General Terms of Business of KMD A/S

These General Terms and Conditions were last updated in October 2019

§ 1 Application
§ 2 Rights
§ 3 Reservation of ownership
§ 4 Assignment
§ 5 Subcontractors
§ 6 Remedies for breach
§ 7 Liability
§ 8 Product liability
§ 9 Force majeure
§ 10 Third party rights
§ 11 Processing of personal data
§ 12 Price adjustment
§ 13 Anti-corruption
§ 14 Confidentiality and references
§ 15 Expiry
§ 16 Disputes and legal venue

§1 Application

These General Terms of Business will apply to all of KMD's deliveries, such as the delivery of solutions, software, services and hardware, irrespective of whether the delivery is to be installed or operated at the customer, at KMD or at a third party.

These General Terms of Business will also apply to any other terms adopted in any agreement established between KMD and the customer.

§2 Rights

KMD or KMD's subcontractors are the holders of and retain the right of ownership and all intellectual property rights to solutions, products, software, interfaces and code that have been or will be developed by KMD or KMD's subcontractors. The same applies to business concepts, methods, know-how and similar, as well as written material, including documentation, training material and reports, that have been or will be prepared by KMD or KMD's subcontractors. The customer will only achieve a right of use to this if and to the extent that this is specified in the agreement between the parties.

KMD will be entitled, free of charge and without limitations, to use any general knowledge achieved by KMD in conjunction with the fulfillment of the agreement in other contexts.

§3 Reservation of ownership

To the extent that KMD has assigned relevant rights to the customer, KMD will reserve ownership of the respective solutions, products, software, interfaces, code, documentation, work results, etc. until the remuneration for the aforementioned elements has been paid in full.

§4 Assignment

Without KMD's prior written consent, the customer may not assign its rights and obligations under the agreement, including these General Terms of Business.

Without the consent of the customer, KMD will be entitled to assign part or all of its rights and obligations to companies in the same Group, as defined in the Danish Companies Act, including to KMD's parent companies and subsidiaries. In such case, KMD will be liable for the company's fulfillment of the agreement. KMD will furthermore be entitled, without the customer's consent, to assign its rights and obligations pursuant to the agreement to any third party in connection with the restructuring, merger, demerger or divestment of all or parts of KMD's activities.

§5 Subcontractors

Without the customer's consent, KMD will be entitled to use subcontractors and to hire external consultants in order to fulfil its obligations. KMD will be responsible for the services of its subcontractors and external consultants in the same way as for its own services.

§6 Remedies for breach

Remedies for breach may be invoked in accordance with the ordinary rules of Danish law, subject to the modifications set out below.

Remedies concerning defects in a delivery may be invoked by the customer within 12 (twelve) months of delivery. KMD will be entitled at any time to remedy defects and/or make a replacement delivery free of charge, including by indicating methods to avoid the defect, to the extent that this does not significantly impair the customer's use of KMD's delivery. After duly completed remedy of defects and/or replacement delivery, the customer may not exercise any other rights as a consequence of defects.

A proportional price reduction will only be granted in the case of material defects that KMD decides not to redress by remedial action and/or a replacement delivery.

If this may prove to be necessary in exceptional cases, KMD may postpone a delivery for up to 20 (twenty) working days, subject to notice of 5 (five) working days. Such postponement will not be considered to be a delay.

KMD's delay will not be considered to be significant if it does not exceed 40 (forty) working days.

The customer may only terminate the agreement if KMD is in material breach of its obligations, and the customer may only terminate the element(s) of the agreement that include the obligations which the material breach concerns. The customer's termination of the agreement must take place by giving written notice, with grounds, and no later than 40 (forty) working days after the material breach has occurred.

On termination, each party will return the deliveries, including solutions, products, software, interfaces, code, documentation and working results, which the parties have exchanged. For services that, by their nature, cannot be returned, KMD will be entitled to the agreed remuneration – and if no remuneration has been agreed, to reasonable remuneration for the services delivered. In cases where return can take place, irrespective of the customer's return, KMD will always be entitled to reasonable remuneration for deliveries and services which have been of useful value to the customer during the period up to the termination's taking effect.

If the customer is in material breach of its obligations, and this breach persists for more than 10 (ten) working days after the customer has received a written request for rectification, KMD will be entitled, at its own volition, to stop its deliveries, suspend the customer's right of use and/or terminate the agreement, and to invoke any claim in accordance with the ordinary rules of Danish law. Any payment default will be considered to be material breach. The customer may not withhold payment or make set-off for any claims that have not been acknowledged in writing by KMD.

§7 Liability

The parties will hold liability in accordance with the ordinary rules of Danish law, subject to the modifications set out below.

The customer will only be entitled to invoke claims for losses that are a consequence of a material defect in a delivery or any other material breach for which KMD is liable.

KMD is not liable for any loss of operations, loss of profits, corruption or loss of messages, loss of expected savings or earnings, the customer's costs of examination and rectification of damage or a defect, the customer's internal hours spent, third-party expenses, interest expenses, lost interest income, loss of goodwill, indirect losses and consequential claims.

Loss and corruption of data will be regarded as an indirect loss. For agreements whereby KMD operates or otherwise processes data, KMD will be responsible - at the customer's request - for the re-establishment of lost or corrupted data up to the time of and on the basis of the last agreed back-up (unless the back-up cannot be used due to vira, the customer's circumstances or matters for which KMD is not expressly responsible in accordance with the agreement). The customer may not invoke any other powers in the event of loss and corruption of data. The customer will pay for the re-establishment of data in accordance with the time and materials used, including to third parties, to the extent that the loss or corruption of data is not due to KMD's circumstances.

KMD will have no liability to pay damages for a delay or a defect in a delivery that is due to delays or impaired connections in the communication infrastructure for which KMD is not responsible, or delayed or defective deliveries from utility companies or third-party suppliers that are not subject to KMD's instructions and liability, and whose services are a prior condition for KMD’s delivery.

In addition, KMD will not be liable for losses incurred by the customer or a third party as a consequence of the customer's use of the results of the delivery. Examples include results as a consequence of advice or results and recommendations from or based on analysis models, or planning, decision support, registration, investigation or processing-related tools.

Finally, KMD will not be liable for vira or other malware that the customer, the customer's users or the general public might accidentally or deliberately introduce in the customer's IT systems on using solutions or services provided by KMD.

Maximisation of damages: During the term of the agreement, KMD's obligation to pay damages (including for product damage), compensation, guarantee obligations, proportional reductions and penalties may not in total exceed the contract sum concerning the agreed delivery that has led to the loss. For agreements concerning ongoing services, the contract sum, will, however, be compiled as the payments for the ongoing services under the agreement during the last 12 (twelve) months from the claim arising.

Penalties will be deducted from any damages concerning the same indemnifiable claim. No proportional reduction is granted for matters that lead to the payment of penalties.

For a series of losses as a consequence of the same indemnifiable action or omission that triggers losses for several of KMD's customers, or triggers losses concerning several deliveries, irrespective of whether these had to be delivered in accordance with several separate agreements for the same customer, the total maximum damages (including for product damage), compensation, guarantee obligations, proportional reductions, and penalties for the indemnifiable action or omission for all agreements between the customer and KMD will amount to maximum DKK 500,000.

The above maximisation of damages also covers KMD’s liability as data processor to pay damages and compensation for tort under claims raised by data subjects (and the customer’s claim against KMD for recourse for claims from data subjects) (in the following jointly called “Data Subjects’ Claims”). This means that the customer is obliged to indemnify KMD for Data Subjects’ Claims, including reasonable internal and external costs involved in KMD’s handling of the Data Subjects’ Claims, inclusive of legal proceedings before the courts of law (in the following jointly called “Costs of Proceedings”) to the extent that the Data Subjects’ Claims, including Costs of Proceedings, and other claims (regardless of the nature of such claims) that are raised by the customer and covered by the said maximisation of damages jointly exceed the maximum damages. Indemnification is to be paid regardless of whether or not the customer is responsible for the loss, damage or tort on which the Data Subjects’ Claims are based.

The limitations of liability and the claim for the customer’s indemnification of KMD in this Clause 7 will not apply to loss events caused by KMD’s gross or deliberate negligence.

The legal relationship between the customer and any third party which entails obligations for the customer - including concerning services based on KMD's deliveries which the customer provides or makes available to a third party - will be no concern of KMD.

When determining the prices to be paid by the customer for KMD’s deliveries under this agreement, the above distribution of risks between the parties has been taken into account.

§8 Product liability

KMD is liable for product damage caused by KMD's deliveries or services in accordance with the ordinary rules of Danish law, but is not liable for loss of operations, loss of profits, corruption or loss of messages, loss of expected savings or earnings, the customer's costs of examination and rectification of damage or a defect, the customer's internal hours spent, interest expenses, lost interest income, loss of goodwill, indirect losses and consequential claims due to product damage.

KMD's liability in connection with product damage will be included in the statement of and will be subject to the limitation of the amount of liability in Clause 7.

If a third party presents a claim for compensation for product damage due to KMD's deliveries or services delivered to or via the customer, for which KMD has disclaimed liability towards the customer, the customer must indemnify KMD for any such claim.

§9 Force majeure

The obligations of a party under the agreement will be deferred in the event of force majeure, by which is meant circumstances which

a) a) significantly affect the party’s ability to fulfill or prevent the party from fulfilling its obligations under the agreement;
b) are beyond the reasonable control of the party;
c) the party could not have taken into account on the establishment of the agreement; and
d) the party could not reasonably have avoided or overcome during the term of the agreement.

An internal strike and a cyber attack at KMD could be examples of force majeure.

A party may rely on force majeure in respect of its sub-supplier’s deliveries if the party’s sub-supplier is affected by force majeure. Force majeure at a sub-supplier is deemed to have occurred under the same conditions as those applicable to the party itself, cf. above.

Force majeure may solely be invoked for the number of days that the force majeure situation persists. If a time limit to be observed by KMD is deferred due to force majeure, any payments related to that limit will be deferred on a proportional basis.

Force majeure may only be invoked if the party concerned has given notice thereof in writing to the other party no later than 10 working days after force majeure commenced.

The party that is not affected by the force majeure situation will be entitled to cancel the element of the delivery which is affected by force majeure with immediate effect, if this element of the delivery remains significantly uncompleted for more than 60 days. The parties will not able to invoke any remedies of breach in this respect.

§10 Third party rights

KMD will be obliged to indemnify the customer if, and to the extent that, KMD has infringed the rights of any third party, and in accordance with the terms specified in this Clause 10, provided that the customer immediately notifies KMD in writing of any third party's filing of a case against the customer claiming such infringement. KMD will then take over the defense of the case. KMD may, for its own account, decide to acquire a right for the customer to continue to use the delivery, or to bring the infringement to an end, by fully or partly changing or replacing the agreed delivery with an equivalent delivery that does not infringe the rights of any third party.

If KMD terminates the infringement by fully or partly changing or replacing the agreed delivery with an equivalent delivery that does not infringe the rights of any third party, the customer will be entitled to a proportional reduction if the changed or replaced delivery entails a significant diminution in value that can be documented. The customer may not otherwise invoke remedy of breach or compensation claims, but will be entitled to terminate the agreement with three months' notice, irrespective of any agreed non-terminability, provided that the permanent diminution in value exceeds 25% of the total remuneration for the delivery.

KMD will be entitled to terminate the agreement in full or in part, with immediate effect, if KMD does not consider any of the aforementioned options to be financially justifiable. In such case, KMD will repay any one-off remuneration, less the utility value gained by the customer from the delivery. In this respect, the utility value is calculated as 2% of the one-off remuneration for the terminated element of the agreement per month as from the delivery date.

§11 Processing of personal data

If KMD acts as data processor for the customer in the sense of the law on personal data, the customer must ensure that the parties enter into a data processor agreement.

§12 Price adjustment

KMD will adjust the agreed prices in accordance with KMD's price adjustment regulations in force at any time, as shown on KMD's customer network.

§13 Anti-corruption

The customer undertakes to comply with relevant anti-corruption legislation, including the US Foreign Corrupt Practices Act and the UK Bribery Act.

§14 Confidentiality and references

The parties will observe confidentiality with regard to all matters that do not fall within general knowledge. KMD will ensure that subcontractors and other parties that assist KMD with the delivery are subject to an equivalent obligation.

The customer's confidentiality obligation will include information that is not publicly available concerning the delivery, including information concerning the contractual and financial conditions, and information concerning KMD's circumstances. KMD's business concepts, methods and know-how are business secrets belonging to KMD and are also subject to the customer's confidentiality obligation.

If the customer is a public authority, the customer's confidentiality obligation in accordance with this provision will be waived, however, if and to the extent that this is required in accordance with mandatory rules in legislation concerning access to documents and party insight. Unless otherwise specified in mandatory legislation, KMD must be consulted before access to documents is granted.

Unless otherwise agreed, KMD will be entitled to use the customer's name and logo in KMD's company presentation material and on KMD's Internet sites, and to include the customer on KMD's general customer and reference lists, provided that this use takes place on a loyal basis.

§15 Expiry

The agreement may be terminated by either party with six months’ written notice, unless otherwise agreed.

After the expiry of the agreement, the provisions which, due to their nature, must remain valid, including the provision concerning confidentiality in Clause 14, will remain in force.

§16 Disputes and legal venue

The agreement and these General Terms of Business will be governed by Danish law, except for the United Nations Convention on Contracts for the International Sales of Goods (CISG) and Danish international private law principles which lead to the application of the law of another country, rather than Danish law.

In the event of a dispute between the parties concerning the agreement, the parties will adopt a positive, collaborative and responsible approach and commence negotiations to settle the dispute. If the dispute cannot be resolved, the matter must be escalated within the parties' organizations.

If the disagreement continues, each of the parties may request the dispute to be settled by mediation. A mediator will be nominated by the parties or the Association of Danish IT Attorneys (Danske IT-advokater) (DITA), and will adhere to DITA’s mediation procedure.

The parties will be obliged to attend the first meeting convened by the mediator.

If the dispute has not been resolved by mediation within eight weeks of the written request for mediation, either of the parties may submit the dispute for final resolution by simplified arbitration at the Danish Institute of Arbitration in Copenhagen, in accordance with the rules adopted by the Institute which are in force on the commencement of the arbitration case.