Exhibit 10.1
EXECUTION COPY
TRANSITION SERVICES
AGREEMENT
by and between
iGATE CORPORATION
and
MASTECH HOLDINGS,
INC.
Dated as of September 30,
2008
TRANSITION SERVICES
AGREEMENT
This TRANSITION
SERVICES AGREEMENT (this “ Services Agreement ”)
is made as of this 30 th day of September, 2008 by
and between iGATE Corporation, a Pennsylvania corporation (“
iGATE ”), and Mastech Holdings, Inc., a Pennsylvania
corporation (“ Mastech ”).
WHEREAS, in order to provide greater
flexibility for the management, capital requirements and growth of
Mastech Business while ensuring that iGATE can focus its time and
resources on the development of the iGATE Business, 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 separate companies: one comprising the Mastech
Business, which shall be owned and conducted, directly or
indirectly, by Mastech, all of the common stock of which is
intended to be distributed to iGATE’s shareholders, and one
comprising the iGATE Business, which shall continue to be owned and
conducted, directly or indirectly, by iGATE;
WHEREAS, iGATE and Mastech have
entered into the Separation and Distribution Agreement (the “
Separation Agreement ”), dated as of the date hereof,
in order to carry out, effect and consummate the
Separation;
WHEREAS, prior to the Effective
Time, the Mastech Business received certain services from iGATE and
certain of its Subsidiaries and Affiliates;
WHEREAS, the Separation Agreement
contemplates that iGATE and Mastech enter into this Services
Agreement to properly document the transitional services to be
provided by the iGATE Entities (as defined below) to the Mastech
Entities (as defined below).
NOW, THEREFORE, in consideration of
the mutual covenants and agreements contained in this Services
Agreement and in the Separation Agreement, the Parties hereto
hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions Incorporated
. All capitalized terms not otherwise defined in this Services
Agreement have the meaning ascribed to them in the Separation
Agreement.
1.2 Additional Definitions .
Unless the context otherwise requires, the following terms, and
their singular or plural, used in this Services Agreement shall
have the meanings set forth below:
(a) “ Disbursement
” shall have the meaning set forth in Section 5.8
of this Services Agreement.
(b) “ Force Majeure
” shall have the meaning set forth in Section 6.1
of this Services Agreement.
(c) “ iGATE ”
shall have the meaning set forth in the Preamble.
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(d) “ iGATE Entities
” means, collectively, iGATE and its Affiliates (and which
shall not include any Mastech Entities).
(e) “ iGATE Provided
Services ” shall have the meaning set forth in
Section 2.1 of this Services Agreement.
(f) “ Independent
Accountants ” shall have the meaning set forth in
Section 3.4(d) of this Services Agreement.
(g) “ Indemnifiable
Losses ” shall mean any and all damages, losses,
deficiencies, Liabilities, obligations, penalties, judgments,
settlements, claims, payments, fines, interest, costs and expenses
(including the costs and expenses of any and all Actions and
demands, assessments, judgments, settlements and compromises
relating thereto and the reasonable costs and expenses of
attorneys’, accountants’, consultants’ and other
professionals’ fees and expenses incurred in the
investigation or defense thereof or the enforcement of rights
hereunder), excluding special, consequential, indirect or punitive
damages (other than special, consequential, indirect and/or
punitive damages) awarded to any third party against an indemnified
party.
(h) “ Mastech ”
shall have the meaning set forth in the Preamble.
(i) “ Mastech Entities
” means, collectively, Mastech and its Affiliates (and which
shall not include any iGATE Entities).
(j) “ Other Party
” shall have the meaning set forth in Section 5.7
of this Services Agreement.
(k) “ Party ”
means each of the entities set forth on the signature pages to this
Services Agreement.
(l) “ Paying Party
” shall have the meaning set forth in Section 5.7
of this Services Agreement.
(m) “ Pennsylvania
Courts ” shall have the meaning set forth in
Section 9.7 of this Services Agreement.
(n) “ Prime Rate
” shall mean the rate per annum publicly announced by
JPMorgan Chase Bank (or successor thereto) from time to time as its
prime rate in effect at its principal office in New York, New York.
For purposes of this Services Agreement, any change in the Prime
Rate shall be effective on the date such change in the Prime Rate
is publicly announced as effective.
(o) “ Provider ”
shall mean the person identified on Schedule A to this
Services Agreement providing the services set forth
therein.
(p) “ Receipt ”
shall have the meaning set forth in Section 5.8 of this
Services Agreement.
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(q) “ Receiving Party
” shall have the meaning set forth in Section 5.8
of this Services Agreement.
(r) “ Recipient ”
shall mean the person identified on Schedule A to this
Services Agreement receiving the services set forth
therein.
(s) “ Responsible Party
” shall have the meaning set forth in Section 5.7
of this Services Agreement.
(t) “ Sales and Service
Taxes ” shall have the meaning set forth in
Section 3.3(a) of this Services Agreement.
(u) “ Separation
Agreement ” shall have the meaning set forth in the
Recitals.
(v) “ Term ”
shall have the meaning set forth in Section 4.1 of this
Services Agreement.
ARTICLE 2
SERVICES PROVIDED
2.1 iGATE Provided Services .
Pursuant to the terms of this Services Agreement, the iGATE
Entities agree to provide, or cause to be provided, to the Mastech
Entities the services described in Schedule A to this
Services Agreement (the “ iGATE Provided Services
”).
2.2 Other Services . If,
after the execution of this Services Agreement and prior to the six
(6) month anniversary hereof, the Parties determine that a
service provided to the Mastech Business as conducted by iGATE
prior to the Effective Time was inadvertently omitted from the
Schedules to this Services Agreement, then the Parties shall
negotiate in good faith to attempt to agree to the terms and
conditions upon which such services would be added to this Services
Agreement, it being agreed that the charges for such services
should be determined on a basis consistent with the methodology for
determining the initial prices provided for herein ( i.e. ,
sufficient to cover a Provider’s reasonable estimate of its
actual costs and, if applicable, consistent with the prices such
Provider would charge to an Affiliate), in each case without taking
into account any profit margin or projected savings from increased
efficiency. Upon the Parties’ agreement on the fees and other
specific terms and conditions applicable to such services, the
Parties shall execute an amendment to this Services Agreement that
provides for the substitution of the relevant Schedule, or
additions or supplements to the relevant Schedule, in order to
describe such service and the agreement upon the related fees and
other specific terms and conditions applicable thereto.
2.3 Licenses and Consents .
The Parties shall also use their commercially reasonable efforts to
assist each other in obtaining licenses and/or consents with or
from any of their current vendors or service providers who are
providing services, products or licenses to them or to their
Affiliates for the benefit of the Other Party, prior to the
Distribution Date; provided that in no event shall such
assistance by either Party require or be deemed to require such
Party to incur any additional costs or make any additional payments
to any such vendors or service providers. Except with respect to
the obligations under this Section 2.3 , each Party
acknowledges and agrees that the other Party has no obligation to
obtain licenses or consents with any vendor or
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service provider in connection with the iGATE
Provided Services and that any failure by such Party to obtain any
such license or consent will not constitute a breach of this
Services Agreement or the negligence or willful misconduct of such
Party; provided that failure to obtain any such license or
consent shall not relieve any Provider of its obligations to
provide the iGATE Provided Services set forth herein.
2.4 Independent Contractors .
Except as otherwise agreed in writing by the Parties, in the
performance of the iGATE Provided Services to be rendered
hereunder, the iGATE Entities shall at all times act as independent
contractors, and none is in any respect an agent, attorney,
employee, representative, joint venturer or fiduciary of Mastech,
and Mastech shall not declare or represent to any third party that
any iGATE Entity is acting in any respect as agent, attorney,
employee representative, joint venturer or fiduciary of the Mastech
Entities. Neither the iGATE Entities, on the one hand, nor the
Mastech Entities, on the other, shall have any power or authority
to negotiate or conclude any agreement, or to make any
representation or to give any understanding on behalf of the other
in any way whatsoever.
ARTICLE 3
COMPENSATION
3.1 Compensation for iGATE
Provided Services . The compensation for the iGATE Provided
Services for the duration of the Term shall be as described for
each individual service provided to the Mastech Entities as set
forth on Schedule A .
3.2 Allocation of Certain
Expenses .
(a) Each Provider shall bear the
costs and expenses of obtaining any and all consents from third
parties which may be necessary in connection with such
Provider’s performance of its obligations hereunder,
including the costs of obtaining the consent to the assignment of
all leases of equipment and licenses of software which may be
necessary to provide the services contemplated hereby.
(b) In addition to the payment of
all compensation provided under Section 3.1 , Recipient
shall reimburse Provider for all reasonable out-of-pocket costs and
expenses incurred by Provider or its Affiliates in connection with
providing the applicable services hereunder (including all
travel-related expenses) to the extent that such costs and expenses
are not reflected in the compensation for such services on
Schedule A ; provided , however , any such
expenses exceeding $5,000 per month (other than routine business
travel and related expenses) shall require advance approval of
Recipient. Any travel-related expenses incurred by Provider in
performing the applicable services hereunder shall be incurred and
charged to Recipient in accordance with Provider’s then
applicable business travel policies.
(c) In the event that Recipient
terminates any individual service as contemplated by
Section 4.2 earlier than the expiration of the Term,
Recipient shall reimburse Provider for any and all costs and
expenses incurred by Provider or any of its subsidiaries as a
result of such early termination by Recipient, including
incremental early termination fees and other costs incurred in
order to terminate or reduce the level of services provided by
third parties under Contracts with Recipient or any of its
subsidiaries, which services are affected by such
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early termination, such reimbursement to be due
and payable within five Business Days following Recipient’s
receipt of any invoice from Provider with respect to such costs and
expenses.
3.3 Taxes .
(a) In addition to the compensation
payable to Provider determined exclusive of the taxes payable by
Recipient under this Section 3.3 , Recipient will pay
and be liable for all sales, service, value added, lease, use,
transfer, consumption or similar taxes levied and measured by:
(i) the cost of services provided to Recipient under this
Services Agreement or (ii) Provider’s cost in acquiring
property or services used or consumed by Provider in providing
iGATE Provided Services under this Services Agreement (the “
Sales and Service Taxes ”). Such taxes will be payable
by Recipient to Provider in accordance with Article 3 or as
otherwise mutually agreed in writing by the parties and under the
terms of the applicable law which govern the relevant Sales and
Service Tax. Recipient’s obligation to pay Sales and Service
Taxes under this Section 3.3 shall be subject to the
receipt of (i) a computation of the Sales and Service Taxes
payable under this Section 3.3 identifying the nature
and amount of the goods or services on which the Sales and Service
Tax is assessed and the applicable rate and (ii) a valid and
customary invoice (or other document) under the terms of applicable
law for each Sales and Service Tax. If Recipient complies with the
terms of this Section 3.3 regarding the payment of
Sales and Service Taxes, it shall not be liable for any interest,
penalties or other charges attributable to Provider’s
improper filing relating to Sales and Service Taxes or late payment
or failure to remit Sales and Service Taxes to the relevant taxing
authority.
(b) Each of Provider and Recipient
shall pay and be responsible for their own personal property taxes
and taxes based on their own income or profits or
assets.
3.4 Terms of Payment; Dispute
Resolution; Audits .
(a) Provider shall invoice the
Recipient for the iGATE Provided Services provided by
Section 3.1 monthly in advance on the first calendar
day of each month of the term following the date hereof (or the
first business day following each such date). Provider shall also
provide invoices to Recipient monthly in arrears for amounts, such
as Sales and Service Taxes and out-of-pocket or other expenses,
that are payable in addition to the flat fee for service that was
paid in advance pursuant to the first sentence of this
Section 3.4 . Payment shall be made by Recipients
within thirty (30) days after receipt of an invoice and other
required documentation. No Recipient shall withhold any payments to
its Provider under this Services Agreement and such payments shall
be made without any other set-off or deduction, notwithstanding any
dispute that may be pending between them, whether under this
Services Agreement or otherwise (any required adjustment being made
on subsequent invoices). Subject to the provisions of
Section 3.4(c) , amounts not paid on or before the date
required to be paid hereunder shall accrue interest at a rate per
annum equal to the then effective Prime Rate plus two percent
(2%) (or the maximum legal rate, whichever is lower),
calculated for the actual number of days elapsed, accrued from the
date on which such payment was due up to the date of the actual
receipt of payment.
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(b) All amounts due for services
rendered pursuant to this Services Agreement shall be billed and
paid in the currency in which the rate for such service is quoted,
as stated herein or as shown on Schedule A
hereto.
(c) If there is a dispute between
any Recipient and any Provider regarding the amounts shown as
billed to such Recipient on any invoice, such Provider shall
furnish to such Recipient reasonable documentation to substantiate
the amounts billed including, but not limited to, listings of the
dates, times and amounts of the services in question where
applicable and practicable. Upon delivery of such documentation,
such Recipient and such Provider shall cooperate and use their best
efforts to resolve such dispute among themselves. If such disputing
parties are unable to resolve their dispute within thirty
(30) days of the initiation of such procedure, and such
Recipient believes in good faith and with a reasonable basis that
the amounts shown as billed to such Recipient are inaccurate or are
otherwise not in accordance with the terms of this Services
Agreement, then such Recipient shall have the right, at its own
expense, to have any disputed invoice(s) audited as provided in
Section 3.4(d) .
(d) Any audit pursuant to
Section 3.4(c) shall be limited solely to the purpose
of verifying the amounts in dispute and shall be made by an
independent certified public accounting firm selected and paid for
by the Recipient initiating such audit and reasonably satisfactory
to the Provider being audited (such accounting firm, the “
Independent Accountants ”). Any such audit shall be
reasonably conducted by the Independent Accountants during the
normal business hours of the Provider being audited. Such Provider
shall reasonably cooperate with the Independent Accountants and
shall make available to the Independent Accountants all applicable
cost and other data may be reasonably necessary for the sole
purpose of verifying the amounts in dispute. The Independent
Accountants shall not disclose any of the underlying data and
information to said Recipient or to any other Person (except may be
required by law) and, prior to any such audit the Independent
Accountants shall, if requested by the Provider being audited,
enter into a confidentiality agreement reasonably acceptable to
such Provider.
ARTICLE 4
TERM AND
TERMINATION
4.1 Term . The term of this
Services Agreement shall commence at the Effective Time and shall
expire on the latest date on which any service is to be provided as
indicated on Schedule A (the “ Term ”).
The obligation of any Recipient to make a payment for services
previously rendered shall not be affected by the expiration of the
Term and shall continue until full payment is made.
4.2 Termination of Individual
Services . Upon the mutual agreement of the Parties, a
Recipient may terminate at any time during the Term any individual
service provided under this Services Agreement on a
service-by-service basis (and/or location-by-location basis where
individual service is provided to multiple locations of a
Recipient) upon written notice to the Provider identifying the
particular service (or location) to be terminated and the effective
date of termination, which date shall not be less than thirty
(30) days after receipt of such notice unless the Provider
otherwise agrees. The termination of any individual iGATE Provided
Service pursuant to this Section 4.2 shall not affect
this Services Agreement with respect to the iGATE
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Provided Services not terminated under this
Section 4.2 . In addition, upon the mutual agreement of
the Parties, a Provider may terminate at any time during the Term
any individual service provided under this Services Agreement upon
written notice to the Recipient identifying the particular service
to be terminated and the effective date of termination if the
employee that was providing the applicable service is no longer
employed by the Provider (and there is no other employee employed
by Provider at the time that could reasonably provide such
service).
4.3 Termination of Agreement
. This Services Agreement shall terminate on the earliest to occur
of (a) the latest date on which any service is to be provided
as indicated on Schedule A , (b) the date on which the
provision of all services has terminated or been canceled pursuant
to Section 4.2 , and (c) the date on which this
Services Agreement is terminated pursuant to
Section 4.4 .
4.4 Breach of Agreement . If
either Party shall materially breach any of its obligations under
this Services Agreement, including, but not limited to, any failure
to perform any services or to make payments when due, and said
Party does not cure such breach within fifteen (15) days after
receiving written notice thereof from the non-breaching Party, the
non-breaching Party may terminate this Services Agreement,
including the provision of services pursuant hereto, immediately by
providing written notice of termination. The failure of a Party to
exercise its rights hereunder with respect to a breach by the other
Party shall not be construed as a waiver of such rights nor prevent
such Party from subsequently asserting such rights with regard to
the same or similar defaults. In the event of a termination of this
Services Agreement, Provider shall be entitled to all outstanding
amounts due from Recipient for the provision of iGATE Provided
Services rendered prior to the date of termination.
4.5 Effect of Termination .
In the event this Services Agreement is validly terminated as
provided herein, each of the Parties shall be relieved of its
duties and obligations arising hereunder after the date of such
termination, provided , however , that (i) the
provisions set forth in Articles 4 , 7 , 8 and
9 hereof shall survive any termination of this Services
Agreement and (ii) such termination in and of itself shall not
relieve a Party of liability for a breach prior to the date of such
termination. For the avoidance of d
