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Commercial Dept

HCL Infosystems Ltd


HCL INFOSYSTEMS LIMITED, LEGAL DEPARTMENT
DUE DILIGENCE – CUM - APPROVAL FORM
This Due Diligence Form (“DDF”) captures the proposed business transaction or arrangement that the parties wish to enter. Please read the instructions (given
below) carefully and subsequently fill the table(s) given below.
INSTRUCTIONS FOR FILLING DDF
1. This DDF is divided into following parts -
o Part A – General including, commercial, operational and legal information which
must be filled in for all type of contracts. Ref. No.
o Part B – Additional Information Required for specific contracts viz., Originating Dept
1.1 Distributors / Reseller or Supplier;
1.2 Teaming contracts/Outsourcing or facilities management/
Legal Dept.
Software services/
2. Please fill both Part A and relevant questions of Part B completely (in simple English and without any short forms).
3. THIS IS A MANDATORY PRE-REQUISITE FOR THE LEGAL DEPARTMENT TO BEGIN WORK ON ANY CONTRACT.
4. Clauses which may not be applicable please write “Not Applicable” in the relevant box.
5. The Agreement request must be sent to the Legal Department ONLY AFTER the commercial terms have been mutually agreed between the Parties.
6. LEGAL DEPT SHALL RESPOND IN A REASONABLE TIME, DEPENDING UPON OTHER PRIORITIES. THEREFORE, WOULD REQUEST YOU TO FOLLOW UP ONLY
UPON LAPSE OF 3-4 DAYS OR ONLY IN CASE OF EMERGENCIES.
PART A – GENERAL
Information Requested Response Use extra sheets or e-mail for explaining relevant sections
of this DDF, where necessary
GENERAL
Business Head/ Project Manager/ person responsible forA
negotiating and finalizing the contract with email ID and phone
number and Department name.
Whether management approval has been taken. If yes, pleaseS
attach copy of such approval
Description of business arrangement or salient features of
Agreement in detail.
Have you thoroughly studied the Agreement sent by the Other
Party? What are the changes recommended by you?
Name of the person who will be keeping the contracts and related
documents .
PARTIES TO THE CONTRACT
Name, address and contact information of the other party
Whether the other Party is an Indian or foreign entity
Legal status of the company (limited company or firm )
Rationale for choosing this party
Credit worthiness of the other party with source of credit
worthiness. Please attach a copy of latest financial results
Whether we have entered into a contract earlier with the same
party. If yes, please give details and attach a copy.
OPERATIONAL CLAUSES
Value of contract
Tenure of contract
Describe the product/ services involved.
Deliverables or Responsibilities of HCL
Deliverables or Responsibilities of other party
What are the financial risks that we need to protect. What can be
done to reduce financial risks
What are technical or operational risks that we need to protect.
What can be done to reduce technical or operational risks
Additional inputs that you consider necessary
COMMERCIAL ARRANGEMENT
Exclusive or non-exclusive [explain the rationale for Exclusivity]
Territory
Any Minimum Purchase Commitments of the Supplier/ OEM
Payment Terms / Price / Consideration
Credit period and payment mode – by cheque/ L/C.
Bank Guarantee (e.g. PBG / EMD, L/C) with amount

Confidential 1
Commercial Dept
HCL Infosystems Ltd
Liquidated Damages, percentage or amount
Quantum of liquidated damages acceptable to you.
Warranty policy including, product warranty, software warranty,
service warranty and AMC
Training support for sales and service
Spares support policy
Applicable taxes including, withholding tax / VAT / Service Tax to
be borne by
Insurance and Freight obligation
Late payment charges, if any
Any fee for cancellation of Purchase order
Additional inputs that you consider necessary
LEGAL CLAUSES
Indemnity provisions for both parties
IPR Indemnification
Whether Intellectual Property Rights (IPR) being licensed or
transferred?
Limitation of liability with value
Any exclusions in Limitation of liability
Jurisdiction
Product liability
Insurance
FCPA Compliance / FCPA Indemnification Clause by Supplier
Termination by HCL
Termination by other party
Termination at convenience
Effect / consequences of termination
Non-solicitation of employee
Non-compete in respect of similar business / projects
Coverage of Force Majeure and right to termination thereof
Additional inputs that you consider necessary

PART B – FOR SPECIFIC CONTRACTS

In addition to Part A above, please fill the information given below for :-
1.1 DISTRIBUTOR / RESELLER OR ENGAGEMENT OF SUPPLIER
Arrangement proposed (distribution / manufacturing / service)
If software license involved? Any sublicense agreement to be
signed?
Post termination events
- continuity of supply of spares for [__] years
- inventory buy back by supplier or transfer to other
distributors upon termination of contract and settlement of
dues.
- Warranty / AMC support
Any conflict with the existing product or tie ups. If yes, whether
NOC has been taken? Please attach copy of NOC
Terms of shipment (e.g. FOB / CFR / CIF) specify Port/Warehouse
Lead time for delivery
Demo machines policy, Advertisement and promotion support
policy
Has the Product been technically & commercially evaluated? If so,
by whom? Please attach report.
Branding of product/ services
HCL Investment required in current assets / manpower? Approval?
Price Protection Policy

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Commercial Dept
HCL Infosystems Ltd
Spares Support policy
Training support for sales and service
TRC spares or jigs support if required with policy
Additional inputs that you consider necessary

1.2 TEAMING / CONSORTIUM AGREEMENTS/ OUT SOURCING/ FM/ SOFTWARE DEVELOPMENT FOR SI

Name of the Project, and the project authority


Who is the prime bidder
Who are the key vendors and consortium partners?
Last date for submission of Bid
Date until which HCL’s bid must remain valid
Total estimated value of bid/ Contract
HCL’s share in the total bid value
Are the parties jointly and severally liable as per the RFP or RFQ
Whether RFP mandates source code escrow arrangement? If yes, is it
covered on back to back with the concerned vendor.
Project model (Please specify whether outright sale of products and
services, lease, rental, BOOT or BOT)
If BOOT or BOT model, what are the terms for transferring assets at the end
of operational period?
What is our investment in the project and how this will recovered from the
customer during the term as well as any early termination of the contract?
What are exchange fluctuation risks, and how HCL shall be protected?
Steps taken / proposed in this regard?
In case of cloud computing / infrastructure support, define the service and
delivery model.
Whether third party vendors have agreed to abide by (a) Payment terms (b)
warranty and AMC (c) Liquidated damages (d) liabilities / deliverables (with
details) on back to back basis with the terms with customers? In case
vendor is a subsidiary company then third party vendor means vendor of
subsidiary company.
Acceptance Criteria for acceptance of services / deliverables?
Whether clients IT assets, including licenses, employees, processes,
equipment and software will be used under Project. If so, details and our
responsibilities
What are the SLA’s agreed with the customer with penalties and whether
these SLA’s are back to back with our vendors?
Service delivery model – whether onsite, offsite, offshore or customer-
supervised offshore centre
Billing model – whether milestone – based or T&M based
Insurance coverage required and the person responsible for compliance.
Mechanism to monitor the project delivery/ implementation
Whether any requirement to form a JV company with consortium partner?
Additional inputs that you consider necessary

Signatures required (as applicable)

Product Manager (1) Service Head (2) Business Manager (3)

Logistics/Purchase Head (4) Division Head (5) CFO/Finance Head (6)

Legal department (7) Legal department (8) CEO / COO (9)

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