**Exhibit 10.31**

 

**LEASE AGREEMENT**

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** **

THIS AGREEMENT OF LEASE (**“Agreement”**) EXECUTED AT HYDERABAD, on this22nd, day of April, 2004:

 

**BETWEEN**

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**Mr.T. Devendar Reddy S/o Late Mr. Gopal Reddy, Aged about 45 years, R/O8-2-269/27/B, Road No. 2 Banjara Hills, Sagar Society, Hyderabad**(hereinafterreferred to as the **“Lessor”**, whichexpression shall, unless the context otherwise requires, mean to include hislegal heirs, legal representatives and successors-in-interest) of the one part;

 

**AND**

** **

**M/sSTC Systems Private Limited,**a Company incorporatedunder the Companies Act, 1956, having its Registered office at Hyderabad,Represented by **Mr. Barry Plaga CFO ofSeeBeyond Technology Corporation** (hereinafter referred to as the **“Lessee”**, which expression shall, unlessthe context otherwise requires, mean to include its successors, assigns andsuccessors-in-interest) of the other part.

 

**WHEREAS:**

 

A             The Lessor is the absolute owner of the building bearingNo. **8-2-120/77/4B** containing inadmeasurement 21642 Sq. Ft. [built-up / carpet] area and situate **Opposite Chiran Palace, Road No, 2 Banjara Hills,Hyderabad,** more fully described in the Schedule hereunder written,together with all the structures, fixtures and fittings including electricalinstallations in upon therein and appurtenant thereto (hereinafter collectivelyreferred to as the **“Scheduled Property”)**.

 

B             The Lessee has approached the Lessor and offered to takethe Scheduled Property on lease.

 

C             The Lessor has agreed to give the Scheduled Property onlease for a monthly rent of Rupees Three Lacs Forty Six Thousand Two Hundredand Seventy Two only (Rs 346,272/-) per month and both the parties have agreedto reduce the terms and conditions agreed upon by them in to writing beingthese presents.

 

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3.             The Lessee shall pay to the Lessor on the CommencementDate an amount of Rs.2,077,632/- (Rupees Twenty Lacs Seventy Seven Thousand SixHundred and Thirty Two Only) by way of a non-interest bearing refundablesecurity deposit (hereinafter referred to as the “Security Deposit”).  The Security Deposit shall not be adjustedtowards the Lease Rent(except as specifically addressed hereinafter) and shallbe refunded by the Lessor to the Lessee forthwith after the Lessee handing overvacant and peaceful possession of the Scheduled Property to the Lessor on theexpiry of the term of the lease hereby granted or of any renewals thereof, asthe case may be, after deducting any outstanding dues (the amounts to bemutually agreed upon by both parties), which specifically include electricity,water, maintenance charges and any damage to the Scheduled Property.  Lessor agrees to furnish an irrevocable BankGuarantee for Rs 2,077,632/- (Rupees Twenty Lacs Seventy Seven Thousand SixHundred and Thirty Two Only) within ten days of the signing of the leaseagreement from a nationally recognized banking institution.  Said Bank Guarantee shall remain in forceuntil the termination of this Lease Agreement.

 

4.             The Lessor hereby acknowledges the receipt of theSecurity Deposit paid by the Lessee by way of check number                 

in the amountof                    

 

5.             The Lessor has already provided to the ScheduledProperty (a) 250KV, Three (3) Phase Electrical supply; (b) water connection;and (c) drainage and sewerage connection. The Lessee shall pay all charges levied and demanded for the electricityand water actually consumed in accordance with the meter readings shown by themeters installed in the Scheduled Property directly to the concernedauthorities and shall produce proof of the same at the time of vacating theScheduled Property.  The Lessee shall beresponsible to make and maintain the consumption deposits as may be required tobe the electricity and water supply authorities during the term of the leaseand the Lessor shall take over the said consumption deposits to his account atthe time of the expiry of the term of the lease of termination of thisAgreement by the Lessee, as the case may be, and reimburse to the Lessee.

 

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**NOWTHIS AGREEMENT FOR LEASE WITNESSETH AS FOLLOWS:**

 

1.                                       TheLessor hereby grants unto the Lessee the Scheduled Property on lease for aperiod of three years commencing 15 days from the date of signing of thislease.  Payment of the lease payments bythe Lessee shall commence thereafter from the date (“Commencement Date”) onwhich each of the following conditions has been satisfied or waived in writingby the Lessee:

 

(a)                                  theLessor has completed to the satisfaction of the Lessee all the works on theScheduled Property and rendered the same ready to be delivered to the Lesseeand the Scheduled Property can be used by the Lessee for the purpose ofcarrying on its computer software development business there from and theLessor has delivered peaceful possession of the Scheduled Property to theLessee;  In the event that entire floorsare completed and delivered to Lessee one at a time the lease payments shallcommence and be prorated by square foot and lessee shall pay that pro ratashare of the lease payments if all other conditions have been met; and

 

(b)                                 allplug-in equipment (including but not limited to EPABX, Genset, A/c’s, Lift,Vending machines, and Access Control Systems) which are needed for the Lesseeto occupy the Scheduled Property and carry on its business (the leasingarrangements in respect whereof the Lessee has entered into with one Mrs. T.Jhansi Reddy) have been installed or set up or fixed in or to the ScheduledProperty to the satisfaction of the Lessee and the Lessee has certified inwriting to the Lessor that the Scheduled Property together with the saidplug-in equipment are in a ready to use condition.  Lessor agrees to turn all plug in equipmentover to Lessee within 60 days of the signining of this lease,

 

in consideration of the rent hereby reserved and on the covenants,conditions and stipulations hereinafter contained.

 

2.             Reckoning from the Commencement Date, the Lessee shallpay to the Lessor an amount of Rs. 346,272 (Rupees Three Lacs Forty SixThousand Two Hundred and Seventy Two only) per month, which rent shall beincreased once in every 2 (two) years [i.e. at the end of every 2nd(second) years] by 10 (ten) percent of the rent paid for the immediatepreceding month (such amount from time to time, the “Lease Rent”).  The first lease rental shall be proratedbased on the number of days remaining in the calendar month in which theCommencement Date occurs, and shall be paid by the Lessee within five (5) daysof the Commencement Date.  The Lease Rentfor the period thereafter shall be paid by the Lessee to the Lessor in advanceon or before the fifth (5) day of each calendar month.  The Lessee shall comply with the provisionsof the Income-tax Act, 1961 as to deduction of tax at source on the amount ofthe Lease Rent and shall issue certificates of tax deduction at source to theLessor.

 

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6.             The Lessor shall be responsible to pay all taxes, cessesand charges levied on and demanded of the Scheduled Property by anyGovernmental authority including the Municipal Corporation of Hyderabad or anyother local authority including, without limitation, any Property Tax, WaterTax and Sewerage Tax to the concerned authorities as and when required.  However in case any taxes or fees are leviedon the Scheduled Property solely attributable to any equipment installed by theLessee (other than the plug-in equipment being hired by the Lessee from oneMrs. T. Jhansi Reddy), the same shall be borne by the Lessee.

 

7.             The Lessor guarantees all rights of ingress and egressin the Scheduled Property at all times and also authorizes the Lessee to usethe common areas.

 

8.             The Lessee shall use the Scheduled Property only for theauthorized business purposes of itself and of its affiliates, associates orsister concerns and shall ensure that its occupation and enjoyment of theScheduled Property will not result in contravention of any law, rule,regulations of the Municipal Corporation of Hyderabad.  The Lessee shall obtain permission fromMinistry of Communications, Government of India and all other concernedGovernmental authorities for all equipment installed by the Lessee in theScheduled Property.

 

9.             The Lessee shall not carry on in the Scheduled Propertyany activities which are prohibited by law. The Lessee shall observe, abide by and comply with, at its own costs,all the rules, regulations, and directions and orders issued by anyGovernmental authorities in respect to the business activity carried on in theScheduled Property.

 

10.           The Lessee shall not to do or permit or suffer to be doneanything in or upon the Scheduled Property or any part thereof which may becomea nuisance, annoyance or damage to the Lessor or occupants of the adjoiningpremises.

 

11.           The lease of the Scheduled Property demised hereunder untothe Lessee may be extended for such further periods as may be mutuallyagreed.  The Parties agree that thisAgreement shall not be terminable by the Lessor.  If for any reason other than due to a breachby the Lessor of any of his implied or express representations, warranties,covenants or other obligations the Lessee intends to terminate this Agreementduring the agreed term of three years, the Lessor shall be entitled to forfeitthe Security Deposit.

 

12.           The Lessor undertakes that during the continuance of thisAgreement:

 

(a)           He will not create or permit to be created anyEncumbrances over the Scheduled Property or create or permit to be created anythird party interests;

 

(b)           He will not sell or transfer any of his right, interest ortitle to the Scheduled Property to any person other than lease created underthis Agreement in favor the Lessee;

 

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(c)           He will continue to have good right and full authority togrant the lease to the Lessee;

 

(d)           He will permit the Lessee, its affiliates, associates andsister concerns to peacefully and quietly hold, possess and enjoy the ScheduledProperty without any eviction, interruption, disturbance, claim or demandwhatsoever by the Lessor or anyone claiming under or in trust for the Lessor;

 

(e)           He will pay any and all present and future taxes, ratesand other impositions payable in respect of the Scheduled Property and not toallow the same to fall in arrears;

 

(f)            He will not do anything to the Scheduled Property or makeany additions / alterations / changes to the Scheduled Property which arelikely to render the Scheduled Property dangerous for occupation / use by theLessee or its affiliates, associates and sister concerns or which would in anymanner whatsoever effect the rights of the Lessee under this Agreement; and

 

(g)           He shall keep the Scheduled Property fully insured againstall risks at his own cost.

 

13.           The Lessee shall be responsible for the maintenance andupkeep of the Scheduled Property including the entire common areas.  The Lessee shall maintain the ScheduledProperty in good and tenable condition and shall not make any structuralalteration to the same without prior consent of the Lessor.  At the expiry of the lease and/ or therenewed term(s) thereof, as the case may be, the Lessee shall hand over theScheduled Property to the Lessor in the similar condition as was handed over tothe Lessee subject however to the normal wear and tear expected of the dailyuse by the Lessee.

 

14.           Notwithstanding anything to the contrary containedelsewhere in this Agreement the Lessee shall be at liberty to constructtemporary structures and interior designing without prior consent of the Lessorwithout, however, (a) causing any damage to the structure, structural stabilityetc.; and (b) affecting the façade/elevation of the building.  Upon the termination of the lease if sorequired by the Lessor, the Lessee shall at its cost remove the temporarystructures and interior designs constructed by them and restore the ScheduledProperty to the condition it was at the time of commencement of the lease.

 

15.           The Lessee shall repair at its own cost and expense, anydamage to the Scheduled Property, which does not arise from normal wear andtear, if and to the extent that such damage is caused by any act or default onthe part of the Lessee, its servants, agents or visitors or by reasons of anybreach by the Lessee of any covenants herein contained.

 

16.           The Lessee shall permit the Lessor and his duly authorizedagents at all reasonable times of the day with three (3) days prior notice toenter upon the Scheduled Property and to view the state or condition thereofand to do any structural or other

 

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repairs to the ScheduledProperty and to the remaining portions of the building or any works, acts andthings required in pursuance lease under this Agreement

 

17.           The Lessee is entitled and permitted to assign, alienate,underlet or sublet or part with possession of the Scheduled Property or anypart thereof to any person or entity and shall not create change, mortgage,lien or encumbrance on the Scheduled Property or any part thereof without thepermission of the owner which shall not be unreasonably withheld.  However, the Lessee shall be entitled toallow its affiliates, sister concerns or Associates to carry on theiroperations from the Scheduled Property with prior intimation to the Lessor.

 

18.           The Lessor hereby confirms that (a) he is the sole legaland beneficial owner of the Scheduled Property; (b) the Scheduled Property isfree from any encumbrances or third party interests; (c) he has power andauthority to enter into this Agreement; (d) the Scheduled Property can be usedfor the business activities of the Lessee and (e) there are no orders of court,pending litigation etc., restraining them from entering into this Agreement.

 

19.           The Lessee shall be entitled and permitted to display itsName Board on the Scheduled Property. However, this will be at the sole discretion of Lessee and Lessor shallnot place any signage on the building (other than required by law) without theexpress permission of the Lessee.

 

20.           The Lessor shall keep the Lessee indemnified against allexpenses, costs, claims, damage and loss arising from any breach of any of theLessor’s representations, warranties or undertakings in this Agreement or hisfailure to perform any of his obligations under this Agreement, or any act oromission of the Lessor, or his workers, contractors or agents or any otherperson on the Scheduled Property with the actual or implied authority of any ofthem.

 

21.           Any notice or other communication given under or pursuantto this Agreement (“Communication”) shall be in writing and in the Englishlanguage and shall be made or delivered to the appropriate addresses andfacsimile numbers set forth below (or as otherwise notified by that Partyhereunder):

 

**Lessor:**

 

Mr. T.Devendar Reddy,

8-2-269/27/B

Sagar Society,

Road No.2, Banjara Hills,

Hyderabad

 

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**Lessee:**

 

STC Systems Private Limited

 

 

Attention:  Company Manager

 

Additionally all communicationsto STC Systems India Private Limited must be sent to SeeBeyond Technology inthe United States to the attention of the General Counsel and the ChiefFinancial Officer.

 

Any Communication may bedelivered personally or by prepaid post, or facsimile transmission and shall bedeemed to have been served (i) if by personal delivery, at the time ofdelivery; (ii) if by private courier, within three (3) days after sending to anaddress in India, and within seven (7) days after sending to an address outsideIndia; and (iii) if by facsimile transmission, at the time of transmission ifsuccessful transmission is confirmed by a transmission report generated by thesender’s machine.

 

22.           Neither this lease nor any part thereof is to be construedas creating a joint enterprise, partnership or any other relationship betweenthe Parties except that of “Lessor and Lessee”.

 

23.           This Agreement will be governed by Indian Law.  Any dispute between the parties with regardto this Agreement or the subject matter thereof, including existence andvalidity of the Agreement shall be settled through arbitration by an arbitrationtribunal comprising three arbitrators. Each Party will be entitled to nominate one arbitrator and the twoarbitrators so appointed shall choose the third arbitrator.  The place of arbitration shall be Hyderabadand the proceedings of the arbitration shall be conducted in English in accordancewith the Arbitration & Conciliations Act 1996.  The arbitration award shall be final andbinding on both the Parties.

 

24.           The Parties agree that the terms contained herein shallnot be modified unless mutually agreed to in writing between the Parties.

 

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**SCHEDULEOF THE PROPERTY BEING LEASED UNDER THESE PRESENTS**

 

All the parts and parcels ofthe five storied building bearing No. 8-2-120/77/4B (containing inadmeasurement 21642 Sq. Ft. [built-up / carpet] area: Cellar – 560 Sq. Ft.;Ground Floor – 3086 Sq. Ft.; First to Fourth Floors – 4233 Sq. Ft. each)situate Opposite Chiran Palace, Road No. 2 Banjara Hills, Hyderabad, andbounded on:

 

**NORTH:House No. 8-2-120/77/4A on plot number 4A.**

** **

**SOUTH:Neighbor’s Land.**

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**EAST:30 Feet Road.**

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**WEST:Neighbor’s Land.**

 

together with all theamenities, structures, fixtures and fittings including electrical installationsin upon therein and appurtenant thereto

 

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IN WITNESS WHEREOF THE PARTIESHERETO HAVE SIGNED AND EXECUTED THESE PRESENTS ON THE DAY, MONTH AND YEARHEREIN ABOVE WRITTEN.

 
| ** **     | **(LESSOR)**           | ** ** | **(LESSEE)**         | ** **     |
|----------------|------------------------|------------|----------------------|----------------|
| ** **     | ** **             | ** ** | ** **           | ** **     |
|           | /s/ T.  Devendar Reddy |       | /s/ James E. Thomson |           |
|           | T. Devendar  Reddy     |       | James E. Thomson     |           |
| ** **     | ** **             |
| ** **     |
| **WITNESSES:** |
| ** **     | ** **             |
| **1.**         | /s/ Sunil Bajpai       |       | **2.**               | /s/ Kim Rysell |   |
| ** **     | Sunil Bajpai           |       | ** **           | Kim Rysell     |   |
|                |                        |            |                      |                |  |  |  |  |

 

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