Johnson Controls - Supplemental HaaS Terms and Conditions

These Supplemental HaaS Terms and Conditions (the “HaaS Terms”) supplement and form part of the Johnson Controls Master SaaS Agreement, Service Agreement or other agreement entered into between the applicable Johnson Controls entity (“JCI”) and the applicable customer entity (“Customer”) (such agreement, the “Agreement”). In addition to the JCI software or software services subscription (the “Software Subscription”) supplied to Customer under the Agreement and, subject to these HaaS Terms, JCI desires to provide the hardware and related firmware (the “Hardware”) on a subscription hardware-as-a-service basis, as further described in an executed Order Form (the “HaaS Services”). In the case of a conflict between these HaaS Terms and the terms of the Agreement, the terms of these HaaS Terms shall control, but only with respect to the Hardware and any HaaS offerings. Capitalized terms used herein but not defined shall have the definitions given to such terms in the Agreement.

1. Hardware as a Service.

1.1. Grant of License to Use Hardware. Subject to compliance with these HaaS Terms, JCI hereby grants to Customer a non-transferrable license, and Customer hereby accepts such license from JCI, to use the Hardware solely for internal use by Customer at the project site defined in the Order Form (the “Project Site”) and solely for the purpose of using the Software Subscription supplied to Customer by JCI under the Agreement.

1.2. Delivery and Installation. JCI shall deliver and if applicable, install the Hardware at the Project Site as set forth in the Order Form. Any Customer installations shall be performed in accordance with the applicable Documentation. Unless approved in writing by JCI Customer shall only be permitted to use the Hardware at the Project Site. Customer shall be responsible for all costs and fees associated with moving the Hardware, and any warranty terms set forth herein shall be suspended until JCI has inspected and re-certified the new installation. Customer shall provide at the Project Site all of the following at its own expense and at all times during such installation: (a) free, dry, and reasonable access to Customer’s premises; and (b) proper foundations, lighting, power, water and storage facilities reasonably required by JCI. Customer represents and warrants that with regard to the Project Site where the Installation Services are required to be performed under these HaaS Terms that there is no: (i) “permit required confined space” as defined by Occupational Safety and Health Administration; (ii) risk of infectious disease; (iii) need for air monitoring, respiratory protection, or protection from other medical risk; and/or (iv) asbestos, asbestos-containing material, polychlorinated biphenyl (PCB), formaldehyde or other potentially toxic or otherwise hazardous material present or contained in or on the surface of the floors, walls, ceilings, insulation or other structural components.

1.3. Acceptance. Unless Customer provides written notice to JCI of a defect in the Hardware within seven (7) calendar days after such Hardware is delivered to Customer, Customer shall be deemed to have (a) accepted such Hardware and (b) agreed that such Hardware was in good and operable condition at the time of its delivery.

1.4. Title To Hardware. This is a license only; the Hardware shall remain JCI’s property. Title shall at all times remain with JCI, and Customer shall not have any right, title or interest in any of the Hardware except as expressly set forth in these HaaS Terms. Customer shall not alter, deface, cover, or remove any indicia of ownership by JCI on the Hardware. Customer expressly permits JCI to file Uniform Commercial Code (“UCC”) financing statements in any appropriate filing office reflecting JCI’s ownership of the Hardware and expressly permits JCI to make any other notification necessary to protect JCI’s interest in the Hardware (such as those contemplated by UCC § 9-324) to any person or entity that has filed a UCC financing statement that, in JCI’s sole discretion, may evidence a conflicting interest in the Hardware. The Hardware shall not become fixtures, regardless of whether the Hardware is or may be affixed to real property.

1.5. No Liens or Assignment. Customer agrees to (a) maintain the Hardware free and clear of all liens and encumbrances of any nature whatsoever and (b) indemnify and hold harmless JCI from and against any loss or damage caused by any such liens or encumbrances placed upon any Hardware. Customer may not assign, sell, transfer, or attempt to assign, sell or transfer any Hardware to any person or entity, without JCI’s prior written consent.
                     
1.6. Risk of Loss. Customer shall keep the Hardware in good working order (reasonable wear and tear excepted). Customer assumes all risk of loss, damage, theft or destruction of the Hardware, regardless of cause (hereinafter, a “Loss”) from and after the date on which JCI delivers the Hardware to the Project Site, until the Hardware is returned to JCI or transferred to Customer in accordance with Section 8 of these HaaS Term. No Loss shall impair any of the obligations of Customer under the Agreement or Order Form, all of which shall continue in full force and effect, notwithstanding the Loss. Upon the occurrence of a Loss, Customer, at JCI’s option and Customer’s expense, shall either (a) place the Hardware in good repair, condition and working order; or (b) replace the same with like equipment in good repair, condition and working order; or (c) pay replacement and, if applicable, reinstallation costs for the Hardware. Customer shall immediately notify JCI of any Loss and of any accident connected with the malfunctioning or operation of any item of the Hardware.

1.7. Use of Hardware. Customer is not permitted to use the Hardware other than for the purpose of using the corresponding Software Subscription. Customer shall use the Hardware only in its business at the Project Site and only for the purposes for which the Hardware was designed. Customer agrees that it shall use the Hardware in accordance with these HaaS Terms and in conformity with all applicable federal, state and local laws, ordinances, orders, rules and regulations (“Applicable Law”), any and all applicable permit(s) issued by any regulatory or other governmental agency, all applicable insurance policies, and any Documentation relating to use or operation of the Hardware provided to Customer by JCI. Customer shall obtain such licensing and registration of the Hardware as is required by Applicable Law. Customermay not make alterations or additions to Hardware except where they are (a) required by law; (b) recommended by JCI in its Documentation (e.g., installing bug fixes); (c) a configurable element of Hardware; or (d) approved in advance by JCI in writing. Any alterations or additions must be readily removable without damage to Hardware.

1.8. Insurance. Customer will maintain levels of insurance sufficient to fully cover Hardware and upon request, will deliver to JCI a certificate of insurance showing compliance with this requirement

1.9. JCI’s Performance of Customer’s Obligations. If Customer fails to duly and promptly perform any of its obligations under these HaaS Terms, JCI may (at its option) perform any act or make any payment that JCI deems necessary for the maintenance or preservation of the Hardware and/or JCI’s title thereto, including but not limited to payments for satisfaction of liens, repairs, taxes, fees, levies or insurance, and all sums so paid or incurred by JCI, together with interest at the rate applicable to delinquent payments set forth in the Agreement, and any reasonable attorneys’ fees and legal expenses incurred by JCI in connection therewith, shall be added as additional Service Fees and be payable by Customer to JCI on demand. The performance of any act or making of any payment by JCI as aforesaid shall not be deemed a waiver or release of any obligation or default on the part of Customer.

1.10. Depreciation and Tax Benefits. These HaaS Terms are a true lease and not a capital lease, and the parties intend for it to be construed as such. Customer shall not, whether by action or omission, cause these HaaS Terms not to be treated as a true lease for federal and state tax purposes. If, by any action or omission, Customer causes these HaaS Terms not to be treated as a true lease for tax purposes, in whole or in part, Customer shall defend, indemnify and hold harmless JCI from any and all losses (including, without limitation, loss of tax benefits), liabilities, damages, penalties, claims, demands, actions, costs and expenses (including, without limitation, reasonable attorneys’ fees and legal expenses) resulting therefrom.


2. Service Fees.


2.1. Annual Service Fee. The annual service fee for the HaaS Services shall be as set forth in the applicable Order Form (the “Service Fees”).

2.2. Payment Terms. The Service Fees shall be paid by Customer in accordance with the terms of the Order Form. Unless otherwise set forth herein, in the Agreement or in the Order Form, Service Fees are non-refundable.

2.3. Taxes. Customer shall pay, in addition to the Service Fees, all taxes, duties, insurance, and similar charges in connection with the HaaS Services.



3. Intellectual Property and Software.


3.1. Firmware Terms. The software that is embedded or encoded in the Hardware and any updates thereto (the “Firmware”) is licensed, not sold. Subject to this Agreement and payment of applicable fees, JCI grants Customer a non-exclusive, non-transferable, non-sublicensable, worldwide license to use the Firmware solely in object code, solely as embedded in and for the operation of the applicable Hardware, and solely for Customer’s internal business purposes in connection with the corresponding Software Subscription. Except to the extent expressly permitted by applicable law, Customer shall not (and shall not permit any third party to) copy modify, translate, reverse engineer, decompile, disassemble, or work around technical limitations of the Firmware; separate the Firmware from the Hardware; use the Firmware to operate non-JCI hardware; or rent, lease, or host the Firmware for third parties. JCI or its licensors retain all right, title and interest in and to the Firmware and all copies. JCI may provide updates, patches, or fixes for the Firmware; any such update is deemed Firmware and governed by this Section.

3.2. Intellectual Property. All intellectual property rights (including, without limitation, patents, trademarks, registered designs, and any rights to apply for the same, copyright, design rights, database rights, rights in and to confidential information and know-how), and any rights analogous to the same anywhere in the world and existing at any time in Hardware or Software or arising out of or relating to the design or manufacture of Hardware or the provision of the software or software services shall belong to and remain vested in JCI. Nothing in these HaaS Terms grants to Customer any right, title or interest in or to JCI’s intellectual property.



4. Warranty; Support.


4.1. Hardware Warranty. Subject to Section 4.4 of these HaaS Terms, JCI warrants that the Hardware shall be free from defects in materials and workmanship and shall operate in conformance with the Documentation for the duration of the Hardware Subscription.

4.2. Warranty Remedies. If, within the applicable warranty period, any such Hardware fails to conform to this limited warranty, JCI shall, in its sole discretion, either (a) repair or replace the affected Hardware free of charge or (b) refund the Service Fees paid by Customer to JCI for such Hardware for such calendar year. Such repair, replacement, or refund shall be JCI’s sole obligation and Customer’s exclusive remedy for any deficiency in Hardware furnished under these HaaS Terms, and shall be conditioned upon Customer’s return of such defective Hardware to JCI or, in JCI’s sole discretion, inspection in the field by a JCI-authorized representative, in either case, at Customer’s expense and risk of loss. Any parts of Hardware repaired or replaced under this warranty are warranted only for the balance of the warranty period on the original part that was repaired or replaced. Customer must promptly report any failure of the Hardware to JCI in writing.

4.3. Support. For the duration of any HaaS Subscription term, JCI will provide (i) for download, at no additional charge, any applicable software upgrades for the Hardware when made generally available to its customers and (ii) telephone and online support in accordance with the Support and Service Level terms set forth in the Agreement.

4.4. Warranty Exclusions. Notwithstanding anything in these HaaS Terms to the contrary, JCI shall not be responsible for defects or conditions caused by (a) any acts or omissions of Customer or any third party; (b) any failure by Customer to perform its obligations under these HaaS Terms and/or under the Documentation provided by JCI to Customer for the Hardware, including the provision of persistent power to the Hardware; (c) any use of the Hardware by Customer in excess of the rights granted in these HaaS Terms or in a manner for which it is not designed or intended; (d) any installation, servicing, modification, addition or alteration to the Hardware, or repairs by Customer or third parties not conducted by JCI or its agents; (e) misuse or abuse of the Hardware or a failure to maintain the Hardware; (f) harmful environments or improper storage, such as outdoor installations, excessive moisture or excessive dust; (g) any Force Majeure Event; (h) improper use or application; (i) corrosion, normal deterioration, wear or tear; or (j) operation beyond rated capacity, if applicable. JCI shall not be required to perform under any warranty where performing would violate any Applicable Laws. The warranties set forth in this Section 4 run only to Customer and are not assignable by Customer without the prior written consent of JCI.

4.5. Warranty Service. Warranty service will be provided during normal business hours, excluding holidays. If Customer requests, and JCI approves, warranty service at other than normal working hours, such warranty service will be performed at JCI’s then-current rates for after-hours services.In the event JCI elects repair or replacement as a warranty remedy, but the Hardware is later determined be excluded from warranty coverage pursuant to this Section 4, JCI shall invoice to Customer, and Customer shall pay, JCI’s then-current rates for labor (including service call fees), parts, and shipping or other freight costs for such Hardware repair or replacement. The warranty remedies and support services set forth in this Section 4 do not include costs of Installation Services and onsite services.

4.6. Warranty Disclaimers. THE WARRANTIES SET FORTH IN THIS SECTION 4 OR IN THE PUBLISHED WARRANTY (IF ANY) ARE EXCLUSIVE AND IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED. JCI EXPRESSLY DISCLAIMS AND EXCLUDES ANY IMPLIED WARRANTY OF MERCHANTABILITY, NON-INFRINGEMENT, TITLE, OR FITNESS FOR ANY PARTICULAR PURPOSE, AND ANY WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE. JCI EXPRESSLY DISCLAIMS ANY WARRANTY THAT THE SOFTWARE IN THE HARDWARE WILL BE ERROR-FREE, SECURE FROM CYBER THREATS, HACKING OR OTHER SIMILAR MALICIOUS ACTIVITY, OR OPERATION THEREOF WILL BE UNINTERRUPTED.IN ADDITION, JCI DISCLAIMS ANY RESPONSIBILITY FOR MAINTAINING OR PROTECTING ANY CONFIGURATION SETTINGS OR DATA FOUND ON THE HARDWARE OR COMPONENT PART THEREOF. CUSTOMER IS SOLELY RESPONSIBLE FOR REMOVING ANY AND ALL OF CUSTOMER’S DATA FROM ALLEGEDLY DEFECTIVE HARDWARE.



5. Swaps; Upgrades

5.1. Eligibility and Frequency. Customer may, no more than once every thirty-six (36) months per Hardware unit, (a) swap out the existing Hardware for a new unit of the same model (“Swap”), or (b) upgrade to a newer model or alternative JCI-approved hardware type (“Upgrade”). All Swaps and Upgrades are subject to JCI’s then-current availability and approval.To the extent that JCI Installation Services or other onsite services are required for the Swap or Upgrade, such services shall be charged to Customer at JCI’s then-standard rates.

5.2. Service Fee Adjustment. In the case of an Upgrade, the Service Fees shall be adjusted to reflect the then-current JCI list price for the new Hardware model or type, as set forth in an updated Order Form. The adjusted Service Fees shall become effective as of the effective date of the Upgrade and shall apply for the remainder of the applicable term. Swaps for the same model shall not result in a Service Fee adjustment.

5.3. Term Commitment. Each Swap or Upgrade must be accompanied by a HaaS license term of at least twelve (12) months. The new term and any revised Service Fees shall be documented in an updated Order Form or Change Order signed by both parties.

5.4. Return of Replaced Hardware. Upon any Swap or Upgrade, Customer shall uninstall and return the replaced Hardware to JCI, in accordance with Section 8 of these HaaS Terms within thirty (30) days of delivery of the replacement Hardware. JCI reserves the right to charge continued Service Fees or applicable fair market value for any Hardware not returned within such period.

5.5. Effect on Warranty and Risk of Loss. Any new or upgraded Hardware shall be subject to the same risk of loss, insurance, and warranty provisions as the original Hardware, and the warranty period for such upgraded Hardware shall reset as of the date of delivery.



6. International Trade Laws. Customer acknowledges that the Hardware (including any related technical data) received from JCI may be subject to economic sanctions, export controls, and other restrictive trade measures. Customer further agrees that it will not (and will not permit any of its affiliates or representatives to) directly or indirectly sell, ship, export, reexport, disclose or transfer any of the foregoing to any party, country, or territory for which the United States Government (or any agency of the United States Government) requires an export license or other approval without first obtaining any licenses, consents or permits that may be required under the Applicable Laws related to trade of the United States or other foreign jurisdictions (collectively “International Trade Laws.”). The obligation of JCI to license the right to use the Hardware to Customer is subject to the ability of JCI to supply such items consistent with these International Trade Laws, and, as such, Customer agrees that any refusal by JCI to continue to license the right to use the Hardware to Customer or cancellation or termination of these HaaS Terms by JCI due to Customer being in violation of these International Trade Laws will not constitute a breach of any of JCI’s obligations under these HaaS Terms, and Customer hereby waives any and all claims against JCI or its representatives for such refusal, cancellation or termination. In the event that the Order Form describes activities to be undertaken in Cuba, Iran, North Korea, Syria, the disputed Crimea region, or sanctioned territories, such Order Form shall be null and void unless JCI and Customer obtain the necessary authorizations from the U.S. government and any applicable foreign governments.

7. Limitation of Liability. The liability limitations and damage exclusions set forth in the Agreement will apply to offerings provided under the Agreement other than the HaaS Services. In relation to or arising out of the HaaS Services and items governed by these HaaS Terms, the following terms will apply:

7.1. Overall Damage Cap. JCI’S LIABILITY UNDER THESE HAAS TERMS AND FOR THE HAAS SERVICES, REGARDLESS OF THE FORM OF ACTION AND WHETHER SUCH LIABILITY IS ASSERTED IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), INDEMNITY OR OTHERWISE, SHALL IN NO EVENT EXCEED: (A) FOR ANY SINGLE CLAIM OR SERIES OF RELATED CLAIMS, THE AMOUNT OF THE SERVICE FEES PAID OR PAYABLE BY CUSTOMER TO JCI FOR THE HAAS SERVICES GIVING RISE TO THE CLAIM(S) IN THE 12-MONTH PERIOD PRECEDING THE DATE ON WHICH SUCH CLAIM AROSE AND (B) IN THE AGGREGATE FOR ALL CLAIMS, THE TOTAL OF ALL SERVICE FEES PAID OR PAYABLE BY CUSTOMER TO JCI UNDER THE APPLICABLE ORDER FORM FOR THE APPLICABLE HAAS SERVICES.

7.2. No Consequential or Punitive Damages. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THESE HAAS TERMS, JCI SHALL NOT BE LIABLE, WHETHER IN CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), INDEMNITY, OR OTHERWISE, TO CUSTOMER OR TO ANY THIRD PARTY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING UNDER OR IN CONNECTION WITH THE HAAS SERVICES, INCLUDING, WITHOUT LIMITATION, LOSS OF PROFITS, LOSS OF EARNINGS, LOSS OF REVENUE, LOSS OF CUSTOMER OPPORTUNITIES, LOSS OF ANTICIPATED SAVINGS, DATA LOSS OR OTHER LOSSES ARISING FROM VIRUSES, RANSOMWARE, CYBER ATTACKS OR FAILURES OR INTERRUPTIONS TO NETWORK SYSTEMS, LOSS OF BUSINESS OR GOODWILL, BUSINESS INTERRUPTION, DOWN-TIME, COST OF CAPITAL, COST OF SUBSTITUTE PRODUCTS, OR FOR ANY OTHER TYPES OF ECONOMIC LOSS, OR FOR CLAIMS OF CUSTOMER’S CUSTOMERS OR ANY THIRD PARTY FOR ANY SUCH DAMAGES, COSTS OR LOSSES, REGARDLESS OF (A) WHETHER SUCH DAMAGES WERE FORESEEABLE, AND/OR (B) WHETHER OR NOT JOHNSON CONTROLS WAS ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.



8. Term and Termination; Other JCI Rights on Customer Default.

8.1. Term. The term of the HaaS Services will run concurrently with the corresponding Software Subscription period, unless terminated earlier pursuant to these HaaS Terms or the Agreement.

8.2. Termination. Either Party may terminate these HaaS Terms by written notice to the other party (such other party, the “Breaching Party”) if the Breaching Party breaches a material term or condition of the Order Form or these HaaS Terms (including any failure to make a payment when due) and fails to cure such breach within thirty (30) days after written notice thereof by the terminating party. JCI may terminate these HaaS Terms for convenience on 180 days’ written notice.These HaaS Terms shall automatically terminate upon termination or expiration of corresponding Software Subscription.

8.3. Effect of Termination. Upon expiration or termination of HaaS Services under an Order Form, Customer shall at JCI’s sole discretion, either (a) uninstall and return all Hardware to JCI at a destination that JCI shall direct, at Customer’s sole risk and expense, and all Hardware so delivered to JCI shall be in the same operating order, repair, condition, and appearance as on the effective date of the applicable Order Form, except for reasonable wear and tear resulting from authorized use, or (b) buy the Hardware from JCI at a price equal to the fair market value of the Hardware as of the date of such termination. If any Order Form is terminated by JCI as the result of a Customer Default, Customer shall pay any unpaid Service Fees covering what would otherwise have been the remainder of the then-current term of the Order Form but for such earlier termination.

8.4. Customer Default. If Customer breaches these HaaS Terms and fails to cure such breach within thirty (30) days after written notice thereof by JCI (a “Customer Default”), then, in addition to JCI’s right to terminate the Agreement, the applicable Order Form(s), and any other rights afforded under the Agreement or at law, JCI may without further notice to Customer or others exercise any one or more of the following remedies as JCI in its sole discretion shall elect: (a) declare all unpaid Service Fees to be immediately due and payable; (b) stop performing services, withhold deliveries of Hardware and other materials, and/or terminate any unpaid software licenses or use rights (c) take possession of the Hardware wherever located, and for this purpose enter upon any premises of Customer and remove the Hardware, without incurring any liability to Customer or others thereby and without any suit, action or other proceeding by JCI, Customer or others; (d) cause Customer at its expense to promptly return the Hardware to a location specified by JCI in the same operating order, repair, condition and appearance as on the effective date of the applicable Order Form, except for reasonable wear and tear resulting from authorized use; (e) use, hold, sell, re-lease or otherwise dispose of the Hardware or any item thereof without affecting any of the obligations of Customer as provided in these HaaS Terms; (f) sell, re-lease or otherwise dispose of the Hardware or any item thereof in a commercially reasonable manner, by public or private sale or lease, at such time or times and upon such terms as JCI may determine, free and clear of any rights of Customer and, if notice thereof is required by law, the parties agree that any notice in writing of any such sale or re-lease by JCI to Customer not less than ten (10) calendar days prior to the date thereof shall constitute reasonable notice thereof to Customer; (g) proceed by appropriate action either at law or in equity to enforce performance by Customer of the applicable covenants and terms of these HaaS Terms and/or to recover damages for the breach thereof; and (h) exercise any and all rights accruing to a lessor under any Applicable Law upon a default by a lessee.