E-PROCUREMENT SERVICE PROVIDER AGREEMENT

This Agreement made on this . day of . 2012 at between. a Limited Company incorporated under the Companies Act, 1956 having its Registered Office at hereinafter referred to as the Service Recipient (which expression unless excluded by or repugnant to the context shall mean and include its successors in office and assigns)-the party of the FIRST PART. AND MSTC Limited, a Government of India Company within the meaning of Section 617 of the Companies Act, 1956having its Registered Office at 225-C, AJC Bose Road, Kolkata 700 020, hereinafter referred to as the Service Provider (which expression unless excluded by or repugnant to the context shall mean and include its legal heirs, successors in office and assigns)-MSTC, the party of the SECOND PART. WHEREAS MSTC, the party of the SECOND PART has developed an elaborate system for providing e-procurement services to its various clients enabling them to procure goods, services and works and its e-procurement comprehensive infrastructure helps expansion of e-commerce providing a
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robust, proven platform enabling trade between companies of different sizes, platforms and locations. AND WHEREAS the e-procurement system provides real-time bidding solutions for buyers and sellers that bring competitive level of profitability, control and simplicity to corporate procurement and liquidation processes and includes inter alia e-tendering and e-reverse auctioning for inviting online bids from intending bidder(s). AND WHEREAS the Service Recipient has discussed with the officials of MSTC, the party of the SECOND PART and has acquainted itself thoroughly with such internet based e-procurement system developed by MSTC and has expressed its desire to use MSTCs e-procurement system for procuring their goods, services and works. AND WHEREAS on the basis of the discussion between the officials of the Service Recipient and Service Provider, the party of the FIRST PART has expressed its willingness to avail the e-procurement services of the party of the SECOND PART and the Service Provider has expressed its willingness to render its e-procurement services to the Service Recipient subject to certain terms and conditions which were discussed and agreed to by and between the parties as provided hereinafter. NOW THIS AGREEMENT WITHNESSETH the terms and conditions agreed to by and between the parties hereto for the purpose aforesaid as under:Page 2 of 17

1. Definitions: 1.01: MSTC e-procurement system-means the use of web / internet based technology developed by the Service Provider to support key elements of the procurement process such as: requisition or Web-based ERP (Enterprise Resource Planning), e-sourcing, etendering, e-reverse auctioning, e-Informing / ordering /invoicing /payment/ specification etc. for business to business purchase and sale of goods /services / works. 1.02: Web-based ERP (Enterprise Resource Planning): means creating and approving purchasing requisitions, placing purchase orders and receiving goods and services by using a software system based on Internet technology. 1.03: e-sourcing means identifying new suppliers for a specific category of purchasing requirements using Internet technology. 1.04: e-tendering means sending requests for information and prices to suppliers and receiving the responses of suppliers using Internet technology. 1.05: e-reverse auctioning means using Internet technology to buy goods and services from a number of known or unknown suppliers. 1.06: e-informing means gathering and distributing purchasing information both from and to internal and external parties using Internet technology. 1.07: Service Recipient means the party of the FIRST PART who receives e-procurement service from the party of the Second Part. 1.08: Service Provider means the party of the SECOND PART who provides / renders e-procurement service to the party of the First Part.
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1.09: Copy right other intellectual property rights will imply in this agreement to the extent that MSTC, the party of the SECOND PART is the owner of the copy right and trade mark relating to the eprocurement site related to this agreement and both Indian and international copyright and trademark laws protect the entire contents of the Site and will include all rights existing from time to time
under patent law, copyright law, moral rights law, trade secret law, trademark law, competition law, information technology rights law, privacy rights law, and any and all other proprietary rights, and any and all applications, renewals, extensions and restorations thereof, now or hereafter in force and effect worldwide.

1.10: Confidential Information means all technical and non-technical information and documents disclosed or produced by either party in the course of this Agreement which are disclosed in written form and identified by a marking thereon as proprietary, or oral information which is defined at the time of disclosure and confirmed in writing within ten (10) business days of its disclosure, shall be deemed the "Confidential Information" of the disclosing party. Notwithstanding the above, the parties agree that any information (in any form, whether in tangible or Intangible) relating to the Service Providers Technology is considered Confidential Information of the Party of the SECOND PART.

2.

This is a Service Provide Agreement wherein MSTC the party of the SECOND PART shall act only as a Service Provider to the party of the FIRST PART and shall not be a party to any contract that the party of the FIRST PART may enter into with its supplier(s) / vendor(s) / contractors pursuant to use of the system provided by MSTC, the party of the SECOND PART.

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3.

ROLES AND RESPONSIBILITIES OF MSTC, THE PARTY OF THE SECOND PART:

(a)

MSTC, the party of the SECOND PART shall make all reasonable arrangements to provide the party of the FIRST PART with the facility to use the MSTC e-procurement system throughout the duration of the Agreement. MSTC shall make its e-procurement technology infrastructure available for use by the Party of the FIRST PART. However, at no point of time, the Service Recipient will have any ownership, in full or in part, of any of the facilities being provided by MSTC, the party of the SECOND PART. If required by the party of the FIRST PART, MSTC-the party of the SECOND PART shall arrange for providing training to the users of the e-procurement system at the Service Recipients end as well as the vendors who shall participate in the events that shall be conducted by the Service Recipient using the e-procurement system of the Service Provider. The cost of such required training shall be borne by the Service Recipient. Service Provider shall depute its executive(s) for imparting training. MSTC, the party of the SECOND PART shall undertake minor customization of the e-procurement system to suit any specific need of the party of the FIRST PART without charging any fees from the Service Recipient for any minor customization. If major changes / customizations are required, MSTC, the party of the SECOND PART shall be at liberty to charge customization fees MSTC, the party of the SECOND PART retains the exclusive right to classify the amendment / customization as minor or major.
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(b)

(c)

(d)

It shall be the responsibility of MSTC, the party of the SECOND PART to keep its e-procurement system updated so as to be complying with the relevant guidelines of Central Vigilance Commission and provisions of Information Technology Act 2000 as may be amended from time to time. Accordingly, MSTC, the party of the SECOND PART shall get its system periodically audited by recognized authorities like Standardisation, Testing and Quality Certification (STQC) Directorate which is an attached office of the Department of Electronics and Information Technology, Government of India, MSTC, the party of the SECOND PART shall maintain a valid ISO 27001:2005 certification (which relates to Information Security Management System) throughout the duration of this Agreement.

(e)

4.

ROLES AND RESPONSIBILITIES OF THE PARTY OF THE FIRST PART-THE SERVICE RECIPIENT: It shall be responsibility of the Service Recipient to get well acquainted with the e-procurement system of the Service Provider so as to use the system correctly and make use of all the features available in the system.
ii.

i.

The party of the FIRST PART shall nominate one Nodal Officer for e-procurement who shall be registered with the Service Provider as the authorized person for the Service Recipient to deal with the Service Provider in the affairs of e-procurement service. Such Nodal Officer shall be the single point contact for
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all communications between the Service provider and the Service Recipient.
iii.

The Nodal Officer nominated by the party of the FIRST PART shall create various users of the Buyer. All activities under the offered e-procurement system (like from generation of indents to Issuance of LOI / Purchase Order to successful vendors) will be carried out by different users/clients of the Service Recipient; and MSTC, the party of the SECOND PART shall not be involved in any of the activities which is exclusively related between the Service Recipient and its users/ clients. All the users of the Service Recipient must have Digital Signature Certificate of class II or class III. The Digital Signature Certificates shall be either for signing any document electronically or for data encryption. The Service Recipient shall have to purchase the required number of Digital Signature Certificates for its users from authorized agencies at its own cost and arrangement. The party of the FIRST PART shall arrange for publicity of its forthcoming events in print media and through its website at its own cost. If any vendor participates in any e-procurement event without paying the transaction fees to the Service Provider, the party of the FIRST PART shall extend full cooperation to MSTC, the party of the SECOND PART for recovering the transaction fees from the vendor(s) to the extent of but not limited to deducting it from any payment due to the vendor from the buyer.
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iv.

v.

vi.

vii.

viii.

EMD against any e-tender or e-reverse auction shall be collected and refunded by the party of the FIRST PART and MSTC, the party of the SECOND PART shall not be responsible for collection, processing or refund of EMD and for any dispute between the party of the FIRST PART and the vendors arising out of any issues related to EMD.

ix.

Further role and responsibility matrix shown in Annexure-A hereto.

5. NON LIABILITY CLAUSE OF THE GOVERNMENT OF INDIA It is clearly understood and accepted by the parties hereto that Government of India is not a party to this Agreement in any way and no liability whatsoever attaches to the Government in any manner arising out of any execution, performance, non-performance or otherwise of this Agreement by the parties hereto. INCORPORATION OF INTEGRITY PACT BY REFERENCE The parties hereto agree to be bound by the terms of the Integrity Pact prescribed under the rules, the terms whereof are known to the parties hereto and deemed to be incorporated in this Agreement by reference. TRANSACTION FEES AND TRAINING CHARGES
(a)

6.

7.

MSTC shall collect transaction fees at the rate of 0.05% of the estimated value of the procurement per event from all the
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participating vendors subject to a minimum of Rs 1,000/- (Rupees One Thousand only) and maximum of Rs 15,000/- (Rupees Fifteen Thousand only) per event per vendor. For the avoidance of doubt, an event shall be construed as an e-tender or an e-reverse auction or any other mode of e-procurement services as may be mutually decided by the Service Provider and the Service Recipient irrespective of the number of items being procured through the same. Service tax on the transaction fees and other statutory charges on service tax shall be payable extra by the vendors.
(b)

For imparting training to the users of the Buyer, MSTC, the party of the SECOND PART shall be paid training charges (along with applicable service tax) by the Service Recipient at the following rate :
(i)

For a training session containing one day, the training charges shall be Rs 20,000/- (Rupees Twenty Thousand only) plus applicable service tax and other statutory charges on service tax. For a training session containing more than one day, training charges shall be Rs 20,000/- (Rupees Twenty Thousand only) for the first day and Rs 5,000/- (Rupees Five Thousand only) per day for all subsequent days. For avoidance of doubt, a training session shall mean a period of training that will involve a single trip made by MSTCs official to the place of the party of the FIRST PART.
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(ii)

(iii)

(c)

All such trainings shall take place at the premises of the Service Recipient only. MSTC, the party of the SECOND PART shall raise monthly bills towards training charges and the party of the FIRST PART shall make the full payment within 30 days from the date of receipt of the bills. Necessary arrangements for the training sessions like providing computers, conference hall, internet connection, paper, pencil etc shall be made by the Service Recipient at its own cost and MSTC, the party of the SECOND PART shall not bear any cost towards such arrangements. MSTC, the party of the SECOND PART reserves the exclusive right to revise the transaction fee and/or training charges from time to time during the currency of this Agreement.

(d)

(e)

(f) The service tax or any other statutory charges on the transaction fees shall be payable extra by the vendor(s).
(g)

MSTC shall not collect any transaction fee from the Buyer.

8. DURATION OF CONTRACT The Agreement shall remain valid for a period of 5 (five) years from the date of signing. At the end of the validity period, the Agreement may be extended for further such period as may be mutually agreed by the parties hereto on same or different terms and conditions as may be mutually agreed by both parties. Such extension of the Agreement along with the terms and conditions shall be written and signed by both the parties.
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9.

TERMINATION OF AGREEMENT Either party may terminate the Agreement before the end of validity of the Agreement as stated aforesaid by serving one months notice in writing to the other party. Under such a case, neither party shall be entitled to claim any compensation from the other party for the premature termination of the Agreement. All pending jobs as on the date of termination of the Agreement shall be continued till completion as if the Agreement was in force.

10.

GENERAL PROVISIONS While MSTC, the party of the SECOND PART shall make all reasonable efforts to make its e-procurement system available for use by the Servce Recipient; and MSTC, the party of the SECOND PART shall not be responsible for any disruption of services due to reasons beyond its control as covered under Force Majeure clause. MSTC shall not be liable to pay any compensation to either the party of the FIRST PART or its vendor(s) for any loss accrued to them due to such disruption in services. During the currency of this Agreement, the party of the FIRST PART shall not engage the services of any other agency for eprocurement services. If any particular requirement of the Service Recipient remains unfulfilled even after all customizations have been made by the Service Provider, the party of the FIRST PART may engage another service provider for that particular event after obtaining written consent of the party of the SECOND PART.
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(a)

(b)

(c)

MSTC, the party of the SECOND PART shall not be liable in any manner for any inconvenience due to any disruption in internet services at bidders end. However, if any disruption takes place at Service Providers end during the progress of any event, MSTC, the party of the SECOND PART shall make all efforts to restore normal services at the earliest.

(d) Neither party shall assign or transfer its rights and obligations under this Agreement (in whole or in part) without the prior written consent of the other.
(e)

No waiver of any breach of this Agreement shall be deemed to be a waiver of any other or of any subsequent breach. The failure of either party to enforce at any time any of the provisions of this Agreement shall in no way be interpreted as a waiver of such provision.

(f) In the event that any or any part of the provisions contained in the Agreement be determined invalid, unlawful or unenforceable to any extent, such terms, conditions or provisions shall be severed from the remaining provisions which shall continue to be valid and enforceable to the fullest extent permitted by law.
(g)

This

Agreement

replaces

and

supersedes

any

prior

understandings, communications and representations whether verbal or written. This Agreement may only be amended by execution of a written document duly signed by the authorized representatives of both parties.
(h)

The Service Recipient hereby agrees that their users/clients will be responsible for maintaining the confidentiality of the password and account, and are fully responsible for all activities that occur
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under their password or account. The users will be responsible to notify the Service Provider about any unauthorized use of the eprocurement site and the service Recipient will impose terms and restrictions upon their users so that the Service Provider cannot and will not be liable for any loss or damage arising from their failure to comply with the breach of security of their account.
(i)

The Service Recipient hereby agrees that the Service Provider will not be responsible for the information provided in the tenders published. In case of any clarifications arising out of the tenders, the users have to contact the respective Tender Inviting Authority, i.e. the party of the FIRST PART herein. The Service Recipient hereby agrees that the suppliers / the bidders have to ensure to the effect that the files being uploaded by them are free from all kinds of viruses and contains only the relevant information as stated by the tender inviting authorities for the particular tender. If any bidder / company has uploaded / attached irrelevant data, bogus or fabricated certificates towards his qualification requirements to the respective tender then their user account will be made liable for termination permanently or temporarily. The Service Recipient hereby agrees that the users/bidders are
entirely responsible for all Content that they upload, post, e-mail or otherwise transmit via the e-Procurement portal. The party of the

(j)

(k)

SECOND PART herein does not control the Content posted via the e-Procurement portal and, as such, does not guarantee the accuracy, integrity or quality of such Content. Under no circumstances will the Service Provider be liable in any way for
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any Content, including, but not limited to, for any errors or omissions in any Content, or for any loss or damage of any kind incurred as a result of the use of any Content posted, e-mailed or otherwise transmitted via the Site.
(l)

The Service Recipient hereby agrees that their users are to comply with all local rules regarding online conduct and acceptable Content. Specifically, must agree to comply with all applicable laws regarding the transmission of technical data to and from India or the country in which they reside.

11.

FORCE MAJEURE If, any time during the continuance of this Agreement, the performance, in whole or in part by either party, of any obligation under this Agreement be prevented or delayed by reason of any war, hostility, act of public enemy, civil commotion, sabotage, fires, floods, explosions, epidemics, quarantine restrictions, strikes, lock-outs, Technical and / or Connectivity failure which is entirely beyond the control of the Service Provider, acts of God (hereinafter referred to as events) provided notice of happening of any such eventuality is given by the affected party to the other within 21 days from the date of occurrence thereof, neither party shall by reason of such event have any claim for damages against the other party in respect of such non-performance or delay in performance, provided further that if the performance in whole or part of any obligation under this Agreement is prevented or delayed by reasons of any such event for a period exceeding sixty days, the parties shall try to arrive at an amicable settlement, failing such settlement may terminate this Agreement.
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12.

ARBITRATION In the event of any dispute or difference relating to the interpretation and/or application of the provisions of any clause of this Agreement, such dispute or difference shall be referred by either party to the Arbitration of sole arbitrator to be nominated by the Secretary to the Government of India, In Charge of the Bureau of Public Enterprises. The request for appointment of arbitrator to the said appointing authority must be made giving copy of request to the other side. The Arbitration and Conciliation Act 1996 shall be applicable in all circumstances other than agreed terms and procedure between the parties. The award of the Arbitration shall be binding upon the parties to the dispute, provided, however, any party aggrieved by such award may make a further reference within 30 days of the final award passed by the sole arbitrator to the Law Secretary, Department of Legal Affairs, Ministry of Law & Justice, Government of India to decide the legality of the award of the sole arbitrator within the scope of this agreement and law of contract. Upon such reference the dispute shall be decided by the Law Secretary himself, or the Special Secretary/Additional Secretary when so authorized by the Law Secretary, whose decision shall bind the parties finally and conclusively. The parties to the dispute will share equally the cost of arbitration as intimated by the Arbitrator.

13.

GOVERNING LAW
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The interpretation, construction and performance of this Agreement shall be governed exclusively by laws in India and the parties expressly submit to the exclusive jurisdiction of the courts of Kolkata subject to the provision prescribed in clause 12 of this agreement.

14. Counterparts:
This Agreement may be executed simultaneously in two counterparts, each of which will be considered an original, but both of which together will constitute one and the same instrument.

IN WITNESS WHEREOF the parties hereto have put their respective hands and seals on the day, month and year above first written. For : ( ) Company Seal Witness : 1. 2. Witness : 1. 2. ( ) Company Seal For : MSTC LIMITED

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Annexure A

Roles and Responsibility matrix for MSTC and the Buyer

Sl No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Activity Registration of Nodal Officer of Buyer Registration of other users of Buyer Registration of vendors Training to users of Buyer and vendors Indent raising / Item entry Publicity (advt) through newspaper Event creation Tender Committee creation NIT / Corrigendum upload Pre-Bid Meeting EMD receipt Transaction fee receipt Tender Opening Event Bid evaluation Bid approval / rejection Issuance of LOI / P.O System maintenance / up gradation Action By MSTC Buyer Buyer MSTC Buyer Buyer Buyer Buyer Buyer Buyer / vendors Buyer MSTC Buyer Buyer Buyer Buyer MSTC

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