Exhibit 10.3
TAX SHARING
AGREEMENT
by and between
iGATE CORPORATION
and
MASTECH HOLDINGS,
INC.
September 30,
2008
TABLE OF CONTENTS
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Page
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ARTICLE I
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DEFINITIONS AND
INTERPRETATION
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Section 1.1
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General
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2
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Section 1.2
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References;
Interpretation
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10
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Section 1.3
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Effective
Time
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10
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ARTICLE II
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PREPARATION AND FILING OF TAX
RETURNS
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Section 2.1
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Responsibility of iGATE to prepare and file
Pre-Spin Tax Returns and Post-Spin Tax Returns
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11
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Section 2.2
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Responsibility of Mastech to prepare and file
Mastech Tax Returns
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12
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Section 2.3
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Time of
filing Tax Returns; manner of Tax Return preparation
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12
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ARTICLE III
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RESPONSIBILITY FOR PAYMENT OF
TAXES
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Section 3.1
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Responsibility of iGATE to pay
Taxes
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12
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Section 3.2
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Responsibility of Mastech to pay
Taxes
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12
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Section 3.3
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Responsibility for Pre-Spin Taxes
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13
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ARTICLE IV
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REFUNDS AND OTHER MATTERS
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Section 4.1
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Refunds for
the benefit of iGATE
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13
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Section 4.2
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Refunds for
the benefit of Mastech
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13
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Section 4.3
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Pre-Spin
Refunds
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13
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Section 4.4
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Carrybacks
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14
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Section 4.5
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Amended Tax
Returns
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14
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Section 4.6
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Payments of
Refunds
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14
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ARTICLE V
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DISTRIBUTION TAXES
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Section 5.1
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Liability
for Distribution Taxes
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14
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Section 5.2
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Definition
of Fault
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15
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Section 5.3
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Limits on
Proposed Acquisition Transactions and other transactions for
Restricted Period
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15
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ARTICLE VI
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INDEMNIFICATION
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Section 6.1
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Indemnification obligations of
iGATE
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16
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Section 6.2
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Indemnification obligations of
Mastech
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17
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ARTICLE VII
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PAYMENTS
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Section 7.1
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General
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17
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Section 7.2
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Treatment of
payments made pursuant to Tax Sharing Agreement and Separation and
Distribution Agreement
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17
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Section 7.3
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Treatment of
payments made upon the exercise of Options
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18
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ARTICLE VIII
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AUDITS
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Section 8.1
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Notice
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19
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Section 8.2
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Pre-Spin
Audits
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19
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Section 8.3
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Audits
exclusively controlled by iGATE
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21
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Section 8.4
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Audits
exclusively controlled by Mastech
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21
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Section 8.5
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Payment of
Pre-Spin Audit Tax Amounts
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21
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ARTICLE IX
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COOPERATION AND EXCHANGE OF
INFORMATION
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Section 9.1
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Cooperation
and Exchange of Information
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22
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Section 9.2
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Retention of
Records
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22
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ARTICLE X
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ALLOCATION OF TAX ATTRIBUTES, DUAL
CONSOLIDATED LOSSES GAIN RECOGNITION AGREEMENTS AND OTHER TAX
MATTERS
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Section
10.1
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Allocation
of Tax Attributes
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23
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ARTICLE XI
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DEFAULTED AMOUNTS
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Section 11.1
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General
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24
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ARTICLE XII
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DISPUTE RESOLUTION
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Section 12.1
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Negotiation
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24
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Section 12.2
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Arbitration
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24
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Section 12.3
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Continuity
of Service and Performance
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26
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Section 12.4
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Costs
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26
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ARTICLE XIII
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MISCELLANEOUS
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Section 13.1
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Counterparts; Facsimile
Signatures
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Section 13.2
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Survival
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Section
13.3
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Notices
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26
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Section
13.4
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Waivers
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27
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Section
13.5
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Amendments
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27
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Section
13.6
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Assignment
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27
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Section
13.7
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Successors
and Assigns
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27
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Section
13.8
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Certain
Termination and Amendment Rights
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27
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Section
13.9
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No
Circumvention
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Section 13.10
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Subsidiaries
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27
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Section
13.11
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Third Party
Beneficiaries
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28
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Section
13.12
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Title and
Headings
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28
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Section
13.13
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Exhibits and
Schedules
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28
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Section
13.14
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Governing
Law
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28
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Section
13.15
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Consent to
Jurisdiction
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28
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Section
13.16
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Specific
Performance
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28
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Section
13.17
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Waiver of
Jury Trial
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28
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Section
13.18
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Severability
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29
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Section
13.19
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Force
Majeure
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29
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Section
13.20
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Construction
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29
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Section
13.21
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Changes in
Law
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29
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Section
13.22
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Authority
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29
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Section
13.23
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Severability
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30
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Section
13.24
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Tax Sharing
Agreements
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30
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Section
13.25
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Exclusivity
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30
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Section
13.26
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No
Duplication, No Double Recovery
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30
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TAX SHARING
AGREEMENT
THIS TAX SHARING
AGREEMENT (this “ Agreement ”) is made and
entered into as of the 30 th day of September, 2008, by and
between iGATE Corporation, a Pennsylvania corporation (“
iGATE ”) and Mastech Holdings, Inc., a Pennsylvania
corporation (“ Mastech ”). Each of iGATE and
Mastech are sometimes referred to herein as a “ Party
” and collectively, as the “ Parties
”.
W I T N E S
S E T H:
WHEREAS, iGATE, acting through its
direct and indirect Subsidiaries, currently conducts a number of
businesses, including: (i) the iGATE Business; and
(ii) the Mastech Business;
WHEREAS, the Board of Directors of
iGATE has determined that it is appropriate, desirable and in the
best interests of iGATE and its stockholders to separate iGATE into
two (2) separate, publicly traded companies, one for each of:
(i) the iGATE Business, which shall be owned and conducted,
directly or indirectly, by iGATE; and (ii) the Mastech
Business, which shall be owned and conducted, directly or
indirectly, by Mastech;
WHEREAS, in order to effect such
separation, the Board of Directors of iGATE has determined that it
is appropriate, desirable and in the best interests of iGATE and
its stockholders: (i) for iGATE and certain of its
subsidiaries to enter into a series of transactions whereby, among
other things, iGATE will contribute to Mastech the stock of Mastech
Trademark Systems, Inc., Global Financial Services of Nevada, iGATE
Mastech, Inc., and RPOworldwide, Inc.; and (ii) for iGATE to
distribute to the holders of iGATE Common Stock on a pro rata basis
(in each case without consideration being paid by such
stockholders) all of the issued and outstanding shares of common
stock of Mastech (the “ Mastech Common Stock ”)
(such transactions as they may be amended or modified from time to
time, collectively, the “ Plan of Separation
”);
WHEREAS, it is the intention of the
Parties that each of the contributions of assets to, and the
assumption of liabilities by, Mastech together with the
corresponding distribution of all of the Mastech Common Stock shall
qualify as a reorganization within the meaning of Sections
368(a)(1)(D) and 355 of the Internal Revenue Code of 1986, as
amended (the “ Code ”);
WHEREAS, it is the intention of the
Parties that the distribution of Mastech Common Stock to the
stockholders of iGATE will qualify as a tax-free distribution
within the meaning of Section 355(a) of the Code to such
stockholders; and
WHEREAS, in connection with the Plan
of Separation, each of the Parties desire to set forth their
agreement on the rights and obligations with respect to handling
and allocating Taxes and related matters.
NOW, THEREFORE, in consideration of
the foregoing and the terms, conditions, covenants and provisions
of this Agreement, each of the Parties mutually covenant and agree
as follows:
ARTICLE I
DEFINITIONS AND
INTERPRETATION
Section 1.1 General . As
used in this Agreement, the following terms shall have the
following meanings:
(1) “ AAA ” has
the meaning set forth in Section 12.2 .
(2) “ Accounting
Dispute ” has the meaning set forth in
Section 12.2 .
(3) “ Affiliate ”
means a Person that directly, or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under common
control with, a specified Person. A Person shall be deemed to
control another Person if such first Person possesses, directly or
indirectly, the power to direct, or cause the direction of, the
management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise. For
purposes hereof, none of the Parties or their respective
Subsidiaries (determined immediately after the Distribution Date)
shall he considered an “Affiliate” of the other Party
or its respective Subsidiaries (determined on the same
basis).
(4) “ Agreement ”
has the meaning set forth in the preamble hereto.
(5) “ Ancillary
Agreements ” has the meaning set forth in the Separation
and Distribution Agreement.
(6) “ Audit ”
means any audit, assessment of Taxes, other examination by any
Taxing Authority, proceeding, or appeal of such a proceeding
relating to Taxes, whether administrative or judicial, including
proceedings relating to competent authority
determinations.
(7) “ Business Day
” means any day other than a Saturday, Sunday or a day on
which banks are required to be closed in Pittsburgh,
Pennsylvania.
(8) “ Business Entity
” means any corporation, partnership, limited liability
company or other entity.
(9) “ Code ” has
the meaning referred to in the recitals to this
Agreement.
(10) “ Common Parent
” means: (i) for U.S. federal income tax purposes, the
“common parent corporation” of an “affiliated
group” (in each case, within the meaning of Section 1504
of the Code) filing a U.S. federal consolidated income tax return;
or (ii) for state, local or foreign income tax purposes, the
common parent (or similar term) of a consolidated, unitary,
combined or similar group.
(11) “ Credit Carryover
” means the aggregate of all alternative minimum Tax credit
carryovers, general business credit carryovers and foreign Tax
credit carryovers.
(12) “ Dispute ”
means any dispute, controversy or claim arising out of, in
connection with, or in relation to the interpretation, performance,
nonperformance, validity or
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breach of this Agreement or otherwise arising
out of, or in any way related to, this Agreement or the
transactions contemplated thereby, including any claim based in
contract, tort, statute or constitution.
(13) “ Dispute Notice
” has the meaning set forth in Section 12.1
.
(14) “ Distribution
” means the distribution on the Distribution Date to holders
of record of shares of iGATE Common Stock as of the Distribution
Record Date of the Mastech Common Stock owned by iGATE on the basis
of one (1) share of Mastech Common Stock for every 15
outstanding shares of iGATE Common Stock.
(15) “ Distribution
Date ” means September 30, 2008.
(16) “ Distribution Record
Date ” means September 16, 2008.
(17) “ Distribution
Taxes ” means any and all Taxes required to be paid by or
imposed on the Parties (or any Tax Group of the Parties) resulting
from, or directly arising in connection with, the failure of the
Distribution to qualify under Section 355(a) or (c) of
the Code or, if applicable, Section 361(c) of the Code, or the
application of Sections 355(d) or (e) of the Code to the
Distribution, or under the corresponding provisions of the Laws of
other jurisdictions.
(18) “ Due Date ”
means the date (taking into account all valid extensions) upon
which a Tax Return is required to be filed.
(19) “ Fault ”
has the meaning set forth in Section 5.2 .
(20) “ Fifty Percent or
Greater Interest ” means a “50-percent or greater
interest” for purposes of Sections 355(d) and (e) of the
Code and the Treasury Regulations promulgated
thereunder.
(21) “ Final
Determination ” means the final-resolution of liability
for any Tax for any taxable period, by or as a result
of:
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(i)
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a final
decision, judgment, decree or other order by any court of competent
jurisdiction that can no longer be appealed;
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(ii)
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a final
settlement with the IRS, a closing agreement or accepted offer in
compromise under Sections 7121 or 7122 of the Code, or a comparable
agreement under the Laws of other jurisdictions, which resolves the
entire Tax liability for any taxable period;
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(iii)
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any allowance
of a refund or credit in respect of an overpayment of Tax, but only
after the expiration of all periods during which such refund may be
recovered by the jurisdiction imposing the Tax; or
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(iv)
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any other final
disposition, including by reason of the expiration of the
applicable statute of limitations.
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(22) “ Final Tax Attribute
Allocation ” has the meaning set forth in
Section 10.1(b) .
(23) “ Force Majeure
” has the meaning set forth in the Ancillary
Agreements.
(24) “ Group ”
means the iGATE Group or the Mastech Group.
(25) “ IRS ”
means the United States Internal Revenue Service or any successor
thereto, including, but not limited to its agents, representatives,
and attorneys.
(26) “ iGATE ”
has the meaning set forth in the preamble of this
Agreement.
(27) “ iGATE Business
” has the meaning set forth in the Separation and
Distribution Agreement.
(28) “ iGATE Common
Stock ” has the meaning set forth in the Separation and
Distribution Agreement.
(29) “ iGATE Employee
” has the meaning set forth in the Separation and
Distribution Agreement.
(30) “ iGATE Group
” has the meaning set forth in the Separation and
Distribution Agreement.
(31) “ iGATE
Indemnitees ” means iGATE, each member of the iGATE
Group, each of their respective directors, officers, employees and
agents and each of the heirs, executors, successors and assigns of
any of the foregoing, except the Mastech Indemnitees.
(32) “ iGATE Option
” means an option to acquire iGATE Common Stock.
(33) “ iGATE Option
Holder ” means a holder of an iGATE Option.
(34) “ iGATE
Subsidiaries ” means all direct and indirect Subsidiaries
of iGATE, determined immediately after the Distribution
Date.
(35) “ Income Tax
Returns ” mean all Tax Returns relating to Income
Taxes.
(36) “ Income Taxes
” means: (i) all Taxes based upon, measured by, or
calculated with respect to (A) net income or profits
(including, but not limited to, any capital gains, minimum Tax or
any Tax on items of Tax preference, but not including sales, use,
real or personal property, gross or net receipts, transfer or
similar Taxes) or (B) multiple bases (including, but not
limited to, corporate franchise, doing business and occupation
Taxes) if one or more bases upon which such Tax may be based,
measured by, or calculated with respect to, is described in clause
(i)(A) above; and (ii) all U.S., state, local or foreign
franchise Taxes, including in the case of each of (i) and
(ii) any related interest and any penalties, additions to such
Tax or additional amounts imposed with respect thereto by any Tax
Authority.
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(37) “ Indemnified
Party ” means the Party (or Indemnitee) which is or may
be entitled pursuant to this Agreement to receive any payments
(including reimbursement for Taxes or costs and expenses) from the
other Party to this Agreement.
(38) “ Indemnifying
Party ” means the Party which is or may be required
pursuant to this Agreement to make indemnification or other
payments (including reimbursement for Taxes and costs and expenses)
to the other Party to this Agreement.
(39) “ Indemnitee
” means an iGATE Indemnitee or a Mastech
Indemnitee.
(40) “ Independent Firm
” means a nationally recognized accounting firm other than
UHY LLP and Ernst & Young.
(41) “ Law ”
means any U.S. or non-U.S. federal, national, supranational, state,
provincial, local or similar statute, law, ordinance, regulation,
rule, code, administrative pronouncement, order, requirement or
rule of law (including common law).
(42) “ Mastech ”
has the meaning set forth in the recitals to this
Agreement.
(43) “ Mastech Business
” has the meaning set forth in the Separation and
Distribution Agreement.
(44) “ Mastech Common
Stock ” has the meaning set forth in the recitals
hereto.
(45) “ Mastech Employee
” has the meaning set forth in the Separation and
Distribution Agreement.
(46) “ Mastech Group
” has the meaning set forth in the Separation and
Distribution Agreement.
(47) “ Mastech
Indemnitees ” means Mastech, each member of the Mastech
Group, each of their respective directors, officers, employees and
agents and each of the heirs, executors, successors and assigns of
any of the foregoing.
(48) “ Mastech Option
” means an option to acquire Mastech Common Stock.
(49) “ Mastech Option
Holder ” means a holder of a Mastech Option.
(50) “ Mastech
Subsidiaries ” means all direct and indirect Subsidiaries
of Mastech, determined immediately after the Distribution (and
predecessors of such entities).
(51) “ Mastech Tax
Audit ” means all Audits relating to or involving a
Mastech Tax Return.
(52) “ Mastech Tax
Return ” means:
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(i)
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any Income Tax
Returns required to be filed by any Tax Group of which Mastech or a
Mastech Subsidiary is the Common Parent;
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(ii)
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any U.S.,
state, local or foreign separate Income Tax Return required to be
filed by Mastech or a Mastech Subsidiary; and
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(iii)
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any U.S.,
state, local or foreign separate Non-Income Tax Return required to
be filed by Mastech or a Mastech Subsidiary.
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(53) “ Mastech Taxes
” means all Taxes required to be paid by or imposed upon
Mastech or a Mastech Subsidiary with respect to all Mastech Tax
Returns.
(54) “ Non-Income Tax
Returns ” mean all Tax Returns other than Income Tax
Returns.
(55) “ Non-Income Taxes
” mean all Taxes other than Income Taxes.
(56) “ Options ”
means, collectively, and as the context requires, iGATE Options and
Mastech Options.
(57) “ Ordinary Course of
Business ” means an action taken by a Person only if such
action is taken in the ordinary course of the normal day-to-day
operations of such Person consistent with the past practices of
such Person.
(58) “ Other Dispute
” has the meaning set forth in Section 12.2(b)
.
(59) “ Party ”
has the meaning set forth in the preamble hereto.
(60) “ Pennsylvania
Courts ” has the meaning set forth in Section
13.15.
(61) “ Person ”
means any natural person, firm, individual, corporation, business
trust, joint venture, association, company, limited liability
company, partnership or other organization or entity, whether
incorporated or unincorporated, or any governmental
entity.
(62) “ Plan of
Separation ” has the meaning set forth in the recitals
hereto.
(63) “ Post-Spin Tax
Return ” means:
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(i)
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any Income Tax
Return required to be filed by any Tax Group of which iGATE is the
Common Parent for Tax years beginning on or after the Distribution
Date;
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(ii)
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any U.S.,
state, local or foreign separate Income Tax Return required to be
filed by iGATE or any of its Subsidiaries for Tax years beginning
on or after the Distribution Date; and
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(iii)
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any U.S.,
state, local or foreign Non-Income Tax Return required to be filed
by iGATE or any of its Subsidiaries for Tax years beginning on or
after the Distribution Date.
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(64) “ Post-Spin Taxes
” means all Taxes required to paid by or imposed upon iGATE
with respect to all Post-Spin Tax Returns.
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(65) “ Post-Distribution
Tax Period ” means:
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(i)
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in the case of
iGATE, a Tax year beginning on or after January 1, 2009;
and
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(ii)
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in the case of
Mastech, a Tax year beginning after the Distribution
Date.
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(66) “ Post-Spin Audits
” means all Audits relating to all Post-Spin Tax
Returns.
(67) “ Pre-Spin Audits
” means all Audits relating to all Pre-Spin Tax
Returns.
(68) “ Pre-Spin Correlative
Adjustment ” means a disallowance of an item of
deduction, loss or credit (or an increase of an item of income or
gain) included in the applicable Tax Return that is related or
attributable to the business or operations of Mastech or its
Subsidiaries and also is more likely than not to result in a
related correlative increase of an item of deduction, loss or
credit (or reduction of an item of income or gain for a
Post-Distribution Tax Period of such entity). For purposes of this
Agreement, a Correlative Adjustment shall not include any such
disallowance or increase that more likely than not will result in
an increase in basis in property the basis of which is neither
deductible, depreciable or amortizable.
(69) “ Pre-Spin Tax
Returns ” means:
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(i)
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any Income Tax
Returns (other than Post-Spin Tax Returns) required to be filed by
any Tax Groups of which iGATE is the Common Parent for Tax years
ending on or prior to December 31, 2008;
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(ii)
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any U.S.,
state, local or foreign separate Income Tax Return (other than a
Post-Spin Tax Return) required to be filed by iGATE or any of its
Subsidiaries for Tax years ending on or prior to December 31,
2008; and
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(iii)
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any U.S.,
state, local or foreign Non-Income Tax Return (other than a
Post-Spin Tax Return) required to be filed by iGATE or any of its
Subsidiaries for Tax years ending on or prior to December 31,
2008.
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(70) “ Pre-Spin Taxes
” means all Taxes required to be paid by or imposed upon
iGATE with respect to all Pre-Spin Tax Returns.
(71) “ Prime Rate
” has the meaning set forth in the Separation and
Distribution Agreement.
(72) “ Principal
Shareholders ” means Ashok Trivedi and Sunil
Wadhwani.
(73) “ Principal
Shareholders Agreement ” means that certain agreement by
and between the Principal Shareholders and the Parties dated
September 30, 2008.
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(74) “ Proposed Acquisition
Transaction ” means a transaction or series of
transactions (or any agreement, understanding or arrangement,
within the meaning of Section 355(e) of the Code and the
Treasury Regulations promulgated thereunder, to enter into a
transaction or series of related transactions), as a result of
which any of the Parties (or any successor thereto) would merge or
consolidate with any other Person or as a result of which any
Person or any group of Persons would (directly or indirectly)
acquire, or have the right to acquire (through an option or
otherwise) from any of the Parties (or any successor thereto)
and/or one or more holders of their common stock, respectively, any
amount of stock of any of the Parties, as the case may be, that
would, when combined with any other changes in ownership of the
stock of such Party pertinent for purposes of Section 355(e)
of the Code and the Treasury Regulations promulgated thereunder,
comprise more than thirty-five percent (35%) or more of:
(i) the value of all outstanding stock of such Party as of the
date of such transaction, or in the case of a series of
transactions, the date of the last transaction of such series; or
(ii) the total combined voting power of all outstanding stock
of such Party as of the date of such transaction, or in the case of
a series of transactions, the date of the last transaction of such
series. For purposes of determining whether a transaction
constitutes an indirect acquisition for purposes of the first
sentence of this definition, any recapitalization resulting in a
shift of voting power or any redemption of shares of stock shall be
treated as an indirect acquisition of shares of stock by the
non-exchanging shareholders. This definition and the application
thereof is intended to monitor compliance with Section 355(e)
of the Code and the Treasury Regulations promulgated thereunder and
shall be interpreted accordingly by the parties in good
faith.
(75) “ Reed Smith
” means Reed Smith LLP.
(76) “ Refund ”
means any refund of Taxes (including any overpayment of Taxes for a
period ending on or prior to December 31, 2008 that can be
refunded or, alternatively, applied to future Taxes payable),
including any interest paid on or with respect to such refund of
Taxes, provided , however , that with respect to any
refund of Taxes imposed on any Person, refunds shall be net of any
Taxes imposed on or related or attributable to the receipt or
accrual of such refund.
(77) “ Requesting Party
” has the meaning set forth in Section 5.3
.
(78) “ Restricted
Period ” means the period beginning the day after the
Distribution Date and ending on the two-year anniversary
thereof.
(79) “ Rules ”
has the meaning set forth in Section 12.2 .
(80) “ Separation and
Distribution Agreement ” means the Separation and
Distribution Agreement by and between iGATE and Mastech, dated as
of September 30, 2008.
(81) “ Steps Memorandum
” means the memorandum attached hereto as Exhibit A
.
(82) “ Subsidiary
” of any Person means, on any date, any Person of which
securities or other ownership interests representing more than
fifty percent (50%) of the equity or more than fifty percent
(50%) of the ordinary voting power or, in the case of a
partnership, more than fifty percent (50%) of the general
partnership interests or more than fifty percent
(50%) of
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the profits or losses of which are, as of such
date, owned, controlled or held by the applicable Person or one or
more subsidiaries of such Person. For purposes hereof, none of the
Parties or their respective Subsidiaries (determined immediately
after the Distribution Date) shall be considered a
“Subsidiary” of the other Party or its respective
Subsidiaries (determined on the same basis).
(83) “ Tax Benefit Actually
Realized ” means an actual reduction in Taxes otherwise
due and payable by a Party or its Affiliates which reduction is
solely attributable to the accrual or payment of a Tax, cost,
expense, liability or other amount by such Party or its Affiliates
which accrual or payment resulted in the right by such Party or its
Affiliates to receive a payment from another Party pursuant to this
Agreement.
(84) “ Tax-Free Status
” means the qualification of the Distribution and related
transactions as a distribution in which no gain or loss is
recognized, and no amount is included in income, including by
reason of Distribution Taxes, for U.S. federal income Tax purposes
(other than intercompany items, excess loss accounts or other items
required to be taken into account pursuant to Treasury Regulations
promulgated under Section 1502 of the Code).
(85) “ Tax Group
” means any U.S. federal, state, local or foreign affiliated,
consolidated, combined, unitary or similar group that files an
Income Tax Return.
(86) “ Tax Package
” means that certain information requested of Mastech by
iGATE related to iGATE’s preparation of a Pre-Spin Tax
Return, which information may include:
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(i)
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a pro forma Tax
Return relating to the operations of Mastech and/or its
Subsidiaries that is required to be included in any Tax Group of
which iGATE is or was the Common Parent and Mastech and/or such
Subsidiaries is or was a member for one or more days in a taxable
year; and
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(ii)
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all information
relating to the operations of Mastech and/or its Subsidiaries that
is reasonably necessary to prepare and file the applicable Income
Tax Return required to be filed by any Tax Group of which iGATE is
or was the common parent and Mastech or any of its Subsidiaries is
or was a member for one or more days in a Tax year.
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(87) “ Tax Representation
Letter ” means a letter containing certain
representations and covenants issued by a Party to Reed Smith in
connection with certain Tax opinions to be rendered by Reed Smith
to iGATE in connection with the Plan of Separation.
(88) “ Tax Return
” means any return, report, certificate, form or similar
statement or document (including any related or supporting
information or schedule attached thereto and any information
return, amended tax return, claim for refund or declaration of
estimated tax) required to be supplied to, or filed with, a Taxing
Authority in connection with the determination, assessment or
collection of any Tax or the administration of any Laws,
regulations or administrative requirements relating to any
Tax.
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(89) “ Tax Sharing
Agreement Termination Date ” means, as between the
applicable Parties and their respective Subsidiaries, the
Distribution Date.
(90) “ Taxes ”
means all taxes, charges, fees, duties, levies, imposts, or other
similar assessments imposed by any federal, state, local or foreign
Taxing Authority, including, but not limited to, income, gross
receipts, excise, property, sales, use, license, capital stock,
transfer, franchise, payroll, withholding, social security, value
added and other taxes, and any interest, penalties or additions
attributable thereto.
(91) “ Taxing Authority
” means any governmental authority or any subdivision,
agency, commission or authority thereof or any quasi-governmental
or private body having jurisdiction over the assessment,
determination, collection or imposition of any Tax (including the
Internal Revenue Service).
(92) “ Treasury
Regulations ” means the final and temporary (but not
proposed) income tax regulations promulgated under the Code, as
such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
(93) “ U.S. ”
shall mean United States.
(94) “ Unqualified Tax
Opinion ” means an unqualified “should”
opinion of a law firm of nationally recognized standing in the
field of taxation, which opinion is reasonably acceptable to the
Parties and upon which each of the Parties may rely to confirm that
a transaction (or transactions) will not result in Distribution
Taxes, including confirmation in accordance with Circular 230 or
otherwise that may be provided for purposes of avoiding any
applicable penalties or additions to Tax.
Section 1.2 References;
Interpretation . References in this Agreement to any gender
include references to all genders, and references to the singular
include references to the plural and vice versa. Unless the context
otherwise requires, the words “include”,
“includes” and “including” when used in
this Agreement shall be deemed to be followed by the phrase
“without limitation”. Unless the context otherwise
requires, references in this Agreement to Articles, Sections,
Annexes, Exhibits and Schedules shall be deemed references to
Articles and Sections of, and Annexes, Exhibits and Schedules to,
this Agreement. Unless the context otherwise requires, the words
“hereof”, “hereby” and “herein”
and words of similar meaning when used in this Agreement refer to
this Agreement in its entirety and not to any particular Article,
Section or provision of this Agreement.
Section 1.3 Effective
Time .
(a) This Agreement shall be
effective as of the Distribution Date.
(b) Notwithstanding anything to the
contrary contained in this Agreement, for so long as Mastech is
still an Affiliate (without regard to the last sentence set forth
in such definition) of iGATE, iGATE shall be responsible for any
Taxes or other amounts required to be paid by Mastech pursuant to
this Agreement.
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For the avoidance of doubt, in the
event of a conflict between this Section 1.3(b) and any
other provision of this Agreement, this Section 1.3(b)
shall govern and control.
ARTICLE II
PREPARATION AND FILING OF TAX
RETURNS
Section 2.1 Responsibility
of iGATE to prepare and file Pre-Spin Tax Returns and Post-Spin Tax
Returns .
(a) Pre-Spin Tax Returns
.
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(i)
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General . To the extent not previously filed, subject to
the rights and obligations of Mastech set forth herein, iGATE shall
(at iGATE’s own cost and expense) prepare and file or cause
to be prepared and filed, all Pre-Spin Tax Returns.
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(ii)
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Tax
Package . To the extent
not previously provided, upon the written request of iGATE
specifying with particularity the materials requested, Mastech (at
its own cost and expense) shall prepare and provide or cause to be
prepared and provided to iGATE a Tax Package relating to each
Pre-Spin Tax Return required to be filed by any Tax Group of which
iGATE was the Common Parent and Mastech or any of its Subsidiaries
was a member for one or more days in the relevant Tax year. The Tax
Package shall be provided to iGATE no later than May 31, 2009
(other than U.S. Tax Returns for such Tax year of any foreign
Subsidiary of Mastech, which shall be provided no later than
July 31, 2009). For the avoidance of doubt, in the event
Mastech does not fulfill its obligations pursuant to this
Section 2.1(a)(ii) , iGATE shall be entitled, at the
sole cost and expense of Mastech, to prepare or cause to be
prepared the information required to be included in the Tax Package
for purposes of preparing any such Pre-Spin Tax Return.
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(iii)
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Procedures . In the case of Pre-Spin Tax Returns, to the
extent not previously filed, no later than thirty (30) days
prior to the Due Date of each such Pre-Spin Tax Return, iGATE shall
make available or cause to be made available drafts of such Tax
Return (together with all related work papers) to Mastech. All such
Pre-Spin Tax Returns shall be prepared in accordance with past
practices unless otherwise required by applicable law.
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(b) Preparation and filing of
Post-Spin Tax Returns . iGATE shall (at its own cost and
expense) prepare and file or cause to be prepared and filed, all
Post-Spin Tax Returns.
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Section 2.2 Responsibility
of Mastech to prepare and file Mastech Tax Returns .
(a) To the extent not previously
filed, no later than thirty (30) days prior to the Due Date of
each Mastech Tax Return for any taxable period ending on or prior
to December 31, 2008 which Mastech Tax Return includes income
that is also included in a Pre-Spin Tax Return, Mastech shall make
available or cause to be made available drafts of such Tax Return
to iGATE. All such Mastech Tax Returns shall be prepared in
accordance with past practice unless otherwise required by
applicable Law.
(b) To the extent not previously
filed, Mastech shall (at its own cost and expense), subject to
Section 2.2(a) , prepare and file or caused to be
prepared and filed all Mastech Tax Returns.
Section 2.3 Time of filing
Tax Returns; manner of Tax Return preparation . Each Tax Return
shall be filed on or prior to the Due Date for such Tax Return by
the Party responsible for filing such Tax Return hereunder. Unless
otherwise required by a Taxing Authority pursuant to a Final
Determination, the Parties hereto shall prepare and file or cause
to be prepared and filed all Tax Returns and take all other actions
in a manner consistent with (and shall not take any position
inconsistent with):
(a) the contributions by iGATE to
Mastech of the stock of Mastech Trademark Systems, Inc., Global
Financial Services of Nevada, iGATE Mastech, Inc., and
RPOworldwide, Inc. and the distribution by iGATE to its
stockholders of all of the stock of Mastech, as a reorganization
under Sections 368(a)(1)(D) and 355 of the Code; and
(b) the distribution by iGATE to its
stockholders of all of the stock of Mastech as a tax-free
distribution under Section 355(a) of the Code to such
stockholders.
ARTICLE III
RESPONSIBILITY FOR PAYMENT OF
TAXES
Section 3.1 Responsibility
of iGATE to pay Taxes .
(a) General . Except as
otherwise provided in this Agreement, iGATE shall be liable for and
shall pay or cause to be paid to the applicable Taxing Authority,
all Post-Spin Taxes.
(b) Timing of Payments . All
Taxes required to be paid or caused to be paid by iGATE to an
applicable Taxing Authority pursuant to Section 3.1(a)
shall be paid or caused to be paid by iGATE to such applicable
Taxing Authority on or prior to the Due Date of the applicable Tax
Return.
Section 3.2 Responsibility
of Mastech to pay Taxes .
(a) Except as otherwise provided in
this Agreement, Mastech shall be liable for and shall pay or cause
to be paid to the applicable Taxing Authority, all Mastech
Taxes.
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(b) Timing of Payments . All
Taxes required to be paid or caused to be paid by Mastech to an
applicable Taxing Authority pursuant to Section 3.2(a)
shall be paid or caused to be paid by Mastech to such applicable
Taxing Authority on or prior to the Due Date of the applicable Tax
Return.
Section 3.3 Responsibility
for Pre-Spin Taxes .
(a) All Pre-Spin Taxes that are
identifiable to a specific Party and which are required to be paid
or caused to be paid to an applicable Taxing Authority shall be
paid or caused to be paid to such applicable Taxing Authority by
such Party and such Party shall be solely liable for the payment of
such Taxes. The responsible Party pursuant to this
Section 3.3(a) shall be entitled to any accrued
liabilities related to such Taxes. Notwithstanding anything else
contained in this Section 3.3(a) , if a FIN 48 reserve
has been created by iGATE and the Pre-Spin Taxes are identifiable
to Mastech and pertain to the FIN 48 reserve, Mastech shall be
entitled to the benefit of such FIN 48 reserve. Schedule A
contains a listing of all FIN 48 reserves created by
iGATE.
(b) To the