General terms of operating lease of hermes auto geoup limited

1.1. HERMES AUTO GROUP LIMITED, UIC 203842817, herebelow called HERMES is a Lessor.

1.2. The Lessee is called a CLIENT.

1.3. The Manufacturer or the person from which HERMES obtained the vehicle is herebelow called a Supplier.

1.4. The subject of the Leasing contract is called a Vehicle.

1.5. All changes to contract terms as well as any notifications between the parties involved are valid only in written form. Any form of notification but in written is allowed only in crucial circumstances when the written form is impossible to apply.

1.6. The term total damage should be considered only as per the definition of the respective Insurer.

1.7. The value of the leasing object (or the cost of the object) is the book value of the vehicle as of certain moment. The Article II of the Leasing contract stipulates and determines the cost of the leasing object as of the moment of signing of the contract. If the respective vehicle is newly manufactured then the cost of the leasing object as of the moment of signing of the contract corresponds to the price, which HERMES has paid to the Supplier including all paid taxes, fees, transport costs and any other cost related to the delivery of the vehicle. 1.8. Initial payment (advance payment) is a sum that the Client pays in advance to the Lessor prior to signing of the Contract. The amount of the initial payment is determined in the leasing offer submitted by the Lessor to the Client. The Lessor issues an invoice to the Client upon receipt of the payment.

1.9. Leasing fee (payment) is the rental price, which the Client pays to HERMES for every 30 days of rent and in accordance with the Instalment plan (repayment schedule).

1.10. Instalment schedule is an integral enclosure to the leasing contract and determines the amount and value date of each leasing fee due.

1.11. Book value is the carrying amount of the leased vehicle in accordance of the accounting practices of HERMES as of the respective moment of the leasing period.

1.12. Fee tariff (the Tariff) is an integral enclosure to the present General Terms and includes all fees that the Client is obliged to pay to HERMES in relation to and in the course of the fulfillment of the leasing contract as per the terms stipulated hereto.

1.13. All articles quoted here that have numeration but not any additional definitions, should be considered as articles of the present General terms.
2. OBJECT OF THE CONTRACT FOR OPERATING LEASING. RESPONSIBILITIES.

2.1. With the Contract for Operating leasing, HERMES provides to the customer to use its own vehicle on agreed monthly leasing fee. HERMES remains sole owner of the said vehicle, while the Client is a holder of the said vehicle during the whole period of the leasing contract. All profits and benefits based on the usage of the said vehicle remain for the Client except payments due to the Lessor by the Client.

2.2. The liability of HERMES in accordance with Article 344, Para 1 of the Commercial Law and in connection with Article 230 on the Law on Obligations and Contracts is limited to the obligation to ensure conformity between the order of the Client and the parameters of the vehicle that HERMES gives to the Client if such order exists. The Client could claim only those specifications that the Client explicitly and in written described in the order for the respective vehicle. Otherwise, HERMES is only obliged to submit the vehicle to the Client AS IS, which means with such specifications as described in the leasing contract. Any reservations of the Client with previous suppliers or owners of the vehicle, if any, shall not have effect in respect of HERMES and cannot be opposed to the Lessor. If during delivery and acceptance procedure any of the parties find that the vehicle does not conform to the customer's request (if and to the extent where HERMES is responsible for this compliance within the meaning of the preceding paragraph) or has obvious flaws, then these inconsistencies or shortcomings should be removed by HERMES. In that case, the execution of the leasing contract shall be deferred until removal of said flaws and inconsistencies. HERMES is liable for any hidden defects of the vehicle that were available at the time of the delivery and acceptance, but had not been detected by ordinary inspection except when the Client, by nature of actions or inactions, contributed to the increase of such damages, and to the extent where it is impossible to determine which ones were available at the time of delivery and acceptance, and which have arisen subsequently. HERMES is not liable if the Client by any action or inaction has caused partial or complete inability to execute the rights under the factory warranty of the vehicle. These actions or inactions, where the liability lays on the Client could be but are not limited to such as (incorrect or different operation from that recommended by the manufacturer; use of non-recommended consumables or spare parts; repair works or attempted repair works by any unauthorized by HERMES or the manufacturer persons and etcetera). When above mentioned inconsistencies or flaws should be removed by HERMES, then the Client is released from its obligation to pay lease instalments for the period of the said removal and the final term of the leasing contract shall be extended accordingly.

2.3. After the vehicle takeover all responsibilities between the parties for the cost of its operation, maintenance and repair are distributed between the parties as follows

2.3.1. Unless expressly agreed otherwise by the parties, all consumables used for normal operation of the vehicle (for example, but not limited to: change of oil and other fluids, filters, bulbs, wipers and etc.), as well as all costs for replacement of parts resulting from normal use and amortization for the respective mileage (e.g. but not limited to: replacement of brake pads and / or discs, clutch discs, belts, pulleys, bearings, shock absorbers, exhaust pipes, etc.) should be carried out by the client in accordance with the provisions of the factory and supplier and are paid the customer.

2.3.2. All necessary repair works that are not consumables and/or are not related to the normal operation of the vehicle for the respective mileage are carried out and paid by HERMES, unless these failures that require repair works resulted from wrongful acts of the Client (intentionally or negligently) or any other third party. In this case, the Client pays these repairs. The present paragraph does not treat repairs for damages described in the next paragraph.

2.3.3. The risk of damages of the vehicle, including total destruction or loss (including all kinds of illegal theft by a third party) lays on HERMES, unless the damage is wrongfully (intentionally or negligently) made by the Client or any third party to whom the Client gave the vehicle to, or if the Client and any third party by their actions or inactions gave reason for the Insurer to deny claims for full or partial payment of damages. In that case, the Client is liable and obliged to indemnify HERMES for all vehicle damages that have been refused to be paid by the Insurer as well all related additional costs. The obligation of the Client to pay for the said damage as well as for all additional costs is decommited if the Client has arranged at his expense repair of the vehicle by an authorized repair shop of the Supplier/Importer of the respective automobile brand.

2.4. It is strictly forbidden for Client to expropriate, encumber or rent the vehicle. The Client has no right to:

- to dispose of the vehicle;

- to submit the vehicle to any third party unless explicitly allowed by HERMES

- to use the vehicle for taxi services, rent-a-car, driving license courses or any other specific activities that bear risks or lead to amortization higher than those caused by normal use of the vehicle unless explicitly allowed by HERMES.

- to make any contracts or any kind of legal actions related to the vehicle without explicit permission by HERMES;

- to pawn the vehicle;

- To endanger in any way the ownership and possession of the vehicle by HERMES.

Failure or violation of any condition under this Article raises HERMES right to terminate the contract without notice. Terms of Article 12.2.1, 12.3 and 12.4 to apply.

2.5. The Client is obliged to hold and treat the vehicle as the property of HERMES.

2.6. The Client is obliged to immediately notify HERMES for any litigation or possible claims of third parties on the vehicle.

2.7. The Client is obligated to notify HERMES for any factual state or any action by a third party relating to the vehicle or for any initiated or expected actions of enforcement, such as confiscation, expropriation or any actions by third parties related to the vehicle. The Client is authorized and obliged to take all necessary measures and to take all actions to protect the property rights of Hermes, as well as in cases where it raises costs for the Client.

2.8. If the client is subject to insolvency proceedings or liquidation procedures or if the Client goes bankrupt or in over-indebtedness within the meaning of the Commercial Law, even if bankruptcy proceedings were not initiated, he is obliged to immediately notify HERMES. In such cases, HERMES has the right to terminate the leasing contract and / or to request immediate return of the vehicle. In the event of bankruptcy or liquidation, the Client must inform the trustee or the liquidator that the ownership of the vehicle belongs to HERMES

2.9. HERMES has the right to mark the vehicle in a visible way that evidences the ownership of HERMES, and the Client is not allowed to remove or hide these markings.

2.10. In cases and during the period of the leasing contract and due to destruction, loss or waste of the vehicle or any other causes stipulated by the legislation where HERMES should pay VAT (Value Added Tax) and if the liability for such destruction, loss or waste lays on the Client as per Article 2.3.3 and if such damages are not fully covered by the insurance, then the Client is obliged to pay to HERMES the total amount of the VAT on the respective vehicle. This obligation of the Client arises from the said specific reason and is not related or dependent on any other obligations of the Client related to and described in the General Terms. The Client is not liable to the above-mentioned payment of VAT only if the Clients submits to HERMES such evidences or means, which in accordance with the respective legislative norm exonerate HERMES from the obligation to pay the said VAT.

2.11.. HERMES takes no responsibility for any tax effects for the client in connection with the signing of the leasing contract or use of the leased vehicle. Among other things, HERMES is not liable for any possibility on behalf of the Client to use a tax credit as per the Law on VAT.

3.1. Unless otherwise provided in the contract, the vehicle is delivered to the customer after HERMES notifies the Client that the vehicle is ready for hand over. Unless otherwise provided in the contract, the hand over is carried out in an authorized repair shop of the official importer of the respective automobile brand or its authorized dealership or warehouse. HERMES notifies the client for the exact place of the hand over. The Client accepts and receives the vehicle in such condition as at the time of delivery. The validity of the handover is evidenced by a written handover statement, which should be signed by Hermes, by the Client and by the third party, which stores or delivers the vehicle. Any defects or flaws of the vehicle should be described in the statement. If the statement is clear of any objections on behalf of the Client, the parties agree that the vehicle is delivered in perfect condition, which corresponds to the Client’s request.

3.2. Any delays in the hand over that are not due to HERMES, including delays caused by third parties, does not affect the validity of the leasing contract. The Client is obliged to receive the vehicle 10 days upon delivery notification by HERMES. If the customer is late, HERMES can specify additional delivery time and to say that after this additional time the contract will be considered terminated due to failure by the Client. In this case, the Client loses his rights on the advanced payment. Moreover, the Client is obliged to pay to HERMES a penalty of 300 leva +10% of the financial value of the contract

3.3. HERMES hands over the vehicle to the Client after the Client has made the initial payment in accordance with the payment notice, and if the leasing contract has been dully signed.

3.4. Unless otherwise agreed between the parties, the Client accepts to pay expenditures under Article 2.3.1 and all incidental expenses that are associated with the operation of the car during the whole period of the leasing such as motor vehicle tax, and all other taxes that exist or would be introduced in connection with the use of the motor vehicle such as compulsory technical inspection, vignettes and etcetera. If HERMES pays these costs instead of the Client, the Client is obliged to reimburse the HERMES within 3 days of delivery of the invitation for payment. When different deadlines for the payment of any taxes or expenses payable by the owner are provided, or there is a possibility for deferred payment, then HERMES can choose when and to what amount to pay these obligations. In these cases the Client has no right of objection to the term of payment and undertakes to reimburse to HERMES all taxes paid / expenses in full within 3 days from the delivery of the invitation for payment

3.5. Starting from the date of delivery, the Client is obliged to duly pay leasing instalments for any subsequent 30 says period as per the Article 5.1 and in accordance with the Instalment schedule.

3.6. Registering or if necessary re-registering of the vehicle is carried out only by HERMES. All expenses related to registering are described in the leasing offer.

3.7. HERMES delivers the vehicle to the Client with one original key. HERMES can make additional key following a written request by Client to HERMES. The Executor under the preceding sentence is the automobile manufacturer or its authorized person. The Executor sets all terms and conditions of the contract. The Client shall bear all costs for making of the new key, and the corresponding fee according to the Tariff. The Client is obliged to immediately notify HERMES whenever any of the received keys are lost or damaged. Expenses related to the making of new keys are always borne by the customer.

4.1. As HERMES is the owner of the vehicle, HERMES has the right to insure the vehicle for its own benefit. Any property insurance (CASCO) made by HERMES should be considered as a guarantee that the Client shall fulfill its obligations arising from the leasing contract. In reference to that, all insurance expenses as well as all subsequent expenses are borne by the Client. The Client is obliged to pay all expenses if such are needed and required by the Insurer that are related to mounting security systems. The Client receives a hard copy of the Insurance policy. The insurance of the vehicle benefits the Client as per the rules of Article 2.3.3.

4.2. If The Client intends to travel with the vehicle outside the territory of EU, the Client should notify HERMES in advance and to ask HERMES for additional agreements on the Casco insurance and on the Civil liability policies (“Full CASCO” and “Green card”) and the respective PoA. The Client should submit its requirement in written and at least three working days prior to exit of the leased vehicle out of the country. Expenses in that respect are described in the Tariff. The Client is obliged to abide to the territorial scope of the policies and is forbidden to use the vehicle in such a way or in such regions, that will void the insurance in full or partially The Client is liable to HERMES for all damages that may arise from any breach of this rule.

4.3. Upon any case of reimbursed of partially paid insurance compensations HERMES has the right to pay the extra premium that is required by the Insurer so as to keep full coverage of the cost of the vehicle in case of total damage or theft (additional insurance). In this case, The Client owes HERMES all expenses for the additional insurance and shall pay them to HERMES against invoice or invitation for payment.

4.4. HERMES offers the service "Deferred payment of the insurance premium." If the Client wishes to use it, then the Client pays to HERMES the premium amount on several subsequent installments within one year. In these cases, the nominal rate of insurance premium increases according to the Tariff of Fees. The customer is required to determine prior to signing of the leasing contract if the Client will use this service, and the number of instalments of the insurance premium.

4.5.. When Casco insurance covers a period greater than one year, the Client is obliged to declare in writing to HERMES his intention to use the deferred payment of the premium for each subsequent year of insurance, no later than thirty days before the start of that year. In the absence of a written application within this period, the premium shall be paid for the whole year in the way that was paid in the previous year. In the absence of a written request by the customer and at the discretion of HERMES, the whole premium may be charged at once.

4.6. The Client is obliged to fulfill all the conditions necessary to preserve the effect of concluded insurance. The customer is obliged among other things to ensure timely inspection and photographing of the car according to the requirements of the insurance, in a way to ensure continuity in the validity of the insurance. If the Client does not fulfill this obligation, the Client shall be liable for any damage to the vehicle in its full amount.

4.7. The Client is not entitled to take out, amend or terminate any insurance on the leased vehicle without prior written permission of HERMES. The Client can represent HERMES to insurers only within concluded by HERMES insurance contracts on the leased respective vehicle; which is used by the Client, and only in respect of any need assistance in the settlement of insurance damages.

4.8.. The Client declares that he received from HERMES copies of the insurance policies CASCO and civil liability of the leased vehicle and also all annexes and that the Client is familiar with all the terms of insurance, incl. The general conditions of the insurer, and that the Client undertakes to comply strictly with these conditions, so as not to harm the interests of HERMES as insured person.

4.9. The Client has the right to choose an insurer and a duplicate insurer among those insurers with whom Hermes has contractual relationships. HERMES submits to the Client a list of these insurers prior to conclusion of the insurance. If the Client does not explicitly exercise its right, then choice is made by HERMES

4.10. HERMES has the right to cancel an acting Casco insurance on the leased vehicle before the time set, in cases where the insurer by its actions or inaction threatens the interests of the parties of the leasing contract. In case of such termination and if there is a valid agreement pursuant to Article 4.9, HERMES has the right to provide immediate insurance on the same vehicle by a duplicate insurer. In the absence of such an agreement. Hermes chooses the insurer at its own discretion, and notifies the Client about the change and submits the Client a copy of the new insurance terms and conditions of the new insurer and all amendments. In all cases of change of the insurer before the time set, the client shall pay HERMES full insurance premium for the new insurance within three (3) days of notification by HERMES stating that the insurer has been changed. Upon reimbursement by the previous insurer of the part of the premium on the terminated insurance, that reimbursed amount is for the Client, less all current liabilities due to HERMES. If there are no other current liabilities of the Client, Hermes, reimburses the Client with the amount received by the previous insurer.

4.11. In all cases, where during the leasing period the insurance becomes invalid or the same is not extended / prolonged, HERMES has the right to conclude a new insurance policy with another insurer. The rules of the previous article. 4:10 shall apply accordingly

4.12. The customer shall at any time keep in the vehicle а spare set of documents for the preparation of a bilateral protocol for road accidents according to the instructions of the insurer and effective laws.