pollutants", or words of similar import, under any applicable Environmental Law (as defined below) and (ii) any petroleum or petroleum products and asbestos in any form that is or could become friable. 7.08 For the purposes of this Lease, the term "Environmental Laws" shall mean all federal, state, and local laws, statutes, ordinances, regulations, criteria, guidelines and rules of common law now or hereafter in effect, and in each case as amended, and any judicial or administrative interpretation thereof, including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases or Hazardous Materials or otherwise related to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials. Environmental Laws include but are not limited to the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended; the Resource Conservation and Recovery Act, as amended; the Clean Air Act, as amended; the Clean Water Act, as amended; and their state and local counterparts or equivalents. 7.09 Tenant shall not (either with or without negligence) cause or permit the escape, disposal or release of any Hazardous Materials. Tenant shall not allow the storage or use of such Hazardous Materials on the Premises or the Project in any manner prohibited by the Environmental Laws or by the highest standards prevailing the industry for the storage and use of such Hazardous Materials, nor allow to be brought into the Premises or the Project any such Hazardous Materials except to use in the ordinary course of Tenant's business, and then only after written notice is given to Landlord of the identity of such Hazardous Materials and Landlord consents in writing to the use of such materials. Landlord shall have the right at any times during the term of this Lease to perform assessments of the environmental condition of the Premises and of Tenant's compliance with this Section 7.09. In connection with any such assessment, Landlord shall have the right to enter and inspect the Premises and perform tests (including physically invasive tests), provided such tests are performed in a manner that minimizes disruption to Tenant. Tenant will cooperate with Landlord in connection with any such assessment by, among other things, responding to inquires and providing relevant documentation and records. Tenant will accept custody and arrange for the disposal of any Hazardous Materials that are required to be disposed of as a result of those tests, provided that those Hazardous Materials were disposed of or released by Tenant or otherwise resulted from Tenant's operations. Landlord shall have no liability or responsibility to Tenant with respect to any such assessment or test or with respect to results of any such assessment or test. If any lender or governmental agency shall ever require testing to ascertain whether or not there has been any release of Hazardous Materials, then the reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand as additional charges if such requirement applies to the Premises or Tenant's activities on the Project and it is determined that such Hazardous Materials were released by Tenant, Tenant's servants, employees, agents, clients, customers. licensees, invitees, visitors, and contractors in violation of this Section 7.09 and are the reason for such testing. If any inspection indicates any (i) non-compliance with any Environmental Law or the highest standards prevailing in the industry for the storage and use of Hazardous Materials; (ii) damage; or (iii) contamination, Tenant shall, at its cost and expense, remedy such non-compliance, damage or 7

contamination. In addition, Tenant shall execute affidavits, representations and the like from time to time at Landlord's request concerning Tenant's best knowledge and belief regarding the presence of Hazardous Materials on the Premises. Irrespective of whether Landlord elects to inspect the Premises, if Hazardous Materials are found on or about the Premises, Landlord shall have no responsibility, liability or obligation whatsoever with respect to the existence, removal or transportation of the Hazardous Material or the restoration and remediation of the Premises. Further, Landlord shall have the right to require Tenant to immediately terminate the conduct of any activity in violation of the Environmental Law, the highest standards prevailing in the industry for the storage and use of Hazardous Materials or, if none exist, the standards determined by Landlord. 7.10 Tenant further agrees that it will not, by either action or inaction, invite or otherwise cause agents or representatives of any federal, state or local governmental agency to enter onto the Premises or the Project and/or investigate the Premises or the Project. Tenant may invite agents or representatives of any federal, state or local governmental agency to enter onto the Premises or the Project if doing so within the normal course of Tenant business. This agreement does not allow Tenant to obstruct any such entry or investigation and the mere fact of a regulatory agency entry or investigation without Tenant's involvement either by action or inaction shall not be deemed a breach of this lease. Nothing set forth in this paragraph shall prohibit Tenant from reporting any fact or condition which Tenant has been advised it has a legal obligation to report provided Tenant first notifies Landlord of such fact or condition and Tenant's intention to report the fact or condition. 7.11 Tenant shall indemnify, hold harmless and defend Landlord, its licensees, servants, agents, employees and contractors for any loss, damage, claim, liability or expense (including reasonable attorney's fees) arising out of any violation of any Environmental Law(s) or the Disabilities Act which exists or occurs after the date hereof. Tenant shall notify Landlord as soon as possible after Tenant learns of the existence of or potential for any such loss, damage, claim, liability or expense arising out of any violation or suspected violation of any Environmental Law(s) or the Disabilities Act. In the event Tenant refuses to address such violation or suspected violation within five (5) days of such notice or another notice from Landlord, and, thereafter, to investigate such violation or suspected violation, and promptly commence and diligently pursue any action required to address such violation or suspected violation, Landlord shall have the right, in addition to every other right and remedy it may have hereunder, to terminate this Lease by giving ten (10) days prior written notice thereof to Tenant, and upon the expiration of such ten (10) days, this Lease shall terminate. The covenants set forth herein shall survive the expiration or earlier termination of this Lease. SECTION 8. INSURANCE 8.01 Commencing on the Commencement Date, Tenant shall, during the Term of this Lease, maintain in full force and effect policies of commercial general liability insurance (including premises, operation, bodily injury, personal injury, death, independent contractors, products and completed operations, broad form contractual liability and broad form property damage coverage), in a combined single limit amount of not less than Two Million Dollars ($2,000,000), per occurrence (exclusive of defense costs), against all claims, demands or actions with respect to damage, injury or death made by or on behalf of any person or entity, arising from or relating to the conduct and operation of Tenant's business in, on, or about the Premises (which shall Include Tenant's signs, if any), or arising from or related to any act or omission of Tenant or of Tenant's principals, officers, agents, contractors, servants, employees, licensees and invitees. Whenever, in Landlord's reasonable judgment, good business practice and changing conditions indicate a need for additional amounts or different types of insurance coverage, Tenant shall, within ten (10) days after Landlord's request, obtain such insurance coverage, at Tenant's sole cost and expense. 8.02 Commencing on the Commencement Date, Tenant shall obtain and maintain policies of workers' compensation and employers' liability insurance which shall provide for statutory workers' compensation benefits and employers' liability limits of not less than that required by law. 8.03 Commencing on the Commencement Date, Tenant shall obtain and maintain Insurance protecting and indemnifying Tenant against any and all damage to or loss of any personal property, fixtures, leasehold improvements, alterations, decorations, installations, repairs, additions, replacements or other physical changes in or about the Premises, including but not limited to the Tenant Improvements, and all claims and liabilities relating thereto, for their full replacement value without deduction or depreciation. In addition, if Tenant shall install or maintain one or more pressure vessels to serve Tenant's operations on the Premises, Tenant shall, at Tenant's sole cost and expense, obtain, maintain and keep in full force and effect appropriate boiler or other insurance coverage therefore in an amount not less than One Million and No/100 Dollars ($1,000,000.00) (it being understood and agreed, however, that the foregoing shall not be deemed a consent by Landlord to the installation and/or maintenance of any such pressure vessels in the Premises, which installation and/or maintenance shall at all times be subject to the prior written consent of Landlord). All insurance policies required pursuant to this Paragraph 8.03 shall be written on a so-called "all risk" form and shall be carried in sufficient 8

amount so as to avoid the imposition of any co-insurance penalty in the event of a loss. Such Insurance shall provide the broadest coverage then available, including coverage for loss of profits or business income or reimbursement for extra expense incurred as the result of damage or destruction to all or a part of the Premises. 8.04 All insurance policies which Tenant shall be required to maintain pursuant to this Section 8 shall, in addition to any of the foregoing: be written by insurers which have an A.M. Best & Company rating of "A", Class "X", or better and who are authorized to write such business in the State of Michigan and are otherwise satisfactory to Landlord; be written as "occurrence" policy; be written as primary policy coverage and not contributing with or in excess of any coverage which Landlord or any ground or building lessor may carry; name Landlord, the Manager, and Landlord's mortgagee and ground or building lessor, if any, as additional insureds; be endorsed to provide that they shall not be cancelled, failed to be renewed, diminished or materially altered for any reason except on thirty (30) days prior written notice to Landlord and the other additional insureds; and provide coverage to Landlord, Landlord's property management company, and Landlord's mortgagee whether or not the event or occurrence giving rise to the claim is alleged to have been caused in whole or in part by the acts or negligence of Landlord, Landlord's property management company, or Landlord's mortgagee. At Landlord's option, either the original policies or certified duplicate copies of the original policies will be delivered by Tenant to Landlord at least ten (10) days prior to their effective date thereof, together with receipts evidencing payment of the premiums therefor. Tenant will deliver certificates of renewal for such policies to Landlord not less than thirty (30) days prior to the expiration dates thereof. No such policy shall contain a deductible or self insured retention greater than $5,000.00 per claim, nor shall any such policy be the subject of an indemnification or other arrangement by which any insured is obligated to repay any Insurer with respect to loss occurring on the Premises. 8.05 If Tenant fails to provide all or any of the insurance required by this Section 8 or subsequently falls to maintain such insurance in accordance with the requirements hereof, then after giving five (5) business day written notice to Tenant, Landlord may (but will not be required to) procure or renew such insurance to protect its own interests only, and any amounts paid by Landlord for such insurance will be additional rental due and payable on or before the next Rent Day, together with late charges and interest as provided in Section 5 hereof. Landlord and Tenant agree that no insurance acquired by Landlord pursuant hereto shall cover any interest or liability of Tenant and any procurement by Landlord of any such insurance or the payment of any such premiums shall not be deemed to waive or release the default of Tenant with respect thereto. SECTION 9. DAMAGE BY FIRE OR OTHER CASUALTY 9.01 It is understood and agreed that if, during the Term hereof, the Project and/or the Premises shall be damaged or destroyed in whole or in part by fire or other casualty, without the fault or neglect of Tenant, Tenant's servants, employees, agents, visitors, invitees or licensees, which damage is covered by insurance carried pursuant to Section 8 above, unless Landlord elects to terminate this Lease as provided in Paragraph 9.02 below, Landlord shall cause the Project and/or the Premises to be repaired and restored to good, tenantable condition with reasonable dispatch at its expense; provided, however, Landlord shall not be obligated to expend for such repair or restoration an amount in excess of insurance proceeds made available to Landlord for such purpose, if any. Landlord's obligation hereunder shall be limited to repairing or restoring the Project and/or the Premises to substantially the same condition that existed prior to such damage or destruction. 9.02 If (i) more than fifty (50%) percent of the floor area of the Premises shall be damaged or destroyed, (ii) more than twenty-five (25%) percent of the Project shall be damaged or destroyed, or (iii) any material damage or destruction occurs to the Premises or the Project during the last twelve (12) months of the Initial Term or Option Term, as the case may be, then Landlord may elect to either terminate this Lease or repair and rebuild the Premises. In order to terminate this lease pursuant to this Paragraph, Landlord must give written notice to Tenant of its election to so terminate, such notice to be given within ninety (90) days after the occurrence of damage or destruction fitting the above description, and thereupon the term of this Lease shall expire by lapse of time ten (10) days after such notice is given and Tenant shall vacate the Premises and surrender the same to Landlord, without prejudice, however, to Landlord's rights and remedies against Tenant under the Lease provisions in effect prior to such termination, and any rent owing shall be paid up to such date and any payments of rent made by Tenant which were on account of any period subsequent to such date shall be returned to Tenant. Tenant acknowledges that Landlord will not carry insurance on Tenant's furniture and/or furnishings or any fixtures or equipment, improvements, or appurtenances removable by Tenant and agrees that Landlord will not be obligated to repair any damage thereto or replace the same. 9

9.03 Tenant shall give immediate notice to Landlord in case of fire or accident at the Premises. If Landlord repairs or restores the Premises as provided in Paragraph 9.01 above, Tenant shall promptly repair or replace its trade fixtures, furnishings, equipment, personal property and leasehold improvements in a manner and to a condition equal to that existing prior to the occurrence of such damage or destruction. 9.04 If the casualty, or the repairing or rebuilding of the Premises or Project pursuant to Paragraphs 9.01 and 9.02 above shall render the Premises or Project untenantable, in whole or in part, a proportionate abatement of the rent due hereunder shall be allowed from the date when the damage occurred until the date Landlord completes the repairs on the Premises or Project or, in the event Landlord elects to terminate this Lease, until the date of termination. Such abatement shall be computed on the basis of the ratio of the floor area of the Premises or Project rendered untenantable to the entire floor area of the Premises or Project. 9.05 Tenant shall not entrust any property to any employee, contractor, licensee, or invitee of Landlord. Any person to whom any property is entrusted by or on behalf of Tenant in violation of foregoing prohibition shall be deemed to be acting as Tenant's agent with respect to such property and neither Landlord nor its agents shall be liable for any damage to property of Tenant or of others entrusted to employees of the Project, nor shall Landlord or its agents be liable for any such damage caused by other tenants or persons in, upon or about the Project or caused by operations or construction of any private, public or quasi-public work. SECTION 10. REPAIRS, RENOVATIONS AND ALTERATIONS 10.01 Tenant shall, at Tenant's sole expense, keep the interior of the Premises and the fixtures therein in good condition, reasonable wear and tear excepted, and will also repair all damage or injury to the Premises and fixtures resulting from the carelessness, omission, neglect or other action or inaction of Tenant, its servants, employees, agents, visitors, invitees or licensees. Such damage shall be promptly repaired or damaged items replaced by Tenant, at its sole expense, to the satisfaction of Landlord. If Tenant fails to make such repairs or replacements, Landlord may do so and the cost thereof shall become collectible as additional rent hereunder and shall be paid by Tenant within ten (10) days after presentation of statement therefor. Landlord shall maintain, and shall make all necessary repairs and replacements to, the Building, the heating, air conditioning and electrical systems located therein, and the Common Areas, provided that at Landlord's option, (i) Tenant shall make all repairs and replacements arising from its act, neglect or default and that of its agents, servants, employees, invitees and licensees, or (ii) Landlord may make such repairs and replacements and the costs thereof shall become collectable as additional rent hereunder and shall be paid by Tenant within five (5) days after presentation of a statement therefore. Tenant shall keep and maintain the Premises in a clean, sanitary and safe condition, and shall keep and maintain the interior of the Premises in full compliance with the laws of the United States and State of Michigan, all directions, rules and regulations of any health officer, fire marshal, building inspector, or other proper official of any governmental agency having jurisdiction over the Premises, and the requirements of Landlord's mortgagee, all at Tenant's full cost and expense, and Tenant shall comply with all requirements of law, ordinance and regulation affecting the Premises. Tenant shall make all non-structural repairs to the Premises as and when needed to preserve them in good order and condition. All the aforesaid repairs shall be of quality or class equal to the original construction. Tenant shall give Landlord prompt written notice of any defective condition in any plumbing, heating system or electrical lines located in, servicing or passing through the Premises and following such notice, Landlord shall remedy the condition with due diligence but at the expense of Tenant if repairs are necessitated by damage or injury attributable to Tenant, Tenant's servants, agents, employees, invitees or licensees. There shall be no allowance to Tenant for diminutions of rental value and no liability on the part of Landlord by reason of inconvenience, annoyance or injury to business arising from Landlord, Tenant, or others making or failing to make any repairs, alterations, additions, or improvements in or to any portion of the Building or the Premises or in and to the fixtures, appurtenances or equipment thereof. The provisions of this Section 10 with respect to the making of repairs shall not apply in the case of fire or other casualty which are dealt with in Section 9 hereof. 10.02 Tenant shall not make any renovations, alterations, additions or improvements to the Premises without Landlord's prior written consent, which consent shall not be unreasonably withheld or delayed. All plans and specifications for such renovations, alterations, additions or improvements shall be approved by Landlord prior to commencement of any work. Landlord's approval of the plans, specifications and working drawings for Tenant's alterations shall create no responsibility or liability on the part of Landlord for their completeness, design sufficiency, or compliance with laws, rules and regulations of governmental agencies or authorities, including but not limited to the Americans with Disabilities Act, as amended. All renovations, alterations, additions or improvements made by Tenant upon the Premises, except for movable office furniture and movable trade fixtures installed at the expense of Tenant, shall be and shall remain the property of Landlord, and shall he surrendered with the Premises at the termination of this Lease, without molestation or injury. In addition, Landlord may designate by written notice to Tenant at the time of written consent the alterations, additions, 10

improvements and fixtures made by or for Tenant, which shall be removed by Tenant at the expiration or termination of the Lease and Tenant shall promptly remove the same and repair any damage to the Premises caused by such removal. 10.03 Tenant agrees that all renovations, alterations, additions and improvements made by it pursuant to Paragraph 10.02, notwithstanding Landlord's approval thereof, shall be done in a good and workmanlike manner and in conformity with all guidelines provided by Landlord and all laws, ordinances and regulations of all public authorities having jurisdiction, that materials of good quality shall be employed therein, that the structure of the Premises shall not be impaired thereby, that the work shall be carried out and completed in an orderly, clean and safe manner, and that, while the work is being performed, Tenant shall maintain builder's risk insurance coverage with Landlord as a named insured, which insurance coverage shall meet the criteria set forth in Section 8. 10.04 Notwithstanding anything to the contrary set forth in this Lease, Landlord shall have the right at any time and from ti me to time during the Term of this Lease to add an additional building (or buildings) and other improvements to the northeast side of the Building and, in connection therewith to (a) cause Tenant to vacate the 3' x 44' section on the northeast side of each floor of the Premises, (b) to demolish, repair and replace the existing exterior wall, windows and other structures therein with a new demising wall, halfway and other features excluding windows which Landlord may deem desirable and, (c) within twenty-four (24) months after the date Tenant vacates such space, the 3' x 44' wall section, to repair and restore such portion of the Premises excluding windows, to substantially the same condition it was in prior to the construction activity. During the period Landlord requires Tenant to vacate the 3' x 44' section, the rent and all other sums due hereunder for such space shall abate proportionately until such area is returned to Tenant "ready for occupancy". Except for the abatement of the rent pursuant to this Section 10.04, Landlord's construction activity shall not constitute an eviction of Tenant or a default under this Lease. SECTION 11. LIENS 11.01 Tenant will keep the Premises free of liens of any sort and will hold Landlord harmless from any liens which may be placed on the Premises except those attributable to debts incurred by Landlord. In the event a construction or other lien shall be filed against the Building, the Premises or Tenant's interest therein as a result of any work undertaken by Tenant or its employees, agents, contractors or subcontractors, or as a result of any repairs or alterations made by or any other act of Tenant or its employees, agents, contractors or subcontractors, Tenant shall, within two (2) ten (10) business days after receiving notice of such lien, discharge such lien either by payment of the indebtedness due the lien claimant or by filing a bond (as provided by statute) as security for the discharge of such lien. In the event Tenant shall fail to discharge such lien, Landlord shall after have the right to procure such discharge by filing such bond, and Tenant shall pay the cost of such bond to Landlord as additional rent upon the next Rent Day in accordance with Section 5 hereof. SECTION 12. EMINENT DOMAIN 12.01 If all of the Premises are condemned or taken in any manner (including without limitation any conveyance in lieu thereof) for any public or quasi-public use, the term of this Lease shall cease and terminate as of the date title is vested in the condemning authority. If (i) more than fifty (50%) percent of the floor area of the Premises shall be condemned or taken in any manner, or (ii) more than twenty-five (25%) percent of the Building shall be condemned or taken, or (iii) any material condemnation or taking occurs during the last twelve (12) months of the Initial Term or Option Term, as the case may be, or (iv) such a portion of the parking area on the Land is so condemned or taken that the number of parking spaces remaining are less than the number required by applicable zoning laws or other building code for the Building, then Landlord may elect to terminate this Lease. In order to terminate this Lease pursuant to this Paragraph, Landlord must give Tenant written notice of its election to so terminate, such notice to be given not later than ninety (90) days after the completion of such condemnation or taking, and thereupon the term of this Lease shall expire on the date set forth in such notice, and Tenant shall vacate the Premises and surrender the same to Landlord, without prejudice, however, to Landlord's rights and remedies against Tenant under the Lease provisions in effect prior to such termination, and any rent owing shall be paid up to such date and any payments of rent made by Tenant which were on account of any period subsequent to such date shall be returned to Tenant. 12.02 If this Lease is not terminated following such a condemnation or taking, Landlord, as soon as reasonably practicable after such condemnation or taking and the determination and payment of Landlord's award on account thereof, shall expend as much as may be necessary of the net amount which is awarded to Landlord and released by Landlord's mortgagee, if any, in restoring, to the extent originally constructed by Landlord (consistent, however, with zoning laws and building codes then in existence), so much of the Building as was originally constructed by Landlord to an architectural unit as 11

nearly like its condition prior to such taking as shall be practicable; provided, however, Landlord shall not be obligated to expend for such restoration an amount in excess of condemnation proceeds made available to Landlord, if any. Landlord's obligation hereunder shall be limited to restoring the Building and/or the Premises to substantially the same condition that existed prior to such condemnation or taking. 12.03 If this Lease is not terminated pursuant to Paragraph 12.01, the Base Rent and other sums payable by Tenant hereunder, as adjusted as provided herein, shall be reduced in proportion to the reduction in area of the Premises by reason of the condemnation or taking. If this Lease is terminated pursuant to Paragraph 12.01, the minimum net rental and other charges which are the obligation of Tenant hereunder shall be apportioned and prorated accordingly as of the date of termination. 12.04 The whole of any award or compensation for any portion of the Premises taken, condemned or conveyed in lieu of taking or condemnation, including the value of Tenant's leasehold interest under the Lease, shall be solely the property of and payable to Landlord. Nothing herein contained shall be deemed to preclude Tenant from seeking, at its own cost and expense, an award from the condemning authority for loss of its business, the value of any trade fixtures or other personal property of Tenant in the Premises or moving expenses, provided that the award for such claim or claims shall not be in diminution of the award made to Landlord. SECTION 13. ASSIGNMENT OR SUBLETTING 13.01 Tenant agrees not to assign or In any manner transfer this Lease or any interest in this Lease without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed and not to sublet the Premises or any part of the Premises or to allow anyone to use or to come in, through or under the Premises without Landlord's consent, which consent shall not be unreasonably withheld or delayed. Any attempted subletting or assignment without Landlord's consent, which consent shall not be unreasonably withheld or delayed shall be voidable in Landlord's sole discretion and, at Landlord's option, shall grant Landlord the right to terminate this Lease or to exercise any of the other rights or remedies it may have hereunder. If consented to, no assignment or subletting shall be binding upon Landlord unless the sublessee or assignee shall deliver to Landlord an instrument (in recordable form, if Landlord so requests) containing an agreement of assumption of all of Tenant's obligations under this Lease. In no event may Tenant assign, sublet or otherwise transfer this Lease or any interest in this Lease at any time while an Event of Default exists hereunder. Landlord may, in its sole discretion, refuse to give its consent to any proposed subletting or assignment or exercise its other rights hereunder for any reason, including, but not limited to, the financial condition, creditworthiness or business reputation of the proposed sublessee or assignee, the prevailing market or quoted rental rates for space in the Building or other comparable buildings, and the proposed use of the Premises by, or business of, the proposed sublessee or assignee. One consent by Landlord to a subletting or assignment will not be deemed a consent to any subsequent assignment, subletting, occupation or use by any other person. Neither the consent to any assignment or subletting nor the acceptance of rent from an assignee, subtenant or occupant will constitute a release of Tenant from the further performance of the obligations of Tenant contained in this Lease. A dissolution, merger, consolidation, or other reorganization of Tenant, and the issuance or transfer of twenty (20%) percent or more of the voting capital of Tenant to persons other than shareholders as of the beginning of such period within any twelve (12) month period, shall each be deemed to be an assignment of this Lease, and as such, prohibited without Landlord's prior written consent. Notwithstanding anything in this paragraph or the foregoing to the contrary, the merger, consolidation, or other reorganization of Tenant and the sale of all or substantially all of Tenant's assets (the "Permitted Transaction") shall be permitted hereunder with sixty (60) day prior written notice to Landlord (unless such notice is prohibited by law in which event Tenant shall give such notice to Landlord as soon as possible but in no event less than ten (10) days prior to such transaction), but not prior approval of Landlord, if the resultant entity (the "Resultant Entity") after such Permitted Transaction has, and has maintained for each of the two (2) full fiscal years preceding the Permitted Transaction, an Investment Grade Bond Rating (as hereinafter defined) and a net worth exceeding Twenty Million Dollars ($20,000,000) determined in accordance with general accepted accounting principles, consistently applied, and Tenant furnishes Landlord evidence reasonably acceptable to Landlord of the Investment Grade Bond Rating and net worth standard. For purposes of this Lease, "Investment Grade Bond Rating" means either (i) debt instruments issued and outstanding by the Resultant Entity are rated by either Standard & Poors or Moody's (or similar rating agency) to be Investment Grade or (ii) the credit of the Resultant Entity, in the absence of any such outstanding debt instruments, is determined pursuant to a report issued by Standard & Poors or Moody's (or such similar rating agency) to be equal to, or greater than, an existing Standard & Poors rating of BBB or higher, or an existing Moody's rating of BAA or higher. In addition, an initial public offering (IPO) by the Tenant shall be permitted hereunder with sixty (60) day prior written notice (unless such notice is prohibited by law in which event Tenant shall give such notice to Landlord as soon as possible but in no event less than ten (10) days prior to such transaction), but not prior approval, of Landlord if the resultant entity after such transaction has a net 12

worth exceeding Twenty Million Dollars ($20,000,000) determined in accordance with generally accepted accounting principles, consistently applied, and Tenant furnishes Landlord evidence reasonably acceptable to Landlord of net worth standard. 13.02 In the event Tenant desires to sublet all or a portion of the Premises or assign this Lease, Tenant shall give notice to Landlord setting forth the terms of the proposed subletting or assignment together with such financial and other information Landlord may request. Landlord shall have the right, exercisable by written notice to Tenant within sixty (60) days after receipt of Tenant's notice, (i) to consent or refuse to consent thereto in accordance with Paragraph 13.01 above, or (ii) to terminate this Lease which termination may, in Landlord's sole discretion, be conditioned upon Landlord and the proposed subtenant/assignee entering into a new Lease. 13.03 Upon the occurrence of an Event of Default, as defined under Section 18, if all or any part of the Premises are then sublet or assigned, Landlord, in addition to any other remedies provided by this Lease or by law, may, at its option, collect directly from the sublessee or assignee all rent becoming due to Landlord by reason of the subletting or assignment. Any collection by Landlord from the sublessee or assignee shall not be construed to constitute a waiver or release of Tenant from the further performance of its obligations under this Lease or the making of a new Lease with such sublessee or assignee. 13.04 In the event Tenant shall sublet all or a portion of the Premises or assign this Lease, all of the sums of money or other economic consideration received by Tenant or its affiliates, directly or indirectly, as a result of such subletting or assignment, whether denominated as rent or otherwise, which exceed in the aggregate the total sums which Tenant is obligated to pay Landlord under this Lease (prorated to reflect obligations allocable to that portion of the Premises subject to such sublease) shall be payable to Landlord as additional rent under this Lease without effecting or reducing any other obligation of Tenant hereunder. SECTION 14. INSPECTION OF PREMISES 14.01 With reasonable prior notice, except in the case of an emergency, Tenant agrees to permit Landlord to enter the Premises for the purpose of inspecting the same and to show same to prospective purchasers, tenants or mortgagees of the Project, and to make such repairs, alterations, improvements or additions as Landlord may deem necessary or desirable, and Landlord shall be allowed to take all material into and upon the Premises that may be required therefor without the same constituting an eviction of Tenant in whole or in part and the rent reserved shall in no way abate while said repairs, alterations, improvements, or additions are being made, by reason of loss or interruption of business of Tenant, or otherwise. Landlord will give Tenant reasonable notice prior to an entry by Landlord pursuant to this Section 14.01, except in the case of emergencies in which event no notice need be given. SECTION 15. FIXTURES AND EQUIPMENT 15.01 All fixtures and equipment paid for by Landlord and all fixtures which may be paid for and placed on the Premises by Tenant from time to time but which are so incorporated and affixed to Premises that their removal would involve damage or structural change to Premises will be and remain the property of Landlord. 15.02 All tenant furnishings, office equipment and tenant fixtures (other than those specified in Sections 10.02 and 15.01), which are paid for and placed on the Premises by Tenant from time to time (other than those which are replacements for fixtures originally paid for by Landlord) will remain the property of Tenant. SECTION 16. PARKING AREAS 16.01 Tenant and its agents, employees, customers, licensees and invitees shall have the non-exclusive right to use in common with Landlord and all other tenants and occupants of the Building and their respective agents, employees, customers, licensees and invitees, the Common Area parking and loading dock facilities, if any, on the Land, and all driveways, entrances and exits located within the Project necessary to provide a means of ingress and egress to and from the Premises. Such use of parking facilities shall be subject to, and consistent with, the Rules and Regulations of the Project (as set forth in Exhibit B), together with such reasonable modifications and additions as may be made thereto during the term of this Lease. Landlord shall designate the number of parking spaces set forth in Paragraph 1.01(i) in the parking lot of the Project for the exclusive use of Tenant. Tenant shall pay 13

Landlord, as additional rent on each Rent Day, an amount set forth in Section 1.01(i). Such sums may be increased by Landlord from time to time by the delivery of thirty (30) days prior written notice to Tenant. Within thirty (30) days of receipt of such notification, Tenant may: (i) accept such increase; or (ii) reject such increase for all or any of its exclusive spaces, in which event Tenant's exclusive parking rights for such spaces shall terminate. If Tenant accepts such increase or fails to reject such increase within the thirty (30) day period, then commencing with the next Rent Day following Landlord's notice, the amount of additional rent payable hereunder shall be increased accordingly. Notwithstanding anything contained herein to the contrary, Landlord shall have the right to relocate Tenant's Designated Parking Spaces within the parking lot of the Project, and Landlord shall have the right to designate other parking spaces in the parking lot for the exclusive use of others. Tenant agrees to be bound by parking regulations in effect at the Project, together with reasonable modifications or additions as may be necessary during the term of this Lease, as more fully described in Exhibit "B", attached hereto and made part hereof. SECTION 17. NOTICE OR DEMANDS 17.01 All bills, notices, requests, statements, communications, or demands (collectively, "notices or demands") to or upon Landlord or Tenant desired or required to be given under any of the provisions hereof must be in writing. Any such notices or demands from Landlord to Tenant will be deemed to have been duly and sufficiently given if a copy thereof has been personally delivered, mailed by United States certified mail, return receipt requested, postage prepaid, or sent via overnight courier service to Tenant at the address of the Premises or at such other address as Tenant may have last furnished in writing to Landlord for such purpose. Any such notices or demands from Tenant to Landlord will be deemed to have been duly and sufficiently given if delivered to Landlord in the same manner as provided above at the address set forth at the heading of this Lease or at the address last furnished by written notice from Landlord to Tenant. The effective date and the delivery date of such notice or demand will be deemed to be the time when it is personally delivered three (3) days after it is mailed or the day after it is sent via overnight courier as herein provided. SECTION 18. BREACH; INSOLVENCY; RE-ENTRY 18.01 Each of the following shall constitute an Event of Default under this Lease: (i) Tenant's failure to pay rent or any other sum payable hereunder for more than five (5) business days after written notice of such failure has been delivered to Tenant (but if one notice has been (given in any twelve (12) month period, no further notice shall be required during such twelve (12) month period); (ii) Tenant's failure to perform any of the non-monetary terms, conditions or covenants of this Lease to be observed or performed by Tenant for more than ten (10) business days after written notice of such failure shall have been delivered to Tenant except in connection with a breach which cannot be remedied or cured within said ten (10) business day period, in which event the time of Tenant within which to cure such breach shall be extended for such time as shall be necessary to cure the same, but only if Tenant, within such ten (10) business day period, shall have commenced and diligently proceeded to remedy or cure such breach; (iii) if Tenant is named as the debtor in any bankruptcy proceeding, or similar debtor proceeding, and any such proceeding, if involuntary, is not dismissed or set aside within sixty (60) days from the date thereof; (iv) if Tenant makes an assignment for the benefit of creditors or petitions for or enters into an arrangement with creditors or if a receiver of any property of Tenant in or upon the Premises is appointed in any action, suit or proceeding by or against Tenant, or if Tenant shall admit to any creditor or to Landlord that it is insolvent, or if the interest of Tenant in the Premises shall be sold under execution or other legal process; or (v) if Tenant shall abandon the Premises, vacate the Premises for a period of more than fifteen (15) consecutive days, or suffer this Lease to be taken under any writ of execution. Upon the occurrence of any Event of Default and after the delivery of written notice thereof to the extent required under applicable Michigan law, Landlord, in addition to any other rights and remedies it may have hereunder or by law, shall have the immediate right of re-entry, and may remove all persons and property from the Premises and it shall have the right to abandon or otherwise dispose of such property in any way it may deem fit which is not in contravention of applicable law. In addition, Landlord shall have the right, but not the obligation, to store all or some of the property which may have been removed in a public warehouse or elsewhere at the cost of, and for the account of, Tenant, all without service of notice or resort to legal process and all without being deemed guilty of trespass or becoming liable for any loss or damage which may be occasioned thereby. 18.02 In the event Landlord shall elect to re-enter the Premises in accordance with Paragraph 18.01, or should Landlord take possession of Premises pursuant to legal proceedings or pursuant to any notice provided by law, Landlord may either terminate this Lease or may from time to time without terminating this Lease, make such alterations and repairs as Landlord may deem necessary in order to relet the Premises, and relet the Premises or any part thereof for any such term or terms (which may be for a term extended beyond the term of this Lease) and at such rental or rentals, and upon such other terms and conditions as Landlord may deem advisable. 14

18.03 Upon the reletting of the Premises in accordance with Paragraph 18.02, all rentals received by Landlord from such reletting shall be applied in the following order of priority: (a) to the payment of any additional rent payable as provided in Section 5 hereof, including interest and late charges; (b) to the payment of any other indebtedness other than rent due hereunder from Tenant to Landlord; (c) to the payment of the actual costs and expenses of obtaining possession, restoring and repairing the Premises and the actual costs and expenses of reletting, including brokerage and reasonable attorneys' fees; and (d) to the payment of any rent and other sums due and unpaid under this Lease. The remainder, if any, shall be held by Landlord and applied in payment of future rent as the same may become due and payable hereunder. If the rental received from such reletting during any month is less than that to be paid during that month by Tenant hereunder, Tenant shall pay any such deficiency to Landlord monthly. No such re-entry or taking possession of the Premises or any part thereof by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention is given to Tenant or unless the termination thereof is decreed by a court of competent jurisdiction. 18.04 Notwithstanding any reletting of the Premises without termination in accordance with Paragraph 18.02, Landlord may at any time after the occurrence of any Event of Default, terminate this Lease and, in addition to any, other remedies Landlord may have, Landlord may recover from Tenant all damages it may incur by reason of Tenant's breach, including, without limitation, the reasonable cost of recovering and reletting the Premises and reasonable attorneys' fees incidental thereto and the worth at the time of the termination of the amount of rent and other charges payable hereunder for the remainder of the Term, all of which amounts shall be immediately due and payable by Tenant to Landlord. 18.05 In case suit shall be brought or an attorney otherwise consulted, for recovery of possession of the leased premises, for the recovery of rent or any other amount due under the provisions of this Lease, or because of the breach of any other covenant herein contained on the part of Tenant to be kept and performed, or any other action against Tenant by Landlord, or because of any claimed breach of this Lease by Landlord or any other action against Landlord by Tenant, (and Landlord shall be the prevailing party), Tenant shall pay to Landlord all expenses incurred therefor, including a reasonable attorneys' fee. In addition, Landlord and Tenant hereby waive trial by jury in any action, proceeding or counterclaim brought by Landlord or Tenant against the other on any matter whatsoever arising out of or in any way connected with this Lease, the relationship of Landlord to Tenant, the use or occupancy of the Premises by Tenant or any person claiming through or under Tenant, any claim of injury or damage, and any emergency or other statutory remedies; provided, however, the foregoing waiver shall not apply to any action for personal injury or property damage. 18.06 Landlord and Tenant shall each use reasonable efforts to mitigate any damages resulting from a default of the other party under this Lease. Landlord's obligation to mitigate damages after a default by Tenant under this Lease shall be satisfied in full if Landlord undertakes to lease the Premises to another tenant (the "Substitute Tenant") in accordance with the following criteria: (i) Landlord shall have no obligation to solicit or entertain negotiations with any other prospective Substitute Tenant for the Premises until Landlord obtains full and complete possession of the Premises, including, without limitation, the absolute right to relet the Premises free of any claim of Tenant. (ii) Landlord may give priority to lease any or all available space(s) in the Project before offering the Premises to a Substitute Tenant. (iii) Landlord shall not be obligated to lease the Premises to a Substitute Tenant for a rental less than the current fair market rental then prevailing for similar space in comparable properties in the same sub-market as the Building, nor shall Landlord be obligated to enter into a lease under other terms and conditions that are unacceptable to Landlord under Landlord's then current leasing policies for comparable space in the Building. (iv) Landlord shall not be obligated to enter into a lease with any proposed Substitute Tenant whose use would: A. Disrupt the tenant mix of the Building; B. Violate any restriction, covenant, or requirement contained in the lease of another tenant of the Building or Project; C. Adversely affect the reputation of the Building or the Project; or D. Be incompatible with the tenancy or use of the Building as a first class office building. 15

(v) Landlord shall not be obligated to enter into a lease with any proposed Substitute Tenant which does not have, in Landlord's reasonable opinion. sufficient financial resources to lease the Premises. (vi) Landlord shall not be required to expend any amount of money to alter, remodel, or otherwise make the Premises suitable for use by a proposed Substitute Tenant unless: A. Tenant pays any such sum to Landlord in advance of Landlord's execution of a lease with a Substitute Tenant (which payment shall not be in lieu of any damages or other sums to which Landlord may be entitled as a result of Tenant's default under this Lease); or B. Landlord, in Landlord's reasonable discretion, determines that any such expenditure is financially justified in connection with entering into a lease with such Substitute Tenant. Upon compliance with the above criteria regarding releasing of the Premises after a default by Tenant, Landlord shall be deemed to have fully satisfied Landlord's obligation to mitigate damages under this Lease and under any law or judicial ruling in effect on the date of this Lease or at the time of Tenant's default, and Tenant waives and releases, to the fullest extent legally permissible, any right to assert in any action by Landlord to enforce the terms of this Lease, any defense, counterclaim, or rights of setoff or recoupment respecting the miti gation of damages by Landlord, unless and to the extent Landlord fails to act in accordance the requirements of this section. SECTION 19. SURRENDER OF PREMISES ON TERMINATION 19.01 At the expiration (or earlier termination) of the Term hereof, Tenant will surrender the Premises broom clean and in as good condition and repair as they were at the time Tenant took possession, subject to insured loss by casualty under Section 9 and reasonable wear and tear excepted, and promptly upon surrender will deliver all keys and building security cards for the Premises to Landlord at the place then fixed for the payment of rent. At the expiration of the Lease term, Tenant will, at its own cost and expense, repair or pay the cost of restoration with respect to any damage to the Premises arising from the removal of any trade fixtures or similar items. Tenant shall have no rights of removal as to property affixed or otherwise placed on or in the Premises by or at the expense of Landlord, its predecessors, successors or assigns. All costs and expenses incurred by Landlord in connection with repairing or restoring the Premises to the condition called for herein, together with the costs, if any, of removing any property of Tenant together with any property designated by Landlord pursuant to Section 10.02, left on the Premises, shall be paid by Tenant on demand. Tenant shall remove all property of Tenant and make all repairs necessitated thereby at its own cost, as directed by Landlord. Tenant's obligation to observe or perform this covenant shall survive the expiration or other termination of the Term of this Lease. SECTION 20. PERFORMANCE BY LANDLORD OF THE COVENANTS OF TENANT 20.01 If Tenant fails to pay any sum of money, other than Base Rent, required to be paid hereunder or fails to perform any act on its part to be performed hereunder, including, but not limited to, the performance of all covenants pertaining to the condition and repair of the Premises pursuant to Section 10 above, and if such failure shall not otherwise be cured within the time, if any, provided herein, then upon two (2) days notice Landlord may (but shall not be required to), without waiving or releasing Tenant from any of Tenant's obligations, make any such payment or perform any such other act. All sums so paid or incurred by Landlord and all incidental costs, including, but not limited to, the cost of repair, maintenance or restoration of the Premises, shall be deemed additional rental and, together with interest thereon computed at the rate set forth in Section 5 hereof from the date of payment by Landlord until the date of repayment by Tenant to Landlord, shall be payable to Landlord on demand. On default in such payment, Landlord shall have the same remedies as on default in payment of rent. The rights and remedies granted to Landlord under this Section 20 shall be in addition to, and not in lieu of, all other remedies, if any, available to Landlord under this Lease or otherwise, and nothing contained herein shall be construed to limit such other remedies of Landlord with respect to any matters covered herein. SECTION 21. SUBORDINATION; ESTOPPEL CERTIFICATES 21.01 This Lease is subject and subordinate to all ground leases, underlying leases, and mortgages, if any, now or hereafter made, which may now or hereafter affect the Project and to all renewals, modifications, consolidations, replacements and extensions of any such ground leases, 16

underlying leases and mortgages. This clause shall be self-operative and no further instrument of subordination shall be necessary. Notwithstanding the foregoing, Landlord reserves the right to declare this Lease prior to the lien of any ground lease, underlying lease, or mortgage now or hereinafter placed upon the real property of which the Premises are a part by recording a written notice of such priority with the register of deeds. Tenant covenants and agrees to execute and deliver, within ten (10) days after requested by Landlord, such further instrument or instruments subordinating this Lease (or declaring the Lease prior and superior) to any lease or proposed lease or to the lien of any such mortgage or mortgages as shall reasonably be desired by Landlord, any lessor or proposed lessor, and any mortgagees or proposed mortgagees. Such instruments will be commercially reasonable. Landlord warrants as of the date of signing of this Lease there are no ground leases, underlying leases or mortgages attached to the Project. 21.02 In the event any proceedings are brought for foreclosure of, or in the event of the conveyance by deed in lieu of foreclosure of, or in the event of the exercise of the power of sale under, any mortgage made by Landlord covering the Premises, Tenant hereby attorns to the new owner, and covenants and agrees to execute any instrument in writing reasonably satisfactory to the new owner, whereby Tenant attorns to such successor in interest and recognizes such successor as Landlord under this Lease. 21.03 Tenant, within ten (10) days after request (at any time or times) by Landlord, will execute and deliver to Landlord an estoppel certificate, in form reasonably acceptable to Landlord, certifying: (i) to the Commencement Date and expiration date of the Term; (ii) that this Lease is unmodified and in full force and effect, or is in full force and effect as modified, stating the modifications; (iii) that Tenant does not claim that Landlord is in default in any way, or listing any such claimed defaults and that Tenant does not claim any rights of setoff, or listing such rights of setoff; (iv) to the amount of monthly rent and other sums due hereunder as of the date of the certificate, the date to which the rent has been paid in advance, and the amount of any security deposit or prepaid rent; (v) that Tenant agrees to provide any mortgagee of Landlord with notice of any default by Landlord hereunder and give such mortgagee the opportunity to cure such default within sixty (60) days of such mortgagee's receipt of notice of such default; and (vi) such other matters as may be reasonably requested by Landlord. Any such certificate may be relied upon by any prospective purchaser, mortgagee or lessor of the Premises or any part thereof. SECTION 22. QUIET ENJOYMENT 22.01 Landlord agrees that at all times when no Event of Default exists under this Lease, Tenant's quiet and peaceable enjoyment of the Premises, in accordance with and subject to the terms of this Lease, will not be disturbed or interfered with by Landlord or any person claiming by, through, or under Landlord. SECTION 23. HOLDING OVER 23.01 If Tenant remains in possession of the Premises after the expiration of this Lease without executing a new lease, Landlord shall have the right to deem Tenant to be occupying the Premises as a tenant from month to month and the Base Rent for each month will be one hundred fifty (150%) percent of the greater of: (a) the regular monthly installment of Base Rent payable for the last month of the Term of this Lease; or (b) the then prevailing market rates of rent for the Project determined by Landlord in its sole and absolute discretion. This provision shall not preclude Landlord from terminating the lease or recovering any and all damages Landlord may incur as a result of Tenant's failure to timely deliver possession of the Premises to Landlord or from exercising any other right or remedy it may have hereunder. SECTION 24. REMEDIES NOT EXCLUSIVE; WAIVER 24.01 Each and every of the rights, remedies and benefits of Landlord provided by this Lease are cumulative, and are not exclusive of any other of said rights, remedies and benefits, or of any other rights, remedies and benefits allowed by law. 24.02 The failure of Landlord to seek redress for violation of, or to insist upon the strict performance of, any covenant or condition of this Lease or of any of the rules or regulations set forth or hereafter adopted by Landlord, shall not prevent a subsequent act which would have originally constituted a violation from having all the force and effect of an original violation. The receipt by Landlord of rent with knowledge of the breach of any covenant of this Lease shall not be deemed a 17

waiver of such breach and no provision of this Lease shall be deemed to have been waived by Landlord unless such waiver be in writing signed by Landlord. One or more waivers of any covenant or condition by either party shall not be construed as a waiver of a further or subsequent breach of the same covenant or condition, and the consent or approval by Landlord to or of any act by Tenant requiring Landlord's consent or approval will not be deemed to waive or render unnecessary Landlord's consent or approval to or of any subsequent similar act by Tenant. No payment by Tenant or receipt by Landlord of a lesser amount than the monthly rental herein stipulated shall be deemed to be other than on account of the earliest stipulated rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as rent be deemed an accord and satisfaction, and Landlord shall accept such check or payment without prejudice to Landlord's right to recover the balance of such rent or pursue any other remedy provided in this Lease. SECTION 25. WAIVER OF SUBROGATION 25.01 Landlord and Tenant hereby release each other and their respective agents and employees from any and all liability to each other or anyone claiming through or under them by way of subrogation or otherwise for any loss or damage to property caused by or resulting from risks insured against under the property insurance for loss, damage or destruction by fire or other casualty carried by the parties hereto and which was in force at the time of any such loss or damage or which would have been so covered had the insurance required hereunder been maintained; provided, however, that this release shall be applicable only with respect to loss or damage occurring during such time as the releasor's policies of insurance contain a clause or endorsement to the effect that any such release shall not adversely affect or impair such policies or prejudice the right of the releasor to recover thereunder. Landlord and Tenant each agrees that it will require its property insurance carriers to include in its policy such a clause or endorsement. However, if such endorsement cannot be obtained, or shall be obtainable only by the payment of an additional premium charge above that which is charged by companies carrying such insurance without such waiver of subrogation, then the party undertaking to obtain such waiver shall notify the other party of such fact and such other party shall have a period of ten (10) days after the giving of such notice to agree in writing to pay such additional premium if such policy is obtainable at additional cost (in the case of Tenant, pro rate in proportion of Tenant's rentable area to the total rentable area covered by such insurance); and if such other party does not so agree or the waiver shall not be obtainable, then the provisions of this Section 25.01 shall be null and void as to the risks covered by such policy for so long as either such waiver cannot be obtained or the party in whose favor a waiver of subrogation is desired shall refuse to pay the additional premium. If the release of either Landlord or Tenant, as set forth in the second sentence of this Section 25.01, shall contravene any law with respect to exculpatory agreements, the liability of the party in question shall be deemed not released, but no action or rights shall be sought or enforced against such party unless and until all rights and remedies against the other's insurer are exhausted and the other party shall be unable to collect such insurance proceeds. The waiver of subrogation referred to above shall extend to the agents and employees of each party (including, as to Landlord, the Manager), but only if and to the extent that such waiver can be obtained without additional charge (unless such party shall pay such charge). Nothing contained in this Section 25.01 shall be deemed to,relieve either party from any duty imposed elsewhere in this Lease to repair, restore and rebuild. SECTION 26. RIGHT TO SHOW PREMISES 26.01 Landlord may show the Premises to prospective tenants and brokers, and may display signs about the Project and elsewhere advertising the availability of the Premises during the last eighteen (18) months of the Lease. SECTION 27. INDEMNIFICATION 27.01 Tenant at its expense will defend, indemnify, save and hold harmless Landlord, its invitees, licensees, servants, agents, employees, affiliated entities and contractors, from and against any loss, damage, claim of damage, liability or expense, (including attorney fees) to or for any person or property, whether based on contract, tort, negligence or otherwise, arising directly or indirectly out of or in connection with the condition of the Premises, the occupation, use or misuse thereof by Tenant or any other person, the acts or omissions of Tenant, its invitees, licensees, servants, agents, employees or contractors, the failure of Tenant to comply with any provision of this Lease, or any event on or relating to the Premises, whatever the cause or any litigation or other proceeding by or against Tenant to which Landlord is made a party, other than the intentional, willful or malicious act of Landlord which causes an injury which was either expected or intended by Landlord when it performed the act in question. The provisions of this Section 27.01 will survive the expiration or termination of this Lease. 18

SECTION 28. DEFINITION OF LANDLORD; LANDLORD'S LIABILITY 28.01 The term "Landlord" as used in this Lease so far as covenants, agreements, stipulations or obligations on the part of Landlord are concerned is limited to mean and include only the owner or owners of the Premises at the time in question, and in the event of any transfer or transfers of the title to such fee Landlord herein named (and in case of any subsequent transfers or conveyances the then grantor) will automatically be freed and relieved from and after the date of such transfer or conveyance of all personal liability for the performance of any covenants or obligations on the part of Landlord contained in this Lease thereafter to be performed. 28.02 This Lease and the obligation of Tenant to pay rent hereunder and perform all of the other covenants and agreements hereunder on the part of Tenant to be performed shall in no way be affected, impaired or excused because Landlord is unable to fulfill any of its obligations under this Lease or is unable to supply or is delayed in supplying any service expressly or impliedly to be supplied or is unable to make, or is delayed in making any repairs, additions, alterations or decorations or is unable to supply or is delayed in supplying any equipment or fixtures if Landlord is prevented or delayed from so doing by reasons of shortages of materials, acts of God, governmental restrictions, strike or labor troubles or any cause beyond Landlord's reasonable control including, but not limited to, government preemption in connection with a national emergency or by reason of any rule, order or regulation of any department or subdivision thereof of any government agency or by reason of the conditions of supply and demand which have been or are affected by war or other emergency. SECTION 29. SECURITY DEPOSIT AND SECURITY INTEREST 19

SECTION 30. RULES AND REGULATIONS 30.01 Tenant shall faithfully abide by and observe the rules and regulations for the Building, a copy of which is attached hereto as Exhibit B and made a part hereof, and, after notice thereof, all reasonable additions thereto and modifications thereof of uniform applicability from time to time promulgated in writing by Landlord. SECTION 31. SIGNS AND ADVERTISING 31.01 No signs, lighting, lettering, pictures, notices, advertisements, shades, awnings or decorations will be displayed, used or installed by Tenant except as approved in writing by Landlord. All such materials displayed in and about the Premises will be such only as to advertise the business carried on upon the Premises and Landlord will control the location, character and size thereof. Tenant shall not cause or permit to be used any advertising materials or methods which are reasonably objectionable to Landlord or to other tenants of the Building, including without limiting the generality of the foregoing: loudspeakers, mechanical or moving display devices, unusually bright or flashing lights and similar devices the effect of which may be seen or heard from outside the Premises. Tenant shall not solicit business, sell or display merchandise, or distribute hand bills or other advertising matter in the parking area or other Common Areas. SECTION 32. GENERAL 32.01 If, by reason of the occurrence of unavoidable delays due to acts of God, governmental restrictions, strikes, labor disturbances, shortages of materials or supplies or for any other cause or event beyond Landlord's reasonable control, Landlord is unable to furnish or is delayed in furnishing any service required by Landlord under the provisions of this Lease, or Landlord is unable to perform or make or is delayed in performing or making any installations, decorations, repairs, alterations, additions, or improvements, required to be performed or made under this Lease, or is unable to fulfill or is delayed in fulfilling any of Landlord's other obligations under this Lease, no such inability or delay shall constitute an actual or constructive eviction in whole or in part, or, except as otherwise (expressly provided herein, entitle Tenant to any abatement or diminution of rental or other charges due hereunder or otherwise relieve Tenant from any of its obligations under this Lease, or impose any liability upon Landlord or its agents by reason of inconvenience or annoyance to Tenant, or injury to or interruption of Tenant's business, or otherwise. 32.02 This Lease is being entered into and executed in the State of Michigan, and all questions with respect to the construction of this Agreement and the rights and liabilities of the parties shall be determined in accordance with the provisions of the laws of the State of Michigan. 32.03 Many references in this Lease to persons, entities and items have been generalized for ease of reading. Therefore, references to a single person, entity or item will also mean more than one person, entity or thing whenever such usage is appropriate (for example, "Tenant" may include, if appropriate, a group of persons acting as a single entity, or as tenants-in-common). Similarly, pronouns of any gender should be considered interchangeable with pronouns of other genders. 32.04 Section headings appearing in this Lease are for convenience only. They do not define, limit or construe the contents of any paragraphs or clauses contained herein. 32.05 Landlord reserves the right to relocate Tenant in other comparable space In the Building upon not less than sixty (60) days prior written notice to Tenant. Landlord shall pay the cost of moving Tenant to new space. If Tenant does not wish to accept such relocation, Tenant may object thereto by written notice to Landlord within ten (1 0) days after the notice from Landlord. In the event Tenant fails to object within such ten (10) day period, Tenant shall be deemed to have accepted the relocation. In the event Tenant so objects, Landlord may rescind the notice of intention to relocate Tenant or may reaffirm said intention, in which event Tenant may terminate this Lease by written notice to Landlord within five (5) days after the affirmation notice from Landlord. In the event Tenant fails to notify Landlord of its termination within such five (5) day period, it shall be deemed to have accepted the relocation. If Tenant terminates this Lease pursuant this paragraph, Tenant must vacate the Premises within thirty (30) days 20

following Tenant's notice to Landlord of termination. The cost of relocation to be paid by Landlord shall include the expense of the de-installation and installation of equipment, facilities, and business communications facilities to such substitute space. All reimbursements to Tenant shall be made within thirty (30) days of receipt of the invoice(s) therefor. 32.06 The covenants, conditions and agreements contained in this Lease shall bind and inure to the benefit of Landlord and Tenant and their respective heirs, distributees, successors, administrators and executors provided, however, that no assignment by, from, through, or under Tenant in violation of any of the provisions hereof shall vest in the assigns any right, title, or Interest whatsoever. All provisions of this Lease are and will be binding on the successors and permitted assigns of Landlord and Tenant. 32.07 Time shall be and is of the essence in this Lease and with respect to the performance of all obligations of Landlord and Tenant hereunder. 32.08 Any services which Landlord is required to furnish pursuant to the provisions of this Lease may, at Landlord's option, be furnished from time to time, in whole or in part, by employees of Landlord or by the managing agent of the Project or by one or more third persons. 32.09 Landlord shall have the right at any time, and from time to time, to unilaterally amend the provisions of this Lease if Landlord is advised by counsel that all or any portion of the monies paid by Tenant to Landlord hereunder are, or may be deemed to be, unrelated business income within the meaning of the United States Internal Revenue Code or regulation issued thereunder, and Tenant agrees that it will execute all documents or instruments necessary to effect such amendment or amendments, provided that no such amendment shall result in Tenant having to pay in the aggregate more money on account of its occupancy of the Premises under the term of this Lease as so amended and provided, further, that no such amendment or amendments shall result in Tenant receiving under the provisions of this Lease less service than it is entitled to receive, nor services of a lesser quality. 32.10 Except as otherwise provided herein, neither Landlord nor Landlord's agents have made any representations or promises with respect to the physical condition of the Building, the Land or the Premises, or with respect to the rents, leases, expenses of operation or any other matter or thing affecting or related to the Premises except as expressly set forth herein; and no rights, easements or licenses are acquired by Tenant by implication or otherwise except as expressly set forth in the provisions of this Lease. 32.11 Annually and at any other time, Tenant shall promptly furnish Landlord financial statements reflecting Tenant's and any Guarantor's current financial condition. All such financial statements shall be in such form and contain such detail as Landlord shall reasonably request. 32.12 In case any provision of this Lease or any agreement or instrument executed in connection herewith shall be invalid, illegal or unenforceable, such provision shall be enforced to the fullest extent permitted by applicable law, and the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby. This Lease shall not be construed more strictly against one party than against the other, merely by virtue of the fact that it may have been prepared by counsel for one of the parties, it being recognized that both Landlord and Tenant have contributed substantially and materially to the preparation of this Lease. 32.13 This Lease can be modified or amended only by a written agreement signed by Landlord and Tenant. This Lease and the Exhibits attached hereto and forming a part hereof set forth all of the covenants, agreements, stipulations, promises, conditions and understandings between Landlord and Tenant concerning the Premises, and there are no covenants, agreements, stipulations, promises, conditions or understanding, either oral or written, between them other than set forth herein or therein. 32.14 Tenant will not record this Lease or a memorandum hereof, and will not otherwise disclose the terms of this Lease to anyone other than its attorneys, accountants or employees who need to know of its contents in order to perform their duties for Tenant. Any other disclosure will be an Event of Default under the Lease. Tenant agrees that Landlord shall have the right to publish a "tombstone" or other promotional description of this Lease. 32.15 Except as disclosed in writing to Landlord, Tenant represents and warrants to Landlord that there are no claims for brokerage commissions or finder's fees in connection with this Lease as a result of the contracts, contacts or actions of Tenant, and Tenant agrees to indemnify Landlord and hold it harmless from all liabilities arising from any such claim arising from an alleged agreement or act by Tenant (including, without limitation, the cost of counsel fees in connection therewith); such agreement to survive the termination of this Lease. 21

32.16 The matters set forth on Exhibit D, Special Provisions, if any, are hereby accepted and agreed to between Landlord and Tenant and incorporated herein by reference. IN WITNESS WHEREOF Landlord and Tenant have executed this Lease as of the date and year first above written.
LANDLORD: WRC PROPERTIES, INC., a Delaware Corporation By: Nicholas E. Stolatis -----------------------------------Signature Printed Name: Nicholas E. Stolatis -------------------------Its: Assistant Secretary ----------------------------------Date: ---------------------------------TENANT: SYNTEL, INC., a Michigan Corporation By: Bharat Desai ------------------------------------Signature

Bharat Desai --------------------------Its: President -----------------------------------Date: August 29, 1996 -----------------------------------

Printed Name:

22

EXHIBIT A SPACE PLAN [FLOOR PLAN] TROY OFFICENTRE 2 [LOGO] Building - D - 2 - 4 NO SCALE Approved by Tenant: SYNTEL, INC., a Michigan Corporation
By: Bharat Desai ----------------------------------Signature Printed Name: Bharat Desai ------------------------Its: President ----------------------------------

Date: August 29, 1996 ---------------------------------

EXHIBIT B RULES AND REGULATIONS OF THE PROJECT Tenant agrees for itself, its employees, agents, clients, customers, licensees, invitees and guests, to comply fully with the following rules and regulations and with such reasonable modifications thereof and additions thereto as Landlord may make for the Project. All rules and regulations set forth in this Exhibit B shall be in addition to, and shall in no way limit, the provisions of the Lease. 1 . The Common Areas of the Project shall not be used by Tenant for any purpose other than those for which they are intended or designated. 2. Landlord has the right to control access to the Project and refuse admittance to any person or persons without satisfactory identification or a pass issued by Tenant during hours reasonably determined by Landlord. 3. No person shall disturb other occupants of the Building by making loud or disturbing noises. 4. Soliciting, peddling and canvassing is prohibited in the Project and Tenant shall cooperate to prevent the same. 5. All deliveries and removals of furniture, equipment or other bulky items must take place after notification to Landlord, during such hours and in such manner as Landlord shall reasonably determine. Tenant shall be responsible for all damage or injury resulting from the delivery or removal of all articles into or out of the Project or the Premises. No load shall be placed on the floors or in elevators in excess of the limits which shall be established by Landlord. 6. Tenant shall not use any equipment emitting noxious fumes or offensive odors unless they are properly vented at Tenant's expense. 7. Nothing shall be attached to the interior or exterior of the Building without the prior written consent of Landlord, except art work and/or the Syntel, Inc. logo on the walls. 8. No sign or other representation shall be placed on the interior or exterior of the Building without prior written consent of Landlord. 9. No hazardous articles, bicycles, vehicles or animals of any kind (other than wheelchairs and seeing-eye dogs) shall be brought into or kept in or about the Building without the prior consent of Landlord. 10. No marking, painting, drilling, boring, cutting or defacing of the walls, floors or ceilings of the Building, other than that which is reasonably necessary for the hanging of art work, diplomas and similar objects which do not require any material alteration to any wall, floor or ceiling, shall be permitted without the prior written consent of Landlord. 11. The electrical system and lighting fixtures in the Building shall not be altered or disturbed in any manner without the prior written consent from Landlord. Any alterations or additions must be performed by licensed personnel authorized by Landlord. 12. The toilets and other plumbing fixtures shall not be used for any purpose other than that for which they are designed. No sweepings, rubbish or other similar materials or substances shall be deposited therein. 13. Smoking is prohibited in the elevators), hallways, corridors, stairs, lobbies and other common areas of the Project unless clearly designated to the contrary by Landlord. 14. Tenant shall not waste electricity, water or air-conditioning, and shall cooperate fully with Landlord to assure the most effective operation of the Building's heating and air-conditioning. Tenant shall not adjust any controls other than room thermostats installed for Tenant's use. Tenant shall not tie, wedge or otherwise fasten open any water faucet or outlet. Tenant shall keep all corridor doors closed. 15. Tenant assumes full responsibility for protecting the Premises from theft, burglary, robbery and pilferage. Except during Tenant's normal business hours, Tenant shall keep all door's to the Premises locked and other means of entry to the Premises closed and secured. 16. Tenant or Tenant's employees shall not distribute literature, flyers, handouts or pamphlets of any kind in any of the common areas of the Project without the prior written consent of Landlord. 24

17. Tenant shall not sell or prepare any food or beverages in or from the Premises without Landlord's prior written consent, except for coffee, tea, soup and microwave foods prepared for consumption by Tenant, Tenant's servants, employees, agents, clients, customers, licensees, invitees. visitors, and contractors. 18. Tenant shall not permit the use of any apparatus for sound production or transmission in such manner that the sound so transmitted or produced shall be audible or vibrations therefrom shall be detectable beyond the Premises. 19. Tenant shall keep all electrical and mechanical apparatus free of vibration, noise and air waves which may be transmitted beyond the Premises. 20. No floor covering shall be affixed to any floor in the Premises by means of glue or other adhesive without Landlord's prior written consent. 21. Tenant shall not use the name of the Building for any purpose other than that of the business address of Tenant (which it may do, at its own risk, in the event the name of the Building changes), and shall not use any picture or likeness of the Building in any circulars, notices, advertisements or correspondence. 22. Tenant shall not obstruct sidewalks, entrances, passages, courts, corridors, vestibules, halls, elevators and stairways in or about the Building, nor shall Tenant place objects against glass partitions, doors or windows which would be unsightly from the Building's corridors, or from other areas of the Building. 23. Tenant shall not make any room-to-room canvass to solicit business from other tenants of the Building. 24. No additional locks or similar devices shall be attached to any door and no locks shall be changed without Landlord's prior written consent. A card access security system may be installed and maintained by Tenant. Upon termination of this Lease or of Tenant's possession of the Premises, Tenant shall surrender all keys for door locks and other locks in or about the Premises and shall make known to Landlord the combination of all locks, safes, cabinets and vaults which are not removed by Tenant. 25. Tenant shall not install or operate any machinery or mechanical devices of a nature not directly related to Tenant's ordinary use of the Premises without Landlord's prior written consent. 26. Tenant shall not employ any person to perform any cleaning, repairing, janitorial, decorating, painting or other services or work in or about the Premises, except with the approval of Landlord. 27. Tenant shall ascertain from Landlord the maximum amount of electrical current which can safely be used in the Premises, taking into account the capacity of the electric wiring in the Building and the Premises and the needs of other tenants, and shall not use more than such safe capacity. Landlord's consent to the installation of electric equipment shall not relieve Tenant from the obligation not to use more electricity than such safe capacity., 28. Tenant shall not overload any floor or elevator and shall not install any heavy objects, safes, business machines, files or other equipment without having received Landlord's prior written consent as to size, maximum weight, routing and locations thereof. Safes, furniture, equipment, machines and other large or bulky articles shall be brought through the Building and into and out of the Premises at such times and in such manner as Landlord shall direct (including the designation of elevator) and at Tenant's sole risk and responsibility. Prior to Tenant's removal of any such articles from the Building, Tenant shall obtain written authorization therefore from Landlord. 29. Tenant shall not in any manner deface or damage the Building. 30. Tenant shall not bring into the Building or Premises inflammables such as gasoline, kerosene, naphtha and benzine, or explosives or any other articles of intrinsically dangerous nature. 31. Movement into or out of the Building of furniture or office equipment, or dispatch or receipt by Tenant of any merchandise or materials other than hand-delivered packages, which requires the use of elevators or stairways or movement through the Building entrances or lobby, shall be restricted to the hours designated by Landlord. Tenant assumes all risk of damage to any and all articles so moved, as well as injury to any person or property in such movement, and hereby agrees to indemnify Landlord against any loss resulting therefrom. 25

32. Landlord shall not be responsible for any lost or stolen property, equipment, money or jewelry from the Premises or the public areas of the Building regardless of whether such loss occurs when the Premises are locked. 33. The Premises shall not be used for housing, lodging, sleeping or for any immoral or illegal purpose. 34. The work of the janitor or cleaning personnel shall not be hindered by Tenant after 5:30 p.m. and the windows may be cleaned at any time. Tenant shall provide adequate waste and rubbish receptacles to prevent unreasonable cost to Landlord in discharging its obligations regarding cleaning services. 35. Tenant will refer all contractors or installation technicians rendering any service for Tenant for supervision and approval of Landlord before performance of any contractual services. 36. Parking Regulations: (i) Cars WILL NOT park in the designated "Reserved" spaces. There will be no parking in any area of the Project other than those areas clearly marked and defined for parking. (ii) Parking will be on the basis of first-come, first-served except for reserved spaces. (iii) Parkers will be expected to park their cars in an orderly manner within the marked stalls provided. (iv) It is recommended that cars be left in a "brakes on, doors locked" condition at all times. (v) No car will be allowed to park in any driveway area or in any manner which will interfere with the normal flow of traffic. (vi) Cars parked illegally will be towed at the car owner's expense. (vii) Tenant agrees that all its employees have been fully informed as to the content of these regulations. (viii) Landlord or Landlord's agents and employees shall not be liable for and Tenant waives all claims resulting from any accident or occurrence in and upon the parking area. (ix) All automobiles parked in the parking areas shall be in good condition and repair, utilized for personal transportation, not commercial in nature and driven and handled at the risk of the owner. (x) Automobile owner or owner's agents shall not wash, wax or otherwise clean or prep the interior/exterior of vehicles or perform any maintenance whatsoever on vehicles within the parking area or on any part of the parking lot servicing the Building. (xi) In the event that automobile owner's use of the parking area violates any local, county or state law, regulation or ordinance, automobile owner's right to utilize the parking area shall immediately cease. In addition, in no event shall Tenant permit its employees, licensees, invitees or other occupants to use more than Tenant's Proportionate Share of the existing parking spaces for the Project. (xii) Parking areas shall not be used to store vehicles or for parking large commercial or recreational vehicles. Tenant shall be responsible for the observance of all the foregoing rules and regulations by Tenant's employees, agents, clients, customers, invitees, licensees and guests. Landlord shall not be responsible for any violation of the foregoing rules and regulations by other tenants of the Building and shall have no obligation to enforce the same against other tenants. Landlord shall have the right to amend these rules and regulations from time to time in accordance with the terms of the Lease. Approved by Tenant: SYNTEL, INC., A MICHIGAN CORPORATION
By: Bharat Desai -------------------------------Signature Printed Name: Bharat Desai ---------------------Its: President -------------------------------

Date: August 29, 1996 ------------------------------

EXHIBIT C DAILY JANITORIAL SERVICE (a) All waste paper baskets and ashtrays are emptied and cleaned. (b) All furniture and cleared desks are dusted as required. (c) All carpeting is vacuum cleaned daily as required. (d) All doors, doorknobs, and glass are wiped down as required. (e) Walls are spot cleaned as required. (f) Windows are spot cleaned as required. (g) All corridors, common areas, common area bathrooms, and elevators are cleaned daily, which includes washing all tile floors, washing out the sinks and stalls, vacuum cleaning the hallway carpeting, cleaning out the drinking fountains and spot cleaning the walls and mirrors where necessary. Approved by Tenant: SYNTEL, INC., A MICHIGAN CORPORATION
By: Bharat Desai ------------------------------Signature Printed Name: Bharat Desai --------------------Its: President ------------------------------

Date: August 29, 1996 -----------------------------

27

EXHIBIT D SPECIAL PROVISIONS D1 EXCESS TENANT IMPROVEMENT COSTS. Landlord shall construct the Tenant Improvements up to a cost of Four hundred forty-five thousand three hundred thirty-one dollars and fifty-two cents ($445,331.52) (the "Tenant Improvement Allowance"). In the event the cost of completing the Tenant Improvements is less than the Tenant Improvement Allowance, Landlord shall retain the difference and Tenant shall have no claim for and not be entitled to receive any such sums. In the event the estimated cost of completing the Tenant Improvements in accordance with the Plans shall at anytime exceed one hundred five percent (105%) of the Tenant Improvement Allowance, Tenant shall pay Landlord, within five (5) days of request for such payment (which request will come no more than twice monthly), the difference between the estimated cost of completion and the Tenant Improvement Allowance on a percentage of completion basis. If the estimated cost of completion of the Tenant Improvements is less than one hundred five percent (105%) of the Tenant Improvement Allowance, Tenant shall pay Landlord the difference between the actual cost of completion and the Tenant Improvement Allowance when the Tenant Improvements are substantially complete. D2 MOVING ALLOWANCE. Landlord shall provide Tenant with a Moving Allowance of up to $1.00 per usable square foot, Twenty-three thousand three hundred twenty-eight dollars and zero cents ($23,328.00), to be paid upon presentation of related moving company invoices. The cost of moving in excess of the $1.00 per usable square foot provided by the Landlord shall be funded by the Tenant. D3 OPTION TERM. Provided that no default exists under this Lease and provided no default shall have existed within a period of one (1) year prior to the notification hereunder by Tenant, Tenant shall have the right to extend the Initial Term of this Lease for one (1) term of five (5) Lease Years (an "Option Term"), provided that Tenant shall deliver to Landlord written notice of its election to extend the Term of this Lease at least twelve (12) months prior to the expiration date of the Initial Term of this Lease or the expiring Option Term, as the case may be. Except as expressly otherwise provided herein, all the covenants, agreements, terms and conditions contained herein shall remain in full force and effect during the Option Term, and the rent shall be adjusted as below. Base Rent for the Option Term shall be as follows: the rent for the Option Term shall be at then prevailing market levels for comparable renewal space at the Building but not, in any event, less than the Base Rent payable at the end of the then current Term. D4 TENANT AUDIT RIGHT. Tenant shall have the right, at its sole cost and expense, to audit Landlord's records at the Manager's office relating to Real Estate Taxes and Operating Expenses for the Base Year and any subsequent year solely for the purpose of determining the amounts paid by Tenant pursuant to Section 6 of this Lease. However, Tenant may only conduct an audit (i) upon reasonable notice to Landlord so as to allow landlord sufficient time to compile its records and make them available to Tenant at Manager's office and upon reimbursement to Landlord for its costs and expenses incurred in connection with such audit; (ii) not more than sixty (60) days after Tenant receives the Annual Statement of Real Estate Taxes and Operating Expenses for the subject year, regardless of whether the year in question is the Base Year or any subsequent year, and (iii) not more than once during any Lease Year. D5 TENANT'S RIGHT TO CURE, If Landlord shall default in any of its obligations under this Lease, Tenant shall give written notice of such default to Landlord. Landlord shall cure any material default within thirty (30) days after the date of such notice or, in the event that such default is of a character as to require more than thirty (30) days to cure, Landlord shall commence curing such default within thirty (30) days and shall diligently pursue such cure. If any material default relates to a condition that is for the exclusive benefit of the Premises and as a result thereof Tenant is denied the use of the Premises and Landlord fails to cure such default in all material respects within the applicable time period, Tenant shall have the right to cure such default in a good and workmanlike manner and Landlord shall reimburse Tenant within thirty (30) days of demand for its reasonable costs in performing such work. 28

D6 NON-DISTURBANCE. In the event of subordination of this Lease, the subordination shall be conditioned upon the agreement of the mortgagee or lessor that in the event of foreclosure or the assertion of any other rights under the mortgage or lease, this Lease and the rights of Tenant hereunder shall continue in effect and shall not be terminated or disturbed so long as Tenant continues to perform and no Event of Default exists under this Lease. Approved by Tenant: SYNTEL, INC., A MICHIGAN CORPORATION BY: Bharat Desai Signature
Printed Name: Bharat Desai -----------------------Its: President ---------------------------------

Date: August 29, 1996 --------------------------------

29

EXHIBIT 10.6 ORIGINAL LEASE AGREEMENT BY AND BETWEEN NATIONSBANK OF NORTH CAROLINA, N.A., AS TRUSTEE FOR THE PUBLIC EMPLOYEES RETIREMENT SYSTEM OF OHIO AND SYNTEL, INC., (AS TENANT)

TABLE OF CONTENTS
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. DESCRIPTION OF PREMISES .................. TERM ..................................... RENTAL ................................... DELIVERY OF POSSESSION ................... ALTERATIONS AND IMPROVEMENTS BY TENANT ... USE OF PREMISES .......................... TAXES .................................... FIRE AND EXTENDED COVERAGE INSURANCE ..... UTILITIES AND SERVICES ................... PROPERTY OF TENANT ....................... TRADE FIXTURES AND EQUIPMENT ............. DAMAGE OR DESTRUCTION OF PREMISES ........ GOVERNMENTAL ORDERS ...................... MUTUAL WAIVER OF SUBROGATION ............. SIGNS AND ADVERTISING .................... INDEMNIFICATION AND LIABILITY INSURANCE .. LANDLORD'S RIGHT OF ENTRY ................ EMINENT DOMAIN ........................... EVENTS OF DEFAULT AND REMEDIES ........... SUBORDINATION ............................ PAGE 1 1 2 7 8 8 9 9 9 11 11 11 12 12 12 13 14 14 14 15

21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35.

ASSIGNING AND SUBLETTING ................. TRANSFER OF LANDLORD'S INTEREST .......... COVENANT OF QUIET ENJOYMENT .............. ESTOPPEL CERTIFICATES .................... PROTECTION AGAINST LIENS ................. MEMORANDUM OF LEASE ...................... FORCE MAJEURE ............................ REMEDIES CUMULATIVE --NONWAIVER .......... HOLDING OVER ............................. NOTICES .................................. LEASING COMMISSION ....................... MISCELLANEOUS ............................ SEVERABILITY ............................. REVIEW OF DOCUMENTS ...................... SPECIAL PROVISIONS .......................

16 16 17 17 17 17 17 18 18 18 19 19 21 21 21

LEASE AGREEMENT THIS LEASE AGREEMENT (the "Lease") made and entered into as of the 30th day of November, 1994, by and between NATIONSBANK OF NORTH CAROLINA, N.A., AS TRUSTEE FOR THE PUBLIC EMPLOYEES RETIREMENT SYSTEM OF OHIO, hereinafter called "Landlord"; and SYNTEL, INC., a Michigan corporation hereinafter called "Tenant": WITNESSETH In consideration of the mutual covenants and agreements contained herein, the parties hereto agree for themselves, their successors and assigns, as follows: 1. DESCRIPTION OF PREMISES. Landlord hereby leases to Tenant, and Tenant hereby accepts and rents from Landlord, that certain office space (the "Premises") containing approximately 50,241 rentable square feet (of which approximately 44,343 is usable square feet) of space located on the second (2nd) floor in a building known as Crossroads Office Building II, 110 Corning Road, Crossroads Corporate Park, Cary, North Carolina 27511 (the "Building") on a tract of land more particularly described on Exhibit "A" attached hereto; together with the nonexclusive right to use all parking areas, driveways, sidewalks and other common facilities furnished by Landlord from time to time in and around the Building. The Premises are shown shaded on the building plan attached hereto as Exhibit "B". The usable square footage for the Premises has been computed using the BOMA Method, and the rentable square footage has been computed by multiplying said usable square footage by 1.133. 2. TERM. (a) Initial Term. Unless another date is specified for occupancy on an Exhibit attached hereto, or unless otherwise adjusted as provided pursuant to Paragraph 4 hereinbelow, the initial term of this Lease (the "Initial Term") shall commence on March 15, 1995 (the "Commencement Date") and shall end at midnight on March 31, 1999 (the "Expiration Date"). As used herein, the term "Lease Year" shall mean each consecutive twelve-month period of the Lease term, beginning with the Commencement Date (as same may be adjusted as hereinbelow provided) or any anniversary thereof. Notwithstanding anything herein to the contrary during the period commencing on the date that Landlord delivers Phase I (as defined in Exhibit "E" attached hereto and incorporated herein by this reference) of the Premises to Tenant and ending on the Commencement Date (or such earlier date that this Lease may be terminated,

as herein provided) (the "Pre-commencement Occupancy Period"), Tenant shall be entitled to use and occupy Phase I (as defined in Exhibit "E") subject to and under the terms and conditions of this Lease, excepting only that Tenant shall not be responsible for the payment of any rentals with respect to such Pre-commencement Occupancy Period. (b) Option Period(s). Provided this Lease is still in full force and effect and Tenant is not in default under any of the terms, provisions or conditions of this Lease on its part to observe, comply with or fulfill, Tenant shall have the option to renew the term of this Lease for one (1) period of four (4) years next succeeding the Initial Term (the "Option Period"). Such option to renew shall be exercised by written notice to Landlord not less than nine (9) months prior to the end of the Initial Term. The Option Period, if exercised by Tenant, shall be on the same terms and conditions as provided in this Lease except that the annual Minimum Rental during such Option Period shall be an amount equal to ninety-five percent (95%) of the fair market rental for the Premises as mutually agreed upon by the parties. The term "fair market rent" as used herein shall be defined as the annual rental rate regarding the Premises, negotiated at arms length, that a willing, comparable, new non-equity tenant would pay and receive and what a willing landlord of a Comparable Building would accept and give as rent, and taking into consideration, without limitation, both the size of the Premises and the applicable "Operating Expense Base Amount" (as defined hereinbelow). In the event the parties cannot agree upon such mutually acceptable fair market rental on or before the date that is eight (8) months prior to the expiration of the Initial Term, each party shall select an MAI appraiser having at least five (5) years of experience with similar properties in the Raleigh/Cary, North Carolina area and such appraisers shall select a third MAI appraiser similarly qualified to determine such fair market rental. The average of the closest two determinations prepared by such appraisers shall be deemed to be such fair market rental and shall be binding upon Landlord and Tenant. Each party shall pay the cost of its own appraiser and the cost of the third appraiser shall be shared equally by Landlord and Tenant. Notwithstanding anything to the contrary, in no event shall the annual Minimum Rental for the Premises during said Option Period exceed an amount equal to Nineteen and No/100 Dollars per rentable square foot of the Premises or be less than the annual Minimum Rental payable during the final Lease Year of the Initial Term. Further, there shall be no option to renew except as set forth in this paragraph. TIME IS OF THE ESSENCE with regard to the exercise of the option to renew hereunder. As used in this Lease, the word "term" shall mean not only the Initial Term but also the Option Period, if exercised. 3. RENTAL. During the full term of this Lease, Tenant shall pay to Landlord, without notice, demand, reduction (except as may be applicable pursuant to the paragraph entitled "Damage or Destruction of Premises" or the paragraph entitled "Eminent Domain" of this Lease), setoff or any defense, a total rental (the "Annual Rental") consisting of the sum total of the following: (a) Minimum Rental. (i) Lease Year One through Lease Year Two. Commencing with the Commencement Date and continuing through the end of Lease Year Two, Tenant shall pay a minimum annual rental (the "Minimum Rental") of Seven Hundred Seventy-eight Thousand Seven Hundred Thirty-five and 56/100 Dollars ($778,735.56) payable in equal monthly installments of Sixty-four Thousand Eight Hundred 2

Ninety-four and 63/100 Dollars ($64,894.63) each in advance on or before the first day of each month. If the Commencement Date is a date other than the first day of a calendar month, the Minimum Rental shall be prorated daily from such date to the first day of the next calendar month and paid on the Commencement Date. (ii) Lease Year Three through Lease Year Four. Commencing at the beginning of Lease Year Three and continuing through the end of Lease Year Four, Tenant shall pay an annual Minimum Rental of Eight Hundred Thirty-nine Thousand Twenty-four and 76/100 Dollars ($839,024.76) payable in equal monthly installments of Sixty-nine Thousand Nine Hundred Eighteen and 73/100 Dollars ($69,918.73) each in advance on or before the first day of each month. (b) Operating Expenses. (i) As used in this paragraph 3(b), the following terms shall have the following meanings: (A) Annual Payment. Tenant's proportionate share of the increase, if any, in the Operating Expenses (as hereinbelow defined) paid or incurred respecting the Building during any applicable calendar year over the estimated Operating Expenses respecting the Building of Five and No/100 Dollars ($5.00) per rentable square foot (the "Operating Expense Base Amount"), reduced by the amount, if any, paid by Tenant as the Monthly Estimate during the applicable calendar year (such calculations to be annualized respecting any partial calendar year). Landlord represents that, to the best of Landlord's belief, the Operating Expenses regarding the Building regarding calendar year 1995 [adjusted, as applicable, in accordance with the provisions of subparagraphs 3(b)(i)(C) and 3(b)(i)(D) below] will not exceed Five and No/100 Dollars ($5.00) per rentable square foot. As used herein, Tenant's "proportionate share" shall be fifty-one and 04/100ths percent (51.04%) of said increase. Landlord represents that the Building contains 98,436 rentable square feet of space. (B) Monthly Estimate. Tenant's proportionate share of the amount determined by Landlord and payable by Tenant as the estimated increase in Operating Expenses for the ensuing calendar year over the Operating Expense Base Amount, which amount is payable in twelve (12) equal monthly installments. (C) Operating Expenses. All reasonable costs and expenses paid or incurred by Landlord (or the applicable agent of Landlord ["Agent"]) each calendar year in the management, operation, repair and maintenance of the Premises, the Building and the land described on Exhibit "A" (hereinafter collectively referred to as the "Project"), including without limitation: (1) All wages, salaries and compensation (including fringe benefits) paid or incurred for employees of Landlord or Agent performing any services in connection with the Project; (2) The costs of all materials, supplies, equipment and tools (whether purchased or leased) utilized with respect to the Project; 3

(3) The costs of all services rendered by third parties with respect to the Project; and all costs paid or incurred by Landlord in providing any of the services to be provided by Landlord pursuant to the terms of the Lease; (4) Utility costs and services paid or incurred with respect to the Project, including, without limitation, costs for electricity, gas, telephone, sewage, refuse or garbage collection and fire protection for the Project; (5) All insurance premiums and policy deductibles paid with respect to the Project, including, without limitation, fire and extended coverage insurance, rent loss and public liability insurance coverage; (6) Management fees (not to exceed competitive market rates for similar properties) and expenses for the Project; (7) Taxes, as hereinafter defined; (8) Accounting and legal costs relating to the Project, except as hereinbelow excluded; (9) Common area maintenance charges, if any, levied or assessed against or payable with respect to the Project; and (10) Costs of all capital improvements to the Project which are either required under any governmental law or regulation which was not applicable to the Project at the time a certificate of occupancy is issued for the Building or which reduce Operating Expenses; provided that the costs of any such capital improvements shall be amortized over a reasonable period (as determined in accordance with generally accepted accounting principles) with interest thereon at the lower of 10.5% or the prime rate of NationsBank of North Carolina, N.A., in effect at the time such capital improvements were made. Operating Expenses shall not include: (i) depreciation or amortization (except as otherwise provided above), (ii) debt service or interest (paid or accrued) or ground lease payments, (iii) leasing commissions or brokerage fees, (iv) repairs to the Building and any demised premises where the occurrence causing the damage or loss necessitating repair is reimbursed by insurance carried by Landlord or which would have been reimbursed by insurance as would normally be carried by a reasonably prudent operator, (v) renovating space for new tenants or in renovating space vacated by any tenant, (vi) Landlord's cost of utilities charged to tenants and Landlord's payroll, material and contract cost of other services charged to tenants, (vii) costs incurred by Landlord for Tenant's alterations, (viii) any cost of painting and decorating the premises of other tenants, (ix) the cost of capital improvements (except as described above), (x) all expenses of leasing other premises within the Building (including without limitation attorneys' fees, accounting fees and real estate brokerage commissions), (xi) all general administrative and office overhead or related expenses for offices of Landlord located inside or outside of the Building, (xii) salaries and other compensation and benefits of Landlord's employees not located full-time at the Project (provided that a prorata portion of the salary, other compensation and benefits of 4

Landlord's employees at or below the level of Building manager providing services on site to the Project or within the Building shall be included in the Operating Expenses, (xiii) advertising, promotions and public relations attributable to Landlord's efforts to increase or maintain the occupancy rate in the Building, (xiv) state, federal or local income taxes, excess profits or franchise taxes, and other similar taxes imposed on, measured by or determined from the gross income of Landlord, (xv) expenses performed as a special service for another tenant that are not standard to all tenants, (xvi) any costs, fines or penalties incurred because Landlord violated any governmental rule or authority, (xvii) costs incurred to test, survey, cleanup, contain, abate, remove or otherwise remedy hazardous wastes or asbestos-space containing materials from the Building or Premises, unless present because of Tenant's negligence or intentional acts on the Project, or (xviii) costs to repair any defects in workmanship or materials related to the construction of the Building. Furthermore, Operating Expenses shall be reduced by reimbursements, credits, discounts, reductions or other allowances are receivable by Landlord for items of costs included in Operating Expenses except for reimbursements to the Landlord by tenants under the Operating Expenses/Taxes provisions. Operating Expenses for any partial calendar year of the Term shall be prorated by Landlord. If, in determining the Operating Expenses in any calendar year, less than ninety-five percent (95%) of the Building is fully occupied during such calendar year, then Landlord will adjust, in a commercially reasonable manner, the applicable items of Operating Expenses which are occupancy dependent for such calendar year to reflect what the Operating Expenses would have been had the Building been ninety-five percent (95%) occupied at all times during such calendar year, and Tenant's "proportionate share" of the cost of such Operating Expenses shall be based on such adjusted total cost. (D) Taxes. All real estate taxes, drainage assessments (whether for drainage, sewage or public improvements), taxes on rent or the occupancy or use of the Project and similar governmental impositions, whether general or special, levied, assessed, charged or imposed by federal, state, county or local governmental authorities against the Project or any part thereof or the rents therefrom (excluding, however, any income, franchise or similar tax imposed directly on Landlord or the income derived by Landlord from the Project unless the same are levied or assessed in lieu of any of the foregoing), together with all costs reasonably incurred by Landlord in contesting the same. In the event of any special assessment or similar charge affecting the Project, Tenant shall only be responsible for paying its proportionate share of those portions of such charge(s) which are due and payable during the term of this Lease and under the assumption that any such charge has been paid over the longest period allowed by law (and regardless of whether Landlord shall have elected to pay such charge in a lump sum or other accelerated basis). If, in determining the Taxes in any calendar year, the Building is not assessed as a fully completed structure, then Landlord will reasonably adjust the Taxes for such calendar year to reflect what the Taxes would have been had the Building been assessed as a fully completed structure and Tenant's "proportionate share" shall be based on such adjusted amount. (ii) In addition to the payment of Minimum Rental, Tenant shall also pay throughout the term of this Lease, including any applicable extensions and renewals, the Monthly Estimate and the Annual Payment, which amounts shall be payable as follows: 5

(A) During the final month of each calendar year, or as soon as possible thereafter, Landlord shall provide Tenant with written notice of Landlord's estimate of Operating Expenses for the ensuing calendar year and the amount to be paid by Tenant as the Monthly Estimate. In the event such estimate indicates that Operating Expenses for the ensuing calendar year shall exceed the Operating Expense Base Amount, then Tenant shall pay to Landlord the Monthly Estimate in advance on the first day of each month during the ensuing calendar year; provided, however, that if such estimate is not given on or prior to the commencement of the ensuing calendar year, then (1) Tenant shall continue paying the Monthly Estimate paid during the prior calendar year until such time as Landlord provides Tenant with such notice for the then current calendar year and (2) at such time as Tenant is given the Monthly Estimate for the then current calendar year, Tenant shall pay any unpaid portion of the new Monthly Estimate payments which has accrued from the commencement of the then current calendar year through the date such notice is given; (B) Within sixty (60) days after the end of each calendar year, or as soon as possible thereafter, but not later than one hundred twenty (120) days thereafter, Landlord shall deliver to Tenant a reasonably detailed statement setting forth (1) the amount of Operating Expenses paid or incurred in the immediately preceding calendar year in excess of the Operating Expense Base Amount, (2) the amount paid by Tenant as the Monthly Estimate during the immediately preceding calendar year and (3) the amount, if any, owing by Tenant as the Annual Payment. Upon the request of Tenant, Landlord will promptly provide any supplemental information reasonably required by Tenant related to any such statement. If the statement indicates that an Annual Payment is due from Tenant, then Tenant shall pay such amount in full within thirty (30) days after such statement is given to Tenant and any applicable Monthly Estimate then being paid by Tenant shall be increased by an amount equal to one-twelfth (1/12) of the amount of the Annual Payment then due, which amount shall be payable as provided in paragraph 3(b)(ii)(A) above. If the statement indicates that the amount paid by Tenant during the preceding calendar year as the Monthly Estimate is in excess of Tenant's share of increases in Operating Expenses for the then applicable calendar year, then the excess shall be applied as a credit to the Monthly Estimate due from Tenant for the then current calendar year, and if after the expiration of the Term, reimbursed to Tenant within thirty (30) days. Notwithstanding anything provided herein to the contrary, in no event shall the amount of Annual Rental payable by Tenant in any calendar year, annualized for any partial calendar year, be less than the Minimum Rental. (iii) Tenant may review Landlord's books pertaining to the determination of the Monthly Estimate and the Annual Payment during regular business hours in Landlord's or Agent's office on or before one (1) year after Landlord delivers its statement of amounts due from Tenant; provided, however, that all reasonable expenses incurred by Landlord or Agent in connection with such review shall be paid by Tenant and such review by Tenant shall not postpone or alter the liability and obligation of Tenant to pay the Monthly Estimate or Annual Payment. (iv) Continuing Obligation. If for any reason the Expiration Date of this Lease shall be on a day other than the final day of a calendar year, then the Monthly Estimate shall continue to be paid by 6

Tenant through the Expiration Date and upon determination of the actual Operating Expenses for the calendar year in which the Expiration Date occurs, Tenant shall pay to Landlord the Annual Payment or Landlord shall refund any excess amounts paid to Tenant as the Monthly Estimate, as the case may be. (v) No Annual Payment for 1995. Notwithstanding anything herein to the contrary, Landlord agrees that Tenant shall not be responsible for the payment of any Annual Payment or Monthly Estimate payments regarding calendar year 1995. Tenant shall be responsible for any applicable Annual Payment and Monthly Estimate payments for all calendar years subsequent to calendar year 1995. (c) Late Payment. If any installment of Minimum Rental, Monthly Estimate or Annual Payment (if any) or any other sum due and payable pursuant to this Lease remains due and unpaid ten (10) days after said amount becomes due, Tenant shall pay as additional rent hereunder a late payment charge equal to the greater of (i) Fifty and No/100 Dollars ($50.00) or (ii) a sum equal to five percent (5%) of the unpaid rent or other payment, but not in excess of Two Hundred Fifty and No/100 Dollars ($250.00). All unpaid rent and other sums of whatever nature owed by Tenant to Landlord under this Lease shall bear interest from the tenth (10th) day after the due date thereof until paid, at the lesser of twelve percent (12%) per annum or the maximum interest rate per annum allowed by law. Acceptance by Landlord of any payment from Tenant hereunder in an amount less than that which is currently due shall in no way affect Landlord's rights under this Lease and shall in no way constitute an accord and satisfaction. (d) Documentary Tax. In the event that any documentary stamp tax, sales tax or any other tax or similar charge (exclusive of any income tax payable by Landlord as a result hereof) levied on the rental, leasing or letting of the Premises, whether local, state or federal, is required to be paid due to the execution hereof or otherwise with respect to this Lease or the payments due hereunder, to the extent that same is payable by real property owners as a class the cost thereof (based upon the Project being the sole property of Landlord) shall be borne by Tenant and shall be paid promptly and prior to same becoming past due. Tenant shall provide Landlord with copies of all paid receipts respecting such tax or charge promptly after payment of same. 4. DELIVERY OF POSSESSION. Landlord will deliver both Phase I and Phase II (as such phases are defined in Exhibit "E") of the Premises to Tenant on or before the Commencement Date, with Landlord's work substantially completed in accordance with the Plans (as defined in Exhibit "E") to be prepared by Landlord, all as more particularly set forth in Exhibit "E" attached hereto. Without limiting the generality of anything herein (or in Exhibit "E"), the Plans will comply with all applicable laws and ordinances respecting the construction of the Premises and the "Upfit Work" (as such term is defined in Exhibit "E") will be performed in a good and workmanlike manner. Landlord and Tenant agree to cooperate in good faith in the preparation and approval of said Plans, consistent with the schedule set forth in Exhibit "E" attached hereto. When the Plans have been completed and approved, a copy of same (or a list of the applicable drawings) shall be attached to this Lease as Exhibit "C". Such substantial completion of the 7

Premises in accordance with the Plans shall be evidenced by the certification of Landlord's architect or other designated engineering representative. If Landlord for any reason whatsoever cannot deliver posses- sion of the Premises to Tenant on the Commencement Date as above specified, this Lease shall not be void or voidable nor shall Landlord be liable to Tenant for any loss or damage resulting therefrom; but in that event, the Commencement Date shall be adjusted to be the date when Landlord does in fact deliver possession of the Premises to Tenant. However, in the event the Premises are not delivered to Tenant on or prior to July 14, 1995, then, as Tenant's sole and exclusive remedy, Tenant may terminate this Lease by written notice given to Landlord on or before such date, in which event Tenant shall surrender possession of any applicable portion(s) of the Premises occupied by Tenant in the condition set forth in Paragraph 6(c) below. In such event, and if this Lease is not terminated pursuant to the foregoing sentence, then the Commencement Date shall be adjusted to the date Landlord delivers the Premises to Tenant as hereinabove provided. 5. ALTERATIONS AND IMPROVEMENTS BY TENANT. Tenant shall make no structural changes respecting the Premises or the Building and shall make no changes of any kind respecting the Premises or the Building that are visible from the exterior of the Premises. Any other nonstructural changes or other alterations, additions, or improvements to the Premises shall be made by or on behalf of Tenant only with the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. All alterations, additions or improvements including without limitation all partitions, walls, railings, carpeting, floor and wall coverings and other fixtures (excluding, however, Tenant's trade fixtures as described in the paragraph entitled "Trade Fixtures and Equipment" below) made by, for, or at the direction of Tenant shall, when made, become the property of Landlord, at Landlord's sole election, and shall, at Landlord's sole election, remain upon the Premises at the expiration or earlier termination of this Lease. 6. USE OF PREMISES. (a) Tenant shall use the Premises only for general office space purposes only (including general ancillary purposes related thereto) and for no other purposes. Tenant shall comply with all laws, ordinances, orders, regulations or zoning classifications of any lawful governmental authority, agency or other public or private regulatory authority (including insurance underwriters or rating bureaus) having jurisdiction over the Premises. Tenant shall not do any act or follow any practice relating to the Premises which shall constitute a nuisance or detract in any way from the reputation of the Building as a first-class real estate development. Tenant's duties in this regard shall include allowing no noxious or offensive odors, fumes, gases, smoke, dust, steam or vapors, or any loud or disturbing noise or vibrations to originate in or emit from the Premises. (b) Without limiting the generality of (a) above, the Premises shall not be used for the treatment, storage, transportation to or from, use or disposal of toxic or hazardous wastes, materials or substances, or any other substance that is prohibited, limited or regulated by any governmental or quasi-governmental authority or that, even if not so regulated, could or does pose a hazard to health and safety of the occupants of the Building or surrounding property. Landlord agrees that it shall not knowingly use or permit the use of the Building or any portion thereof in violation of any applicable law, ordinance or regulation of any governmental authority having jurisdiction over the Building. 8

(c) Tenant shall exercise due care in its use and occupancy of the Premises and shall not commit or allow waste to be committed on any portion of the Premises; and at the expiration or earlier termination of this Lease, Tenant shall deliver the Premises to Landlord in as good condition as on the date of the completion of the tenant improvements in the Premises, ordinary wear and tear, acts of God, damage by casualty, and repairs required to be made by Landlord hereunder alone excepted. (d) Tenant shall save Landlord harmless from any claims, liabilities, penalties, fines, costs, expenses or damages resulting from the failure of Tenant to comply with the provisions of this numbered paragraph 6. This indemnification shall survive the termination or expiration of this Lease. 7. TAXES. (a) Except as may otherwise be required by law, Tenant shall pay any taxes, documentary stamps or assessments of any nature imposed or assessed upon this Lease, Tenant's occupancy of the Premises or Tenant's trade fixtures, equipment, machinery, inventory, merchandise or other personal property located on the Premises and owned by or in the custody of Tenant as promptly as all such taxes or assessments may become due and payable without any delinquency. (b) Landlord shall pay Taxes which are now or hereafter assessed upon the Project, except as otherwise expressly provided in this Lease. 8. FIRE AND EXTENDED COVERAGE INSURANCE. Landlord shall maintain and pay for fire insurance, with extended coverage, covering the Building equal to at least eighty percent (80%) of the replacement cost thereof. Tenant shall not do or cause to be done or permit on the Premises or in the Building anything deemed extrahazardous on account of fire and Tenant shall not use the Premises or the Building in any manner which will cause an increase in the premium rate for any insurance in effect on the Building or a part thereof. If, because of anything done, caused to be done, permitted or omitted by Tenant or its agent(s), contractor(s), employee(s), invitee(s), licensee(s), servant(s), subcontractor(s) or subtenant(s) the premium rate for any kind of insurance in effect on the Building or any part thereof shall be raised, Tenant shall pay Landlord on demand the amount of any such increase in premium which Landlord shall pay for such insurance and if Landlord shall demand that Tenant remedy the condition which caused any such increase in an insurance premium rate, Tenant shall remedy such condition within five (5) days after receipt of such demand. Tenant shall maintain and pay for all fire and extended coverage insurance on its contents in the Premises, including trade fixtures, equipment, machinery, merchandise or other personal property belonging to or in the custody of Tenant. Landlord represents that Tenant's contemplated use of the Premises will not cause any increase in insurance premiums. 9. UTILITIES AND SERVICES. In accordance with all applicable laws, regulations and ordinances, Landlord, at its expense, subject to Operating Expenses reimbursement by Tenant for such services (the utilities and services in this Paragraph 9 described to be provided by Landlord hereinafter being referred to as the "Services"), shall provide the Premises with reasonably comfortable heating and air conditioning (between 68 degrees F and 9

78 degrees F, inclusive, from October 1 to April 30, and between 74 degrees F and 78 degrees F, inclusive, from May 1 to September 30, unless mandated otherwise by law) Monday through Friday from 7:00 a.m. to 6:00 p.m. and Saturdays from 8:00 a.m. to 1:00 p.m. [exclusive of holidays observed in Raleigh, North Carolina, by other landlords of similar type properties ("Holidays")]. So long as the Premises are kept in reasonable order by Tenant, Landlord shall provide the Premises with reasonable janitorial and general cleaning services as shown on Exhibit "H" from Monday through Friday provided further, however, that Landlord shall not be obligated to provide such services on Holidays. Landlord shall, at its expense, subject to Operating Expenses reimbursement by Tenant for the Services, furnish the Premises with electricity for routine lighting and the operation of general office machines such as typewriters, dictating equipment, desk model adding machines, personal computers, copying machines, and the like which use 110 volt electrical power and 20 AMP circuits and 220 volt circuits for specific equipment requirements, all in accordance with the Plans referred to in Exhibit "E". Tenant shall not use any electrical equipment which in Landlord's reasonable opinion will overload the Building's electrical circuits or interfere with the reasonable use thereof by other tenants except as contemplated in the Plans. Tenant shall not, without Landlord's prior written consent in each instance (which consent shall not be unreasonably withheld), connect any additional items (such as electrical heaters or mainframe computer systems) to the Building's electrical distribution system or make any alteration or addition to such system. In the event that Landlord shall consent to such alterations or additions, all labor, material and equipment required therefor shall be provided by Landlord and the reasonable cost thereof shall be paid by Tenant upon demand by Landlord. If heat generating machines or equipment shall be used in the Premises by Tenant which affect the temperature otherwise maintained by the heating and air conditioning system, Landlord shall have the right to install supplemental air conditioning units in the Premises and the cost thereof, including the cost of installation and the cost of operation and maintenance thereof, shall be paid by Tenant to Landlord upon demand by Landlord. If Tenant shall install any equipment that (i) uses electrical power requiring other than 110 volt service, or (II) in any way increases demands for electrical power, water or gas usually furnished for use in Premises of like size in the Building, Tenant shall pay Landlord upon demand the cost of any such excess. Landlord shall furnish elevator service to all floors of the Building at all times. At Landlord's option, all elevators may be self-service. Landlord shall furnish a reasonable amount of hot and cold running water to lavatories and toilets in or appurtenant to the Premises and shall keep all plumbing in working order. Landlord shall maintain and keep up all elevators, rest rooms and corridors of the Building. Landlord shall have the right to terminate the furnishing of any or all of the utilities and Services hereinbefore provided for at and for any and all such reasonable time or times as Landlord shall deem necessary for repairs, alterations or improvements. In the event the Premises becomes unfit for the conduct of Tenant's business operation as a result of Landlord's failure to provide any of such Services for three (3) consecutive business days, then the rental hereunder shall abate proportionately for the portion deemed unfit from and after such third business day. Also, if the Premises becomes unfit because of Landlord's failure to provide any of such Services more than once in any twelve (12) consecutive month period, with respect to each of such instances occurring after the first such failure during any such twelve (12) consecutive month period which continued beyond such three (3) day grace period, then the rental hereunder shall abate proportionately to the portion deemed unfit immediately [i.e., without such three (3) day grace period] with respect to such subsequent occurrences. Landlord shall have no liability or responsibility to Tenant for loss or damage in the event the furnishing of any of the utilities and Services hereinbefore provided for is prohibited or stopped for repairs, alterations or improvements or by reason of causes beyond Landlord's reasonable control including, 10

without limitation, accidents, strikes, lockouts, or orders or regulations of any federal, state or municipal authority. 10. PROPERTY OF TENANT. All property placed on the Premises by, at the direction of or with the consent of the Tenant, its employees, agents, licensees or invitees, shall be at the risk of the Tenant or the owner thereof and Landlord shall not be liable for any loss of or damage to said property resulting from any cause whatsoever. 11. TRADE FIXTURES AND EQUIPMENT. So long as Tenant is not in default under this Lease, any trade fixtures installed in the Premises at Tenant's expense shall remain Tenant's personal property and Tenant shall have the right at any time during the term of this Lease to remove such trade fixtures. Upon removal of any trade fixtures, Tenant shall immediately restore the Premises to substantially the same condition as they were when received by Tenant, ordinary wear and tear and acts of God alone excepted. Any trade fixtures not removed by Tenant at the expiration or an earlier termination of the Lease shall become, at Landlord's sole election, either (i) the property of Landlord, in which event Landlord shall be entitled to handle and dispose of same in any manner Landlord deems fit without any liability or obligation to Tenant or any other third party with respect thereto, or (ii) subject to Landlord's removing such property from the Premises and storing same, all at Tenant's expense and without any recourse against Landlord with respect, thereto. Without limiting the generality of the foregoing, the following property shall in no event be deemed to be "trade fixtures" and Tenant shall not remove any such property from the Premises under any circumstances, regardless of whether installed by Landlord or Tenant: (a) any air conditioning, air ventilating or heating fixtures or equipment; (b) any lighting fixtures or equipment; (c) any dock levelers; (d) any carpeting or other permanent floor coverings; (e) any paneling or other wall coverings; (f) plumbing fixtures and equipment; or (g) permanent shelving. 12. DAMAGE OR DESTRUCTION OF PREMISES. If the Premises are damaged by fire or other casualty, but are not rendered untenantable for Tenant's business, either in whole or in part, Landlord shall cause such damage to be repaired without unreasonable delay and the Annual Rental shall not be abated. If by reason of such casualty the Premises are rendered untenantable in Tenant's business, either in whole or in part, Landlord shall cause the damage to be repaired or replaced without unreasonable delay, and, in the interim, the Annual Rental shall be proportionately reduced as to such portion of the Premises as is rendered untenantable. Any such abatement of rent shall not, however, create an extension of the term of this Lease. Provided, however, if by reason of such casualty, the Premises are rendered untenantable in some material portion, and the amount of time required to repair the damage using due diligence is in excess of one hundred twenty (120) days, then either party shall have the right to terminate this Lease by giving written notice of termination within sixty (60) days after the date of casualty, and the Annual Rental shall abate as of the date of such casualty in proportion to the part of the Premises rendered untenantable. Notwithstanding the other provisions of this paragraph, in the event there should be a casualty loss to the Premises to the extent of fifty percent (50%) or more of their replacement value or if the Premises are rendered untenant11

able for the conduct of Tenant's business operations during the last Lease Year of the initial term or any extended term, either party may, at its option, terminate this Lease by giving written notice within sixty (60) days after the date of the casualty and rent shall abate as of the date of such notice. Except as provided herein, Landlord shall have no obligation to rebuild or repair in case of fire or other casualty, and no termination under this paragraph shall affect any rights of Landlord or Tenant hereunder because of prior defaults of the other party. Tenant shall give Landlord immediate notice of any fire or other casualty in the Premises. 13. GOVERNMENTAL ORDERS. Except as hereinbelow set forth regarding compliance of the physical structure of the Premises with the applicable requirements of the Americans with Disabilities Act and the implementing regulations (the "ADA") as of the Commencement Date, Tenant agrees, at its own expense, to comply promptly with all requirements of any legally constituted public authority that may be in effect from time to time made necessary by reason of Tenant's use or occupancy of the Premises. Landlord agrees to comply promptly with any such requirements if not made necessary by reason of Tenant's use or occupancy. With regard to the physical structure of the Premises, Landlord agrees to use good faith and due diligence to undertake those actions that are "readily achievable" (as such term is defined in the ADA) in order to attempt to bring the physical structure of the Premises in compliance with the applicable requirements of the ADA in effect as of the Commencement Date. If it is determined that for any reason Landlord shall have failed to cause the physical structure of the Premises to be brought into compliance with the ADA as of the Commencement Date (to at least the minimum extent required under applicable regulations then in effect), then Landlord, as its sole obligation, will take the action(s) necessary to cause the physical structure of the Premises to so comply, and Tenant acknowledges and agrees that Landlord has and shall have no other obligation or liability whatsoever to Tenant, or to anyone claiming by or through Tenant, regarding JD any failure of the Premises or the activities therein to comply with the applicable requirements of the ADA. 14. MUTUAL WAIVER OF SUBROGATION. For the purpose of waiver of subrogation, the parties mutually release and waive unto the other all rights to claim damages, costs or expenses for any injury to persons (including death) or property caused by a casualty of any type whatsoever in, on or about the Premises if the amount of such damage, cost or expense has been paid to such damaged party under the terms of any policy of insurance. All insurance policies carried with respect to this Lease, if permitted under applicable law, shall contain a provision whereby the insurer waives, prior to loss, all rights of subrogation against either Landlord or Tenant. 15. SIGNS AND ADVERTISING. (a) Landlord will install one tenant identification sign for Tenant in accordance with Building standards, such sign to be located at or near the Tenant's front entrance to the Premises. Landlord will further install, at Landlord's expense, a monument sign for the Building, such monument sign to contain tenant identification panels, one of which shall identity Tenant. Tenant's name shall be displayed in the uppermost prominent position on such monument sign. In the event Landlord, in its sole and absolute 12

discretion, ever elects to allow signage on the side(s) of the Building, Landlord will allow Tenant the first opportunity to place its name on the Building. (b) In order to provide architectural control for the Building, Tenant shall install no other exterior signs, marquees, billboards, outside lighting fixtures and/or other decorations on the Premises. Landlord shall have the right to remove any such sign or other decoration and restore fully the Premises at the cost and expense of Tenant if any such exterior work is done without Landlord's prior written approval, which approval Landlord shall be entitled to withhold or deny in its sole discretion. Tenant shall not permit, allow or cause to be used in, on or about the Premises any sound production devices, mechanical or moving display devices, bright lights, or other advertising media, the effect of which would be visible or audible from the exterior of the Premises. 16. INDEMNIFICATION AND LIABILITY INSURANCE. (a) Tenant shall indemnify and save Landlord harmless against any and all claims, suits, demands, actions, fines, damages, and liabilities, and all costs and expenses thereof (including without limitation reasonable attorneys' fees) arising out of injury to persons (including death) or property occurring in, on or about, or arising out of the Premises or other areas in the Building if caused or occasioned wholly or in part by any act(s) or omission(s) of Tenant, its agent(s), contractor(s), employee(s), invitee(s), licensee(s), servant(s), subcontractor(s) or subtenant(s), except if caused by any act or omission on the part of Landlord. The non-prevailing party shall also pay all costs, expenses and reasonable attorneys' fees that may be incurred by the prevailing party in enforcing the agreements of this Lease, whether incurred as a result of litigation or otherwise. Tenant shall give Landlord immediate notice of any such happening causing injury to persons or property. (b) Landlord shall indemnify and save Tenant harmless against any and all claims, suits, demands, actions, fines, damages, and liabilities, and all costs and expenses thereof (including without limitation reasonable attorneys' fees) arising out of injury to persons (including death) or property occurring in, on or about, or arising out of the Premises or other areas in the Building if caused or occasioned by any act(s) or omission(s) of Landlord, its agent(s) or employee(s), except if caused by any act(s) or omission(s) on the part of Tenant, its agent(s), contractor(s), employee(s), invitee(s), licensee(s), servant(s), subcontractor(s) or subtenant(s). Provided, however, Landlord shall not be liable for any damage caused or occasioned by or from water, snow or ice being upon or coming through the roof, trapdoor, walls, windows, doors, or otherwise in, upon or about the Premises or the Building, or from any damage arising from acts or omissions of co-tenants or other occupants of the Building. (c) At all times during the term of this Lease, Tenant shall at its own expense keep in force adequate public liability insurance under the terms of a commercial general liability policy (occurrence coverage) in the amount of not less than $1,000,000.00 coverage and with such company(ies) licensed to do business in the state in which the Premises is located and naming Landlord as an additional insured. Such insurance shall include, without limitation, personal injury and contractual liability coverage for the performance by Tenant of the indemnity agreements set forth in this Lease. Tenant shall first furnish to Landlord copies of policies or certificates of insurance evidencing the required coverage prior to the Commencement Date and thereafter prior to each policy renewal date. All policies required of Tenant 13

hereunder shall contain a provision whereby the insurer is not allowed to cancel or change materially the coverage without first giving thirty (30) days' written notice to Landlord. 17. LANDLORD'S RIGHT OF ENTRY. Landlord, and those persons authorized by it, shall have the right to enter the Premises at all reasonable times and upon reasonable notice for the purposes of making repairs, making connections, installing utilities, providing services to the Premises or for any other tenant, making inspections or showing the same to prospective purchasers and/or lenders, as well as at any time in the event of emergency involving possible injury to property or persons in or around the Premises or the Building. Further, during the last six (6) months of the initial or of any extended term, Landlord and those persons authorized by it shall have the right at reasonable times and upon reasonable notice to show the Premises to prospective tenants. 18. EMINENT DOMAIN. If any substantial portion of the Premises is taken under the power of eminent domain (including any conveyance made in lieu thereof) or if such taking shall materially impair the normal operation of Tenant's business, then either party shall have the right to terminate this Lease by giving written notice of such termination within thirty (30) days after such taking. If neither party elects to terminate this Lease, Landlord shall repair and restore the Premises to the best possible tenantable condition and the Annual Rental shall be proportionately and equitably reduced. All compensation awarded for any taking (or the proceeds of a private sale in lieu thereof) shall be the property of Landlord whether such award is for compensation for damages to the Landlord's or Tenant's interest in the Premises, and Tenant hereby assigns all of its interest in any such award to Landlord; provided, however, Landlord shall not have any interest in any separate award made to Tenant for loss of business, moving expense or the taking of Tenant's trade fixtures or equipment if a separate award for such items is made to Tenant and if such separate award does not reduce the award to Landlord. 19. EVENTS OF DEFAULT AND REMEDIES. (a) Upon the occurrence of any one or more of the following events (the "Events of Default," any one an "Event of Default"), the party not in default shall have the right to exercise any rights or remedies available in this Lease, at law or in equity. Events of Default shall be: (i) Tenant's failure to pay when due any rental or other sum of money payable hereunder and such failure is not cured within ten (10) days after written notice thereof; (ii) Failure by either party to perform any other of the terms, covenants or conditions contained in this Lease if not remedied within thirty (30) days after receipt of written notice thereof, or if such default cannot be remedied within such period, such party does not within thirty (30) days after written notice thereof commence such act or acts as shall be necessary to remedy the default and shall not thereafter complete such act or acts within a reasonable time; 14

(iii)Tenant shall become bankrupt or insolvent, or file any debt or proceedings, or file pursuant to any statute a petition in bankruptcy or insolvency or for reorganization, or file a petition for the appointment of a receiver or trustee for all or substantially all of Tenant's assets and such petition or appointment shall not have been set aside within sixty (60) days from the date of such petition or appointment, or if Tenant makes an assignment for the benefit of creditors, or petitions for or enters into an arrangement; or (iv) Tenant allows its leasehold estate to be taken under any writ of execution and such writ is not vacated or set aside within thirty (30) days. (b) In addition to its other remedies, Landlord, upon an Event of Default by Tenant, shall have the immediate right, after any applicable grace period expressed herein, to terminate and cancel this Lease and/or to reenter and remove all persons and properties from the Premises and dispose of such property as it deems fit, provided Landlord's actions shall be in accordance with applicable legal procedures. If Landlord reenters the Premises, it may either terminate this Lease or, from time to time without terminating this Lease, make such alterations and repairs as may be necessary or appropriate to relet the Premises and relet the Premises upon such terms and conditions as Landlord deems advisable without any responsibility on Landlord whatsoever to account to Tenant for any surplus rents collected. No retaking of possession of the Premises by Landlord shall be deemed as an election to terminate this Lease unless a written notice of such intention is given by Landlord to Tenant at the time of reentry; but, notwithstanding any such reentry or reletting without termination, Landlord may at any ti me thereafter elect to terminate for such previous default. Landlord will use reasonable efforts to mitigate its damages in the event of any such Event of Default by Tenant; provided, however, as used herein, the term "reasonable efforts to mitigate its damages" shall never be construed to require Landlord to make efforts to mitigate its damages in excess of the requirement to mitigate damages imposed upon Landlord under applicable North Carolina law in effect as of the date of this Lease. In the event of an elected termination by Landlord, whether before or after reentry, Landlord may recover from Tenant damages, including the costs of recovering the Premises, and Tenant shall remain liable to Landlord for the total amount of (i) the Annual Rental as would have been payable by Tenant hereunder for the remainder of the term, less (ii) the rentals actually received from any applicable reletting, or less the reasonable rental value of the Premises for the remainder of the term (which amount may, at Landlord's election, be accelerated to be due and payable in full, as of the Event of Default and recoverable as damages in a lump sum, in which event said amount shall be discounted to present value, using a discount rate equal to the then rate publicly announced by NationsBank of North Carolina, N.A., as its "prime" rate). In determining the Annual Rental which would be payable by Tenant subsequent to default, the Annual Rental for each Lease Year of the unexpired term shall be equal to the Annual Rental payable by Tenant for the last Lease Year prior to the default. If any rent owing under this Lease is collected by or through an attorney, Tenant agrees to pay Landlord's reasonable attorneys' fees to the extent allowed by applicable law. 20. SUBORDINATION. Landlord represents and warrants that at the time of execution of this Lease there is no mortgage, deed of trust or similar lien encumbering the Building or the Premises. This Lease shall be subject and subordinate to any and all mortgages or deeds of trust hereafter placed on the property of which the Premises are a part, and this clause shall be self-operative without any further instrument necessary to 15

effect such subordination; however, if requested by Landlord, Tenant shall promptly execute and deliver to Landlord any such certificate(s) as Landlord may reasonably request evidencing subordination of this Lease to or the assignment of this Lease as additional security for such mortgages or deeds of trust. Provided, however, it shall be a condition to any such subordination that in each case the holder of the mortgage or deed of trust shall agree in writing that this Lease shall not be divested by foreclosure or other default proceedings thereunder so long as Tenant shall not be in default under the terms of this Lease beyond any applicable cure period set forth herein. Tenant shall continue its obligations under this Lease in full force and effect notwithstanding any such default proceedings under a mortgage or deed of trust and shall attorn to the mortgagee, trustee or beneficiary of such mortgage or deed of trust, and their successors or assigns, and to the transferee under any foreclosure or default proceedings. Tenant will, upon request by Landlord, execute and deliver to Landlord or to any other person designated by Landlord, any instrument or instruments required to give effect to the provisions of this paragraph. 21. ASSIGNING AND SUBLETTING. Tenant shall not assign, sublet, mortgage, pledge or encumber this Lease, the Premises, or any interest in the whole or in any portion thereof, directly or indirectly, without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. If Landlord denies consent, it must explain in writing, in reasonable detail, its reasons for the denial. Notwithstanding the foregoing, and provided that there is no change in use or in the tenant's operations within the Premises, Tenant shall have the right, without the prior approval of Landlord, but upon written notice to Landlord, to assign the Lease or sublet all or any portion of the Premises to any corporation or entity which is controlled by or is under common control with Tenant, or to any corporation, partnership or other entity resulting from the merger or consolidation with Tenant or any person or entity which acquires substantially all of Tenant's assets. If Tenant makes any such assignment, sublease, mortgage, pledge or encumbrance with or without Landlord's written consent, Tenant will still remain primarily liable for the performance of all terms of this Lease and one-half (1/2) of any rental or any fees or charges received by Tenant (net of Tenant's reasonable costs related to such assignment or sublease) in excess of the Annual Rental payable to Landlord hereunder shall be also paid to Landlord as further rental under this Lease. Landlord's consent to one assignment or sublease will not waive the requirement of its consent to any subsequent assignment or sublease as required herein. 22. TRANSFER OF LANDLORD'S INTEREST. If Landlord shall sell, assign or transfer all or any part of its interest in the Premises or in this Lease to a successor in interest which expressly assumes the obligations of Landlord hereunder, then Landlord shall thereupon be released or discharged from all covenants and obligations hereunder accruing from and after the date of such transfer, and Tenant shall look solely to such successor in interest for performance of all of Landlord's obligations accruing from and after the date of such transfer. Tenant's obligations under this Lease shall in no manner be affected by Landlord's sale, assignment, or transfer of all or any part of such interest(s) of Landlord, and Tenant shall thereafter attorn and look solely to such successor in interest as the Landlord hereunder. 16

23. COVENANT OF QUIET ENJOYMENT. Landlord represents that it has full right and authority to lease the Premises and Tenant shall peacefully and quietly hold and enjoy the Premises for the full term hereof so long as Tenant does not default in the performance of any of the terms hereof. 24. ESTOPPEL CERTIFICATES. Within ten (10) days after a request by Landlord, Tenant shall deliver a written estoppel certificate, in form supplied by or acceptable to Landlord, certifying any facts that are then true with respect to this Lease, including without limitation that this Lease is in full force and effect, that no default exists on the part of Landlord or Tenant, that Tenant is in possession, that Tenant has commenced the payment of rent, and that, to the best of its knowledge and belief, Tenant claims no defenses or offsets with respect to payment of rentals under this Lease except as may be otherwise noted. Likewise, within ten (10) days after a request by Tenant, Landlord shall deliver to Tenant a similar estoppel certificate covering such matters as are reasonably required by Tenant. 25. PROTECTION AGAINST LIENS. Tenant shall do all things necessary to prevent the filing of any mechanics', materialmen's or other types of liens whatsoever, against all or any part of the Premises by reason of any claims made by, against, through or under Tenant. If any such lien is filed against the Premises, Tenant shall either cause the same to be discharged of record within thirty (30) days after filing or, if Tenant in its discretion and in good faith determines that such lien should be contested, it shall furnish such security as may be necessary to prevent any foreclosure proceedings against the Premises during the pendency of such contest. If Tenant shall fail to discharge such lien within said time period or fail to furnish such security, then Landlord may at its election, in addition to any other right or remedy available to it, discharge the lien by paying the amount claimed to be due or by procuring the discharge by giving security or in such other manner as may be allowed by law. If Landlord acts to discharge or secure the lien then Tenant shall immediately reimburse Landlord for all sums paid and all costs and expenses (including reasonable attorneys' fees) incurred by Landlord involving such lien together with interest on the total expenses and costs at the maximum lawful rate. 26. MEMORANDUM OF LEASE. If requested by Tenant, Landlord shall execute a recordable Memorandum or Short Form Lease, prepared at Tenant's expense, specifying the exact term of this Lease and such other terms as the parties shall mutually determine. 27. FORCE MAJEURE. In the event Landlord or Tenant shall be delayed, hindered or prevented from the performance of any act required hereunder, by reason of governmental restrictions, scarcity of labor or materials, strikes, fire, or any other reasons beyond its reasonable control, the performance of such act shall be excused for the period of delay, and the period for performance of any such act shall be extended as 17

necessary to complete performance after the delay period. However, the provisions of this paragraph shall in no way be applicable to Tenant's obligations to pay Annual Rental or any other sums, monies, costs, charges or expenses required by this Lease. 28. REMEDIES CUMULATIVE - NONWAIVER. Unless otherwise specified in this Lease, no remedy of Landlord or Tenant shall be considered exclusive of any other remedy, but each shall be distinct, separate and cumulative with other available remedies. Each remedy available under this Lease or at law or in equity may be exercised by Landlord or Tenant from time to time as often as the need may arise. No course of dealing between Landlord and Tenant or any delay or omission of Landlord or Tenant in exercising any right arising from the other party's default shall impair such right or be construed to be a waiver of a default. 29. HOLDING OVER. If Tenant remains in possession of the Premises or any part thereof after the expiration of the term of this Lease, whether with or without Landlord's acquiescence, Tenant shall be deemed only a tenant at will and there shall be no renewal of this Lease without a written agreement signed by both parties specifying such renewal. The "monthly" rental payable by Tenant during any such tenancy at will period shall be one hundred twenty-five percent (125%) of the monthly installments of Annual Rental payable during the final year immediately preceding such expiration. If Tenant retains possession of the Premises in a holdover situation, without Landlord's written approval, for more than thirty (30) days, then Tenant shall also remain liable for any and all damages, direct and consequential, suffered by Landlord as a result of any holdover without Landlord's unequivocal written acquiescence. 30. NOTICES. Any notice allowed or required by this Lease shall be deemed to have been sufficiently served if the same shall be in writing and placed in the United States mail, via certified mail or registered mail, return receipt requested, with proper postage prepaid and addressed as follows:
AS TO LANDLORD: c/o NationsBank of North Carolina, N.A., Real Estate Investment Services, Investment Division, Trust Department One NationsBank Plaza, NCI-002-11-07 Charlotte, North Carolina 28255-0131 Attention: Mr. Floyd T. Boyce

18

AS TO TENANT:

Syntel, Inc. Suite 200 110 Coming Road Cary, North Carolina 27511 Attention: Personnel & Administration Manager Syntel, Inc. Suite 301 5700 Crooks Road Troy, Michigan 48098 Attention: Financial Controller; and, VP, Human Resources & Administration

WITH A COPY TO:

The addresses of Landlord and Tenant and the party, if any, to whose attention a notice or copy of same shall be directed may be changed or added from time to time by either party giving notice to the other in the prescribed manner. 31. LEASING COMMISSION. Landlord and Tenant represent and warrant each to the other that they have not dealt with any broker(s) or any other person claiming any entitlement to any commission in connection with this transaction except Carolantic Realty, Inc. and Highwoods Properties, Inc. (the "Brokers"). Landlord and Tenant agree to indemnify and save each other harmless from and against any and all claims, suits, liabilities, costs, judgments and expenses, including reasonable attorneys' fees, for any leasing commissions or other commissions, fees, charges or payments resulting from or arising out of their respective actions in connection with this Lease except as to Brokers. Landlord agrees to be responsible for the leasing commission due Brokers pursuant to a separate written agreement between Landlord and Carolantic Realty, Inc., and to hold Tenant harmless respecting same. 32. MISCELLANEOUS. (a) Rules and Regulations. Landlord shall have the right from time to time to prescribe reasonable rules and regulations (the "Rules and Regulations") for Tenant's use of the Premises and the Building. A copy of Landlord's current Rules and Regulations respecting the Premises and the Building is attached hereto as Exhibit "D". Tenant shall abide by and actively enforce on all its employees, agents, invitees and licensees such regulations including without limitation rules governing parking of vehicles in designated portions of the Building. 19

(b) Evidence of Authority. If requested by Landlord, Tenant shall furnish appropriate legal documentation evidencing the valid existence and good standing of Tenant and the authority of any parties signing this Lease to act for Tenant. (c) Limitation of Landlord's Liability. If Landlord shall fail to perform any covenant, term or condition of this Lease upon Landlord's part to be performed, and, as a consequence of such default, Tenant shall recover a money judgment against Landlord, such judgment shall be satisfied solely out of the proceeds of sale received upon execution of such judgment levied thereon against the right, title and interest of Landlord in the Building as the same may then be encumbered; and neither Landlord nor, if Landlord be a partnership, any of the partners comprising Landlord shall have any personal liability for any deficiency. It is understood and agreed that in no event shall Tenant or any person claiming by or through Tenant have the right to levy execution against any property of Landlord other than its interest in the Building as hereinbefore expressly provided. (d) Nature and Extent of Agreement. This Lease, together with all exhibits hereto, contains the complete agreement of the parties concerning the subject matter, and there are no oral or written understandings, representations,. or agreements pertaining thereto which have not been incorporated herein. This Lease creates only the rela- tionship of landlord and tenant between the parties, and nothing herein shall impose upon either party any powers, obligations or restrictions not expressed herein. This Lease shall be construed and governed by the laws of the state in which the Premises are located. (e) Binding Effect. This Lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors and assigns. This Lease shall not be binding on Landlord until executed by a Vice President of Landlord and delivered to Tenant. No amendment or modification to this Lease shall be binding upon Landlord unless same is in writing and executed by a Vice President of Landlord. (f) Captions and Headings. The captions and headings in this Lease are for convenience and reference only, and they shall in no way be held to explain, modify, or construe the meaning of the terms of this Lease. (g) Lease Review. The submission of this Lease to Tenant for review does not constitute a reservation of or option for the Premises, and this Lease shall become effective as a contract only upon execution and delivery by Landlord and Tenant. 20

(h) Right to Relocate. [Intentionally deleted.] (i) Security Deposit. Tenant, simultaneously with the delivery of this Lease executed by Tenant to Landlord, has paid to Landlord the amount of Sixty-four Thousand Eight Hundred Ninety-four and 63/100 Dollars ($64,894.63) (the "Deposit") as security for Tenant's performance of all obligations hereunder. The Deposit may be held by Landlord in such manner as it shall elect and Landlord shall be entitled to any interest which accrues on the Deposit. In the event of a default by Tenant, Landlord may, at its option, apply all or any part of the Deposit to cure the default, and thereupon Tenant shall immediately redeposit with Landlord the amount so applied in order that Landlord will always have the full Deposit on hand during the term of this Lease. Upon the termination of this Lease, provided that Tenant is not in default hereunder, Landlord shall refund to Tenant any of the remaining balance of the Deposit subject to final adjustments for payment of any rental required by this Lease. If the Premises is sold, Landlord shall have the right to transfer the Deposit to the new owner, and upon the new owner's express assumption of the obligations for the Deposit required by this Lease, Landlord shall thereupon be released from all liability for such Deposit, and Tenant thereafter shall look only to the new owner for such Deposit. The terms hereof shall apply to every transfer of the Deposit. 33. SEVERABILITY. If any term or provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Lease shall be valid and enforced to the fullest extent permitted by law notwithstanding the invalidity of any other term or provision hereof. 34. REVIEW OF DOCUMENTS. If, following the execution of this Lease, either party hereto requests that the other party execute any document or instrument that is other than (i) a document or instrument the form of which is attached hereto as an exhibit, or (ii) a document that solely sets forth facts or circumstances that are then existing and reasonably ascertainable by the requested party with respect to the lease, then the party making such request shall be responsible for paying the out-of-pocket costs and expenses, including without limitation, the attorneys fees, incurred by the requested party in connection with the review (and, if applicable, the negotiations) related to such document(s) or instrument(s), regardless of whether such document(s) or instrument(s) is (are) ever executed by the requested party. In the event the requesting party is Tenant, all such costs and expenses incurred by Landlord in connection with its review and negotiation of any such document(s) or instrument(s) shall be deemed to be additional rental due hereunder and shall be payable by Tenant promptly upon demand. 35. SPECIAL PROVISIONS. The special provisions, if any, contained in Exhibit "E" attached hereto and initialled by the parties, are incorporated herein by this reference. In the event of a conflict between the terms and conditions of said Exhibit "E" and the terms and conditions of the main body of this Lease, the terms and conditions of Exhibit "E" shall control. 21

IN WITNESS WHEREOF, the parties have caused this Lease to be duly executed and sealed pursuant to authority duly given as of the day and year first above written. "LANDLORD" NATIONSBANK OF NORTH CAROLINA, N.A., AS [CORPORATE SEAL] TRUSTEE FOR THE PUBLIC EMPLOYEES RETIREMENT SYSTEM OF OHIO ATTEST:
? - ---------------------Assistant Secretary By: ? -----------------------------Vice President ---------

"TENANT" SYNTEL, INC.,
[CORPORATE SEAL] ATTEST: ? - ---------------------Secretary - ----------a Michigan corporation

By:

? -----------------------------President ---------

22

STATE OF NORTH CAROLINA COUNTY OF CABARRUS This 5th day of December, 1994, personally came before me George Massengale who, being by me duly sworn, says that he is Vice President of NATIONSBANK OF NORTH CAROLINA, N.A., that the seal affixed to the foregoing instrument in writing is the corporate seal of said Bank, and that said writing was signed and sealed by him, in behalf of said Bank by its authority duly given, and the said Vice President acknowledged the said writing to be the act and deed of said Bank. ROBBIE E. CALDWELL Notary Public [NOTARIAL SEAL] My Commission Expires September 11, 1995 STATE OF MICHIGAN COUNTY OF OAKLAND This 30 day of November, 1994, personally came before me Bharat Desai, who, being by me duly sworn, says that he is President of SYNTEL, INC., that the seal affixed to the foregoing instrument in writing is the corporate seal of the Corporation, and that said writing was signed and sealed by him, in behalf of said Corporation, by its authority duly given, and the said President acknowledged the said writing to be the act and deed of said Corporation. ARLENE M. PAULI Notary Public [NOTARIAL SEAL] ARLENE M. PAULI
My Commission expires: 01/29/95 - -----------------NOTARY PUBLIC - MACOMB COUNTY, MICH. MY COMMISSION EXPIRES 1-29-95 ACTING IN OAKLAND COUNTY

EXHIBIT A Legal Description Of Crossroads II For: Crossroads 11 Building Cary, North Carolina LEGAL DESCRIPTION CROSSROADS TWO A certain tract or parcel of realty, lying and being in the Town of Cary, Wake County, North Carolina, being more fully described as follows, viz: BEGINNING at an existing iron pipe in the western right of way line of Corning Road, said pipe marking the southeast corner of the Crossroads One parcel; thence with the line of Corning Road, a course of S 6 deg 39' 47" W for a distance of 30.00 feet to a calculated point; thence along the arc of a circular curve with a radius of 100.00 feet and a delta angle Of 99 deg 28' 31" for an arc length of 173.62 feet, a chord bearing of S 43 deg 05' 02" E and chord length of 152.62 feet to a calculated point; thence with the line of NationsBank as Trustee, a course of S 2 deg 19' 42" E for a distance of 95.62 feet to a calculated point; thence with the line of NationsBank as Trustee, a course of S 20 deg 09' 46" W for a distance of 370.01 feet to a calculated point; thence with the line of Margaret Benfield, a course of N 70 deg 19' 37" W for a distance of 815.00 feet to an existing iron pipe; thence with the line of Felix Jones and Hex Investments, a course of N 31 deg 47' 08" E for a distance of 538.62 feet to an existing iron pipe; thence with the line of Crossroads One, a course of S 60 deg 12' 36" E for a distance of 165.00 feet to an existing iron pipe; thence with the line of Crossroads One, a course of S 75 deg 00' 40" E for a distance of 125.98 feet to an existing iron pipe; thence along the arc of a circular curve with a radius of 988.00 feet and a delta angle of 14 deg 11' 15" for an arc length of 244.65 feet, a chord bearing of S 82 deg 06' 17" E and chord length of 244.02 feet to an existing iron pipe, the point and place of BEGINNING and containing 8.799 acres, more or less. This description was prepared 29 March 1994 by James S. Murphy, RLS for the sole purpose of describing lease limits and in no way is this description to be used for purposes of sale or conveyance. * This legal description shall be revised to include an additional tract of realty if Landlord chooses to develop such additional tract of realty as part of the Building.

EXHIBIT B - PREMISES SYNTLE, INC [PHASE I CONSTRUCTION AND PHASE II CONSTRUCTION FLOORPLAN]

EXHIBIT "C" PLANS AND SPECIFICATIONS/WORK LETTER IDENTIFICATION LISTING [TO BE PROVIDED BY LANDLORD UPON COMPLETION]

EXHIBIT "D" RULES AND REGULATIONS a. The sidewalks, halls, passages, elevators and stairways shall not be obstructed by any tenant or used by any tenant for any other purpose than for ingress and egress from and to their respective offices. The halls, passages, entrances, elevators, stairways, balconies and roof are not for the use of the general public and Landlord shall in all cases retain the right to control and prevent access thereto of all persons whose presence in the judgement of Landlord, or its employees, shall be prejudicial to the safety, character, reputation and interest of the Building and its tenants. b. The floors, skylights, windows, doors and transoms that reflect or admit light in passageways, or into any place in the Building, shall not be covered or obstructed by any tenant. The toilet rooms, water closets and other water apparatus shall not be used for any purpose other than those for which they were constructed, and no sweepings, rubbish, rags, ashes, chemicals or refuse or other injurious substances, shall be thrown therein. Any damage resulting from such misuse or abuse shall be borne and immediately paid by the tenant by whom or by whose employees it shall have been caused. c. No sign, advertisement or notice shall be inscribed, painted or affixed on any part of the outside or inside of said Building unless first consented to in writing by the Landlord. d. No additional locks shall be placed upon any doors of the Premises and no tenant shall permit any duplicate keys to be made, but if more than two keys for any door or lock shall be desired, the additional number must be obtained from the Landlord and be paid for by the tenant; each tenant must, upon the termination of its lease, leave the windows and doors in the demised Premises in like condition as the date of said lease, and must then surrender all keys to its premises. e. No tenant shall cause unnecessary labor by reason of carelessness and indifference to the preservation of good order and cleanliness in its Premises and in the Building. In order that the leased premises may be kept in good state of preservation and cleanliness, each tenant shall, during the continuance of its lease, permit the janitor of the Landlord to take charge of and clean the said leased premises. f. No tenant, shall employ any person or persons other than the janitor of the Landlord for the purpose of cleaning or taking charge of said premises without Landlord's prior written consent and it is understood and agreed that the Landlord shall in no wise be responsible to any tenant for any damage done to the furniture or other effects of any tenant by the janitor or any of his employees, or any other person, or for any loss of property of any kind whatever from leased Premises, however occurring. Tenant will see each day that the doors to its premises are securely locked before leaving the Building. g. Tenants, their clerks or servants, shall not make or commit any improper noises or disturbances of any kind in the Building, smoke in elevators, or mark or defile the water closets, or toilet rooms, or the walls, windows or doors of the Building, or interfere in any way with other tenants or those having business with them.

h. Music, including vocal and instrumental, shall not be permitted at volumes audible outside the Premises. i. No tenant shall do or permit anything to be done, in said Premises, or bring or keep anything therein, which will in any way increase the rate of fire insurance on said Building, or on property kept therein, or obstruct or interfere with the rights of other tenants, or in any other way injure or annoy them or conflict with the laws relating to fires, or with the regulations of the Fire Department or with any insurance policy upon said Building or any part thereof, or conflict with any of the rules and ordinances of the Board of Health. j. Each tenant shall promptly and at its expense execute and comply with all laws, rules, order, ordinances and regulations of the city, county, state or federal government, and of any department or bureau of any of them and of any other governmental authority having jurisdiction over the said Premises, affecting the tenant's occupancy of the demised Premises or tenant's business conducted thereon. k. Nothing shall be thrown or allowed to drop by the tenants, their clerks or employees out of the windows or doors, or down the passages or skylight of the Building, and no tenant shall sweep or throw, or permit to be swept or thrown from its premises, any dirt or other substances into any of the corridors or halls, elevators or stairways of said Building. l. No animals or birds shall be kept in or about any premises or permitted therein. m. If tenants desire to introduce signalling, telegraphic, telephonic or other wires and instruments into their premises, the Landlord will direct the electricians as to where and how the same are to be placed, and without such directions no placing, boring or cutting for wires will be permitted. Landlord shall in all cases retain the right to require the placing and using of electrical protecting devices to prevent the transmission of excessive currents of electricity into or through the Building, and to require the changing of wires and of their placing and arrangements as Landlord may deem necessary, and further to require compliance on the part of all using or seeking access to such wires with such rules as Landlord may establish relating thereto, and in event of non-compliance with such requirements and rules Landlord shall have the right to immediately cut and prevent the use of such wires. n. A directory in a conspicuous place on the first floor will be provided by the Landlord, on which the names of tenants will be placed by the Landlord at its discretion. o. Tenants shall not use or keep in the building any explosives, kerosene, gasoline, benzine, camphene, burning fluid or other flammable material. p. No tenant or employees of any tenant shall go upon the roof of said Building without the written consent of the Landlord. q. No article shall be fastened to or holes drilled or nails or screws driven into the walls or partitions, nor shall the walls or partitions be painted, papered or otherwise covered in such a way as to cause permanent damage or in any way marked or broken, nor shall any attachment be made to the

electric lighting wires of the Building for storing of electricity, or for the running of motors or other purpose, nor will machinery of any kind be allowed to be operated in any premises, nor shall any tenant use any other method of heating than that provided by Landlord, without the prior written consent of the Landlord. Tenants desiring to put in telephone junction or control boxes in the Premises will notify the Landlord who will designate where the same shall be placed. No mechanics shall be allowed in or about the Building other than those employed by the Building management without the written consent of the Landlord first having been obtained. r. Access may be had by the tenants to the halls, corridors, elevators and stairways in the Building and to the offices leased by them at any time or times. Access to the Building may be refused unless the person seeking admission is known to the watchman in charge, or has a pass or is properly identified. The Landlord shall in no case be liable in damages for the admission or exclusion of any person from said Building. In case of invasion, mob riot, public excitement, or other commotion, the Landlord reserves the right to prevent access to the Building during continuance of the same by closing the doors or otherwise for the safety of the tenants and protection of property in said Building. s. The Landlord in all cases shall prescribe the method and manner in which any merchandise, heavy furniture, large packages or safes shall be brought in or taken out of the Building, and also the hours at which such moving shall he done. The Landlord shall in all cases retain the right to prescribe the weight and proper position of such heavy furniture and safes and all damage done to the Building taking in or out of such merchandise, heavy furniture, large packages or safes or any damage done to the Building while said property shall be therein, shall be made good and paid for by the tenant by, through or under whom the said damage may have been done. All furniture, safes or fixtures shall be provided with supports, glides or castors that will meet the approval of the management of the Building. t. The Landlord reserves the right to rescind any of these rules and to make such other and further rules and regulations as in Landlord's judgement may from time to time be needed for the safety, care, maintenance, operation and cleanliness of the Building, and for the preservation of good order therein, which, when so made and notice thereof shall have been given to any tenant, shall have the same force and effect as if originally made a part of the foregoing Lease, and such, other and further rules, shall not, however, be inconsistent with the proper and rightful enjoyment by the Tenant under the foregoing Lease of the Premises therein referred to. u. If any of these rules and regulations directly contradict the terms of the foregoing Lease, the terms of said Lease shall prevail.

EXHIBIT "E" SPECIAL PROVISIONS 1. Improvements Allowance. (a) Landlord shall contribute (subject to adjustment as provided hereinbelow in subparagraph 1(b) of this Exhibit "E") Seven Hundred Sixty-One Thousand One Hundred Fifty-One and 15/100 Dollars ($761,151.15) ("Landlord's Contribution") toward only the following costs (the "Designated Costs") of the work performed pursuant to making the Premises ready for Tenant's access, use and occupancy (the "Upfit Work", it being understood that the term Upfit Work, as used herein, shall mean both the "Phase I Work" and the "Phase II Work", as said terms are defined hereinbelow), and for no other purpose (except as provided in subparagraph 1(b) and in Paragraph 15 of this Exhibit "E" below): (i) the costs of completing and approving the Layout Plan and Finish Schedule (as these terms are defined hereinbelow in Paragraph 2 of this Exhibit "E"), (ii) the costs of the preparation of the Plans (as defined hereinbelow in Paragraph 3 of this Exhibit "E"), and (iii) the costs of all construction work performed in accordance with the Plans. Landlord's Contribution represents an amount equal to Fifteen and 15/100 Dollars ($15.15) multiplied by the rentable square footage within the Premises. (b) Except as set forth below in numbered Paragraph 15 of this Exhibit "E", Landlord's Contribution shall be adjusted according to the following terms: (i) If the actual aggregate Designated Costs are greater than $15.15 per rentable square foot, but less than or equal to $15.65 per rentable square foot, the Designated Costs in excess of $15.15 per rentable square foot shall be shared equally by Landlord and Tenant. Any amount due from Tenant pursuant to this subparagraph (i) shall be payable by Tenant promptly upon demand. (ii) If the actual aggregate Designated Costs are greater than $15.65 per rentable square foot, but less than or equal to $15.90 per rentable square foot, the Designated Costs in excess of $15.65 per rentable square foot shall be at Tenant's sole cost and expense. Any amount due from Tenant pursuant to this subparagraph (ii) shall be payable by Tenant promptly upon demand. (iii) If the actual aggregate Designated Costs are greater than $15.90 per rentable square foot, the Designated Costs in excess of $15.90 per rentable square foot shall be at Landlord's sole cost and expense. (iv) If the actual aggregate Designated Costs are less than $15.15 per rentable square foot, but greater than or equal to $14.75 per rentable square foot, the amount of Landlord's Contribution which is not expended on Designated Costs shall be shared equally by Landlord and Tenant. Any amount due to Tenant pursuant to this subparagraph (iv) shall be credited against Tenant's installments of Annual Rental first coming due hereunder. (v) If the actual aggregate Designated Costs are less than $14.75 per rentable square foot, the amount of Landlord's Contribution which is not expended on Designated Costs and which is

attributable to Designated Costs having been less than $14.75 per rentable square foot shall also be credited against Tenant's payments of Annual Rental first coming due hereunder. 2. Layout Plan and Finish Schedule. On or prior to November 22, 1994, Tenant and Landlord shall work together in good faith and shall finalize the Tenant's layout and design plan (the "Layout Plan") for the Premises and Tenant's finish schedule for the Premises (the "Finish Schedule"). Tenant agrees that it shall cause Tenant's designated representative timely to meet with Landlord's architect in Raleigh, North Carolina, regarding same. 3. Plans. On or before November 30, 1994, provided that Tenant and Landlord have approved and finalized the Layout Plan and the Finish Schedule on or before November 22, 1994, Landlord shall prepare a complete set of plans and specifications for the Premises (the "Plans"). Such Plans shall include (i) the Layout Plan, (ii) the Finish Schedule, and (iii) all other construction documents (such as mechanical, electrical, lighting and ceiling plans) that are required to obtain any necessary construction permits for the Upfit Work. The Plans, once finalized by Landlord, and mutually approved, as hereinbelow provided, shall then be attached to this Lease as Exhibit "C". 4. Construction of Phase 1. Upon the completion of the Plans and the final approval of same by Landlord and Tenant, such approval to be provided by both Landlord and Tenant, negotiating in good faith and with due diligence, on or before December 2, 1994, Landlord shall submit the Plans for permitting. Further, on or before November 22, 1994, Landlord shall also submit the portion of the Plans, though not finalized, related to that certain portion of the Premises consisting of approximately 12,000 rentable square feet and identified as "Phase I" on Exhibit "B" ("Phase I") to a general contractor selected by and satisfactory to Landlord to obtain an estimate for the conduct of the portion of the Upfit Work attributable to Phase I (the "Phase I Work") in accordance with the Plans. Such estimate shall be received by Landlord from the selected general contractor on or before November 30, 1994. The contract for the conduct of all Phase I Work shall be issued to such general contractor on or before December 1, 1994, or as soon thereafter as practicable. Such general contractor shall commence construction on December 2, 1994, or as soon thereafter as practicable. 5. Substantial Completion of Phase I Work. Landlord intends to have Phase I ready for Tenant's access, with all Phase I Work substantially complete (i.e., complete except for punchlist items), on or before January 6, 1995. Tenant shall provide Landlord with its punchlist items on or before the date that is thirty (30) days following the date that Landlord informs Tenant that Phase I is ready for Tenant's access, and Landlord will use good faith and due diligent efforts to correct said punchlist items within thirty (30) days following its receipt of said list. Landlord hereby agrees that if Landlord has Phase I ready for Tenant's access, with all Phase I Work (excepting punchlist items) substantially complete prior to January 6, 1995, then Landlord will deliver same to Tenant on such earlier date. Tenant shall be entitled to occupy and use Phase I during the Pre-Commencement Occupancy Period on the terms and conditions of this Lease, except that Tenant shall have no obligation to pay any rentals during said Pre-Commencement Occupancy Period, all as described in numbered Paragraph 2 of the main body of this Lease. 6. Construction of Phase II. On or before December 2, 1994, Landlord shall submit the portion of the Plans related to the balance of the Premises which is not included in Phase I ('Phase II") to two (2)

general contractors selected by and reasonably satisfactory to Landlord to obtain estimates for the conduct of the portion of the Upfit Work attributable to Phase II (the "Phase II Work") in accordance with the Plans. Such estimates shall be received by Landlord from the selected general contractors on or before December 16, 1994. The two (2) estimates received shall be shared with a designated representative of the Tenant, and the contract for the conduct of all Phase II Work shall be issued to the general contractor which submits the lowest qualified bid (unless Landlord and Tenant mutually agree to issue the contract to a general contractor that did not submit the lowest bid). A general contractor shall be selected to perform such Phase II Work on or before December 30, 1994. After the selection of a general contractor to perform the Phase II Work, such general contractor shall commence construction on January 2, 1995, or as soon thereafter as practicable. 7. Substantial Completion of Phase II Work. Landlord intends to have Phase II ready for Tenant's access, with all Phase II Work substantially complete (i.e., complete except for punchlist items), on or before March 15, 1995. Tenant shall provide Landlord with its punchlist items on or before the date that is thirty (30) days following the Commencement Date, and Landlord will use good faith and due diligent efforts to correct said punchlist items within forty-five (45) days following its receipt of said list. Landlord hereby agrees that if Landlord has the Premises ready for Tenant's access, with all Phase II Work (excepting such punchlist items) substantially complete prior to March 15, 1995, then Landlord will deliver same to Tenant on such earlier date, and Tenant shall be entitled to occupy and use Phase 11 during the period commencing on such date of delivery by Landlord through the Commencement Date (the "Phase II Pre-Commencement Occupancy Period") on the terms and conditions of this Lease, except that Tenant shall have no obligation to pay any rentals during said Phase II Pre-Commencement Occupancy Period. Further, Landlord will allow Tenant a period of ten (10) days prior to Landlord's delivery of Phase II to Tenant during which time Tenant shall be entitled to conduct any work on Phase II that Tenant deems necessary or appropriate, including (i) wiring for telephone and computer systems, (ii) installation of furniture and fixtures and (iii) any other work that Tenant deems necessary or appropriate (provided, however, that Tenant must coordinate any such work with Landlord's architect). Tenant shall ensure that any such work performed by Tenant pursuant to the immediately preceding sentence does not interfere with the general contractor's completion of the Phase II Work. 8. Tenant's Delays. Notwithstanding anything contained in this Lease to the contrary, including the provisions of Paragraph 4 of the main body of this Lease and Paragraphs 5 and 7 of this Exhibit "E", the Commencement Date shall not be adjusted to the date that Landlord substantially completes the Upfit Work and provides Tenant with access to the Premises if (and/or to the extent that) the reason that Landlord cannot substantially complete the Upfit Work and/or provide Tenant with access to the Premises is due to any delay which has been caused by Tenant [or any of its agent(s), employee(s) or contractor(s)], including any failure to meet any of the deadlines set forth in Paragraphs 2-4 of this Exhibit "E". 9. After-Hours HVAC. In the event Tenant desires HVAC services to the Premises other than during the Building normal operating hours of 7:00 a.m. - 6:00 p.m. Monday through Friday, 8:00 a.m. - 1:00 p.m. Saturday, excluding holidays, then Tenant shall pay to Landlord the actual cost to Landlord of providing such services, such payment to be made within ten (10) days following receipt by Tenant of the invoice(s) therefor. Without limiting the generality of the foregoing, Landlord estimates the cost

of providing such additional services to be approximately Twenty-Five and No/100 Dollars ($25.00) per hour. 10. Excess Utilities Costs. In addition to the after-hours HVAC services costs described in Paragraph 9 of this Exhibit "E" above, in the event Tenant's use of the Premises results in an electrical demand in excess of seven (7) watts per rentable square foot of the Premises, Tenant shall also be responsible for both the costs related to Landlord increasing the capacity of the electrical system(s) serving the Premises and the additional electricity costs above and beyond Tenant's proportionate share of Building standard electrical usage. Such payment shall be made by Tenant to Landlord within ten (10) days following receipt by Tenant of an invoice therefor. 11. Additional Parking. Landlord agrees, at Landlord's expense, to expand the Building site by approximately one (1) acre and to construct additional parking spaces so that there will be a total of at least 500 parking spaces for the Building, as shown generally on Exhibit "F". Landlord will use good faith and duly diligent efforts to make such additional spaces available on or about June 1, 1995. Tenant shall have the right to use up to 300 of such parking spaces, on a nonexclusive basis with other tenants in the Building. In the event Tenant expands the Premises, as herein provided, then Tenant shall be entitled to the nonexclusive use of additional parking spaces computed at the ratio of four (4) additional parking spaces for each additional 1,000 rentable square feet of space leased by Tenant. In the event that Landlord ever determines, in its reasonable discretion, that (a) the overall parking for the Building is congested, and (b) that Tenant is exceeding its allocated parking entitlement, as herein described, then Landlord will notify Tenant of same and Tenant shall promptly take whatever corrective action is required to remedy same. 12. Interim Space. Landlord shall consent to a subleasing arrangement which will make available to Tenant, at no cost to Tenant, for a period commencing on December 1, 1994, and terminating on January 31, 1995, approximately 3,157 square feet of space on the first floor of the Crossroads Office Building I (the "Interim Space"), provided Tenant enters into a sublease with the present tenant in the Interim Space which is reasonably satisfactory to Landlord. 13. Right of First Refusal. During the Initial Term of this Lease, provided Tenant is not then in default beyond any applicable cure period under any of the terms, conditions or provisions of this Lease on its part to observe, comply with or fulfill, Landlord hereby agrees to work in good faith with Tenant to make available to Tenant any available space within the Building (or any other building owned or controlled by Landlord within Crossroads Corporate Park) under the terms and conditions of this Paragraph 13, as follows: (a) Notice By Tenant. For Tenant to be granted any right of first refusal under this Paragraph 13, Tenant must notify Landlord in writing ("Tenant's Notice") that Tenant anticipates needing additional space within ninety (90) days following the date that Landlord receives Tenant's Notice (such 90-day period beginning on the date Landlord receives Tenant's Notice hereinafter referred to as the "RFR Period"). Upon receipt by Landlord of Tenant's Notice, Landlord will inform Tenant of space, if any, that is then (or that within such RFR Period is scheduled to become) available for leasing in Crossroads Corporate Park in any Building that at such time is owned or controlled by Landlord (the "Park"). The applicable space within the Park that is or later in fact becomes available shall then be

designated the "Expansion Space" for the purposes of this Paragraph 13. Without limiting the generality of the foregoing, "Expansion Space" shall not be deemed to include any space which, though scheduled to become available, is subsequently leased to the existing tenant or existing occupant of such space (whether pursuant to a renewal or an extension of an existing lease or otherwise) and consequently does not become vacant and available [except that, within the Building (as opposed to within other buildings in the Park), only space renewed pursuant to an enforceable renewal, extension or option provision in favor of the applicable tenant will be excluded from such "available" space.] During the RFR Period, Tenant shall have a right of first refusal ("RFR") to lease the Expansion Space under the terms and conditions of subparagraph 13(b) below. Notwithstanding anything herein to the contrary, however, in no event shall Tenant be entitled to lease less than all of any contiguous space that becomes available in the Park if, in Landlord's reasonable discretion, the portion(s) remaining of such Expansion Space would be commercially unmarketable (in the manner and for the purposes in which the Landlord then markets space in the Park). (b) Right of First Refusal. If Landlord proposes to lease the Expansion Space [or, subject to the provisions of the last sentence of subparagraph 13(a) above, such applicable portion thereof] during the RFR Period to another prospective tenant on mutually agreeable terms ("Lease Proposal"), then the space that Landlord proposes to lease pursuant to the Lease Proposal must first be offered, in writing, to Tenant at the same rental rate and under the same terms and conditions (or, as applicable, under such rental rate and such terms and conditions which provide to Landlord the equivalent net economic effect) as under the terms and conditions of the Lease Proposal which Landlord is prepared to make (or accept, as applicable) regarding such third party prospective tenant. Tenant shall have five (5) days following its receipt of such Lease Proposal to accept such offer. In the event Tenant does not exercise its right to lease the Expansion Space (or such applicable portion thereof) under the terms and conditions of the Lease Proposal, then for the remainder of the RFR Period (i) Tenant's rights under this Paragraph 13 shall automatically expire without further notice with respect to all Expansion Space, and (ii) Landlord shall be permitted to lease all or any portion(s) of the Expansion Space to any party on any terms whatsoever without having to offer such space to Tenant. In the event Tenant elects to accept an offer and lease any Expansion Space having less square footage than Tenant needs, Tenant's RFR shall remain open for the remainder of the applicable RFR Period. (c) Additional Notices. In the event Tenant shall have given a Tenant's Notice as described above and Tenant shall have been presented with and failed to accept a Lease Proposal, such that Tenant's RFR regarding such Tenant's Notice shall have expired, as set forth in subparagraph 13(b) above, then Tenant shall not be entitled to give another Tenant's Notice until the end of the 90-day period of such prior RFR Period. (d) Expiration of Rights of First Refusal. Tenant's rights under this Paragraph 13 shall terminate on the date of the expiration of the Initial Term. TIME IS OF THE ESSENCE WITH RESPECT TO TENANT'S EXERCISE OF THIS RIGHT OF FIRST REFUSAL. 14. Additional Security . As a material inducement for Landlord entering into this Lease, the performance by Tenant of its obligation to pay Annual Rental pursuant to the terms of this Lease is secured by an irrevocable standby letter of credit (together with any applicable extensions or replacements thereto, the "Letter of Credit") from NBD Bank, N.A. (the "Issuing Bank"), which has been provided

contemporaneously herewith on behalf of Tenant, and a copy of which is attached to this Lease as Exhibit "G". Notwithstanding anything herein to the contrary, including, without limitation, the provisions of Paragraph 19 of the main body of this Lease, upon the occurrence of an Event of Default by Tenant prior to the end of the fourth (4th) Lease Year resulting from Tenant's failure to pay any installment of Annual Rental or any component thereof (i.e., Minimum Rental, the tax payments due under Paragraph 3(b)(1)(D) of the main body of the Lease, the Monthly Estimate, or the Annual Payment), Landlord shall be entitled to liquidated damages according to the following schedule, and shall be entitled to exercise its rights to such liquidated damages by drawing against the Letter of Credit: If the Event of Default occurs: Then, liquidated damages amount shall be: 1. During Lease Year One: $409,464.18 2. During Lease Year Two: $279,674.92 3. During Lease Year Three: $139,837.46 4. During Lease Year Four: $ 69,918.73 Provided, however, except as provided in the last grammatical paragraph of this Paragraph 14 of Exhibit "E", Landlord shall not be entitled to exercise its right to said liquidated damages by drawing against the Letter of Credit until such time as (i) an Event of Default has occurred under the Lease prior to the end of the fourth (4th) Lease Year resulting from Tenant's failure to pay any installment of Annual Rental or any component thereof (a "Rent Default"), (ii) Landlord has commenced a legal proceeding against Tenant in a court of competent jurisdiction that alleges that a Rent Default has occurred, and (iii) provided the Issuing Bank with a statement that a Rent Default has occurred, in accordance with the provisions in the Letter of Credit regarding such statement. LANDLORD AND TENANT AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTABLISH LANDLORD'S DAMAGES BY REASON OF TENANT'S DEFAULT, THAT THE AMOUNTS SET FORTH ABOVE AS LIQUIDATED DAMAGES ARE REASONABLE ESTIMATES OF LANDLORD'S DAMAGES, AND THAT LANDLORD SHALL BE ENTITLED UNDER THE CONDITIONS SET FORTH HEREINABOVE TO DRAW UPON THE LETTER OF CREDIT AND TO RETAIN THE AMOUNT(S) COLLECTED THEREUNDER AS LANDLORD'S SOLE REMEDY AGAINST TENANT. LANDLORD AND TENANT FURTHER AGREE THAT SUCH AMOUNTS ARE REASONABLE SUMS FOR LIQUIDATED DAMAGES AS OF THE DATE OF THIS LEASE. BY PLACING THEIR INITIALS IMMEDIATELY BELOW, LANDLORD AND TENANT EACH CONFIRM THAT THEY HAVE READ AND UNDERSTAND AND ACCEPT THIS LIQUIDATED DAMAGES PROVISION. In addition to the foregoing provisions regarding the Letter of Credit, Landlord and Tenant recognize that the initial expiration date of the Letter of Credit is April 15, 1996. The Letter of Credit provides that it will be automatically extended for three (3) additional consecutive periods of twelve (12) months each, through April 15, 1999), unless the Issuing Bank notifies Landlord at least ninety (90) days

(b) Notwithstanding anything in numbered Paragraph 1 of this Exhibit "E" to the contrary, in the event the total Designated Costs regarding the Upfit Work, exclusive of the Additional Costs related to Non-Standard Improvements, is less than the amount of Landlord's Contribution, then so much of said Landlord's Contribution which is not required for the completion of the balance of such Upfit Work (i.e., except for the Non-Standard Improvements) (the "Surplus Allowance") shall be allocable against the total of such Additional Costs, up to a maximum amount allocable, of Seventy-five Thousand Three Hundred Sixty-one and 50/100 Dollars ($75,361.50)(the "Maximum Allocation"). All amounts in excess of said Maximum Allocation shall be at the sole cost and expense of Tenant and shall be payable by Tenant to Landlord promptly upon demand. Further, in the event the amount of the Additional Costs exceeds any applicable Surplus Allowance, or, if there is no Surplus Allowance (i.e., the costs to complete the Upfit Work, exclusive of the Non-standard Improvements equals or exceeds the amount of Landlord's Contribution), then Tenant shall also be solely responsible for the entire amount of the Additional Costs not covered by any applicable Surplus Allowance, which amount shall be payable by Tenant to Landlord promptly upon demand. (c) In addition to the payment of any applicable Additional Costs by Tenant as described above, and notwithstanding anything in the Lease to the contrary, Tenant shall be solely responsible, at Tenant's sole cost and expense, for the maintenance, repair and replacement of all Non-Standard Improvements. Further, the electrical service to the Non-Standard Improvements shall be submetered, and Tenant shall be solely responsible for the cost thereof. Such costs shall be invoiced monthly and paid by Tenant promptly upon receipt. (d) In the event that all of the Additional Costs are paid solely by Tenant [i.e., no portion of the Landlord's Contribution has been applied towards such costs as provided in subparagraph 15(b) above], then Tenant shall be allowed to remove from the Premises upon the expiration or earlier termination of this Lease those items of the Non-Standard Improvements consisting of any applicable computer raised flooring, any applicable stand-up HVAC unit located in the computer room (but not any roof-mounted unit) and any specialized fire suppression system. Tenant shall cause such items to be removed in a good and workmanlike manner. Any of such items not removed upon such expiration or earlier termination of the Lease shall thereupon automatically become the sole property of Landlord, unless Landlord and Tenant shall have entered into a separate written agreement regarding same.

EXHIBIT F CROSSROADS II - Site Plan Depicting 500 Parking Spaces Additional Acreage to be added to Site and additional parking spaces to be constructed Crossroads I Building Parking (Not Crossroads II)

Exhibit G Syntel, Inc. Lease, dated 11/30/94 Page 1 of 4
[NBD LOGO] NBD Bank, N.A. INTERNATIONAL DIVISION Letter of Credit Department P.O. Box 330116 Detroit, Michigan 48232-6116 (313) 225-1000 IN ALL CORRESPONDENCE QUOTE OUR REFERENCE NO. < BY MAIL BY WIRE > CABLES: NATIONBANK DET TELEX: TRT 164177 ITT 4320060 S.W.I.F.T.: NBDD US33 FAX: (313) 225-1111 Imports/Standby (313) 225 -2505 Exports

IRREVOCABLE STANDBY LETTER OF CREDIT NO. S135457 *** B E N E F I C I A R Y *** NATIONSBANK OF NORTH CAROLINA NA AS TRUSTEE FOR THE PUBLIC EMPLOYEES RETIREMENT SYSTEM OF OHIO C/O NATIONSBANK OF NORTH CAROLINA, N.A. NATIONSBANK REAL ESTATE INVESTMENT SERVICES NATIONSBANK PLAZA, 11TH FLOOR (NC1-002-11-07) CHARLOTTE, NORTH CAROLINA 28255-0131 ATTN: MR. GEORGE MASSENGALE VICE PRESIDENT

PLACE AND DATE OF ISSUE: DETROIT, MI/DECEMBER 01, 1994 *** A P P L I C A N T *** SYNTEL, INC. 5700 CROOKS ROAD, SUITE 301 TROY, MI 48098

*** EXPIRY DATE/PLACE *** EXPIRES ON APRIL 14, 1996 (UNLESS EXTENDED AS PROVIDED BELOW) FOR PRESENTATION AT OUR OFFICE. A M O U N T O F C R E D I T :

*** AVAILABLE AT/BY: *** OUR OFFICE ONLY BY PRESENTATION OF DOCUMENT(S) REQUIRED AND YOUR DRAFT(S) DRAWN AT SIGHT. NOT TO EXCEED, IN THE AGGREGATE 409,464.18

(FOUR HUNDRED NINE THOUSAND FOUR HUNDRED SIXTY FOUR AND 18/100) U.S. DOLLARS. GENTLEMEN, AT THE REQUEST AND FOR THE ACCOUNT OF THE ABOVE NAMED APPLICANT, WE HEREBY ESTABLISH OUR IRREVOCABLE LETTER OF CREDIT IN YOUR FAVOR WHICH IS AVAILABLE AS INDICATED ABOVE AGAINST PRESENTATION OF YOUR DRAFT(S) DRAWN ON NBD BANK, N.A., DETROIT, MICHIGAN, WHEN ACCOMPANIED BY THE FOLLOWING DOCUMENTS: ------- --DOCUMEN TS REQUIRED------- -A DATED STATEMENT BEARING AN ORIGINAL SIGNATURE PURPORTING TO BE AN AUTHORIZED SIGNER FOR NATIONSBANK OF NORTH CAROLINA, N.A., AS TRUSTEE FOR THE PUBLIC EMPLOYEES RETIREMENT SYSTEM OF OHIO, (INDICATING THE NAME AND TITLE/CAPACITY OF THE SIGNER), READING AS FOLLOWS: <<< CONTINUED ON NEXT PAGE >>>

Exhibit G Syntel, Inc. Lease dated 11/30/94 Page 2 of 4
[NBD LOGO] NBD Bank, N.A. INTERNATIONAL DIVISION Letter of Credit Department P.O. Box 330116 Detroit, Michigan 48232-6116 (313) 225-1000 IN ALL CORRESPONDENCE QUOTE OUR REFERENCE NO. < BY MAIL BY WIRE > CABLES: NATIONBANK DET TELEX: TRT 164177 ITT 4320060 S.W.I.F.T.: NBDD US33 FAX: (313) 225 -1111 Imports/Standby (313) 225-2505 Exports

OUR REF. NO. S135457 PAGE 2 "WE HEREBY CERTIFY THAT THE AMOUNT OF $ (SPECIFY) DRAWN UNDER NBD BANK, N.A. LETTER OF CREDIT NO. S135457, AS EVIDENCED BY OUR DRAFT ACCOMPANYING THIS STATEMENT, IS PAYABLE TO NATIONSBANK OF NORTH CAROLINA, N.A., AS TRUSTEE FOR THE PUBLIC EMPLOYEES RETIREMENT SYSTEM OF OHIO, BECAUSE AN EVENT OF DEFAULT HAS OCCURRED BY SYNTEL, INC. UNDER THE TERMS OF THAT CERTAIN LEASE AGREEMENT DATED NOVEMBER 30, 1994 BETWEEN OURSELVES AND SYNTEL, INC." ------- ----O THERCONDITIONS ---- ----- -PARTIAL DRAWINGS ARE PERMITTED. UNLESS EXTENDED AS SET FORTH BELOW, THIS LETTER OF CREDIT SHALL EXPIRE, FOR PRESENTATION OF YOUR DRAWING HEREUNDER, AT OUR OFFICE AT 645 GRISWOLD, 1950 PENOBSCOT BLDG., DETROIT, MI 48226 ON APRIL 14, 1996 (THE "INITIAL EXPIRY DATE"). IF EXTENDED AS SET FORTH BELOW, THE EXPIRY DATE OF THIS LETTER OF CREDIT SHALL BE EACH SUCCEEDING APRIL 14, (THE "EXTENDED EXPIRY DATE(S)"), BUT IN NO EVENT LATER THAN APRIL 14, 1999 (THE "FINAL EXPIRY DATE"). THE INITIAL EXPIRY DATE AND THE EXTENDED EXPIRY DATE(S) SHALL BE AUTOMATICALLY EXTENDED (WITHOUT THE NECESSITY OF A FORMAL AMENDMENT TO THIS LETTER OF CREDIT) FOR AN ADDITIONAL PERIOD OF ONE YEAR UNTIL APRIL 14 OF THE FOLLOWING CALENDAR YEAR, BUT IN NO EVENT BEYOND THE FINAL EXPIRY DATE, UNLESS WE SHALL HAVE MAILED TO YOU BY REGISTERED MAIL RETURN RECEIPT REQUESTED, AT YOUR ADDRESS SHOWN ABOVE (OR SUCH OTHER ADDRESS AS YOU MAY HAVE SPECIFIED TO US IN WRITING FROM TIME TO TIME), AT LEAST NINETY (90) DAYS PRIOR TO EACH RESPECTIVE INITIAL OR EXTENDED EXPIRY DATE(S), WRITTEN NOTICE OF OUR INTENTION NOT TO EXTEND THIS LETTER OF CREDIT AS PROVIDED HEREIN (THE "NON-EXTENSION NOTICE"). IN THE EVENT WE HAVE SENT SUCH NON-EXTENSION NOTICE TO YOU, YOU SHALL THEN BE ENTITLED TO DRAW AND PRESENT YOUR ONE SIGHT DRAFT FOR UP TO THE THEN REMAINING BALANCE OF THIS LETTER OF CREDIT (THE "NON-EXTENSION DRAWING") WITHOUT BEING REQUIRED TO PRESENT THE OTHER DOCUMENTATION DETAILED IN THIS LETTER OF CREDIT, IF ANY, EXCEPT FOR THE ORIGINAL OF THIS LETTER OF CREDIT INSTRUMENT WHICH MUST BE SURRENDERED WITH YOUR NON-EXTENSION DRAWING. SUCH NON-EXTENSION DRAWING MUST BE PRESENTED TO OUR OFFICE NOT LATER THAN THE THEN RELEVANT INITIAL OR EXTENDED EXPIRY DATE. NOTWITHSTANDING ANY TERM OR PROVISION HEREIN TO THE CONTRARY, <<< CONTINUED ON NEXT PAGE >>>

Exhibit G Syntel, Inc. Lease dated 11/30/94 Page 3 of 4
[NBD LOGO] NBD Bank, N.A. INTERNATIONAL DIVISION Letter of Credit Department P.O. Box 330116 Detroit, Michigan 48232-6116 (313) 225-1000 IN ALL CORRESPONDENCE QUOTE OUR REFERENCE NO. < BY MAIL BY WIRE > CABLES: NATIONBANK DET TELEX: TRT 164177 ITT 4320060 S.W.I.F.T.: NBDD US33 FAX: (313) 225 -1111 Imports/Standby (313) 225-2505 Exports

OUR REF. NO. S135457 PAGE 3 SUBJECT TO BEING EXTENDED FOR SUCH PERIODS AS PROVIDED ABOVE, THE AGGREGATE AMOUNT OF THIS LETTER OF CREDIT SHALL BE REDUCED AS FOLLOWS DURING THE THREE (3) EXTENSION TERMS UNDER THIS LETTER OF CREDIT: - - FROM APRIL 15, 1996, THROUGH APRIL 14, 1997, THE AGGREGATE AMOUNT OF THIS LETTER OF CREDIT SHALL BE REDUCED TO TWO HUNDRED SEVENTY-NINE THOUSAND SIX HUNDRED SEVENTY-FOUR AND 92/100 DOLLARS ($279,674.92) MINUS ANY SUMS (IF ANY) PREVIOUSLY DRAWN BY THE BENEFICIARY HEREUNDER. - - FROM APRIL 15, 1997, THROUGH APRIL 14, 1998, THE AGGREGATE AMOUNT OF THIS LETTER OF CREDIT SHALL BE REDUCED TO ONE HUNDRED THIRTY-NINE THOUSAND EIGHT HUNDRED THIRTY-SEVEN AND 46/100 DOLLARS ($139,837.46) MINUS ANY SUMS (IF ANY) PREVIOUSLY DRAWN BY THE BENEFICIARY HEREUNDER SINCE THE DATE OF ISSUANCE OF THIS LETTER OF CREDIT. - - FROM APRIL 15, 1998, THROUGH APRIL 14, 1999, THE AGGREGATE AMOUNT OF THIS LETTER OF CREDIT SHALL BE REDUCED TO SIXTY-NINE THOUSAND NINE HUNDRED EIGHTEEN AND 73/100 DOLLARS ($69,918.73) MINUS ANY SUMS (IF ANY) PREVIOUSLY DRAWN BY THE BENEFICIARY HEREUNDER, SINCE THE DATE OF ISSUANCE OF THIS LETTER OF CREDIT. THE ORIGINAL OF THIS LETTER OF CREDIT MUST BE RETURNED TO US WITH ANY DRAWING(S) HEREUNDER FOR OUR ENDORSEMENT OF ANY PAYMENT EFFECTED. WE UNDERTAKE TO RETURN SAID ORIGINAL LETTER OF CREDIT TO YOU (UNLESS FULLY UTILIZED OR EXPIRED) TOGETHER WITH OUR ADVICE OF SETTLEMENT. EACH DRAFT DRAWN HEREUNDER MUST BE MARKED "DRAWN UNDER NBD BANK, N.A. LETTER OF CREDIT NO. (SPECIFY L/C NO.)". UNLESS OTHERWISE EXPRESSLY STATED HEREIN, THIS LETTER OF CREDIT IS SUBJECT TO THE UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS, 1993 REVISION, ICC PUBLICATION NO. 500. <<< CONTINUED ON NEXT PAGE >>>

Exhibit G Syntel, Inc. Lease dated 11/30/94 Page 4 of 4
[NBD LOGO] NBD Bank, N.A. INTERNATIONAL DIVISION Letter of Credit Department P.O. Box 330116 Detroit, Michigan 48232-6116 (313) 225-1000 IN ALL CORRESPONDENCE QUOTE OUR REFERENCE NO. < BY MAIL BY WIRE > CABLES: NATIONBANK DET TELEX: TRT 164177 ITT 4320060 S.W.I.F.T.: NBDD US33 FAX: (313) 225-1111 Imports/Standby (313) 225 -2505 Exports

OUR REF. NO. S135457 PAGE 4 ------EN GAGEMENT----- WE HEREBY AGREE WITH YOU THAT DRAFTS DRAWN UNDER AND IN COMPLIANCE WITH THE TERMS OF THIS CREDIT WILL BE DULY HONORED UPON PRESENTATION AND DELIVERY OF THE DOCUMENTS AS SPECIFIED HEREIN IF PRESENTED TO THIS OFFICE ON OR BEFORE THE EXPIRY DATE INDICATED ABOVE, AS SAME MAY BE EXTENDED AS HEREIN PROVIDED. VERY TRULY YOURS,
[SIG] - -------------------------------AUTHORIZED SIGNATURE [SIG] --------------------------------AUTHORIZED SIGNATURE

EXHIBIT "H" CLEANING SPECIFICATIONS AREAS TO BE COVERED Clean all areas of the building including entrance lobby, basement areas, loading platforms, public halls, stairwells, lavatories, passageways, elevator cabs. Areas not normally included are: stores, restaurants, banks, concessions, garages, elevator shafts or elevator pits. 1. LAVATORIES -- DAILY a. Wash all mirrors. b. Wash hand basins and bright work with a non-abrasive cleaner. c. Wash urinals. d. Wash toilet seats using disinfectant in water. e. Wash toilet bowls. f. Damp mop floor using disinfectant in water. g. Damp wipe and clean where necessary. Walls and partitions are to be free of hand prints and dust. h. Replenish hand soap, towels, tissues, and sanitary napkins. i. Partition and ventilation louvres to be damp wiped. j. Machine scrub floors with approved germicidal detergent solution on a monthly basis. Toilet bowl brush shall be used on toilet bowls and care shall be given to clean flush holes under rim of bowls and passage trap. Bowl cleaner shall be used at least once each month and more often if necessary. The intent of this specification is that restrooms shall be maintained in a spotlessly clean and odor free condition at all times. 2. OFFICE AND HALLWAYS (CORRIDORS) a. Dusting--Daily All furniture, office equipment and appliances, window sills, etc., will be dusted daily with a treated cloth or static duster. This shall include all horizontal surfaces up to 84 inches high and enough vertical surfaces daily to complete all vertical surfaces within each week. Desks and tables not cleared of paper and work materials will only be dusted where desk is exposed. Telephones will be damp wiped. b. Dust Mopping--Daily All non-carpeted floor areas will be dust mopped with a treated yarn dust mop daily with special attention being given to areas under desks and furniture to prevent accumulation of dust and dirt. Floor dusting will be done after furniture has been dusted. c. Wastepaper--Ashtrays--Daily Wastepaper baskets and ashtrays to be emptied daily and wiped clean. Wastebaskets shall be damp wiped as necessary. Plastic liners where used will be changed as needed. d. Vacuuming--Daily--Weekly All rugs and carpets in office areas, as well as public spaces, are to be vacuumed daily in all traffic areas. Hard to reach places, under desks and chairs shall be vacuumed weekly. The intent of this specification is to provide a complete vacuuming at least once a week. e. Spot Cleaning Carpets--Daily All carpeted areas will be inspected daily for spots and stains. All spots and stains will be removed as soon as possible. Where difficult spots are encountered, a notation should be left with the building management. f. Wet Mopping--Daily and as Needed When floors require wet mopping, they will be left in a streak free condition. Extreme care shall be exercised in all mopping so as to avoid splashing walls or furniture. Transporting of water and other liquids over carpeted areas will be done in such a manner to avoid spillage. g. Tile Floors--Daily All tile floors will be refinished, buffed, dept. in scuff/spot free condition at all times. Since some tile areas require more attention than others, refinishing and buffing will be done on an as needed basis. Transporting of floor finish and other liquids over carpeted areas will be accomplished in such a manner to avoid spillage. h. Special Floor Coverings--As Necessary Parquet, quarry, ceramic, raised computer floors, and other special floor coverings will be treated with appropriate methods and materials. i. Water Coolers--Daily Water coolers shall be cleaned and polished daily. The intent of this specification is that water coolers be maintained in a spotlessly clean condition at all times.

CLEANING SPECIFICATIONS-CONTINUED j. Spot Cleaning--Daily--As Needed All hand prints and spots will be removed from doors and light switches daily. Walls, woodwork, and interior glass spot cleaned as needed. k. Cigarette Urns--Daily Cigarette urns and ash receivers shall be cleaned as necessary, sanitized and, where required, the same level shall be maintained. l. High Dusting--Quarterly Pipes, ledges, ceilings, mouldings, picture frames, etc. will be cleaned quarterly or more frequently if necessary. m. Venetian Blinds--Periodic Venetian blinds will be dusted quarterly and damp wiped annually. n. Air Conditioning Grills--Monthly All areas around air conditioning and return air grills will be cleaned once each month, or more often, if necessary. 3. STAIRWAYS & LANDINGS--WEEKLY DAILY All stairways and landings will be policed daily. They will be dust mopped with a treated yarn dust mop weekly. Spot cleaning of walls and doors will be done weekly. These areas will be damp mopped and scrubbed as necessary. Hand rails, fire points, and other miscellaneous hardware will be cleaned periodically. If day personnel are available in building, stairwells and landings will be policed and dust mopped daily. The intent of this specification is that stairways be kept in a neat and clean condition at all times. 4. ENTRANCE LOBBY--DAILY Entrance lobby will be thoroughly cleaned daily. Lobby glass and metal will be cleaned and dusted daily. Directory board glass will be damp cleaned and wiped. Lobby walls will be dusted and kept free from fingermarks, smudges, etc. Lobby floor and entrance ways are to be thoroughly dust mopped nightly, damp mopped as needed, and buffed and refinished as necessary to maintain a clean and lustrous appearance. 5. POLISHING--PERIODICALLY All door plates, kick plates, brass and metal fixtures within the building will be wiped weekly and polished periodically. 6. ELEVATORS--DAILY a. All elevators to be vacuumed nightly. b. All stainless steel and metal to be cleaned nightly. c. All elevator tracks to be vacuumed as needed. d. Elevator button panels and elevator doors to be cleaned nightly. e. Carpets will be spotted periodically. f. Ceilings, overhead plexiglass, and/or special light fixtures will be cleaned periodically and normally through arrangement with building management. 7. LIGHT FIXTURES--PERIODICALLY The exterior of all light fixtures will be dusted as needed. GENERAL PERSONNEL: Employees who are to be permanently assigned to your building shall be carefully interviewed, screened, and bonded. They shall be neat and clean in appearance and properly identified. Employees shall not eat, drink, or smoke while on duty. Employees shall not disturb papers on desks, open drawers or cabinets, use telephones, televisions or radios. All employees shall abide by all building regulations and safety rules which may be promulgated from time to time as they pertain to our operation. SUPERVISORS: Competent supervisory personnel shall be employed, and they will, at a minimum, have completed our 10 week Supervisory Training Course. Our Supervisor shall arrive and depart approximately one half hour before and after the cleaning crew.

The Supervisor will report to the building management any conditions such as leaky faucets, stopped toilets and drains, broken fixtures, etc. The Supervisor will also report any unusual happenings in the building. OTHER: We shall furnish the necessary, appropriate, tested and approved implements, machinery and cleaning

CLEANING SPECIFICATIONS-CONTINUED supplies for the satisfactory performance of our services. Sufficient space in the premises shall be assigned to us for storage of cleaning materials, implements, and machinery. Adequate utilities will be provided to Contractor, without charge, for performance of duties. A communications log book shall be kept in a designated place on the premises, in which a record shall be made promptly of, any occurrences requiring building management or contractor's attention. We shall furnish Workmen's Compensation and Public Liability Insurance, certification of which shall be forwarded to you. All office cleaning, where possible, will be done behind locked doors. In other words, cleaner goes into an office to perform duties, where possible the office entrance door will be locked behind. The Building Management may require the dismissal of any employee who is incompetent, careless, insubordinate, or otherwise objectionable, of whose continued employment is contrary to consistent and good relationship with tenants. Contractor will be responsible for loss or damage caused by his employees and for conduct of of his employees. Upon completion of the daily work, the contractor shall insure that all slop sinks and equipment storage areas are left in a neat and orderly condition; all lights are extinguished, and all doors are locked. We shall make reasonable and prompt restitution, by cash, replacement, or repairs, subject to Building Management approval for any damage for which are liable. Regular, periodic inspection of the building shall be performed by our management staff with the customers representative. This is in addition to the regular nightly inspection to be performed by the Supervisor. SCHEDULE OF CLEANING Nightly cleaning services shall be rendered five nights each week, Monday through Friday, except on legal holidays. DAY PERSONNEL SERVICE (IF REQUIRED) Contractor shall provide uniformed day personnel whose duties will be coordinated with building management. They shall work eight hours per day, five days per week, Monday through Friday, excluding legal holidays to perform the following: ENTRANCE LOBBY Police and maintain the lobbies to insure they are kept in a neat and clean condition. Lobby glass shall be washed and cleaned as necessary. Particular attention shall be given floor and glass doors during inclement weather. LAVATORIES Day personnel shall make periodic checks of lavatories so that they are kept in a neat and clean condition. Lavatories shall be replenished with supplies. Fixtures shall be cleaned as necessary, waste cans emptied, etc. BUILDING EXTERIOR Entrance of building shall be swept clean of litter and hosed down when possible. Sidewalk shall be kept clean and free of snow and ice within the limitation of regular manpower staffing and equipment provided. Police and maintain loading and driveway areas to insure they are kept neat and clean. INTERIOR PUBLIC AREAS Interior public areas will be policed and mopped as necessary. MISCELLANEOUS Perform other duties as assigned by Building Management and Contractor.

EXHIBIT 10.7 OFFICE LEASE AGREEMENT This Lease Agreement (hereafter "the Lease") is made and entered into between Landlord and Tenant upon the terms and conditions contained herein. ARTICLE 1 FUNDAMENTAL LEASE PROVISIONS Agreement Date: June 7, 1995 Landlord: Office Court Development Ltd. Co. (hereafter "Landlord") a New Mexico General Partnership
Tenant: Syntel, Inc. - A Michigan based company (hereafter "Tenant"). ------------------------------------------------------------doing business as same ----

Description of Premises: 460 St. Michael's Drive, Building 500 (Article II & Exh. A) containing 5328 (gross square feet) Commencement Date: July 1, 1995 or on move-in (Article III) Base Term Expiration Date: June 30, 1999 (Article III) Termination: After year one, upon 30 days notice, Tenant shall be given the right to terminate the lease under the following conditions: After year one and provided that Lessee is not in default of said lease and provided the State of New Mexico has terminated their contract, Lessee may terminate with the following penalties: Year Two: 12 months rent Year Three: 9 months rent Year Four: 6 months rent Landlord shall use due diligence in releasing the premises, and rent penalties are to be mitigated by a direct reduction of any proceeds of leasing the space. Tenant shall be responsible for all costs of releasing. Date Rent Obligation Begins: July 1 or date of move in, or when Landlord substantially completes the tenant improvements, whichever is later. Landlord shall complete improvements within 30 days of signing of lease. (Article IV) Base Term: Four (4) years. (Article III) Option Periods (if any). Up to two (2) four (4) year options with 120 day notice to exercise options. Upon availability of more space in Phase 2, (see Exhibit C) Tenant shall have the option to expand to 700 s.f. or as much as 6000 s.f... landlord shall update Lessee monthly on additional available space and Lessee shall have two weeks to respond. Base Rent: Four hundred ten thousand two hundred fifty six and no/100 Dollars ($410,256.00) payable in equal monthly installments of Eight thousand five hundred forty seven and no 100 Dollars ($8547.00) during each year of base term (hereafter "Monthly Base Rent"). (Article IV) Annual Percentage Increase is C.P.I. with a cap of 5% (Article IV) See 4.2 Address for Notices and Payments: To Landlord: 1660 Old Pecos Trail, Suite A., Santa Fe, N.M. 87505 (Article XVIII) To Tenant: To the premises and:

5700 Crooks Road, Suite 301 Troy, Michigan 48098

Security Deposit: See 4.4 (Article IV) Use of Premises: general office use (Article V) The above Fundamental Lease Provisions include only some of the provisions of this Lease. This summary is not intended to replace or amend these other Provisions. References in this Article I to other Articles are for convenience and designate some of the other Articles where references to the particular Fundamental Lease Provisions appear. Each reference in this Lease to any of the Fundamental Lease Provisions contained in this Article I shall be construed to incorporate all of the terms provided under each such Fundamental Lease Provision. In the event of any conflict between any Fundamental Lease Provision and the balance of the Lease, the latter shall control. AN INDEX TO THE LEASE TERM HEADINGS IS AT THE END OF THIS LEASE. ARTICLE II PREMISES 2.1 DESCRIPTION. Landlord, for and in consideration of the covenants and agreements of Tenant herein contained and upon and subject to terms, conditions and provisions herein set forth, hereby leases to Tenant, and Tenant leases and

accepts, the Premises described in Article I hereof as the Description of Premises and as described on Exhibit A, which is attached hereto and incorporated herein by reference upon which the Landlord has constructed the Building (as defined below), (hereafter "the Premises"). 2.2 CONDITION OF PREMISES. Tenant's taking possession of the Premises shall be conclusive evidence against Tenant that the Premises were then in good order and satisfactory condition, with the exception of punch list items which shall be given to Landlord within 30 days of possession or the Lease Commencement Date, whichever comes first, and except for latent defects. No promises of Landlord to remodel, improve, decorate or clean the Premises have been made, and no representation respecting the condition of the Premises or the Building has been made to Tenant by or on behalf of Landlord except to the extent expressly set forth herein or in Exhibit "A" attached to this Lease. 2.3 DEFINITIONS. A. The term "Building" shall mean the entire development, including any and all structures, (whether reflected in Exhibit "A" or hereafter incorporated in the compound during the base term of this Lease or any extension thereof), parking facilities, common facilities and the like built on the property of the development, as the same may from time to time be changed or reduced, or as the same from time to time may be increased by the addition of other land, together with structures and the like thereon which may from time to time be included by Landlord in its sole discretion in the development, provided that such rights reserved to the Landlord shall not be exercised in a manner which materially and adversely affects tenant's use and enjoyment of the premises or access to the premises. B. The term "Common Areas" shall mean all areas within the exterior boundaries of the Building which are now or hereafter made available for the general use, convenience and benefit of Landlord and other persons entitled to occupy any part of the Building, as shown on site plan (Exhibit C) including, but not limited to parking areas, driveways, entrances and exits, ramps, landscaped areas, exterior stairways, service roads, sidewalks and other areas constructed or to be constructed for use in common by the Tenant, other tenants in the Building and their employees and business invitees, subject, however, to the terms of this Agreement and reasonable rules and regulations prescribed from time to time by the Landlord. Landlord expressly reserves the right to change, alter or amend the common areas and building areas at any time, in its reasonable discretion as long as tenants use or enjoyment of or access to the premises are not materially and adversely affected. ARTICLE III TERM 3.1 BASE TERM. The base term of this Lease and Tenant's obligation to pay rent hereunder shall commence on the date specified in Article I as the Commencement Date (hereafter "the Commencement Date") shall continue thereafter during the Base Term specified in Article I herein and shall end on the last day of the last lease year of that Base Term, as specified in Article I herein as Base Term Expiration Date, unless sooner terminated as hereinafter provided in this Lease. 3.2 LEASE YEAR. The term "lease year" shall mean the twelve (12) month period beginning on the first day immediately following the commencement date referred to in Paragraph 3.1 above and each year of the Lease thereafter measured from such commencement date. 3.3 OPTION FOR EXTENSION OF LEASE. Tenant may elect to extend this Lease for such additional periods and for such lengths as described in Article I hereof as Option Periods, beginning with the expiration of the base term. (If no periods are indicated in Article I, no options are being granted under this Lease.) Provided, however, that the said options may only be exercised if this Lease is in force and effect at the time of exercise and Tenant, on that date, shall have fully complied with all conditions and obligations contained herein subject to any applicable grace periods. In the event that Tenant desires to exercise such election the Tenant shall give the Landlord notice in writing of such election at least the number of days prior to the expiration of the base term for the first option period and at least the number of days prior to the expiration of such subsequent option term for the next succeeded Option Period, as described in Article I hereof as the Option Notice Period. The Base Rent shall be subject to increase, but not decrease, at the beginning of each option period in accordance with the provisions for paragraph 4.2 hereof. Leasing of the Premises to Tenant for each of such option periods shall be upon and subject to the terms, conditions and provisions contained in this Lease. The Base Term plus exercised Option periods shall hereafter be the Lease Term. 3.4 POSSESSION. Tenant understands that the Premises may be in the process of construction and that Landlord makes no representation or agreement that the Premises will be ready for occupancy on the Commencement Date. In the event the Premises shall not be completed and ready for occupancy on the Commencement Date. In the event the Premises shall not be completed and ready for occupancy on the Commencement Date, this Lease shall nevertheless continue in full force and effect and no liability shall arise against Landlord by reason of any such delay beyond the abatement of Base Rent until the Premises are ready for occupancy; provided, however, that there shall be no abatement of Base Rent if the Premises are not ready for occupancy because of the failure to complete the installation of special equipment, fixtures or materials ordered by Tenant. In the event of any disagreement concerning whether the Premises are ready for occupancy hereunder, the certification by Landlord's architect shall be binding upon all parties. Landlord may authorize Tenant to take possession of all or any part of the Premises prior to the Commencement Date. If Tenant does take possession pursuant to authority so given, all of the covenants and conditions of this Lease shall apply to and shall control such pre-Term occupancy. Rent for such Pre-Term occupancy shall be paid upon occupancy and on the first day of each calendar month thereafter at the rate set forth in Article IV. If the Premises are occupied for a fractional month, Rent shall be prorated on a per diem basis for such fractional month. If Landlord has not completed build out within 30 days of June 13, 1995, Tenant may terminate lease.

ARTICLE IV RENTS 4.1 BASE RENT. The Tenant shall pay the Landlord as Base Rent for the Premises during the initial term the amount specified in Article I hereof, as Base Rent (hereafter Base Rent). The rent is due on the first of each calendar month payable at Landlord's address as indicated in Article I hereof, or such other place as Landlord may designate from time to time, in equal monthly installments during each year, in advance. The obligation to pay rent shall begin on the date specified in Article I hereof as: Date Rent Obligation Begins. In the event the Tenant's obligation to pay rent does not begin on the first day of a month, then Tenant shall pay rent for the days from the date Tenant's obligation to pay rent begins to the first day of the next calendar month on a pro rata basis calculated on a thirty (30) day month. The Base Rent shall be increased as provided in Paragraph 4.2 below. All rent shall be payable in cash, in US currency and without the necessity of prior notice except as specifically provided herein, and without abatement, deduction, counterclaim or set-off except as otherwise permitted herein. -2-

4.2 RENT ADJUSTMENTS PER CONSUMER PRICE INDEX PROCEDURE. The Minimum Rent shall be subject to increase, but not decrease, on that particular anniversary of the Commencement Date and on the subsequent anniversaries of the Commencement Date thereafter during the term of this Lease and any option periods thereunder indicated in Article I as Rent Adjustment Dates in accordance with the following provisions (each such date of adjustment being thereafter referred to as an "Adjustment Date" and the initial period and succeeding periods indicated in Article II as Rent Adjustment Periods being hereafter individually refered to as an "Adjustment Period"): A. The Minimum Rent may be increased on and as of each Adjustment Date in accordance with and based on the computation prescribed by the Consumer Price Index Procedure set forth on subparagraph B, below. If utilization of such procedure for any Adjustment period does not produce an amount of Minimum Rent greater than the amount of Minimum Rent greater than the amount of Minimum Rent for the immediately preceding Adjustment Period, the amount of Minimum Rent then in effect shall not be decreased: B. Consumer Price Index Procedure. The basis for computing each adjustment in rent shall be the Consumer Price Index for all Urban Consumers, All Items, U.S. City Average, utilizing a base of 1982-1984=100, as published for each calendar month by the United States Department of Labor, Bureau of Labor Statistics, or by its successor agency (hereafter "the Index" and "the Agency", respectively); provided that if during the term of this Lease a later base year replaces the base year of 1982-1984=100 then such later base year shall be used in determining the Index. If the Index is changed so that the base year differs from that in effect on the Commencement Date, the Index shall be converted in accordance with the conversion factor published by the Agency, so that the two indices compared for the purpose of computing any adjustment to the Minimum Rent shall always utilize the same base year. If the Index is discontinued or materially revised during the term of this Lease or any renewal hereof, subsequent adjustments to the Minimum Rent shall be computed base on any replacement index published by the Agency or, if no replacement index is published, based on any index published by any nationally recognized governmental or non-governmental agency or entity which generally measures changes in consumer purchasing power of the U.S. dollar on a national or national urban basis, as selected by Landlord in its discretion. On and as of each Adjustment Date the amount of Minimum Rent hereunder shall be increased (i) for and during the first Adjustment Period, by the amount of the percentage increase, if any, in the Index published for the last calendar month of the first Adjustment Period under this Lease over and above the Index published for the calendar month immediately preceding the Commencement Data, and (ii) for and during succeeding Adjustment Periods by the percentage increase, if any, in the Index published for the last calendar month of the subsequent Adjustment period over and above the Index published for the calendar month immediately preceding the Commencement Date of that subsequent Adjustment Period which shall have ended just prior to the Adjustment Date. Assume the index for the last calendar month of the adjustment period is 150 and the index for the month before the commencement date 125. The adjustment would be determined by dividing 125 into 25 (which is XXXXXXXXXXXXXXXXXXX In the event that the Index figures necessary for computation of an adjustment of the Minimum Rent are not available on any Adjustment Date. Tenant shall continue to pay the Minimum Rent then in effect until such Index figures become available, (at which time such computation shall be made). Immediately following such computation and if such computation results in an amount of Minimum Rent on and after such Adjustment Date greater than the preceding Minimum Rent, then within ten (10) days of written demand by Landlord, Tenant shall pay to Landlord the amount of additional rent, if any, which theretofore would have become due and payable if the necessary Index figures had been available on such Adjustment Date. Once an adjustment has been made, that amount shall be the Minimum Rent for the next Adjustment Period, subject to increases in the amount of Percentage Rent due, and shall be the amount upon which the adjustment for the next adjustment period shall be based. There shall be a 5% cap on any yearly adjustment. 4.3 UTILITIES. Tenant shall pay during the Lease Term for all separately metered utilities, such as gas, electrical power, and telephone, together with any taxes thereon. It shall be Tenant's responsibility to ensure that these utilities have been properly billed and paid. Landlord shall be responsible for water and sewer service and shall pay for same, as provided in Paragraph 7.2 below. 4.4 SECURITY DEPOSIT. In lieu of a Security Deposit, Tenant agrees to provide Landlord with complete financials within 5 days of signing of the lease. Current financial shall be provided to Landlord annually by the anniversary date. 4.5 CHARGE ON LATE PAYMENT. Because the late payment of any rent due hereunder results in extraordinary expenses, Landlord reserves the right to charge a late payment charge equal to ten percent (10%) of Tenant's monthly rent if any rent is not paid by the tenth (10th) day of any month of the Term. 4.6 HOLDING OVER. Tenant shall pay Landlord for each day Tenant retains possession of the Premises or any part thereof after the termination of this Lease for any reason, an amount which is 125% of the amount of Rent per day, based on the annual rate of the Monthly Base Rent in effect at the time of such termination, and any applicable additional Rent for such day of the period in which such retention of possession occurs, and Tenant shall also pay all damages, consequential as well as direct, sustained by Landlord by reason of such retention. Nothing in this Section contained, however, shall be construed or operate as a waiver of Landlord's right of re-entry or any other right or remedy of Landlord.

ARTICLE V USE OF PREMISES 5.1 TENANT USE. The Premises shall be used and occupied by Tenant solely as for the purposes indicated in Article I, hereof and for no other purpose without Landlord's written consent, which consent shall not be unreasonably withheld. Tenant -3-

shall comply with all rules, regulations and laws of any governmental authority with respect to Tenant's specific use and occupancy. The premises shall not be used in any manner which creates a public or private nuisance or unreasonably interferes with the rights of Landlord or other tenants in the use of the Building. Tenant may not display or allow aerials, antennae, carts, portable signs, or any other objects to be stored or to remain outside the defined exterior walls or roof and permanent doorways of the Premises without first obtaining, in each instance, the written consent of Landlord, which consent shall not be unreasonably withheld. Any item so installed without such written consent shall be subject to removal by landlord without notice at any time. This Lease does not grant any rights to light or air over or above the real property of Landlord. Landlord specifically reserves to itself the use of any roofs, the exterior portions of the Premises, all rights to the land and improvements below the improved floor level of the Premises and to such areas within the Premises required for installation of utility lines and other installations required to serve any occupants of the Buildings and to maintain and repair same. 5.2 SIGNS. Tenant shall not place on any exterior door, wall or window of the Premises any sign or advertising matter which is not within the building standard for signs and without first obtaining the Landlord's written approval and consent which approval shall not be unreasonably withheld. Tenant agrees to maintain such signs or advertising matter as approved by Landlord in good condition and repair. All signs shall comply with applicable ordinances or other governmental restrictions and the determination of such requirements and the prompt compliance therewith shall be the responsibility of the Tenant. 5.3 FIRE EXTINGUISHERS. Landlord shall provide new fire extinguishers to the Premises at the Commencement Date. Tenant will be responsible for all servicing of said fire extinguishers and replacement during the Lease Term. If Tenant fails to comply with this provision Landlord may provide this service at Tenant's expense plus an additional charge of fifty dollars, which sums shall be additional rent due hereunder at the beginning of the next month following notice by Landlord to Tenant of the incurring of said expenditure. 5.4 QUIET ENJOYMENT. Landlord agrees that, if the rent is being paid in the manner and at the time prescribed and the covenants and obligations of Tenant being all and singular kept, fulfilled and performed, Tenant shall lawfully and peaceably have, hold, possess, use, occupy and enjoy the Premises so long as this Lease remains in force, without hindrance, disturbance or molestation from Landlord, subject to the specific provisions of this Lease. 5.5 RULES AND REGULATIONS. Tenant agrees to observe and not to interfere with the rights reserved to Landlord contained in Paragraph 7.3 hereof and elsewhere in this Lease, and agrees, for itself, its employees, agents, invitees, licensees and contractors, to comply with the rules and regulations set forth in Exhibit B attached to this Lease, and such other rules and regulations as shall be reasonably adopted by Landlord from time to time. 5.6 SURRENDER OF PREMISES. At the termination of the Lease Term or any renewal term, the Tenant agrees to deliver the premises in the same condition as received by it on the Commencement Date, (subject, to the removals hereinafter required) reasonable wear and tear and less by casualty excepted, neat and broom clean, and shall surrender all keys for the premises to the Landlord at the place then fixed for the payment of rent and shall inform Landlord of all combinations of locks, safes and vaults, if any, in the premises. If Tenant is not then in default hereunder, Tenant, during the last thirty (30) days of such term, shall remove all its trade fixtures, and, to the extent required by the Landlord by written notice, shall remove any other installations, alterations or improvements made by Tenant provided herein, and shall repair any damage to the premises caused thereby. Tenant's obligation to observe or perform this covenant shall survive the expiration or other termination of the lease term. Any items remaining in the premises on the termination date of this Lease shall be deemed abandoned for all purposes and shall become the property of the Landlord and the latter may dispose of the same without liability of any type or nature. ARTICLE VI CONSTRUCTION, MAINTENANCE AND REPAIR 6.1 ALTERATIONS AND ADDITIONS. Tenant shall not, without Landlord's prior written consent, which shall not be unreasonably withheld, make any alterations, improvements, additions, or utility installations in, on or about the Premises, including, but not limited to floor coverings, window coverings, air lines, power panels, electrical distribution systems, lighting fixtures, space heaters, air conditioning, plumbing, and fencing. Tenant shall promptly pay all costs and expenses associated with such alterations, improvements, additions or utility installations, including, but not limited to, all costs and expenses associated with compliance with any governmental statutes, ordinances, rules or regulations required solely by Tenant's alteration, improvement, addition or utility installation, including all handicapped access requirements and requirements under the Americans With Disabilities Act 42 U.S.C. Sections 12181,et.seq. Landlord may require Tenant to provide, at Tenant's sole cost and expense, a lien and completion bond in an amount equal to one and one-half (1 1/2) times the estimated cost of such alterations, improvements, additions or utility installations to insure Landlord against any liability for mechanic's and materialmen's liens and to insure completion of the work. Should Tenant make any alterations, improvements, additions or utility installations without the prior approval of Landlord, Landlord may require that Tenant remove any or all of the same. Any alterations, improvements, additions or utility installations in, or about the Premises that Tenant shall desire to make and which require the prior written consent of the Landlord shall be presented to Landlord in written form, with proposed detailed plans. If Landlord shall give its written consent, its consent shall be deemed conditioned upon Tenant obtaining all necessary permits to do so from appropriate governmental

agencies, the furnishing of copies thereof to Landlord prior to the commencement of the work and the compliance by Tenant of all conditions of such plan approval and permits in a prompt and expeditious manner. Tenant shall perform all such work in a first class, workmanlike manner and in compliance with all applicable governmental statutes, ordinances, rules and regulations. Tenant shall pay, when due, all claims for labor, and/or equipment and materials furnished or alleged to have been furnished to or for Tenant at or for its use in the Premises whether or not such claims may be secured by any mechanics' or materialmen's lien against the Premises or any interest therein. Tenant shall give Landlord not less than fifteen (15) days' notice prior to the commencement of any work in the Premises, and Landlord shall have the right to post notices of non-responsibility in or on the Premises as provided by law. If Tenant shall, in good faith, contest the validity of any such lien, claim or demand, then Tenant shall, at its sole expense, defend itself and Landlord against the same and shall pay and satisfy any such adverse judgment that may be rendered thereon before the enforcement thereof against the Landlord or the Premises, upon the condition that if Landlord shall so require, Tenant shall furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to one and one-half (1 1/2) times the amount of such contested lien claim or demand indemnifying Landlord against liability for the same and holding the Premises free from the effect of such lien or claim. In addition, Landlord may require Tenant to pay Landlord's -4-

attorneys' fees and costs for Landlord's appearing in and in participating in such action if Landlord shall decide it is to its best interest to so appear and participate therein through its own counsel. 6.2 TENANT'S DUTY TO REPAIR. During the term of this Lease and any extensions thereof, Tenant shall: A. Keep and maintain in good order, condition and repair (including any replacement and restoration as is required for the purpose) the following: 1) All lights within the Premises, including all exit signs, emergency lighting and all light bulbs and ballasts; 2) All signage installed by Tenant; 3) All fixtures, improvements, alterations, additions, utility installations and personal property, installed by Tenant; 4) All stopped up or impeded plumbing within the Premises or from the Premises to the main sewer line to the extent cause by Tenant; 5) All flooring and carpet within the Premises, including any damage to carpet caused by a lack of protective mats under desk chairs or equipment or any other abnormal puncture or wearing of carpet; 6) All damage to the Premises or the Building caused by the negligence or intentional acts of Tenant, its employees, agents, invitees, licensees or contractors, or strike involving the Tenant or its employees. Any charges to furnish service to the Premises made by any utility company or municipality shall be paid by the Tenant within the time limit specified by each utility company. Tenant shall also be responsible for repairing all damage to the Premises caused by or during the work described in this paragraph. If Tenant refuses or neglects to commence and to complete repairs promptly and adequately, Landlord may, but shall not be required to, make and complete said repairs and Tenant shall pay the cost thereof to Landlord as additional rent on demand, plus an overhead and service fee of fifteen percent (15%) of the amount paid by Landlord not withstanding the forgoing, Tenant shall not be obligated to make any of the above repairs to the extent such repairs are covered by Landlord's insurance. B. Tenant shall keep and maintain the Premises in a clean, sanitary and safe condition, provide all janitorial service, garbage removal from the Premises and window cleaning in accordance with all uses of the premises, directions, rules and regulations of the proper officials of the governmental agencies having jurisdiction, at the sole cost and expense of tenant, and Tenant shall comply with all requirements of law, by statute, ordinance or otherwise, affecting the Tenant's specific use of the Premises and all appurtenances thereto. 6.3 LANDLORD'S DUTY TO REPAIR. Landlord shall keep and maintain in good order, condition and repair (including any replacement restoration as is required for that purpose, all portions of the Premises, the Building or the Common Areas not otherwise required by Tenant to be repaired under Paragraph 6.2 above, except that Landlord shall not be called upon to make any such repairs occasioned by the act or neglect of Tenant, its agents, employees, invitees, licesees or contractors, unless covered by Landlord's insurance. Landlord shall not be called upon to make any other improvements or repairs of any kind upon the leased Premises and appurtenances except as otherwise provide in the Lease or unless caused by the act or neglect of Landlord, its agents or contractors. Any of the foregoing repairs required to be made by reason of the negligence of Tenant, its agents, employees, invitees, licensees or contractors as above described, shall be the responsibility of Tenant notwithstanding the provisions above contained in this paragraph. Premises, will not in any matter cut or drive nails into or otherwise mutilate the roof of the Premises and will be responsible for any damage caused to the roof by any acts of the Tenant, its agents, servants, employees, or contractors of any type or nature. 6.4 ROOF. Tenant will not cause or permit accumulation of any debris or extraneous matter on the roof of the Premises, will not in any matter cut or drive nails into or otherwise mutilate the roof of the Premises and will be responsible for any damage caused to the roof by any acts of the Tenant, its agents, servants, employees, or contractors of any type or nature. Tenant may not put compressors, antennae, microwave, television or other disks, or other such attachments on the roof without Landlord's prior written consent, which consent may withheld within Landlord's discretion. 6.5 TRADE FIXTURES. At the expiration of this Lease or renewal thereof, Tenant shall have the right and obligation to promptly remove any trade fixtures installed by Tenant on the Premises, and shall repair any damage to the Premises caused by such removal. 6.6 NON TRADE FIXTURES. All installations, additions, non trade fixtures and improvements, including floor treatments, whether placed there by Tenant or Landlord, except movable furniture and equipment belonging to Tenant, which Tenant shall promptly remove, shall be Landlord's property and shall remain upon the Premises upon expiration of the Term or sooner termination of this Lease or Tenant's possession hereunder, all without compensation, allowance or credit to Tenant. ARTICLE VII LANDLORD'S RIGHTS AND RESPONSIBILITIES AS TO THE OFFICE BUILDING AND PREMISES 7.1 CONTROL OF COMMON AREAS. All Common Areas shall at all times be subject to the exclusive control and management of Landlord, and Landlord shall have the right from time to time to establish, modify and enforce reasonable rules and regulations with respect to use of all such Common Areas in a non-discriminatory manner. Landlord shall have the right to operate and maintain the same in such manner as Landlord, in its sole discretion, shall determine from time to time, including without limitation the right to employ all personnel and to make all rules and regulations pertaining to and necessary for the proper operation and maintenance of said Common Areas. Landlord shall have the exclusive right at any and all times to close any portion of the Common Areas for the purpose of making repairs, changes or additions thereto and may change the size, area or arrangement of the Building or parking areas or the lighting thereof within or adjacent to the existing areas and may enter into agreements with adjacent owners for cross easements for parking and ingress and egress, provided that such activities shall not unreasonably interfere with Tenant's operations. In the event that the lighting controls, ceiling or roof access for the Common Areas shall

be located in the Premises, then Landlord in such event shall have the right to enter the Premises for the purpose of adjusting or otherwise dealing with the said controls and/or access as required. 7.2 SERVICES PROVIDED BY LANDLORD. Landlord, at all times during the term shall furnish the following services at Landlord's expense: (a) Air conditioning and heating units and electric current to the Premises, which shall be properly hooked up to utility services, and which shall be operable by Tenant. Tenant promptly shall pay directly to the utility companies all charges -5-

incurred in connection with the use any of any such unites or service. Tenant agrees that its use of electric current will not exceed the capacity of the feeders to the Building or the risers or wiring installed thereon. Tenant may not, at any time, reduce the heating to the Premises to create any risk that the pipes in and around the Premises would freeze. (b) Domestic water and refuse service in common with other tenants. In the event that Tenant makes greater use of water service or refuse disposal service than the usual and ordinary office use of such service, then Landlord may bill Tenant for the additional cost of such increased use. Failure by Tenant to promptly pay Landlord's proper charges for excess water or refuse services shall give Landlord, upon not less than ten (10) days notice, the right, in addition to any other remedies available to Landlord, to discontinue furnishing the services, and no such discontinuance shall be deemed an eviction or disturbance of Tenant's use of the Premises or render Landlord liable for damages or relieve Tenant from performance of Tenant's obligations under this Lease. Tenant agrees that Landlord and its employees and agents shall not be liable in damages, by abatement of Rent or otherwise, unless the premises are unfit for their intended purpose, for failure to furnish or for delay in furnishing any service or performing any other term of this Lease when such failure or delay is occasioned, in whole or in part, by repairs, renewals or improvements, or by any cause beyond the reasonable control of Landlord. 7.3 RIGHTS RESERVED TO LANDLORD. Landlord reserves the following rights, exercisable without notice and without any liability to Tenant whatsoever, and without effecting any eviction or disturbance of Tenant's use or possession, or giving rise to any claim for set-off or abatement of Rent, or affecting any of Tenant's obligations under this Lease: -6-

(a) To change the name or street address of the Building. (b) To install and maintain signs on the exterior and interior of the Building. (c) To prescribe the location and style of the suite number and identification sign or lettering for the Premises, but not to change the mailing address. (d) To retain at all times, and to use in appropriate instances, pass keys to the Premises. (e) To grant to any one the right to conduct any business or render any service in the Building or Project, whether or not it is the same as or similar to the use expressly permitted to Tenant by Article V. (f) To exhibit the Premises at reasonable hours, and to decorate, remodel, repair, alter or otherwise prepare the Premises for re-occupancy at any time after Tenant vacates or abandons the Premises. (g) Provided that reasonable access to the Premises shall be maintained and the business of Tenant shall not be interfered with materially and unreasonably, to make repairs and alterations, structural or otherwise, in or to the Building, including the Premises, and any part of the Project, and may for such purposes erect scaffolding and other structures reasonably required, and during such operations may enter upon the Premises and interrupt or temporarily suspend any services or facilities agreed to be furnished by Landlord, all without the same causing an eviction of Tenant in whole or in part, and without abatement of Rent by reason of loss or interruption of the business of Tenant or otherwise. (h) Landlord reserves to itself the right, from time to time, to grant such easements, rights and dedications that Landlord deems necessary or desirable, and to cause the recordation of parcel maps and covenants and restrictions, so long as such easements, rights, dedications, maps, covenants and restrictions do not unreasonably interfere with the use of the Premises by Tenant. Tenant shall sign any of the aforementioned documents upon request of Landlord and failure to do so shall constitute a material breach of this Lease. 7.4 LANDLORD'S RIGHT OF ENTRY. Landlord reserves the right at all reasonable times during the term of this Lease for Landlord or Landlord's agents to enter the Premises for the purpose of inspecting and examining the same, and to show the same to prospective purchasers or tenants, and to make such repairs, alterations, improvements or additions as Landlord reasonably may deem necessary or desirable. During the one hundred twenty (120) days prior to the expiration of the term of this Lease or any renewal term, Landlord may exhibit the Premises to prospective tenants or purchasers, and place upon the Premises the usual notices advertising the Premises for sale or lease, as the case may be, which notices Tenant shall permit to remain thereon without molestation. If Tenant shall not be personally present to open and permit an entry into said Premises and Landlord has tried to contact Tenant, Landlord, or Landlord's agent, may at any time, when for any reason an entry therein shall be necessary or permissible, enter the same to the extent permitted by law, by a master key, or may forcibly enter the same, without rendering Landlord or such agents liable therefor, and without in any manner affecting the obligations and covenants of this Lease. If Landlord was unable to contact Tenant, Landlord shall secure the Premises until Tenant or its agent arrives. Nothing herein contained, however, shall be deemed or construed to impose upon Landlord any obligation, responsibility or liability whatsoever for the care, maintenance or repair of the building or any part thereof, except as otherwise herein specifically provided. In order to secure Landlord's right of entry hereunder, Tenant agrees to make no changes in the locks of the Premises and shall not re-key the present locks without Landlord's prior written consent. 7.5 SECURITY MEASURES. Tenant hereby acknowledges that the rental payable to Landlord hereunder does not include the cost of guard service or any other security measures, and that Landlord shall have no obligation whatsoever to provide same. Tenant assumes all responsibility for the protection of Tenant, its agents and invitees from acts of third parties. ARTICLE VIII INDEMNITY AND INSURANCE 8.1 INDEMNIFICATION. Except as provided in the section entitled "Waiver of Subrogation" each party agrees to exonerate, hold harmless, protect and indemnify the other party from and against any and all losses, damages, claims, suits or actions, judgements and costs (including reasonable attorney's fees) which may arise or grow out of injury or attributable to the negligence or willful acts or omissions of the indemnifying party, its employees or agents. A. The preparation or approval of maps, drawings, opinions, reports, surveys, change order, designs or specifications by the Landlord, or the agents or employees of the Landlord; or B. The giving of or the failure to give directions or instructions by the Landlord or the agents or employees of the Landlord, where such giving or failure to give directions or instructions is the primary cause of bodily injury to persons or damage to property. 8.2 NOTICE OF CLAIM OR SUIT. Tenant agrees to promptly notify Landlord of any known claim, action, proceeding or suit instituted or threatened against the Landlord. In the event Landlord is made a party to any action for damages which Tenant has herewith indemnified Landlord against, then Tenant shall pay all costs and shall provide counsel in such litigation or shall pay, at Landlord's option, the reasonable attorney fees and costs incurred in connection with said litigation by Landlord.

8.3 TENANT'S INSURANCE. During the Lease term and any renewals thereof Tenant agrees to maintain, at its expense, at all times the following insurance coverages: A. Public liability insurance with the broad form comprehensive general liability endorsement including contractual liability insurance coverages and with such increases in limits as Landlord may, from time to time reasonably require, property protecting and indemnifying Landlord and Landlord's Agent in an amount not less than $1,000,000.00 combined single -7-

limit for injuries or damages to persons, or such greater limits as the Landlord may reasonably require during the term of this Lease. B. "All risk" physical damage insurance including, fire, sprinkler leakage, vandalism and extended coverage for the full replacement cost of all additions, improvements and alterations to the Premises (except to the extent the same are part of building standard work performed by Landlord pursuant to Exhibit "A," if any, attached hereto) and of all office furniture, trade fixtures, office equipment, merchandise and all other items of Tenant's property on the Premises; 8.4 TENANT'S INSURANCE POLICIES. Insurance required hereunder shall be in companies holding a "General Policyholders Rating" of at least B plus, or such other rating as may be required by a mortgage lender having a lien on the Premises, as set forth in the most current issue of "Best's Insurance Guide." Tenant shall deliver to Landlord prior to occupancy an insurance binder on the Premises for the coverages provided herein and shall deliver to Landlord or Landlord's agent prior to occupancy. Tenant shall, thereafter, promptly deliver to Landlord true copies of all such policies of insurance as required by this Article, certified by the insurer. No such policy shall be cancelable or subject to reduction of coverage or other modification except after at least thirty (30) days' prior written notice to Landlord. Tenant shall, at least thirty (30) days prior to the expiration of such policies, furnish Landlord with renewals or renewal "binders" thereof. Tenant shall not do or permit to be done anything which shall invalidate any of such insurance policies. Insurance required under Paragraph 8.3 A, D and E shall name Landlord (and Landlord's lender, if requested by Landlord) and Landlord's Agent as an additional named insured. 8.5 FAILURE TO PROCURE INSURANCE. In the event Tenant shall fail to procure insurance required under this Article and fail to maintain the same in force continuously during the term, Landlord may procure the same and Tenant shall immediately reimburse Landlord for such premium expense, plus a service charge of fifteen percent (15%) of the amount paid by Landlord, which amount shall be payable as additional rent hereunder upon demand by Landlord. 8.6 INCREASE IN FIRE INSURANCE PREMIUM. Tenant agrees not to keep upon the Premises any articles or goods which may be prohibited by the standard form of fire insurance policy. It is agreed between the parties that in the event the insurance rates applicable to fire and extended coverage insurance covering the Premises shall be increased by reason of any use of the Premises made by the Tenant, then Tenant shall pay to Landlord such increase in insurance as shall be occasioned by said use, as additional rent hereunder, due upon demand by Landlord. Landlord acknowledges that Tenant's use will not cause an increase. 8.7 PROPERTY OF TENANT. Tenant agrees that all property owned by it, on or about the Premises shall be maintained at the sole risk and hazard of the Tenant. Landlord shall not be liable or responsible for any loss or damage to Tenant, or anyone claiming under or through Tenant, or otherwise, whether caused by or resulting from a peril required to be insured hereunder, or from water, steam, gas, leakage, plumbing, electricity or electrical apparatus, pipe or apparatus of any kind, the elements or other similar or dissimilar causes, and whether or not originating in the original Premises or elsewhere, provided such damage or loss is not the result of negligence or an intentional or willful act of Landlord, its agents, employees or contractors. 8.8 WAIVER OF SUBROGATION. Landlord shall obtain insurance for the Building of which the Premises are a part, and Tenant shall insure or self-insure as provided in the Lease. Landlord and Tenant, for themselves and their respective insurers, agree to and do hereby release each other of and from any and all claims, demands, actions and causes of action that each may have claim to have against the other for loss or damage to property, both real and personal, caused by or resulting from casualties customarily insurable, notwithstanding that any such loss or damage may be due to or result from the negligence of either of the parties hereto or their respective employees or agents. ARTICLE IX DESTRUCTION OR DAMAGED PREMISES 9.1 PARTIAL DESTRUCTION. In the event the Premises becomes partially destroyed by fire or other casualty to the extent that the cost of restoration or repair is less than one-third (1/3) of the total reasonable costs of replacement of all improvements included in the Premises (as reasonably estimated by Landlord), and premises cannot be repaired within 120 days, then either tenant or Landlord shall have the option (which option shall be exercised in writing within ten (10) days of the date of loss) to terminate this Lease and all further obligations of either party hereunder or, within forty-five (45) days of such loss or damage, to commence repairs of the damage and restore that part of the Premises owned by the Landlord. If either party elects to terminate this Lease, all obligations hereunder, including rent, shall cease as of the date of partial destruction, but shall not affect obligations prior to partial destruction. If Landlord elects to repair, the rental hereunder shall abate as hereinafter provided until such time as that part of the Premises are restored to substantially their previous condition. If the damage or destruction of such improvements on said Premises is of such nature that the same can, allowing for all reasonable contingencies, be repaired or restored to substantially its former condition within one hundred twenty (120) days after such loss or damage, Landlord shall promptly proceed to have said repairs made and said Premises so restored at its own expense, and this Lease shall remain in full force and effect subject only to a proportionate reduction of the Minimum Rent during the period prior to such restoration based upon the percentage of that portion of the original Premises damaged or destroyed (as reasonably determined by the Landlord). Tenant shall be responsible, at its own expense to do such work as may be necessary to place that portion of the Premises not so damaged or destroyed in a condition to permit Tenant to continue to carry on the approved use as of the date of damage or destruction and Tenant shall continue that use to the extent possible. Tenant shall not be entitled to any additional abatement or deduction of rent from any business interruption caused by such damage or destruction or by the necessity for Tenant to do work on the portion of the Premises not damaged. 9.2 TOTAL OR EXTENSIVE DAMAGE. N/A

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9.3 NO COMPENSATION TO TENANT. In the event of Partial or Total Damage or Destruction as provided above Tenant shall not be entitled to obtain a share in any fire or extended coverage insurance proceeds on property owned by Landlord in any manner, but all such proceeds shall be payable to Landlord or Landlord's mortgagee as they shall agree between them, provided Landlord shall not be relieved of its obligation to repair the premises as set forth in this Article. ARTICLE X EMINENT DOMAIN 10.1 DEFINITIONS. For purposes of this paragraph, the following terms shall have the following meanings: A. A "taking" shall mean taking by eminent domain which is either permanent or for a duration of more than three (3) months; B. "Substantially all the Premises" shall mean a taking, or a sale under threat of eminent domain, of such portion of the Premises or a restriction placed on the Premises by other governmental actions such that the portion not so taken or sold or affected is not reasonably usable by the Tenant for the uses permitted by this Lease as of the date of taking; and C. "Date of taking" shall mean the date legal title to, or the right to possess, the Premises or substantially all the Premises is vested in the condemning authority. 10.2 TOTAL OR SUBSTANTIAL TAKING. If all or substantially all the Premises are taken or sold or affected under threat of eminent domain or other governmental action during the term of this Lease or any renewal thereof, this Lease will terminate on the date of taking without further liability of Landlord to Tenant under the Lease and accrual of rent hereunder shall cease on the date of taking. Any prepaid rental or security deposit shall be rebated to Tenant within thirty (30) days from Landlord's notice of election provided Tenant is otherwise in compliance with the terms of this Lease. 10.3 PARTIAL TAKING. If less than substantially all the Premises is taken or sold under threat of eminent domain or other governmental action during the term of this Lease or any renewal hereof, this Lease shall nonetheless continue in force and effect except as to the portion of the Premises so taken or sold, and the amount of Base Rent payable hereunder from and after the date of such partial taking shall be reduced by the percentage of that portion of the original Premises covered by this Lease which was so partially taken or sold (as reasonably determined by Landlord). Tenant shall be responsible, at its own expense, to do such work as may be necessary to place that portion of the Premises not so partially taken or sold in a condition to permit Tenant to continue to carry on the approved use as of the date of taking. Tenant shall not be entitled to any additional abatement or deduction of rent for any business interruption caused by such partial taking or sale or by the necessity for Tenant to do work on the portion of the Premises not so partially taken or sold. 10.4 NOTICE OF TENANT. If and when Landlord learns of a threat of a taking or partial taking, Landlord will immediately notify Tenant of such threat. 10.5 NO COMPENSATION TO TENANT. In the event of any taking or partial taking during the term of this Lease or any renewal thereof, Tenant shall not be entitled to obtain or share in any condemnation award or proceeds of sale under threat of condemnation, whether or not such taking results in a full or partial termination of this Lease or the leasehold estate created hereunder except moving expenses, loss of business and any other award which will not diminish award payable to the Landlord. ARTICLE XI COMPLIANCE WITH HAZARDOUS MATERIALS LAW 11.1 HAZARDOUS MATERIALS. Tenant and Landlord shall not (either with or without negligence) cause or permit the escape, disposal or release of any biologically or chemically active or other hazardous substances or materials on or about the Premises. Tenant and Landlord shall not allow the storage or use of such substance or materials in any manner not sanctioned by law or by the highest standards prevailing in the industry for the storage and use of such substances or materials, nor allow to be brought into the Premises, any such materials or substances except to use in the ordinary course of Tenant's or Landlord's business. Without limitation, hazardous substances and materials shall include those described in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended 42 U.S.C. Section 9601 et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901 et seq., any applicable state or local laws and the regulations adopted under these acts. If any lender or governmental agency shall ever require testing to ascertain whether or not there has been any escape, disposal or release of hazardous substances or materials, then the reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand as additional rent if such requirement applies to the Premises. In addition, Tenant shall execute affidavits, representations and the like from time to time at Landlord's request concerning Tenant's best knowledge and belief regarding the presence, escape, disposal or release of hazardous substances or materials on the Premises. In all event, Tenant shall indemnify Landlord in the manner elsewhere provided in this Lease form any release of hazardous substances or materials on the Premises occurring while Tenant is in possession,or elsewhere if caused by Tenant or persons acting under Tenant. Landlord shall likewise indemnify Tenant of same. The within covenants shall survive the expiration or any earlier termination of the term of this Lease. -9-

ARTICLE XII TRANSFERS OF INTEREST 12.1 RESTRICTION ON TRANSFER. It is agreed that Tenant shall not have the right to sublease, assign, transfer, mortgage or encumber any part of Tenant's interest in this Lease without the prior written approval of Landlord, which said approval shall not be unreasonably withheld. Landlord shall consider factors including the proposed use, parking requirements and financial strength of the sublessee or assignee in determining whether to approve a sublease or assignment. Any attempted or purported change of Tenant's interest without Landlord's prior written consent shall be void and shall confer no rights upon any third party. Nothing herein contained shall relieve Tenant or any Guarantor from its' convenants and obligations under this Lease. Tenant agrees to reimburse Landlord for Landlord's reasonable attorneys' fees, costs and expenses incurred in conjunction with the processing and documentation of any such requested change of Tenant's interest. 12.2 FORM OF TRANSFER. Each change of Tenant's interest to which there has been consent shall be by an instrument in writing in form reasonably satisfactory to Landlord, and shall be executed by the transferor, assignor, sublessor, licensor, concessionaire, hypothecator or mortgagor and the transferee, assignee, sublessee, licensee, concessionee or mortgagee shall agree in writing for the benefit of the Landlord herein to assume, to be bound by, and to perform the terms, convenants and conditions of this Lease to be done, kept and performed by Tenant, including the payment of all amounts due or to become due under this Lease directly to Landlord. One executed copy of such written instrument shall be delivered to Landlord. Failure to first obtain in writing Landlord's consent or failure to comply with the provisions of this Article shall operate to prevent any such change of Tenant's interest from becoming effective. Consent by Landlord to one change of Tenant's interest shall constitute a waiver of Landlord's right to consent to subsequent changes of Tenant's interest. 12.3 RENT UPON TRANSFER. N/A 12.4 TRANSFER OF STOCK INTEREST. N/A 12.5 BANKRUPTCY. Neither this Lease, not any interest therein, nor any estate created hereby, shall pass to any trustee or receiver in bankruptcy, or to any other receiver or assignee for the benefit of creditors or otherwise by operation of law. In the event of bankruptcy or assignment for the benefit of creditors, Landlord shall be entitled to retain the security deposit and shall be deemed a secured creditor as to the next six months' rental to the extent permitted by the applicable federal or state laws unless a tenant paying at least the amount due from Tenant shall be procured in said period in which case the actual rent collected during that six (6) month period shall reduce the amount of secured debt. As to any additional loss of rent, Landlord shall be entitled to file as a general creditor. The rights herein are cumulative of and in addition to any other rights provided by law. 12.6 SALE OF PREMISES BY LANDLORD. In the event of any sale or exchange of the Premises by Landlord and assignment by Landlord of this Lease, Landlord shall be and is hereby entirely freed and relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Premises or this Lease occurring after the consummation of such sale or exchange and assignment, provided such purchaser or assignee shall expressly assume said covenants and obligations of Landlord. 12.7 PERMITTED TRANSFER. Tenant must have the right to assign the lease in the event of the sale of the company. ARTICLE XIII DEFAULTS BY TENANT 13.1 LANDLORD'S ELECTIONS UPON DEFAULT. Should Tenant at any time be in default with respect to any rental payments or other charges payable by Tenant, and should such default continue for a period of five (5) days after written notice from Landlord to Tenant; or should Tenant be in default in the prompt and full performance of any other of its promises, covenants or agreements herein contained and should such default or breach of performance continue for a period of twenty (20) days after written notice thereof from Landlord to Tenant specifying the particulars of such default or breach of performance, (Provided, however, if Landlord is required to send more than two (2) written notices of default of any kind in any lease year, then Tenant shall be in default under this Lease notwithstanding any attempts to cure after the third failure by Tenant to timely perform) or should Tenant vacate or abandon the Premises; the Landlord may treat the occurrence of any one or more of the foregoing events as a breach of this Lease, and in addition to any or all other rights or remedies of Landlord and by law provided, it shall be, at the option of Landlord, without further notice or demand of any kind to Tenant or any other person: (a) The right of Landlord to declare the term hereof ended, to terminate this Lease and to reenter the Premises and take possession thereof and remove all persons therefrom, and Tenant shall have no further claim thereon or hereunder; or (b) The right of Landlord without declaring this Lease ended to reenter the Premises and occupy the whole or any part thereof for and on account of Tenant and to collect any unpaid rentals and other charges, which have become payable, or which may thereafter become payable; or

(c) The right of the Landlord, even though it may have reentered the Premises, to thereafter elect to terminate this Lease and all of the rights of Tenant in or to the Premises. 13.2 ELECTION TO REENTER. Should Landlord have reentered the Premises under the provisions of subparagraph (b) above, Landlord shall not be deemed to have terminated this Lease, or the liability of Tenant to pay any rental or other charges thereafter accruing, or to have terminated Tenant's liability for damages under any of the provisions hereof, by any such reentry or by any action, in unlawful detainer or otherwise, to obtain possession of the Premises, unless Landlord shall have notified Tenant in writing that it has so elected to terminate this Lease, and Tenant further covenants that the service by Landlord of any notice pursuant to the unlawful detainer statutes of the State of New Mexico and the surrender of possession pursuant to such notice shall not (unless Landlord elects to the contrary at the time of or at any time subsequent to the serving of such notices and such election -10-

is evidenced by a written notice to Tenant) be deemed to be a termination of this Lease. In the event of any entry or taking possession of the Premises as aforesaid, Landlord shall have the right, but not the obligation, to remove therefrom all or any part of the personal property located therein and may place the same in storage at a public warehouse at the expense and risk of Tenant. 13. ELECTION TO TERMINATE. Should Landlord elect to terminate this Lease pursuant to the provisions of subparagraph (a) or (c) above, Landlord may recover from Tenant as damages, the following: (i) The worth at the time of award of any unpaid rental which had been earned at the time of such termination; plus (ii) the worth at the time of award of the amount by which the unpaid rental which would have been earned after termination until the time award exceeds the amount of such rental loss Tenant proves could have been reasonably avoided; plus (iii) the worth at the time of award of the amount by which the unpaid rental for the balance of the term after the time of the award exceeds the amount of such rental loss that Tenant proves could be reasonably avoided; plus (iv) any other amount necessary to compensate Landlord for all the detriment proximately caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to any costs or expenses incurred by Landlord in (a) in retaking possession of the Premises, including reasonable attorney's fees therefor, (b) maintaining or preserving the Premises after such default, (v) at Landlord's election, such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time by the laws of the State of New Mexico. As used in subparagraphs (i) and (ii) above, the "worth at the time of award" is computed by allowing interest at the rate of twelve percent (12%) per annum. As used in subparagraph (iii) above, the "worth at the time of award" is computed by discounting such amount at the discount rate of the Federal Reserve Bank for New Mexico at the time of the award, plus one percent (1%). For all purposes of this Article XIII, the term "rental" shall be deemed to be the Base Rental and all other sums required to be paid by Tenant pursuant to the terms of this Lease. All such sums, other than the Base Rent, shall be computed on the basis of the average monthly amount thereof accruing during the immediately preceding sixty (60) month period, except that if it becomes necessary to compute such rental before such a sixty (60) month period has occurred then such rental shall be computed on the basis of the average monthly amount hereof accruing during such shorter period. 13.4 USE OF TENANT'S PROPERTY. In the event of default, and in addition to other rights of Landlord hereunder, all of Tenant's fixtures, furniture, equipment, improvements, additions, alterations, and other personal property shall remain on the Premises and in that event, and continuing during the length of said default, Landlord shall have the right to take the exclusive possession of same and to use same, rent or charge free, until all defaults are cured or, at its option, at any time during the term of this Lease, to require Tenant to forthwith remove same. 13.5 NONMONETARY DEFAULT PERIOD FOR REMEDY. Notwithstanding any other provisions of this Article, Landlord agrees that if the default complained of, other than for the payment of monies, is of such a nature that the same cannot be rectified or cured within the period requiring such rectification or curing as specified in the written notice relating thereto, then such default shall be deemed to be rectified or cured if Tenant within such period shall have commenced the rectification and curing thereof and shall continue thereafter with all due diligence to cause such rectification and curing and does so complete the same with the use of such diligence as aforesaid. 13.6 SUPPLEMENTAL REMEDIES. The remedies given to Landlord in this Article shall be in addition and supplemental to all other rights or remedies which Landlord may have under laws then in force. 13.7 NON-WAIVER BY LANDLORD. The failure by Landlord to enforce any breach of any term, covenant or condition herein contained shall not be deemed to be a waiver of such term, covenant or condition or of any subsequent breach of the same or any other term, covenant condition herein contained. The subsequent acceptance of rental hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular rental so accepted, regardless of Landlord's knowledge of such preceding breach at the time of acceptance of such rental. No covenant, term, or condition of this lease shall be deemed to have been waived by Landlord unless such waiver be in writing signed by Landlord. 13.8 RELETTING THE PREMISES. Upon entering and taking possession of the Premises without terminating the Lease and, without prejudice or waiver of its rights to sue and collect unpaid rent and any other damages from Tenant, Landlord may relet the Premises in the name of Landlord and for such term and on such conditions and provisions as Landlord shall determine in its discretion (including the granting of reasonable amounts of free rent and other concessions reasonably required to effect such reletting) and may collect and receive the rents from such reletting. Such reletting may be for a term greater than the term then remaining under this Lease but in any event shall operate to preempt Tenant from any right to repossess the Premises. Landlord shall also not be liable or responsible to Tenant for any failure to collect rent payable upon reletting by Landlord. The proceeds of any such reletting, less all costs and expenses of reletting (including any attorneys' fees) shall be applied to unpaid rents, damages and other sums due and payable by Tenant to Landlord for Tenant's breaches of Lease and other wrongful conduct, notwithstanding anything contained herein to the contract, Landlord agrees to exercise reasonable effects to mitigate damages. 13.9 LANDLORD'S OPTION TO REMEDY. Landlord at its option may, but in no event shall be obligated to, advance and pay any sums and do such other things, which may include entering into the Premises to do such other things, which may be necessary to cure, discharge or satisfy any monetary or nonmonetary defaults of Tenant under this Lease. Should Landlord elect to do so, all sums advanced and paid by

Landlord in connection therewith (including attorneys' fees), together with interest thereon until repaid to Landlord at the rate of twelve percent (12%) per annum, shall be considered as additional rent payable hereunder and shall be due and payable by Tenant upon demand of Landlord to Tenant. 13.10 OPTIONAL ARBITRATION. In the event of any dispute between the parties hereto as to any matter in controversy under the Lease the both Parties shall have the option (but not the obligation) to submit the dispute to binding arbitration by delivering to each other a written demand therefor. Said arbitration shall take place before an arbitrator chosen by the parties, or if they are unable to agree within fifteen (15) days of the date of the written demand for arbitration, by the Chief Judge of the First Judicial District court of New Mexico. The cost of the arbitrator shall be split evenly by the parties. The arbitration shall take place within sixty (60) days of the date of the written demand therefor except that the arbitrator may grant minimal continuances as justice requires. There shall be only such discovery allowed by the arbitrator which would not postpone the date -11-

of arbitration. The arbitration shall be controlled by the Rules of Civil Procedure and the Rules of Evidence of the State of New Mexico except as specifically provided for herein. The decision of the arbitrator shall be final and unappealable. The arbitrator shall decide all factual and legal issues. The prevailing party shall be entitled to an award of attorneys fees, expenses and costs. 13.11 ALLOCATION OF PAYMENTS. Any payment received from Tenant may be applied by Landlord at any time against any obligation due and owing by Tenant under this Lease, notwithstanding any statement appearing on or referred to in any remittance from Tenant or any prior application of such payment. 13.12 DEFAULT UNDER OTHER LEASES. N/A ARTICLE XV SUBORDINATION & ESTOPPEL 15.1 SUBORDINATION. Upon request of Landlord, Tenant shall attorn to any lender in a form satisfactory to such lender or subordinate its rights hereunder to the lien of any mortgage or mortgages, or the lien resulting from any other method of financing now or hereafter in force against the real estate and/or Buildings of which the Premises are a part or against any Building hereafter placed upon said real estate of which the premises are a part. 15.2 ESTOPPEL CERTIFICATE. Tenant shall at any time upon not less than (10) days' prior written notice from Landlord execute, acknowledge and deliver to Landlord a statement in writing (i) certifying that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as so modified, is in full force and effect) and the date to which the rent and other charges are paid in advance, if any, and (ii) acknowledging that there are not, to Tenant's knowledge, any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed. Any such statement may be conclusively relied upon by any prospective purchaser of or existing or prospective lender on the security of the Premises. At Landlord's option, Tenant's failure to deliver such statement within such time shall be a material breach of this Lease or shall be conclusive upon Tenant (i) that this Lease is in full force and effect, without modification except as may be represented by Landlord, (ii) that there are no uncured defaults in Landlord's performance, and (iii) that no rent has been paid in advance except as may be represented by Landlord. If Landlord desires to finance, refinance, or sell the Premises, or any part thereof, Tenant hereby agrees to deliver to any prospective lender or purchaser designated by Landlord such financial statements of Tenant as may be reasonably required by such lender or purchaser. Such statements shall include the past three (3) years' financial statements of Tenant. Such financial statements shall be prepared in accordance with generally accepted accounting principles and, if such is the normal practice of Tenant, shall be audited by an independent certified public accountant. All such financial statements shall be received by Landlord and such prospective lender or purchaser in confidence and shall be used only for the purposes herein set forth. Notwithstanding the foregoing, tenant's obligation under this article are conditioned on Landlord's providing with a subordination, non-disturbance and attornment agreement in term and substance reasonably satisfactory to Landlord, Tenant and Landlord's lender. -12-

ARTICLE XVI GENERAL PROVISIONS 16.1 TIME IS OF THE ESSENCE. Time is of the essence in respect to the performance by Tenant of all its monetary and non-monetary obligations hereunder and also in respect to Tenant's exercise of any options or rights granted to Tenant hereunder, including but not limited to options and rights to renew or to terminate this Lease. 16.2 NOTICES. All notices by either party to the other shall be made to the locations indicated in Article I hereof or at such other address as the party may from time to time designate in writing to the other Party to this Lease, by depositing such notices in the certified mail of the United States of America, and such notice shall be deemed to have been served on the date of such depositing in the certified mail unless otherwise provided. 16.3 ATTORNEYS' FEES. 16.4 NO PARTNERSHIP. It is understood that Landlord does not in any way or purpose become a partner or joint venturer with Tenant in the conduct of Tenant's business. 16.5 AUTHORITY. If Tenant is a corporation, trust, or general or limited partnership, each individual executing this Lease on behalf of such entity represents and warrants that he or she is duly authorized to execute and deliver this Lease on behalf of said entity. 16.6 INTEREST ON AMOUNTS DUE. Unless otherwise specifically provided, all amounts owed by Tenant to Landlord pursuant to any provision of this Lease shall bear interest from the date due until paid at the annual rate equal to three percentage points in excess of the rate of interest announced from time to time by the First National Bank of Chicago at Chicago, Illinois, or any successor thereto, as its corporate base rate, changing as and when said corporate base rate changes, unless a lesser rate shall then be the maximum rate permissible by law with respect thereto, in which event said lesser rate shall be charged. 16.7 PARTIAL INVALIDITY. If any term or condition of this lease or the application thereof to any person or events shall to any extent be invalid and unenforceable, the remainder of this Lease or the application of such term, covenant or condition to persons or events other than those to which it is held invalid or unenforceable, shall not be affected and each term, covenant and condition of this Lease shall be valid and be enforced to the fullest extent permitted by law. 16.8 SUCCESSORS. The provisions, covenants and conditions of this Lease shall bind and inure to the benefit of the legal representatives, successors and assigns of each of the parties, except that no assignment or subletting by Tenant without the written consent of Landlord shall vest any right in the assignee or sublessee of Tenant. 16.9 ENTIRE AGREEMENT - AMENDMENT. This agreement constitutes the entire agreement between the parties. Oral agreements in conflict with any of the terms of this Lease shall be without force and effect, all amendments to be in writing, executed by the parties or their respective successors in interest. 16.10 MISCELLANEOUS. A. If the Tenant is more than one person, the obligations of Tenant shall be joint and several obligations of such persons. B. In construing this Lease, "Landlord" and "Tenant" shall include the plural as well as singular, and the neuter gender shall include the masculine and/or feminine, when the context so requires. C. Each party agrees to execute and deliver any instruments in writing which may be necessary and appropriate to carry out the terms, conditions, provisions and purposes of this Lease when requested by the other party. D. The paragraph and sub-paragraph headings contained in this Lease are for convenience only and shall not be relied on in construing this Lease. E. This Lease shall be construed and enforced in accordance with the laws of New Mexico. F. Any rights, reserved or granted to Landlord hereunder may be exercised by Landlord, or the manager or agent for the Project or their respective agents, employees, contractors or designees. LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH TERM AND PROVISION CONTAINED HEREIN AND, BY EXECUTION OF THIS LEASE, SHOW THEIR INFORMED AND VOLUNTARY CONSENT THERETO. THE PARTIES HEREBY AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, THE TERMS OF THIS LEASE ARE COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND TENANT WITH RESPECT TO THE PREMISES. This Lease consisting of ___ pages, including the page on which these signatures appear, and Exhibit(s) ____ attached hereto, entered into this __ day of ____________, 19__. -13-

LANDLORD: By: ? Its: Member TENANT: By: ? Its: Chief Financial Officer By: Its: By: Its: -14-

INDEX ARTICLE I - FUNDAMENTAL LEASE PROVISIONS.................................... 1 ARTICLE II - PREMISES....................................................... 1 2.1 DESCRIPTION..................................................... 1 2.2 CONDITION OF PREMISES........................................... 1 2.3 DEFINITIONS..................................................... 2 ARTICLE III - TERM.......................................................... 2 3.1 BASE TERM....................................................... 2 3.2 LEASE YEAR...................................................... 2 3.3 OPTION FOR EXTENSION OF LEASE................................... 2 3.4 POSSESSION...................................................... 2 ARTICLE IV - RENTS.......................................................... 2 4.1 BASE RENT....................................................... 2 4.2 ADDITIONAL RENT................................................. 2 4.3 UTILITIES....................................................... 3 4.4 SECURITY DEPOSIT................................................ 3 4.5 CHARGE ON LATE PAYMENT.......................................... 3 4.6 HOLDING OVER.................................................... 3 ARTICLE V - USE OF PREMISES................................................. 3 5.1 TENANT USE...................................................... 3 5.2 SIGNS........................................................... 3 5.3 FIRE EXTINGUISHERS.............................................. 3 5.4 QUIET ENJOYMENT................................................. 3 5.5 RULES AND REGULATIONS........................................... 4 5.6 SURRENDER OF PREMISES........................................... 4 ARTICLE VI - CONSTRUCTION, MAINTENANCE AND REPAIR........................... 4 6.1 ALTERATIONS AND ADDITIONS....................................... 4 6.2 TENANT'S DUTY TO REPAIR......................................... 4 6.3 LANDLORD'S DUTY TO REPAIR....................................... 4 6.4 ROOF............................................................ 5 6.5 TRADE FIXTURES.................................................. 5 6.6 NON TRADE FIXTURES.............................................. 5 ARTICLE VII - LANDLORD'S RIGHTS AND RESPONSIBILITIES AS TO THE OFFICE BUILDING AND PREMISES...................................................... 5 7.1 CONTROL OF COMMON AREAS......................................... 5 7.2 SERVICES PROVIDED BY LANDLORD................................... 5 7.3 RIGHTS RESERVED TO LANDLORD..................................... 5 7.4 LANDLORD'S RIGHT OF ENTRY....................................... 6 7.5 SECURITY MEASURES............................................... 6 8.1 INDEMNITY OF LANDLORD........................................... 6

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8.2 NOTICE OF CLAIM OR SUIT......................................... 8.3 TENANT'S INSURANCE.............................................. 8.4 TENANT'S INSURANCE POLICIES..................................... 8.5 FAILURE TO PRODUCE INSURANCE.................................... 8.6 INCREASE IN FIRE INSURANCE PREMIUM.............................. 8.7 PROPERTY OF TENANT.............................................. 8.8 WAIVER OF SUBROGATION........................................... ARTICLE IX - DESTRUCTION OR DAMAGED PREMISES................................ 9.1 PARTIAL DESTRUCTION............................................. 9.2 TOTAL OR EXTENSIVE DAMAGE....................................... 9.3 NO COMPENSATION TO TENANT....................................... ARTICLE X - EMINENT DOMAIN.................................................. 10.1 DEFINITIONS..................................................... 10.2 TOTAL OR SUBSTANTIAL TAKING..................................... 10.3 PARTIAL TAKING.................................................. 10.4 NOTICE OF TENANT................................................ 10.5 NO COMPENSATION TO TENANT....................................... ARTICLE XI - COMPLIANCE WITH HAZARDOUS MATERIALS LAW........................ 11.1 HAZARDOUS MATERIALS............................................. ARTICLE XII - TRANSFERS OF INTEREST......................................... 12.1 RESTRICTION OF TRANSFER......................................... 12.2 FORM OF TRANSFER................................................ 12.3 RENT UPON TRANSFER.............................................. 12.4 TRANSFER OF STOCK INTEREST...................................... 12.5 BANKRUPTCY...................................................... 12.6 SALE OF PREMISES BY LANDLORD.................................... ARTICLE XIII - DEFAULTS BY TENANT........................................... 13.1 LANDLORD'S ELECTION UPON DEFAULT................................ 13.2 ELECTION TO REENTER.............................................

6 6 7 7 7 7 7 7 7 7 8 8 8 8 8 8 8 8 8 9 9 9 9 9 9 9 9 9 9

13.3 ELECTION TO TERMINATE........................................... 10 13.4 USE OF TENANT'S PROPERTY........................................ 10 13.5 NONMONETARY DEFAULT PERIOD FOR REMEDY........................... 10 13.6 SUPPLEMENTAL REMEDIES........................................... 10 13.7 NON-WAIVER BY LANDLORD.......................................... 10 13.8 RELETTING THE PREMISES.......................................... 10 13.9 LANDLORD'S OPTION TO REMEDY..................................... 10 13.10 OPTIONAL ARBITRATION........................................... 10 13.11 ALLOCATION OF PAYMENTS......................................... 11 13.12 DEFAULT UNDER OTHER LEASES..................................... 11 ARTICLE XIV - SECURITY FOR TENANT'S PERFORMANCE............................. 11 ARTICLE XV - SUBORDINATION & ESTOPPEL....................................... 11

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15.1 SUBORDINATION.................................................... 11 ARTICLE XII - GENERAL PROVISIONS............................................. 12 16.1 TIME IS OF THE ESSENCE........................................... 12 16.2 NOTICES.......................................................... 12 16.3 ATTORNEY'S FEES.................................................. 12 16.4 NO PARTNERSHIP................................................... 12 16.5 AUTHORITY........................................................ 12 16.6 INTEREST ON AMOUNTS DUE.......................................... 12 16.7 PARTIAL INVALIDITY............................................... 12 16.8 SUCCESSORS....................................................... 12 16.9 ENTIRE AGREEMENT - AMENDMENT..................................... 12 16.10 MISCELLANEOUS................................................... 12

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EXHIBIT A [MAIN FACILITY WALL BUILDOUT PLAN] 6. OBSTRUCTION OF PUBLIC AREAS: Tenant shall not, whether temporarily, accidentally or otherwise, allow anything to remain in, place or store anything, in, or obstruct in any way, any sidewalk, court, passageway, entrance, exit, loading or shipping area. Tenant shall lend its full cooperation to keep such areas free from all obstruction and in a clean and sightly condition, and 1

EXHIBIT A [MAIN FACILITY FURNITURE CONFIGURATION GRAPHIC]

EXHIBIT B RULES AND REGULATIONS 1. Building Directory: The directory of the Building shall display Tenant's name which shall fit on one line of the directory and will be provided at the expense of Landlord. Any additional names other than Tenant's name requested by Tenant to be displayed in the directory must be approved by Landlord in writing, and, if so approved, will be provided at the sole expense of the Tenant. 2. Signs: Tenant shall not paint, display, inscribe, maintain or affix any sign, placard, picture, advertisement, name, notice, lettering or direction on any part of the outside or inside of the Building, or any part of the outside of the Premises, or on any part of the inside of the Premises which can be seen from the outside of the Premises, without the, prior, written consent of Landlord, and then only such name or names or content and in such color, size, style, character, material and manner of affixing as may be first approved by Landlord in writing. Landlord reserves the right to remove at Tenant's expense all sign matter not consented to or approved by Landlord. 3. Compliance with Laws: Tenant shall comply with all applicable laws, ordinances, governmental orders and regulations and applicable orders and directions from any public office or body having jurisdiction, with respect to the Premises or the Building and the use or occupancy thereof. Tenant shall not make or permit any use of the Premises or the Building which directly or indirectly is forbidden by law, ordinance, governmental regulation or order or direction of applicable public authority, or which may be dangerous to person or property. 4. Hazardous Materials: Tenant shall not use or permit to be brought into the Premise or the Building any flammable oils or fluids, or any explosive or other articles deemed hazardous to persons or property, or do or permit to be done anything in or upon the Premises, or bring or keep anything herein, which shall not comply with all rules, orders, regulations or requirements of any organization, bureau, department, or body having jurisdiction with respect thereto (and Tenant shall at all times comply with all such rules, orders, regulations or requirements), or which shall invalidate or increase the rate of insurance on the Building, its appurtenances, contents or operation. 5. Defacing and Altering Premises and Overloading: Tenant shall not place anything or allow anything to be place in the Premises near the glass of any door, partition, wall or window which may be unsightly from outside the Premises, and Tenant shall not place or permit to be placed any article of any kind on any window ledge or on the outside of the exterior walls of the Premises or the Building. Shades, awnings or other forms of outside window ventilators or similar devices, shall not be placed in or about the outside windows in the Premises. No blinds, shades, draperies or other forms of inside window covering other than those accepted by Landlord may be installed in the Premises. Tenant shall not deface any part of the Premises or Building. Tenant shall not overload any floor or part thereof in the Premises in

move all supplies, furniture and equipment as soon as received directly to the Premises, and shall move all such items and waste that are at any time being taken from the Premises directly to the areas designated for disposal. All courts, passageways, entrances, exits, loading or shipping areas, and roofs are not for the use general public and Landlord shall in all cases retain the right to control and prevent access thereto by all persons whose presence in the judgment of Landlord shall be prejudicial to the safety or security of the Building or its occupants. No tenant and no employee, agent, licensee, invitee or contractor of Tenant shall enter into areas reserved for the exclusive use of Landlord or its agents, employees, licensees or invites. 7. Keys and Additional Locks: Tenant shall not attach or permit to be attached locks or similar devices to any door or window, or change existing locks or the mechanisms thereof. Upon termination of this Lease or of Tenant's possession, Tenant shall surrender all keys to the Premises and all keys for offices which have been furnished to Tenant or which Tenant shall have made, and in the event of loss of any keys so furnished, Tenant shall pay Landlord therefor. 8. Toilet Rooms: The toilet rooms, urinals, wash bowls and the other bathroom apparatus shall not be used for any purpose other than that for which they were constructed, and no foreign substance of any kind whatsoever including paper towels or sanitary napkins shall be thrown therein, and the expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the Tenant who, or whose employees, agents, licensees, invitees or contractors, shall have caused it. 9. Nuisances and Certain Other Prohibited Uses: Tenant shall not (i) install or operate any internal combustion engine, boiler, or machinery, in or about the Premises; (ii) sell any article, thing or service except those ordinarily embraced within the permitted use of the premises specified in Section 4; (iii) use the Premises for housing, lodging or sleeping purposes; (iv) place any radio or television antennae on the roof or on or in any part of the inside or outside of the Building other than the inside of the Premises; (v) operate any electrical device from which may emanate electrical waves which may interfere with or impair radio or television broadcasting or reception from or in the Building or elsewhere; (vi) bring or permit to be in the Building any dog (except in the company of a blind or deaf person) or other animal or bird; (vii) make or permit any objectionable noise or odor to emanate from the Premises; (viii) disturb, solicit or canvass any occupant of the Building. 10. Freeze Up: Tenant shall at all, times, whether or not it is currently using the Premises, leave its heating system on at a temperature sufficient to prevent freeze up of any water pipes in the Premises or the walls or ceiling space near the Premises.

EXHIBIT C [BUILDING LOCATIONS MAP]

EXHIBIT 10.8 DUPLICATE [SEAL AND CERTIFICATION] This Indenture made at Bombay on the 11th October, 1993 between the President of India, hereinafter called "the Land Lord" (which expression shall unless the context does not so admit include his successors in office and assigns) of the One Part and SYNTEL SOFTWARE PVT. LTD. hereinafter referred to as "the tenant" (in which expression are included, unless such inclusion is inconsistent with the context of meaning thereof its/his/their heirs, executors, administrators and assigns/its executors and assigns) of the Other Part. WHEREAS by an Indenture of Lease, made at Bombay on the Twentieth day of January, 1975 between the Maharashtra Industrial Development Corporation, therein and hereinafter referred to as the Lessor of the One Part and the Landlord of the Other Part the Lessor in consideration of the premises and of the rent therein referred to and of the covenants and agreements on the part of the Landlord, the Lessor did demise unto the Landlord all that piece of land known as Plot No. F-1 in the Marol Industrial Area within the village limits of Vyarawali, Parjapur, Kondivitta and Marol Taluka Andheri, District Bombay Suburban Sub-Registration No. Sub District and contd.

[SEAL AND CERTIFICATION] :: 2 :: and Registration District Bombay City and Bombay Suburban containing by admeasurement 375013 square metres or thereabout and more particularly described in the First Schedule thereunder written for use as Santacruz Electronics Export Processing Zone, Government of India. AND WHEREAS the Government of India have constituted a Santacruz Electronics Export Processing Zone, hereinafter called the SEEPZ in the aforementioned demised land for the purpose of encouraging the export industries in India and for earning foreign exchange on the export of various kinds of electronics and gem and jewellery items from the SEEPZ in the interest of the national economy by establishing industrial units in the said zone; AND WHEREAS the landlord has constructed a building known as Standard Design Factory hereinafter referred to as the said building on a portion of the land demised to the Landlord under the aforementioned lease for the purpose of allotting the same to the various entrepreneurs carrying on business of manufacturing and/or processing articles, things, materials components and instruments relating to the industries of electronics. AND WHEREAS the tenant has approached the Landlord for demising to it him/them a portion of the said building on ground floor, constructed and/or erected on Plot No. F-1 in the Marol Industrial Area within the village limits of Vyarawali, Parjapur, Kondivita and Maral Taluka Andheri District Bombay Suburban Sub-Registration No. Sub District and Registration District Bombay City and Bombay Suburban containing by admeasurement 375013 square metres of thereabouts to establish manufacturing/processing establishment for the manufacture of articles things, materials, components and instruments relating to the electronics industries on the terms and conditions hereinafter contained and to grant to it/him/them all facilities and variety of concessions: Contd. ....3/-.

[SEAL AND CERTIFICATION] :: 3 :: AND WHEREAS the Landlord has agreed, to let out a portion of the said building, admeasuring about 7825 sq. ft. equivalent to 751 sq. metres or thereabout on the First floor of the said building at the concessional rent of Rs 15,646/- per month for a terms of five years upon the terms and conditions hereinafter contained: AND WHEREAS it has been agreed by and between the parties hereto that the stamp duty and registration charges shall be borne and paid by the Landlord. NOW THIS INDENTURE WITNESSETH AS FOLLOWS: 1. In consideration of the premises and of various facilities and a variety of concessions made available to the Tenant and the concessional rent hereby reserved and of the covenants and agreements on the part of the Tenant hereinafter contained, the Landlord doth hereby demise to the Tenant to HOLD the said premises hereunder expressely demised unto the Tenant for the term of Five Years computed from the 1st day of Month & year of possession paying therefor the yearly rental during the said term unto the Landlord through Central Bank of India, SEEPZ Branch, as may be otherwise required by the Landlord the said yearly rent of Rs. 1,87,750/- in advance being the concessional rent by the Landlord without any deductions whatsoever: The Tenant with intent to bind all persons into whatsoever hands the demised premises may come doth hereby convenant with the Landlord as follows: (a) During the said terms hereby created to pay unto the Landlord the said rent and all other charges that may be fixed from time to time by the Development Commissioner at the time on the days and in manner hereinbefore appointed for payment thereof clear of all deductions, Contd. ...4/-.

[SEAL AND CERTIFICATION] :: 4 :: (a) (a) Further, during the said terms, the Landlord may revise the said rent even during the currency of this indenture on the following grounds: 1) To meet any increase in the maintenance costs. 2) To bring parity with the rents charged in respect of the premises similar to the demised premises. 3) Any other exigencies which may necessitate the revision of the lease rent during the currency of this indenture. b) To pay all existing and future taxes, rates, assessments and outgoings of every description for the time being payable either by Landlord or tenant or by the occupier in respect of the demised premises and anything for the time being thereon. c) It is hereby agreed to declared that in the event the Landlord insures and or keeps insured the building including the demised promises the tenant shall be liable to pay to the Landlord the amount of the premium/premiums in the proportion to the area of the demised premises within fifteen days of receipt of notice by the Landlord for payments of the amount of premium/premiums and that the tenant shall pay the same without objection provided always in the event of dispute arising between Landlord and Tenant regarding the Liability of the Tenant to pay the said amount of insurance premium. The decision of the Development Commissioner shall be final and binding upon the Tenant. (d) During the said term hereby agreed to manufacture electronic products as authorised by the Development Commissioner from time to time. (e) To commence production within two months from the date of taking possession of premises. (f) Not to manufacture/process any article things, materials, components and instruments which do not in anyway relate to the Industry of Electronics. Contd. ...5/-.

[SEAL AND CERTIFICATION] :: 5 :: (g) To export the entire production (whether manufactured/processed) including seconds to foreign countries in accordance with the provisions of the law subject to such concessions and facilities as may be given by the Government to the Tenant in the matter of the Customs duty, routing of applications or import licenses, etc. and such other concessions as may be notified hereafter from time to time. The disposal of the Wastes and Scrap material will be made with in the prior permission and as per the instructions of the Development Commissioner. (h) To submit from time to time to the Development Commissioner, Santacruz Electronics Export Processing Zone (hereinafter referred to as the Development Commissioner) plans and the scheme of the particular industry to be established together with such other details as may be required. (i) To furnish a legal undertaking as may be prescribed for the fulfillment of export obligations set out in their application for setting up industries in the Zone. (j) To make exports of items of electronics to the levels indicated in the phased manufacturing programme projected in the application submitted to the SEEPZ Board for setting up an industry in the Zone and also to maintain the value added approved by the Board. (k) To arrange forwarding/clearance of manufactured/processed goods for export or import of raw materials, spares and such another materials as are required for manufacture/processing by the Development Commissioner or agencies authorised by the Development Commissioner. (i) Not to allow any of the products hereinafter for brevity's sake referred to as "Electronics Products) manufactured/processed in SEEPZ produced by the Tenant to enter or pass into and/or be sold in any market in India or anywhere in India provided always that the Development Commissioner may permit the Tenant to sell and/or dispose of the Electronics. Contd. ...6/-.

[SEAL AND CERTIFICATION] :: 6 :: products to enter or pass into and/or be sold in any market in India or anywhere in India. (m) To sell or dispose of the electronics products manufactured/processed by the Tenant in the local markets in India or as may be directed by the Development Commissioner in the event the Development Commissioner considers that the said products are essential or necessary for national defence or for countering natural disaster or considered urgent and necessary for the national economy upto payment as may be mutually agreed upon and that the Tenant shall not be entitled to make any other claim for compensation for delivering the products as aforesaid in any manner whatsoever. (n) To observe and perform all the terms and conditions of the lease entered into by the Landlord with the Maharashtra Industrial Development Corporation with the Landlord dated the 20th day of January, 1975, which terms and conditions of the said lease immediately aforementioned the Tenant are made aware of before execution of these presents. (o) To permit the Development Commissioner or his any officer duly authorised by him at any time and without any prior notice being given to enter into and upon the demised premises and to inspect the general state of the demised premises and also the processing plant and machinery, etc. and the books of account and other documents and vouchers concerning the electronic products manufactured by the Tenant. (p) Not to do or permit anything to be done or stored (except those required for production of electronic products approved for manufacture in the demised premises, which may be a nuisance, annoyance or disturbance to the owners, occupiers or residents of other premises in the vicinity. (q) To use the demised premises only for the purpose of manufacturing processing or assembling electronic Contd. ...7/-

[SEAL AND CERTIFICATION] :: 7 :: products for export and other purposes incidental to the same and not to use the said demised premises or any part thereof for any other purpose. (r) Not to sublet, assign or part with the possession of the demised premises or any part thereof without the prior consent in writing of the Development Commissioner and subject to such terms and conditions as the Development Commissioner may prescribe in granting the possession to the Tenant for the transfer of the said demised premises or any part thereof as hereinbefore mentioned. (s) To intimate in writing the Development Commissioner within a fortnight of the changes made or effected in the Corporate structure or the construction of the Tenant. (t) To submit the statements of accounts and such other details within such time as may be stipulated by the Development Commissioner during the terms of these presents giving all the necessary particulars as may be required by the Development Commissioner. (u) To allow the persons and vehicles entering and leaving SEEPZ to be examined by the Staff of the Development Commissioner for the purpose of checking that no products or any materials manufactured in the demised premises are removed in the manner not authorized by these presents. (v) Not to make any alternations, changes or additions in the demised premises except with the written previous permission of the Development Commissioner and in accordance with the directions that the Development Commissioner may prescribe and in accordance with the plans approved by the Development Commission and the rules, byelaws and regulations of the Bombay Municipal Corporation or any other authority prescribed by the law. (w) Not to cause any annoyance or hindrance to the other tenants of the Landlord and to so conduct the activities which will imede the other tenants of the Landlord in manufacturing or processing the electronic products AND in the event the Contd. ...8/-

[SEAL AND CERTIFICATION] :: 8 :: Tenant experiences or finds any difficulty in conducting its/his/their business and/or activities connected therewith smoothly and efficiently by reason of the user of the said building or any portion thereof by the other tenants of the Building the same shall be referred to the Development Commissioner and any directions or orders issued by the Development Commissioner in relation thereto shall be complied by the Tenant. (x) To observe and perform all rules and regulations prescribed under the Labour Legislation such as Industrial Dispute Act, Workmen's Compensation Act, payment of Wages Act, Minimum Wages Act or any other statuttes governing the relationship of the employees and employer's including the Factories Act and Fatal Accidents Act. (y) If the said rent hereby reserved shall be in arrears for the space of 30 days whether the same shall have been legally demanded or not or if within a period of three months from the date of the commencement of the Tenancy the entire demised premises are not utilised for the purpose for which the same has been demised or if the Tenant ceases to manufacture items of electronics products for a period of six continuous months for whatever cause arising, including a strike, lock-out or any injunction the Court in any sort of litigation, if and whenever there shall be a breach of any of the covenants and conditions herein before set out or referred or if the tenant fails to make exports to the level projected in the application submitted to the Government for approval of the project or to maintain the value added approved by the Government for the project or the Tenant becoming insolvent or is wound up or amalgamated or merged with other body corporate or otherwise pursuant to the Court's orders or under the provisions law then in force or under any agreement entered into by the Tenant, the Landlord may re-enter upon any part of the demised premises in the name of the whole and thereupon the sub-demise hereby granted shall absolutely cease and determine and in the case, no compensation shall be payable to the Tenant on account of any structural Contd. ...9/-

[SEAL AND CERTIFICATION] :: 9 :: Alternations or improvements made or carried out in the said premises PROVIDED ALWAYS that the Landlord shall in addition to the right of determination of this Tenancy and to effect re-entry as mentioned aforesaid be entitled to recover as and by way of compensation such amount as may be considered by the Landlord as appropriately recoverable from the Tenant in the event the Tenant were not given or granted all those various concessions and variety of facilities. (y-2) If the said rent hereby reserved shall be in arrears for a period of 30 days whether the same shall have been legally demanded or not. The Development Commissioner may take steps to recover the arrears of rent as arrears of land revenue. (z) At the expiration or sooner determination of the said term quietly to deliver upto the Landlord the demised premises after removing the partitions and fittings and fixtures pertaining thereto any alterations, changes or additions erected on the demised premises by the Tenant and such removal should be done without in any way damaging or defacing the premises and such delivery should be given within a period of Sixty days after the expiration or sooner determination of the said term PROVIDED ALWAYS that in the event the Tenant fails to deliver vacant and peaceful possession of the demised premises as aforesaid, the said partitions and fittings and fixtures and any alterations, changes or additions as aforesaid on the expiry of the aforementioned period shall belong to the Landlord and the Tenant shall not be entitled to claim any compensation or raise any dispute in respect thereof PROVIDED ALWAYS that in the event the fixtures, etc. as aforesaid, the Landlord shall pay to the Tenant compensation thereof as may be determined by the Development Commissioner and the Tenant shall not be entitled to raise any objection against such retention and/or the valuation determined by the said Development Commissioner, as aforesaid, PROVIDED ALWAYS that Contd. ...10/-

[SEAL AND CERTIFICATION] :: 10 :: the Tenant shall continue to be liable to pay compensation for the period of unauthorized occupation of the said premises till the date Tenant hands over vacant and peaceful possession of the demised premises at such rate as may be charged by the Landlord. (a) (a) The Landlord both hereby convenant with the Tenant that the Tenant paying the rent hereby reserved and performing the covenants hereinbefore on the Tenant's part contained shall and may peaceable enjoy the demised premises for the said term hereby granted without any interruption or disturbance from or by the Landlord or any persons lawfully claiming by from or under Landlord. (a) (b) All disputes and differences arising out of or in any way touching or concerning these persents (except as to any matters the decision of which is left to the sole discretion of the said DEVELOPMENT COMMISSIONER, as specially provided for in these presents) shall be referred to the arbitration of two arbitrators, one each to be appointed by the respective parties to these presents. The arbitrators so appointed shall appoint an Umpire in the manner provided in the Arbitration Act, 1940. It will be no objection that the person appointed as Arbitrator on behalf of the Sub-Lessor is or was an employee of the Govt. that he had to deal with the matters to which the Tenancy herein relates and/or that in the course of his duties as such employee of the Govt. he had expressed a view on all or any of the matters in dispute or difference. In the event of either or both of arbitrators dying, neglecting or refusing to act or resigning or being unable to act for any reason, the substitute(s) to be appointed by the concerned parties shall be entitled to proceed with the reference from the stage at which it was left by the previous Arbitrator/Arbitrators. The cost in connection with the artibtration shall be in the discretion of the Arbitrators who may make a suitable provision for the same in their award. Subject to the aforesaid, the provisions of Arbitration Act, 1940 and the Rules thereunder and Contd. ...11/-

[SEAL AND CERTIFICATION] :: 11 :: any statutory modifications thereof for the time being in force shall apply to the arbitration proceedings under this clause. (a) (c) If the Tenant shall have duly performed and observed the covenants and conditions on the part of the Tenant herein before contained and shall at the end of the said term hereby granted by desirous of receiving a new Tenancy of the demised premises and of such desire shall give notice in writing to the Landlord before the expiration of the term hereby granted the Landlord shall and will at the cost and expenses in every respect of the Tenancy grant to the Tenant a new Tenancy of the demised premises for a futher terms of five years of payment of yearly rent as may be determined by the Landlord AND WITH covenants, provisos and stipulations hereinbefore contained expected is provision for renewal and such new Tenancy shall contain in lieu of this clause a covenant that at the end of the said renewed term of five years, the Landlord shall at the like cost and expense grant to the Tenant further renewals and that every such renewal shall be fore such terms and subject to such covenants, provisos and stipulations. The cost of an in connection with arbitration shall be in the discretion of the Arbitrator who may make a suitable provision for the same in his award. Subject as aforesaid, the Arbitration Act, 1940, shall apply to the arbitration proceedings under this clause. FIRST SCHEDULE (Description of Land) All that piece of parcel of land known as Plot No. F-1, in the Marol Industrial Area within the village limits of Parajapur, Kondivita, Marol and Vyaravali, Taluka Andheri and now in the Registration Sub-District and District of Bombay Suburban, containing by a measurement 3,75,013 sq. mtrs. or thereabouts, that is to say: Contd. ...12/-

[SEAL AND CERTIFICATION] :: 12 :: On or towards the North by Road and Aarey Milk Colony Land. On or towards the South by Road On or towards the East Pipe Line and Aarey Milk Colony land and on or towards the West by Road. SIGNED, SEALED AND DELIVERED BY SHRI S. S. Yadwadkar Development Commissioner, Santacruz Electronics Export Processing Zone, On behalf of President of India in the presence of: 1. [sig] [sig] 2. [sig] [sig] SIGNED, SEALED AND DELIVERED by the abovenamed Licensee in the presence of:
1. Signature ------------------------Name ------------------------Address ------------------------2. Signature Name Address: ----------------------------------------------------------

The common Seal of the abovenamed Licensee was, pursuant to a resolution of its Board of Directors passed in that behalf of the day of 19 affixed hereto in the presence of: ********

DUPLICATE Receipt No. 55063 Date 19-1-93 No 41751921908615 General Stamp Bombay 25-1-93 CERTIFIED under Section 32, clause (2) of the Bombay Stamp Act. 1935 that this instrument is exempt from stamp duty. [SEAL] COLLECTION This Indenture made at Bombay on the 18th January, 1993, between the President of India, hereinafter called "the Land Lord" (which expression shall unless the Context does not so admit include his successors in office and assigns) of the One Part and SYNTEL SOFTWARE PRIVATE LIMITED hereinafter referred to as "the tenant" (in which expression are included, unless such inclusion is inconsistent with the context of meaning thereof its/his/their heirs, executors, administrators and assigns/its executors and assigns) of the Other Part. WHEREAS by an Indenture of Lease made at Bombay on the Twentieth day of January, 1975 between the Maharashtra Industrial Development Corporation, therein and hereinafter referred to as the Lessor of the One Part and the Landlord of the Other Part the Lessor in consideration of the premises and of the rent therein referred to and of the covenants and agreements on the part of the Landlord, the Lessor did demise unto the Landlord all that piece of land known as Plot No. F-1 in the Marol Industrial Area within the village limits of Vyarawali, Parjapur, Kondivitta and Marol Taluka Andheri, District Bombay Suburban Sub-Registration No. Sub District and contd.

[SEAL] :: 2 :: and Registration District Bombay City and Bombay Suburban containing by admeasurement 375013 square metres or thereabout and more particularly described in the First Schedule thereunder written for use as Santacruz Electronics Export Processing Zone, Government of India. AND WHEREAS the Government of India have constituted a Santacruz Electronics Export Processing Zone, hereinafter called the SEEPZ in the aforementioned demised land for the purpose of encouraging the export industries in India and for earning foreign exchange on the export of various kinds of electronics and gem and jewellery items from the SEEPZ in the interest of the national economy by establishing industrial units in the said zone: AND WHEREAS the landlord has constructed a building known as Standard Design Factory hereinafter referred to as the said building on a portion of the land demised to the Landlord under the aforementioned lease for the purpose of allotting the same to the various entrepreneurs carrying on business of manufacturing and/or processing articles, things, materials components and instruments relating to the industries of electronics. AND WHEREAS the tenant has approached the Landlord for demising to it him/them a portion of the said building on ground floor, constructed and/or erected on Plot No. F-1 in the Marol Industrial Area within the village limits of Vyarawali, Parjapur, Kondivita and Marol Taluka Andheri District Bombay Suburban Sub-Registration No. Sub District and Registration District Bombay City and Bombay Suburban containing by admeasurement 375013 square metres of thereabouts to establish manufacturing/processing establishment for the manufacture of articles things, materials, components and instruments relating to the electronics industries on the terms and conditions hereinafter contained and to grant to it/him/them all facilities and variety of concessions: Contd. .....3/-.

[SEAL] :: 3 :: AND WHEREAS the Landlord has agreed, to let out a portion of the said building, admeasuring about 3443 sq. ft. equivalent to 320sq.metres or thereabout on the 2nd floor of the said building at the concessional rent of Rs 6667/- per month for a terms of five years upon the terms and conditions hereinafter contained: AND WHEREAS it has been agreed by and between the parties hereto that the stamp duty and registration charges shall be borne and paid by the Landlord. NOW THIS INDENTURE WITNESSETH AS FOLLOWS: 1. In consideration of the premises and of various facilities and a variety of concessions made available to the Tenant and the concessional rent hereby reserved and of the covenants and agreements on the part of the Tenant hereinafter contained, the Landlord doth hereby demise to the Tenant to HOLD the said premises hereunder expressly demised unto the Tenant for the term of Five Years computed from the 1st day of Month & year of possession paying therefor the yearly rental during the said term unto the Landlord through Central Bank of India. SEEPZ Branch, as may be otherwise required by the Landlord the said yearly rent of Rs. 40,000/-in advance being the concessional rent by the Landlord without any deductions whatsoever: The Tenant with intent to bind all persons into whatsoever hands the demised premises may come doth hereby covenant with the Landlord as follows: (a) During the said terms hereby created to pay unto the Landlord the said rent and all other charges that may be fixed from time to time by the Development Commissioner at the time on the days and in manner hereinbefore appointed for payment thereof clear of all deductions, Contd. ....4/-.

[SEAL] :: 4 :: (a) (a) Further, during the said terms, the Landlord may revise the said rent even during the currency of this indenture on the following grounds: 1) To meet any increase in the maintenance costs. 2) To bring parity with the rents charged in respect of the premises similar to the demised premises. 3) Any other exigencies which may necessitate the revision of the lease rent during the currency of this indenture. b) To pay all existing and future taxes, rates, assessments and outgoings of every description for the time being payable either by Landlord or tenant or by the occupier in respect of the demised premises and anything for the time being thereon. c) It is hereby agreed to declared that in the event the Landlord insures and or keeps insured the building including the demised premises the tenant shall be liable to pay to the Landlord the amount of the premium/premiums in proportion to the area of the demised premises within fifteen days of receipt of notice by the Landlord for payments of the amount of premium/premiums and that the tenant shall pay the same without objection provided always in the event of dispute arising between Landlord and Tenant regarding the Liability of the Tenant to pay the said amount of insurance premium. The decision of the Development Commissioner shall be final and binding upon the Tenant. (d) During the said term hereby agreed to manufacture electronic products as authorised by the Development Commissioner from time to time. (e) To commence production within two months from the date of taking possession of premises. (f) Not to manufacture/process any article things, materials, components and instruments which do not in anyway relate to the Industry of Electronics. Contd....5/-.

[SEAL] :: 5 :: (g) To export the entire production (whether manufactured/processed) including seconds to foreign countries in accordance with the provisions of the law subject to such concessions and facilities as may be given by the Government to the Tenant in the matter of the Customs duty, routing of applications or import licences, etc. and such other concessions as may be notified hereafter from time to time. The disposal of the Wastes and Scrap material will be made with in the prior permission and as per the instructions of the Development Commissioner. (h) To submit from time to time to the Development Commissioner, Santacruz Electronics Export Processing Zone (hereinafter referred to as the Development Commissioner) plans and the scheme of the particular industry to be established together with such other details as may be required. (i) To furnish a legal undertaking as may be prescribed for the fulfillment of export obligations set out in their application for setting up industries in the Zone. (j) To make exports of items of electronics to the levels indicated in the phased manufacturing programme projected in the application submitted to the SEEPZ Board for setting up an industry in the Zone and also to maintain the value added approved by the Board. (k) To arrange forwarding/clearance of manufactured/processed goods for export or import of raw materials, spares and such other materials as are required for manufacture/processing by the Development Commissioner or agencies authorised by the Development Commissioner. (i) Not to allow any of the products hereinafter for brevity's sake referred to as "Electronics Products) manufactured/processed in SEEPZ produced by the Tenant to enter or pass into and/or be sold in any market in India or anywhere in India provided always that the Development Commissioner may permit the Tenant to sell and/or dispose of the Electronics Contd. ....6/-.

[SEAL] :: 6 :: products to enter or pass into and/or be sold in any market in India or anywhere in India. (m) To sell or dispose of the electronics products manufactured/processed by the Tenant in the local markets in India or as may be directed by the Development Commissioner in the event the Development Commissioner considers that the said products are essential or necessary for national defence or for countering natural disaster or considered urgent and necessary for the national economy upto payment as may be mutually agreed upon and that the Tenant shall not be entitled to make any other claim for compensation for delivering the products as aforesaid in any manner whatsoever. (n) To observe and perform all the terms and conditions of the lease entered into by the Landlord with the Maharashtra Industrial Development Corporation with the Landlord dated the 20th day of January, 1975, which terms and conditions of the said lease immediately aforementioned the Tenant are made aware of before execution of these presents. (o) To permit the Development Commissioner or his any officer duly authorised by him at any time and without any prior notice being given to enter into and upon the demised premises and to inspect the general state of the demised premises and also the processing plant and machinery, etc. and the books of account and other documents and vouchers concerning the electronic products manufactured by the Tenant. (p) Not to do or permit anything to be done or stored (except those required for production of electronic products approved for manufacture in the demised premises, which may be a nuisance, annoyance or disturbance to the owners, occupiers or residents of other premises in the vicinity. (q) To use the demised premises only for the purpose of manufacturing processing or assemblibng electronic Contd.......7/-.

[SEAL] :: 7 :: products for export and other purposes incidental to the same and not to use the said demised premises or any part thereof for any other purpose. (r) Not to sublet, assign or part with the possession of the demised premises or any part thereof without the prior consent in writing of the Development Commissioner and subject to such terms and conditions as the Development Commissioner may prescribe in granting the possession to the Tenant for the transfer of the said demised premises or any part thereof as hereinbefore mentioned. (s) To intimate in writing the Development Commissioner within a fortnight of the changes made or effected in the Corporate structure or the construction of the Tenant. (t) To submit the statments of accounts and such other details within such time as may be stipulated by the Development Commissioner during the terms of these presents giving all the necessary particulars as may be required by the Development Commissioner. (u) To allow the persons and vehicles entering and leaving SEEPZ to be examined by the Staff of the Development Commissioner for the purpose of checking that no products or any materials manufactured in the demised premises are removed in the manner not authorised by these presents. (v) Not to make any alterations, changes or additions in the demised premises except with the written previous permission of the Development Commissioner and in accordance with the directions that the Development Commissioner may prescribe plans approved by the Development Commissioner and the rules, byelaws and regulations of the Bombay Muncipal Corporation or any other authority prescribed by the law. (w) Not to cause any annoyance or hindrance to the other tenants of the Landlord and to so conduct the activities which will impede the other tenants of the Landlord in manufacturing or processing the electronic products AND in the event the Contd. .......8/-.

[SEAL] :: 8 :: Tenant experiences or finds any difficulty in conducting its/his/their business and/or activities connected therewith smoothly and efficiently by reason of the user of the said building or any portion thereof by the other tenants of the Building the same shall be referred to the Development Commissioner and any directions or orders issued by the Development Commissioner in relation thereto shall be complied by the Tenant. (x) To observe and perform all rules and regulations prescribed under the Labour Legislation such as Industiral Dispute Act, Workmen's Compensation Act, payment of Wages Act, Minimum Wages Act or any other statuttes governing the relationship of the employees and employers including the Factories Act and Fatal Accidents Act. (y) If the said rent hereby reserved shall be in arrears for the space of 30 days whether the same shall have been legally demanded or not or if within a period of three months from the date of the commencement of the Tenancy the entire demised premises are not utilised for the purpose for which the same has been demised or if the Tenant ceases to manufacture items of electronics products for a period of six continuous months for whatever cause arising, including a strike, lock-out or any injunction the Court in any sort of litigation, if and whenever there shall be a breach of any of the covenants and conditions herein before set out or referred or if the tenant fails to make exports to the level projected in the application submitted to the Government for approval of the project or to maintain the value added approved by the Government for the project or the Tenant becoming insolvent or is wound up or amalgamated or merged with other body corporate or otherwise pursuant to the Court's orders or under the provisions law then in force or under any agreement entered into by the Tenant, the Landlord may re-enter upon any part of the demised premises in the name of the whole and thereupon the sub-demise hereby granted shall absolutely cease and determine and in the case, no compensation shall be payable to the Tenant on account of any structural Contd.....9/-.

[SEAL] :: 9 :: Alternations or improvements made or carried out in the said premises PROVIDED ALWAYS that the Landlord shall in addition to the right of determination of this Tenancy and to effect re-entry as mentioned aforesaid be entitled to recover as and by way of compensation such amount as may be considered by the Landlord as appropriately recoverable from the Tenant in the event the Tenant were not given or granted all those various concessions and variety of facilities. (y-2) If the said rent hereby reserved shall be in arrears for a period of 30 days whether the same shall have been legally demanded or not, the Development Commissioner may take steps to recover the arrears of rent as arrears of land revenue. (z) At the expiration or sooner determination of the said term quitely to deliver upto the Landlord the demised premises after removing the partitions and fittings and fixtures pertaining thereto any alternations, changes or additions erected on the demised premises by the Tenant and such removal should be done without in any way damaging or defacing the premises and such delivery should be given within a period of Sixty days after the expiration or sooner determination of the said term PROVIDED ALWAYS that in the event the Tenant fails to deliver vacant and peaceful possession of the demised premises as aforesaid, the said partitions and fittings and fixtures and any alterations, changes or additions as aforesaid on the expiry of the aforementioned period shall belong to the Landlord and the Tenant shall not be entitled to claim any compensation or raise any dispute in respect thereof PROVIDED ALWAYS that in the event the Landlord desires to retain the said partitions and fittings and fixtures, etc. as aforesaid, the Landlord shall pay to the Tenant compensation thereof as may be determined by the Development Commissioner and the Tenant shall not be entitled to raise any objection against such retention and/or the valuation determined by the said Development Commissioner, as aforesaid, PROVIDED ALWAYS that Contd. .......10/-.

[SEAL] :: 10 :: the Tenant shall continue to be liable to pay compensation for the period of unauthorised occupation of the said premises till the date Tenant hands over vacant and peaceful possession of the demised premises at such rate as may be charged by the Landlord. (a) (a) The Landlofd both hereby convenant with the Tenant that the Tenant paying the rent hereby reserved and performing the covenants hereinbefore on the Tenant's part contained shall and may peaceable enjoy the demised premises for the said term hereby granted without any interruption or disturbance from or by the Landlord or any persons lawfully claiming by from or under Landlord. (a) (b) All disputes and differences arising out of or in any way touching or concerning these persents (except as to any matters the decision of which is left to the sole discretion of the said DEVELOPMENT COMMISSIONER, as specially provided for in these presents) shall be referred to the arbitration of two arbitrators, one each to be appointed by the respective parties to these presents. The arbitrators so appointed shall appoint an Umpire in the manner provided in the Arbitration Act, 1940. It will be no objection that the person appointed as Arbitrator on behalf of the Sub-Lessor is or was an employee of the Govt. that he had to deal with the matters to which the Tenancy herein relates and/or that in the course of his duties as such employee of the Govt. he had expressed a view on all or any of the matters in dispute or difference. In the event of either or both of arbitrators dying, neglecting or refusing to act or resigning or being unable to act for any reason, the substitute(s) to be appointed by the concerned parties shall be entitled to proceed with the reference from the stage at which it was left by the previous Arbitrator/Arbitrators. The cost in connection with the arbitration shall be in the discretion of the Arbitrators who may make a suitable provision for the same in their award. Subject to the aforesaid, the provisions of Arbitration Act, 1940 and the Rules thereunder and Contd. .....11/-.

[SEAL] :: 11 :: any statutory modifications thereof for the time being in force shall apply to the arbitration proceedings under this clause. (a) (c) If the Tenant shall have duly performed and observed the covenants and conditions on the part of the Tenant herein before contained and shall at the end of the said term hereby granted by desirous of receiving a new Tenancy of the demised premises and of such desire shall give notice in writting to the Landlord before the expiration of the term hereby granted the Landlord shall and will at the cost and expenses in every respect of the Tenancy grant to the Tenant a new Tenancy of the demised premises for a further terms of five years on payment of yearly rent as may be determined by the Landlord AND WITH covenants, provisos and stipulations hereinbefore contained expected is provision for renewal and such new Tenancy shall contain in lieu of this clause a covenant that at the end of the said renewed term of five years, the Landlord shall at the like cost and expense grant to the Tenant further renewals and that every such renewal shall be for such terms and subject to such covenants, provisos and stipulations. The cost of an in connection with arbitration shall be in the discretion of the Arbitrator who may make a suitable provision for the same in his award. Subject as aforesaid, the Arbitration Act, 1940, shall apply to the arbitration proceedings under this clause. FIRST SCHEDULE (Description of Land) All that piece of parcel of land known as Plot No. F-1, in the Marol Industrial Area within the village limits of Parajapur, Kondivita, Marol and Vyaravali, Taluka Andheri and now in the Registration Sub-District and District of Bombay and Bombay Suburban, containing by a measurement 3,75,013 sq. mtrs. or thereabouts, that is to say: Contd. .......12/-.

[SEAL] :: 12 :: On or towards the North by Road and Aarey Milk Colony Land. On or towards the South by Road On or towards the East Pipe Line and Aarey Milk Colony land and on or towards the
West by Road. SIGNED, SEALED AND DELIVERED BY SHRI R.M. PREMKUMAR, Development Commissioner Santacruz Electronics Export Processing Zone, On behalf of President of India in the presence of: 1. SMT. V. ABRAHAM, --------------------------ESTATE MANAGER --------------------------SMT. S.D. SHENDE, --------------------------UDC, SEEPZ SDS --------------------------R. M. Premkumar R. M. Premkumar IAS Development Commissioner SEEPZ, Govt. of India. Ministry of Commerce, Andheri (E), Bombay-96.

2.

V. Abraham Smt. V. ABRAHAM ESTATE MANAGER SEEPZ GOVT. OF INDIA MINISTRY OF COMMERCE Andheri (E), Bombay-400 096. For Syntel Software P. Ltd. N Saes Director 2. Signature Name Address: MI Gushnan --------------Gushnan P.R. --------------No. 7, P.P. BHAGAT BLDG, Dombivli (E). Thane Dist.

SIGNED, SEALED AND DELIVERED by the abovenamed Licensee - ----------------------in the presence of: 1. Signature Name Address: Ropakuman K.A. -----------------Ropakuman K.A. -----------------B/6 Si Orndaz Achole Road, Nallasspara (E). Thane Dist.

The common Seal of the abovenamed Licensee was, pursuant to a resolution of its Board of Directors passed in that behalf of the day of 19 affixed hereto in the presence of: ********

DUPLICATE RECEIPT NO. C2889 DATE 2-11-92 NO. 3085/92/6701/S General Stamp Office Bombay, 4-11-1992 CERTIFIED under Section 32, clause (2) of the Bombay Stamp Act, 1935 that this instrument is exempt from stamp duty. [SIG] 4/11 [SEAL] COLLECTOR This Indenture made at Bombay on the 2nd Nov. '92 between the President of India, hereinafter called "the Land Lord" (which expression shall unless the context does not so admit include his successors in office and assigns) of the One Part and SYNTEL SOFTWARE PRIVATE LIMITED hereinafter referred to as "the tenant" (in which expression are included, unless such inclusion is inconsistent with the context of meaning thereof its/his/their heirs, executors, administrators and assigns/its executors and assigns) of the Other Part. WHEREAS by an Indenture of Lease made at Bombay on the Twentieth day of January, 1975 between the Maharashtra Industrial Development Corporation, therein and hereinafter referred to as the Lessor of the One Part and the Landlord of the Other Part the Lessor in consideration of the premises and of the rent therein referred to and of the covenants and agreements on the part of the Landlord, the Lessor did demise unto the Landlord all that piece of land known as Plot No. F-1 in the Marol Industrial Area within the village limits of Vyarawali, Parjapur, Kondivitta and Marol Taluka Andheri, District Bombay Suburban Sub-Registration No. Sub District and 1

[SEAL] :: 2 :: and Registration District Bombay City and Bombay Suburban containing by admeasurement 375013 square metres or thereabout and more particularly described in the First Schedule thereunder written for use as Santacruz Electronics Export Processing Zone, Government of India. AND WHEREAS the Government of India have constituted a Santacruz Electronics Export Processing Zone, hereinafter called the SEEPZ in the aforementioned demised land for the purpose of encouraging the export industries in India and for earning foreign exchange on the export of various kinds of electronics and gem and jewellery items from the SEEPZ in the interest of the national economy by establising industrial units in the said zone: AND WHEREAS the landlord has constructed a building known as Standard Design Factory hereinafter referred to as the said building on a portion of the land demised to the Landlord under the aforementioned lease for the purpose of allotting the same to the various entrepreneurs carrying on business of manufacturing and/or processing articles, things, materials components and instruments relating to the industries of electronics. AND WHEREAS the tenant has approached the Landlord for demising to it him/them a portion of the said building on ground floor, constructed and/or erected on Plot No. F-1 in the Marol Industrial Area within the village limits of Vyarawali, Parjapur, Kondivita and Marol Taluka Andheri District Bombay Suburban Sub-Registration No. Sub District and Registration District Bombay City and Bombay Suburban containing by admeasurement 375013 square metres of thereabouts to establish manufacturing/processing establishment for the manufacture of articles things, materials, components and instruments relating to the electronics industries on the terms and conditions hereinafter contained and to grant to it/him/them all facilities and variety of concessions: Contd. ......3/-.

[SEAL] :: 3 :: AND WHEREAS the Landlord has agreed, to let out a portion of the said building, admeasuring about 3443 sq.ft. equivalent to 320sq.metres or thereabout on the ground floor of the said building at the concessional rent of Rs 6667/- per month for a terms of five years upon the terms and conditions hereinafter contained: AND WHEREAS it has been agreed by and between the parties hereto that the stamp duty and registration charges shall be borne and paid by the Landlord. NOW THIS INDENTURE WITNESSETH AS FOLLOWS: 1. In consideration of the premises and of various facilities and a variety of concessions made available to the Tenant and the concessional rent hereby reserved and of the covenants and agreements on the part of the Tenant hereinafter contained, the Landlord doth hereby demise to the Tenant to HOLD the said premises hereunder expressly demised unto the Tenant for the term of Five Years computed from the 1st day of Month & year of possession paying therefor the yearly rental during the said term unto the Landlord through Central Bank of India, SEEPZ Branch, as may be otherwise required by the Landlord the said yearly rent of Rs. 80,004/- in advance being the concessional rent by the Landlord without any deductions whatsoever: The Tenant with intent to bind all persons into whatsoever hands the demised premises may come doth hereby convenant with the Landlord as follows: (a) During the said terms hereby created to pay unto the Landlord the said rent and all other charges that may be fixed from time to time by the Development Commissioner at the time on the days and in manner hereinbefore appointed for payment thereof clear of all deductions, Contd. ....4/-.

[SEAL] :: 4 :: (a) (a) Further, during the said terms, the Landlord may revise the said rent even during the currency of this indenture on the following gounds: 1) To meet any increase in the maintenance costs. 2) To bring parity with the rents charged in respect of the premises similar to the demised premises. 3) Any other exigencies which may necessitate the revision of the lease rent during the currency of this indenture. b) To pay all existing and future taxes, rates, assessments and outgoings of every description for the time being payable either by Landlord or tenant or by the occupier in respect of the demised premises and anything for the time being thereon. c) It is hereby agreed to declared that in the event the Landlord insures and or keeps insured the building including the demised premises the tenant shall be liable to pay to the Landlord the amount of the premium/premiums in proportion to the area of the demised premises within fifteen days of receipt of notice by the Landlord for payments of the amount of premium/premiums and that the tenant shall pay the same without objection provided always in the event of dispute arising between Landlord and Tenant regarding the Liability of the Tenant to pay the said amount of insurance premium. The decision of the Development Commissioner shall be final and binding upon the Tenant. (d) During the said term hereby agreed to manufacture electronic products as authorised by the Development Commissioner from time to time. (e) To commence production within two months from the date of taking possession of premises. (f) Not to manufacture/process any article things, materials, components and instruments which do not in anyway relate to the Industry of Electronics. Contd. .....5/-.

[SEAL] (g)

:: 5 :: To export the entire production (whether manufactured/processed)

including seconds to foreign countries in accordance with the provisions of the law subject to such concessions and facilities as may be given by the Government to the Tenant in the matter of the Customs duty, routing of applications or import licences, etc. and such other concessions as may be notified hereafter from time to time. The disposal of the Wastes and Scrap material will be made with in the prior permission and as per the instructions of the Development Commissioner. (h) To submit from time to time to the Development Commissioner, Santacruz Electronics Export Processing Zone (hereinafter referred to as the Development Commissioner) plans and the scheme of the particualr industry to be established together with such other details as may be required. (i) To furnish a legal undertaking as may be prescribed for the fulfillment of export obligations set out in their application for setting up industries in the Zone. (j) To make exports of items of electronics to the levels indicated in the phased manufacturing programme projected in the application submitted to the SEEPZ Board for setting up an industry in the Zone and also to maintain the value added approved by the Board. (k) To arrange forwarding/clearance of manufactured/processed goods for export or import of raw materials, spares and such other materials as are required for manufacture/processing by the Development Commissioner or agencies authorised by the Development Commissioner. (i) Not to allow any of the products hereinafter for brevity's sake referred to as "Electronics Products) manufactured/processed in SEEPZ produced by the Tenant to enter or pass into and/or be sold in any market in India or anywhere in India provided always that the Development Commissioner may permit the Tenant to sell and/or dispose of the Electronics Contd. ....6/-.

[SEAL] :: 6 :: products to enter or pass into and/or be sold in any market in India or anywhere in India. (m) To sell or dispose of the electronics products manufactured/processed by the Tenant in the local markets in India or as may be directed by the Development Comnmissioner in the event the Development Commissioner considers that the said products are essential or necessary for national defence or for countering natural disaster or considered urgent and necessary for the national economy upto payment as may be mutually agreed upon and that the Tenant shall not be entitled to make any other claim for compensation for delivering the products as aforesaid in any manner whatsoever. (n) To observe and perform all the terms and conditions of the lease entered into by the Landlord with the Maharashtra Industrial Development Corporation with the Landlord dated the 20th day of January, 1975, which terms and conditions of the said lease immediately aforementioned the Tenant are made aware of before execution of these presents. (o) To permit the Development Commissioner or his any officer duly authorised by him at any time and without any prior notice being given to enter into and upon the demised premises and to inspect the general state of the demised premises and also the processing plant and machinery, etc. and the books of account and other documents and vouchers concerning the electronic products manufactued by the Tenant. (p) Not to do or permit anything to be done or stored (except those required for production of electronic products approved for manufacure in the demised premises, which may be a nuisance, annoyance or disturbance to the owners, occupiers or residents of other premises in the vicinity. (q) To use the demised premises only for the purpose of manufacturing processing or assemblibng electronic Contd......7/-.

[SEAL] :: 7 :: products for export and other purposes incidental to the same and not to use the said demised premises or any part thereof for any other purpose. (r) Not to sublet, assign or part with the possession of the demised premises or any part thereof without the prior consent in writing of the Development Commissioner and subject to such terms and conditions as the Development Commissioner may prescribe in granting the possession to the Tenant for the transfer of the said demised premises or any part thereof as hereinbefore mentioned. (s) To intimate in writing the Development Commissioner within a fortnight of the changes made or effected in the Corporate structure or the construction of the Tenant. (t) To submit the statements of accounts and such other details within such time as may be stipulated by the Development Commissioner during the terms of these presents giving all the necessary particulars as may be required by the Development Commissioner. (u) To allow the persons and vehicles entering and leaving SEEPZ to be examined by the Staff of the Development Commissioner for the purpose of checking that no products or any materials manufactured in the demised premises are removed in the manner not authorised by these presents. (v) Not to make any alterations, changes or additions in the demised premises except with the written previous permission of the Development Commissioner and in accordance with the directions that the Development Commissioner may prescribe and in accordance with the plans approved by the Development Commissioner and the rules, byelaws and regulations of the Bombay Municipal Corporation or any other authority prescribed by the law. (w) Not to cause any annoyance or hindrance to the other tenants of the Landlord and to so conduct the activities which will impede the other tenants of the Landlord in manufacturing or processing the electronic products AND in the event the Contd. .......8/-.

[SEAL] :: 8 :: Tenant experiences or finds any difficulty in conducting its/his/their business and/or activities connected therewith smoothly and efficiently by reason of the user of the said building or any portion thereof by the other tenants of the Building the same shall be referred to the Development Commissioner and any directions or orders issued by the Development Commissioner in relation thereto shall be complied by the Tenant. (x) To observe and perform all rules and regulations prescribed under the Labour Legislation such as Industiral Dispute Act, Workmen's Compensation Act, payment of Wages Act, Minimum Wages Act or any other statuttes governing the relationship of the employees and employers including the Factories Act and Fatal Accidents Act. (y) If the said rent hereby reserved shall be in arrears for the space of 30 days whether the same shall have been legally demanded or not or if within a period of three months from the date of the commencement of the Tenancy the entire demised premises are not utilised for the purpose for which the same has been demised or if the Tenant ceases to manufacture items of electronics products for a period of six continuous months for whatever cause arising, including a strike, lock-out or any injunction the Court in any sort of litigation, if and whenever there shall be a breach of any of the covenants and conditions herein before set out or referred or if the tenant fails to make exports to the level projected in the application submitted to the Government for approval of the project or to maintain the value added approved by the Government for the project or the Tenant becoming insolvent or is wound up or amalgamated or merged with other body corporate or otherwise pursuant to the Court's orders or under the provisions law then in force or under any agreement entered into by the Tenant, the Landlord may re-enter upon any part of the demised premises in the name of the whole and thereupon the sub-demise hereby granted shall absolutely cease and determine and in the case, no compensation shall be payable to the Tenant on account of any structural Contd.....9/-.

[SEAL] :: 9 :: Alternations or improvements made or carried out in the said premises PROVIDED ALWAYS that the Landlord shall in addition to the right of determination of this Tenancy and to effect re-entry as mentioned aforesaid be entitled to recover as and by way of compensation such amount as may be considered by the Landlord as appropriately recoverable from the Tenant in the event the Tenant were not given or granted all those various concessions and variety of facilities. (y-2) If the said rent hereby reserved shall be in arrears for a period of 30 days whether the same shall have been legally demanded or not, the Development Commissioner may take steps to recover the arrears of rent as arrears of land revenue. (z) At the expiration or sooner determination of the said term quitely to deliver upto the Landlord the demised premises after removing the partitions and fittings and fixtures pertaining thereto any alternations, changes or additions erected on the demised premises by the Tenant and such removal should be done without in any way damaging or defacing the premises and such delivery should be given within a period of Sixty days after the expiration or sooner determination of the said term PROVIDED ALWAYS that in the event the Tenant fails to deliver vacant and peaceful possession of the demised premises as aforesaid, the said partitions and fittings and fixtures and any alterations, changes or additions as aforesaid on the expiry of the aforementioned period shall belong to the Landlord and the Tenant shall not be entitled to claim any compensation or raise any dispute in respect thereof PROVIDED ALWAYS that in the event the Landlord desires to retain the said partitions and fittings and fixtures, etc. as aforesaid, the Landlord shall pay to the Tenant compensation thereof as may be determined by the Development Commissioner and the Tenant shall not be entitled to raise any objection against such retention and/or the valuation determined by the said Development Commissioner, as aforesaid, PROVIDED ALWAYS that Contd. .....10/-.

[SEAL] :: 10 :: the Tenant shall continue to be liable to pay compensation for the period of unauthorised occupation of the said premises till the date Tenant hands over vacant and peaceful possession of the demised premises at such rate as may be charged by the Landlord. (a) (a) The Landlofd both hereby covenant with the Tenant that the Tenant paying the rent hereby reserved and performing the covenants hereinbefore on the Tenant's part contained shall and may peaceable enjoy the demised premises for the said term hereby granted without any interruption or disturbance from or by the Landlord or any persons lawfully claiming by from or under Landlord. (a) (b) All disputes and differences arising out of or in any way touching or concerning these persents (except as to any matters the decision of which is left to the sole discretion of the said DEVELOPMENT COMMISSIONER, as specially provided for in these presents) shall be referred to the arbitration of two arbitrators, one each to be appointed by the respective parties to these presents. The arbitrators so appointed shall appoint an Umpire in the manner provided in the Arbitration Act, 1940. It will be no objection that the person appointed as Arbitrator on behalf of the Sub-Lessor is or was an employee of the Govt. that he had to deal with the matters to which the Tenancy herein relates and/or that in the course of his duties as such employee of the Govt. he had expressed a view on all or any of the matters in dispute or difference. In the event of either or both of arbitrators dying, neglecting or refusing to act or resigning or being unable to act for any reason, the substitute(s) to be appointed by the concerned parties shall be entitled to proceed with the reference from the stage at which it was left by the previous Arbitrator/Arbitrators. The cost in connection with the artibtration shall be in the discretion of the Arbitrators who may make a suitable provision for the same in their award. Subject to the aforesaid, the provisions of Arbitration Act, 1940 and the Rules thereunder and Contd......11/-.

[SEAL] :: 11 :: any statutory modifications thereof for the time being in force shall apply to the arbitration proceedings under this clause. (a) (c) If the Tenant shall have duly performed and observed the covenants and conditions on the part of the Tenant herein before contained and shall at the end of the said term hereby granted by desirous of receiving a new Tenancy of the demised premises and of such desire shall give notice in writing to the Landlord before the expiration of the term hereby granted the Landlord shall and will at the cost and expenses in every respect of the Tenancy grant to the Tenant a new Tenancy of the demised premises for a further terms of five years on payment of yearly rent as may be determined by the Landlord AND WITH covenants, provisos and stipulations hereinbefore contained expected is provision for renewal and such new Tenancy shall contain in lieu of this clause a covenant that at the end of the said renewed term of five years, the Landlord shall at the like cost and expense grant to the Tenant further renewals and that every such renewal shall be for such terms and subject to such covenants, provisos and stipulations. The cost of an in connection with arbitration shall be in the discretion of the Arbitrator who may make a suitable provision for the same in his award. Subject as aforesaid, the Arbitration Act, 1940, shall apply to the arbitration proceedings under this clause. FIRST SCHEDULE (Description of Land) All that piece of parcel of land known as Plot No. F-1, in the Marol Industrial Area within the village limits of Parajapur, Kondivita, Marol and Vyaravali, Taluka Andheri and now in the Registration Sub District and District of Bombay and Bombay Suburban, containing by a measurement 3,75,013 sq. mtrs. or thereabouts, that is to say: Contd.........12/-.

:: 12 :: On or towards the North by Road and Aarey Milk Colony Land. On or towards the South by Road On or towards the East Pipe Line and Aarey Milk Colony land and on or towards the West by Road.
SIGNED, SEALED AND DELIVERED BY SHRI R. M. PREMKUMAR Development Commissioner, Santacruz Electronics Export Processing Zone, On behalf of President of India in the presence of: 1. SMT. V. ABRAHAM --------------------------ESTATE MANAGER --------------------------/S/ R. M. Premkumar IAS Development Commissioner SEEPZ, Govt. of India Ministry of Commerce, Andheri (B), Bombay--96 /S/ Smt. V. ABRAHAM --------------------------Smt. V. ABRAHAM ESTATE MANAGER

SEEPZ GOVT. OF INDIA MINISTRY OF COMMERCE
2. SMT S. D. SHENDE --------------------------UDE, SEEPZ --------------------------SIGNED, SEALED AND DELIVERED by the abovenamed Licensee - -------------FOR SYNTEL SOFTWARE PVT. LTD. ? ----------------------------DIRECTOR/AUTHORIZED SIGNATORY Andheri (E), Bombay-400 096

in the presence of:
1. Signature Name Address: N. Barg --------------------------------------2. Signature Name Address: ---------------------------------------

The common Seal of the abovenamed Licensee was, pursuant to a resolution of its Board of Directors passed in that behalf of the day of 2nd Nov 1992 affixed hereto in the presence of: N. Barg - -------------------------------

DUPLICATE Receipt No. 0310332 No. 9257193 Date 261093

General Stamp Office 11716 Bombay, 2-12-93 CERTIFIED under Section 32, clause (2) of the Bombay Stamp Act, 1958 that this instrument be exempt from stamp duty. Exempt under Section ??????? [SEAL] This Indenture made at Bombay on the 11th October, 1993 between the President of India, hereinafter called "the Land Lord" (which expression shall unless the context does not so admit include his successors in office and assigns) of the One Part and SYNTEL SOFTWARE PVT LTD.,hereinafter. referred to as "the tenant" (in which expression are included, unless such inclusion is inconsistent with the context of meaning thereof its/his/their heirs, executors, administrators and assigns/its executors and assigns) of the Other Part. WHEREAS by an Indenture of Lease made at Bombay on the Twentieth day of January, 1975 between the Maharashtra Industrial Development Corporation, therein and hereinafter referred to as the Lessor of the One Part and the Landlord of the Other Part the Lessor in consideration of the premises and of the rent therein referred to and of the covenants and agreements on the part of the Landlord, the Lessor did not demise unto the Landlord all that piece of land known as Plot No. F-1 in the Marol Industrial Area within the village limits of Vyarawali, Parjapur, Kondivitta and Marol Taluka Andheri, District Bombay Suburban Sub-Registration No. Sub District and contd. 1

:: 2 :: [SEAL] and Registration District Bombay City and Bombay Suburban containing by admeasurement 375013 square metres or thereabout and more particularly described in the First Schedule thereunder written for use as Santacruz Electronics Export Processing Zone, Government of India. AND WHEREAS the Government of India have constituted a Santacruz Electronics Export Processing Zone, hereinafter called the SEEPZ in the aforementioned demised land for the purpose of encouraging the export industries in India and for earning foreign exchange on the export of various kinds of electronics and gem and jewellery items from the SEEPZ in the interest of the national economy by establishing industrial units in the said zone: AND WHEREAS the landlord has constructed a building known as Standard Design Factory hereinafter referred to as the said building on a portion of the land demised to the Landlord under the aforementioned lease for the purpose of allotting the same to the various entrepreneurs carrying on business of manufacturing and/or processing articles, things, materials components and instruments relating to the industries of electronics. AND WHEREAS the tenant has approached the Landlord for demising to it him/them a portion of the said building on ground floor, constructed and/or erected on Plot No. F-1 in the Marol Industrial Area within the village limits of Vyarawali, Parjapur, Kondivita and Marol Taluka Andheri District Bombay Suburban Sub-Registration No. Sub District and Registration District Bombay City and Bombay Suburban containing by admeasurement 375013 square metres of thereabouts to establish manufacturing/processing establishment for the manufacture of articles things, materials, components and instruments relating to the electronics industries on the terms and conditions hereinafter contained and to grant to it/him/them all facilities and variety of concessions: Contd. ....3/-.

:: 3 :: AND WHEREAS the Landlord has agreed, to let out a portion of the said building, admeasuring about 5502 sq.ft. equivalent to 528 sq.metres or thereabout on the Third floor of the said building at the concessional rent of Rs 11,000/- per month for a terms of five years upon the terms and conditions hereinafter contained: AND WHEREAS it has been agreed by and between the parties hereto that the stamp duty and registration charges shall be borne and paid by the Landlord. NOW THIS INDENTURE WITNESSETH AS FOLLOWS: 1. In consideration of the premises and of various facilities and a variety of concessions made available to the Tenant and the concessional rent hereby reserved and of the covenants and agreements on the part of the Tenant hereinafter contained, the Landlord doth hereby demise to the Tenant to HOLD the said premises hereunder expressly demised unto the Tenant for the term of Five Years computed from the 1st day of Month & year of possession paying therefor the yearly rental during the said term unto the Landlord through Central Bank of India, SEEPZ Branch, as may be otherwise required by the Landlord the said yearly rent of Rs. 1,32,000/- in advance being the concessional rent by the Landlord without any deductions whatsoever: The Tenant with intent to bind all persons into whatsoever hands the demised premises may come doth hereby convenant with the Landlord as follows: (a) During the said terms hereby created to pay unto the Landlord the said rent and all other charges that may be fixed from time to time by the Development Commissioner at the time on the days and in manner hereinbefore appointed for payment thereof clear of all deductions, Contd. ....4/-.

[SEAL] :: 4 :: (a) (a) Further, during the said terms, the Landlord may revise the said rent even during the currency of this indenture on the following grounds: 1) To meet any increase in the maintenance costs. 2) To bring parity with the rents charged in respect of the premises similar to the demised premises. 3) Any other exigencies which may necessitate the revision of the lease rent during the currency of this indenture. b) To pay all existing and future taxes, rates, assessments and outgoings of every description for the time being payable either by Landlord or tenant or by the occupier in respect of the demised premises and anything for the time being thereon. c) It is hereby agreed to declared that in the event the Landlord insures and or keeps insured the building including the demised premises the tenant shall be liable to pay to the Landlord the amount of the premium/premiums in proportion to the area of the demised premises within fifteen days of receipt of notice by Landlord for payments of the amount of premium/premiums and that the tenant shall pay the same without objection provided always in the event of dispute arising between Landlord and Tenant regarding the Liability of the Tenant to pay the said amount of insurance premium. The decision of the Development Commissioner shall be final and binding upon the Tenant. (d) During the said term hereby agreed to manufacture electronic products as authorised by the Development Commissioner from time to time. (e) To commence production within two months from the date of taking possession of premises. (f) Not to manufacture/process any article things, materials, components and instruments which do not in anyway relate to the Industry of Electronics. Contd.......5/-.

[SEAL]

:: 5 :: To export the entire production (whether manufactured/processed)

(g)

including seconds to foreign countries in accordance with the provisions of the law subject to such concessions and facilities as may be given by the Government to the Tenant in the matter of the Customs duty, routing of applications or import licences, etc. and such other concessions as may be notified hereafter from time to time. The disposal of the Wastes and Scrap material will be made with in the prior permission and as per the instructions of the Development Commissioner. (h) To submit from time to time to the Development Commissioner, Santacruz Electronics Export Processing Zone (hereinafter referred to as the Development Commissioner) plans and the scheme of the particualr industry to be established together with such other details as may be required. (i) To furnish a legal undertaking as may be prescribed for the fulfillment of export obligations set out in their application for setting up industries in the Zone. (j) To make exports of items of electronics to the levels indicated in the phased manufacturing programme projected in the application submitted to the SEEPZ Board for setting up an industry in the Zone and also to maintain the value added approved by the Board. (k) To arrange forwarding/clearance of manufactured/processed goods for export or import of raw materials, spares and such other materials as are required for manufacture/processing by the Development Commissioner or agencies authorised by the Development Commissioner. (i) Not to allow any of the products hereinafter for brevity's sake referred to as "Electronics Products) manufactured/processed in SEEPZ produced by the Tenant to enter or pass into and/or be sold in any market in India or anywhere in India provided always that the Development Commissioner may permit the Tenant to sell and/or dispose of the Electronics Contd. ....6/-.

[SEAL] :: 6 :: products to enter or pass into and/or be sold in any market in India or anywhere in India. (m) To sell or dispose of the electronics products manufactured/processed by the Tenant in the local markets in India or as may be directed by the Development Commissioner in the event the Development Commissioner considers that the said products are essential or necessary for national defence or for countering natural disaster or considered urgent and necessary for the national economy upto payment as may be mutually agreed upon and that the Tenant shall not be entitled to make any other claim for compensation for delivering the products as aforesaid in any manner whatsoever. (n) To observe and perform all the terms and conditions of the lease entered into by the Landlord with the Maharashtra Industrial Development Corporation with the Landlord dated the 20th day of January, 1975, which terms and conditions of the said lease immediately aforementioned the Tenant are made aware of before execution of these presents. (o) To permit the Development Commissioner or his any officer duly authorised by him at any time and without any prior notice being given to enter into and upon the demised premises and to inspect the general state of the demised premises and also the processing plant and machinery, etc. and the books of account and other documents and vouchers concerning the electronic products manufactued by the Tenant. (p) Not to do or permit anything to be done or stored (except those required for production of electronic products approved for manufacure in the demised premises, which may be a nuisance, annoyance or disturbance to the owners, occupiers or residents of other premises in the vicinity. (q) To use the demised premises only for the purpose of manufacturing processing or assemblibng electronic Contd.......7/-.

[SEAL] :: 7 :: products for export and other purposes incidental to the same and not to use the said demised premises or any part thereof for any other purpose. (r) Not to sublet, assign or part with the possession of the demised premises or any part thereof without the prior consent in writing of the Development Commissioner and subject to such terms and conditions as the Development Commissioner may prescribe in granting the possession to the Tenant for the transfer of the said demised premises or any part thereof as hereinbefore mentioned. (s) To intimate in writing the Development Commissioner within a fortnight of the changes made or effected in the Corporate structure or the construction of the Tenant. (t) To submit the statments of accounts and such other details within such time as may be stipulated by the Development Commissioner during the terms of these presents giving all the necessary particulars as may be required by the Development Commissioner. (u) To allow the persons and vehicles entering and leaving SEEPZ to be examined by the Staff of the Development Commissioner for the purpose of checking that no products or any materials manufactured in the demised premises are removed in the manner not authorised by these presents. (v) Not to make any alterations, changes or additions in the demised premises except with the written previous permission of the Development Commissioner and in accordance with the directions that the Development Commissioner may prescribe and in accordance with the plans approved by the Development Commissioner and the rules, byelaws and regulations of the Bombay Muncipal Corporation or any other authority prescribed by the law. (w) Not to cause any annoyance or hindrance to the other tenants of the Landlord and to so conduct the activities which will impede the other tenants of the Landlord in manufacturing or processing the electronic products AND in the event the Contd. .......8/-.

[SEAL] :: 8 :: Tenant experiences or finds any difficulty in conducting its/his/their business and/or activities connected therewith smoothly and efficiently by reason of the user of the said building or any portion thereof by the other tenants of the Building the same shall be referred to the Development Commissioner and any directions or orders issued by the Development Commissioner in relation thereto shall be complied by the Tenant. (x) To observe and perform all rules and regulations prescribed under the Labour Legislation such as Industiral Dispute Act, Workmen's Compensation Act, payment of Wages Act, Minimum Wages Act or any other statuttes governing the relationship of the employees and employers including the Factories Act and Fatal Accidents Act. (y) If the said rent hereby reserved shall be in arrears for the space of 30 days whether the same shall have been legally demanded or not or if within a period of three months from the date of the commencement of the Tenancy the entire demised premises are not utilised for the purpose for which the same has been demised or if the Tenant ceases to manufacture items of electronics products for a period of six continuous months for whatever cause arising, including a strike, lock-out or any injunction the Court in any sort of litigation, if and whenever there shall be a breach of any of the covenants and conditions herein before set out or referred or if the tenant fails to make exports to the level projected in the application submitted to the Government for approval of the project or to maintain the value added approved by the Government for the project or the Tenant becoming insolvent or is wound up or amalgamated or merged with other body corporate or otherwise pursuant to the Court's orders or under the provisions law then in force or under any agreement entered into by the Tenant, the Landlord may re-enter upon any part of the demised premises in the name of the whole and thereupon the sub-demise hereby granted shall absolutely cease and determine and in the case, no compensation shall be payable to the Tenant on account of any structural Contd.....9/-.

[SEAL] :: 9 :: Alterations or improvements made or carried out in the said premises PROVIDED ALWAYS that the Landlord shall in addition to the right of determination of this Tenancy and to effect re-entry as mentioned aforesaid be entitled to recover as and by way of compensation such amount as may be considered by the Landlord as appropriately recoverable from the Tenant in the event the Tenant were not given or granted all those various concessions and variety of facilities. (y-2) If the said rent hereby reserved shall be in arrears for a period of 30 days whether the same shall have been legally demanded or not, the Development Commissioner may take steps to recover the arrears of rent as arrears of land revenue. (z) At the expiration or sooner determination of the said term quitely to deliver upto the Landlord the demised premises after removing the partitions and fittings and fixtures pertaining thereto any alternations, changes or additions erected on the demised premises by the Tenant and such removal should be done without in any way damaging or defacing the premises and such delivery should be given within a period of Sixty days after the expiration or sooner determination of the said term PROVIDED ALWAYS that in the event the Tenant fails to deliver vacant and peaceful possession of the demised premises as aforesaid, the said partitions and fittings and fixtures and any alterations, changes or additions as aforesaid on the expiry of the aforementioned period shall belong to the Landlord and the Tenant shall not be entitled to claim any compensation or raise any dispute in respect thereof PROVIDED ALWAYS that in the event the Landlord desires to retain the said partitions and fittings and fixtures, etc. as aforesaid, the Landlord shall pay to the Tenant compensation thereof as may be determined by the Development Commissioner and the Tenant shall not be entitled to raise any objection against such retention and/or the valuation determined by the said Development Commissioner, as aforesaid, PROVIDED ALWAYS that Contd. .....10/-.

[SEAL] :: 10 :: the Tenant shall continue to be liable to pay compensation for the period of unauthorised occupation of the said premises till the date Tenant hands over vacant and peaceful possession of the demised premises at such rate as may be charged by the Landlord. (a) (a) The Landlord both hereby convenant with the Tenant that the Tenant paying the rent hereby reserved and performing the covenants hereinbefore on the Tenant's part contained shall and may peaceable enjoy the demised premises for the said term hereby granted without any interruption or disturbance from or by the Landlord or any persons lawfully claiming by from or under Landlord. (a) (b) All disputes and differences arising out of or in any way touching or concerning these persents (except as to any matters the decision of which is left to the sole discretion of the said DEVELOPMENT COMMISIONER, as specially provided for in these presents) shall be referred to the arbitration of two arbitrators, one each to be appointed by the respective parties to these presents. The arbitrators so appointed shall appoint an Umpire in the manner provided in the Arbitration Act, 1940. It will be no objection that the person appointed as Arbitrator on behalf of the Sub-Lessor is or was an employee of the Govt. that he had to deal with the matters to which the Tenancy herein relates and/or that in the course of his duties as such employee of the Govt. he had expressed a view on all or any of the matters in dispute or difference. In the event of either or both of arbitrators dying, neglecting or refusing to act or resigning or being unable to act for any reason, the substitute(s) to be appointed by the concerned parties shall be entitled to proceed with the reference from the stage at which it was left by the previous Arbitrator/Arbitrators. The cost in connection with the artibtration shall be in the discretion of the Arbitrators who may make a suitable provision for the same in their award. Subject to the aforesaid, the provisions of Arbitration Act, 1940 and the Rules thereunder and Contd. .......11/-.

[SEAL] :: 11 :: any statutory modifications thereof for the time being in force shall apply to the arbitration proceedings under this clause. (a) (c) If the Tenant shall have duly performed and observed the covenants and conditions on the part of the Tenant herein before contained and shall at the end of the said term hereby granted by desirous of receiving a new Tenancy of the demised premises and of such desire shall give notice in writting to the Landlord before the expiration of the term hereby granted the Landlord shall and will at the cost and expenses in every respect of the Tenancy grant to the Tenant a new Tenancy of the demised premises for a further terms of five years on payment of yearly rent as may be determined by the Landlord AND WITH covenants, provisos and stipulations hereinbefore contained expected is provision for renewal and such new Tenancy shall contain in lieu of this clause a covenant that at the end of the said renewed term of five years, the Landlord shall at the like cost and expense grant to the Tenant further renewals and that every such renewal shall be for such terms and subject to such covenants, provisos and stipulations. The cost of an in connection with arbitration shall be in the discretion of the Arbitrator who may make a suitable provision for the same in his award. Subject as aforesaid, the Arbitration Act, 1940, shall apply to the arbitration proceedings under this clause. FIRST SCHEDULE (Description of Land) All that piece of parcel of land known as Plot No. F-1, in the Marol Industrial Area within the village limits of Parajapur, Kondivita, Marol and Vyaravali, Taluka Andheri and now in the Registration Sub-District and District of Bombay and Bombay Suburban, containing by a measurement 3,75,013 sq. mtrs. or thereabouts, that is to say: Contd. .......12/-.

:: 12 :: On or towards the North by Road and Aarey Milk Colony Land.
On or towards the South by Road On or towards the East Pipe Line and Aarey Milk Colony land and on or towards the West by Road. SIGNED, SEALED AND DELIVERED BY SHRI S.S. Development Commissioner Santacruz Electronics Export Processing Zone, Development Commissioner SEEPZ. Govt. of India Ministry of Commerce, Andheri (E) Bombay-96.

On behalf of President of India in the presence of: 1. Smt. V. Abraham, ESTATE MANAGER.
2. Smt. S. D. -----------------UDC, SEEPZ -----------------V. Abraham Smt. V. Abraham ESTATE MANAGER SEEPZ. GOVT. OF INDIA MINISTRY OF COMMERCE Andheri (E), Bombay-400 096

SIGNED, SEALED AND DELIVERED. by the abovenamed Licensee - -------------in the presence of: 1. Signature Name 2. Signature Name Address:

FOR SYNTEL SOFTWARE GVT. LTD. DIRECTOR/AUTHORISED/SIGNATORY -------------------------------------------------------------------

-------------------

----------------------

Address: --------------------

The common Seal of the abovenamed Licensee was, pursuant to a resolution of its Board of Directors passed in that behalf of the day of 19 affixed hereto in the presence of:

Exhibit 10.9 10Rs. [STAMP GRAPHIC]
/s/ Syntel Software P Ltd. /s/ M.V. Santhanam M.V. SANTHANAM Stamp Vendor 5, Arundale Street Mylapore, Madras 600 004, Licence: C4/2345/32

RENTAL AGREEMENT THIS AGREEMENT made this the 24th day of FEBRUARY 1997 BETWEEN [The Landlords] herein after referred to as the Landlord which expression shall unless it be repugnant to the context or the meaning thereof include his/her heirs, executors, administrators and assigns of the ONE PART: M/S SYNTEL SOFTWARE PVT. LTD., a company registered under the provision of the Companies Act, and having its Registered Office at Unit No. 69, S..D.F. III, SEEPZ, Andheri (East), Mumbai - 400 096 hereinafter called the Tenant which expression shall unless it be repugnant to the context or meaning thereof include its successors and assigns OF THE OTHER PART: WHEREAS the Landlord is the owner of the property namely Office Premises having [an area of 32813.83 square feet in the building situated at] No.21, Mount Road, (Anna Salai) Madras 600 035, and more fully described in the Schedule hereunder, hereinafter referred to as "the demised premises": AND whereas the Landlord had agreed to grant a Tenancy and the Tenant agreed to take the demised premises for a period of 6 years (extendable by a further term of three years) subject to the

terms and conditions set out hereinafter and the tenancy shall be calculated to the English Calendar month. NOW THIS DEED WITHESSETH 1. The Landlord hereby grants unto the Tenant a tenancy in respect of [32813.83 square feet in] the building situated at No.21, Anna Salai, (Mount Road) Madras 600035 more fully described in the Schedule hereto 2. The Tenancy shall be for a period of 6 years commencing from 01 May 1997 a. The Tenancy agrees to pay the MONTHLY RENT as followsi. At the rate of Rs [18.00] per square feet per month amounting to Rs [5,90,648.94] per month commencing from 1st of May 1997 for the first term of three years upto 30th April 2000. ii. At the rate of Rs [21.60] per square feet month amounting to Rs [7,08,778.68] per month commencing from 1st May 2000 for the second term of three year upto 30th April 2003. b. If the Tenant desires to continue the tenancy for a third term of 3 years then in that event, the Landlord and the Tenant shall agree upon on the same terms and conditions and the rent to be mutually agreed, based on prevailing market rates at the time. 3. a. The premises shall be handed over to the Tenant on or before 01 Mar 1997. to enable the tenants to commence their Interior Decoration Work. b. Certain modifications in the toilets including the provision of one additional toilet shall be carried out immediately by the Landlords with the materials required being supplied by/ cost borne by the client and the cost of labour for the execution being borne by the landlords as per design submitted by the tenants Architects. 4. The monthly rents as aforesaid shall be payable on or before the 7th day of each succeeding month to Ms Hassina Beevi. 5. The Tenant has paid to the Landlord the sum of Rs [47,25,191.10] as interest free deposit representing EIGHT months rent by means of Cheque No [ ] dated [2-24-97] drawn on [ ] check which is refundable by the Landlord upon the Tenant vacating and handing over possession of the demised premises on termination of this agreement. 6. The Tenant agrees to pay the charges for electricity actually consumed by the Tenant on the demised premises as shall be registered in the meter in respect of the demises premises and in the event of the Tenant consuming over and above the limit fixed by the Tamil Nadu Electricity Board, the Tenant shall be liable to pay the extra Security Deposit and other charges to TNEB Madras. The Landlord shall at his/her expense arrange to install 500 KVA. Power as agreed to and for that purpose the Tenant shall pay to the Landlord the necessary additional Security Deposit if any, as demanded by TNEB and such amount shall be treated as additional interest free advance and refunded by the Landlord to the Tenant upon the Tenant vacating the premises. The Tenant shall pay the Water Charges as may be charged by the local authorities in respect of water consumed by the Tenant in the demised premises. The electricity consumption for the common area, pump and lift shall be borne by the tenant, he being the sole occupant of the entire premises.

7. The Landlords /agree to make clear an area of about 500 sq. ft adjacent to the property and such space shall be used by the Tenant for the purposes of installing their generator and/or any parking purposes. 8. The Tenant convenants with the Landlord as follows: a. The premises shall be used for Non Residential purposes only. b. The Tenant shall be entitled to put up and/or fix their own partitions, false ceilings, fittings, including air conditioners, name board, etc., in the demised premises and on the outside walls, but shall not make any structural alterations without the written consent of the Landlord. The Tenants are allowed/permitted to install all computers, Communications equipment, UPS, Electrical panels and all equipment necessary for their business. Air-conditioning and for that purpose ducting and alteration of the windows as may be required shall be done at the cost of the Tenant. Air Conditioner, condensers and name boards will be fixed on the outer walls and/or on the ledges as structurally thought fit. It is further agreed that the landlord shall not be liable for any damages caused by fire or other accidents to the air conditioning system and wooden partition or other properties belonging to the tenatn kept in the demised premises. 9. The Landlord shall be responsible for the maintenance of the common facilities including Lifts, Motors Pumps, Water supply. Comprehensive Annual Maintenance contracts shall be periodically renewed by the Landlord, and the tenants informed of the details. The Landlord shall keep the premises insured against Fire and floods etc. at all times. If the Tenants incur any expenditure in respect of these items the same may be deducted from the rent payable to the Landlord upon production of legitimate bills and vouchers. 10. The Landlord shall provide a dependable Security from a reputed Agency round the clock to oversee the security of the building in general and the common facilities. The Tenants shall have their own Internal security in addition. The Landlords security shall have restricted entry inside the premises. 11. The Landlord does convenant with the Tenant as follows: a. The Landlord shall permit the Tenant to peacefully and quietly hold and enjoy the scheduled premises without eviction or interruption or disturbance by the Landlord or any person lawfully or otherwise claiming by or through or under them during the currency of the lease period. b. The Landlord shall regularly and periodically pay or cause to be paid all rents, rates and taxes in respect of the said property on the basis of assessments made by the local authorities and other outgoings of every description that may during the continuance of the said term be or has become payable in respect of or charged upon the scheduled premises, whether the same shall be imposed or assessed by the Government, local authorities or otherwise. The Landlord further states that he/she has no Income Tax arrears and there are no Revenue recovery proceedings pending against them. In the event of any loss or damage arising to the Tenant by the non-payment of any of these dues the Landlord shall at all times keep the Tenant, fully indemnified from all such loss or damage. c. The Landlord shall keep, during the said term, at his own expenses painted outer walls of the demised premises once in three years.

d. The Landlord shall not during the tenure of thus agreement, do or cause to be done anything which may inconvenience employees, cause disruption of works, force tenants to vacate any part or portion of the premises, or shift their equipments, adversely affecting the Tenant's running business or causing losses of any kind whatsoever. 12. In the event of any unforeseen/natural/irresistible force by which the said premises becomes unfit for occupation/use, the rent or rents reserved for a proportion thereof according to the nature and extent of the damages sustained shall be suspended until the scheduled premises shall again be rendered fit for occupation and use. 13. The Tenant shall have the further option of terminating the tenancy hereby granted at any time during the tenancy thereof on giving the Landlord three months previous notice in writing. The Landlord shall be entitled to terminate this Agreement only in the event the Tenant fails to pay the rent hereby reserved or part thereof for a period of three months and is given atleast one months written notice for termination of the agreement and vacation of the premises. 14. Tenant shall not sub-let or assign the tenancy in favor of and other person except their associate/successor/sister/assignee company, without the written consent of the Landlord. 15. The Tenant agrees not to carry on any activity which are against Law/Government and which are opposed to public policy. 16. The Tenant shall maintain the entire interior building at their own cost. The Landlords shall have a right to inspect the premises upon giving proper Notice of their intention to do so in writing to the Tenant. 17. The tenants shall be entitled to the use the entire premises with all facilities, amenities, use of the entire compound for the purpose of parking of vehicles belonging to them, their employees and visitors. The Landlord shall ensure all the time that the compound is free from any nuisance or encroachment and that its access remains clean and unhindered. 18. It is further agreed by and between the parties that as and when required by the tenant to execute and complete all such documents including execution of a proper lease deed and having the same registered and do all such acts, things and deeds, as would be necessary for giving effect to this agreement. All costs for such registration including stamp duties will be borne by the tenant. 19. It is specifically agreed by the Landlords that the open terrace space at the top of the premises shall be used by the Tenant with or without any modification. It is also agreed that the same may be used for Installation of any Communication equipment, sign Boards, generators, Storage Batteries and Air Conditioners and the like and for this purpose. The Landlord shall have right of access to the Terrace for their maintenance staff and such authorized persons with prior intimation given to the tenant, without causing any inconvenience to the tenant or his staff. 20. It is clearly agreed by the Landlords that given the nature and type of Lease, it is necessary and mandatory for all Owners/Landlords of the building to act in unison and no disputes shall arise amidst the various owners of the building. It is also clearly agreed to by the Landlords that in the event of any of them failing to comply with or act detrimental to the interests of the other owners/Landlords/Tenants, then the matter shall be settled as per terms and conditions of this agreement. It is also clearly understood that at the end fo 6 years and at the time of renewal of the Lease if so desired by the Tenants, should there be any dispute in fixing the market price, what is

the prevailing market price for rental will be a matter that will be decided by Arbitration the sole arbitrator of the dispute being a person of repute to be nominated by the tenant. The parties shall fall in line with any decisiion given by the arbitrator in this regard. 21. It is agreed that the Tenant shall pay to G R Maintenance Services the authorized maintenance contractor of the Landlords/owner cumulatively a sum of Rs.6500/-per month for the first year towards maintenance charges for the Lift, Pump, plumbing, security etc. A sum of Rs 12,000/- shall be paid from the 2nd year onwards. 22. The Landlord declares that he/she is the lawful owner of the scheduled premises and have an unfettered right to grant tenancy of the same, and no other person has any right, lien title or interest in the said Premises. Should the Tenant suffer any loss monetary or otherwise, then the Landlord undertakes to indemnify the Tenant from any loss suffered by them in this regard. 23. The landlord shall obtain and confirm the receipt of a Completion certificate from the Local Building Authorities, MMDA, Corporation of Madras etc. The landlord confirms that the same will be made available, when provided by the authorities, once the construction of another building now in progress at the site, and forming part of the same approval by MMDA is completed. SCHEDULE All that Office building of an plinth area of 1389.25 square feet in the BASEMENT FLOOR in the multistoried building bearing Door No. 21, Mount Road, Madras 600 035, together with reserved for car parking with the compound of the complex, and situate within the Registration District of Madras Central and Registration Sub District of Thousand light. IN WITNESS WHEREOF THE Landlord and THE Tenant have sets his/her/their hands and signatures on the day month and year first above written.
WITNESSES 1. /S/ 2. /S/ 1. /S/ 2. /S/ [LANDLORDS] /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ /s/ N. Umayal Achi S.V. Alamelu Achi V.L. Ambika M. Anitha Hassina Beevi S.V. Sevagun Chetti S.RMS. Narayanan Chettiar V.R. Periyakaruppan Chettiar M. Geetha V.K. Kalavathy N. Mahesh S. Meenakshi S.V. Meyyappan N. Ramanathan Mohamed Rasied V.S. Shanthi Periakaruppan Valliappan

TENANT /s/Syntel Software Pvt. Ltd. Managing Director

EXHIBIT 10.10 AGREEMENT FOR SOFTWARE PROGRAMMING SERVICES This Agreement for software programming services (the "Agreement") is entered into effective as of September 6, 1994 (the "Effective Date") by and between American Home Assurance Company, a New York corporation ("AH") with principal offices at 70 Pine Street, New York, NY 10270 and Syntel, Inc., a Michigan corporation ("Syntel") with principal offices at 5700 Crooks Road, Suite 301, Troy, Michigan 48098. For and in consideration of the mutual premises and undertakings set forth herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged by all parties hereto, AH and Syntel hereby agree as follows: 1. BACKGROUND AH and its Affiliates, are the owners, licensees or otherwise authorized users of various software systems. "Affiliate" shall mean any company controlling, controlled by or under common control of a party hereto. AH, on behalf of itself and its Affiliates, desires to engage Syntel to provide programming services for these various software systems (the "Services"). Syntel is willing to contract to provide such Services. The parties hereto wish to reduce their agreement to writing. 2. ENGAGEMENT AH, on behalf of itself and its Affiliates, hereby engages Syntel as the contractor to provide the Services as described herein and Syntel hereby accepts such engagement and agrees to provide such services pursuant to the terms and conditions set forth herein. 3. TERM This Agreement shall commence upon the Effective Date and shall remain in full force and effect continuously thereafter until December 31, 1998 (the "Expiration Date"), subject to termination as provided herein. Except as otherwise expressly provided herein and in the attachments hereto, any extension of the term hereof must be in writing and mutually agreed to by both AH and Syntel. In the event either party desires to continue this Agreement after the Expiration Date, then, at least on hundred eighty (180) days prior to the Expiration Date, that party shall provide the other party with a written proposal for continuance. The receiving party shall respond in writing to the proposal no later than thirty (30) days after receipt of the proposal whether or not the party agrees to the terms of the proposal. In the event the parties are unable to agree upon terms of continuance or renewal at least ninety (90) days prior to the Expiration Date, then this Agreement shall terminate pursuant to its own terms, unless otherwise agreed to in writing by both parties. 4. DUTIES OF AH 4.01 AH shall assign on of its individual employees (the "AH Engagement Manager") as AH's primary point of contact with Syntel who will be responsible for assuring that AH meets its obligations under this Agreement and who will have the authority to manage the day to day operations and to grant consents hereunder, but no power to amend this Agreement.

* Indicates that material has been omitted and confidential treatment has been requested therefore. All such omitted material has been filed separately with the SEC pursuant to Rule 406.

4.02 AH shall be responsible for its own equipment and the equipment located at the mainframe complex located at 2 Peachtree Hill Road, Livingston, New Jersey (the "AH Data Center"). Syntel shall have no responsibility for any equipment located in the AH Data Center or any other AH facility. AH agrees * to provide and maintain back-up files of its data in accordance with the standards for the facilities of AH and its Affiliates. 4.03 On every April 1st and October 1st, during the term of this Agreement, AH shall provide to Syntel, a good faith reasonable projection of Personnel Resource Levels defined in terms of Man Years, as hereinafter defined ("Projection") of the Services to be performed for the following periods: each October Projection shall encompass the period from the following January 1, through June 30, and each April Projection shall encompass the period from the following July 1, through December 31. Services required by AH shall not exceed the Projection by more than 20% without the written consent of Syntel, provided however that Syntel may in its sole discretion offer AH different or additional terms to provide the additional services which exceed the Projection by more than 20%, and if such different or additional terms are not acceptable to AH, the additional services do not have to be performed by Syntel. Approval by AH of such different or additional terms must be in writing. 5. DUTIES OF SYNTEL 5.01 Syntel will assign an individual (the "Syntel Engagement Manager") who will serve as Syntel's primary point of contact with AH and who will be responsible for assuring that Syntel meets its obligations under this Agreement and who will have the authority to manage the day to day operations but no power to amend this Agreement. AH reserves the right, for any reason, to require Syntel to change the Syntel Engagement Manager, or any other personnel on its account. Syntel agrees that, except with the prior written consent of AH, Syntel shall not replace the Syntel Engagement Manager for reasons other than death, disability, failure to perform in the opinion of AH, request by AH, family considerations, promotion to regional or national management responsibilities, or resignation or termination from employment by Syntel. 5.02 Syntel agrees that all Services provided hereunder, will be done at locations which are identified in writing to AH and which must be acceptable to AH and Syntel (collectively the "Syntel Service Center"). Syntel agrees that it will not relocate the Syntel Service Center, nor establish a satellite facility, for providing Services hereunder, without first obtaining the written consent of AH, which consent shall not be unreasonably withheld. AH and Syntel agree that initially the Services will be performed from a Syntel facility in India and a Syntel facility in North Carolina. 5.03 Syntel will adhere to all material AH practices and standards identified to them and further agrees to use its best efforts to adhere to all practices and standards concerning access to the mainframes located in the AH Data Center as outlined in the

* Indicates that material has been omitted and confidential treatment has been requested therefore. All such omitted material has been filed separately with the SEC pursuant to Rule 406.

American International Group Data Center, Inc. Manual, as amended from time to time, provided however, Syntel shall be responsible for only those changes to practices and standards for which it receives prior notice sufficient for it to act upon. A copy of the manual which is in effect will be available at all times for Syntel to access on the AH mainframe computer under TSO under data set AIGDC. Prod. Stands. 5.04 Syntel shall be solely responsible for establishing a connection to the AH Data Center including without limitation all telecommunications equipment, all telephone and other telecommunications lines and all expenses associated with transmission of data from Syntel's locations to the AH Data Center or other AH facilities. 5.05 Prior to * , Syntel, at the Syntel Service Center * will install * Both of these systems may be a non-customized, off the shelf version of current software, acceptable to AH, such acceptance not to be unreasonably withheld. AH shall have complete access to these systems or the output of these systems as AH deems necessary. 5.06 Syntel shall be responsible * for developing a disaster recovery plan, acceptable to AH addressing, among other matters, the telecommunication connection between the Syntel Service Center and the AH Data Center. Syntel will provide for and maintain backup files of the data and programs at its facilities. 5.07 * 5.08 Syntel agrees to accept assignment of leases for certain computer hardware and the licenses for software that are currently installed on them which (i) have been utilized by AH or an Affiliate, (ii) AH shall identify reasonably promptly after the Effective Date and (iii) are reasonably acceptable to Syntel and required by Syntel to provide the Services. AH shall take all necessary action to transfer to Syntel all rights to the software that resides in, or is necessary for the operation of, the computer hardware being transferred to Syntel. * All such computer hardware is "as is" without warranty of any kind. If prior to the Expiration Date AH terminates this Agreement, AH shall accept reassignment from Syntel of any remaining leases and licenses of computer hardware and software provided hereunder by AH. Page 3 * Indicates that material has been omitted and confidential treatment has been requested therefore. All such omitted material has been filed separately with the SEC pursuant to Rule 406.

6. PAYMENT 6.01. In consideration of the Services to be provided by Syntel, AH agrees that it will provide Syntel with sufficient requests for Services to meet the following project Guaranteed Personnel Resource Levels or AH will pay Syntel * as indicated in the table below * * All Services required by AH in November, 1994 and December, 1994 will be based * and will be paid on November 15, 1994 for November 1994 and December 15, 1994 for December 1994 based on * provided by AH in * by October 1, 1994 on the amount of Services to be required. If the actual charges are more or less than the payments made, such adjustment will be made to the charges are more or less than the payments made, such adjustment will be made to the February 15th payment required hereunder. Any Services required by AH during the term of this Agreement which are in excess of the Guaranteed Personnel Resource Level will be provided by Syntel at the rate of * , subject to the provision of the last sentence of Section 4.03. 6.02 AH agrees to reimburse Syntel at its cost for *

* Indicates that material has been omitted and confidential treatment has been requested therefore. All such omitted material has been filed separately with the SEC pursuant to Rule 406.

* 6.03 As set forth in Section 4.03, AH shall provide a * to Syntel every April 1st and October 1st during the term of this Agreement. * Beginning in 1995 and continuing in each subsequent year on April 10, July 10, October 10 and January 10, Syntel will provide a detailed summary of * 6.04 AH shall reimburse Syntel the amount * Invoices are subject to audit by AH. All other out of pocket expenses are to be paid by Syntel. 6.05 Computer charges for use of the * at * will be paid for by * 6.06 * 6.07 All amounts payable hereunder are payable in legal tender of the United States of America. Acceptance by * of any payment in an amount less than the amount then due hereunder shall be deemed an acceptance on account only, and the page 5 * Indicates that material has been omitted and confidential treatment has been requested therefore. All such omitted material has been filed separately with the SEC pursuant to Rule 406.

failure to pay the entire amount then due shall be and continue to be a default. * 6.08 Notwithstanding any provision of this Agreement to the contrary, it is the intent of AH and Syntel hereof that * shall never be entitled to receive, collect or apply, as interest on principal of the indebtedness due hereunder, any amount in excess of the maximum rate of interest permitted to be charged by applicable law. 7. PROJECT MANAGEMENT 7.01 Syntel agrees to perform the Services as set forth in Attachment A as may be amended by agreement of AH and Syntel. 8. CONFIDENTIALITY AND OWNERSHIP OF WORK PRODUCT 8.01 AH and Syntel acknowledge to each other that they will be disclosing to each other valuable and confidential information including but not limited to data processing techniques, software programs, business affairs, methods of operation and access codes, financial information (collectively "Confidential Information") which contain proprietary information and trade secrets of the disclosing party. Accordingly, each party hereto agrees that it will only use the Confidential Information in furtherance of this Agreement and will maintain the complete confidentiality of the Confidential Information and prevent its unauthorized disclosure to any third party, provided such information may be disclosed to Affiliates, agents, advisors and third party consultants so long as such information remains subject to the terms of this provision. Confidential Information shall not include: (i) any such information that has been released to the public by a party hereto, its Affiliates or any third party other than through a breach of this Agreement; (ii) any information already possessed by the receiving party; (iii) any information received from a third party without an obligation of confidentiality; and (iv) any information independently developed. All tangible forms of Confidential Information,including but not limited to diskettes, tapes or written material delivered to Syntel by AH shall be and remain the property of AH. If either party receives a subpoena or other legal notice requiring disclosure of Confidential Information of the other party, it will promptly notify the other party and will take reasonable steps to try to retain confidential treatment. Any resulting disclosure shall not be a breach hereof. Notwithstanding anything contained herein to the contrary, under no circumstances shall AH disclose any of Syntel's financial or related information which AH obtains through the financial reviews of Syntel, except as compelled by law and then only after giving prior notice to Syntel. Upon the termination of this Agreement for any reason, with respect to any AH software, data, information or materials ("AH Data"), on request by AH, or on such earlier date that the same shall be no longer required by Syntel in order to render the Services, all AH Data in the custody of Syntel and permitted subcontractors will be returned to AH or,if AH so elects, destroyed by Syntel.

* Indicates that material has been omitted and confidential treatment has been requested therefore. All such omitted material has been filed separately with the SEC pursuant to Rule 406.

8.02 All intellectual property rights including without limitation, software program code, logic diagrams, flow charts, procedural diagrams, maps and documentation related to all the foregoing developed hereunder by Syntel (collectively, "Work Product") shall be the sole and exclusive property of AH, who shall own any rights based upon trade secret law, copyrights and/or patents on those materials. To the extent that any Work Product, under applicable law may not be considered works made for hire, Syntel (i) hereby irrevocably assigns and transfers to AH the ownership of all rights, title and interests in such Work Product (including copyrights, whether published or unpublished and patents and all other intellectual property rights thereto); (ii) waives any rights or claims to such right or claims to moral rights; and (iii) will execute * all documents which AH may require to secure or confirm AH's rights, titles and interests hereunder. Syntel shall have all personnel that provide Services hereunder execute a noncompete nondisclosure agreement reasonably acceptable to AH that will among other things, require such personnel to agree not to claim any rights in AH's intellectual property. Upon termination of this Agreement for any reason, any Work Product will be delivered to AH with Syntel retaining no copies of Work Product. 8.03 All design tools, design techniques, computer programming techniques and know how, relating to information systems, developed by Syntel as a result of this engagement shall be the sole and exclusive property of Syntel, who shall own any rights based upon trade secret law, copyrights and/or patents on those materials. To the extent necessary or required by law or Syntel, AH (i) hereby assigns and transfers to Syntel the ownership of all rights, title and interests in such works and material (including copyrights, whether published or unpublished and patents thereto); (ii) waives any rights or claims to such right or claims to moral rights; and (iii) will execute * all documents which Syntel may require to secure or confirm Syntel's rights, titles and interests hereunder. Syntel hereby irrevocably grants AH, in perpetuity, a non assignable license for its own or its Affiliates use of the above referenced property of Syntel. 9. REPRESENTATIONS, COVENANTS AND WARRANTIES OF SYNTEL Syntel represents, covenants and warrants that: 9.01 It will use its best efforts so that all Services provided hereunder will be performed in a workmanlike manner by competent staff, appropriately experienced to do the tasks assigned to them. Syntel's obligation under this warranty shall be to manage and direct the persons providing Services in a proper and workmanlike manner. Syntel makes no representation or warranty regarding whether the source code it develops is error free. 9.02 Any employees or any subcontractors it assigns to perform Services hereunder will be qualified individuals with suitable training, experience and skill to perform the duties they are assigned. 9.03 It will perform its responsibilities under this Agreement in a manner that does not knowingly infringe, or constitute an infringement or misappropriation of, any patent, Page 7 * Indicates that material has been omitted and confidential treatment has been requested therefore. All such omitted material has been filed separately with the SEC pursuant to Rule 406.

trade secret, copyright or other proprietary right of any third party. 9.04 It is the owner of or otherwise has the rights to use in performance of its obligations hereunder all systems and methodologies utilized in connection with the Services. 9.05 It will materially comply with all AH standards, rules, procedures and policies relating to or affecting the Services and the performance standards agreed to by the parties, including the Service Levels and Performance Standards, in the Attachments contained hereto. 9.06 All software maintained and developed by Syntel will conform to AH's requirements and/or applicable specifications and that the Services provided hereunder shall meet or exceed the standards set forth in this Agreement and the Attachments hereto for such Services and that it shall use its best efforts in providing the Services. 9.07 It will comply with all applicable United States federal, state and local laws and all international laws relating to the provision of the Services and the AH operations affected by this Agreement. 9.08 It will not engage in any unlawful discrimination as to race, creed, color, national origin, sex, age, disability, marital status, citizenship status, sexual orientation or affectional preference in any employment decisions relating to this Agreement and that it is an equal opportunity employer and will comply with all federal and state employment laws and regulations, including: Executive Order 11246; The Vietnam ERA Veteran's Readjustment Act of 1974; Section 503 of the Rehabilitation Act of 1973. 9.09 As of the time of delivery to AH it will have successfully tested all software to be provided to AH to determine if the software contains threats known as software viruses, time bombs, logic bombs, trojan horses, trap doors, or other malicious computer instructions, intentional devices or techniques that can or were designed to threaten, infect, attack, assault, vandalize, defraud, disrupt, damage, disable, or shut down a computer system or any component of such computer system, including its security or user data (hereinafter "Disabling Devices"). Syntel further warrants that as of at the time of delivery to AH the Syntel developed software, as delivered, to the best of Syntel's knowledge, is free and clear of and contains no Disabling Devices. 9.10 It will maintain books and records relating to time records, billing statements related to the Services hereunder for four (4) calendar years following the end of the calendar year in which Services were provided. 9.11 It will maintain its computer hardware, equipment, software and facilities utilized for the performance of the Services with appropriate providers of such services at all times during the term of this Agreement. 9.12 It is a duly organized corporation authorized to enter into this Agreement and Page 8

entering into this Agreement will not violate any other agreement to which it is a party. 9.13 THE REPRESENTATIONS, COVENANTS AND WARRANTIES SET FORTH IN THIS AGREEMENT CONSTITUTE THE ONLY REPRESENTATIONS, COVENANTS, WARRANTIES OF SYNTEL WITH RESPECT TO THIS AGREEMENT, AND SUCH REPRESENTATIONS, COVENANTS AND WARRANTIES ARE IN LIEU OF ALL OTHER REPRESENTATIONS, COVENANTS AND WARRANTIES, WRITTEN OR ORAL, STATUTORY, EXPRESSED OR IMPLIED, INCLUDING WITHOUT LIMITATION THE WARRANTY OF MERCHANTABILITY AND THE WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE, OR THE RESULTS TO BE DERIVED FROM THE USE OF ANY INFORMATION TECHNOLOGY SERVICE, SOFTWARE, HARDWARE OR OTHER MATERIALS PROVIDED UNDER THIS AGREEMENT. THE UNIFORM COMMERCIAL CODE DOES NOT APPLY TO THIS AGREEMENT NOR GOVERN THE RELATIONSHIP OF THE PARTIES HERETO. 10. TAXES AND INSURANCE 10.01 * agrees to pay all local, state and fe